FINANCIAL STATEMENTS INFORMATION January 1 - December 31, 2005
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE February 21, 2006, 8;30 a.m
FINANCIAL STATEMENTS INFORMATION January 1 - December 31, 2005
FINANCIAL YEAR 2005
. The net turnover for the Group came to EUR 433.0 (2004; 473.8) million.
. The operating profit came to EUR 16.3 (11.4) million and the profit before
taxes to EUR 14.9 (12.6) million.
. The earnings per share were EUR 1.81 (1.68).
. The Board's proposal to the Annual General Meeting will be EUR 0.73 (0.65) per
share.
. The net turnover for continuing business operations came to EUR 433.0 (424.9)
million.
. The operating profit for continuing business operations came to EUR 16.3 (14.7)
million and the profit before taxes to EUR 14.9 (16.3) million.
This financial statements information has been drawn up in line with IFRS
bookkeeping and valuation principles. The data in this report have not been
audited.
FOURTH QUARTER 2005
. The net turnover for the Group in October-December came to EUR 122.5 (112.4)
million.
. The operating profit came to EUR 12.6 (6.7) million and the profit before taxes
to EUR 12.8 (8.9) million.
. The earnings per share were EUR 1.52 (1.36).
. The operating profit before non-recurring items came to EUR 6.2 (6.7) million
and the profit before taxes and non-recurring items to EUR 7.5 (8.9) million.
FINANCIAL YEAR 2005
Key figures illustrating performance, EUR million
Continuing
Discontinued
Group total operations
operations
1-12/05 1-12/04 1-12/05 1-12/04 1-12/05 1-12/04
Net turnover 433.0 473.8 433.0 424.9 - 48.9
Operating profit/loss
before non-recurring items 12.1 13.2 12.1 14.7 - -1.5
Operating profit/loss
after non-recurring items 16.3 11.4 16.3 14.7 - -3.3
Profit/loss before taxes,
before non-recurring items 11.8 14.4 11.8 16.3 - -1.9
Profit/loss before taxes,
after non-recurring items 14.9 12.6 14.9 16.3 - -3.7
Profit/loss after taxes 11.4 10.5 11.4 14.2 - -3.7
Earnings/share, EUR 1.81 1.68 1.81 2.30 -
FOURTH QUARTER 2005
Key figures illustrating performance, EUR million
Continuing
Discontinued
Group total operations
operations
10-12/05 10-12/04 10-12/05 10-12/04 10-12/05 10-12/04
Net turnover 122.5 112.4 122.5 112.4 - -
Operating profit before
non-recurring items 6.2 6.7 6.2 6.7 - -
Operating profit after
non-recurring items 12.6 6.7 12.6 6.7 - -
Profit before taxes,
before non-recurring items 7.5 8.9 7.5 8.9
Profit before taxes,
after non-recurring items 12.8 8.9 12.8 8.9 - -
Profit after taxes 10.0 8.0 10.0 8.0 - -
Profit per share, EUR 1.52 1.38 1.52 1.38
In the fourth quarter, the net turnover for the Food Division totalled EUR 39.0
(2004: 37.9) million, EUR 59.9 (53.0) million for the Feed segment, EUR 26.6
(25.0) million for Grain Trading and EUR 1.8 (2.4) million for Other Operations.
In the Feed segment, the increase originated from acquisitions.
The operating profit of the Food Division for the fourth quarter before non-
recurring items was EUR 2.8 (2.2) million, and after non-recurring items EUR 10.1
(2.2) million. The performance of Apetit Kala showed a favourable trend towards
the end of the year. The company's financial performance for the last quarter was
good and Christmas sales exceeded expectations. Lännen Sugar's operative result
continued to be at the 2004 level. Apetit Frozen Foods and Jams fell short of its
previous year's achievement.
In the Feed segment, the financial performance for the final quarter was weakened
by raw material price increases which could not be transferred to sales prices in
full because of the tough competition. Mildola's favourable profit trend
continued in the last quarter and the segment's operating profit was EUR 3.6
(4.4) million.
Operating profit for Grain Trading was at the same level as in the comparison
period, EUR 0.5 (0.6) million. Operating profit for Other Operations before non-
recurring items came to EUR -0.6 (-0.6) million and after non-recurring items EUR
-1.5 (-0.6) million.
LÄNNEN TEHTAAT PLC
Board of Directors
More information: Matti Karppinen, CEO, tel. +358 10 402 00
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
BOARD OF DIRECTORS' REPORT 2005
Lännen Tehtaat's vision is to be one of the leading Finnish food companies,
CHANGES IN GROUP STRUCTURE AND ORGANIZATION
The Group structure was given a clearer definition and profit responsibility was
underlined in the last quarter of 2005. The Group administration organization was
streamlined heavily and human resources and information management were moved
closer to the customer interface as part of the Food segment. New key personnel
were recruited for Group management.
At the end of the financial year, the Food Division was organized into two
strategic business units: Apetit Frozen Foods and Jams, and Apetit Kala. Apart
from these, joint operations include marketing, sales, controlling, information
management and human resources management.
Operations by Lännen Sugar, which was a business unit in the Food Division, were
discontinued at the end of 2005, since Sucros Ltd terminated its sales contract
for Dansukker consumer products on December 31, 2005.
The Agricultural Division's companies operate as independent units with their own
product brands. The Division comprises Lännen Tehtaat plc's subsidiaries Suomen
Rehu Oy and Avena Nordic Grain Oy. Suomen Rehu Oy's subsidiaries are Lännen Rehu
Oy, Hiven Oy, Mildola Oy and UAB Baltic Feed. The companies are managed through
internal Board work. The segments reporting to the Agricultural Division are the
Animal Feeds segment, consisting of Suomen Rehu Oy and its subsidiaries and the
Grain Trading segment, which consists of Avena Nordic Grain Oy.
In March, Suomen Rehu Oy acquired 65% of the total stock of Mildola Oy, which
produces vegetable oils and protein feeds. After the transaction Suomen Rehu Oy
owns 82.5 per cent of Mildola Oy's stock. The company has been included in the
consolidated financial statements as of May 1, 2005. Mildola Oy's inoperative
companies Anttilan Koetila Oy and ÖP-Trading Oy were merged with their parent
company at the end of 2005.
In August, Lännen Tehtaat and Raisio set up an equally-owned joint venture
Scandic Feed in Russia. The company's aim is to start producing feeds in
northwestern Russia and win a significant market share there within five years.
In order to develop grain trading in the Baltic region, Avena Nordic Grain Oy
established a subsidiary in Lithuania. UAB Avena Nordic Grain's operations began
in August.
The Other Operations segment comprises Group administration and Harviala Oy.
The business operations of Lännen Plant Systems, which was part of the Other
Operations segment, were sold at the beginning of April. The deal had no
significant impact on Group performance.
NET TURNOVER
The Lännen Tehtaat Group's consolidated net turnover totalled EUR 433.0 (473.8)
million. Net turnover for continuing operations was EUR 424.9 million in the
comparison year. Food accounted for 35% of this figure (31% of continuing
operations) and the Animal Feeds segment 47% (46%). Grain Trading accounted for
17% (21%) and Other Operations for 1% (2%).
The Food Division's net turnover was EUR 149.5 (130.6) million. The increase was
due to the addition of Apetit Kala to the Group at the end of June in 2004. Net
turnover for the fish products business grew as planned. Retail sales of frozen
foods were at the same level as in the comparison year. Sales of frozen foods,
pizzas and frozen potato products grew on 2004. Sales of frozen vegetables fell,
particularly for products sold under own product brand. Retail sales of jams and
marmalades fell, too. Sales to the food industry and to the hotel, restaurant and
catering sector fell short of that in the comparison year as a result of
increased imports. Imports of sugar products for consumer use through the retail
trade from the Baltic States increased, which reduced Lännen Sugar's net
turnover. The good berry and apple crops reduced the expected fall in sugar
sales, however.
Net turnover for the Feeds segment was EUR 205.1 (195.0) million. The comparable
net turnover with the impact of the corporate acquisition eliminated fell by some
5% on the previous year. The fall in sales was primarily due to the impact of
lower raw material prices on sales prices. The merging of Mildola with the Group
caused an increase of EUR 19.5 million in the Feeds segment net turnover in 2005.
Net turnover for Grain Trading was EUR 86.6 (107.2) million. The volume was
reduced in the early part of the year by the previous year's small crops in
Finland. The price level of grains was also lower than in the previous year. In
the latter half of the year, the grain trade from 2005 crops was as planned.
Net turnover for Other Operations was EUR 7.1 (8.8) million. The decrease was due
to the sale of Lännen Plant Systems at the beginning of April.
Net turnover for the parent company Lännen Tehtaat plc was EUR 99.0 (107.5)
million.
PROFITS
The operating profit for Lännen Tehtaat's continuing operations before non-
recurring items came to EUR 12.1 (14.7) million. The impact of non-recurring
items on the operating profit was EUR +4.2 (-) million. The non-recurring items
affecting the operating profit include the write-downs and cost reserves of EUR
3.2 million resulting from the decision to close down Suomen Rehu's factory in
Vaasa and recorded in the Feed segment's result in the first quarter, and the
entry in the profit and loss account of the negative goodwill of EUR 1.1 million
created in the acquisition of Mildola Oy in the second quarter. The Food Division
recorded a non-recurring income item of EUR 7.6 million from the termination of
the sales contract concerning sugar retailing and a EUR 0.3 million reserve for
restructuring expenses in the final quarter. Other Operations reserved EUR 0.7
million for restructuring expenses and EUR 0.3 million for impairment losses.
The operating loss for discontinued operations was EUR 3.3 million in the
comparison period.
The Food Division's operating profit before non-recurring items amounted to EUR
2.3 (4.1) million and EUR 9.6 (4.1) after non-recurring items. The division's
profitability fell short of the target level and the comparison period, primarily
as a result of poor profitability in the fish products business in the early part
of the year. The performance of Frozen Foods and Jams fell slightly on the
comparison year as a result of lower net turnover. Lännen Sugar's operative
performance was at the same level as in 2004.
The operating profit for the Feed segment before non-recurring items was EUR 11.5
(11.7) million and after non-recurring items EUR 9.4 (11.7) million. The merging
of Mildola with the Feed segment improved profitability significantly.
Operating profit by Grain Trading amounted to EUR 1.4 (2.3) million. EUR 0.4 of
the decrease is due to value changes of derivative contracts in the profit and
loss account. Value changes in the derivative contracts taken to hedge the raw
material positions reduced the performance for the early part of the year by EUR
0.2 million and improved the performance of the comparison period 2004 by EUR 0.2
million. As of the beginning of 2005, hedge accounting has been applied to
efficient hedging of purchases and sales under the IAS 39 Standard.
The operating profit before non-recurring items for Other Operations was EUR -3.1
(-3.4) million and after non-recurring items EUR -4.1 (-3.4) million.
Net financial expenses totalled EUR 1.2 (1.5) million. The share of profits of
associated companies was EUR -0.1 (2.7) million. The compensation relating to the
termination of the sugar sales contract between Lännen Tehtaat and Sucros reduced
the share of profits of associated companies by EUR 1.1 million in the final
quarter.
Consolidated profit before taxes and non-recurring items was EUR 11.8 (14.4)
million and after non-recurring items EUR 14.9 (12.6) million. The profit for the
period was EUR 11.4 (10.5) million.
FINANCING AND CASH FLOW
The Group's financial position and liquidity continued to be good. Cash flow from
operations after interest and taxes stood at EUR 17.8 (27.8) million. The
difference between 2005 and 2004 is primarily due to changes in working capital.
The net cash flow from investments was EUR -8.0 (-9.4) million. A total of EUR
4.1 (3.9) million was paid out in dividends.
The Group's interest-bearing liabilities came to a total of EUR 45.9 (46.4)
million and liquid assets to EUR 11.2 (10.2) million at the end of the financial
period. Net interest-bearing liabilities amounted to EUR 34.7 (36.2) million. The
consolidated balance sheet total stood at EUR 232.2 (215.4) million. Equity
totalled EUR 116.1 (106.8) million at the end of the financial period. The equity
ratio was 50.0 (49.6) %. Commercial papers issued for the Group's short-term
financing stood at EUR 19.0 (13.0) million at the end of the review period.
Liquidity is secured with long-term committed credit facilities. No credit
facilities were used during the financial period.
INVESTMENT
Consolidated gross investment in non-current assets came to EUR 7.3 (5.4)
million. Investment excluding corporate acquisitions by the Food Division
totalled EUR 1.4 (2.7) million, by the Feed segment EUR 5.6 (2.1) million, by
Grain Trading EUR 0.0 (0.0) million and by Other Operations EUR 0.3 (0.4)
million. Investment by the Machinium Group in 2004 stood at EUR 0.3 million at
the time it was disengaged from the Group.
The Feed segment's investments were primarily related to improving production and
logistics processes in the Feed segment and to increasing production capacity at
the Feed group's other factories related to the closing down of the Suomen Rehu
factory in Vaasa.
Other consolidated investments in non-current assets concerned productivity and
replacements.
The most significant of the share and corporate acquisitions which totalled EUR
4.4 (5.6) million, was the purchase of a majority holding of Mildola Oy's shares
for EUR 4.1 million in a transaction that took effect at the beginning of May.
ANNUAL GENERAL MEETING, SHARE CAPITAL AND SHARES
The Annual General Meeting on March 31, 2005 decided to distribute a dividend of
EUR 0.65 per share.
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.
So far the Board has not exercised its right to raise share capital by issuing
new shares or a convertible bond.
The Annual General Meeting decided to authorize the Board of Directors to decide
to surrender the company's own shares. The authorization concerns the 65,000
company shares acquired using the authorization granted by the AGM on April 5,
2001. The Board is authorized to decide to whom and in what order the company's
own shares are surrendered. The shares can be surrendered in one or more
tranches. The Board may decide to surrender the Company's own shares otherwise
than in proportion to the pre-emptive right of shareholders.
The shares can be surrendered in one or more tranches, as decided by the Board,
in connection with corporate acquisitions or other corporate arrangements or for
some other similar purpose that the Board may consider suitable. Surrender of the
shares can also be carried out via public trading on Helsinki 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.
The Board has not yet made use of the authorization. The 65,000 Lännen Tehtaat
plc shares in the company's possession represent 1.0% of the total share capital
and total votes.
Flagging notices
Tapiola General Mutual Insurance Company and Tapiola Mutual Life Assurance
Company, whose shareholdings are calculated together under the flagging
regulations, announced on February 18, 2005 a change in their shareholding on
February 17, 2005. They now hold 4.37% of Lännen Tehtaat plc's total share
capital and total votes.
Raisio plc announced on September 14, 2005 that its holding in Lännen Tehtaat
plc's share capital and voting rights had fallen below 5% on September 14, 2005.
After the change, neither Raisio plc nor any organization or foundation
controlled by Raisio plc owns Lännen Tehtaat plc's shares.
ODIN Forvaltning AS announced on September 15, 2005 that the proportion of its
holding in Lännen Tehtaat plc's share capital and voting rights had risen to
5.18%.
Share Trading
In the period under review, 3,768,866 (1,778,558) company shares were traded on
the Stock Exchange, i.e. 59.7% (28.6%) of the total stock. The highest share
price was EUR 18.29 (14.50) and the lowest EUR 11.71 (11.00). Share turnover
totalled EUR 54.0 (22.4) million. The price at the end of the year was EUR 18.00
(12.05).
IFRS REPORTING
Lännen Tehtaat's consolidated financial statements have been drawn up in
accordance with the International Financial Reporting Standards (IFRS) adopted by
the European Union. The Group transferred to IFRS reporting at the beginning of
2005. The transition was reported in a separate information bulletin issued on
April 27, 2005.
SEASONALALITY OF OPERATIONS
The transition to IFRS reporting has had a noticeable impact on the accrual of
Lännen Tehtaat's profits over the financial year.
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads. In
production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the year's final quarter, which means that the
inventory volumes and their balance-sheet values are at their highest at the end
of the year. As entering as an expense of the fixed production overheads included
in the historical cost is deferred until the time of sale, most of the Group's
annual profit is accrued in the final quarter. The seasonal nature of operations
features most strongly in the Food Division and in the associated company Sucros,
which is part of that division. There is also some seasonal fluctuation in the
Feed segment. Apetit Kala's sales depend largely on seasonal holidays, such as
Christmas. A major proportion of the entire year's profit depends on the success
of Christmas sales.
R&D
The Group's product development expenses were 0.7% (0.6%) of net turnover.
In food products, the development focus was on ready-made frozen foods and fish
products. A new series of Apetit casseroles and a series of Grilled Fish products
were launched, and new products were added to the Quick & Tasty microwave range.
In animal feeding solutions, the emphasis in 2005 was on the development of
feeding that advances intestinal health and the wellbeing of young animals.
RISKS AND UNCERTAINTIES
The Group companies and the business units regularly assess the risks involved in
their operations and the adequacy of the control methods needed. The purpose of
these risk assessments, which support strategy work and decision-making, is to
ensure sufficient action to control risks.
No significant individual risks have come up in the Group's risk assessments that
would call for special action in addition to measures falling within normal
business operations and defined in the risk management process.
The European Union new sugar regime has a negative impact on the operating
conditions in this sector in Finland. Sucros Ltd has decided to start co-
determination talks concerning reductions in personnel relating to the closing
down of the factory in Salo. The factory in Säkylä will continue for the time
being. The sugar regime reform and the consequent changes will reduce the
dividends received by Lännen Tehtaat from Sucros Ltd in future years and the
share of profit to be entered in the profit and loss account.
Lännen Tehtaat plc owns 20% of the stock of Sucros Ltd, which engages in sugar
production in Finland. The company has sugar beet factories in Salo and Säkylä, a
glucose syrup factory in Jokioinen and a factory that refines raw sugar in
Kantvik.
ENVIRONMENAL RESPONSIBILITY
Lännen Tehtaat's operations are guided by the principles of continuous
improvement and sustainable development. The company is a responsible operator,
taking into account the requirements of both society and the environment.
The management of Lännen Tehtaat has set environmental objectives for the company
in its operating policy.
The company is not aware of any significant individual risks relating to the
environment at the time of closing the accounts.
CORPORATE GOVERNANCE, MANAGEMENT AND PERSONNEL
The Supervisory Board of Lännen Tehtaat plc elected the following Board members
at a meeting on June 16, 2005: Tom von Weymarn, Hannu Simula, Harri Eela, Aappo
Kontu, Matti Lappalainen and Soili Suonoja. Tom von Weymarn was elected Chairman
of the Board and Hannu Simula Vice Chairman. In a meeting held on October 31,
2005 the Supervisory Board elected Simo Palokangas member of the Board as of
April 1, 2006.
The CEO of Lännen Tehtaat plc was Erkki Lepistö up to August 31, 2005. Matti
Karppinen was elected CEO and started in office on September 1, 2005.
The Chairman of the Supervisory Board is Tom Liljeström and the Deputy chairman
is Juha Nevavuori.
The Group employed an average of 1,033 (1,072) people in 2005. At the end of the
year the head count was 1,115 (1,077), an increase of 38, when Mildola Oy was
merged with the Group at the beginning of May. The sale of Lännen Plant Systems
reduced the number by 24 employees.
PROPOSED DIVIDEND
The goal of the Lännen Tehtaat Board of Directors is to ensure that an investment
in the company's shares produces a good yield and stable value. In accordance
with its dividend distribution policy, the company distributes dividends worth at
least 40 per cent of the profit for the financial year to the owners of the
parent company. The Board proposes to the Annual General Meeting that a dividend
of EUR 0.73 (0.65) be paid per share, i.e. 40 (39) % of the yield per share.
OUTLOOK FOR 2006
The Food Division's net turnover and profit will be reduced by the termination of
the sales contract between Lännen Tehtaat and Sucros Ltd on December 31, 2005.
Sugar retailing will be handled by Sucros Ltd as of January 1, 2006. The impact
of the discontinuation of sugar sales will be some EUR 45 million on the Food
Division's net turnover and some EUR 2 million on operating profit. Sales of
frozen foods are expected to follow the general trend on the market. Sales of
ready-made frozen foods are predicted to exceed the general market trend. Sales
by Apetit Kala are expected to continue growing, and the proportion of
industrially packaged fish of all retailed fish is expected to grow. Apetit
Kala's profit is expected to improve and be well in the black in 2006. As a
result of Apetit Kala's improved performance and cuts in fixed costs, the Food
Division's operating profit is expected to rise above the 2005 result from which
the impact of sugar business has been eliminated.
Net turnover in the feeds business is expected to increase slightly as a result
of higher sales prices and volumes. Mildola's net turnover contribution to the
Group for the entire financial period will increase the year's net turnover by
EUR 10 million. The discontinuation of the feeds factory in Vaasa and transfer of
production to the other factories in the Feeds group will be carried out
gradually during the summer. Transfers of production will call for increased
capacity in the other factories in the Feeds group. Investments are being made in
Finland at the moment, and investments to extend and revamp the Baltic Feed
factory in Latvia are beginning. The discontinuation of the factory in Vaasa is
geared to save some EUR 2 million, which will be felt in full in 2007. After the
cost cuts implemented at the beginning of the year, the operating profit for the
Feeds business is expected to exceed the 2005 operating profit from which the
impact of non-recurring items has been eliminated even though the operating
profit from vegetable oil operations is expected to fall short of the record
achieved in 2005
The Grain Trading net turnover is expected to exceed EUR 100 million as a result
of the good crops harvested last autumn. The profit is expected to be at the same
level as in 2005.
The entire Lännen Tehtaat Group's net turnover for 2006 is expected to be
slightly lower than in 2005. Operating profit for the entire year is expected to
be somewhat better than the 2005 operating profit reduced by the elimination of
non-recurring items, thanks to a better performance in the fish products
business, productivity measures and a cost-cutting programme. The impact of the
cost cutting programme on profit will be EUR +2.5 - 3.0 million.
Net turnover for the first quarter will be at around the same level as that for
the first quarter in 2005. The operating result for the first quarter will show a
loss in the same way as in the comparison period.
The transfer to IFRS reporting will cause the consolidated profit to accrue in
the latter part of the year.
Lännen Tehtaat's vision is to be one of the leading Finnish food companies, which
means the emphasis is on developing food operations. Action to expand the Group's
food business began in autumn. The goal is significant expansion in Finland and
in the northern parts of the Baltic Rim by the end of 2006.
Development of the Agricultural Division's business operations will continue with
the focus of growth being in the Baltic Sates and Russia.
The Group's cost-efficiency will be improved by implementing an action plan
during the first quarter of the year. Productivity will be enhanced e.g. by
looking into the possibilities of transferring the production of the Food
Division's factory in Turku to Säkylä.
CONSOLIDATED INCOME STATEMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2005 2004 2005 2004
3 mths 3 mths 12 mths 2 mths
Net turnover 122.5 112.4 433.0 473.8
Other operating income 8.2 0.3 10.9 4.1
Operating expenses -115.6 -104.1 -416.3 -457.8
Depreciation and reduction
in value -2.1 -2.1 -8.3 -8.7
Impairments -0.3 - -3.0 -
Operating profit 12.6 6.7 16.3 11.4
Financial income and expenses -0.4 -0.2 -1.2 -1.5
Share of profit of associate
companies 0.6 2.4 -0.1 2.7
Profit before taxes 12.8 8.9 14.9 12.6
Income taxes -2.8 -0.9 -3.5 -2.1
Profit for the financial period 10.0 8.0 11.4 10.5
The income taxes are based on the result for the period.
Attributable to:
Equity holders of the parent 9.6 8.5 11.4 10.4
Minority interest 0.4 -0.4 0.0 0.1
Earnings per share, EUR 1.52 1.38 1.81 1.68
Diluted earnings per share, EUR 1.52 1.38 1.81 1.68
CONSOLIDATED INCOME STATEMENT - CONTINUING OPERATIONS
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2005 2004 2005 2004
3 mths 3 mths 12 mths 12 mths
Net turnover 122.5 112.4 433.0 424.9
Other operating income 8.2 0.4 10.9 2.9
Operating expenses -115.6 -104.1 -416.3 -405.0
Depreciation -2.1 -2.1 -8.3 -8.1
Impairments -0.3 - -3.0 -
Operating profit 12.6 6.7 16.3 14.7
Financial income and expenses -0.4 -0.2 -1.2 -1.1
Share of profit of associate
companies 0.6 2.4 -0.1 2.7
Profit before taxes 12.8 8.9 14.9 16.3
Income taxes -2.8 -0.9 -3.5 -2.1
Profit for the financial period 10.0 8.0 11.4 14.2
The income taxes are based on the result for the period.
Attributable to:
Equity holders of the parent 9.6 8.5 11.4 14.1
Minority interest 0.4 -0.4 0.0 0.1
Earnings per share, EUR 1.52 1.36 1.81 2.30
Diluted earnings per share, EUR 1.52 1.36 1.81 2.30
CONSOLIDATED INCOME STATEMENT - DISCONTINUED OPERATIONS
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2005 2004 2005 2004
3 mths 3 mths 12 mths 12 mths
Net turnover - - - 48.9
Other operating income - - - 1.2
Operating expenses - - - -52.8
Depreciation and reduction in
value - - - -0.6
Operating profit/loss - - - -3.3
Financial income and expenses - - - -0.4
Share of profit of associate
companies - - - -
Profit/loss before taxes - - - -3.7
Income taxes - - - -
Profit/loss for the financial
period - - - -3.7
The income taxes are based on the result for the period.
Attributable to:
Equity holders of the parent - - - -3.7
Minority interest - - - -
NET TURNOVER BY BUSINESS SEGMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2005 2004 2005 2004
3 mths 3 mths 12 mths 12 mths
Food segment 39.0 37.9 149.4 130.6
Feed segment 59.9 53.0 205.1 195.0
Grain trading segment 26.0 25.0 86.6 107.2
Other operations segment 1.8 2.4 7.1 8.8
Inter-segment sales -4.2 -5.9 -15.3 -16.8
Continuing operations total 122.5 112.4 433.0 424.9
Discontinued operations - - - 48.9
Total 122.5 112.4 433.0 473.8
OPERATING PROFIT/LOSS BY BUSINESS SEGMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2005 2004 2005 2004
3 mths 3 mths 12 mths 12 mths
Food segment 10.1 2.2 9.6 4.1
Feed segment 3.6 4.4 9.4 11.7
Grain trading segment 0.5 0.6 1.4 2.3
Other operations segment -1.5 -0.6 -4.1 -3.4
Continuing operations total 12.6 6.7 16.3 14.7
Continuing operations total - - - -3.3
Total 12.6 6.7 16.3 11.4
NET TURNOVER BY GEOGRAPHICAL SEGMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2005 2004 2005 2004
3 mths 3 mths 12 mths 12 mths
Finland 105.2 100.1 382.8 383.2
Other EU member states 13.5 7.1 34.2 59.6
Other countries 3.8 5.2 16.0 31.0
Total 122.5 112.4 433.0 473.8
CONSOLIDATED BALANCE SHEET
EUR million
Dec. 31.2005 Dec. 31.2004
ASSETS
Non-current assets
Tangible assets 72.2 70.0
Goodwill 17.4 17.4
Other intangible assets 1.7 2.5
Investment in associate companies 21.3 22.3
Available-for-sale financial
assets 3.2 3.7
Receivables 6.9 0.3
Deferred tax assets 1.3 2.2
123.9 118.4
Current assets
Inventories 54.5 49.5
Receivables 42.5 37.2
Financial assets at fair value
through profit or loss - 0.5
Cash and cash equivalents 11.2 9.7
108.2 96.9
Total assets 232.2 215.4
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent 112.4 104.3
Minority interest 3.7 2.5
Total equity 116.1 106.8
Non-current liabilities
Long-term borrowings 16.0 23.1
Deferred tax liavilities 7.4 7.5
Non-current provisions 0.9 1.0
Non-current liabilities total 24.3 31.6
Current liabilities
Trade payables and other
liabilities 60.9 52.7
Short-term borrowings 29.9 23.3
Current provisions 0.9 1.0
Current liabilities total 91.7 77.0
Liabilities total 116.1 108.6
Total equity and liabilities 232.2 215.4
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1-12/2005 1-12/2004
12 mths 12 mths
Cash flows from operating
activities 17.8 27.8
Cash flows from investing
activities -8.0 -9.4
Cash flows from financing
activities
Change in net debt -4.5 -17.1
Dividends paid -4.1 -3.9
Net increase/decrease in cash
and cash equivalents 1.0 -2.8
Cash and cash equivalents
at beginning of the period 10.2 13.0
Cash and cash equivalents
at end of the period 11.2 10.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = 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 7.3 0.8 -0.5 52.1 1.7 95.1 4.9 100.0
Transition to
IFRS standars 0.9 -0.8 - 2.1 -1.7 0.6 -0.6 -
Shareholders'
equity at Jan 1,
2004 IFRS 12.2 21.4 0.9 7.3 - -0.5 54.2 - 95.7 4.3 100.0
Available-for-sale
financial assets:
gains/losses
from fair value
measurement 0.4 0.4 0.4
removed from equity
and recognized in
income statement -0.2 -0.2 -0.2
Taxes related to
items entered into
equity and removed
from equity -
Translation
differences 0.2 0.2 0.2
Dividend
distribution -3.9 -3.9 -3.9
Targeted share
issue 0.4 1.9 2.3 2.3
Translation
differences -0.4 -0.4 -1.8 -2.2
Result of the
period 10.4 10.4 0.1 10.5
Shareholders'
equity at Dec
31, 2004 IFRS 12.6 23.4 1.1 7.3 - -0.3 60.2 - 104.3 2.5 106.8
Shareholders'
equity at Jan.
1, 2005 IFRS 12.6 23.4 1.1 7.3 - -0.3 60.2 - 104.3 2.5 106.8
Available-for-sale
financial assets:
gains/losses
from fair value
measurement 0.4 0.4 0.4
Cash flow hedges:
gains/losses
recorded in
equity 0.3 -
-
Taxes related to
items entered into
equity and removed
from equity -0.0
Translation
differences 0.1 0.1 0.1
Dividend
distribution -4.1 -4.1 -0.1 -4.2
Changes in
minority interest - 1.2 1.2
Other changes - -
-
Result of the period 11.4 11.4 0.0 11.4
Shareholders'
equity at Dec.
31, 2005, IFRS 12.6 23.4 1.8 7.3 - -0.2 67.5 - 112.4 3.7 116.1
RECONCILIATION OF SHAREHOLDERS' EQUITY IN THE COMPARATIVE PERIOD
EUR million
Shareholders' equity at September 30, 2004, FAS 97.5
+ minority interest (IAS 1, difference in presentation) 1.6
IFRS 3 Goodwill 3.4
IAS 2 Inventories 3.5
IAS 12 Deferred tax assets 1.6
IAS 12 Deferred tax liabilities -3.4
IAS 16 Tangible assets 0.4
IAS 19 Pension liability -0.1
IAS 28 Investments in associate companies 2.2
IAS 32 Own shares -0.8
IAS 39 Shares in listed companies 1.4
IAS 39 Derivatives -0.5
Shareholders' equity at December 31, 2004 (IFRS) 106.8
RECONCILIATION OF RESULT IN THE COMPARATIVE PERIOD
EUR million
Profit for the period (FAS) 6.0
+ minority interest (IAS 1, difference in presentation) 0.2
IFRS 3 Reversal of good will amortizations 3.2
IAS 2 Inventories -0.3
IAS 12 Deferred tax assets -0.5
IAS 12 Deferred tax liabilities -0.2
IAS 17 Finance leases 1.0
IAS 19 Pension liability 0.6
IAS 28 Investments in associate companies 0.3
IAS 39 Derivatives 0.2
Profit for the period Jan 1 - Dec 31, 2004 (IFRS) 10.5
KEY INDICATORS
Dec 31, 2005 Dec 31, 2004
Shareholders' equity per
share, EUR 18.56 17.08
Equity ratio, % 50.0% 49.6%
Return on equity, % 10.2% 10.1%
Return on investment, % 10.8% 8.7%
Investments, EUR million 11.7 11.2
Average number of personnel,
continuing operations 1033 890
Average number of personnel,
discontinued operations - 182
Average number of shares, 1 000 6 253 6 161
CONTINGENT LIABILITIES
EUR million
Dec 31, 2005 Dec 31, 2004
Mortgages given for debts:
Real estate mortgages 40.7 34.9
Corporate mortgages 51.4 51.4
Share pledged 3.6 3.6
Other securities given for own
commitments
Real estate mortgages 0.1 0.1
Pledges 0.0 0.0
Leasing liabilities 1.3 0.9
Non-cancellable other leases,
minimum lease payments 2.1 1.9
Contingent liabilities for own
commitments:
Repurchasing commitments 0.1 0.2
Contingent liabilities on behalf
of the associate companies:
Guarantees - 0.1
Repurchasing commitments 0.1 0.1
Other contingent liabilities:
Redemption liability of
leased buildings - 2.5
OUTSTANDING VALUES OF DERIVATIVE INSTRUMENTS
Forward currency contracts 1.5 3.3
Commodity derivative instruments 5.0 5.9
Interest rate swaps 25.0 25.0
