LÄNNEN TEHTAAT PLC Stock exchange release May 13, 2003 at 9.00 a.m.
INTERIM REPORT JANUARY 1 MARCH 31, 2003
Lännen Tehtaats net turnover for January-March was EUR 113.5 million
(2002: EUR 52.7 million). Operating profit for the period was EUR 0.1
million (EUR 0.4 million) and result before extraordinary items was
EUR 1.1 million (EUR 0.1 million). Earnings per share came to EUR
0.08 (EUR 0.05).
Changes in Group structure and in the presentation of figures
The corporate structure was altered as a result of the Avena
acquisition in November 2002. The Lännen Tehtaat Group now consists of
three operating divisions: the Food Division, the Agricultural
Division and the Machinium Division. The new Agricultural Division
comprises Suomen Rehu Ltd and its subsidiaries acquired via Avena;
Avena Nordic Grain Oy; and three companies which used to form the
division Other Business Units: Lännen Feed, Lännen Plant Systems,
and Harviala Oy. Lännen Cultivation now operates in the Food Division,
while the Machinium Division retained its former structure.
In this interim report, presentation of data on the individual
divisions reflects the new organization. Comparative data for previous
years have been brought into line with the new organization structure.
The profit and loss account and the balance sheet are presented in two
ways: the actual data for the period under review are compared with
both the actual data and the pro forma data for the previous year. Pro
forma data consist of the combined data for the Lännen Tehtaat Group
and for the Avena Group for 2002.
Net turnover
Lännen Tehtaats net turnover for January-March was EUR 113.5 million
(2002: EUR 52.7 million); addition of Suomen Rehu and the Avena Nordic
Grain business units more than doubled the net turnover. Net turnover
for the Food Division was EUR 24.7 million (EUR 26.0 million); for the
Agricultural Division, EUR 66.8 million (EUR 6.6 million); and for the
Machinium Division, EUR 22.0 million (EUR 20.1 million).
Financial performance
During the period under review, Lännen Tehtaats financial performance
fell below that for the last year and the targets set for this period.
Operating profit was EUR 0.1 million (EUR 0.4 million) and result
before extraordinary items was EUR 1.1 million (EUR 0.1 million).
Result after taxes and minority interests stood at EUR 0.5 million
(EUR 0.3 million). Earnings per share came to EUR 0.08 (EUR 0.05).
Direct taxes for the period under review came to EUR 0.1 million
receivable (EUR 0.3 million).
Financing
The Groups financial structure was altered by the Avena acquisition,
which was mainly financed with external capital. As the acquisition
included Avenas debts, Lännen Tehtaats interest-bearing liabilities
increased to EUR 87.3 million by the end of the period under review
(EUR 25.2 million). Financial assets stood at EUR 13.5 million (EUR 23.6
million). The consolidated balance sheet total came to EUR
253.7 million (EUR 163.0 million) and the equity ratio was 37% (59%).
Short-term financing has been arranged through commercial paper. The
availability of short-term financing has been safeguarded with
sufficient and binding committed credit facilities; these were not
used during the period. The Groups financing situation remained good
for the entire period.
Investments
Investments during the period under review came to EUR 4.1 million. At
the beginning of the year, the parent company bought the buildings
housing the headquarters and the canteen facilities for EUR 3.4
million. These buildings were sold to a finance company in 1988 but
have always been used by Lännen Tehtaat. Other investments focused on
minor replacement or maintenance of technology and facilities. They
totalled EUR 0.7 million. Last years figure was EUR 0.6 million.
Decisions of the Annual General Meeting
The Annual General Meeting on April 3, 2003 decided to distribute a
dividend of EUR 0.30 (0.60) per share on 2002.
The Board was authorized to decide on surrender of the companys own
shares. In accordance with this authorization, the Board may surrender
the 65,000 company shares acquired. Shares can be surrendered in
connection with corporate acquisitions or for some similar purpose, or
sold in public trading on the Helsinki Exchanges. This authorization
is valid for one year as of the AGM.
The 65,000 company shares owned by the company represent 1.1% of share
capital and votes.
Share trading
The volume of trading in company shares on the stock exchange amounted
to 21,961 shares (198,531), or 0.4% of all shares (3.2%). The highest
share price was EUR 9.90 (EUR 11.90) and the lowest EUR 8.70 (EUR
10.30).
Merger plan
On January 31, 2003, the Boards of Directors of Lännen Tehtaat plc and
Avena Oy signed a merger plan. Avena Oy will merge with Lännen Tehtaat
plc by the end of 2003.
Business Divisions
Food Division
Net turnover for the Food Division was EUR 24.7 million (EUR 26.0
million). Apetits domestic sales were about the same last year, and
sugar sales were down slightly. Sales of both frozen pizzas and fish
products increased. Sales of frozen vegetables and the sale of jams
and marmalades, however, fell below last years figures. Net turnover
was affected most by the sale of Lannen Polska in late 2002.
Food Division profitability fell short of the target but remained at
the level of last year. Profitability from domestic business was lower
than last year and suffered from the fact that campaign-priced
products accounted for a larger proportion of sales and that energy
prices were higher. Operating profit improved as Lännen Tehtaat gave
up the loss-making subsidiary in Poland. Operating profit for the Food
Division was EUR 0.8 million (EUR 0.7 million).
Agricultural Division
Net turnover for the Agricultural Division was EUR 66.8 million (EUR
6.6 million). This figure is not comparable with last years figure,
as Suomen Rehu and Avena Nordic Grain were not acquired until the end
of 2002. Net turnover for the divisions animal feed industry fell
short of the targeted level. The demand for industrially produced
feeds fell because of the excess of milk quotas for the year ending on
March 31. Net turnover for Avena Nordic Grain was much the same as
last year. Net turnover for the rest of the Agricultural Division
business was low.
Agricultural Division profitability fell short of the target during
the first quarter. Because of the rising prices of raw materials and
turnover below target, the divisions feed industry business did not
meet the target results nor did it reach the last years comparative
figures. In spite of higher freight costs due to difficult ice
conditions at sea, the grain trade increased its operating profit on
the comparable period of last year. Operating profit for the
Agricultural Division was EUR 0.2 million (EUR 0.5 million).
A new subsidiary called Lännen Rehu Oy started operations at the
beginning of 2003. The new subsidiary had been formed through a
transfer of the assets and liabilities of Lännen Tehtaat plcs animal
feeds business to the new company under the Corporate Taxation Act.
Machinium Division
The Machinium Divisions net turnover was EUR 22.0 million (EUR 20.1
million), which was higher than targeted and exceeded last years
figure. In particular, sales of earthmoving machinery increased in
Sweden and the Baltic republics, which in turn increased deliveries
made by the Finnish sales company and manufacture of the machinery.
Sales of materials-handling machinery had a difficult time in Sweden,
and failed to meet both their target and last years figures.
Profitability for the Machinium Division during the first quarter was
about the same as last year, but did not meet the targets set for it.
The earthmoving machinery business met the targets and showed a profit
both in Finland and in the Baltic republics, and profitability in
Sweden also improved. The decline in the volume of sales and
maintenance of materials-handling machinery brought lower
profitability and the business did not meet its targets. Operating
loss for the Machinium Division was EUR 0.9 million (EUR 0.8
million).
Outlook for the rest of the year
Net domestic turnover for the Food Division is expected to be slightly
lower than last year because of the sale of the subsidiary in Poland.
Net domestic turnover for the Apetit Group is expected to exceed last
years figures. Net turnover for Lännen Sugar is likely to fall as the
domestic consumer market for sugar is expected to decline.
A significant boost to the Food Division's profits is expected against
last year, due to the sale of the loss-making Polish subsidiary and
the fact that the one-off costs related to withdrawing from Poland
will no longer have an impact. Tougher competition and rising costs
will affect business on the domestic market where profits are expected
to weaken on last year.
In the Agricultural Division, the net turnover for the feed industry,
compared with the figures for all of 2002, is expected to remain at
the level of last year. Net turnover for the grain trade will depend
on the volume and quality of this seasons crops in the main market
areas. Net turnover should still reach last years level.
Animal feed industry profitability is likely to improve on the first
quarter thanks to the growth expected in sales and net income and to
the campaign launched in February to cut costs. For the grain trade,
profitability will remain on the first quarter level for the rest of
the year. Despite a slack beginning, the Agricultural Divisions
profitability and financial performance are expected to reach the same
figures for this year as in 2002.
The market for earthmoving machinery in Sweden is experiencing a
slight downturn. While there was a rise in the domestic market in
early 2003, the overall figure for 2003 is not likely to exceed that
for 2002. The sales of earthmoving machinery in Sweden began to grow
in the first quarter and will continue to grow for the rest of the
year, one reason for this being the recent strengthening of the sales
organization. Sales in Finland and the Baltic republics will remain at
the 2002 level. The decline in the market for materials-handling
machinery in Sweden is expected to continue. However, rising sales in
the earthmoving machinery business will increase Machinium Divisions
overall net turnover.
Thanks to growing sales and the reorganization and restructuring
project carried out in Sweden, the profitability of the earthmoving
machinery business will improve. We also expect reduced losses from
the materials-handling machinery business, despite an expected decline
in sales. The Machinium Divisions financial performance will improve
considerably although it will not earn a profit.
Lännen Tehtaats net turnover for 2003 will amount to approximately
EUR 500 million. Despite the weak performance in the first quarter,
profits for the whole year are expected to rise to a satisfactory
level.
The next interim report for January 1 - June 30, 2003 will be
published on August 12, 2003.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
1-3/ 1-3/ 1-12/
2003 2002 2002
EUR million
Net turnover 113.5 52.7 283.4
Other operating income 0.5 0.2 4.2
Costs and expenses -111.3 -51.0 -278.3
Depreciation -2.8 -1.7 -8.5
Share of profits of
associated undertakings 0.2 0.2 2.5
Operating profit 0.1 0.4 3.3
Share of loss of
associated undertakings -0.2
Finacial income and
expenses -1.2 -0.3 -3.2
Profit/loss before extra-
ordinary items and taxes -1.1 0.1 -0.1
Extraordinary income
Extraordinary expenses
Income taxes 0.1 -0.3 0.5
Minority interests 0.5 0.5 2.0
Profit/loss for the financial
period -0.5 0.3 2.4
The tax corresponding to the profit for the period has been taken into
account as tax shown in the profit and loss statement.
CONSOLIDATED PROFIT AND LOSS ACCOUNT, PRO FORMA
AVENA FIGURES INCLUDED IN COMPARISON DATA 2002
Pro forma
1-3/ 1-3/ 1-12/
2003 2002 2002
EUR million
Net turnover 113.5 116.9 506.5
Other operating income 0.5 0.6 5.2
Costs and expenses -111.3 -113.4 -491.5
Depreciation -2.8 -3.3 -13.9
Share of profits of
associated undertakings 0.2 0.2 2.6
Operating profit 0.1 1.0 8.9
Share of loss of
associated undertakings -0.1 -0.4
Finacial income and
expenses -1.2 -0.9 -6.2
Profit/loss before extra-
ordinary items and taxes -1.1 0.0 2.3
Extraordinary income
Extraordinary expenses
Income taxes 0.1 -0.3 0.0
Minority interests 0.5 0.4 1.5
Profit/loss for the financial
period -0.5 0.1 3.8
CONSOLIDATED BALANCE SHEET
Pro forma
March 31, March 31, March 31, Dec 31,
2003 2002 2002 2002
EUR million
Assets
Intangible assets 19.4 6.5 24.8 20.4
Tangible assets 71.5 38.4 80.9 69.4
Investments 21.8 19.4 21.4 21.5
Own shares 0.8 0.8 0.8 0.8
Stocks 79.5 40.5 73.3 81.9
Receivables 47.2 33.8 39.6 51.9
Marketable securities 3.3 6.6 10.9 5.7
Cash and cash equivalents 10.2 17.0 18.0 11.3
Total 253.7 163.0 269.7 262.9
Liabilities
Share capital 12.2 12.2 12.2 12.2
Other capital and reserves 78.4 80.8 80.6 79.0
Minority interests 5.6 5.2 7.3 6.1
Provisions 0.1 0.1 0.1 0.2
Long-term liabilities 68.2 23.4 76.7 68.9
Current liabilities 89.2 41.3 92.8 96.5
CONTINGENT LIABILITIES
March 31, March 31, Dec 31,
2003 2002 2002
EUR million
Securities given for debts
Real estate mortgages 37.6 0.1 37.6
Corporate Mortgages 54.7 13.5 54.7
Shares pledged 43.4 39.8
Other securities given
Pledges 0.0 0.0 0.0
Real estate mortgages 1.7
Corporate mortgages 8.2 1.7 8.2
Leasing liabilities 2.4 0.4 1.6
Contingent liabilities
for own commitments
Guarantees 0.0 0.0 0.0
Repurchasing commitments 17.7 23.0 22.4
Other commitments 1.4 0.9 1.4
Contingent liabilities on behalf
of associated undertakings
Guarantees 0.4 0.4
Other contingent liabilities
Redemption liability
of leased buildings 2.7 6.1 6.0
Outstanding derivative instruments
Forward currency contracts
Market value -0.1 -0.2
Value of underlying instruments 8.9 4.7 11.8
Raw material futures
Market value 0.7 -0.5
Value of underlying instruments 16.3 15.5
The data have not been audited.
Säkylä, May 13, 2003
LÄNNEN TEHTAAT PLC
Board of Directors
More details: Erkki Lepistö, President and CEO, tel. +358 2 8397 4001
Distribution:
Helsinki Exchanges
Main media
www. lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE April 25, 2003
JUHA KORKEAOJA HAS RESIGNED FROM HIS POSITION AS A BOARD MEMBER AND
DEPUTY CHAIRMAN OF THE BOARD
Juha Korkeaoja, who has been appointed Minister of Agriculture and
Forestry, has resigned from his position as a Board Member and Deputy
Chairman of the Board of Directors of Lännen Tehtaat plc.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
President and CEO
For more information, please contact President and CEO Erkki Lepistö,
tel. +358 2 8397 4001.
Distribution:
Helsinki Exchanges
Main media
www.lannen.fi
Lännen Tehtaat plc Stock exchange bulletin April 11, 2003 at
9.30 a.m.
LÄNNEN TEHTAAT SHOWS A FIRST QUARTER LOSS
The Lännen Tehtaat showed a loss after financial items of
approximately EUR 1 million in the first quarter of 2003. This was
below the targeted figure. In 2002 there was a first quarter profit
of EUR 0.1 million.
Group results have been affected in the Food Division by the
competitive new situation in trading, and in the Agricultural
Division by lower demand and higher raw material prices.
The Lännen Tehtaat interim report for the first quarter of 2003 will
be published on May 13, 2003.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
President and CEO
For more information, please contact President and CEO Erkki Lepistö,
tel. +358 2 8397 4001.
Distribution:
Helsinki Exchanges
Key media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE APRIL 3, 2003 at 4.45 p.m.
LÄNNEN TEHTAAT PLC ANNUAL GENERAL MEETING
The Annual General Meeting on April 3, 2003 approved the financial
statements, discharged those accountable from liability and decided to
distribute a dividend of EUR 0.30 per share.
MATTERS DEALT WITH BY THE ANNUAL GENERAL MEETING
FINANCIAL STATEMENTS
The Annual General Meeting approved the Companys and the Groups
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 2002.
The Annual General Meeting decided to distribute as dividend EUR 0.30
per share. The record date is April 8, 2003 and the dividend payment
date April 15, 2003.
ELECTION OF THE MEMBERS OF THE SUPERVISORY BOARD AND THE AUDITORS
Matti Eskola, Pasi Jaakkola and Jouni Kaitila were re-elected to the
Supervisroy Board. Ilkka Markkula and Markku Länninki were elcted as
new members. New personnel representatives in the Supervisory Board
are Aila Koivuniemi, personal deputy member Marja-Liisa Marttila,
Paula Paasonen, personal deputy member Timo Kaila, Esa Paganus,
personal deputy member Harri Ollonqvist, and Pekka Sihvonen, personal
deputy member Marja Rusi.
Kauko Lehtonen, Authorized Public Accountant, and PricewaterCoopers Oy
Authorized Public Accountants with Hannu Pellinen, Authorized Public
Accountant as responsible auditor, were re-elected as auditors.
SURRENDERING THE COMPANYS OWN SHARES
The Annual General Meeting decided to authorize the Board of Directors
to decide to surrender the companys 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 companys own shares are surrendered.
The shares can be surrendered in one or more tranches. The Board may
decide to surrender the Companys 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 Exchanges. 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.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
President & CEO
More details: Erkki Lepistö (President & CEO), tel. +358 2 8397 4001
Distribution:
Helsinki Exchanges
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Stock exchange announcement March 26, 2003
LÄNNEN TEHTAAT ANNUAL REPORT 2002 PUBLISHED
Lännen Tehtaat Annual Report for 2002 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 2 8397 or by e-mail .
LÄNNEN TEHTAAT PLC
Riitta Jaakkola
Director of Finance
tel +358 2 8397 4920
LÄNNEN TEHTAAT PLC Stock Exchange Announcement March 13, 2003
SUMMONS TO ANNUAL GENERAL MEETING OF SHAREHOLDERS
Company shareholders are hereby invited to the Annual General Meeting,
which will be held on Thursday, April 3, 2003, starting at 2:00 p.m.
in the Lännen Tehtaat canteen in Iso-Vimma, Säkylä.
The meeting agenda is as follows:
1. Matters to be dealt with by the annual general meeting of
shareholders under §11 of the Articles of Association.
2. The Board of Directors proposal for authorizing the Board to
decide 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 13, 2000. The Board of Directors
will be authorized to decide to whom and in what order the shares
will be surrendered. The shares can be surrendered in one or more
parts 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 Helsinki Exchanges at their current
value at the time of surrender, determined in public trading on
Helsinki Exchanges. They can also be surrendered against other
than monetary consideration. The Board of Directors may not decide
to derogate from a prior subscription right in the interests of
any party in the inner circle of the company. The authorization is
valid for one year from the AGM decision.
Distribution of dividend
The Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.30 per share be paid for the financial year 2002.
Dividend will be paid to shareholders whose shares are registered by
the Finnish Central Securities Depository Ltd, before the record date,
April 8, 2003. The dividend will be paid on April 15, 2003.
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 24, 2003 has the right to attend the Annual
General Meeting.
A shareholder who was entered in the companys 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 1 April 2003 before 4:00
p.m. local time either by writing to Lännen Tehtaat plc, P.O. Box.
100, 27801 Säkylä, by telefax +358 2 8397 4022, by phoning +358 2 8397
4011/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.
The financial statement documents and other documents required under
the Companies Act can be inspected during the week before the
shareholders meeting at the companys head office, Lännen Tehtaat
plc, Maakunnantie 4, 27820 Säkylä. Copies of documents will be sent to
shareholders on request.
LÄNNEN TEHTAAT PLC Stock exchange release March 11, 2003 at 16;15 pm
BOARD RECONSIDERS PROPOSALS TO LÄNNEN TEHTAAT ANNUAL GENERAL MEETING
The Lännen Tehtaat plc Board of Directors has in its meeting today
discussed matters on the agenda of the annual general meeting and
decided to propose to the AGM, which is to convene on April 3, 2003,
that the Board be authorized to surrender the companys own shares.
The Board has decided not to request authorization to raise share
capital.
I DIVIDEND
The Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.30 per share be paid for the financial year 2002.
II 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.
1. The authorization concerns the 65,000 company shares acquired for
the company under authorization of the AGM on April 13, 2000.
2. 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.
3. 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 Helsinki Exchanges.
4. Shares will be surrendered at their current value at the time of
surrender, determined in public trading on Helsinki Exchanges. They
can also be surrendered against other than monetary consideration.
5. 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.
LÄNNEN TEHTAAT PLC
Board of Directors
Erkki Lepistö
President & CEO
More details: Erkki Lepistö, President & CEO, tel. +358 2 8397 4001
Distribution:
Helsinki Exchanges
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE March 4, 2003 9.00 a.m.
ANNUAL ACCOUNTS INFORMATION Jan.1 - Dec.31, 2002
Net turnover by Lännen Tehtaat totalled EUR 283.4 (254.1) million. The
12% growth was entirely due to the business purchased during the year.
The consolidated operating profit was EUR 3.3 (5.7) million and profit
before extraordinary items EUR 0.1 (4.8) million. Earnings per share
came to EUR 0.40 (EUR 0.84). The Board proposes a dividend of EUR 0.30
(EUR 0.60) per share to the Annual General Meeting.
Corporate expansion
The most significant event in 2002 was a share deal between Lännen
Tehtaat plc and the Finnish government. The ownership of a new company
called Avena Oy, formed through a demerger, was transferred in full to
Lännen Tehtaat on November 4, 2002. As a result, Lännen Tehtaat is now
Finlands leading producer of industrial feeds and a major actor in
the grain trade. Suomen Rehu Ltd, which concentrates on animal
nutrition (Lännen Tehtaat holding 82%), with its subsidiaries, and
Avena Nordic Grain Oy, which engages in the grain trade, were
transferred to Lännen Tehtaat from the former Avena Group.
Corporate structure
The corporate structure was altered as a result of the Avena deal. The
Lännen Tehtaat Group now consists of three operating divisions. In
this report on operations and these financial statements, division-
specific data are presented in accordance with the new organization,
and comparison data for previous years have been adjusted to
correspond to the new organization structure.
The Food Division comprises the Lännen Tehtaat plc units Apetit and
Lännen Sugar, and the subsidiary Tresko Fish Ltd. Lännen Cultivation,
which includes the former Agricultural Department and the Räpi
experimental farm, and was formerly part of Other business units, was
integrated with the Apetit unit. Lannen Polska Sp. z o.o. in Poland
was a Group company until the beginning of November, when Lännen
Tehtaats holding was reduced to 19%.
Following the Avena deal, a new Agricultural Division was formed,
comprising Suomen Rehu Ltd with its subsidiaries Hiven Oy in Finland,
SIA Baltic Feed in Latvia and Rehu Eesti Oü in Estonia, and Avena
Nordic Grain Oy with its subsidiary ZAO Avena St. Petersburg in
Russia. Lännen Feed, Lännen Plant Systems and Harviala Oy were
transferred to the new Division from Other business units.
The Machinium Division consists of Machinium Ltd as the parent company
of the sub-group and its subsidiaries Lännen Engineering Oy and Suomen
Rakennuskone Oy; SMA Construction AB and SMA Maskin AB with 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.
The Other business units division was discontinued and divided between
the Food Division and the Agricultural Division.
Of the associated companies, Sucros Ltd belongs to the Food Division,
while Agribalt Oy, Movere Oy and Farmit Website Oy are part of the
Agricultural Division. Oy Potma Ltd was given up at the end of
December.
Net turnover
Consolidated net turnover totalled EUR 283.4 (254.1) million. The 12%
growth was entirely due to the business purchased during the year. The
Food Division accounted for 43% (48%) of net turnover, the
Agricultural Division for 25% (11%) and the Machinium Division for 32%
(41%).
Net turnover for the Food Division was EUR 120.8 (121.6) million.
Apetits domestic net turnover was EUR 55.4 (55.5) million, with
frozen foods accounting for EUR 42.0 (42.3) million. The fall in sales
of frozen vegetables and meals was compensated by higher sales of
frozen fish products. Sales of other fish products and jams also grew.
Lannen Polska net turnover is included for part of the year only and
was distinctly below the 2001 figure. Sales by Lännen Sugar grew
somewhat in spite of the delivery problems caused in early autumn by a
fire at the Sucros Ltd sugar packaging unit.
Net turnover for the new Agricultural Division came to EUR 70.8 (27.2)
million. The increase was due to integration of the Suomen Rehu and
Avena Nordic Grain groups into the Agricultural Division.
The Machinium Divisions net turnover, at EUR 91.8 (105.3) million,
was below the 2001 level. Reorganization of operations and
concentration on Komatsu and Lännen earthmoving machinery reduced net
turnover in Sweden. Market shares fell, too. Some of the market shares
in Finland were also lost because of the tough competition. In the
Baltic States, the Divisions net turnover increased and the companies
also increased their market shares. Thanks to exports to the Baltic
States, net turnover for the Finnish companies remained close to the
2001 level.
The net turnover of the parent company Lännen Tehtaat plc was EUR
140.1 (138.8) million.
Profits
The consolidated operating profit was EUR 3.3 (5.7) million and profit
before extraordinary items EUR 0.1 (4.8) million. Performance was
hampered by one-off costs arising from the discontinuation of
operations in Poland and poor profitability in the Machinium Division.
Direct taxes recorded in the profit and loss account came to EUR 0.5
million receivable, against EUR 1.5 million in 2001. Profit for the
financial year after tax and minority interest was EUR 2.4 (5.1)
million.
After taxes and minority interests, 2002 profits stood at EUR 2.4
million. The 41.4% share of Machinium Group losses carried by
Machiniums minority shareholders improved the figure by EUR 2.0
million. The other minority interests' effect was negligible.
The Food Divisions operating profit stood at EUR 3.3 (7.0) million.
Giving up Lannen Polska reduced the total by EUR 3.3 million.
Reductions in operating profit were also caused by a decline in other
operating income and a lower share of associated companies profits.
Lännen Sugars operating profit was at the 2001 level.
The Agricultural Division made EUR 5.2 (1.4) million in operating
profit. The figure for the Lännen Tehtaat units in the division was at
the 2001 level. The increase was due to Suomen Rehu and Avena Nordic
Grain, which were integrated with the Agricultural Division at the
beginning of November, and to EUR 3.3 million sales profit from the
sale of a real estate company previously owned by Avena Oy.
The Machinium Divisions financial performance was poor. The operating
result was EUR 5.2 (-2.7) million. Profitability was below target and
the previous years level. The losses were incurred solely by the
Swedish companies, and the EUR 1.3 million one-off costs of the
rationalization project also lowered profits in 2002, as did writing
off in a single sum the remaining consolidated goodwill of EUR 1.2
million on acquisition of the companies in Sweden, equivalent to 6,5
years of depreciation. Earthmoving machinery operations in Finland and the
Baltic States showed a profit, with financial performance in excess of
target and the 2001 figures.
Lännen Tehtaat owns 58.6% of the Machinium Division. The balance sheet
value of this holding is EUR 5.4 million. Other liabilities for
Machinium Division come to EUR 7.5 million.
Financing
The Groups financial structure changed with the acquisition of Avena.
The deal was mainly financed with external capital, which is why the
net interest-bearing liabilities of the Group were EUR 83.9 (24.9)
million at the end of the year. Financial assets stood at EUR 17.0
(20.8) million. Current liabilities include EUR 7.0 million worth of
outstanding commercial papers. The availability of short-term
financing has been safeguarded with sufficient committed credit
facilities. Net financial expenses came to EUR 3.2 (0.9) million.
Financial expenses include EUR 1.2 million in losses made in Poland.
The equity ratio was 37% (57%) at the end of the year.
Annual General Meeting, share capital and shareholders
Lännen Tehtaat plcs Annual General Meeting on April 4, 2002 decided
to distribute a dividend of EUR 0.60 (0.84) per share.
The AGM authorized the Board of Directors to decide to raise share
capital by issuing new shares and/or a convertible bond in one or more
tranches. Share capital can be raised by a maximum of EUR 2,449,030 or
1,224,515 shares through a rights and/or a convertible bond issue. The
authorization is valid for one year as of the AGM. If a weighty
financial reason exists, share capital can be raised and/or a
convertible bond issued in derogation from the shareholders prior
subscription rights.
The Board was further authorized to decide on surrender of the
companys own shares. In accordance with this authorization, the Board
may surrender the 65,000 company shares acquired. Shares can be
surrendered in connection with corporate acquisitions or for some
similar purpose, or sold in public trading on Helsinki Exchanges. This
authorization is also valid for one year as of the AGM.
So far the Board has not exercised its right to raise share capital by
issuing new shares or a convertible bond.
The authorization to surrender the companys own shares has not been
exercised, either. The 65,000 company shares owned by the company
represent 1.1% of share capital and votes.
Investment
Gross investment in non-current assets came to EUR 47.3 (3.9) million.
The most important investment in 2002 was the purchase of Avena Oy
shares. The purchase price was EUR 40 million, minus EUR 1.6 million
in additional costs related to Suomen Rehu Ltd financial arrangements
for the period preceding execution of the deal.
EUR 4.2 million of the EUR 5.8 (1.9) million in Food Division
investments went into Lannen Polska shares, which were given up at the
beginning of November. The investment was a precondition for allowing
the Group to disassociate itself from Lannen Polskas financial and
other liabilities. Other investments went mainly into developing and
maintaining production technology.
Investments by the Agricultural Division, including acquisition of the
Avena Oy shares, stood at EUR 40.8 (1.5) million, and those by the
Machinium Division at EUR 0.7 (0.5) million.
R&D
The Groups R&D expenses totalled 0.6% (0.6%) of net turnover, largely
focusing on Apetit products. Retail sales of frozen fish products
under the Apetit label began at the beginning of 2002, and the targets
set for sales were exceeded. The animal feeds business acquired
brought significant new expertise and innovation into the Group. The
new products introduced by Suomen Rehu relate to improvements in
livestock production productivity, and ways of supporting the health
and well-being of livestock and reducing the environmental impacts of
livestock production.
Events after the end of the financial year
Lännen Rehu Oy started operations at the beginning of 2003. The
company was formed by transferring the assets and liabilities of
Lännen Tehtaat plcs animal feeds business to the new company under
the Corporate Taxation Act.
At the beginning of 2003, the parent company bought back the head
office and canteen buildings in Säkylä, which the company had been
renting since 1988. The deal will have no major impact on financial
performance.
On January 31, the Lännen Tehtaat plc and Avena Oy Boards signed a
merger plan to integrate Avena Oy into Lännen Tehtaat plc by the end
of 2003.
Outlook for 2003
Growth in the retail market for frozen foods and relatively successful
crop season production provide a good foundation for favourable
developments at Apetit in 2003. Domestic sales are expected to grow.
The total market for sugar is expected to remain at the 2002 level,
while the consumer product market will decline, which means falling
sales for Lännen Sugar. As a whole, the Food Divisions net turnover
will decline slightly as a result of giving up the loss-making Polish
subsidiary, but profits will improve.
The trend in the new Agricultural Divisions net turnover and
profitability will depend mainly on the animal feeds sector and grain
trade. Animal feeds net turnover will remain at the previous years
level. Rising raw material prices will keep the first-quarter
performance of the animal feeds business clearly below target and the
2002 figure. Profitability for the entire year is expected to be at
the 2002 level. Grain trade net turnover will depend on the quantity
and quality of the next seasons crops in the main market areas.
Profits are expected to remain at the previous years level.
Earthmoving is expected to maintain the 2002 level in its main market
area in 2003. Investment decisions continue to be hampered by
uncertainty concerning cyclical trends. Demand for machinery is
expected to remain at the 2002 level in Finland and Sweden, and growth
should continue in the Baltic States. The decline on the materials
handling equipment market is expected to come to a halt in Sweden. The
Machinium Divisions net turnover is expected to be higher than in
2002.
The rationalization project carried out in Sweden has greatly reduced
operating costs in the Machinium Division. A strategy development
project has begun, and is expected to produce synergy benefits in
marketing, after-sales marketing, logistics and support functions. New
Komatsu and Lännen products will sharpen Machiniums competitive edge.
Because of the poor start to the year in materials handling machinery
business and the slow summer season in earthmoving, the Divisions
first three quarters are expected to remain in the red. However, with
the exception of materials handling machinery business, Machinium
Division profitability should improve on 2002.
Lännen Tehtaat Group net turnover will reach a new level of EUR 500
million in 2003 as a result of the new animal feeds business and grain
trade. Despite a poor profit for the first quarter of the year 2003,
profits for the whole year are expected to rise to a satisfactory
level from the poor 2002 figure.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2002 2001 2002 2001
Net turnover 107.5 74.4 283.4 254.1
Other operating income 3.7 0.3 4.2 1.2
Costs and expenses -104.3 -71.3 -278.3 -245.2
Depreciation -3.6 -2.0 -8.5 -7.2
Share of profits of
associated undertakings 1.1 0.8 2.5 2.8
Operating profit 4.4 2.2 3.3 5.7
Share of loss of
associated undertakings -0.2 -0.2
Financial income and
expenses -0.1 0.2 -3.2 -0.9
Profit/loss before
extraordinary items 4.1 2.4 -0.1 4.8
Extraordinary income
Extraordinary expenses
Profit/loss before taxes
and minority interests 4.1 2.4 -0.1 4.8
Income taxes -0.3 -1.1 0.5 -1.5
Minority interests 1.0 0.7 2.0 1.8
Profit for the period 4.8 2.0 2.4 5.1
PROPOSAL OF THE BOARD FOR THE DISTRIBUTION OF PROFIT
The Board of Directors proposes that Lännen Tehtaat plc pay a dividend
of EUR 0.30 per share.
SIGNIFICANT SUBGROUP FIGURES FOR THE WHOLE YEAR.
SUBGROUPS WERE INCORPORATED IN LÄNNEN TEHTAAT
AGRICULTURAL DIVISION IN NOVEMBER.
EUR million
Suomen Rehu Group
Net turnover 188.1 175.0
Operating profit 6.5 5.9
Investments 8.5 2.5
Average personnel 289 254
Avena Nordic Grain Group
Net turnover 92.1 90.3
Operating profit 2.1 1.9
Investments 0.3 0.4
Average personnel 25 24
CONTINGENT LIABILITIES
EUR million 2002 2001
Debts against which mortgages
have been given
Pension loans 8.1 8.4
Loans from credit institutions 57.3 10.7
Mortgages given for debts
Real estate mortgages 37.6 0.1
Corporate mortgages 54.7 13.2
Shares pledged 39.8
Other securities given
Real estate mortgages 1.7
Corporate Mortgages 8.2 1.7
Pledges 0.0 0.0
Leasing liabilities
Falling due during the following year 0.8 0.3
Falling due at later date 0.8 0.2
Contingent liabilities
for own commitments
Guarantees 0.0
Repurchasing commitments 22.5 22.6
Other commitments 1.4 0.9
Contingent liabilities on behalf of
Group undertakings 14.7
Contingent liabilities on behalf of
associated undertakings 0.4
Other contingent liabilities
Redemption liability
of leased buildings 6.0 6.2
Outstanding derivative instruments
Forward currency contracts
Market value -0.2
Value of underlying instruments 11.8 5.1
Raw material futures
Market value -0.5
Value of underlying instruments 15.5
The data have not been audited.
LÄNNEN TEHTAAT PLC
Board of Directors
Erkki Lepistö
President & CEO
More details: Erkki Lepistö, President & CEO, tel. +358 2 8397 4001
Distribution:
Helsinki Exchanges
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE January 31, 2003, at 2.30 pm
AVENA OY TO MERGE WITH LÄNNEN TEHTAAT
The Board of Lännen Tehtaat plc has today signed an agreement over a
merger plan in which Avena Oy, wholly owned subsidiary of Lännen
Tehtaat plc, will be absorbed into Lännen Tehtaat without liquidation.
According to the merger plan, Avena is to be merged into Lännen
Tehtaat with all its assets and debts without financial consideration.
The company has no capital loans, and no special rights or interests
will be granted within the meaning of Chapter 14, section 4,
subsection 2, paragraph 8, of the Companies Act in connection with the
merger. The merger will be implemented in order to simplify the Group
structure and achieve savings in administrative costs. The merger is
planned to take effect on December 31, 2003.
Avena Oy came into being on November 1, 2002 as a result of the
demerger of a company previously operating under the same name. The
company is a holding company which owns animal nutrition specialists
Suomen Rehu Oy (ownership 82%) and its subsidiaries, and Avena Nordic
Grain Oy, which is in the grain trade. Avena Oy has no significant
business activity of its own. The seven persons employed by the
company will be transferred to Lännen Tehtaat plc.
LÄNNEN TEHTAAT PLC
Erkki Lepistö
President & CEO
More details: Erkki Lepistö, President & CEO, tel. +358 2 8397 4001
Distribution:
Helsinki Exchanges
Main media
www.lannen.fi
