HK RUOKATALO GROUP?S FINANCIAL STATEMENT BULLETIN FOR 2005
HK Ruokatalo Group Oyj STOCK EXCHANGE BULLETIN 24 Feb 2006, 11.15am
HK RUOKATALO GROUPS FINANCIAL STATEMENT BULLETIN FOR 2005
* GOOD YEAR FOR OUR INTERNATIONAL BUSINESS
* BUSINESS AT HOME WELL BELOW TARGET, OPERATIONS TO BE MADE
MORE EFFICIENT
The financial statements signed by HK Ruokatalo Groups Board of
Directors today show a year-on-year rise of EUR 200 million in Group
revenue to EUR 883.3 million. The consolidated book operating profit
was EUR 24.1 million (EUR 35.7m in 2004). The comparable operative
consolidated book operating profit was EUR 28.8 million (EUR 31.1m).
The Board of Directors is to recommend a dividend of EUR 0.27 per
share (EUR 0.29 in 2004) The recommended dividend amounts to more than
half of the groups 2005 earnings.
HK Ruokatalo Group concerns international business performed well
during 2005, with targets being met in the Baltic market and Poland.
Rakvere Lihakombinaat and Sokolów both reported higher revenue and
improved year-on-year performance. Higher sales also contributed to
enhanced revenue at home. Despite positive progress made, however,
sales profitability was much more modest than envisaged. The subtext
of this was unsatisfactory earnings and operating profit at home.
Similarly in Estonia, Talleggs performance was below target.
REVENUE AND FINANCIAL PERFORMANCE
The consolidated operating profit grew by 29.8% to EUR 883.3 million.
The inclusion of our business in Poland in the consolidated accounts
notched up growth. International operations accounted for 39.5% of
total revenue, up from 23.2% in 2004. Business outside Finland
accounted for 42.3% of the EUR 24.1 million consolidated operating
profit.
The operating profit before taxes was EUR 20.3 million, compared to
EUR 32.6 million in 2004. Any comparison should take into account the
exceptional item of EUR 2.9 million recognised in Q4 of 2004. This was
owing to changes in the principles for calculating disability pension
liabilities under the Finnish statutory employment pension scheme
(TEL).
Furthermore, additional one-off impairment charges of EUR 5.7 million
during Q4 eroded earnings at home. These charges were partly
attributable to write-downs in fixed assets in preparation for the
winding up of production in Turku and Tampere inasmuch as progress is
made with business restructuring as planned and partly to employee and
pension arrangements made earlier. Additionally the EUR 1 million
final part of the disability pension liabilities under the Finnish
statutory employment pension scheme (TEL) booked in the opening IFRS
balance sheet on 1 January 2004 was recognised in Q4.
Saturn Nordic Holding AB - in which HK Ruokatalo Group has a 50% stake
and which owns 82.5% of the shares in Polands leading meat production
and processing company Sokolów S.A. - has been accounted for in the HK
Ruokatalo Groups consolidated figures using proportionate
consolidation since 1 January 2005.
CONSOLIDATED INCOME STATEMENT, Q4 and the entire year
(EUR million)
10-12/05 10-12/04 1-12/05 1-12/04
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Revenue 233.3 180.4 883.3 680.4
Operating profit 2.4 13.1 24.1 35.7
Share of associates' results 0.0 0.1 0.7 2.1
Financial income and expenses, net -0.8 -1.3 -4.5 -5.1
Profit before tax 1.6 11.8 20.3 32.6
Tax on income from operations 0.2 -2.5 -3.3 -6.1
Profit for the period 1.8 9.3 17.0 26.5
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Net profit attributable:
To equity holders of the parent 1.5 9.1 16.0 26.1
To minority interest 0.3 0.2 1.0 0.4
Total 1.8 9.3 17.0 26.5
EPS, diluted, EUR 0.04 0.32 0.46 0.76
BUSINESS IN FINLAND
Although revenue in Finland rose by 2.6% to EUR 588.8 million, the
operating profit slumped by 52.7% to EUR 13.9 million. Our poor
operating profit indicates that business at home was way off target.
Higher sales volume was partly at the expense of profitability.
Moreover, the additional charges above in full eroded domestic
operations.
We are aware of the problems our business is facing at home and will
be addressing them during 2006-2007.
HK Ruokatalos processed meat sales were up 3.7% in terms of volume in
the retail trade compared to market growth of 1.9% over the same
period. We performed best in the largest segments: grilling sausages
and whole meat cold cuts. However, lower retail prices as a result of
a fiercely competitive market meant we lost a slight share of the
market in terms of euros. HK Ruokatalo was market leader in processed
meats.
The Finnish convenience food market rose by 3.8%. At the same time, HK
Ruokatalos convenience foods were up 18.9% in sales volume. The
increase was attributable to snacks and meal components. The fact that
our market share rose by 1.6 percentage points in terms of volume and
just 0.4 percentage points in terms of value reflects the impact of
price competition. HK Ruokatalo was in third place on the convenience
foods market.
The industrially packed meat market rose by 10.5%. Competition was
fiercest in our strong segments, pork cutlets, cold cuts and oven-
ready joints. HK Ruokatalo was market leader in terms of industrially
packed meat volume and ranked second in terms of value. Sales were
unsatisfactory and we lost a 2.2 percentage point share of the market.
Whilst sales volumes of HK Ruokatalos poultry meat grew in line with
the market as a whole, a change in the sales structure was
discernible. Our supplies to the retail trade declined partly in the
wake of falling demand for pieces on the bone and partly because of
tougher competition in imported poultry meat fillet products imports
at the start of the year. On the other hand, we provided Finnish
poultry meat for Tallegg to safeguard its own raw meat supplies. This
occasionally reduced supplies at home. The popularity of boneless
products, especially fillets, grew at the expense of on-the-bone
products in Finland. Extensive publicity about avian flu, which had
spread from Asia during the last few months of the year, had no impact
on the consumption of poultry meat in Finland. Consumer confidence in
Finnish foodstuffs gained ground during the year.
The Finnish HoReCa market rose by around 1.3%. HK Ruokatalos sales
volume in this sector rose by 6.2%, most of this rise was in meat and
poultry meat. Although we lost a small share of the convenience food
market, our share of the processed meats market was slightly up.
Fierce price competition early in the year somewhat weakened HoReCa
profitability because it was impossible to pass on the rise in raw
material and other costs in full to sales prices. However, a good
Christmas season improved profitability towards the end of the year.
HK Ruokatalo successfully increased its exports from Finland in terms
of both volume and value. Demand and prices were good in Russia, an
important export market for pork. Other major export countries were
Japan, the USA, the Baltics and Sweden. Exports were valued at EUR
64.6 million.
BUSINESS IN THE BALTICS
Revenue in the Baltics rose by 3.2% to EUR 113.8 million and the
operating profit by 3.4% to EUR 6.5 million. The year was clearly
dichotomous. We performed well on the red meat front and Rakvere
Lihakombinaat and its subsidiaries posted a record performance. The in-
house development programme systematically carried out at Rakvere
delivered improved competitiveness and profitability. Despite
discounts and pressure on costs, margins remained good and cost
discipline was maintained. New, more highly processed products,
consumer-packed meat and sliced products sold well. Positive progress
was supported by quality, competitive pork raw material produced by
Rakvere itself. With a 33% share of the market, Rakvere Lihakombinaat
is clear market leader in Estonia.
The year was a difficult one on the poultry meat front. We began to
build a salmonella-free production chain based on the Finnish model
following the discovery of salmonella bacteria in the production chain
of poultry company Tallegg in spring 2005. This caused occasional
disruptions in supply and sales of poultry meat in Estonia were down
year-on-year. On a more positive note, there was a marked rise in
sales of cooked products such as nuggets and overall Tallegg
successfully retained its market leadership in broiler products with a
30% share of the market. Sales of eggs remained healthy and bolstered
other operations. Despite improved hygiene and animal health, Tallegg
was way behind target. Lost profits and investments in upgrading the
production chain had an impact of around EUR 2.5 million on Talleggs
result.
In Latvia, Rigas Miesnieks new brand and range of products provided
the momentum for an almost 20% increase in revenue. Specialisation and
cost discipline restored the company to profit. Rigas Miesnieks
slightly increased its share of the market to 18% and ranked number
one on the Latvian market. In Lithuania, we were able to increase
sales in our important Klaipedos Maistas cooking sausages and
frankfurters, where we have a market share of around 9%. Since there
are still over 300 meat processing plants, the Lithuanian market is
fragmented.
BUSINESS IN POLAND
The year under review was the first full financial year of cooperation
with Danish Crown in the ownership of Sokolów. Sokolów S.A. reported
revenue of EUR 376.6 million, up by EUR 38.8 million or 11.5% year-on-
year. The operating profit was also up on the year. After
consolidation, HK Ruokatalo had a EUR 188.3 million share of Sokolóws
revenue and EUR 3.7 million share of the operating profit. Changes in
recognition practice mean there are no comparable figures available
for 2004.
Sokolów achieved its operative targets. There are several reasons
behind this positive development. Sokolów has Polands highest-
respected meat brand and a wealth of experience in the business.
Poland is home to almost 40 million consumers, with nearly one hundred
million more in neighbouring territories. The region provides
considerable growth potential.
TRANSITION TO IFRS REPORTING
HK Ruokatalo Group concern switched over to IFRS-compliant financial
reporting at the start of 2005. A stock exchange bulletin dated 29
April 2005 presented the IFRS comparative information for 2004 and an
explanation of the material changes in the groups financial
statements arising from the adoption of IFRS. The bulletin contained
an IFRS-compliant income statement and balance sheet for 2004,
quarterly figures and bridging statement of the transition from
Finnish GAAP to IFRS accounting.
The interim reports and comparison information published in 2005 were
prepared in compliance with IFRS recognition and measurement
principles.
MANAGEMENT
On 12 April 2005, the companys Board of Directors appointed Kai
Seikku MSc (Econ. & Bus. Admin.) to be HK Ruokatalos next CEO. Seikku
joined the company as managing director of HK Ruokatalo Oy, which is
responsible for the groups business operations in Finland, on 1
September 2005. He will take up the post of CEO of the entire HK
Ruokatalo Group on 1 April 2006, when the present CEO, Simo
Palokangas, retires.
Kai Seikku had earlier carved out a career for himself in business
management consulting and marketing communications. He joined HK
Ruokatalo from advertising agencies Hasan & Partners Oy and McCann-
Erickson, where he was respectively CEO and Country Chairman.
The management organisation was restructured on 9 November 2005, when
Antti Lauslahti MSc (Econ. & Bus. Adm.) was appointed executive vice
president Commercial Operations. Various operative management posts
were also reorganised in the same context. These measures were carried
out in a bid to create added market focus and improve results
accountability.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
An Extraordinary General Meeting held on 23 February 2005 voted in
favour of changes relating to the corporate restructuring under way at
the time. The most important item of business was the proposal to
change the trading name of the company from HK Ruokatalo Oyj to HK
Ruokatalo Group Oyj. At the same time, Article 2 was amended in line
with the companys changing circumstances by the addition to the
companys objects to include not only the possession, letting and
trading of land, buildings and shares, but also other investment
activities. Article 7 was amended so that general meetings of
shareholders can be held in Turku, Espoo, Eura, Forssa, Helsinki,
Pori, Tampere or Vantaa. The new Articles of Association entered into
force on 31 March 2005.
CHANGES IN GROUP STRUCTURE
September 2004 saw a start made on streamlining the companys business
operations in Finland. Streamlining was completed in two stages during
the year under review. In the first stage, HK Ruokatalo Group Oyjs
fully-owned subsidiaries Broilertalo Oy, Food Kuljetus Oy, Koiviston
Teurastamo Oy and Pouttu Foods Oy merged with and into HK Ruokatalo
Group Oyj on 31 March 2005. In the second stage, the groups Finnish
industrial operations, sales, marketing, logistics and transportation,
as well as the employees concerned, were transferred to a new
subsidiary known as HK Ruokatalo Oy. The business transfer from HK
Ruokatalo Group Oyj to HK Ruokatalo Oy took place on 1 April 2005.
Subsequent to the business transfer, the parent company, HK Ruokatalo
Group Oyj, retained responsibility for group management, finance and
administration. HK Ruokatalo Group Oyj owns the entire share capital
of HK Ruokatalo Oy. Procurement company LSO Foods Oy continues to
trade as a wholly owned subsidiary of HK Ruokatalo Group Oyj.
Restructuring took place in the groups poultry business in Estonia.
Holding company AS Baltic Poultry ceased trading and merged with AS
Tallegg in June. July 2005 saw Tallegg discontinue egg processing
operations by selling its 50% stake in AS Eesti Munatooted.
In Poland during the year, Saturn Nordic Holding AB, the joint venture
owned by HK Ruokatalo Group and Danish Crown, increased its holding in
Sokolów S.A. from 72.8% to 82.5%.
INVESTMENTS
Group gross investments totalled EUR 59.2 million (EUR 52.3 million).
EUR 42.5 million of this was spent on projects at home and EUR 8.9
million on projects in the Baltics. HK Ruokatalo Groups share of
Sokolów investments was EUR 7.8 million.
Major projects were pending or nearing completion during the year. The
project to modernise and raise the capacity of the slaughtering line
at Forssa is nearing completion for production use and the freezing
plant project progressed to the equipment installation stage. The cost
of the new slaughtering line at Forssa will be around EUR 30 million
instead of just over EUR 20 million as reported earlier. The earlier
figure quoted did not include the cost of the quick carcass
refrigeration plant.
Work was completed on expanding the delivery terminal at the
production facilities in Vantaa. The project also included upgrading
the order picking system and increasing the level of automation in the
older part of the terminal.
FINANCING
Group interest-bearing liabilities at 31 December 2005 were EUR 176.1
million, compared to EUR 131.2 million a year earlier. EUR 13.4
million of the increase in debt was a result of consolidating the debt
of joint venture Saturn Nordic Holding Group. The equity ratio was
44.7% (49.3%).
SHARE CAPITAL
HK Ruokatalo Group Oyjs registered and fully paid share capital at
the balance sheet date was EUR 58,587,428.10. There was no increase in
share capital during the year.
At the balance sheet date, the share capital was divided into
29,063,193 A Shares and 5,400,000 K Shares. Each share has a nominal
value of EUR 1.70 and gives equal entitlement to a dividend. Under the
companys Articles of Association, each A Share conveys one vote and
each K Share 20 votes. The K Shares are owned by LSO Osuuskunta. HK
Ruokatalo Groups shares joined the book-entry securities system on 31
October 1997.
At the balance sheet date, the company had 8,306 registered owners.
STOCK EXCHANGE LISTINGS
HK Ruokatalo Groups A Share has been quoted on the Helsinki Exchanges
since 6 February 1997. During the year under review, 11,395,007 of the
companys shares were traded for a total of EUR 104,612,945. The
highest price quoted was EUR 10.05 and the lowest EUR 7.23. The middle
price was EUR 9.17 and the closing price on the year was EUR 9.86. The
share price rose by 34% on the year.
HK Ruokatalo Groups market capitalisation (A and K Shares) at the
balance sheet date was EUR 339.8 million (EUR 253.6m).
Since 3 June 2005, HK Ruokatalo Group has had a market making
agreement which meets the requirements of the Helsinki Exchanges
Liquidity Providing (LP) operation. The agreement was concluded with
FIM Pankkiiriliike Oy.
NOTICE OF CHANGE IN OWNERSHIP
On 23 December 2005, Osuuspankkikeskus Osk announced that its stake in
HK Ruokatalo Group Oyj had risen to 5.17% of the share capital and
1.30% of the votes. The stake includes the holding of
Osuuspankkikeskus and its subsidiaries, as well as the mutual funds
administrated by OP and Pohjola Treasury companies.
BOARD OF DIRECTORS AUTHORISATION TO INCREASE THE SHARE CAPITAL
Meeting on 12 April 2005, the Annual General Meeting authorised the
Board of Directors to decide whether to increase the share capital
through one or more rights issues, whether to issue one or more
convertible bond loans and/or warrants so that in a rights issue or
when issuing convertible bonds or warrants, a maximum of 2,000,000 of
the companys new Series A Shares having a nominal value of EUR 1.70
may be issued and the companys share capital may be raised by no more
than EUR 3,400,000.
The authorisation allows the Board of Directors to disapply the pre-
emption rights of existing shareholders and to decide the issue price
and other terms and conditions of subscription and the terms and
conditions of a convertible bond loan or warrants. The authorisation
is valid until 12 April 2006. To date, the Board of Directors has not
exercised this authorisation.
EMPLOYEES
HK Ruokatalo Group concern employed an average of 4,541 persons
(4,713) in Finland and the Baltics during the financial year. At year-
end 2005, we provided jobs for 4,309 people in Finland and the
Baltics. This compares with 4,417 a year earlier. Additionally, the
Sokolów Group in Poland employed an average of 4,734 persons.
The parent company employed an average of 1,702 persons during Q1 2005
and an average of 11 persons during the rest of the year (1,856
persons in 2004). This decrease was attributable to the parent company
transferring its Finnish industrial operations, including employees,
to subsidiary HK Ruokatalo Oy at the beginning of April.
An analysis of employees by country at the end of the financial year
is as follows: Finland 58.6%, Estonia 36.0%, Latvia 4.1%, Lithuania
1.2% and Russia 0.1%.
RISKS, UNCERTAINTY FACTORS AND THE ENVIRONMENT
HK Ruokatalo Group and its business units in Finland, the Baltics and
Poland constantly assess the risks relating to its business at both
the operative and owner administration levels. Assessment also takes
into account whether or not the risk management means are appropriate
in terms of quality and scope.
In the meat industry, factors of uncertainty may constitute
fluctuations in the price and availability of raw meat material and,
in the long term, changes in the EUs common agriculture policy (CAP)
and decisions by the WTO in world trade issues. Animal diseases can
also constitute an uncertainty factor. At the moment there is
uncertainty primarily relating to consumer behaviour and buying
decisions in our principle market areas.
HK Ruokatalo Group operates on the principle of causing minimum
environmental impact during production. This principle is put into
practice in Finland, the Baltics and Poland, taking into account
existing regulations and certification processes. Operative management
in each principal market area is responsible for ensuring the
appropriate organisation of environmental management.
EVENTS TAKING PLACE AFTER 31 DECEMBER 2005
On 10 January 2006, the company announced a two-year programme to
overhaul its production structure in Finland. The plan is to focus
most of the processed meat production on the Vantaa facilities and the
processing of fresh meat on the Forssa facilities. It is envisaged
that Vantaa will form the centre of logistics. When implemented, the
plan will signal the closure of production at the Turku processed meat
factory, the Tampere meat processing plant and the Tampere
distribution terminal. Together with efficiency measures already
announced earlier, the plan will affect an estimated 500 jobs in
Finland by the end of 2007.
On 17 January 2006, chef Jyrki Sukula was appointed HK Ruokatalo's
creative director. The company also acquired Sukula's Via product
range in the same context.
Towards the end of January, HK Ruokatalo Oy and Atria Oy announced
they were to look at ways of safeguarding turkey production in
Finland. The aim is to work together to restore the loss-making turkey
business to profitability.
THE FUTURE
Progress is being made with streamlining the production structure in
Finland. The focusing of operations seeks to achieve annual cost
savings in the region of EUR 15m-20m starting in 2008.
Sales and customer relationship management is being overhauled in
commercial operations. Product and brand strategy is also under
review. The plan is to develop consumer driven, interesting new
products alongside traditional ones, especially in convenience foods
and cookery products.
The three-year investment stage to modernise and increase the capacity
of the Forssa slaughtering facilities is progressing apace so that
quick carcass refrigeration, new animal reception facilities and pre-
cutting operations in the boning plant will be completed during 2006.
We have taken steps in preparation for the spread of avian flu to
Finland and the Baltics. We comply with official regulations and
internal precautionary practices. Our production chain emphasises
hygiene and poultry is reared in halls strictly isolated from the
outside environment. The National Veterinary and Food Research
Institute (EELA) has stated that it is perfectly safe to eat Finnish
broiler meat. Abroad, care should be taken to ensure poultry has been
properly cooked.
The publicity about avian flu has had little impact on the decision of
consumers in Finland to buy Finnish poultry. In the Baltics and
Poland, publicity in the media has lowered prices. Sokolów, which
makes cooked poultry products from raw meat material it purchases from
others, is able to capitalise on the fall in raw poultry meat prices.
In the Baltics, we expect Rakvere Lihakombinaat and its subsidiaries
continue to make positive performance progress. Cleaning operations
will continue at Tallegg during the start of 2006. Despite avian flu
and thanks to improved salmonella control, Tallegg is aiming to break
even.
We are continuing to restructure at Sokolów, with production
facilities specialising more than earlier. This reduces operational
overlaps and improves cost-effectiveness.
We continue to explore the possible expansion of our international
business outside the countries in which we currently have a presence.
DIVIDEND
The consolidated distributable equity is EUR 45.1 million. The parent
companys distributable equity is EUR 9.5 million. The Board of
Directors is to recommend that the company pays a 2005 dividend of EUR
0.27 per share, in other words a total of EUR 9.3 million.
ANNUAL GENERAL MEETING
HK Ruokatalo Groups Annual General Meeting is to take place in
meeting room 201 of the Congress Wing at Helsinki Fair Centre,
Messuaukio 1, 00520 Helsinki starting at 11am on Friday 21 April 2006.
To be eligible to attend the Annual General Meeting, shareholders
should be registered by 11 April 2006 in the share register maintained
by the Finnish Central Securities Depository Ltd (APK). Notice of the
Annual General Meeting and agenda will be published later.
CONSOLIDATED INCOME STATEMENT FOR 1 JANUARY TO 31 DECEMBER
(EUR million)
2005 2004
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Revenue 883.3 680.4
Other operating income 4.1 4.4
Materials and services 587.3 439.1
Employee benefits expense 145.3 114.5
Depreciation and impairment 28.7 20.1
Other operating expenses 102.0 75.5
Operating profit 24.1 35.7
Financial income and expenses, net -4.5 -5.1
Share of associates' results 0.7 2.1
Profit before tax 20.3 32.6
Tax on income from operations -3.3 -6.1
Profit for the period 17.0 26.5
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Net profit attributable:
To equity holders of the parent 16.0 26.1
To minority interest 1.0 0.4
Total 17.0 26.5
EPS, diluted, EUR 0.46 0.76
CONSOLIDATED BALANCE SHEET (EUR million)
31.12.2005 31.12.2004
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ASSETS
Non-current assets
Intangible assets 4.1 4.0
Goodwill 46.8 29.0
Property, plant and equipment 266.3 200.4
Investments in associates 5.1 45.9
Deferred tax asset 2.2 0.6
Other long-term receivables 4.1 4.3
Total long-term assets 328.6 284.2
Current assets
Inventories 65.4 44.7
Trade and other receivables 107.5 86.9
Cash and bank 12.8 13.9
Current assets, total 185.7 145.5
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TOTAL ASSETS 514.3 429.7
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EQUITY AND LIABILITIES
Equity attributable to
holders of the parent 219.1 210.0
Minority interest 10.8 1.9
Total equity 229.9 211.9
Long-term liabilities
Deferred tax liability 12.2 9.9
Long-term liabilities, interest-bearing 84.2 82.2
Pension obligations 4.5 2.0
Non-current provisions 0.0 0.5
Total non-current liabilities 100.9 94.6
Current liabilities
Short-term liabilities, interest-bearing 91.9 49.0
Trade payables and other current liabilities 91.2 74.2
Current provisions 0.4 0.0
Total current liabilities 183.5 123.2
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TOTAL EQUITY AND LIABILITIES 514.3 429.7
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
(EUR million)
Share- Share- Hedging- Other Trans- Retained Tot.
capital premium reserve reserves lation earnings
total diff.
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SHAREHOLDERSEQUITY
1 JAN 2005 58.6 72.9 0.0 8.4 2.6 67.5 210.0
Cash flow
hedging
Amount transferred
to shareholders equity
during the period 1.0 1.0
Reclassifications
between items 0.0 0.0 0.0 0.0 2.2 0.0 2.2
Other changes 0.0 0.0 0.0 0.2 0.0 -0.3 -0.1
----------------------------------------------------------------------
Net profit/loss recognised
directly in share-
holdersequity 0.0 0.0 1.0 0.2 2.2 -0.3 3.1
Profit for the period 16.0 16.0
----------------------------------------------------------------------
Total profits
and losses 0.0 0.0 1.0 0.2 2.2 15.7 19.1
Dividend distribution -10.0 -10.0
----------------------------------------------------------------------
SHAREHOLDERSEQUITY
TOT 31 DEC 05 58.6 72.9 1.0 8.6 4.8 73.2 219.1
----------------------------------------------------------------------
Share- Share- Hedging- Other Trans- Retained Tot.
capital premium reserve reserves lation earnings
total diff.
----------------------------------------------------------------------
SHAREHOLDERSEQUITY
1 JAN 2004 42.9 49.4 0.0 8.2 -0.2 49.5 149.8
Change in transl.
difference 0.0 0.0 0.0 0.0 2.2 -1.0 1.8
Direct bookings in
retained earnings 0.3 0.3
Other changes 0.0 0.0 0.0 0.2 0.0 -0.1 0.1
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Net profit/loss recognised
directly in share-
holdersequity 0.0 0.0 0.0 0.2 2.8 -0.8 2.2
Profit for the period 26.0 26.0
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Total profits
and losses 0.0 0.0 0.0 0.2 2.8 25.2 28.3
Dividend distribution -7.2 -7.2
Rights issue 15.7 15.7
Share premium 24.0 24.0
Transaction
costs for equity -0.5 -0.5
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SHAREHOLDERSEQUITY
TOT 31 DEC 04 58.6 72.9 0.0 8.4 2.6 67.5 210.0
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CASH FLOW STATEMENT (EUR million)
2005 2004
Operating activities
Net cash inflow/outflow from
operating activities 52.5 54.6
Change in net working capital -15.9 -5.6
Financial items and taxes -7.8 -10.4
Net cash inflow/outflow from
operating activities 28.8 38.6
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Investing activities
Net cash inflow/outflow from
investing activities -59.2 -50.7
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Financing activities
Change in loans 30.9 -17.9
Dividends paid -10.0 -7.2
Share issue - 39.2
Net cash inflow/outflow from
financing activities 20.9 14.0
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Change in liquid assets -9.5 1.9
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Saturn Nordic Holding Groups opening balance at 1 January 2005 has
been taken into account in the 2005 cash flow statement.
COMPARISON OF SEGMENT INFORMATION
Revenue and profit in the groups principal market areas for the last
quarter and during the entire financial year (EUR million):
10-12/2005 10-12/2004* 1-12/2005 1-12/2004*
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Revenue
-Finland 153.0 154.2 588.8 573.6
-The Baltics 29.0 28.8 113.8 110.2
-Poland 52.4 0.0 188.3 0.0
-Between segments -1.1 -2.6 -7.5 -3.4
-Total 233.3 180.4 883.3 680.4
Operating profit
-Finland 0.1 12.2 13.9 29.4
-The Baltics 1.4 0.9 6.5 6.3
-Poland 0.9 0.0 3.7 0.0
-Between segments 0.0 0.0 0.0 0.0
-Total 2.4 13.1 24.1 35.7
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*) Comparative information for the Polish market for 2004 was included
in the Income Statement in the item Share of associates results and
so does not appear as a separate item in the table.
COMMITMENTS AND CONTINGENT LIABILITIES (EUR million)
31 Dec 2005 31 Dec 2004
Debts secured by mortgages and pledges
Pension plan loans 0 14.6
Loans from financial institutions 70.0 79.5
Real estate mortgages 35.4 53.1
Pledged securities 12.0 10.0
Floating charges 4.3 22.1
Security for debts of associates and
other participating interests
Guarantees given 4.0 0.1
Security for debts of others
Guarantees and pledges 6.2 4.9
Leasing commitments outside the balance sheet
Maturing in less than a year 1.2 0.2
Maturing later 2.8 0.2
Other liabilities 0 4.9
Derivative instrument liabilities
Values of underlying instruments
at 31 December 12/2005 12/2004
Currency derivatives
- forward exchange contracts 1.2 0
Commodity derivatives
- electricity derivatives 4.3 4.7
FINANCIAL INDICATORS
2005 2004
Revenue, EUR million 883.3 680.4
Operating profit, EUR million 24.1 35.7
- as % of revenue 2.7 5.2
Profit before tax, EUR million 20.3 32.6
- as % of revenue 2.3 4.8
Return on equity (ROE), % 7.7 14.6
Return on investment (ROI), % 7.4 12.3
Equity ratio, % 44.7 49.3
Gross investments, EUR million 59.2 52.3
- as % of revenue 6.7 7.7
R&D expenditure, EUR million 8.0 6.4
- as % of revenue 0.9 0.9
Employees, average 4,541 4,713
PER SHARE DATA
2005 2004
Earnings per share (EPS), diluted, EUR 1) 0.46 0.76 1)
Equity per share, EUR 2) 6.36 6.09
Dividend per share, EUR 0.27 3) 0.29
Dividend payout ratio, diluted, % 58.2 3) 38.4 1)
Effective dividend yield, % 2.7 3) 3.9
Price/earnings ratio (P/E)
- undiluted 21.2 9.7 1)
- diluted 21.2 9.7 1)
Lowest trading price, EUR 7.23 5.53*
Highest trading price, EUR 10.05 7.40*
Middle price, EUR 9.17 6.28*
Closing price on year, EUR 9.86 7.36*
Market capitalisation, EUR million 339.8 253.6
Shares traded, 1,000 11,395.0 10,358.7
- % of average number 39.2 43.1
Adjusted number of shares
- average during the financial year 34,463,193 29,428,181*
- at end of financial year 34,463,193 34,463,193
- fully diluted 34,463,193 34,463,193
1) Based on number of shares at year-end.
2) Excluding minoritys share of equity.
3) Based on Board of Directors dividend recommendation.
* Adjusted share figure
This financial statement bulletin and comparison information has been
prepared in compliance with IFRS recognition and measurement
principles. IFRS-compliant comparison information for 2004 was
disclosed on 29 April 2005. The figures in this bulletin are
unaudited.
Turku, 24 February 2006
HK Ruokatalo Group Oyj
Board of Directors
Simo Palokangas
CEO
DISTRIBUTION:
Helsinki Exchanges
Internet: www.hk-ruokatalo.fi
