INTERIM REPORT 1 January - 30 June 2010
LÄNNEN TEHTAAT PLC Interim Report 12 August 2010, 8.30 am
INTERIM REPORT 1 January - 30 June 2010
April-June:
- Consolidated net sales amounted to EUR 80.0 (65.5) million,
up 22%
- Operating profit, excluding non-recurring items, came to EUR 1.0 (1.6)
million; non-recurring items totalled EUR 0.0 (-0.5) million
- Profit for the period came to EUR 0.6 (0.8) million, and earnings per share
amounted to EUR 0.10 (0.12)
January-June:
- Net sales amounted to EUR 154.9 (130.2) million, a year-on-year growth of 19%
- Operating profit, excluding non-recurring items, came to EUR 1.9 (0.9)
million; non-recurring items totalled EUR 0.0 (-0.5) million
- Profit for the period came to EUR 1.4 (0.5) million, and earnings per share
amounted to EUR 0.24 (0.08)
Assessment of profit performance for the full year is unchanged.
The information in this Interim Report has not been audited.
Matti Karppinen, CEO:
“Thanks to the good level of sales in Grains and Oilseeds, the Group's net sales
were up by more than 20% year on year. The second quarter was expected to be
more challenging than a year earlier, in terms of the profit outlook, and the
consolidated operating profit, excluding non-recurring items, was in fact down
year on year. The Group's profit was nevertheless at the same level as the first
quarter.
The labour market dispute in the food industry in Finland in the spring had a
disruptive impact on our Finnish business, and this continued to be felt until
June. The measures taken in the dispute affected our Frozen Foods, Seafood, and
Grains and Oilseeds businesses. The worst impact was in fresh fish production,
which has the fastest turnover of stocks.
In continuing to develop and strengthen the Finnish Seafood business in line
with our adopted strategy, the company agreed an ownership arrangement with
Taimen Oy in June. This integration with fish farming will allow us to create
the most efficient fresh-product supply chain for rainbow trout on the Finnish
market. The arrangement will also allow the introduction of new business
models.”
KEY FIGURES ILLUSTRATING PERFORMANCE
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Net sales 80.0 65.5 154.9 130.2 266.0
Operating profit 1.0 1.1 1.9 0.4 6.8
Operating profit,
excluding non-recurring items 1.0 1.6 1.9 0.9 7.7
Profit before taxes 0.9 1.0 2.1 0.6 7.3
Profit for the period 0.6 0.8 1.4 0.5 5.8
Earnings per share, EUR 0.10 0.12 0.24 0.08 0.94
CHANGES IN GROUP STRUCTURE AND CORPORATE TRANSACTIONS
In June, Lännen Tehtaat plc and Taimen Oy entered into an arrangement whereby
the Lännen Tehtaat plc's subsidiary Apetit Kala Oy acquired a 30% holding in
Taimen Oy and Taimen Oy acquired a 30% holding in Apetit Kala Oy. As part of
this arrangement, Taimen Oy transferred to Apetit Kala Oy the share capital of
its fish-processing subsidiary Myrskylän Savustamo Oy and the share capital of
Myrskylän Savustamo Oy's subsidiary, Safu Oy. Lännen Tehtaat's share of the
Taimen Group's profits is reported in Lännen Tehtaat Group's segment reporting
as associated company profit for Seafood above the operating profit as from the
start of June.
The Taimen Group has a total of 28 fish farming units in Finland and Sweden and
also three gutting facilities. The company specialises in farming rainbow trout,
trout, whitefish and Saimaa Arctic char, as well as fry and fingerling
production. The Taimen Group's total annual production is approximately eight
million kilos, and its market share is about half of total rainbow trout
production in Finland. The Taimen Group's net sales in 2009 amounted to EUR 29.5
million, and its operating profit was EUR 4.4 million.
Myrskylän Savustamo Oy produces and markets fish products under the Safu brand.
Myrskylän Savustamo Oy's net sales in 2009 totalled EUR 3.8 million, and its
operating profit was EUR 0.3 million.
NET SALES AND PROFIT
April-June:
Consolidated net sales for the second quarter amounted to EUR 80.0 (65.5)
million, an increase of 22% on the same quarter in 2009. This increase was
principally due to the year-on-year growth in sales volumes in Grains and
Oilseeds.
The Group's second-quarter operating profit, excluding non-recurring items, was
EUR 1.0 (1.6) million. The non-recurring items totalled EUR 0.0 (-0.5) million.
The operating profit includes EUR 0.3 (0.4) million as the share of the profits
of associated companies. In Other Operations, the profit was up, while in Grains
and Oilseeds and in Frozen Foods the profit was at about the same level as the
previous year. In the Seafood business, the result, excluding non-recurring
items, was down year on year.
January-June:
Consolidated net sales for January-June came to EUR 154.9 (130.2) million, up by
19%.
The January-June operating profit, excluding non-recurring items, was EUR 1.9
(0.9) million. The operating profit includes EUR 0.2 (0.4) million as the share
of the profits of associated companies. The non-recurring items totalled EUR 0.0
(-0.5) million. The non-recurring items a year earlier were connected with the
Seafood business.
Financial income and expenses came to a total of EUR 0.1 (0.2) million. This
figure includes valuation items of EUR 0.7 (0.5) million with no cash flow
implications. Financial expenses also include EUR -0.5 (-0.3) million of Avena
Nordic Grain Group's profit as the share attributable to the Avena Nordic Grain
Oy employee shareholders.
Profit before taxes was EUR 2.1 (0.6) million. Profit for the period came to EUR
1.4 (0.5) million, and earnings per share amounted to EUR 0.24 (0.08).
FINANCING AND BALANCE SHEET
The Group's liquidity was good and its financial position is strong.
The cash flow from operating activities in January-June after interest and taxes
amounted to EUR 8.6 (21.2) million. The impact of the change in working capital
was EUR 5.6 (17.6) million, most of this being in the Grains and Oilseeds
business. The net cash flow from investing activities came to EUR -7.3 (-11.1)
million. Deposits and withdrawals of liquid assets into and from short-term
fixed income funds had an impact of EUR -1.0 (-9.0) million on the cash flow
from investing activities. The cash flow from financing activities came to EUR
-5.3 (-11.9) million, and this included EUR -4.7 (-5.3) million in dividend
payments.
At the end of the period, the Group had EUR 2.7 (10.1) million in
interest-bearing liabilities and EUR 22.2 (21.0) million in liquid assets. Net
interest-bearing liabilities totalled EUR -19.4 (-10.9) million. The
consolidated balance sheet total stood at EUR 169.9 (170.7) million. At the end
of June, equity totalled EUR 134.0 (130.7) million. The equity ratio was 78.9%
(76.7%). Commercial papers issued for the Group's short-term financing stood at
a total value of EUR 0.0 (3.0) million at the end of the period. The Group's
liquidity over the next few years is secured with committed credit facilities; a
total of EUR 25 (25) million was available in credit at the end of June. No
credit facilities were used during the January-June period.
INVESTMENT
Gross investment in non-current assets in January-June came to EUR 1.7 (1.5)
million.
PERSONNEL
The average number of personnel during January-June was 610 (658). Most of the
reduction in personnel occurred in the Seafood business.
OVERVIEW OF OPERATING SEGMENTS
Frozen Foods
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Net sales 11.0 11.4 23.8 24.2 46.0
Operating profit 0.3 0.5 0.6 0.8 3.4
Operating profit,
excluding non-recurring items 0.3 0.5 0.6 0.8 3.4
Second-quarter net sales in Frozen Foods were down by about 3% year on year.
This decrease was mainly a result of the undelivered retail products due to the
labour market dispute in the food industry. Hotel, restaurant and catering
sector sales, food industry sales and exports were all at the same level as a
year earlier.
Operating profit almost reached the level of the previous year. The labour
market dispute in the food industry had a negative impact on the quarterly
result. The dispute meant that production was at a standstill for eight days.
The disruptive effects of the dispute were seen in lost sales and increased
costs as depleted product stocks were refilled. Product shortages and problems
in production were resolved during June, when stocks returned to normal levels.
In January-June, net sales in Frozen Foods fell by about 2% overall. Sales of
retail products were favourable. Growth occurred in sales of basic products in
particular, such as frozen vegetable and potato products and soups sold under
the Apetit brand. Sales of new products also increased, including Finnish-grown
Apetit vegetables launched in the autumn under the ‘domestic content' theme, and
the Apetit Muurikka pan-fry vegetables launched in the spring. Sales of frozen
pizzas and private label products were down year on year. Sales to the hotel,
restaurant and catering sector fell slightly, as did export sales, while sales
to the food industry were at the level of the same period in 2009.
The operating profit for January-June was slightly below the figure of a year
earlier.
The average number of personnel in Frozen Foods during January-June was 181
(188).
The investment of EUR 0.6 (1.2) million made in the first six months of the year
consisted mainly of expenditure on replacements in crop-season production
facilities and in the frozen ready meals factory.
Seafood
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Net sales 18.4 18.3 37.4 36.8 75.9
Operating profit -1.1 -1.0 -1.1 -1.9 -2.5
Operating profit,
excluding non-recurring items -1.1 -0.5 -1.1 -1.4 -1.8
In June, Lännen Tehtaat entered into an ownership arrangement with Taimen Oy, in
line with the strategy for the Finnish Seafood business. The arrangement allows
the creation of the most efficient fresh-product supply chain for rainbow trout
on the Finnish market. It will also produce synergy benefits, for instance in
production, logistics and sales. The arrangement will, furthermore, open up
opportunities for introducing new business models.
The second-quarter net sales of the Seafood business were up by about 1% on the
figure for the same quarter in 2009.
Net sales in the Finnish Seafood business were at about the level of a year
earlier. Sales received a boost with the incorporation of Myrskylän Savustamo
into the Group at the start of June, and with the growth in service sales,
though sales also suffered the adverse effects of the labour market dispute in
the food industry and the consequent disruptions that occurred in deliveries of
fish products. The dispute meant that production of fish products was at a
standstill for ten days. With Easter sales occurring partly at the end of the
first quarter, in contrast to the previous year, the contribution of Easter to
second-quarter sales was correspondingly down in 2010.
In the foreign Seafood business, euro-denominated net sales were up slightly.
Measured in local currencies, net sales were down year on year by about 10%. In
Norway, the drop in sales was attributable mainly to the discontinuation of an
unprofitable product segment. Sales volumes of the Swedish unit were at the
level of a year earlier, but average prices were down year on year.
Seafood's second-quarter operating profit, excluding non-recurring items, was
below that of the same quarter in 2009.
The result for the Finnish Seafood business was down year on year. This was due
to the considerable increase in salmon and rainbow trout prices that began
during the winter and has since continued, keeping raw material costs at an
exceptionally high level. Due to the competitive environment and the retail
trade's pricing periods, it has only been possible to pass on a proportion of
the higher raw material costs to sales prices. The labour market dispute in the
food industry interfered with production efficiency and led to an increase in
wastage and a deterioration in delivery reliability. Production did not return
to normal until June.
In foreign operations the second-quarter result was at the level of a year
earlier. The result was boosted by the improvement in labour and raw material
productivity and in cost efficiency. On the negative side, the result was
affected by the considerable rise in the market price of salmon raw material in
Norway.
Net sales in January-June were up by about 2% year on year. Net sales of the
Finnish Seafood business were at about the level of a year earlier.
Euro-denominated net sales of the foreign Seafood business grew by about 4%.
Measured in local currencies, net sales fell by 10% as a result of the changes
made to the product range and the fall in average prices in certain product
groups. The favourable trend in dressings and shellfish products continued.
The January-June operating result, excluding non-recurring items, was slightly
up year on year, but was nevertheless a loss. The result for the Finnish Seafood
business was lower than a year earlier. The result for the foreign Seafood
business showed significant growth year on year.
The number of personnel in the Seafood business totalled 359 (398). The drop in
personnel numbers was mainly a consequence of the reduction in the number of
Kalatori service counters and the outsourcing of logistics functions that took
place in summer 2009 in the Finnish Seafood business.
Investment in the Seafood business totalled EUR 0.6 (0.2) million. Most of this
was in completing the productivity investment programme at the Kuopio production
plant.
Grains and Oilseeds
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Net sales 50.5 35.8 93.5 69.0 143.4
Operating profit 2.2 2.2 4.1 3.1 7.3
Operating profit,
excluding non-recurring items 2.2 2.2 4.1 3.1 7.4
Second-quarter net sales in the Grains and Oilseeds business were up by 41% year
on year. The increase in net sales was due to the growth in volumes.
The operating profit in Grains and Oilseeds was at the level of a year earlier.
The good result was a consequence of higher grain trade sales volumes and the
good oil-refining yield and high-quality Finnish rapeseed crop.
Net sales in January-June were up by 36% year on year as a result of volume
growth, and the operating profit was EUR 1.0 million greater than a year
earlier.
There was a plentiful supply of grain on the world market during the first six
months of the year. This was attributable not only to the good crop harvests
around the world but also the high level of stocks transferred from the previous
season, which together kept market prices low. The price of rapeseed in relation
to grain prices was attractive from the grower's viewpoint. The rapeseed price
level was maintained at the start of the period by the scarce supply of soybeans
and the price of mineral oil.
The July weather conditions were unfavourable in parts of Europe and in some
countries of the former Soviet Union, and this led to a downward revision of
crop forecasts and to rising prices. In Finland, too, grain crop expectations
are below those of 2009 as a result of the smaller areas under cultivation and
the drop in per-hectare yield forecasts. By contrast, areas under rapeseed have
almost doubled year on year.
The Grains and Oilseeds business employed an average of 60 (62) people in the
first six months of the year.
In January-June, investment came to EUR 0.4 (0.2) million and focused on the
renewal of Avena's Internet marketplace (Avenakauppa) and replacement equipment
for the Kirkkonummi vegetable oil mill.
Other Operations
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Net sales 0.5 0.4 0.9 0.8 2.4
Operating profit -0.4 -0.6 -1.6 -1.6 -1.3
Operating profit,
excluding non-recurring items -0.4 -0.6 -1.6 -1.6 -1.3
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration, items not allocated under any of the business segments, and the
associated companies Sucros Ltd and Ateriamestarit Oy. The cost impact of the
services produced by Apetit Suomi Oy is an encumbrance on the operating result
of the Group's businesses in proportion to their use of the services.
Net sales from the sale of services were at the previous year's level.
The second-quarter operating result totalled EUR -0.4 (-0.6) million, which
includes EUR 0.4 (0.4) million as the share of the profits of associated
companies.
The January-June operating profit, excluding non-recurring items, totalled EUR
-1.6 (-1.6) million. This figure includes EUR 0.3 (0.4) million as the share of
the profits of associated companies.
Investment in Other Operations totalled EUR 0.1 (0.0) million.
DECISIONS OF THE ANNUAL GENERAL MEETING
Dividend distribution
The Annual General Meeting resolved that a dividend of EUR 0.76 per share,
totalling EUR 4.7 million, be distributed from the profits of the financial year
2009, in accordance with the proposal of the Board of Directors. The dividend
was paid on 13 April 2010.
Other decisions of the Annual General Meeting are given in the stock exchange
release dated 30 March 2010 and in the Interim Report published on 6 May 2010.
USE OF THE AUTHORISATIONS GRANTED TO THE BOARD OF DIRECTORS
Authorisations to issue shares
The Board of Directors has not yet exercised the authorisation granted to it by
the Annual General Meeting on 30 March 2010 to issue new shares or to transfer
Lännen Tehtaat plc shares held by the company.
SHARES AND TRADING
The number of Lännen Tehtaat plc shares traded on the stock exchange during
January-June was 498,118 (692,388), representing 7.9% (11.0%) of the total
number of shares. The euro-denominated share turnover was EUR 8.6 (8.4) million.
The highest share price quoted was EUR 20.00 (14.43) and the lowest EUR 15.51
(11.90). The average price of shares traded was EUR 17.25 (12.17).
At the end of June, the market capitalisation totalled EUR 104.9 (77.0) million.
At the end of June the company possessed a total 130,000 of its own shares, with
a nominal value totalling EUR 0.26 million. The shares in the company's
possession represent 2.1% of the company's total number of shares and of the
total number of votes.
FLAGGING ANNOUNCEMENTS
On 7 May 2010, EM Group Oy announced that its holding of Lännen Tehtaat plc
shares had, on 6 May 2010, exceeded 5% of the total number of Lännen Tehtaat plc
shares and votes. At the time of the announcement, EM Group Oy owned 316,000
Lännen Tehtaat plc shares, equating to 5.002% of the total number of Lännen
Tehtaat plc shares and 5.107% of the votes.
SEASONALITY OF OPERATIONS
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads.
In production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the final quarter of the year, which means that
the inventory volumes and their balance-sheet values are at their highest at the
end of the year. Since the entry of the fixed production overheads included in
the historical cost as an expense item is deferred until the time of sale, most
of the Group's annual profit is accrued in the final quarter. The seasonal
nature of operations is most marked in Frozen Foods and in the associated
company Sucros, due to the link between production and the crop harvesting
season.
Apetit Kala's sales peak at weekends and on seasonal holidays. As Easter can
take place in either the first or the second quarter, this can affect the
comparability of Seafood's net sales and profit between different years. A
significant proportion of Apetit Kala's profit depends on the success of
Christmas sales.
Net sales in the Grains and Oilseeds business vary from one year and quarter to
the next to a greater extent than in the other businesses, being dependent on
the demand and supply situation and on the price levels domestically and on
other markets.
SHORT-TERM RISKS AND UNCERTAINTIES
The most significant short-term risks for the Lännen Tehtaat Group concern the
following: the effects of a prolonged economic downturn on demand from consumers
and customers; the solvency of customers and the delivery performance of
suppliers; availability of raw materials; the impact of seafood price rises on
consumer demand; the management of raw material price changes and currency
risks; changes in the Group's businesses and customerships; introduction of a
new enterprise resource planning (ERP) system in Seafood's foreign operations;
and corporate acquisitions and the subsequent integration processes.
SIGNIFICANT EVENTS SINCE THE END OF THE REVIEW PERIOD
There have been no significant events since the end of the review period.
FUTURE OUTLOOK
The Group's net sales will be affected particularly by the level of activity in
grain and oilseed markets and by changes in the price level of grains and
oilseeds.
The Group's full-year operating profit, excluding non-recurring items, is
expected to be at least at the level of 2009. Profit accrual is expected to be
weighted heavily towards the last quarter of the year, as in 2009.
Raw material prices have risen considerably and the adverse impact of this on
the profit-earning capacity of the Seafood business is expected to continue in
the third quarter. The lower grain crop expectations than a year earlier and
abrupt price changes will mean a more challenging operating environment for
Grains and Oilseeds in the second half of the year than in 2009.
CONSOLIDATED INCOME STATEMENT
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Net sales 80.0 65.5 154.9 130.2 266.0
Other operating income 0.2 0.3 0.6 0.7 1.5
Operating expenses -78.2 -63.8 -151.0 -128.2 -257.3
Depreciation -1.3 -1.4 -2.6 -2.6 -5.3
Impairments 0.0 0.0 0.0 - -0.1
Share of profits of
accociated companies 0.3 0.4 0.2 0.4 2.0
Operating profit 1.0 1.1 1.9 0.4 6.8
Financial income and expenses -0.2 -0.1 0.1 0.2 0.5
Profit before taxes 0.9 1.0 2.1 0.6 7.3
Income taxes -0.3 -0.2 -0.7 -0.1 -1.5
Profit for the period 0.6 0.8 1.4 0.5 5.8
Attributable to
Equity holders of the parent 0.6 0.7 1.5 0.5 5.8
Non-controlling interests -0.1 0.1 -0.1 - -
Basic and diluted earnings per
share, calculated of the profit
attributable to the shareholders
of the parent company, EUR 0.10 0.12 0.24 0.08 0.94
STATEMENT OF COMPREHENSIVE INCOME
EUR million Q2 Q2 Jan-Jun Jan-Jun Jan-Dec
2010 2009 2010 2009 2009
Profit for the period 0.6 0.8 1.4 0.5 5.8
Other comprehensive income
Cash flow hedges -0.4 -0.3 -0.7 0.6 1.1
Taxes related to cash flow hedges 0.1 0.1 0.2 -0.2 -0.3
Translation differences 0.0 -0.1 0.5 0.6 1.4
Total comprehensive income 0.3 0.6 1.4 1.5 8.0
Attributable to
Equity holders of the parent 0.4 0.5 1.4 1.5 8.0
Non-controlling interests -0.1 0.1 -0.1 - -
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 30 June 30 June 31 Dec
2010 2009 2009
ASSETS
Non-current assets
Intangible assets 6.3 6.1 5.6
Goodwill 8.5 6.4 6.9
Tangible assets 38.0 38.3 37.9
Investment in associated companies 32.3 25.4 24.0
Available-for-sale investments 0.1 0.1 0.1
Receivables 0.5 1.7 1.8
Deferred tax assets 1.2 1.5 1.1
Non-current assets total 87.0 79.4 77.4
Current assets
Inventories 30.7 42.0 48.1
Receivables 30.1 24.4 25.5
Income tax receivable 0.0 0.3 0.1
Financial assets at fair value
through profits 18.3 12.9 17.2
Cash and cash equivalents 3.9 8.1 7.9
Current assets total 83.0 87.7 98.7
Non-current assets held for sale - 3.6 -
Total assets 169.9 170.7 176.1
30 June 30 June 31 Dec
2010 2009 2009
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent 131.5 130.7 137.3
Non-controlling interests 2.6 - -
Total equity 134.0 130.7 137.3
Non-current liabilities
Deferred tax liabilities 3.7 3.8 4.1
Long-term financial liabilities 2.6 3.7 2.4
Non-current provisions 0.2 0.1 0.2
Other non-current liabilities 4.5 0.1 -
Non-current liabilities total 11.0 7.7 6.6
Current liabilities
Short-term financial liabilities 0.2 6.5 0.9
Income tax payable 2.4 1.1 1.5
Trade payables and other liabilities 22.3 24.7 29.7
Current liabilities total 24.9 32.3 32.1
Total liabilities 35.9 40.0 38.8
Total equity and liabilities 169.9 170.7 176.1
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Jan-Jun Jan-Jun Jan-Dec
2010 2009 2009
Net profit for the period 1.4 0.5 5.8
Adjustments, total 2.8 4.1 6.5
Change in net working capital 5.6 17.6 14.9
Interests paid -0.8 -1.1 -1.8
Interests received 0.1 0.4 1.0
Taxes paid -0.5 -0.3 -0.6
Net cash flow from operating activities 8.6 21.2 25.8
Investments in tangible and intangible assets -1.7 -1.5 -2.7
Proceeds from sales of tangible
and intangible assets 0.5 0.4 3.2
Acquisition of associated companies -8.0 - -
Transactions with non-controlling interests 2.7 -1.2 -1.2
Purchases of other investments -1.0 -9.0 -22.0
Proceeds from sales of other investments 0.0 - 9.0
Dividends received from investing activities 0.2 0.2 3.3
Net cash flow from investing activities -7.3 -11.1 -10.4
Repayments of short-term loans -0.2 -6.5 -9.5
Repayments of long-term loans -0.3 -0.2 -2.7
Payment of financial lease liabilities - 0.0 0.0
Dividends paid -4.7 -5.3 -5.3
Cash flows from financing activities -5.3 -11.9 -17.5
Net change in cash and cash equivalents -4.0 -1.7 -2.0
Cash and cash equivalents at the
beginning of the period 7.9 9.9 9.9
Cash and cash equivalents at the
end of the period 3.9 8.1 7.9
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Attributable to equity holders of the parent company, total
I = Non-controlling interests (NCI)
J = Total equity
A B C D E F G H I J
Shareholders'
equity at
1 Jan 2010 12.6 23.4 0.0 7.2 -1.8 -0.5 96.4 137.3 - 137.3
Dividend
distribution - - - - - - -4.7 -4.7 - -4.7
Other changes - - - - - - -0.2 -0.2 - -0.2
Transaction
with NCI - - - - - - -2.3 -2.3 2.6 0.3
Total comprehensive
income - - -0.5 0.0 - 0.5 1.5 1.4 -0.1 1.4
Shareholders'
equity at
30 June 2010 12.6 23.4 -0.5 7.2 -1.8 0.0 90.6 131.5 2.6 134.0
Shareholders'
equity at
1 Jan 2009 12.6 23.4 -0.8 7.2 -1.8 -1.9 96.6 135.1 0.5 135.6
Dividend
distribution - - - - - - -5.3 -5.3 - -5.3
Transaction
with NCI - - - - - - -0.7 -0.7 -0.5 -1.2
Total comprehensive
income - - 0.4 - - 0.6 0.5 1.6 - 1.6
Shareholders'
equity at
30 June 2009 12.6 23.4 -0.4 7.2 -1.8 -1.3 91.0 130.7 - 130.7
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the EU. The accounting policies adopted are
consistent with those of the Group's annual financial statements for the year
ended 31 December 2009.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Grains and Oilseeds
D Other Operations
E Total
Operating segments, January-June 2010
EUR million A B C D E
Total segment sales 23.8 37.4 93.5 0.9 155.6
Intra-group sales 0.0 0.0 0.0 -0.7 -0.7
Net sales 23.8 37.4 93.5 0.2 154.9
Share of profits of
associated companies
included in operating
profit - -0.1 - 0.3 0.2
Operating profit 0.6 -1.1 4.1 -1.6 1.9
Gross investments in
non-current assets 0.6 0.6 0.4 0.1 1.7
Corporate acquisitions
and other share purchases - 10.5 - - 10.5
Depreciations 1.1 0.9 0.3 0.3 2.6
Impairments - 0.0 - - 0.0
Personnel 181 359 60 10 610
Operating segments, January-June 2009
EUR million A B C D E
Total segment sales 24.2 36.8 69.0 0.8 130.9
Intra-group sales 0.0 0.0 0.0 -0.7 -0.7
Net sales 24.2 36.8 69.0 0.1 130.2
Share of profits of
associated companies
included in operating
profit - - - 0.4 0.4
Operating profit 0.8 -1.9 3.1 -1.6 0.4
Gross investments in
non-current assets 1.2 0.2 0.2 - 1.5
Corporate acquisitions
and other share purchases - 1.2 - - 1.2
Depreciations 0.9 1.0 0.3 0.4 2.6
Impairments - 0.0 - - -
Personnel 188 398 62 10 658
Operating segments, January-December 2009
EUR million A B C D E
Total segment sales 46.0 75.9 143.4 2.4 267.8
Intra-group sales -0.1 0.0 0.0 -1.6 -1.7
Net sales 46.0 75.9 143.4 0.8 266.0
Share of profits of
associated companies
included in operating
profit - - - 2.0 2.0
Operating profit 3.4 -2.5 7.3 -1.3 6.8
Gross investments in
non-current assets 1.9 0.6 0.3 - 2.7
Corporate acquisitions
and other share purchases - 1.2 - - 1.2
Depreciations 2.0 2.0 0.7 0.7 5.3
Impairments - - 0.1 - 0.1
Personnel 205 379 62 11 657
ACQUISITIONS
On 7 June 2010, Apetit Kala Oy acquired the entire share capital of
fish-processing companies Myrskylän Savustamo Oy and Safu Oy from Taimen Oy. The
purchase price was EUR 2.5 million and was paid by transferring to Taimen Oy 58
new Apetit Kala Oy shares, representing 15% of the total number of shares and
voting interests in Apetit Kala Oy. The fair value of Apetit Kala Oy's shares at
the acquisition date was based on the fair value of the businesses of Myrskylän
Savustamo Oy and Safu Oy transferred to Apetit Kala Oy as capital contribution.
In connection with the deal, Taimen Oy acquired an additional 15% of Apetit Kala
Oy's shares from Lännen Tehtaat plc for a cash payment of EUR 2.5 million. At
the same time, Apetit Kala Oy acquired a 30% holding in Taimen Oy. Due to cross
ownership, both the non-controlling interests' share of Apetit Kala's profit and
balance sheet total and Apetit Kala Oy's share of associated company Taimen's
profits are consolidated on the basis of a 23% share.
The carrying amounts of the assets and liabilities acquired prior to the
amalgamation totalled EUR 0.7 million. EUR 0.8 million was recognised for
customer relationships and EUR 0.2 million recognised as deferred tax
liabilities. The amount of non-tax-deductible goodwill recognised on the
acquisition was EUR 1.3 million, which is based on synergy benefits in
production, logistics and sales. Transaction costs of the share transaction made
with the non-controlling interests, EUR 0.1 million was recognised directly in
equity. The Group's net sales would have been EUR 1.4 million greater and net
profit EUR 0.1 million smaller had the acquisition been consolidated from 1
January 2010. Net sales in June, after the acquisition, were EUR 0.5 million and
net profit EUR 0.0 million.
KEY INDICATORS
30 June 30 June 31 Dec
2010 2009 2009
Shareholders' equity per share, EUR 21.25 21.12 22.19
Equity ratio, % 78.9 76.7 78.0
Gearing, % -14.5 -8.3 -15.8
Gross investments in non-current
assets, EUR million 1.7 1.5 2.7
Corporate acquisitions and other
share purchases, EUR million 10.5 1.2 1.2
Average number of personnel 610 658 657
Average number of shares, 1,000 pcs 6,188 6,188 6,188
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2009 annual financial statements.
CONTINGENT LIABILITIES, CONTINGENT ASSETS AND OTHER COMMITMENTS
30 June 30 June 31 Dec
EUR million 2010 2009 2009
Mortgages given for debts
Real estate mortgages 2.8 7.7 2.0
Guarantees 11.0 10.0 11.1
Non-cancellable other leases,
minimum lease payments
Real estate leases 5.3 4.8 4.3
Other leases 0.8 0.7 0.8
DERIVATIVE INSTRUMENTS
Outstanding nominal values of
derivative instruments
Forward currency contracts 3.3 3.8 4.0
Commodity derivative instruments 9.4 10.4 9.2
CONTINGENT ASSETS
The present value of proceeds from the
sale of shares in the joint entry account 0.7 0.7 0.7
INVESTMENT COMMITMENTS
Lännen Tehtaat has no significant investment commitments at 30 June 2010.
OTHER COMMITMENTS
Based on the shareholder agreements on the ownership arrangement between Apetit
Kala Oy and Taimen Oy, once certain terms and conditions are met the contracting
parties are entitled to terminate the cross ownership at fair value. The
liability in any termination of ownership will, on the basis of IAS 32, be
recognised under non-current liabilities. The receivable arising in connection
with this may not, under IFRS rules, be recognised.
CHANGES IN TANGIBLE ASSETS
30 June 30 June 31 Dec
EUR million 2010 2009 2009
Book value at the beginning of the period 37.9 43.5 43.5
Additions 1.4 0.8 2.0
Additions through acquisitions 0.7 - -
Disposals -0.2 -4.0 -4.0
Depreciations and impairments -2.2 -2.3 -4.5
Other changes 0.4 0.4 0.9
Book value at the end of the period 38.0 38.3 37.9
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million Jan-Jun Jan-Jun Jan-Dec
2010 2009 2009
Sales to associated companies 0.2 0.2 1.0
Sales to joint ventures 3.7 3.9 6.7
Purchases from associated companies 1.6 1.3 2.2
Long-term receivables from associated companies - 0.0 1.3
Long-term receivables from joint ventures 0.1 0.0 0.1
Trade receivables and other receivables
from associated companies 1.4 1.5 1.6
Trade receivables and other receivables
from joint ventures 0.8 0.6 0.7
Trade payables and other liabilities
to associated companies 0.1 0.0 0.2
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: CEO Matti Karppinen, tel. +358 40 8448 692
Copies to:
NASDAQ OMX Helsinki Ltd
Principal media
www.lannen.fi
