LÄNNEN TEHTAAT PLC Interim report 6 November 2009, 8.30 am
INTERIM REPORT 1 January - 30 September 2009
July-September (third quarter), continuing operations:
- Consolidated net sales amounted to EUR 64.1 (76.3) million, a year-on-year
drop of 16%.
- Operating profit, excluding non-recurring items, totalled EUR 1.3 (0.3)
million; non-recurring items amounted to EUR -0.3 (2.5) million.
- Profit for the period came to EUR 1.1 (1.6) million, and earnings per share
amounted to EUR 0.18 (0.26).
- Profit for the period, excluding non-recurring items, came to EUR 1.4 (-0.2)
million, and earnings per share amounted to EUR 0.22 (-0.03).
January-September, continuing operations:
- Net sales amounted to EUR 194.3 (268.2) million, a year-on-year drop of 28%.
- Operating profit, excluding non-recurring items, totalled EUR 2.2 (2.7)
million; non-recurring items amounted to EUR -0.8 (7.3) million.
- Profit for the period came to EUR 1.6 (7.5) million, and earnings per share
amounted to EUR 0.26 (1.18).
- Profit for the period, excluding non-recurring items, came to EUR 2.2 (0.8)
million, and earnings per share amounted to EUR 0.36 (0.11).
The information in this interim report has not been audited.
Matti Karppinen, CEO:
“Thanks to the good result posted by Grains and Oilseeds, the third-quarter
operating profit less non-recurring items for the Group's continuing operations
was significantly better than anticipated and a significant improvement
year-on-year. Frozen Foods continued on a steady track and turned in a result
slightly above that of the same period a year earlier. Our greatest challenges
are still in the Seafood business, where the result was down year-on-year.
Seafood's foreign operations were brought on to an upward track in the second
quarter, but in its Finnish-based operations the market continued to be
difficult.
“Implementation of Seafood's domestic strategy, approved in the spring, is
continuing as planned. The Finnish fish-processing sector has been suffering
from unhealthy price competition and profitability problems, and there is a
fundamental need for urgent restructuring of the sector. We intend to be an
active participant in these developments.
“As a Group-internal measure, we decided in the summer to combine the operations
of the Grain Trading and Vegetable Oils businesses. This will enable the new
Grains and Oilseeds business to provide an even better service to its customers
in the future.”
KEY FIGURES ILLUSTRATING PERFORMANCE
Continuing operations
EUR million Jly-Sep Jly-Sep Jan-Sep Jan-Sep Jan-Dec
2009 2008 2009 2008 2008
Net sales 64.1 76.3 194.3 268.2 349.1
Operating profit 1.0 2.7 1.4 10.0 13.9
Operating profit,
excl. non-recurring items 1.3 0.3 2.2 2.7 5.4
Profit before taxes 1.4 2.2 2.1 8.3 10.7
Profit for the period 1.1 1.6 1.6 7.5 10.0
Profit for the period,
excl. non-recurring items 1.4 -0.2 2.2 0.8 1.8
Earnings per share, EUR 0.18 0.26 0.26 1.18 1.60
Earnings per share,
excl. non-recurring items, EUR 0.22 -0.03 0.36 0.11 0.28
CHANGES IN GROUP STRUCTURE AND NEW SEGMENT DIVISION
Maritim Food AS, which is a Norwegian subsidiary of the Lännen Tehtaat Group,
and Cinvest AS, which was the minority owner of fish-processing company
Sandanger AS, agreed a deal at the end of June, under which Cinvest AS's 49%
holding in Sandanger AS was transferred to the ownership of Maritim Food AS.
Following this, Maritim Food AS now owns the entire share capital of Sandanger
AS.
In August, in an intra-Group transaction, Lännen Tehtaat plc sold the entire
share capital of its vegetable oils company, Mildola Oy, to its trading
specialist in grains, oilseeds and feeding stuffs, Avena Nordic Grain Oy. The
aim of this is to combine the commodity market expertise of Avena Nordic Grain
with Mildola's expertise in oil milling. The new ownership arrangement is being
introduced in two stages. At the first stage, carried out in early September,
the administration, purchasing, sales and logistics functions of Mildola Oy were
transferred to Avena Nordic Grain Oy. The second stage will be the asset deal
taking place towards the end of 2009, when Mildola Oy's vegetable oils business,
excluding its oil milling operation, will be transferred to Avena Nordic Grain
Oy, leaving Mildola Oy to continue its oil milling operation as a production
unit of Avena.
Since the vegetable oils business will no longer form a separate entity for
monitoring purposes, the former Grain Trading and Vegetable Oils segments, which
were reported separately, will, from the start of the third quarter, appear in
the Group's financial reporting under a new segment name, Grains and Oilseeds.
NET SALES AND PROFIT
July-September (third quarter):
Net sales from the continuing operations in July-September came to EUR 64.1
(76.3) million, a decrease of 16% on the same quarter in 2008. The year-on-year
drop in third-quarter net sales was mainly the result of a drop in grain and
oilseed market prices.
The July-September operating profit from the continuing operations, excluding
non-recurring items, was EUR 1.3 (0.3) million. Non-recurring items totalled EUR
-0.3 (+2.5) million. These non-recurring items consisted of integration expenses
in Seafood's foreign operations (EUR -0.2 million) and the costs of combining
operations in the Grains and Oilseeds business (EUR -0.1 million). In Frozen
Foods, in Grains and Oilseeds, and in Other Operations, the operating profit,
excluding non-recurring items, improved on the figure for the same period a year
earlier. In the Seafood business, the result was down on the previous year's
figure.
January-September:
Continuing operations
Net sales from the continuing operations for January-September amounted to EUR
194.3 (268.2) million, a year-on-year drop of 28%.
The operating profit from the continuing operations, excluding non-recurring
items, was EUR 2.2 (2.7) million. The operating profit includes the share of the
profits of associated companies, which, excluding non-recurring items, totalled
EUR 0.7 (0.7) million. Non-recurring items for January-September totalled EUR
-0.8 (7.3) million, of which EUR -0.7 million was in the Seafood business and
EUR -0.1 million in the Grains and Oilseeds business.
Financial income and expenses from the continuing operations totalled EUR +0.7
(-1.6) million. This figure includes valuation items of EUR +0.6 (+0.1) million
with no cash flow implications. The financial expenses also include EUR -0.4
(-0.4) million as the share of Avena Nordic Grain Oy's profit attributable to
the Avena employee shareholders.
Profit before taxes from the continuing operations was EUR 2.1 (8.3) million.
Profit before taxes, excluding non-recurring items, was EUR 2.9 (1.0) million.
The continuing operations' profit for the period came to EUR 1.6 (7.5) million,
and the earnings per share amounted to EUR 0.26 (1.18).
Discontinued operations
The share of the profit of the associated company Suomen Rehu and the profit
from the sale of the minority holding in Suomen Rehu were both included under
discontinued operations in the January-September 2008 income statement. In the
balance sheet figures for September, the non-current assets held for sale
include Seafood's Kerava property.
The profit for the period from discontinued operations came to EUR 0.0 (7.1)
million.
Profit for the period
The profit for January-September from both the continuing and discontinued
operations came to a total of EUR 1.6 (14.5) million, and the earnings per share
amounted to EUR 0.26 (2.31). The profit for the period from both the continuing
and discontinued operations, excluding non-recurring items, came to a total of
EUR 2.2 (1.3) million, and the earnings per share amounted to EUR 0.36 (0.19).
FINANCING AND BALANCE SHEET
The consolidated balance sheet continued to strengthen and the Group is
debt-free. Both the financing situation and liquidity were at a good level.
The net cash flow from operating activities in January-September after interest
and taxes amounted to EUR 23.3 (4.5) million. The impact of the change in
working capital was EUR 18.1 (2.6) million. The net cash flow from investing
activities came to EUR -11.5 (18.7) million. The impact of liquid asset
investments in short-term fixed income funds on cash flow from investing
activities was, in terms of net value, EUR -12.0 (-9.9) million. The cash flow
from financing activities came to EUR -16.8 (-21.9) million, and this included
EUR -5.3 (-5.6) million in dividend payments.
At the end of the period, the Group had EUR 5.6 (17.3) million in
interest-bearing liabilities and EUR 20.9 (24.3) million in liquid assets. Net
interest-bearing liabilities totalled EUR -15.4 (-7.0) million. The consolidated
balance sheet total stood at EUR 172.7 (200.7) million. At the end of September,
equity totalled EUR 132.1 (134.6) million and the equity ratio was 76.7%
(67.1%). Commercial papers issued for the Group's short-term financing stood at
a total value of EUR 0.0 (12.0) million at the end of September. 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 September. No
credit facilities were used during the review period.
INVESTMENT
Gross investment in non-current assets in January-September came to EUR 2.0
(5.7) million.
PERSONNEL
The average number of personnel in the continuing operations during the review
period was 656 (755).
OVERVIEW OF OPERATING SEGMENTS
Frozen Foods
EUR million Jly-Sep Jly-Sep Jan-Sep Jan-Sep Jan-Dec
2009 2008 2009 2008 2008
Net sales 10.4 11.7 34.6 37.7 49.3
Operating profit,
excl. non-recurring items 1.1 0.9 1.9 1.5 3.1
Like-for-like net sales in Frozen Foods, excluding the sale of jam and marmalade
products, grew by 2% in the third quarter, compared with the previous year's
figure. In the retail sector, the growth in sales of frozen products continued
to be good. Exports were also up, due to an increase in the export of peas. The
level of demand fell in the hotel, restaurant and catering sector and in sales
to the food industry. Among the different retail product groups, frozen pizza
sales improved considerably as a result of an increase in marketing. Sales of
frozen ready meals also continued at a good level.
Frozen Foods' third-quarter operating profit improved on the previous year's
figure as a result of higher productivity, centralisation of production and more
efficient operations.
Like-for-like net sales in Frozen Foods for January-September were up on the
previous year by about 4%. Sales growth in retail frozen foods was approximately
9%. This was partly due to the recent new product launches, such as potatoes
plus chopped vegetables for soups, a range of family soups, and lactose-free
spinach soup. Sales in the hotel, restaurant and catering sector were up
slightly, while sales to the food industry and exports were down, year-on-year.
In January-September the operating profit of Frozen Foods, excluding
non-recurring items, was up on the previous year's figure, in line with
expectations.
Processing of crops from Finnish contract growers was at the midway stage at the
end of September. The harvested crop in autumn 2009 was good in both quantity
and quality, especially in comparison with the two previous seasons. The good
crop means an increase in the home-grown content of products, as there is no
need to import supplementary raw materials.
The number of personnel in Frozen Foods during the review period was 199 (231).
The reduction in personnel was a result of the sale of the jams and marmalades
business in autumn 2008, the discontinuation of the Turku factory at the end of
2008, and the centralisation of functions at Säkylä.
Investment during January-September totalled EUR 1.4 (3.9) million. This was
mainly in the renewal of the enterprise resource planning system and the
contract grower data system, the completion of the investment arising from the
centralisation of production at Säkylä and the modernisation of the soups
department and the vegetable patty line. The contract grower data system was
integrated with the enterprise resource planning system and began operating
during the summer.
Seafood
EUR million Jly-Sep Jly-Sep Jan-Sep Jan-Sep Jan-Dec
2009 2008 2009 2008 2008
Net sales 18.1 21.3 54.9 65.9 89.7
Operating profit,
excl. non-recurring items -0.9 -0.7 -2.4 -1.3 -1.6
The third-quarter net sales of the Seafood business were down by 15% on the
previous year's figure. This drop in net sales occurred both in Finland and in
foreign operations.
In Finland, price competition in consumer-packaged retail products was
unhealthily intense, with the focus being on low value-added fillets of salmon
and rainbow trout. The drop in net sales in the domestic Seafood business was
also due to the reduced number of Kalatori service counters compared with the
previous year and the debate concerning counter sales of fresh meat and fish
products, which received a lot of media attention in the late summer and
resulted in a temporary drop in demand.
Calculated in local currencies, the net sales of Seafood's foreign operations
were down by about 5%. This was due to the discontinuation of unprofitable
products and the lower sales of fresh fish products compared with a year
earlier. Sales of ready-to-eat fish products were unchanged from the previous
year. The strong growth in shellfish sales continued on the Norwegian market.
There was also considerable growth in the renewed range of dressings. In Sweden,
demand for shellfish products in the hotel, restaurant and catering sector
declined.
The third-quarter operating result, excluding non-recurring items, was a loss
and was down year-on-year. The result for the Seafood's foreign operations was
at the level of a year earlier, namely a small loss. The profitability of
Seafood's foreign operations improved significantly after the early part of the
year, once the worst of the pressures on raw material prices had subsided. In
the domestic Seafood business, the result was adversely affected by a drop in
sales and by the high purchase price of salmon and rainbow trout during the
summer. The total of EUR -0.2 (0.0) million in non-recurring items for the
period consisted of expenses from the organisational changes made after the
acquisition of the minority holding in Sandanger AS.
Seafood's net sales for January-September were down by 17% on the same period in
2008. Its operating result, excluding non-recurring items, was a loss and was
down year-on-year. Non-recurring items for the period totalled EUR -0.7 (-0.1)
million. The non-recurring items were related to the sale of Apetit Kala's
Kerava property in June, and the organisational changes following the
acquisition of the minority holding in Sandanger AS.
Implementation of the domestic strategy for the Seafood business, approved in
the spring, continued as planned.
The picking and dispatch functions at Apetit Kala Oy's Kerava logistics centre
were transferred in mid-July to logistics service operator SwanLine Oy. As part
of the business transfer, 21 employees at Kerava were also transferred to
SwanLine Oy. The outsourcing of logistics services has proceeded according to
plan. The aim of the Kerava property sale and the transfer of the logistics
functions agreed in June is to achieve improved profits of around EUR 0.4
million annually. This figure is not expected to be achieved in full until 2010.
Productivity investments in line with the Group's strategic plans were
undertaken at the Kuopio production plant during the summer, and they aim to
achieve annual cost savings of about EUR 0.2 million. The investment programme
includes a new layout for the filleting and trimming line and investment in the
packaging line to allow redesign of consumer packages. These investments will
also enable an improvement in production quality.
In Seafood's foreign operations, the acquisition of the minority holding in
Sandanger AS carried out at the end of June enables more efficient utilisation
of synergy benefits and more effective business development in the Maritim Food
group. With the transfer of Sandanger AS in full to Maritim Food AS, Jan Brevik
was appointed Managing Director of Sandanger AS. He also continues as Managing
Director of Maritim Food AS and Maritim Food Sweden AB, thus being responsible
for the Group's Seafood business in Norway and Sweden.
The number of personnel in the Seafood business totalled 385 (445). The
reduction in personnel occurred mainly in Seafood's Finnish-based operations. To
bring production and costs into line, both blue-collar and white-collar
personnel at the Kuopio production plant were laid off for one to two weeks
during the first six months of the year.
Investment in the Seafood business totalled EUR 0.4 (1.2) million and was mainly
in information system and productivity investments.
Grains and Oilseeds
EUR million Jly-Sep Jly-Sep Jan-Sep Jan-Sep Jan-Dec
2009 2008 2009 2008 2008
Net sales 35.6 43.2 104.7 164.3 209.3
Operating profit,
excl. non-recurring items 1.6 0.5 4.8 4.7 5.4
Third-quarter net sales in the Grains and Oilseeds business were down 17%
year-on-year. This drop in net sales was the result of considerably lower market
prices than a year earlier and the smaller delivery volumes in both grain sales
and vegetable oil exports.
The operating profit of the Grains and Oilseeds business, excluding
non-recurring items, improved significantly year-on-year. Non-recurring items
totalled EUR -0.1 (0.0) million. The improved result was a consequence of
success in managing changes in market prices and in developing processes,
operating methods and the organisation in general, and the good oil yield.
In August, in an intra-Group share transaction, Lännen Tehtaat plc sold the
entire share capital of its vegetable oils company, Mildola Oy, to its trading
specialist in grains, oilseeds and feeding stuffs, Avena Nordic Grain Oy. The
aim of this is to combine the commodity market expertise of Avena Nordic Grain
with Mildola's expertise in oil milling and to achieve annual synergy benefits
of approximately EUR 0.5 million from 2010 onwards.
The first stage in combining the operations of Avena and Mildola was undertaken
in early September, when the administration, purchasing, sales and logistics
functions of Mildola Oy were transferred to Avena Nordic Grain Oy. At the same
time these functions were reorganised. As a result of the operations being
combined, five jobs were lost in the Grains and Oilseeds business. The combining
of operations gave rise to non-recurring costs of about EUR 0.1 million, which
were recognised in the third-quarter result.
The second stage of the arrangement will be the asset deal taking place towards
the end of the year, when Mildola Oy's vegetable oils business, excluding its
oil milling operation, will be transferred to Avena Nordic Grain Oy, leaving
Mildola Oy to continue its oil milling operation as a production unit of Avena.
January-September net sales in the Grains and Oilseeds business were down 36%
year-on-year. Operating profit, excluding non-recurring items, was at the
previous year's level.
The grain crop in autumn 2009 exceeded earlier estimates, and in almost all the
world's main production areas the crop was above average. With considerable
stocks also remaining from the record-high 2008 crop, there was an abundant
supply of grain on the world market. This pushed grain prices down everywhere,
including the EU, to a low not seen for years. In the EU, the rapeseed crop was
more than 2 million tonnes up on the previous year's figure. Oilseed prices,
however, were maintained by the tight supply situation for soybeans and, towards
the end of the review period, by the harvesting delay in the United States due
to poor weather.
In Finland the grain crop was above average for the third successive year. The
area under oilseed cultivation was up on the previous year's figure, and the
crop was one third greater than in 2008.
The Grains and Oilseeds business employed 62 (65) people. To bring production
and costs into line, Mildola's personnel were laid off for about one week during
the review period.
The investment of EUR 0.2 (0.2) million in the Grains and Oilseeds business was
primarily in the new enterprise resource planning system introduced in grain
trading in June. Investment at Mildola was in minor replacements.
Other Operations
EUR million Jly-Sep Jly-Sep Jan-Sep Jan-Sep Jan-Dec
2009 2008 2009 2008 2008
Net sales 0.5 0.4 1.3 1.8 3.0
Operating profit,
excl. non-recurring items -0.5 -0.6 -2.1 -2.4 -1.6
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.
In the third quarter, net sales from the sale of services were at the previous
year's level. The reduction in January-September net sales was a result of the
discontinuation of service fees for sales and product development when these
functions were transferred from Apetit Suomi Oy to the business areas at the
start of April 2008.
The January-September operating profit, excluding non-recurring items, totalled
EUR -2.1 (-2.4) million. This figure includes EUR +0.7 (+0.7) million as the
share of the profits of associated companies.
Investment in Other Operations totalled EUR 0.0 (0.2) million.
AUTHORISATIONS GRANTED TO THE BOARD OF DIRECTORS
The Annual General Meeting on 2 April 2009 authorised the Board of Directors to
decide on issuing new shares and on the transfer of Lännen Tehtaat plc shares
held by the company, in one or more lots as a share issue of a total of no more
than 761,757 shares. The share issue authorisation covers all Lännen Tehtaat plc
shares in the company's possession, i.e. 130,000 shares. The maximum number of
new shares that can be issued is 631,757.
The authorisation is valid until the next Annual General Meeting.
The Board of Directors had not yet exercised the authorisation granted to it 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 the
review period was 1,105,775 (900,875), representing 17.5% (14.3%) of the total
number of shares. The euro-denominated share turnover was EUR 14.0 (13.1)
million. The highest share price quoted was EUR 15.20 (17.00) and the lowest EUR
11.90 (13.20). The average price of shares traded was EUR 12.64 (14.49).
At the end of September, the market capitalisation totalled EUR 93.1 (97.6)
million.
FLAGGING ANNOUNCEMENTS
On 28 May 2009, Nordea Investment Fund Company Finland Ltd announced that on 27
May 2009 the level of ownership in Lännen Tehtaat plc held by investment funds
managed by Nordea Investment Fund Company Finland Ltd rose to over 5%; the
proportion of the votes and share capital at the time of the flagging
announcement had risen to 5.46%, or 345,325 shares.
SALE OF SHARES IN JOINT ACCOUNT
Lännen Tehtaat plc shares that were in the joint book-entry account and not
transferred to the book-entry system were sold on behalf of the respective
holders on 23 February 2009 in trading on the NASDAQ OMX Helsinki Ltd exchange.
The assets from the sale, less the expenses of notification and selling, were
deposited with the State Provincial Office of Western Finland. The assets are
redeemable on or before 17 March 2019. At the end of September, the unredeemed
assets totalled EUR 0.8 million.
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. A major
proportion of the entire year's profit in the Seafood business depends on the
success of Christmas sales.
Net sales in grain trading vary from one year and quarter to the next, 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 are: the
effects of the economic downturn on demand from consumers and customers; the
solvency of customers and the delivery performance of suppliers; the quantity
and quality of Finnish vegetable crops; the management of raw material price
changes and currency risks; changes in the operating environments of the Group's
businesses and in customerships; 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.
ASSESSMENT OF 2009
The net sales from Lännen Tehtaat's continuing operations are affected
particularly by changes in the price level of grains and oilseeds. Based on the
grain and oilseed price level, the Group's net sales for the full year are
expected to be below the corresponding figures for 2008.
Thanks to the measures taken to develop the Group's different businesses, the
fourth-quarter operating profit, excluding non-recurring items, is expected to
show a year-on-year improvement, and the full-year operating profit, excluding
non-recurring items, is expected to be around the same level as in 2008.
Investment in non-current assets will be significantly below the level of a year
earlier.
CONSOLIDATED INCOME STATEMENT
EUR million 7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2009 2008 2009 2008 2008
Continuing operations
Net sales 64.1 76.3 194.3 268.2 349.1
Other operating income 0.2 2.8 0.8 3.5 3.8
Operating expenses -62.2 -75.4 -190.4 -263.5 -342.8
Depreciation -1.3 -1.2 -4.0 -3.8 -5.1
Impairments -0.1 - -0.1 - -0.2
Share of profits of
associated companies 0.3 0.2 0.7 5.6 9.1
Operating profit 1.0 2.7 1.4 10.0 13.9
Financial income and expenses 0.4 -0.5 0.7 -1.6 -3.3
Profit before taxes 1.4 2.2 2.1 8.3 10.7
Income taxes -0.3 -0.6 -0.4 -0.8 -0.7
Profit for the period,
continuing operations 1.1 1.6 1.6 7.5 10.0
Discontinued operations
Profit for the period,
discontinued operations - 6.6 - 7.1 7.1
Profit for the period 1.1 8.3 1.6 14.5 17.1
Attributable to
Equity holders of the parent 1.1 8.3 1.6 14.4 17.0
Minority interests - 0.0 - 0.1 0.1
Basic and diluted earnings per
share, calculated of the profit
attributable to the shareholders of
the parent company, EUR
Continuing operations 0.18 0.26 0.26 1.18 1.60
Discontinued operations - 1.07 - 1.13 1.13
Total 0.18 1.33 0.26 2.31 2.73
STATEMENT OF COMPREHENSIVE INCOME
EUR million 7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2009 2008 2009 2008 2008
Profit for the period 1.1 8.3 1.6 14.5 17.1
Other comprehensive income
Cash flow hedges -0.4 -1.4 0.1 -1.4 -1.6
Taxes related to cash flow hedges 0.1 0.3 0.0 0.3 0.4
Translation differences 0.6 -0.4 1.2 -0.5 -2.1
Total comprehensive income 1.4 6.7 3.0 12.9 13.8
Attributable to
Equity holders of the parent 1.4 6.7 3.0 12.8 13.8
Minority interests - 0.0 - 0.1 0.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 30 Sep 30 Sep 31 Dec
2009 2008 2008
ASSETS
Non-current assets
Intangible assets 6.0 5.6 5.3
Goodwill 6.7 6.8 5.9
Tangible assets 38.1 43.6 43.5
Investment in associated companies 22.6 21.5 25.0
Available-for-sale investments 0.1 0.1 0.1
Receivables 1.8 3.3 3.1
Deferred tax assets 2.1 1.7 1.4
Non-current assets total 77.3 82.8 84.3
Current assets
Inventories 46.3 60.1 55.1
Receivables 24.6 33.4 38.7
Income tax receivable 0.0 0.1 0.7
Financial assets at fair value
through profits 16.1 18.0 3.8
Cash and cash equivalents 4.8 6.3 9.9
Current assets total 91.9 117.9 108.0
Non-current assets classified
as held for sale 3.6 - -
Total assets 172.7 200.7 192.3
EUR million 30 Sep 30 Sep 31 Dec
2009 2008 2008
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent 132.1 134.0 135.1
Minority interest - 0.6 0.5
Total equity 132.1 134.6 135.6
Non-current liabilities
Deferred tax liabilities 4.0 4.2 4.5
Long-term financial liabilities 3.7 4.9 4.5
Non-current provisions 0.1 0.1 0.1
Other non-current liabilities 0.1 - 0.2
Non-current liabilities total 7.9 9.2 9.3
Current liabilities
Short-term financial liabilities 1.9 12.5 10.7
Income tax payable 1.3 1.8 0.7
Trade payables and other liabilities 29.5 42.6 36.1
Current liabilities total 32.7 56.9 47.4
Total liabilities 40.6 66.1 56.8
Liabilities directly associated with
non-current assets classified as
held for sale - - -
Total equity and liabilities 172.7 200.7 192.3
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Net profit for the period 1.6 14.5 17.1
Adjustments, total 4.5 -9.9 -8.5
Change in net working capital 18.1 2.6 -5.1
Interests paid -1.2 -1.8 -2.4
Interests received 1.0 0.5 0.4
Taxes paid -0.8 -1.3 -1.8
Net cash flow from operating activities 23.3 4.5 -0.4
Investments in tangible and intangible assets -2.0 -5.7 -8.1
Proceeds from sales of tangible
and intangible assets 0.4 3.0 3.0
Acquisition of subsidiaries deducted by cash - -0.4 -0.4
Transactions with minority -1.2 1.5 1.5
Acquisition of associated companies - -0.4 -0.4
Proceeds from sales of associated companies - 27.0 27.0
Purchases of other investments -15.0 -14.0 -14.0
Proceeds from sales of other investments 3.0 4.1 18.1
Dividends received from investing activities 3.3 3.6 3.6
Net cash flow from investing activities -11.5 18.7 30.3
Repayments of short-term loans -10.2 -14.7 -18.4
Repayments of long-term loans -1.4 -0.5 -0.1
Payment of financial lease liabilities 0.0 -0.1 -0.1
Purchases of own shares - -1.0 -1.0
Dividends paid to minority - -0.3 -0.3
Dividends paid -5.3 -5.3 -5.3
Cash flows from financing activities -16.8 -21.9 -25.1
Net change in cash and cash equivalents -5.0 1.3 4.8
Cash and cash equivalents at the
beginning of the period 9.9 5.1 5.1
Cash and cash equivalents at the
end of the period 4.8 6.3 9.9
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
I = Minority interest
J = Total equity
A B C D E F G H I J
Shareholders'
equity at
1 Jan 2008 12.6 23.4 0.4 7.2 -0.8 0.1 84.5 127.3 0.7 128.0
Transactions
with minority - - - - - - 0.4 0.4 - 0.4
Dividend
distribution - - - - - - -5.3 -5.3 -0.3 -5.6
Other changes - - - - -1.0 - -0.4 -1.4 - -1.4
Total comprehensive
income - - -1.1 - - -0.5 14.5 12.9 0.1 13.0
Shareholders'
equity at
30 Sep 2008 12.6 23.4 -0.7 7.2 -1.8 -0.4 93.7 134.0 0.6 134.6
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
Transactions
with minority - - - - - - -0.7 -0.7 -0.5 -1.2
Dividend
distribution - - - - - - -5.3 -5.3 - -5.3
Other changes - - - - - - 0.1 0.1 - 0.1
Total comrehensive
income - - 0.1 - - 1.2 1.6 3.0 - 3.0
Shareholders'
equity at
30 Sep 2009 12.6 23.4 -0.7 7.2 -1.8 -0.7 92.2 132.1 - 132.1
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 2008.
At the beginning of the year the new IFRS 8 did not change the information shown
in these segments because the Group's earlier segment-based reporting was based
on the Group's internal reporting structures. In August 2009 the Group decided
on a new intra-group ownership arrangement, where vegetable oils business
including administration, purchasing, sales and logistics functions, excluding
oil milling operations, are transferred to Avena Nordic Grain Oy. Since the
vegetable oils business will no longer form a separate entity for monitoring
purposes, the former Grain Trading and Vegetable Oils segments are reported
under a new segment name, Grains and Oilseeds.
The amendment of IAS 1 has an impact on the presentation method of the profit
and loss account and the changes in equity.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Grains and Oilseeds
D Other Operations
E Continuing operations total
F Discontinued operations
G Total
Operating segments 1-9/2009
EUR million A B C D E F G
Total external sales 34.6 54.9 104.7 1.3 195.5 - 195.5
Intra-group sales 0.0 0.0 0.0 -1.2 -1.2 - -1.2
Net sales 34.6 54.9 104.7 0.1 194.3 - 194.3
Share of profits of
associated companies
included in operating
profit - - - 0.7 0.7 - 0.7
Operating profit 1.9 -3.0 4.6 -2.1 1.4 - 1.4
Gross investments in
non-current assets 1.4 0.4 0.2 - 2.0 - 2.0
Corporate acquisitions
and other share
purchases - 1.2 - - 1.2 - 1.2
Depreciations 1.4 1.5 0.5 0.5 4.0 - 4.0
Impairments - 0.0 0.1 - 0.1 - 0.1
Personnel 199 385 62 10 656 - 656
Operating segments 1-9/2008
EUR million A B C D E F G
Total external sales 37.7 65.9 164.3 1.8 269.7 - 269.7
Intra-group sales -0.1 -0.1 0.0 -1.3 -1.5 - -1.5
Net sales 37.6 65.8 164.3 0.5 268.2 - 268.2
Share of profits of
associated companies
included in operating
profit - - - 5.6 5.6 - 5.6
Operating profit 4.0 -1.3 4.7 2.6 10.0 6.6 16.6
Share of profits of
associated companies - - - - - 0.5 0.5
Gross investments in
non-current assets 3.9 1.2 0.2 0.2 5.7 - 5.7
Corporate acquisitions
and other share
purchases - - 0.4 - 0.4 - 0.4
Depreciations 1.0 1.7 0.5 0.6 3.8 - 3.8
Impairments - - - - - - -
Personnel 231 445 65 12 755 - 755
Operating segments 1-12/2008
EUR million A B C D E F G
Total external sales 49.3 89.7 209.3 3.0 351.3 - 351.3
Intra-group sales -0.1 0.0 0.0 -2.1 -2.2 - -2.2
Net sales 49.2 89.7 209.3 0.9 349.1 - 349.1
Share of profits of
associated companies
included in operating
profit - - - 9.1 9.1 - 9.1
Operating profit 5.1 -2.4 5.4 5.8 13.9 6.6 20.5
Share of profits of
associated companies - - - - - 0.5 0.5
Gross investments in
non-current assets 6.0 1.5 0.5 0.2 8.1 - 8.1
Corporate acquisitions
and other share
purchases - 0.1 0.4 - 0.5 - 0.5
Depreciations 1.4 2.1 0.7 0.8 5.1 - 5.1
Impairments - 0.2 - - 0.2 - 0.2
Personnel 237 441 65 12 755 - 755
Net sales by geographical segment
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Finland 140.8 155.1 209.9
Scandinavia 31.7 53.5 65.8
Baltic countries and Russia 2.2 4.1 7.6
Other countries 19.6 55.5 65.9
Continuing operations total 194.3 268.2 349.1
DISCONTINUED OPERATIONS
The sale of the majority holding of 51% in Suomen Rehu Ltd was completed at the
start of June 2007, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous
Oy signed an agreement on 1 September 2008, transferring the remaining 49% of
shares owned by Lännen Tehtaat in Suomen Rehu Ltd to Hankkija-Maatalous Oy.
Lännen Tehtaat recognised a non-recurring tax-free profit of EUR 6.6 million for
the sale of these minority shares in its financial performance for the 2008
third quarter.
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Non-current assets classified as held for sale in the reporting period belong to
Apetit Kala Oy's logistics functions located in Kerava that will be sold during
the fourth quarter in 2009.
KEY INDICATORS
30 Sep 30 Sep 31 Dec
2009 2008 2008
Shareholders' equity per share, EUR 21.36 21.65 21.83
Equity ratio, % 76.7 67.1 70.5
Gearing, % -11.6 -5.2 1.1
Gross investments in non-current
assets, EUR million,
continuing operations 2.0 5.7 8.1
Corporate acquisitions and other
share purchases, EUR million,
continuing operations 1.2 0.4 0.5
Average number of personnel,
continuing operations 656 755 755
Average number of shares, 1 000 pcs 6 188 6 232 6 221
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2008 annual financial statements.
CONTINGENT LIABILITIES
EUR million 30 Sep 30 Sep 31 Dec
2009 2008 2008
Guarantees given for debts
Real estate mortgages 5.6 8.9 8.6
Corporate mortgages - 1.3 -
Other guarantees 10.0 9.8 10.8
Non-cancellable other leases,
minimum lease payments
Real estate leases 4.7 4.2 5.1
Other leases 0.7 0.8 0.9
DERIVATIVE INSTRUMENTS
Outstanding nominal values of
derivative instruments
Forward currency contracts 6.9 0.1 6.3
Commodity derivative instruments 13.8 13.8 13.3
INVESTMENT COMMITMENTS
Lännen Tehtaat had investment commitments in Frozen Foods a total of EUR 0.4
million as of 30 September 2009.
CHANGES IN TANGIBLE ASSETS
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Book value at the beginning of the period 43.5 43.5 43.5
Acquisitions 1.2 4.1 5.9
Disposals and transfers to assets
classified as held for sale -4.1 -0.2 -0.2
Depreciations and impairments -3.4 -3.5 -4.8
Other changes 0.8 -0.2 -1.0
Book value at the end of the period 38.1 43.6 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Sales to associated companies 0.3 12.8 13.4
Sales to joint ventures 5.1 5.4 8.2
Purchase from associated companies 1.4 0.7 0.7
Purchase from joint ventures 0.0 0.0 0.0
Long-term receivables from associated companies 1.5 2.6 2.7
Long-term receivables from joint ventures 0.1 - -
Trade receivables and other
receivables from associated companies 1.6 1.5 1.6
Trade receivables and other
receivables from joint ventures 1.0 1.0 0.6
Trade payables and other liabilities
to associated companies 0.0 0.0 0.0
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: CEO Matti Karppinen, tel. +358 10 402 4001
Distribution:
NASDAQ OMX Helsinki Ltd
Principal media
www.lannen.fi
