HK RUOKATALO GROUP?S INTERIM REPORT 1 JANUARY TO 31 MARCH 2005

HK Ruokatalo Group Oyj  STOCK EXCHANGE RELEASE, 2 May 2005 at 10:30am

HK RUOKATALO GROUP’S INTERIM REPORT 1 JANUARY TO 31 MARCH 2005

HK Ruokatalo Group group’s revenue rose to EUR 197.1 million, up by
29.9 per cent on the figure a year earlier. Group operating profit
increased to EUR 5.8 million and pre-tax earnings were EUR 5.0
million.

HK Ruokatalo switched over to IFRS-compliant financial reporting from
the start of 2005. This interim report and comparison information has
been prepared in compliance with IFRS recognition and measurement
principles. The group’s IFRS comparison financial information for 2004
was published 29 April 2005.


REVENUE AND FINANCIAL PERFORMANCE
Consolidated Q1 revenue was EUR 197.1 million, up by EUR 45.3 million
or 29.9 per cent on the corresponding figure a year earlier. The
operating profit was EUR 5.8 million (EUR 5.4m) and the operating
result before taxes was EUR 5.0 million, compared to EUR 4.7 million
in 2004.

These figures include the group’s business in Finland, the Baltics and
Poland. Saturn Nordic Holding - in which HK Ruokatalo Group has a 50
per cent stake and which, at 31 March 2005, owned 80.4 per cent of the
shares in Poland’s leading meat production and processing company
Sokolów S.A. - has been accounted for in the HK Ruokatalo Group’s
consolidated figures using proportionate consolidation since 1 January
2005.

During Q1 of 2005, 33 per cent of group revenue and 37 per cent of HK
Ruokatalo’s operating profit was generated outside Finland. HK
Ruokatalo’s internationalisation strategy in recent years has
considerably strengthened the company’s growth potential in businesses
where there is typically little growth on the home market.


BUSINESS IN FINLAND
Business and profitability in Finland grew as envisaged during Q1 of
2005. The pork and beef, or red meat market, was similar to that
witnessed during the autumn of last year. Continuous structural change
in the industry reflects the intensity of competition. A new
phenomenon on the poultry meat front is the growing share of imported
meat in the retail trade. Earlier this was evidenced mostly in the
horeca sector.

The largest sales channel for Finnish meat, HK Ruokatalo and its
subsidiaries strengthened their market share in the procurement of
pork, beef and poultry meat.

At home, we continue to strengthen our competitiveness in processed
meats, which underpin HK Ruokatalo’s meat processing operations.


BUSINESS IN THE BALTICS
In the Baltics, the structural change taking place in the retail trade
and fierce competition for shelf space continued. Rakvere
Lihakombinaat and its subsidiaries made progress with improving their
core process and successfully managed to strengthen their market
position. Rakvere’s operations are beginning to be in line with
targets. Tallegg continued work on running in the structural changes
put in place last autumn. We further perfected the entire poultry
chain from primary production to processing, marketing and quality
assurance.


BUSINESS IN POLAND
In Poland, Sokolów had a good start to the year. Q1 earnings exceeded
the target budgeted and earnings for the comparison period. The
operative result was otherwise up on the figure a year earlier. Under
the guidance and control of its Finnish-Danish owners, Sokolów has
made sound progress in line with targets.


CHANGE IN THE ARTICLES OF ASSOCIATION
Meeting on 23 February 2005, the extraordinary meeting of shareholders
voted to amend the company’s Articles of Association as a result of
changes made in the corporate structure. The most important item of
business was the proposal to change the name of the company from HK
Ruokatalo Oyj to HK Ruokatalo Group Oyj. At the same time, Article 2
was amended to reflect the company’s changing circumstances by the
addition to the company’s 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 company’s new Articles of Association
came into force on 31 March 2005.


CHANGES IN GROUP STRUCTURE
September 2004 saw a start made on streamlining the legal structure of
the company’s business operations in Finland. Streamlining was
completed during the period under review. Restructuring took place in
two stages. In the first stage, HK Ruokatalo Group Oyj’s 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 group’s Finnish industrial operations, sales,
marketing, logistics and transportation, as well as the employees
concerned, were transferred to a subsidiary known as HK Ruokatalo Oy,
which was established in February. The business transfer from HK
Ruokatalo Group Oyj to HK Ruokatalo Oy took place on 1 April 2005.

Subsequent to the business transfer, HK Ruokatalo Group Oyj retains
responsibility for Group management, finance and administration. HK
Ruokatalo Group Oyj owns the entire share capital of HK Ruokatalo Oy.
Until 1 September 2005, the companies have the same chief executive
and the same persons sit on the boards of directors of both companies.

Procurement company LSO Foods Oy was not part of restructuring and its
responsibilities remain unchanged.


INVESTMENTS AND FINANCE
During Q1 of 2005, the group invested EUR 12.6 million (EUR 5.9m) of
which Finland accounted for EUR 10.7 million.

Work continued on an extensive investment project to replace the pork
slaughtering line and to increase capacity at Forssa. The project will
also see the modernisation of animal reception facilities and the
quick carcass refrigeration plant. This investment is intended to take
us to the cutting-edge of efficiency in Europe.

Work continued on basic plans for the separate freezing plant to be
built at Forssa.

At the Vantaa site, work continued on upgrading the order picking
system and increasing the level of automation in the older part of the
terminal.

The consolidation of Saturn Nordic Holding Group’s figures have
resulted in a significant growth in asset items in the balance sheet.

The group’s interest-bearing debt at 31 March 2005 was EUR 179.3
million (EUR 154.1m). EUR 31.7 million of the EUR 46.9 million
increase in debt since the turn of the year is a result of the
consolidation of Saturn Nordic Holding Group’s debts. The share issue
of November 2004 resulted in the equity ratio rising to 46.8 per cent
(41.9%).


BOARD OF DIRECTORS’ AUTHORISATION TO INCREASE THE SHARE CAPITAL
At the end of the period under review, the Board of Directors had an
authorisation, given by the Annual General Meeting of Shareholders on
22 April 2004, 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 company’s
new Series A Shares having a nominal value of EUR 1.70 may be issued
and the company’s 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. To date, the Board
of Directors has not exercised this authorisation.


EMPLOYEES
The group employed, Poland excluded, an average of 4,367 persons
(4,647) during Q1 of 2005. An analysis of employees by country at 31
March is as follows: Finland 59.8%, Estonia 35.0%, Latvia 4.1%,
Lithuania 1.0% and other countries 0.1%.


EVENTS TAKING PLACE AFTER 31 MARCH 2005
On 12 April 2005, the company’s Board of Directors appointed Kai
Seikku MSc (Econ. & Bus. Admin.) as HK Ruokatalo’s next CEO. Seikku
will assume the post of managing director of HK Ruokatalo Oy, which is
responsible for the Group’s industrial 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.

HK Ruokatalo Group’s Annual General Meeting held on 12 April 2005
adopted the parent company’s and consolidated financial statements and
discharged the members of the Board of Directors and the CEO from
liability for 2004. It was decided to declare a dividend of EUR 0.29
per share as recommended by the Board of Directors.

Marcus H. Borgström, Agricultural Counsellor (Hon), Markku Aalto,
farmer, Kjeld Johannesen, managing director, Tiina Varho-Lankinen MSc
and Heikki Kauppinen BSc were all re-appointed to the Board. CEO Simo
Palokangas was appointed as a new member of the Board. Mr Borgström
and Mr Aalto were reappointed as chairman and deputy chairman
respectively.

Petri Palmroth CPA auditor was appointed the company’s second auditor
for 2005 to replace Kauko Lehtonen, who had tendered his resignation.
Authorised public accountants PricewaterhouseCoopers Oy were appointed
as the company’s auditors for 2006, with Jari Henttula CPA as the
principal auditor and Petri Palmroth CPA. Mika Kaarisalo CPA and Pasi
Pietarinen CPA were re-appointed as the company’s deputy auditors.

Saturn Nordic Holding AB, the joint venture owned by HK Ruokatalo
Group and Danish Crown, announced that its holding in Sokolów A.S had
grown to 80.4 per cent.


THE FUTURE
The figures for Q1 2005 were slightly up on those a year earlier.
Considering the current year as a whole our targets remain as they
were.

At home, we continue to strengthen the Processing and Production
Group, which will be the focus of investment in a bid to increase our
share of the market in processed meats. To this end, we make even
better use of HK Ruokatalo’s acclaimed brands. At home, investments in
enhancing the Slaughtering and Cutting Group and distribution
logistics will progress as planned.

In the Baltics, we will work to strengthen our competitiveness. We
will seek to achieve operative and structural synergetic benefits from
the red and white meat process chains. Competition is expected to
remain intense, which is why we need to focus our core process.

In Poland, the strengthened position of our joint venture, Saturn
Nordic Holding, as Sokolów’s owner provides a sound platform to
continue the encouraging development made under HK Ruokatalo and
Danish Crown’s guidance and control.



CONSOLIDATED INCOME STATEMENT
(EUR million)
                                    1-3/2005   1-3/2004    1-12/2004
---------------------------------------------------------------------
Revenue                                197.1      151.8        680.4
Operating profit                         5.8        5.4         35.8
Share of associates’ results             0.3        0.5          2.1
Financial income and expenses           -1.1       -1.1         -5.2
Profit before taxes                      5.0        4.7         32.7
Taxes                                   -1.0       -0.8         -6.2
Result for the period under review       3.9        3.9         26.0
---------------------------------------------------------------------
EPS, diluted, EUR                       0.11       0.13         0.76



CONSOLIDATED BALANCE SHEET
(EUR million)
                                   31 Mar 05  31 Mar 04    31 Dec 04
ASSETS
Non-current assets
Intangible assets                        3.9        4.1          4.0
Goodwill on consolidation               46.9       27.2         29.0
Property, plant, and equipment         240.0      193.7        200.4
Financial assets                         6.4       22.0         46.1
Deferred tax assets                      0.6        1.4          0.6
Other receivables                        3.7        4.2          4.0

Current assets
Inventories                             64.1       48.9         44.7
Trade and other receivables            100.2       71.5         86.9
Cash at bank and in hand                16.3        6.4         13.9
ASSETS, TOTAL                          482.2      379.3        429.7

EQUITY AND LIABILITIES
Equity belonging to the shareholders
of parent company                      216.0      157.1        210.0
Minority interests                       9.7        2.0          1.9
Equity, total                          225.7      159.1        211.9
Deferred tax liability                   9.6        9.7          9.9
Non-current interest-bearing debt       88.7       98.0         82.2
Pension obligations                      2.3        4.9          2.3
Long-term provisions for liabilities     1.4        0.2          0.2
Current interest-bearing debt           90.5       56.1         50.3
Trade and other current payables        64.1       51.4         72.9
EQUITY AND LIABILITIES, TOTAL          482.2      379.3        429.7



CASH FLOW STATEMENT (EUR 1000)
                                    1-3/2005   1-3/2004   1-12/2004
--------------------------------------------------------------------
Operating activities
Net cash inflow/outflow from
operating activities                  10,133     10,641      54,553
Change in net working capital        -15,712    -16,547      -5,624
Financial items and taxes             -2,069     -2,048     -10,365
Net cash inflow/outflow from
operating activities                  -7,648     -7,954      38,564

Investments
Net cash inflow/outflow from
investing activities                 -11,465     -5,553     -50,732

Financing activities
Change in loans                       14,835      4,309     -17,929
Dividends paid                             0          0      -7,237
Share issue                                0      3,539      39,209
Net cash inflow/outflow from
financing activities                  14,835      7,848      14,043

Change in liquid assets            -4,278 *)     -5,659       1,875
--------------------------------------------------------------------
*) Saturn Nordic Holding group’s opening balance at 31 December 2004
is taken into account.



ANALYSIS BY SEGMENT (EUR million)

Revenue and operating profit by main market area*)

                   1-3/2005   %-share      1-3/2004   change
-------------------------------------------------------------
Revenue
-Finland              132.8      67.4         127.6       4%
-The Baltics           26.1      13.2          24.6       6%
-Poland                39.9      20.3           0.0        -
-Between segments      -1.7      -0.9          -0.4     309%
-Total                197.1     100.0         151.8      30%

Operating profit
-Finland                3.7      63.3           4.2     -11%
-The Baltics            1.4      23.5           1.3       9%
-Poland                 0.8      13.2           0.0        -
-Between segments       0.0       0.0           0.0        -
-Total                  5.8     100.0           5.4       7%
-------------------------------------------------------------

*) The figures for the Polish market for 2004 are included in the
operating profit for Finland.



FINANCIAL INDICATORS         31 Mar 05   31 Mar 04        31 Dec 04

Earnings per share (EPS)          0.11        0.13    0.76 1), 0.88 2)
Equity per share, 31 March EUR    6.27        5.42             6.09
Equity ratio, %                   46.8        41.9             49.3
Adjusted number of shares   34,463,193  28,967,925       34,463,193
Gross investments, EUR mill.      12.6         5.9             52.3
Employees, average               4,367       4,647            4,713

1) Based on number of shares at year-end: 34,463,193
2) Based on adjusted average number of shares during the accounting
period: 29,428,181




CONSOLIDATED CONTINGENT LIABILITIES
(EUR 1000)
                                  31 Mar 05   31 Mar 04    31 Dec 04

Debts for which pledges or
mortgages given as surety
- pension loans                      14,584      16,426       14,584
- loans from financial institutions  75,305     115,895       79,530

For own debt
- pledges                            10,007      10,007       10,007
- real estate mortgages              52,928      89,088       53,086
- business mortgages                 22,125      22,056       22,125

For associated undertakings
- guarantees                            120          50          120

For others
- pledges                                17          40           17
- guarantees                          6,690       5,340        4,868

Other own commitments
Leasing commitments                     359         470          399
Other liabilities                        30       3,015        4,860

Liabilities arising from derivative instruments

Nominal values of the derivatives
Currency derivatives                  1,009       2,763            0
Commodity derivatives                 4,362       3,694        4,655


Figures in this report are unaudited.


HK Ruokatalo Group Oyj
Board of Directors



Simo Palokangas
CEO


DISTRIBUTION:
Helsinki Exchages
Internet: www.hk-ruokatalo.fi

About Us

HKScan is a Nordic meat and meals company. We employ over 7 300 professionals in striving to serve the world ìs most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service,industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2017, HKScan had net sales of EUR 1.8 billion, making us one of Europe’s leading meat and meals companies.www.hkscan.com

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