Lännen Tehtaat plc Stock Exchange Release May 4, 2005 at 10.00 a.m.
LÄNNEN TEHTAAT AND RAISIO TO ESTABLISH A FEED JOINT VENTURE IN RUSSIA
Suomen Rehu, a part of Lännen Tehtaat Group, is engaged in export of industrial
feeds and premixes to Russia. Lännen Tehtaat aims to strengthen its position in
Russian feed business.
Lännen Tehtaat and Raisio will establish a 50/50 owned joint venture, which will
be in charge of commencing farm feed production in north-west Russia either
through building up own production capacity or through an acquisition.
The industrial feed market of north-west Russia is approximately of same size as
the Finnish feed market. Combining the wide know-how of Lännen Tehtaat and Raisio
in Russia creates good business opportunities in the growing feed markets of
Northwest Russia. In these markets, the joint venture aims for a significant
market share in the next five years.
Final closing of the deal is subject to the clearance by merger control
authorities in Finland and in Russia.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
Further information: Erkki Lepistö, CEO, +358 10 402 00
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
Lännen Tehtaat plc Stock exchange release May 5, 2005 9;00 a.m.
INTERIM REPORT for January 1-March 31, 2005
. Lännen Tehtaat transferred to IFRS reporting, which means most of the profit
will accumulate at the end of the year.
. Net turnover totalled EUR 94.0 million in January-March (2004: EUR 123.9
million).
. The net turnover of the continuing business operations was EUR 94.0 million in
January-March (EUR 103.2 million).
. The operating loss of continuing business operations before non-recurring
expenses was EUR -0.4 million (EUR 2.3 million).
. Operating profit for continuing business operations was EUR -3.6 million (EUR
2.3 million) taking into account non-recurring expenses. A total of EUR 3.2
million in write-downs of fixed assets and provisions for expenses was entered
in the income statement as a result of the decision to close down the Suomen
Rehu factory at Vaasa.
. A majority shareholding was acquired in Mildola Oy. The transaction was
approved by the competition authorities on May 2, 2005.
Transfer to IFRS accounting
Lännen Tehtaat transferred to IFRS reporting on January 1, 2005. Information
about the effects of the transfer on the opening balance sheet for the
comparative year 2004 and the results and balance sheets for the interim report
periods was given in a stock exchange release on April 27, 2005. The activities
in the comparative profit and loss accounts for 2004 have been divided into
continuing and discontinued operations. The Machinium Division, which was
disengaged from the Group in July 2004, has been presented as discontinued
operations.
The release also gave information about the new segment division and reporting.
The primary system of segment reporting is based on the divisions. Fundamental
changes compared with before are the separation of the Animal feeds business and
Grain trading into their own business segments from the earlier Agricultural
Division, and the establishment of an Other Operations segment, which comprises
Lännen Plant Systems, Harviala Oy and the corporate administration. The Food
Division, the former Food Group, remains unchanged. The secondary system of
segment reporting is geographical, by market area, i.e. Finland, other EU Member
States and other countries.
This interim report has been drawn up in line with IFRS bookkeeping and valuation
principles.
Presentation method of turnover and financial-performance comparison
The net turnover and financial performance are compared in terms of the entire
group and in terms of continuing operations in the report section of the interim
report. In the first quarter of 2005 there are only continuing operations.
However, the profit calculation for the comparative period and for the
comparative year 2004 is divided into continuing and discontinued operations.
Information about discontinued operations in the comparative period is mentioned
separately in the text. The table section in the report shows a profit and loss
account for continuing and discontinued operations separately and continuing and
discontinued operations combined.
Net turnover
The Lännen Tehtaat net turnover in January-March was EUR 94.0 million (2004: EUR
123.9 million) and the net turnover for continuing operations EUR 94.0 million
(EUR 103.2 million). The net turnover of the discontinued operations in the
comparative period was EUR 20.7 million
Financial performance
The loss before non-recurring items for the period under review came to EUR -0.4
million (EUR 0.8 million). The operating loss before non-recurring items for
continuing operations was EUR -0.4 million (EUR 2.3 million). The loss for
discontinued operations was EUR -1.5 million for the comparative period.
The loss before taxes and non-recurring items was EUR -1.2 million and EUR -4.4
million after non-recurring items (EUR -0.6 million). The loss after taxes was
EUR -3.4 million (EUR -0.9 million). The decision to close down the Suomen Rehu
factory at Vaasa hampered the result, causing a total of EUR 3.2 million in write-
downs to fixed assets and provisions for expenses.
Financing
The Group's interest-bearing liabilities at the end of the period under review
totalled EUR 48.2 million (EUR 97.7 million) and the financial assets EUR 11.0
million (EUR 17.6 million). The consolidated balance sheet total was EUR 205.7
million (EUR 269.7 million) and the equity ratio 48% (35%). The balance sheet of
the discontinued operations was included in the balance sheet for the comparative
period: the financial assets were EUR 2.3 million and the interest-bearing
liabilities, including financial leasing, EUR 37.6 million. Commercial papers
were used for short-term financing and liquidity was secured with long-term
committed credit facilities. No credit facilities were used in the period under
review. The Group's financing position was good throughout the entire period
under review.
Investment and corporate acquisitions
Investment during the period under review, which was mainly in productivity and
replacement, amounted to EUR 0.3 million (EUR 1.4 million).
At the beginning of March, Suomen Rehu Oy, which is part of the Group, acquired
65% of the shares in the food company Mildola Oy for EUR 3.9 million, thus
raising its holding in Mildola to 82.5%. The transaction required the approval of
the competition authorities to become effective and this approval was given on
May 2, 2005. At the beginning of April, Lännen Tehtaat plc sold its Lännen Plant
Systems unit. Neither transaction will have a fundamental effect on the financial
performance of the Lännen Tehtaat Group in 2005.
Decisions of the Annual General Meeting
The Annual General Meeting on March 31, 2005 approved the distribution of a
dividend of EUR 0.65 (EUR 0.65) per share for 2004. The total amount payable as
dividend, EUR 4.1 million, was transferred in the accounts from profit funds to
non-interest-bearing current liabilities at the end of March. The dividend was
paid on April 12, 2005.
The Annual General Meeting authorized the Board of Directors to decide on
increasing the share capital by means of a new issue and/or taking out a
convertible loan in one or several instalments. In a new issue and/or a new issue
based on a convertible bond, the share capital can be increased by a maximum of
EUR 1,263,514, with a maximum issue of 631,757 shares for subscription. The
authorization is valid for one year from the Annual General Meeting. The share
capital can be increased and/or a convertible bond taken out regardless of the
shareholders' subscription rights, if there is a pressing financial reason for
the company to do so.
The Board of Directors was also authorized to decide on the surrender of the
company's own shares. According to this authorization the Board of Directors can
surrender 65,000 previously purchased Lännen shares. They can be surrendered in
connection with corporate acquisitions or for some other purpose or in public
trading on the Helsinki Stock Exchange. The authorization is valid for one year
from the Annual General Meeting.
The company owns 65,000 of its own shares, which represents 1.0% of the company's
share capital and voting rights.
Share trading
The volume of stock exchange trading in the company's shares during the period
under review was 888,808 shares (313,574), which was 14.1% of the total share
capital (5.1%). The highest price for the shares was EUR 13.70 (EUR 12.50) and
the lowest EUR 11.90 (EUR 11.00). The share trading totalled EUR 11.7 million
(EUR 3.7 million).
BUSINESS SEGMENTS
Food
The Food segment's net turnover was EUR 32.0 million (EUR 25.1 million). The
growth came from Apetit Kala, which became part of the Group at the end of June
2004. Retail sales of Apetit frozen foods were at the same level as in the
comparative period. Retail sales of jams and marmalades fell. Sales to the hotel,
restaurant and catering sector and to industry fell short of the comparative
period. Sales of sugar fell considerably short of the comparative period, mainly
because of imports from the Baltic States
Operating profit for the Food business operations was EUR -1.1 million (EUR 0.1
million). Profitability failed to match expectations and the comparative period
because of the poor profitability of the fish operations. Changing the Kalatori
and Kesäpöytä product brands to the Apetit brand caused non-recurring expenses.
The introduction of the new production line in Kerava increased production costs
at the start-up stage. In other respects the segment's profitability was at the
level of the comparative period.
Feed
The net sales of the Feed business operations fell short of the comparative
period and were EUR 44.0 million (EUR 47.1 million). The fall is a result of the
effect on sales prices of raw material prices that were lower than in the
previous year and a reduction in the volumes of poultry and pig feeds.
Profitability without the non-recurring expenses of EUR 3.2 million for the
closure of the factory at Vaasa was just below that of the comparative period.
Operating profit, not including non-recurring expenses, was EUR 1.7 million, and
EUR -1.5 million (EUR 2.2 million) including non-recurring expenses.
Suomen Rehu has been exporting to Russia on a small scale. Surveys have been
started to chart the possibilities of feed production in Northwest Russia.
Grain Trading
The Grain Trading business operations' net sales amounted to EUR 16.3 million
(EUR 29.6 million). Grain trading has been slow at the beginning of the year
because of the small harvest in the autumn and the large amount of fodder grain.
Net sales at the beginning of the year fell well below those of the comparative
period, when the number of consignments abroad was unusually large. Reduced sales
also had an effect on financial performance, the operating profit being EUR 0.1
million (EUR 1.0 million).
EUR 0.5 million of the reduction in operating profit is a timing differential
caused by the introduction of IFRS. The derivative instruments recorded at fair
value and taken out to protect raw material positions had a negative effect of
EUR 0.2 million on the financial performance for January-March 2005 and a
positive effect of EUR 0.3 million for January-March 2004. The reporting of
derivative instruments made after the beginning of 2005 has been arranged so that
hedge accounting can be applied to the instruments, which will reduce the
susceptibility of Grain Trading's financial performance to fluctuations.
Other Operations
The Other Operations segment's net turnover totalled EUR 1.7 million (EUR 1.3
million) and the operating loss was EUR -1.0 million (EUR -0.9 million).
Reform of the EU sugar regime
The reform of the EU sugar regime will proceed in the way mentioned in the notes
to the year-end accounts published at the end of February. The proposed decision
of the Commission will be announced in June. The reform of the regime is likely
to be implemented in time for the 2006 harvest.
Prospects for the end of the year
Net turnover for the Food business operations will rise when Apetit Kala's net
turnover for a full year is included in the food segment. Frozen food sales are
expected to be in line with the general market trend. However, sales of
vegetables and ready-made frozen foods are expected to increase. There will be no
growth in the overall consumption of sugar. The proportion of domestic sugar is
expected to go down. Because of sugar imports, sales of Lännen Sugar's consumer
products are likely to be no higher than the 2004 level. In order to improve the
poor profitability of the Apetit Kala operations, a programme to improve
efficiency and eliminate costs has been started.
The sales volume of the Feed business operations is expected to remain at the
same level as in 2004. The net turnover will be affected by raw-material prices.
The non-recurring restructuring costs of animal feed production (closing down of
the Vaasa factory) will weaken the financial performance of Feed's business
operations for 2005. The full benefit of this reorganization will be seen in
2007.
Grain Trading's net turnover will depend on the amount and quality of this year's
harvests in the main market areas. It is thought, however, that the small harvest
of last autumn will lead to a reduced net turnover compared with 2004.
The Lännen Tehtaat overall consolidated net turnover will decrease against 2004.
The net turnover for continuing business operations will increase on 2004.
Under the IFRS rules, the prices of goods in stock will be higher than under the
previous accounting practice and most of the profit will accumulate in the final
quarter, when its harvested raw materials are processed into stocks of finished
and semi-finished goods.
Operating profit before non-recurring items in animal feed production will be
better than in 2004. Operating profit after non-recurring items will be poorer
than in 2004. as will profit before taxes. The annual operating profit and profit
before taxes for continuing operations are expected to remain below the 2004
figures in 2005 as a result of non-recurring expenses in animal feed production
and poor profitability in the fish business.
The next interim report for the period January 1-June 30, 2005 will be published
on August 11, 2005.
Current assetsInventories 47.8 76.0 49.5
Receivables 31.5 43.1 37.2
Financial assets at fair value
through profit or loss 0.5 0.5 0.5
Cash and cash equivalents 11.0 17.6 9.7
90.8 137.2 96.9
Total assets 205.7 269.7 215.4
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent 97.3 91.7 104.3
Minority interest 2.2 3.3 2.5
Current liabilities
Trade payables and other
liabilities 49.0 68.3 52.7
Short-term borrowings 25.2 31.4 23.3
Other provisions 1.0 1.0 1.0
Current liabilities total 75.2 100.7 77.0
Cash flow from
investing activities -0.7 -1.0 -10.6
Cash flows from
financing activities -2.2 1.6 -21.0
Net increase/decrease in cash
and cash equivalents 1.3 5.1 -2.8
Cash and cash equivalents
at beginning of the period 10.2 13.1 13.0
Cash and cash equivalents
at end of the period 11.5 18.1 10.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
A = Share capital
B = Share issue premium
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Subordinated loans
I = Equity attributable to equity holders of the parent company
J = Minority interest
K = Shareholders' equity total
A B C D E F G H I J K
Shareholders' equity
at Dec 31
2003, FAS 12,2 21,4 0,9 7,3 0,8 -0,5 52,1 1,7 95,1 4,9 100,0
Transition to IFRS
standards 0,9 -0,8 0,0 2,1 -1,7 0,6 -0,6 0,0
Shareholders' equity
at Jan 1 2004, IFRS 12,2 21,4 0,9 7,3 0,0 -0,5 54,3 0,0 95,7 4,3 99,9
Available-for-sale
financial assets:
gains/losses from
fair value measurement 0,1 0,1 0,1
removed from equity and
reported in income
statement -0,2 -0,2 -0,2
Translation differences -0,3 -0,3 -0,3
Dividend distribution -3,9 -3,9 -3,9
Other changes 0,5 0,5 -0,5 0,0
Result of the period -0,3 -0,3 -0,5 -0,9
Shareholders' equity
at Mar 31 2004, IFRS 12,2 21,4 0,8 7,3 0,0 -0,8 50,7 0,0 91,7 3,3 95,0
Shareholders' equity
at Jan 1 2005, IFRS 12,6 23,4 1,1 7,3 0,0 -0,3 60,2 0,0 104,3 2,5 106,8
Available-for-sale
financial assets:
gains/losses from
fair value measurement 0,1 0,1 0,1
Translation differences 0,1 0,1 0,1
Dividend distribution -4,1 -4,1 -4,1
Result of the period -3,1 -3,1 -0,3 -3,4
Shareholders' equity
at Mar 31 2005, IFRS 12,6 23,4 1,2 7,3 0,0 -0,2 53,1 0,0 97,3 2,2 99,5
RECONCILIATION OF SHAREHOLDERS' EQUITY IN THE COMPARATIVE PERIOD
EUR million
RECONCILIATION OF RESULT IN COMPARATIVE PERIOD
EUR million
Profit/loss for the period. FAS 0.0
+ minority interest
(IAS 1, difference in presentation) -0.6
IFRS 3 Reversal of goodwill
amortizations 0.8
IAS 2 Inventories -0.7
IAS 12 Deferred tax assets -0.1
IAS 12 Deferred tax liabilities 0.1
IAS 17 Finance leases 0.0
IAS 19 Pension liability 0.0
IAS 28 Investments in associate
companies -0.6
IAS 38 Intangible assets 0.0
IAS 39 Derivatives 0.3
Profit/loss for the period, IFRS -0.9
KEY INDICATORS
31 Mar 31 Mar 31 Dec
2005 2004 2004
Shareholders' equity
per share, EUR 15.90 15.68 17.08
Equity ratio, % 48.4% 35.3% 49.6%
Investments, EUR million 0.3 1.4 11.1
Average number of personnel.
continuing operations 974 727 890
Average number of personnel,
discontinued operations - 391 182
CONTINGENT LIABILITIES
EUR million 31 Mar 31 Mar 31 Dec
2005 2004 2004
Mortgages given for debts:
Real estate mortgages 35.1 32.5 34.9
Corporate mortgages 51.4 75.8 51.4
Shares pledged 3.6 3.6 3.6
LÄNNEN TEHTAAT PLC STOCK EXCHANGE ANNOUNCEMENT May 3, 2005 at 8;30 a.m.
MILDOLA DEAL ACCEPTED
The Office of Free Competition has accepted the deal by which Suomen Rehu Ltd, a
part of the Lännen Tehtaat Group, purchased 65 per cent of the share capital of
the food company Mildola Oy on March 10, 2005. Suomen Rehu's ownership of Mildola
is now 82.5% and the remaining 17.5% of Mildola's shares are held by
Maatalouskesko Oy.
Mildola Oy is Finland's leading manufacturer of vegetable oils produced through
pressing. Mildola provides its domestic and international customers with refined
vegetable oils and protein feed produced from rapeseed and soya. There are 38
people working for the company at Kantvik in Kirkkonummi.
Mildola's net turnover in 2004 was EUR 41 million, its operating profit before
depreciation was EUR 2.4 million and its profit before appropriations and taxes
EUR 0.7 million.
Mildola Oy is incorporated into the Lnnen Tehtaat Group as from May 1, 2005. The
acquisition of Mildola Oy by the Lännen Tehtaat Group will increase Lännen
Tehtaat's annual net turnover by more than EUR 15 million. The deal will have no
essential effect on Lännen Tehtaat's profit in 2005.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
More information: Erkki Lepistö, tel. +358 10 402 00
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
Lännen Tehtaat plc Stock exchange release April 27, 2005 9;30 a.m.
LÄNNEN TEHTAAT'S IFRS COMPARISON DATA AND RECONCILIATIONS FOR THE FINANCIAL YEAR
2004
The Lännen Tehtaat Group will start applying the International Financial
Reporting Standards (IFRS) in its financial reporting for 2005. The first IFRS
interim report for the first quarter of year 2005 will be published on May 3,
2005. The first financial statement in conformance with the IFRS will be prepared
for the period ending in December 31, 2005.
What follows below is a summary of the main adjustments needed to the Group's
reported 2004 quarterly financial information in order to present it in a form
consistent with the IFRS requirements for comparison against the 2005 financial
information. Lännen Tehtaat's 2004 financial information was originally reported
in accordance with the accounting regulations for listed companies in Finland
(Finnish Accounting Standards (FAS)). The FAS accounting principles are presented
in Lännen Tehtaat's Annual Report 2004.
The IFRS financial information for 2004 has been drafted in accordance with the
standards in force in April 2005. For this reason, it might be necessary to
adjust the IFRS-based financial information presented in the summary prior to its
inclusion as comparative information in the Group's first IFRS financial
statements, which will be prepared for the financial year ending on December 31,
2005. This is due to the ongoing amendments to IFRS, which might affect the
financial statements of companies applying IFRS as from 2005.
Regarding tangible assets the cost model has been chosen as the accounting
policy. The comparative information of the derivative contracts complies with IAS
32 and IAS 39, which means that the derivate instruments have been measured at
their fair values. Hedge accounting has not been applied in 2004, thus the
changes of value have been entered through profit or loss. Regarding business
combinations the exemption allowed for first-time adopters not to apply IFRS 3
Business Combinations to past combinations has been elected. In accordance with
the IFRS regulations minority interest is presented as part of the shareholders'
equity as a separate item.
The Machinium Division, which exited the Lännen Tehtaat Group during the third
quarter of 2004, is presented under discontinuing operations in accordance with
IFRS 5. The business operations of the exited Machinium Division formed a segment-
level group of cash generating units until its exit from the Lännen Tehtaat
Group. The Group's other business operations are presented under continuing
operations, which are those from which the discontinuing operations were
disengaged as described above.
The financial information presented in this document has not been audited.
All the figures in this release have been presented in millions of Euros, unless
specifically mentioned otherwise.
THE MAIN CHANGES TO THE ACCOUNTING PRINCIPLES AND THE REPORTED 2004 FIGURES AS A
RESULT OF APPLYING THE IFRS STANDARDS
The numbering below is used in the profit and loss account, key indicators,
segment information and balance sheet attached, which show the differences
arising from the transition to IFRS reporting.
1) TREATMENT OF GOODWILL
According to IFRS 3, goodwill is no longer depreciated according to plan.
Instead, any impairment is assessed through annually performed impairment tests
in accordance with IAS 36. Impairment test will also be performed if there is an
indication that the cash generating unit to which goodwill has been allocated,
may be impaired. IAS 36 impairment testing has been carried out for all goodwill
entered in the opening IFRS consolidated balance sheet on January 1, 2004. The
present value of the cash flow from the impairment testing exceeds the book value
of the asset items covered by the tests. The reversal of goodwill amortization
improves the IFRS operating result for 2004 by EUR 3.2 million compared with the
operating result under the FAS standards.
The opening IFRS consolidated balance sheet on January 1, 2004 includes goodwill
amounting to EUR 17.6 million. EUR 16.6 million of this has been allocated to the
Feed Division, EUR 0.6 million to the Food Division and EUR 0.5 million to
discontinuing operations.
2) SEGMENT REPORTING
The Lännen Tehtaat Group's primary system of segment reporting is based on
business segments. The Group has four business segments: the Food Division, the
Feed Division, the Grain Trading Division and Other Operations. Other Operations
includes Lännen Plant Systems, Harviala Oy and the corporate administration. The
Machinium Division, which was part of the Group until July 2004, is presented
under discontinuing operations. The information reported in 2004 under the FAS
standards is reclassified here according to the IFRS segment classification.
The Lännen Tehtaat Group's secondary system of segment reporting is based on
market area segments. The Group has three market areas determined in accordance
with IAS 14: Finland, other EU member states and other countries.
3) OWN SHARES
Lännen Tehtaat plc shares held by the parent company are not presented as assets
nor as shareholders' equity.
4) SEASONALITY OF QUARTERLY OPERATIONS
The transition to IFRS reporting brings a change in the timing of the operating
result accrual during the financial year. Calculated according to IFRS, the
operating result is generated mainly in the fourth quarter of the financial year,
when the raw materials from the crop season are processed into product and semi-
finished product inventories. The higher inventory prices of products ready for
sale will correspondingly reduce the sales margin during the first three quarters
of the year. This affects the Group's food business and partly also its feed
business, and especially the associate company Sucros.
The effect on the operating result accrual in each quarter is evident from the
reconciliation of the IFRS and FAS results presented in section 12 (see lines
'IAS 2 Inventories' and 'IAS 28 Investments in associate companies').
5) PROVISIONS
In the IFRS balance sheet, provisions are classified into current and non-current
liabilities. For the purposes of this document, the FAS figures have been
classified in this way too.
6) PRESENTATION OF SHARE OF PROFITS OF ASSOCIATE COMPANIES
The transition to the IFRS profit and loss account format brings a change to the
way the share of profits of Lännen Tehtaat's associate companies is presented.
Prior to the transition, the share of profits of associate companies was
presented before the operating result. Under the IFRS profit and loss account,
the share of profits of associate companies is presented after the operating
result.
The profit and loss account format in this document is presented in accordance
with the IFRS standards. The FAS profit and loss account presented the share of
profits of associate companies according to the former practice, i.e. before the
operating result. For this reason, a separate line, 'Share of profits of
associate companies, FAS', has been added to the profit and loss account in this
document. In accordance with IAS 1, the 'Share of profits of associate companies,
IFRS' is presented after the operating result.
Due to the difference in presentation of the share of profits of associate
companies, the classification in the table presenting the segment results is
different from that in the interim reports and annual report for 2004.
7) FINANCE LEASE AGREEMENTS
Under IAS 17, rental agreements have been divided into finance lease agreements
and other rental agreements. As an IFRS adjustment, assets acquired through
finance lease agreements have been recognized as assets, and finance lease debts
as liabilities, in the balance sheet. In the profit and loss account, rent
expenses entered as operating expenses in the FAS accounting have been reversed.
Depreciation according to plan and interest expenses resulting from finance lease
liabilities have been entered as operating expenses.
8) DEFERRED TAX ASSETS AND LIABILITIES
In accordance with IAS 1, deferred tax assets and liabilities are presented as
non-current assets and liabilities.
Among the taxable IFRS adjustments, deferred taxes have been entered on the basis
of IAS 12. In the balance sheet at the transition date, January 1, 2004, deferred
tax liabilities resulting from IFRS adjustments amounted to EUR 6.8 million (FAS:
EUR 4.4 million) and deferred tax assets amounted to EUR 2.4 million (FAS: EUR
0.4 million). In connection with the acquisition of Apetit Kala in the second
quarter of 2004 and subsequent allocation of the purchase price to the assets
acquired, a deferred tax liability amounting to EUR 0.7 million was recognized.
9) AVAILABLE-FOR-SALE (AFS) FINANCIAL ASSETS
Available-for-sale financial assets are carried at fair value in accordance with
the basic rule of IAS 39. The fair values of these assets amounted to EUR 2.7
million on January 1, 2004. Under the FAS accounting practice, the AFS assets are
carried at acquisition cost, amounting to EUR 1.4 million. The profit generated
by the valuation difference, less the deferred tax liability, is included in the
equity as net unrealized gains on available-for-sale financial assets.
10) DEFINED BENEFIT PENSION ARRANGEMENTS
A liability amounting to EUR 0.7 million has been entered in the opening IFRS
balance sheet for the defined benefit pension arrangements. Under the FAS
accounting no such liability was recognized. EUR 0.6 million of the liability
figure recognized under the IFRS reporting has been entered as an expense
adjustment in the last quarter of 2004 due to the changes made to the Employees'
Pensions Act (TEL). At the end of 2004 the liability amounted to EUR 0.1 million.
11) BUSINESS COMBINATIONS
Lännen Tehtaat plc acquired a majority (50.9%) of the shares of Apetit Kala Oy
(formerly Kuopion Kalatukku Oy). Apetit Kala's business operations comprise fish
processing and wholesaling and also the retail sale of fish.
The corporate acquisition was carried out as a share exchange whereby the seller
was allowed to subscribe 195,000 new Lännen Tehtaat plc shares as the purchase
price. The value of these shares in the exchange was EUR 2.3 million and the
subscription was made on June 10, 2004. At the same time the ownership of the
acquired shares was transferred to Lännen Tehtaat. Apetit Kala Oy has been
included in the consolidated financial statements as of June 30, 2004.
In the FAS accounting, a consolidation asset of EUR 1.2 million under the
acquisition cost calculations was entered under buildings. The table below shows
the allocation of the acquisition cost in accordance with IFRS 3 to the fair
values of the asset items. The quantification basis for the fair value of real
estate consisted of external evaluations, and, in the case of real estate owned
for less than a year, the acquisition cost. Machinery and equipment was measured
at fair value, which is based on the book value adjusted for state grants
received. Inventories were valued at sales price adjusted for sales expenses.
Fair values Book values prior
recognised in to the combination
the combination
Intangible assets 0.1 0.1
Tangible assets 8.6 6.1
Inventories 2.0 1.6
Trade receivables 2.6 2.6
Other receivables 0.2 0.2
Cash and cash equivalents 1.5 1.5
Total assets 15.0 12.1
Deferred tax liabilities 0.7 0.0
Interest-carrying liabilities 3.2 3.2
Other liabilities 6.2 6.2
Total liabilities 10.1 9.4
Net assets 4.9
Acquired proportion
of the net assets 2.5
Acquisition cost 2.7
Goodwill 0.2
12) INVENTORIES
Under the IFRS standards, inventories include fixed purchase and production
costs. These were not included in the acquisition cost of inventories under the
previous FAS accounting practice.
The following table gives a summary of the impact of the transition to IFRS
standards on Lännen Tehtaat's quarterly results for 2004.
The following table shows the results of a reconciliation of shareholders' equity
under the FAS standards and under the IFRS standards at the end of each quarterly
period in 2004 and at the IFRS transition date on January 1, 2004.
Current assets
Inventories (12) 83.7 80.2 3.5
Receivables 46.7 46.2 0.5
Financial instruments at fair value
through profit or loss 1.0 1.0 0.0
Cash and cash equivalents 12.1 12.1 0.0
143.4 139.5 4.0
Total assets less
total liabilities 99.9 100.0 -0.1
Share capital 12.2 12.2 0.0
Share issue premium 21.4 21.4 0.0
Own shares (3) 0.0 0.8 -0.8
Net unrealised gains
and other reserves 8.2 7.3 0.9
Translation differences -0.5 -0.5 0.0
Retained earnings 54.3 52.1 2.1
Subordinated loans 0.0 1.7 -1.7
Shareholders' equity, FAS,
total 95.7 95.1 0.6
Minority interest 4.3 4.9 -0.6
Shareholders' equity, IFRS,
total 99.9 100.0 -0.1
Equity ratio % 36.8 % 40.0 %
Shareholders' equity
per share, EUR 16.33 15.35
COMPARATIVE IFRS INFORMATION Q1 2004
CONSOLIDATED INCOME STATEMENT - CONTINUING AND DISCONTINUING OPERATIONS, TOTAL
IFRS FAS DIFFERENCE
Q1 Q1
2004 2004
Net sales 123.9 123.9 0.0
Other operating income 1.6 0.7 0.9
Operating expenses -122.5 -121.6 -0.9
Depreciations -2.2 -2.9 0.7
Share of profits of
associate companies, FAS (6 0.5
Operating profit/loss (6) 0.8 0.5 0.3
Financial income and expenses -1.2 -0.8 -0.4
Share of profits of
associate companies, IFRS (6) -0.2
Profit/loss before taxes -0.6 -0.3 -0.3
Income taxes -0.3 -0.3 0.0
Profit/loss for the period -0.9 -0.6 -0.3
Attributable to:
Equity holders of the parent-0.3 0.0 -0.3
Minority interest -0.5 -0.6 0.1
Earnings per share, EUR -0.05 0.00 -0.05
Diluted earnings per share, EUR -0.05 0.00 -0.05
CONSOLIDATED INCOME STATEMENT - CONTINUING OPERATIONS
IFRS FAS DIFFERENCE
Q1 Q1
2004 2004
Net sales 103.2 103.2 0.0
Other operating income 1.5 0.6 0.9
Operating expenses -100.5 -99.5 -1.0
Depreciations -1.9 -2.6 0.7
Share of profit of
associate companies, FAS (6) 0.5
Operating profit/loss (6) 2.3 2.1 0.2
Financial income and expenses -0.9 -0.5 -0.4
Share of profit of
associate companies, IFRS (6) -0.2
Profit/loss before taxes 1.2 1.5 -0.3
Income taxes -0.3 -0.3 0.0
Profit/loss for the period 0.9 1.2 -0.3
Attributable to:
Equity holders of the parent 0.8 1.1 -0.3
Minority interest 0.1 0.1 0.0
Earnings per share, EUR 0.12 0.30 -0.18
Diluted earnings per share, EUR 0.12 0.30 -0.18
CONSOLIDATED INCOME STATEMENT - DISCONTINUING OPERATIONS
IFRS FAS DIFFERENCE
Q1 Q1
2004 2004
Net sales 20.7 20.7 0.0
Other operating income 0.1 0.1 0.0
Operating expenses -22.0 -22.1 0.1
Depreciations -0.3 -0.3 0.0
Operating profit/loss (6) -1.5 -1.6 0.1
Financial income and expenses -0.3 -0.3 0.0
Profit/loss before taxes -1.8 -1.8 0.0
Income taxes 0.0 0.0 0.0
Profit/loss for the period -1.8 -1.8 0.0
Attributable to:
Equity holders of the parent-1.1 -1.1 0.0
Minority interest -0.7 -0.7 0.0
CONSOLIDATED BALANCE SHEET
IFRS FAS DIFFERENCE
MAR 31 MAR 31
2004 2004
ASSETS
Non-current assets
Tangible assets (7) 84.1 64.8 19.3
Goodwill (1) 17.6 16.8 0.8
Other intangible assets 3.6 4.0 -0.4
Investments in associate companies (6) 22.2 20.9 1.3
Available-for-sale financial assets (9) 2.6 1.4 1.2
Own shares (3) 0.0 0.8 -0.8
Deferred tax assets (8) 2.4 0.5 1.9
132.5 109.2 23.3
Current assets
Inventories (12) 76.0 73.3 2.7
Receivables 43.1 42.8 0.3
Financial assets at fair value
through profit or loss 0.5 0.5 0.0
Cash and cash equivalents 17.6 17.6 0.0
137.2 134.2 3.0
Total assets 269.7 243.4 26.3
EQUITY AND LIABILITIES
Shareholders' equity attributable to
equity holders of the parent 91.7 91.5 0.2
Minority interest 3.3 3.9 -0.6
Total equity 95.0 95.3 -0.4
Finland 184.0 184.0 0.0 98.2 98.2 0.0
Other EU member
states 45.3 45.3 0.0 24.5 24.5 0.0
Other countries 25.0 25.0 0.0 7.7 7.7 0.0
Total 254.3 254.3 0.0 130.4 130.4 0.0
COMPARATIVE IFRS INFORMATION Q3 2004
CONSOLIDATED INCOME STATEMENT - CONTINUING AND DISCONTINUING OPERATIONS. TOTAL
Finland 283.1 283.1 0.0 99.1 99.1 0.0
Other EU
member states 52.5 52.5 0.0 7.2 7.2 0.0
Other countries 25.8 25.8 0.0 0.8 0.8 0.0
Total 361.4 361.4 0.0 107.1 107.1 0.0
COMPARATIVE IFRS INFORMATION Q4 2004
CONSOLIDATED INCOME STATEMENT - CONTINUING AND DISCONTINUING OPERATIONS. TOTAL
Net sales 48.9 48.9 0.0 0.0 0.0 0.0
Other operating
income 1.2 1.2 0.0 0.0 0.0 0.0
Operating expenses -52.8 -53.8 1.0 0.0 0.0 0.0
Depreciations -0.6 -0.5 -0.1 0.0 0.0 0.0
Operating
profit/loss (6) -3.3 -4.2 0.9 0.0 0.0 0.0
Financial income
and expenses -0.4 -0.4 0.0 0.0 0.0 0.0
Profit/loss
before taxes -3.7 -4.6 0.9 0.0 0.0 0.0
Income taxes 0.0 0.0 0.0 0.0 0.0 0.0
Profit/loss
for the period -3.7 -4.6 0.9 0.0 0.0 0.0
Attributable to:
Equity holders
of the parent -3.7 -4.6 0.9 0.0 0.0 0.0
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0
CONSOLIDATED BALANCE SHEET
IFRS FAS DIFFERENCE
DEC 31 DEC 31
2004 2004
ASSETS
Non-current assets
Tangible assets (7) 70.0 69.4 0.6
Goodwill (1) 17.4 14.0 3.4
Other intangible assets 2.5 2.6 -0.1
Investments in
associate companies (6) 23.5 21.4 2.1
Available-for-sale
financial assets (9) 2.9 1.4 1.5
Own shares (3) 0.0 0.8 -0.8
Deferred tax assets (8) 2.2 0.7 1.5
118.5 110.2 8.2
Current assets
Inventories (12) 49.5 46.0 3.5
Receivables 37.2 37.0 0.2
Financial assets at fair value
through profit or loss 0.5 0.5 0.0
Cash and cash equivalents 9.7 9.7 0.0
97.0 93.2 3.7
Total assets 215.4 203.5 11.9
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent 104.3 97.5 6.8
Minority interest 2.5 1.6 0.9
Total equity 106.8 99.1 7.7
Finland 383.2 383.2 0.0 100.1 100.1 0.0
Other EU
member states 59.6 59.6 0.0 7.1 7.1 0.0
Other countries 31.0 31.0 0.0 5.2 5.2 0.0
Total 473.8 473.8 0.0 112.4 112.4 0.0
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
Further information: Erkki Lepistö, tel. +358 10 402 4001
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE April 15, 2005 12.00 am
LÄNNEN TEHTAAT'S FIRST-QUARTER FINANCIAL PERFORMANCE WILL INCLUDE THE EFFECTS OF
ONE-OFF EXPENSES OF EUR 3.2 MILLION FROM CLOSURE OF SUOMEN REHU'S VAASA FACTORY
Following completion of the mandatory negotiations between the employer and
employees concerning the closure of Suomen Rehu's factory in Vaasa, which were
begun in March, Suomen Rehu Ltd, which is part of the Lännen Tehtaat Group, has
decided to phase out its animal feed factory in Vaasa by summer 2006. The
factory's production will be transferred to other production plants in the animal
feeds group.
The negotiations concerned a total of 34 employees. Pension arrangements are
possible in the case of 8 employees. Some 10-14 new jobs will be created in the
other units of the animal feeds group, and priority will be given to the Vaasa
factory personnel in filling the new vacancies.
Production will be transferred to other factories in phases in order to ensure
delivery capacity.
By closing down the factory, Suomen Rehu aims at an improvement of more than EUR
two million in annual profits. The full effects of the arrangement will not be
felt on profits until 2007. As a result of the decision to close down the
factory, write-downs on fixed assets and reserves for expenses totalling EUR 3.2
million in one-off expenses will be made in the financial accounts for the first
quarter. These one-off expenses will not affect the cash flow.
Lännen Tehtaat's interim report for the January-March period will be issued on
May 3, 2005.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
Further information: CEO Erkki Lepistö, tel. +358 10 402 4001, Jukka Haikonen,
tel. +358 10 402 7000.
Distribution:
Helsinki Stock Exchange
Main media
www.lannen
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE MARCH 31, 2005 at 5;40 p.m.
LÄNNEN TEHTAAT PLC ANNUAL GENERAL MEETING
The Annual General Meeting on March 31, 2005 approved the financial statements,
discharged those accountable from liability and decided to distribute a dividend
of EUR 0.65 per share.
MATTERS DEALT WITH BY THE ANNUAL GENERAL MEETING
FINANCIAL STATEMENTS
The Annual General Meeting approved the Company's and the Group's profit and loss
accounts and balance sheets, and discharged the members of the Board of
Directors, the members of the Supervisory Board and the President from liability
for the financial year 2004.
The Annual General Meeting decided to distribute as dividend EUR 0.65 per share.
The record date is April 5, 2005 and the dividend payment date April 12, 2005.
ELECTION OF THE MEMBERS OF THE SUPERVISORY BOARD AND THE AUDITORS
Hannu Lamminen, Juha Nevavuori and Helena Walldén were re-elected to the
Supervisroy Board. Marja-Liisa Mikola-Luoto, Jarmo Mäntyharju, Tuomo Raininko and
Mauno Ylinen were elcted as new members.
Hannu Pellinen, Authorized Public Accountant, and PricewaterCoopers Oy
Authorized Public Accountants with Jari Henttula, Authorized Public Accountant as
responsible auditor, were elected as auditors.
RAISING THE SHARE CAPITAL
The Annual General Meeting decided to authorize 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 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.
SURRENDERING THE COMPANY'S OWN SHARES
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 Exchanges.
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.
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Board of Directors' proposals to amend sections 2, 5, 6, 9, 10 and 11 of the
Articles of Association were approved as presented. The amended section 7
regarding the authorization to sign for the Company was approved as follows: The
Company is signed for by the members of the Board of Directors, two together, or
the President with a member of the Board of Directors. A holder of procuration
authorized by the Board of Directors signs for the Company together with a member
of the Board of Directors, the President or another holder of procuration.
The proposal in its entirety has been published on February 23, 2005 in a Stock
Exchange Release.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
More details: Erkki Lepistö, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Stock exchange announcement March 22, 2005
LÄNNEN TEHTAAT ANNUAL REPORT 2004 PUBLISHED
Lännen Tehtaat Annual Report for 2004 with financial statements has been
published today in Finnish and English.
The Annual Report can also be read at www.lannen.fi/investor information. A
printed version of the Annual Report can be ordered by telephone +358 10 40200 or
by e-mail .
LÄNNEN TEHTAAT PLC
Riitta Jaakkola
Director of Finance
tel +358 10 402 4020
LÄNNEN TEHTAAT PLC STOCK EXCHANGE ANNOUNCEMENT March 12, 2005
SUMMONS TO ANNUAL GENERAL MEETING OF LÄNNEN TEHTAAT PLC
Company shareholders are hereby invited to the Annual General Meeting, which will
be held on Thursday, March 31, 2005, starting at 2:00 p.m. in the Lännen Tehtaat
staff restaurant in Iso-Vimma, Säkylä.
The AGM will deal with the following:
1. Items to be dealt with by the AGM under section 11 of the Articles of
Association.
2. A Board of Directors proposal that the Board be authorized to decide to
raise the share capital in one or more new share issues and/or to issue a
convertible bond in one or more instalments. In a new share issue and/or an
issue through a convertible bond, the share capital can be raised by a
maximum of EUR 1,263,514 or by a smaller amount in such a way that a maximum
of 631,757 shares with a nominal value of EUR 2.00 are offered for
subscription. The authorization also covers the right in targeted issues to
diverge from the shareholders' pre-emptive subscription right, and to decide
on the subscription prices and terms, and other terms and aspects related to
a new share issue. The authorization is valid for one year, starting from
the date of the AGM decision.
3. A Board of Directors proposal that the Board be authorized to decide to
surrender the company's own shares, diverging from the shareholders' pre-
emptive subscription right. 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, 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 Board may not make a decision on divergence
from pre-emptive subscription rights that benefits members of the inner
circle of the company. The authorization is valid for one year, starting
from the date of the AGM decision.
4. A Board of Directors proposal to amendment the sections 2, 5 6, 7, 10 and
11 of the Articles of Association as follows:
Existing section 2
Sphere of operations
The Company engages in commercial activities concerning food, animal feed,
the metal industry and seedling technology and other related activities in
Finland and abroad either directly or through subsidiaries or associated
companies. The Company may own and manage real estate and shares and other
securities and engage in trade in them.
Amended section 2
Sphere of operations
The Company engages in commercial activities concerning food, animal feed
and seedling technology and other related activities in Finland and abroad
either directly or through subsidiaries or associated companies. The Company
may own and manage real estate and shares and other securities and engage in
trade in them.
Existing section 5
Board of Directors
By a decision of the Administrative Council, the Board of Directors shall
comprise at least four and at most seven members, one of whom shall be the
Company's President. Persons who have attained the age of 65 are ineligible
for election to the Board of Directors.
The term of a member of the Board of Directors ends at the close of the
Administrative Council meeting following the first Annual General Meeting
immediately after the election.
The Board of Directors is quorate when the chairman or deputy chairman and
at least half the other Board members are present.
Amended section 5
Board of Directors
By a decision of the Supervisory Board, the Board of Directors shall
comprise at least five and at most seven members. Persons who have attained
the age of 65 are ineligible for election to the Board of Directors.
The term of a member of the Board of Directors ends at the close of the
Supervisory Board meeting following the first Annual General Meeting
immediately after the election.
The Board of Directors is quorate when the chairman or deputy chairman and
at least half of the other Board members are present.
Existing section 6
President
The Company has a President elected by the Administrative Council.
The Company may have one or more Vice-Presidents appointed by the Board of
Directors.
Amended section 6
President
The Company has a President elected by the Board of Directors.
The Company may have one or more Vice-Presidents appointed by the Board of
Directors.
Existing section 7
Authorization to sign for the Company
The Company is signed for by the members of the Board of Directors, two
together, or a holder of procuration authorized by the Board of Directors
together with a member of the Board of Directors or another holder of
procuration.
Amended section 7
Authorization to sign for the Company
The Company is signed for by the members of the Board of Directors, two
together, and the President or a holder of procuration authorized by the
Board of Directors together with a member of the Board of Directors or
another holder of procuration.
Existing section 9
Administrative Council
The Administrative Council shall supervise the management of the Company
exercised by the Board of Directors and the President.
In addition, the Administrative Council shall:
1. decide on the number of members of the Board of Directors, elect the
members of the Board and fix the fees and other remunerations payable to
the members of the Board,
2. elect a chairman and deputy chairman from among the members of the Board,
3. elect the President and decide his/her salary and other benefits
4. decide on any substantial changes in the Company's business
5. issue an opinion on the financial statements and auditors' report
6. convene shareholders' meetings and prepare the issues to be dealt with at
them.
Amended section 9
Supervisory Board
The Supervisory Board shall supervise the management of the Company
exercised by the Board of Directors and the President.
In addition, the Supervisory Board shall:
1. decide on the number of members of the Board of Directors, elect the
members of the Board and fix the fees and other remunerations payable to
the members of the Board,
2. elect a chairman and deputy chairman from among the members of the Board,
3. issue an opinion on the financial statements and auditors' report
Existing section 10
Summons to a shareholders' meeting
The summons to a shareholders' meeting shall be published in at least two
national newspapers determined by the Administrative Council, at the
earliest two months and at the latest 17 days before the shareholders'
meeting and one week before the prior registration date specified in the
summons.
In order to attend the meeting, shareholders shall register with the Company
at the latest on the date specified in the Administrative Council summons,
at the earliest ten days before the meeting.
Amended section 10
Summons to a shareholders' meeting
The summons to a shareholders' meeting shall be published in at least two
national newspapers determined by the Board of Directors, at the earliest
two months and at the latest 17 days before the shareholders' meeting and
one week before the prior registration date specified in the summons.
In order to attend the meeting, shareholders shall register with the Company
at the latest on the date specified in the Board of Directors summons, at
the earliest ten days before the meeting.
Existing section 11
Shareholders' meeting
The Annual General Meeting shall be held annually at the latest by the end
of May on a date determined by the Administrative Council.
At the Annual General Meeting the following shall be
presented
1. the financial statements,
2. the auditors' report,
3. the Administrative Council's opinion on the financial statements and the
auditors' report;
decided
4. approval of the Company income statement and balance sheet and the
consolidated income statement and balance sheet,
5. measures called for by the profit or loss reported in the approved
balance sheet or consolidated balance sheet,
6. granting discharge of liability to the members of the Board of Directors
and Administrative Council and to the President,
7. the number of Administrative Council members and their remuneration
8. the number of auditors and their remuneration
elected
9. the members of the Administrative Council,
10. the auditors,
dealt with
11. any other matters mentioned in the summons to the meeting.
Individual shareholders are not entitled to exercise voting powers
representing more than one tenth of the votes at the meeting.
Amended section 11
Shareholders' meeting
The Annual General Meeting of shareholders shall be held annually at the
latest by the end of May on a date determined by the Board of Directors.
At the Annual General Meeting the following shall be
presented
1. the financial statements,
2. the auditors' report,
3. the Supervisory Board's statement on the financial statements and the
auditors' report;
decided
4. approval of the Company income statement and balance sheet and the
consolidated income statement and balance sheet,
5. measures called for by the profit or loss reported in the approved
balance sheet or consolidated balance sheet,
6. granting discharge of liability to the members of the Board of Directors
and Supervisory Board and to the President,
7. the number of the members of the Supervisory Board and their
remuneration,
8. the number of auditors and their remuneration,
elected
9. the members of the Supervisory Board,
10. the auditors,
dealt with
11. any other matters mentioned in the summons to the meeting.
Individual shareholders are not entitled to exercise voting powers
representing more than one tenth of the votes at the meeting.
Distribution of dividend
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.65 per share be paid for the financial year 2004. Dividend will be paid to
shareholders whose shares are registered by the Finnish Central Securities
Depository Ltd, not later than the record date, April 5, 2005. The dividend will
be paid on April 12, 2005.
Right to attend the Annual General Meeting
A shareholder whose shares have been registered in the register of shareholders
maintained by the Finnish Central Securities Depository Ltd not later than March
21, 2005 has the right to attend the Annual General Meeting.
A shareholder who was entered in the company's share register prior to 20 May
1995 also has the right to attend the Annual General Meeting. In these
circumstances, the shareholder must at the Annual General Meeting present his
share certificates or some other evidence that the right of ownership to the
shares has not been entered into a book-entry account.
Notification of intended participation at the Annual General Meeting must be
given to the company not later than March 29, 2005 before 4:00 p.m. local time
either by writing to Lännen Tehtaat plc, P.O.Box. 100, 27801 Säkylä, or by
telefax +358 10 402 4022 or by phoning +358 10 402 4002/Arja Antikainen or by e-
mail . If notice is given by letter, this should arrive
before the above mentioned time. Possible proxies should be forwarded to the same
place within the same time.
Documents
The financial statement documents and other documents required under the
Companies Act can be inspected during the week before the shareholders' meeting
at the company's head office, Lännen Tehtaat plc, Maakunnantie 4, 27820 Säkylä.
Copies of documents will be sent to shareholders on request.
Säkylä, March 8, 2005
LÄNNEN TEHTAAT PLC
Supervisory Board
Distribution:
Helsinki Stock Exchange
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE March 10, 2005 at 12.30
SUOMEN REHU BUYS MILDOLA
Suomen Rehu Ltd, which is part of the Lännen Tehtaat Group, has today purchased
65 per cent of the share capital of the food company Mildola Oy. The purchase
price of the shares acquired by Suomen Rehu Ltd was EUR 3.9 million. Suomen
Rehu's ownership of Mildola stood at 17.5% before the deal and is now 82.5%. The
share capital was purchased from Unilever Finland Oy, Inex Partners Oy, Eka-
kiinteistöt Oy and the SOK Corporation. The remaining 17.5% of Mildola's shares
are held by Maatalouskesko Oy, as a minority shareholder. The deal is subject to
the approval of the competition authorities.
Mildola Oy is Finland's leading manufacturer of vegetable oils produced through
pressing. Mildola provides its domestic and international customers with refined
vegetable oils and protein feed produced from rapeseed and soya. There are 38
people working for the company at Kantvik in Kirkkonummi.
Mildola's net turnover in 2004 was EUR 41 million, its operating profit before
depreciation was EUR 2.4 million and its profit before appropriations and taxes
EUR 0.7 million. The trade value of Mildola's total share capital (100%) is EUR 6
million, and its net asset value at December 31, 2004 was EUR 12.5 million. The
company's net interest-bearing liabilities at December 31, 2004 were EUR 0.8
million. The accumulated depreciation in excess of plan includes deferred tax
liability of EUR 2.4 million.
Mildola fits naturally into the business operations of Lännen Tehtaat's Food and
Agricultural Divisions. Mildola is a significant buyer of Finnish rapeseed. The
company's most important products are refined vegetable oils for consumers and
companies in the food industry. Suomen Rehu Ltd, as a buyer of rapeseed cake and
soya bean meal (both by-products from Mildola's food manufacturing process), is
the company's single largest customer. The acquisition of Mildola Oy by the
Lännen Tehtaat Group will increase Lännen Tehtaat's annual net turnover by more
than EUR 20 million. The deal will have no essential effect on Lännen Tehtaat's
profit in 2005.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
More information: Erkki Lepistö, tel. +358 10 402 4002
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
An amendment to the Annual Accounts Information January 1 - December 31, 2004
In Lännen Tehtaat Group's Consolidated profit and loss account the figure given
in Costs and expenses 1-12/2004 should be 459.5 instead of 495.5. The amendment
has no effect on the other figures presented in the financial statements.
LÄNNEN TEHTAAT PLC
Riitta Jaakkola
Director of Finance
For additional information: Riitta Jaakkola, tel +358 10 402 4020
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE January 24, 2005 9.00 am
SUOMEN REHU PLANS TO IMPROVE OPERATING EFFICIENCY BY CLOSING ITS VAASA FACTORY
All elements of the Finnish food business have been under considerable pressure
in recent years to become more cost effective. The Lännen Tehtaat Group's animal
feeds business has responded to these demands by cutting costs, improving the
efficiency of its processes and optimizing the division of activities between its
factories. It is nevertheless becoming clear that these measures will be
insufficient in the future.
Structural changes are needed in order to achieve improvements in cost
effectiveness and to safeguard competitiveness. As a result, Suomen Rehu is to
begin statutory codetermination talks between staff and management on the closure
of the company's animal feeds factory at Vaasa and the transfer of its production
to other factories within the Suomen Rehu Group. The talks concern the jobs of 34
employees.
By closing the factory, the company aims to achieve an annual saving of about EUR
3 million. The savings are expected to be made gradually from 2006 onwards. The
closure of the factory would have a negative effect on the Lännen Tehtaat Group's
net profit for 2005. The value of the Vaasa factory's fixed assets entered in the
consolidated balance sheet on December 31, 2004 was approximately EUR 4 million.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
CEO
More information: Erkki Lepistö, tel. +358 10 402 4002
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
BOARD PROPOSALS TO LÄNNEN TEHTAAT ANNUAL GENERAL MEETING
I DIVIDEND
The Board of Directors proposes to the Annual General Meeting that
a dividend of EUR 0.65 per share be paid for the financial year
2004.
II AUTHORIZATION TO INCREASE SHARE CAPITAL
The Board of Directors proposes to the Annual General Meeting that
the Companys Board of Directors be authorized, in derogation from
the shareholders pre-emptive right to subscribe, to decide on
increasing the share capital by one or more new issues and/or
taking out a convertible loan in one or more tranches on the
following conditions:
1. The new issue and/or new issue based on the convertible loan
will allow the share capital to be increased by a maximum of EUR
1,263,514 or an amount smaller than this, which corresponds,
taking into account existing unused authorizations, to no more
than one tenth of the companys share capital registered at the
time of the AGM authorization decision and the Board of Directors
decision to make the increase, and of the combined voting rights
of the shares so that a maximum of 631,757 shares will be put up
for subscription at a nominal value of EUR 2 per share.
2. The authorization covers the right in targeted issues to
disregard the shareholders pre-emptive right to subscribe new
shares and/or convertible loans on condition that the company has
a pressing financial reason to do so, and the right to decide on
the new issue so that the shares can be subscribed against
property given as a subscription in kind or otherwise under
certain conditions or by using the right of set-off.
The authorization can be used, for example, for implementing a
corporate acquisition, some other development of the companys
business operations, broadening the ownership base or
strengthening the capital structure or for similar purposes.
3. The authorization also covers the right to decide on those who
are entitled to subscribe, the subscription prices and terms and
conditions, the terms and conditions of the convertible loan and
other terms and conditions and matters associated with the new
issue and/or taking out the convertible loan. The Board of
Directors is not permitted to make a decision about derogating
from the pre-emptive right to subscribe if this would be for the
benefit of a person belonging to the inner circle of the Company.
4. The authorization is valid for one year from the decision of
the AGM.
III AUTHORIZATION FOR SURRENDER OF OWN SHARES
The Board of Directors will propose to the Annual General Meeting
that the Board be authorized to surrender the companys own shares
in derogation from the shareholders prior subscription right.
The authorization concerns the 65,000 company shares acquired for
the company under authorization of the AGM on April 5, 2001.
The Board of Directors will be authorized to decide to whom and in
what order company shares will be surrendered. The shares can be
surrendered in one or more lots. The Board can decide on surrender
of its own shares otherwise than in the pre-emptive right of
shareholders to acquire companys own shares.
The shares can be surrendered in one or more lots as decided by
the Board in connection with corporate transactions or other
arrangements, or for some other similar purpose that the Board
considers practicable.
The shares can also be sold in public trading on the Helsinki
Stock Exchange.
Shares will be surrendered at their current value at the time of
surrender, determined in public trading on the Helsinki Exchange.
They can also be surrendered against other than monetary
consideration.
The authorization is valid for one year from the AGM decision.
Justification for divergence from right of pre-emption;
When shares are surrendered, the Board can decide to diverge from
the shareholders' right of pre-emption within the limits laid down
in the Companies Act if there is some weighty financial reason for
so doing on the company's part. The shares can also be surrendered
through public trading, when all would have an equal right to
purchase them.
IV AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Board of Directors proposes to the Annual General Meeting that
sections 2, 5 6, 7, 10 and 11 of the Articles of Association be
amended to be as follows:
Existing section 2
Sphere of operations
The Company engages in commercial activities concerning food,
animal feed, the metal industry and seedling technology and
other related activities in Finland and abroad either
directly or through subsidiaries or associated companies. The
Company may own and manage real estate and shares and other
securities and engage in trade in them.
Amended section 2
Sphere of operations
The Company engages in commercial activities concerning food,
animal feed and seedling technology and other related
activities in Finland and abroad either directly or through
subsidiaries or associated companies. The Company may own and
manage real estate and shares and other securities and engage
in trade in them.
Existing section 5
Board of Directors
By a decision of the Administrative Council, the Board of
Directors shall comprise at least four and at most seven
members, one of whom shall be the Company's President.
Persons who have attained the age of 65 are ineligible for
election to the Board of Directors.
The term of a member of the Board of Directors ends at the
close of the Administrative Council meeting following the
first Annual General Meeting immediately after the election.
The Board of Directors is quorate when the chairman or deputy
chairman and at least half the other Board members are
present.
Amended section 5
Board of Directors
By a decision of the Supervisory Board, the Board of
Directors shall comprise at least five and at most seven
members. Persons who have attained the age of 65 are
ineligible for election to the Board of Directors.
The term of a member of the Board of Directors ends at the
close of the Supervisory Board meeting following the first
Annual General Meeting immediately after the election.
The Board of Directors is quorate when the chairman or deputy
chairman and at least half of the other Board members are
present.
Existing section 6
President
The Company has a President elected by the Administrative
Council.
The Company may have one or more Vice-Presidents appointed by
the Board of Directors.
Amended section 6
President
The Company has a President elected by the Board of
Directors.
The Company may have one or more Vice-Presidents appointed by
the Board of Directors.
Existing section 7
Authorization to sign for the Company
The Company is signed for by the members of the Board of
Directors, two together, or a holder of procuration
authorized by the Board of Directors together with a member
of the Board of Directors or another holder of procuration.
Amended section 7
Authorization to sign for the Company
The Company is signed for by the members of the Board of
Directors, two together, and the President or a holder of
procuration authorized by the Board of Directors together
with a member of the Board of Directors or another holder of
procuration.
Existing section 9
Administrative Council
The Administrative Council shall supervise the management of
the Company exercised by the Board of Directors and the
President.
In addition, the Administrative Council shall:
1. decide on the number of members of the Board of Directors,
elect the members of the Board and fix the fees and other
remunerations payable to the members of the Board,
2. elect a chairman and deputy chairman from among the
members of the Board,
3. elect the President and decide his/her salary and other
benefits
4. decide on any substantial changes in the Company's
business
5. issue an opinion on the financial statements and auditors'
report
6. convene shareholders' meetings and prepare the issues to
be dealt with at them.
Amended section 9
Supervisory Board
The Supervisory Board shall supervise the management of the
Company exercised by the Board of Directors and the
President.
In addition, the Supervisory Board shall:
1. decide on the number of members of the Board of Directors,
elect the members of the Board and fix the fees and other
remunerations payable to the members of the Board,
2. elect a chairman and deputy chairman from among the
members of the Board,
3. supervise the management of the Company exercised by the
Board of Directors and the President
4. issue an opinion on the financial statements and auditors'
report
Existing section 10
Summons to a shareholders' meeting
The summons to a shareholders' meeting shall be published in
at least two national newspapers determined by the
Administrative Council, at the earliest two months and at the
latest 17 days before the shareholders' meeting and one week
before the prior registration date specified in the summons.
In order to attend the meeting, shareholders shall register
with the Company at the latest on the date specified in the
Administrative Council summons, at the earliest ten days
before the meeting.
Amended section 10
Summons to a shareholders' meeting
The summons to a shareholders' meeting shall be published in
at least two national newspapers determined by the Board of
Directors, at the earliest two months and at the latest 17
days before the shareholders' meeting and one week before the
prior registration date specified in the summons.
In order to attend the meeting, shareholders shall register
with the Company at the latest on the date specified in the
Board of Directors summons, at the earliest ten days before
the meeting.
Existing section 11
Shareholders' meeting
The Annual General Meeting shall be held annually at the
latest by the end of May on a date determined by the
Administrative Council.
At the Annual General Meeting the following shall be
presented
1. the financial statements,
2. the auditors' report,
3. the Administrative Council's opinion on the financial
statements and the auditors' report;
decided
4. approval of the Company income statement and balance sheet
and the consolidated income statement and balance sheet,
5. measures called for by the profit or loss reported in the
approved balance sheet or consolidated balance sheet,
6. granting discharge of liability to the members of the
Board of Directors and Administrative Council and to the
President,
7. the number of Administrative Council members and their
remuneration
8. the number of auditors and their remuneration
elected
9. the members of the Administrative Council,
10. the auditors,
dealt with
11. any other matters mentioned in the summons to the
meeting.
Individual shareholders are not entitled to exercise voting
powers representing more than one tenth of the votes at the
meeting.
Amended section 11
Shareholders' meeting
The Annual General Meeting of shareholders shall be held
annually at the latest by the end of May on a date determined
by the Board of Directors.
At the Annual General Meeting the following shall be
presented
1. the financial statements,
2. the auditors' report,
3. the Supervisory Board's statement on the financial
statements and the auditors' report;
decided
4. approval of the Company income statement and balance sheet
and the consolidated income statement and balance sheet,
5. measures called for by the profit or loss reported in the
approved balance sheet or consolidated balance sheet,
6. granting discharge of liability to the members of the
Board of Directors and Supervisory Board and to the
President,
7. the number of the members of the Supervisory Board and
their remuneration,
8. the number of auditors and their remuneration,
elected
9. the members of the Supervisory Board,
10. the auditors,
dealt with
11. any other matters mentioned in the summons to the
meeting.
Individual shareholders are not entitled to exercise voting
powers representing more than one tenth of the votes at the
meeting.
LÄNNEN TEHTAAT PLC
Board of Directors
Erkki Lepistö
CEO
More details: Erkki Lepistö, CEO, tel. +358 10 402 4002
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Stock exchange release Feb. 24, 2005 at 9;00 am
ANNUAL ACCOUNTS INFORMATION January 1 December 31, 2004
Net turnover by Lännen Tehtaat totalled EUR 473.8 (2003: 492.0)
million. The consolidated operating profit was EUR 8.7 (11.7) million
and profit before extraordinary items EUR 7.7 (8.4) million. Earnings
per share came to EUR 0.97(1.11). The Board will propose a dividend of
EUR 0.65 (0.65) per share to the Annual General Meeting.
Group structure
Several changes occurred in the Group structure during 2004. The most
significant of these were the acquisition of a majority holding in
Kuopion Kalatukku Oy and its incorporation into the Group in June, and
the exit of the Machinium Division from the Group in July, when
Machinium Ltd and its Swedish subsidiaries filed for bankruptcy.
Ateriamestarit Oy, the joint venture set up with Raisio Nutrition Ltd,
began operations in May. At the end of the year, the Group acquired
external minority shareholdings in its Agricultural Divisions animal
feeds business: the 25.0% minority holding in SIA Baltic Feed was
acquired in late November, and the 12.1% minority holding in the
Suomen Rehu Group was acquired in late December. Following this, the
Suomen Rehu Group is now wholly owned by Lännen Tehtaat.
The Food Division consists of Apetit and Lännen Sugar, both units of
Lännen Tehtaat plc, and Apetit Kala Oy (formerly Kuopion Kalatukku
Oy), which was incorporated into the Division in June. At the end of
the year, Tresko Fish Ltd and Kalatori Foods Oy were merged into
Apetit Kala Oy.
The Agricultural Division consists of the following companies: Suomen
Rehu Ltd and its subsidiary companies Lännen Rehu Oy and Hiven Oy in
Finland, SIA Baltic Feed in Latvia and Rehu Eesti Oü in Estonia; Avena
Nordic Grain Oy and its Russian subsidiary ZAO Avena St. Petersburg;
and Lännen Plant Systems and Harviala Oy.
Of the associated companies, Sucros Ltd, Ateriamestarit Oy and Ab
Silva Seafood Oy belong to the Food Division, while Movere Oy and
Farmit Website Oy are part of the Agricultural Division.
The Machinium Division, which was disengaged from the Lännen Tehtaat
Group in July, comprised Machinium Ltd as the parent company and the
following subsidiaries: Lännen Engineering Oy and Suomen Rakennuskone
Oy in Finland; SMA Construction AB and SMA Maskin AB, plus its
subsidiary SMA Maskinuthyrning AB, in Sweden; AS Balti Ehitusmasin-
Baltem in Estonia; SIA BCM Baltijas Celtniecibas Masina in Latvia; and
UAB Baltijos Statybines Masinos in Lithuania.
Net turnover
The Lännen Tehtaat Groups consolidated net turnover totalled EUR
473.8 (2003: EUR 492.0) million. The Food Division accounted for 28%
(23) of this figure, the Agricultural Division for 62% (58) and the
Machinium Division for 10% (19).
The Food Divisions net turnover was EUR 130.6 (114.9) million. The
increase on the previous years net turnover was entirely due to the
addition of Apetit Kala to the Division in June. Sales of Apetits
retail products were up slightly on the 2003 figure, whereas food-
industry sales and exports were down on the previous figures. From
June onwards, sales of sugar manufactured in Finland fell below their
previous years level. This was due to imports of sugar for the
Finnish retail trade from the Baltic States, following their accession
to the European Union in May.
Net turnover for the Agricultural Division was EUR 294.3 (282.6)
million. Net turnover in the animal feeds business was below the
previous years level and fell slightly short of the targeted figure.
Grain trade net turnover for Avena Nordic Grain was considerably
higher than in 2003. Other operations in the Agricultural Division
accounted for only a minor proportion of the Divisions net turnover.
For the period up to its exit from the Lännen Tehtaat Group, the
Machinium Divisions net turnover totalled EUR 48.9 million (2003 full
year: EUR 94.5 million).
Net turnover for the parent company Lännen Tehtaat plc was EUR 107.5
(115.0) million.
Profits
The consolidated operating profit for 2004 was EUR 8.7 (11.7) million
and profit before extraordinary items EUR 7.7 (8.4) million. These
figures were affected by the provision of EUR 4.0 million entered in
June to cover the realization of liabilities and other losses in the
bankruptcy of Machinium Ltd.
Direct taxes recorded in the profit and loss account came to EUR 1.4
(2.6) million.
After taxes and minority interests, the Groups profit for the
financial year came to EUR 6.0 (6.7) million.
The Food Divisions operating profit amounted to EUR 5.2 (6.5) million
in 2004. Apetits profitability fell short of the previous years
level due to low sales prices, higher raw material costs and the lower
margins resulting from the lower net turnover for food-industry sales
and exports. Profits were also affected by the lower profit
contribution (EUR 0.8 million) of the associated company Sucros. The
Divisions operating profit was boosted by Apetit Kala during the
second half of the year.
The Agricultural Divisions operating profit amounted to EUR 8.2 (8.3)
million. Profitability in the animal feeds business was almost at the
targeted level but was below the previous years figure. Profitability
was weakened by the drop in sales margins in the second and third
quarters as a result of high raw material prices. Grain trade
profitability was at the 2003 level.
The Machinium Division recorded an operating loss for the year: EUR
4.7 (-3.1) million.
Fourth-quarter net turnover and net profit
Net turnover in October-December was EUR 112.4 (129.2) million, of
which the Food Division accounted for EUR 37.8 (27.3) million and the
Agricultural Division for EUR 74.6 (73.4) million. The Machinium
Divisions fourth-quarter net turnover in 2003 was EUR 28.5 million.
Lännen Tehtaats fourth-quarter operating profit was EUR 5.2 (3.3)
million and its profit before extraordinary items EUR 5.2 (2.4)
million. The Food Division accounted for EUR 1.9 (1.8) million and the
Agricultural Division for EUR 3.3 (2.7) million of the operating
profit. In the fourth quarter of 2003, the Machinium Division made an
operating loss of EUR 1.2 million.
Financing
The Groups financing position changed significantly following the
exit of Machinium. Interest-bearing liabilities totalled EUR 46.2
(73.7) million at the end of the year, and financial assets amounted
to EUR 10.2 (13.1) million. At the end of the financial year,
commercial papers totalling EUR 13.0 (15.0) million had been issued
for short-term financing. Liquidity was secured by long-term committed
credit facilities; no credit facilities were used during the year. Net
financial expenses came to EUR 1.1 (3.3) million. The reduction on the
previous years figure was due to the repayment of high-interest
shareholder loans, the reduction in other debt capital, and the
increase in dividend yields. The equity ratio was 49% (40) at the end
of the year.
Annual General Meeting, share capital and shares
Lännen Tehtaat plcs Annual General Meeting on March 24, 2004 decided
to distribute a dividend of EUR 0.65 (0.30) per share.
The Annual General Meeting authorized the Board of Directors to decide
on increasing the share capital through a new issue and/or by taking a
convertible loan in one or more tranches. In the new issue and/or new
issue based on a convertible bond, the share capital may be increased
by a maximum of EUR 1,222,514, which would mean a maximum of 611,257
shares for subscription. The authorization remains valid for one year
from the date of the AGM. Increasing the share capital and/or taking a
convertible bond is permitted as an exception to the shareholders
right of pre-emption provided that there is a weighty financial reason
for such an exception.
In June, the Board of Directors used the authorization given by the
AGM to increase the companys share capital. The increase took the
form of a targeted share issue in which Antti Räsänen subscribed
195,000 Lännen Tehtaat plc shares in return for a contribution in
kind. The increase in share capital was entered in the Trade Register
on June 22, 2004. The new total number of shares is 6,317,576 and the
share capital EUR 12,635,152. Trading in the new shares on the
Helsinki Stock Exchange began on June 23, 2004.
The AGM also authorized the Board of Directors to decide on the
surrender of Lännen Tehtaat plc shares. Under this authorization, the
Board may surrender 65,000 previously purchased Lännen shares. The
shares may be surrendered in connection with corporate acquisitions or
for a similar purpose, or sold in public trading on the Helsinki Stock
Exchange. The authorization is valid for one year from the date of the
AGM.
The Board has not yet made use of the authorization. The 65,000 Lännen
Tehtaat plc shares in the companys possession represent 1.0% of the
total share capital and total votes.
Investment
Gross investment in non-current assets came to EUR 11.1 (9.5) million.
Investment by the Food Division totalled EUR 5.3 (1.7) million, and by
the Agricultural Division EUR 5.5 (7.1) million. The most significant
investments were the acquisition of a majority holding in Apetit Kala
Oy (formerly Kuopion Kalatukku Oy) through a share exchange in June,
and the minority shareholding purchase in connection with Suomen Rehu
Group. The purchase price of the Apetit Kala Oy shares was EUR 2.6
million, and the price of the minority shares in the animal feeds
business totalled EUR 2.9 million. The Groups other investments were
in productivity and replacement equipment.
Investment by the Machinium Division amounted to EUR 0.3 (0.7) million
up to the time it was disengaged from the Group.
R&D
The Groups product development expenses accounted for 0.6% (0.7) of
net turnover. In animal feeds, the emphasis in 2004 was on the
development of feeding that advances animal health and wellbeing,
feeding technologies that improve the profitability of livestock
production, and the special feeds business.
In food products, the development focus was on the Apetit products. A
new series of vegetable products designed to be steam-cooked in a
microwave was launched in the autumn. The Quick & Tasty fast-food
range, containing plenty of vegetables but little fat, was expanded to
include several new products, such as soups.
Environmental matters
Environmental protection and development expenses have been charged to
the profit and loss account.
Reform of the EUs sugar regime
In July 2004, the European Commission published its plans for changes
to the EU sugar regime. The proposed reform would lead to a cut in
sugar quotas, a reduction in sugar and sugar beet prices, and the
abandonment of country-specific quotas. The aim of the reform is to
cut sugar overproduction and reduce sugar prices in the EU. In the
form proposed, the plan is a threat to sugar beet growing and the beet
sugar industry in peripheral regions of the EU, including Finland.
Together with ten other EU Member States, Finland has proposed changes
to the Commissions plan that would take better account of the Unions
peripheral regions. The EU will also have to take into consideration
its own commitment to the impoverished ACP countries and India. Sugar
imported from these countries is given Community Preference in the EU,
and a higher price is given for their sugar than on the world market.
The reform would therefore also have a damaging effect on the
economies of developing countries.
The EU has appealed against the decision of the WTOs Dispute
Settlement Body concerning the trade dispute between the EU and the
main sugar-producing countries outside the EU. The EU is not likely to
issue proposals for new sugar regulations before the appeal process
has been concluded. New proposals are, however, likely to be issued
before the WTOs ministerial conference in December 2005.
Reform of the sugar regime in one form or another will probably be
introduced for the 2006 harvest. A drop in the price of sugar will
have a detrimental effect on the financial performance of the sugar
sector, including Lännen Tehtaat, in the years to come.
Transition to IFRS reporting
In 2005, the Lännen Tehtaat Group will begin reporting its financial
statements in accordance with the IFRS standards. This also applies to
the interim reports for 2005. The first-quarter interim report will be
published on May 3, 2005. In April, the Group will publish its 2004
figures recalculated and presented in accordance with the IFRS
standards. This will include the 2004 profit and loss account, balance
sheet and the transition calculations for the changeover from
financial statements produced under Finnish Accounting Standards (FAS)
to the IFRS financial statements.
IFRS reporting will be based on the consolidated balance sheet at
January 1, 2004, including the adjustments required for the IFRS
standards. The main impact on the Groups opening balance sheet
concerns the entry of Machiniums financial leasing agreements and the
capitalization of fixed costs of goods acquisition and manufacture
under valuation of inventories. The adjustments will increase the
opening balance sheet total by about 10%. There will be no significant
change in shareholders equity.
The transition to IFRS reporting will have some effect on the net
profit of the Lännen Tehtaat Group. The most significant change is the
elimination of goodwill amortization in the IFRS accounting. The
amount of goodwill amortization under the FAS reporting was EUR 3.1
million in 2004. The present value of cash flows generated via
impairment testing exceeds the book value of asset items that are
subject to testing. The profit effect of the other IFRS changes will
be smaller than that of eliminating goodwill amortization.
The timing of profit accrual will also change. Under the IFRS rules,
Lännens profits will primarily be generated in the final quarter,
when its harvested raw materials are processed into stocks of finished
and semi-finished goods. With prices of products held in stock being
higher than before, the sales margin for the first three quarters will
be reduced. This will affect the Groups food industry business and
partly also its animal feeds business, and especially the associated
company Sucros.
Outlook for 2005
The Food Divisions net turnover will be up in 2005 because it will
include the full years turnover for Apetit Kala. Frozen food sales as
a whole are expected to be in line with the general trend in the
market. However, sales of vegetables and frozen ready-made foods are
expected to grow. There will be no growth in the overall consumption
of sugar, and Sales of Lännen Sugars consumer products are likely to
be no higher than the 2004 level, due to sugar imports.
Net turnover in the animal feeds business is expected to be up on the
2004 level. A reorganization is planned in animal feed production,
which will give rise to non-recurring write-offs in 2005. The benefits
of this reorganization will be seen from 2006 onwards. Grain trade net
turnover will depend on the amount and quality of this years crops in
the main market areas.
The Lännen Tehtaat Groups net turnover for 2005 is expected to be at
the 2004 level. The transfer to IFRS reporting will affect the
consolidated balance sheet and net profit, as well as the timing of
profit accrual. Net profit for the first quarter will be very modest,
at around the same level as in 2004. Net profit for the full year is
expected to be better than in 2004, despite the costs of reorganizing
animal feeds production.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2004 2003 2004 2003
Net turnover 112.4 129.2 473.8 492.0
Other operating income 0.5 0.8 3.4 2.1
Costs and expenses -105.7 -123.8 -495.5 -473.8
Depreciation -2.8 -3.5 -11.5 -11.8
Share of profits of
associated undertakings 0.8 0.6 2.5 3.2
Operating profit 5.2 3.3 8.7 11.7
Financial income and
expenses 0.0 -0.9 -1.1 -3.3
Profit before
extraordinary items 5.2 2.4 7.7 8.4
Extraordinary income
Extraordinary expenses
Profit before taxes
and minority interests 5.2 2.4 7.7 8.4
Income taxes -0.5 -0.7 -1.4 -2.6
Minority interests 0.2 0.3 -0.2 0.9
Profit for the period 4.9 2.0 6.0 6.7
PROPOSAL OF THE BOARD FOR THE DISTRIBUTION OF PROFIT
The Board of Directors proposes that Lännen Tehtaat plc pay a dividend
of EUR 0,65 per share.
Liabilities
Share capital 12.6 12.2
Other capital and reserves 84.9 82.8
Minority interests 1.6 4.9
Provisions 2.1 2.1
Long-term liabilities 27.2 48.3
Current liabilities 75.1 99.4
Total 203.5 249.7
CONSOLIDATED CASH FLOW STATEMENT
EUR million 2004 2003
Operations
Cash flow from operations 16.4 18.8
Change in working capital 24.0 -7.5
Net cash flow from
operations (A) 40.4 11.3
Investments
Investments in non-current
assets -6.5 -9.5
Tangible and intangible assets of
acquired Group undertakings -6.3
Tangible and intabgible assets of
relinquished subgroup 1.6
Proceeds from sales of
non-current assets 0.8 1.5
Net cash flow from
investments (B) -10.4 -8.0
Financing
Share issue 2.3
Change in loans -27.6 -3.0
Dividends paid -3.9 -1.8
Other changes in capital and
reserves and in minority
interests -3.6 -2.3
Net cash flow from
financing (C) -32.8 -7.1
Changes in liquid assets
(A+B+C) -2.8 -3.9
Liquid assets on Jan. 1 13.1 17.0
Liquid assets on Dec. 31 10.3 13.1
KEY INDICATORS 2004 2003
Earnings per share, EUR 0.97 1.11
Equity per share, EUR 15.47 15.29
Dividend per share, EUR 0.65 0.65
Return on investment, % (ROI) 6.7 7.7
Return on equity, % (ROE) 6.4 6.0
Equity ratio, % 48.5 39.5
Current ratio 1.3 1.4
Gross investments, EUR million 11.1 9.5
% of net turnover 2.3 1.9
Average number of personnel 1072 1161
Average number of shares in thousands 6160 6058
BUSINESS SEGMENT INFORMATION
NET TURNOVER
EUR million 10-12/ 10-12/ 1-12/ 1-12/
2004 2003 2004 2003
Total 1072 1161
CONTINGENT LIABILITIES
EUR million 2004 2003
Debts against which mortgages
have been given
Pension loans 7.9
Loans from credit institutions 31.7 46.6
Mortgages given for debts
Real estate mortgages 34.9 32.6
Corporate mortgages 51.4 76.0
Shares pledged 3.6 3.6
Other securities given
Corporate Mortgages 0.2 6.9
Pledges 0.0 0.0
Leasing liabilities
Falling due during the following year 0.5 1.0
Falling due at later date 0.5 1.1
Contingent liabilities
for own commitments
Repurchasing commitments 0.2 19.0
Other commitments 0.5 2.4
Contingent liabilities on behalf of
associated undertakings
Guarantees 0.2
Other contingent liabilities
Redemption liability
of leased buildings 2.5 2.6
Outstanding derivative instruments
Forward currency contracts
Market value 0.1 -0.3
Value of underlying instruments 3.3 9.5
Interest rate swaps
Market value -0.7 -0.3
Value of underlying instruments 25.0 25.0
Raw material futures
Market value 0.1 -0.5
Value of underlying instruments 4.1 10.6
The data have not been audited.
LÄNNEN TEHTAAT PLC
Board of Directors
Erkki Lepistö
CEO
More details: Erkki Lepistö, tel. +358 10 402 4002
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
CHANGE IN THE SUPERVISORY BOARD OF LÄNNEN TEHTAAT PLC
Paavo Mäkinen will resign from his position as a member of the Supervisroy Board
of Lännen Tehtaat plc as of March 1, 2005. He has been appointed Deputy Head of
the European Commission Representation in Finland. A new Supervisory Board member
will be elected in the Annual General Meeting in March 2005.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
President and CEO
For more information; Erkki Lepistö, tel. +358 10 402 4001.
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT ACQUIRES KEMIRA GROWHOW'S MINORITY SHAREHOLDING IN SUOMEN REHU LTD
Lännen Tehtaat plc and Kemira GrowHow Oyj have today signed a sales contract for
the sale of Kemira GrowHow Oyj's shares in Suomen Rehu Ltd to Lännen Tehtaat plc.
The shares, representing 12.14% of Suomen Rehu Ltd's share capital, will be
transferred to Lännen Tehtaat plc on December 31, 2004. Following the deal,
Lännen Tehtaat plc will own the entire capital stock of Suomen Rehu Ltd.
The share purchase simplifies the structure of the Lännen Tehtaat Group and
enables the adoption of common operating methods and practices within the Group.
The Lännen Tehtaat Group consists of the Food Division and the Agricultural
Division. Its consolidated net turnover in 2004 will be approximately EUR 470
million. Suomen Rehu Ltd, which is part of the Agricultural Division, is the
market leader in Finland's animal feeds sector. The Suomen Rehu Group's net
turnover is about EUR 190 million and it employs a total of 325 people. In
addition to Finland, the Suomen Rehu Group has operations in the Baltic States,
Sweden and Russia.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
President & CEO
More information: Erkki Lepistö, President & CEO, tel. +358 2 8397 4001
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
