2007-10-30 07:30:00 CET
2007-10-30 07:30:00 CET
REGULATED INFORMATION
Raisio - Quarterly report
RAISIO'S RESULT IMPROVED DESPITE THE RISE IN RAW MATERIAL PRICES
Raisio plc, Stock exchange release 30 October 2007
INTERIM REPORT 1 JANUARY- 30 SEPTEMBER 2007
RAISIO'S RESULT IMPROVED DESPITE THE RISE IN RAW MATERIAL PRICES
--------------------------------------------------------------------------------
| July-September 2007 |
| - Turnover increased by 5.5% |
| - Operating result improved in the period, amounting to EUR 4.2 million, |
| excluding rationalisation expenses |
| - Cash flow from operating activities was positive, totalling EUR 25.6 |
| million |
| - Equity ratio high at 76.9% |
| - New start for Benecol following the return of rights |
--------------------------------------------------------------------------------
- Raisio's third-quarter turnover was up 5.5% on the previous quarter,
amounting to EUR 112.9 million (EUR 107.0 million in April-June 2007).
- In the third quarter, operating result improved over the previous quarter
despite the record fast rise in raw material prices and the rationalisation
expenses of EUR 1.2 million. Operating result was EUR 3.0 million (EUR 2.5
million) and, including one-off items, EUR 2.8 million.
- Working capital has been turned downward. At the end of September, working
capital amounted to EUR 96.5 million, which is nearly EUR 20 million less than
at the end of June 2007.
- Raisio, McNeil Nutritionals LLC and Cilag GmbH International have signed an
amendment to their agreement that will return the rights to the plant stanol
ester compound to Raisio in the United States, Great Britain, France, Ireland,
and Benelux countries. In addition, Raisio will gain rights to the Benecol brand
in France and the United States in categories in which McNeil and Cilag are not
currently active.
- Raisio's operating result for 2007, excluding one-off-items, is expected to
be clearly profitable. In the last quarter the Food Division's loss is expected
to
be in line with the previous quarters in 2007 and full-year operating result to
improve clearly over the previous year but to continue in the red. The
Ingredients and Feed & Malt Divisions are expected to record better operating
results than last year.
The figures for the comparison period are given in brackets in the text.
Key figures, continuing operations result
--------------------------------------------------------------------------------
| | 7-9/ | 4-6/ | 7-9/ | 1-9/ | 1-9/ | 2006 |
| | 2007 | 2007 | 2006 | 2007 | 2006 | |
--------------------------------------------------------------------------------
| Turnover, EUR | 112.9 | 107.0 | 108.0 | 317.3 | 309.9 | 411.8 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Operating result, | 3.0 | 2.5 | 3.3 | 6.9 | 2.4 | -2.5 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| % of turnover | 2.7 | 2.4 | 3.1 | 2.2 | 0.8 | -0.6 |
--------------------------------------------------------------------------------
| Result before taxes, | 3.1 | 2.6 | 3.5 | 7.4 | 3.6 | -0.7 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.01 | 0.01 | 0.01 | 0.03 | 0.01 | -0.01 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
The figures do not include one-off items
Key figures, balance sheet
--------------------------------------------------------------------------------
| | 30.9.2007 | 30.9.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Return on investment, % | 3.6 | 2.4 | -9.3 |
--------------------------------------------------------------------------------
| Equity ratio, % | 76.9 | 77.9 | 75.0 |
--------------------------------------------------------------------------------
| Gearing, % | -16.6 | -21.6 | -19.1 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.70 | 2.02 | 1.73 |
--------------------------------------------------------------------------------
CEO Matti Rihko:
“The measures that Raisio has taken to enhance and adjust operations to the
market situation in order to improve profitability have been effective,
improving the Group's performance in each quarter despite the prices of grain
raw material rising at a record pace in the third quarter.
To make performance less dependent on grain price volatility, Raisio has added
predictability to purchase prices and flexibility to sales prices. The flexible
pricing model will also be applied to retail trade from January 2008 onwards.
Raisio has adopted a new business model for operations, in which brands and
business-to-business processes are managed separately. The new business model
ensures consumer- and customer-based operations as well as cost-effectiveness.
Furthermore, the organisation has been made more efficient and less hierarchic,
operations have been centralised and overcapacity in production has been cut.
The diagnostics business was transferred to its new owner at the beginning of
September. The divestment of diagnostics will enable Raisio to focus more
clearly on plant-based, healthy and natural nutrition. I believe that the
increasing global demand for grain will make the food industry into a growth
business.”
RESULT FROM CONTINUING OPERATIONS
Raisio's turnover increased in July-September and totalled EUR 112.9 million
(EUR 108.0 million). The biggest turnover growth was seen in the feed and malt
businesses. The Food Division's turnover amounted to EUR 48.6 million (EUR 49.6
million), while that of Feed & Malt was EUR 61.7 million (EUR 50.9 million) and
that of Ingredients EUR 10.2 million (EUR 12.6 million).
The January-September turnover was also up on the comparison period amounting to
EUR 317.3 million (EUR 309.9 million). Turnover from outside Finland represented
38.7% (39.8%) of the total, or EUR 122.8 million (EUR 123.3 million).
The Group's operating result in July-September was EUR 3.0 million (EUR 3.3
million) and, including one-off items, EUR 2.8 million. The operating result of
the Food Division was EUR -2.1 million (EUR -1.4 million) and, including one-off
items, EUR -5.7 million, that of the Feed & Malt Division EUR 3.4 million (EUR
2.7 million) and, including one-off items, EUR 6.8 million, that of the
Ingredients Division EUR 2.1 million (EUR 2.2 million) and that of other
operations EUR -0.4 million (EUR -0.1 million). Depreciations, allocated to
operations in the income statement, amounted to EUR 5.0 million (EUR 5.6
million) in July-September and to EUR 13.8 million (EUR 16.4 million) in
January-September. Raisio made write-downs and reversed the write-down of
tangible asset in the malting business, which had only a minor impact on the
result. Operating result in January-September was EUR 6.9 million (EUR 2.4
million) and, including one-off items, EUR 6.6 million (EUR 4.3 million).
The third-quarter result before taxes was EUR 3.1 million (EUR 3.5 million) and,
including one-off items, EUR 2.9 million. Result before taxes in
January-September was EUR 7.4 million (EUR 3.6 million) and, including one-off
items, EUR 7.2 million (EUR 5.4 million). Raisio's net financial income in
July-September totalled EUR 0.2 million (EUR 0.4 million), and EUR 0.9 million
in January-September (EUR 1.5 million).
The third-quarter result after taxes was EUR 2.0 million (EUR 2.5 million) and,
including one-off items, EUR 1.4 million. Result after taxes in
January-September was EUR 5.3 million (EUR 2.6 million) and, including one-off
items, EUR 4.7 million (EUR 3.9 million). Earnings per share in July-September
totalled EUR 0.01 (EUR 0.01) and, including one-off items, EUR 0.01. In
January-September earnings per share were EUR 0.03 (EUR 0.01) and, including
one-off items, EUR 0.03 (EUR 0.02). Return on investment amounted to 3.6%
(2.4%).
BALANCE SHEET AND FINANCIAL POSITION
At the end of September, Raisio's balance sheet total was EUR 367.1 million (EUR
387.4 million on 31 December 2006) and shareholders' equity amounted to EUR
282.1 million (EUR 290.4 million on 31 December 2006). Equity per share at the
end of September was EUR 1.70 (EUR 1.73 on 31 December 2006).
The Group's interest-bearing debt at the end of September was EUR 11.2 million
(EUR 23.2 million on 31 December 2006). Net interest-bearing debt totalled EUR
-46.8 million (EUR -55.6 million on 31 December 2006).
The equity ratio at the end of September was 76.9% (75.0% on 31 December 2006),
and the gearing ratio was -16.6% (-19.1% on 31 December 2006).
Cash flow from operating activities in July-September totalled EUR 25.6 million
(EUR 29.3 million) and in January-September EUR 14.4 million (EUR 22.6 million).
In the third quarter, working capital was released from inventories and from an
increase in accounts payable. It amounted to EUR 96.5 million at the end of the
review period (EUR 96.7 million on 31 December 2006). Raisio's gross investments
in July-September totalled EUR 9.2 million (EUR 5.9 million), and in
January-September EUR 21.4 million (EUR 19.6 million). The biggest single
investments targeted the feed plant in Ylivieska and the expansion to the stanol
ester plant in Raisio.
CONTINUING OPERATIONS
Food
The Food Division's turnover in July-September was EUR 48.6 million (EUR 49.6
million). The turnover remained nearly the same as that in the comparison
period, despite the discontinuation of loss-making domestic bakery flour sales
and the end of weakly profitable distributor sales in Finland and Poland.
Turnover grew in the soy-oat business, the Finnish margarine business and
Russian operations. Raisio's flake sales in Russia increased considerably from
the comparison period.
In August Raisio introduced a new brand portfolio with products divided into
three consumer worlds: spreads, breakfast and snacks, as well as baking. The
concept will be tested and finalised in Finland, after which it can be copied
into other market areas. The goal of the reform is to improve availability to
consumers, as well as to enhance product and customer profitability, by focusing
marketing inputs on the Elovena, Keiju and Sunnuntai brands. In 2007 Raisio has
reduced the number of SKUs (stock keeping units) by some 30 per cent from last
year.
Raisio's margarine sales in Finland outpaced general market growth, and the
market share of Keiju products rose to 18 per cent. Flake markets are growing,
with Elovena in particular acting as a growth engine. Elovena holds a 43% share
of the Finnish flake market. The Sunnuntai brand has maintained its market
share.
In January-September the Food Division's turnover totalled EUR 146.8 million
(EUR 146.5 million).
Key figures for the Food Division
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| | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 2006 |
| | 2007 | 2006 | 2007 | 2006 | |
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| Turnover, EUR million | 48.6 | 49.6 | 146.8 | 146.5 | 196.5 |
--------------------------------------------------------------------------------
| Margarines and | | | | | |
--------------------------------------------------------------------------------
| soy-oat products | 27.6 | 29.9 | 84.5 | 89.3 | 118.6 |
--------------------------------------------------------------------------------
| Milling products | 21.0 | 19.7 | 62.4 | 57.3 | 78.1 |
--------------------------------------------------------------------------------
| Other | 0.0 | -0.1 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Internal sales | 0.0 | 0.0 | -0.1 | -0.1 | -0.1 |
--------------------------------------------------------------------------------
| Operating result, EUR | -5.7 | -1.4 | -8.3 | -5.7 | -37.9 |
| million | | | | | |
--------------------------------------------------------------------------------
| % of turnover | -11.7 | -2.8 | -5.7 | -3.9 | -19.3 |
--------------------------------------------------------------------------------
| One-off items, EUR million | -3.6 | 0.0 | -3.6 | 0.0 | -27.4 |
--------------------------------------------------------------------------------
| Operating result, | -2.1 | -1.4 | -4.7 | -5.7 | -10.5 |
| excluding one-off items, | | | | | |
| EUR million | | | | | |
--------------------------------------------------------------------------------
| Investments | 1.5 | 3.3 | 5.8 | 11.2 | 15.3 |
--------------------------------------------------------------------------------
| Net assets | - | - | 88.4 | 112.2 | 85.5 |
--------------------------------------------------------------------------------
The Food Division's operating result in July-September was EUR -2.1 million (EUR
-1.4 million) including EUR 0.9 million of rationalisation expenses and,
including one-off items, EUR -5.7 million. Improvement in the Food Division's
profitability was slowed down by a record fast increase in raw material prices
in all markets. Raisio and the domestic daily consumer goods trade have agreed
on the adoption of a new, flexible pricing model from January 2008 onwards.
At the beginning of September, Raisio transferred the production of its
margarines sold in Russia to a subcontractor. The focus of Russian operations is
on developing marketing and distribution channels. Raisio will reduce
overcapacity by closing down the wheat and rye mills in Nokia. Related to this,
the Group entered a EUR 2.0 million depreciation on machinery and a EUR 1.3
million depreciation on the goodwill of the milling business. Flake production
will continue in Nokia. The sizable rationalisation measures carried out in the
Food Division are expected to have a positive impact on operating result in
2008.
Feed & Malt
The Feed & Malt Division's turnover in July-September increased from the
comparison period by more than 20% to EUR 61.7 million (EUR 50.9 million). The
year-to-year growth in turnover resulted from increases in feed and malt prices.
The sales volumes of feed and malt corresponded to those of the comparison
period. No considerable changes took place in market position. The structural
changes in the Finnish feed industry have led to new forms of co-operation at
the customer interface. Turnover in January-September totalled EUR 156.2 million
(EUR 139.8 million).
Key figures for the Feed & Malt Division
--------------------------------------------------------------------------------
| | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 2006 |
| | 2007 | 2006 | 2007 | 2006 | |
--------------------------------------------------------------------------------
| Turnover, EUR million | 61.7 | 50.9 | 156.2 | 139.8 | 186.5 |
--------------------------------------------------------------------------------
| Feeds | 50.9 | 45.6 | 130.1 | 122.4 | 165.3 |
--------------------------------------------------------------------------------
| Malt | 10.7 | 5.3 | 25.1 | 16.1 | 20.0 |
--------------------------------------------------------------------------------
| Other | 0.2 | 0.2 | 1.4 | 1.6 | 1.7 |
--------------------------------------------------------------------------------
| Internal sales | -0.1 | -0.1 | -0.4 | -0.4 | -0.5 |
--------------------------------------------------------------------------------
| Operating result, EUR | 6.8 | 2.7 | 9.6 | 6.8 | 6.3 |
| million | | | | | |
--------------------------------------------------------------------------------
| % of turnover | 11.0 | 5.2 | 6.1 | 4.9 | 3.4 |
--------------------------------------------------------------------------------
| One-off items, EUR | 3.4 | 0.0 | 3.4 | 1.8 | 0.7 |
| million | | | | | |
--------------------------------------------------------------------------------
| Operating result, | 3.4 | 2.7 | 6.2 | 5.0 | 5.6 |
| excluding one-off items, | | | | | |
| EUR million | | | | | |
--------------------------------------------------------------------------------
| Investments | 5.8 | 1.1 | 10.5 | 3.7 | 5.5 |
--------------------------------------------------------------------------------
| Net assets | - | - | 78.9 | 57.9 | 65.3 |
--------------------------------------------------------------------------------
The operating result of the Feed & Malt Division improved to EUR 3.4 million in
July-September (EUR 2.7 million) and, including one-off items, EUR 6.8 million.
The write-down made in December 2005 on the malt business working capital has
been reversed, and the value of working capital has been increased to EUR 5.5
million as a result of an improved market situation and changes in the pricing
structure. A write-down of EUR 2.1 million was made in the assets of the special
feed plant due to a weaker outlook for business profitability. Good performance
development in the malt business improved the operating result over the
comparison period. The operating result of feed dropped slightly from the
comparison period because the increase of raw material prices could not be fully
transferred to product prices.
The increase in feed prices may weaken the profitability of livestock farms and
lead to a decrease in production volumes. In the malt business, raw material
prices are not expected to significantly affect volumes.
Ingredients
The Ingredients Division's turnover in July-September decreased from the
comparison period, totalling EUR 10.2 million (EUR 12.6 million). The drop
resulted from exceptionally strong seasonal fluctuation in partners stocks and
the decreased volumes in the US and German markets. Sales in Turkey developed
slower than expected because the use of health claims is prohibited in
marketing. Turnover is expected to return to the previous, normal level in the
last quarter. Turnover in January-September totalled EUR 33.3 million (EUR 39.6
million).
Key figures for the Ingredients Division
--------------------------------------------------------------------------------
| | 7-9/ | 7-9/ | 1-9/ | 1-9/ 2006 | 2006 |
| | 2007 | 2006 | 2007 | | |
--------------------------------------------------------------------------------
| Turnover, EUR million | 10.2 | 12.6 | 33.3 | 39.6 | 49.7 |
--------------------------------------------------------------------------------
| Operating result, EUR | 2.1 | 2.2 | 7.1 | 6.2 | 7.8 |
| million | | | | | |
--------------------------------------------------------------------------------
| % of turnover | 20.7 | 17.2 | 21.4 | 15.7 | 15.6 |
--------------------------------------------------------------------------------
| One-off items, EUR | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| million | | | | | |
--------------------------------------------------------------------------------
| Operating result, | 2.1 | 2.2 | 7.1 | 6.2 | 7.8 |
| excluding one-off items, | | | | | |
| EUR million | | | | | |
--------------------------------------------------------------------------------
| Investments | 1.6 | 0.8 | 5.7 | 2.6 | 4.3 |
--------------------------------------------------------------------------------
| Net assets | - | - | 43.8 | 40.2 | 44.5 |
--------------------------------------------------------------------------------
Operating result in July-September was EUR 2.1 million (EUR 2.2 million)
including EUR 0.3 million of rationalisation expenses. The operating result
remained over 20 per cent of turnover.
To ensure a good foundation for future growth, Raisio has reorganised the
Ingredients business, revised the sales concept to focus on consumer
applications and increased production capacity to enhance efficiency. Raisio
will regain rights to stanol ester and the Benecol brand from McNeil, its
long-term partner. This will enable the development of the business from a new
starting point. Raisio aims to be an active player in the growing European,
Asian and US markets for cholesterol-lowering functional foods by introducing
innovative product applications. The Group continues its preparations to enter
the Asian market with local partners.
DISCONTINUED OPERATIONS
The divestment of the diagnostics business was completed, and the business was
transferred to US-based BioControl at the beginning of September.
RESEARCH AND DEVELOPMENT
All of Raisio's divisions engage in their own research and development, which is
based on a customer- and consumer-oriented approach. In 2008 Raisio will
introduce many important new products. Research and development costs amounted
to EUR 1.3 million (EUR 2.4 million) in the third quarter, and to EUR 4.3
million (EUR 7.2 million) in January-September, representing 1.4% (2.3%) of
turnover.
PERSONNEL
Raisio employed 1,132 people at the end of September (1,214 on 31 December
2006), 30.7% of whom worked outside Finland (32.8% on 31 December 2006). The
headcount decreased as a result of the close down of margarine production in
Russia.
At the end of September, the Food Division had 713, Feed & Malt 288, Ingredients
74 and service functions 57 employees.
Pasi Lähdetie, MA (Agriculture and Forestry), has been appointed director of
Raisio's new grain trade operations from 1 December 2007.
SHARES AND SHAREHOLDERS
The number of Raisio plc's free shares traded on the OMX Nordic Exchange in
Helsinki in January-September totalled 38.9 million (36.1 million). The value of
trading was EUR 79.0 million (EUR 70.5 million), and the average price was EUR
2.03. The closing price on 30 September 2007 was EUR 1.94.
A total of 1.0 million restricted shares (1.0 million) were traded in
January-September. The value of trading was EUR 2.0 million (EUR 2.0 million),
and the average price was EUR 2.00. The closing price on 30 September 2007 was
EUR 1.94.
On 30 September 2007, Raisio had 38,334 registered shareholders (40,822 on 31
December 2006). Foreign holding accounted for 16.6% (15.5% on 31 December 2006)
of shares.
Raisio's market capitalisation at the end of September amounted to EUR 307.3
million (EUR 287.1 million on 31 December 2006), excluding the company shares
held by the Group.
At the end of the review period, Raisio plc held 6,630,000 of the company's free
shares and 91,319 of its restricted shares. The shares were acquired from 2005
to 2007. The company's free shares account for 5.07% of all free shares and
their votes. The corresponding figure for restricted shares is 0.26%. In all,
the company shares held by the Group represent 4.07% of the company's share
capital and 1.03% of overall votes. The book value of free shares is EUR
1,115,086 and that of restricted shares EUR 15,359, or a total of EUR 1,130,445.
Of the company shares held by the Group, 1,699,500 free shares and 50,119
restricted shares have been acquired since April 2007 on the basis of the
authorisation granted by the Annual General Meeting. The authorisation
concerning free shares had been exercised in full in October, and the purchase
of free shares has ended. Repurchases of restricted shares will continue until
further notice.
Raisio plc's subsidiaries did not hold any shares in the parent company. A share
in Raisio or its subsidiary does not entitle the holder to participate in the
Annual General Meeting.
DECISIONS MADE AT THE ANNUAL GENERAL MEETING
Raisio plc's Annual General Meeting approved the financial statements for the
financial year 1 January - 31 December 2006 and discharged the members of the
Supervisory Board and the Board of Directors, as well as the Chief Executive
Officers. The Annual General Meeting decided to distribute a dividend of EUR
0.03 per share. The dividend was paid to shareholders on 13 April 2007.
The Board's proposal to amend sections 12, 13, 14, 15 and 17 and repeal section
20 of the Articles of Association was approved as presented. According to
section 10, approved by the Meeting, the Annual and Extraordinary General
Meetings will be held in Raisio or Turku. The main amendment to the Articles of
Association transfers the appointment of Board members from the Supervisory
Board to the Annual General Meeting, which will make its first election of Board
members in spring 2008.
The Annual General Meeting authorised the Board of Directors to decide on the
acquisition of a maximum of 3,300,000 free shares and 875,000 restricted shares.
The authorisation expires, at the latest, on 30 September 2008. In April, the
Board of Directors decided to initiate repurchases of shares through public
trading arranged by the Helsinki Stock Exchange starting on 10 April 2007.
The Annual General Meeting also authorised the Board of Directors to decide on
the disposal of company shares. The authorisation encompasses the 4,930,500 free
shares and 41,200 restricted shares already held by the company, as well as any
shares that the company may acquire based on the new authorisation. The disposal
authorisation expires, at the latest, on 30 March 2012 and has not been used to
date.
Detailed information regarding the amendments to the Articles of Association, as
well as the authorisations, is provided in the stock exchange release dated 12
February 2007. A stock exchange release about the decisions made by the Annual
General Meeting was published on 30 March 2007.
EVENTS AFTER THE REVIEW PERIOD
In October Raisio divested its 25% holding in Obory Sp. z o.o., a Polish dairy
company. The divestment does not have a significant impact on the Group's
result. Obory will continue to produce Benecol drinks for Raisio.
According to the amendment to the agreement signed in October Raisio is to gain
additional rights to plant stanol ester and Benecol brand from McNeil.
Following the reorganisation of Raisio's business, the Group's commercial and
production operations were separated at the beginning of October. In practical
terms, this means that production will be made into a service function alongside
other functions currently in place to serve and support business.
The Group's legal structure will be reformed stepwise starting in October.
Reorganisation aims to enhance the cost-effectiveness of operations, clarify the
Group structure, streamline services and arrange production to reflect the new
organisation structure.
At the beginning of October, Raisio plc transferred its administrative service
function to the newly founded group service function, Raision Konsernipalvelut
Oy. The Group is planning to transfer all of its premises and production
facilities to Raisionkaaren Teollisuuspuisto Oy on 1 January 2008. The only
exception to this is Melia Ltd, whose premises and production facilities will be
transferred to Melian Kiinteistöpalvelut Oy. The new companies will own,
administer and rent out food and feed production facilities, as well as
laboratory and office facilities, including machinery and equipment.
Raisionkaaren Teollisuuspuisto Oy will be a subsidiary of Raisio plc, while
Melian Kiinteistöpalvelut Oy will be a Raisio Nutrition Ltd subsidiary in which
Lantmännen Mills AB has a 25% holding.
As of 1 January 2008, Raisio's commercial operations will be managed by the new
Raisio Nutrition Ltd, Raisio Feed Ltd and Melia Ltd. Raisio Staest Ltd will be
dissolved at the end of December when it merges with Raisio Benecol Ltd, which,
in turn, will become part of the new Raisio Nutrition Ltd.
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The main challenge to Raisio's profitability comes from the management of the
volatility of raw material prices. Managing the changes affecting the grain
chain calls for co-operation and new operating models from all those involved.
The work to improve the predictability of raw material prices and the
flexibility of sales prices continues. Raisio's grain chain operations will be
reorganised in this conjunction.
According to the resolution made by the Assessment Adjustment Board of the Tax
Office for Major Corporations in November 2006, the sales profit from the
divestment of Raisio Chemicals, totalling some EUR 220 million, is free of tax.
The case is still under consideration in the Helsinki administrative court.
Raisio's stand, supported by the expert statements obtained by the company,
remains the same: the sales profit is free of tax.
OUTLOOK
Raisio's operating result for 2007, excluding one-off-items, is expected to be
clearly profitable. In the last quarter the Food Division's loss is expected to
be in line with the previous quarters in 2007 and full-year operating result to
improve clearly over the previous year but to continue in the red. The
Ingredients and Feed & Malt Divisions are expected to record better operating
results than last year.
Raisio, 30 October 2007
RAISIO PLC
Board of Directors
Further information:
Matti Rihko, CEO, tel. +358 400 830 727
Jyrki Paappa, CFO,
tel. +358 50 5566 512
Heidi Hirvonen, Communications Manager, tel. +358 50 567
3060
A press and analyst event in Finnish will be organised on 30 October 2007 at
10:00 a.m. at Hotel President, in the Juho-Kusti meeting room, at Eteläinen
Rautatiekatu 4, Helsinki.
A teleconference in English will be held on 30 October 2007 at 3:30 p.m. We ask
participants to call the number +358 20 699 121.
The interim report has not been audited.
INCOME STATEMENT (EUR million)
--------------------------------------------------------------------------------
| | 7-9/07 | 7-9/06 | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| CONTINUING OPERATIONS: | | | | | |
--------------------------------------------------------------------------------
| Turnover | 112.9 | 108.0 | 317.3 | 309.9 | 411.8 |
--------------------------------------------------------------------------------
| Expenses corresponding to | -93.6 | -89.8 | -265.2 | -257.6 | -365.7 |
| products sold | | | | | |
--------------------------------------------------------------------------------
| Gross profit | 19.2 | 18.2 | 52.1 | 52,3 | 46.1 |
--------------------------------------------------------------------------------
| Other operating income and | -16.5 | -14.9 | -45.4 | -48.1 | -75.3 |
| expenses, net | | | | | |
--------------------------------------------------------------------------------
| Operating result | 2.8 | 3.3 | 6.6 | 4.3 | -29.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income | 0.5 | 0.8 | 1.9 | 2.7 | 4.8 |
--------------------------------------------------------------------------------
| Financial expenses | -0.2 | -0.4 | -1.0 | -1.2 | -6.9 |
--------------------------------------------------------------------------------
| Share of result of | -0.1 | -0.2 | -0.3 | -0.3 | -2.7 |
| associated companies and | | | | | |
| joint ventures | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before taxes | 2.9 | 3.5 | 7.2 | 5.4 | -33.9 |
--------------------------------------------------------------------------------
| Income tax | -1.5 | -1.0 | -2.5 | -1.5 | -0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result for the period from | 1.4 | 2.5 | 4.7 | 3.9 | -34.6 |
| the continuing operations | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DISCONTINUED OPERATIONS: | | | | | |
--------------------------------------------------------------------------------
| Result for the period from | -2.5 | 2.5 | -3.6 | 1.5 | -6.6 |
| discontinued operations | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RESULT FOR THE PERIOD | -1.1 | 5.0 | 1.1 | 5.4 | -41.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | -0.8 | 4.8 | 1.4 | 4.9 | -41.7 |
| parent company | | | | | |
--------------------------------------------------------------------------------
| Minority interest | -0.3 | 0.2 | -0.3 | 0.5 | 0.5 |
--------------------------------------------------------------------------------
| Earnings per share from the | | | | | |
| profit attributable to | | | | | |
| equity holders of the | | | | | |
| parent company (EUR) | | | | | |
--------------------------------------------------------------------------------
| Earnings per share from | 0.01 | 0.01 | 0.03 | 0.02 | -0.22 |
| continuing operations (EUR) | | | | | |
--------------------------------------------------------------------------------
| Earnings per share from | -0.02 | 0.02 | -0.02 | 0.01 | -0.04 |
| discontinued operations | | | | | |
| (EUR) | | | | | |
--------------------------------------------------------------------------------
BALANCE SHEET (EUR million)
--------------------------------------------------------------------------------
| | 30.9.07 | 30.9.06 | 31.12.06 |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | 10.7 | 13.9 | 13.0 |
--------------------------------------------------------------------------------
| Goodwill | 1.3 | 11.7 | 2.6 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 123.7 | 132.7 | 117.7 |
--------------------------------------------------------------------------------
| Shares in associated companies and | 1.9 | 4.6 | 2.4 |
| joint ventures | | | |
--------------------------------------------------------------------------------
| Financial assets available for sale | 0.6 | 2.2 | 1.5 |
--------------------------------------------------------------------------------
| Receivables | 2.6 | 8.1 | 3.1 |
--------------------------------------------------------------------------------
| Deferred tax assets | 11.6 | 13.5 | 10.7 |
--------------------------------------------------------------------------------
| Total non-current assets | 152.2 | 186.7 | 151.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 79.4 | 74.5 | 82.1 |
--------------------------------------------------------------------------------
| Accounts receivables and other | 77.6 | 75.9 | 75.4 |
| receivables | | | |
--------------------------------------------------------------------------------
| Financial assets at fair value | 47.4 | 87.0 | 64.4 |
| through profit or loss | | | |
--------------------------------------------------------------------------------
| Cash in hand and at banks | 10.5 | 9.6 | 14.5 |
--------------------------------------------------------------------------------
| Total current assets | 214.9 | 246.9 | 236.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 367.1 | 433.6 | 387.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| Equity attributable to equity holders | | | |
| of the parent company | | | |
--------------------------------------------------------------------------------
| Share capital | 27.8 | 27.8 | 27.8 |
--------------------------------------------------------------------------------
| Own shares | -14.8 | -11.4 | -11.4 |
--------------------------------------------------------------------------------
| Other equity attributable to equity | 256.3 | 307.7 | 260.7 |
| holders of the parent company | | | |
--------------------------------------------------------------------------------
| Equity attributable to equity holders | 269.3 | 324.1 | 277.1 |
| of the parent company | | | |
--------------------------------------------------------------------------------
| Minority interest | 12.8 | 13.3 | 13.3 |
--------------------------------------------------------------------------------
| Total equity | 282.1 | 337.4 | 290.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 9.6 | 9.5 | 7.9 |
--------------------------------------------------------------------------------
| Pension liabilities | 0.2 | 0.4 | 0.2 |
--------------------------------------------------------------------------------
| Non-current interest-bearing | 0.5 | 4.4 | 1.4 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Other non-current liabilities | 0.0 | 1.0 | 1.0 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 10.3 | 15.3 | 10.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Accounts payable and other | 62.0 | 62.0 | 59.8 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Reserves | 2.3 | | 5.1 |
--------------------------------------------------------------------------------
| Current interest-bearing liabilities | 10.5 | 19.0 | 21.6 |
--------------------------------------------------------------------------------
| Total current liabilities | 74.8 | 81.0 | 86.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 85.0 | 96.3 | 97.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and liabilities | 367.1 | 433.6 | 387.4 |
--------------------------------------------------------------------------------
CHANGES IN GROUP EQUITY (EUR million)
--------------------------------------------------------------------------------
| | Sha | Sha | Re- | Ot- | Own | Tr | Fair | Re- | To- | Mino | To- |
| | r- | - | | | | an | | | | - | |
| | | | | | | s- | | | | | |
--------------------------------------------------------------------------------
| | re | re | ser | her | sha | la | valu | tai- | tal | rity | tal |
| | | | - | | - | ti | e | | | | |
| | | | | | | - | | | | | |
--------------------------------------------------------------------------------
| | ca- | pre | ve- | re- | res | on | re- | ned | | in- | |
| | | - | | | | | | | | | |
--------------------------------------------------------------------------------
| | pi- | miu | fun | ser | | di | ser- | ear- | | te- | |
| | | m | d | - | | ff | | | | | |
| | | | | | | e- | | | | | |
--------------------------------------------------------------------------------
| | tal | re- | | ves | | re | ve | ning | | rest | |
| | | | | | | n- | | s | | | |
--------------------------------------------------------------------------------
| | | ser | | | | ce | | | | | |
| | | ve | | | | s | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | | | | | | |
| at | | | | | | | | | | | |
| 1.1.20 | | | | | | | | | | | |
| 06 | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | 27. | 2.9 | 88. | 0.0 | -8. | 1. | 0.0 | 220. | 332. | 15.3 | 347. |
| | 8 | | 6 | | 7 | 3 | | 1 | 0 | | 3 |
--------------------------------------------------------------------------------
| Divide | | | | | | | | | | | |
| nd | | | | | | | | | | | |
--------------------------------------------------------------------------------
| paid | - | - | - | - | - | - | - | -8.0 | -8.0 | -2.5 | -10. |
| | | | | | | | | | | | 5 |
--------------------------------------------------------------------------------
| Change | | | | | | | | | | | |
| s in | | | | | | | | | | | |
--------------------------------------------------------------------------------
| transl | | | | | | | | | | | |
| ation | | | | | | | | | | | |
| differ | | | | | | | | | | | |
| en- | | | | | | | | | | | |
--------------------------------------------------------------------------------
| ces | - | - | - | - | - | -2 | - | - | -2.2 | 0.0 | -2.2 |
| | | | | | | .2 | | | | | |
--------------------------------------------------------------------------------
| Repurc | | | | | | | | | | | |
| hase | | | | | | | | | | | |
| of own | | | | | | | | | | | |
--------------------------------------------------------------------------------
| shares | - | - | - | - | -2. | - | - | - | -2.6 | - | -2.6 |
| | | | | | 6 | | | | | | |
--------------------------------------------------------------------------------
| Exchan | | | | | | | | | | | |
| ge | | | | | | | | | | | |
| differ | | | | | | | | | | | |
| ences | | | | | | | | | | | |
--------------------------------------------------------------------------------
| from | | | | | | | | | | | |
| receiv | | | | | | | | | | | |
| ables | | | | | | | | | | | |
--------------------------------------------------------------------------------
| consid | | | | | | | | | | | |
| ered | | | | | | | | | | | |
| to be | | | | | | | | | | | |
--------------------------------------------------------------------------------
| net | | | | | | | | | | | |
| invest | | | | | | | | | | | |
| ments | | | | | | | | | | | |
--------------------------------------------------------------------------------
| from a | | | | | | | | | | | |
| foreig | | | | | | | | | | | |
| n | | | | | | | | | | | |
--------------------------------------------------------------------------------
| unit | - | - | - | - | - | 0. | - | - | 0.1 | - | 0.1 |
| | | | | | | 1 | | | | | |
--------------------------------------------------------------------------------
| Tax of | | | | | | | | | | | |
--------------------------------------------------------------------------------
| previo | | | | | | | | | | | |
| us | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | - | - | - | - | - | 0. | - | - | 0.0 | - | 0.0 |
| | | | | | | 0 | | | | | |
--------------------------------------------------------------------------------
| Cash | | | | | | | | | | | |
| flow | | | | | | | | | | | |
| hedges | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transf | | | | | | | | | | | |
| erred | | | | | | | | | | | |
| to | | | | | | | | | | | |
--------------------------------------------------------------------------------
| the | | | | | | | | | | | |
| equity | | | | | | | | | | | |
| with | | | | | | | | | | | |
| taxes | | | | | | | | | | | |
--------------------------------------------------------------------------------
| deduct | | | | | | | | | | | |
| ed | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | - | - | - | - | - | - | 0.0 | - | 0.0 | - | 0.0 |
--------------------------------------------------------------------------------
| Transf | | | | | | | | | | | |
| erred | | | | | | | | | | | |
| to | | | | | | | | | | | |
--------------------------------------------------------------------------------
| income | | | | | | | | | | | |
| statem | | | | | | | | | | | |
| ent | | | | | | | | | | | |
--------------------------------------------------------------------------------
| with | | | | | | | | | | | |
| taxes | | | | | | | | | | | |
| deduct | | | | | | | | | | | |
| ed | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | - | - | - | - | - | - | 0.0 | - | 0.0 | - | 0.0 |
--------------------------------------------------------------------------------
| Net | | | | | | | | | | | |
| profit | | | | | | | | | | | |
--------------------------------------------------------------------------------
| for | | | | | | | | | | | |
| review | | | | | | | | | | | |
--------------------------------------------------------------------------------
| period | - | - | - | - | - | - | - | 4.9 | 4.9 | 0.5 | 5.4 |
--------------------------------------------------------------------------------
| Other | | | | | | | | | | | |
--------------------------------------------------------------------------------
| change | - | - | - | - | - | - | - | 0.0 | 0.0 | - | 0.0 |
| s | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | | | | | | |
| at | | | | | | | | | | | |
| 30.9.2 | | | | | | | | | | | |
| 006 | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | 27. | 2.9 | 88. | 0.0 | -11 | -0 | 0.0 | 217. | 324. | 13.3 | 337. |
| | 8 | | 6 | | .4 | .9 | | 1 | 1 | | 4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | | | | | | | | | | | |
| at | | | | | | | | | | | |
| 1.1.20 | | | | | | | | | | | |
| 07 | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | 27. | 2.9 | 88. | 0.0 | -11 | -1 | 0.0 | 170. | 277. | 13.3 | 290. |
| | 8 | | 6 | | .4 | .2 | | 4 | 1 | | 4 |
--------------------------------------------------------------------------------
| Divide | | | | | | | | | | | |
| nd | | | | | | | | | | | |
--------------------------------------------------------------------------------
| paid | - | - | - | - | - | - | - | -4.8 | -4.8 | -0.3 | -5.1 |
--------------------------------------------------------------------------------
| Transl | | | | | | | | | | | |
| ation | | | | | | | | | | | |
| differ | | | | | | | | | | | |
| ences, | | | | | | | | | | | |
--------------------------------------------------------------------------------
| transf | | | | | | | | | | | |
| erred | | | | | | | | | | | |
| to | | | | | | | | | | | |
--------------------------------------------------------------------------------
| income | | | | | | | | | | | |
| statem | | | | | | | | | | | |
| ent | | | | | | | | | | | |
--------------------------------------------------------------------------------
| on | | | | | | | | | | | |
| dispos | | | | | | | | | | | |
| al | | | | | | | | | | | |
--------------------------------------------------------------------------------
| of | | | | | | | | | | | |
| subsid | | | | | | | | | | | |
| iaries | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | - | - | - | - | - | 0. | - | - | 0.4 | - | 0.4 |
| | | | | | | 4 | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | | | | | |
| change | | | | | | | | | | | |
| in | | | | | | | | | | | |
--------------------------------------------------------------------------------
| transl | | | | | | | | | | | |
| ation | | | | | | | | | | | |
--------------------------------------------------------------------------------
| differ | | | | | | | | | | | |
| ences | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | - | - | - | - | - | -1 | - | - | -1.3 | 0.0 | -1.3 |
| | | | | | | .3 | | | | | |
--------------------------------------------------------------------------------
| Repurc | | | | | | | | | | | |
| hase | | | | | | | | | | | |
| of own | | | | | | | | | | | |
--------------------------------------------------------------------------------
| shares | - | - | - | - | -3. | - | - | - | -3.4 | - | -3.4 |
| | | | | | 4 | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | | | | | | | | |
| profit | | | | | | | | | | | |
--------------------------------------------------------------------------------
| for | | | | | | | | | | | |
| review | | | | | | | | | | | |
--------------------------------------------------------------------------------
| period | - | - | - | - | - | - | - | 1.4 | 1.4 | -0.3 | 1.1 |
--------------------------------------------------------------------------------
| Other | | | | | | | | | | | |
--------------------------------------------------------------------------------
| change | - | - | - | - | - | - | - | 0.0 | 0.0 | - | 0.0 |
| s | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | | | | | | |
| at | | | | | | | | | | | |
| 30.9.2 | | | | | | | | | | | |
| 007 | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | 27. | 2.9 | 88. | 0.0 | -14 | -2 | 0.0 | 167. | 269. | 12.8 | 282. |
| | 8 | | 6 | | .8 | .2 | | 0 | 3 | | 1 |
--------------------------------------------------------------------------------
CASH FLOW STATEMENT (EUR million)
--------------------------------------------------------------------------------
| | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| Cash flow before change in working capital | 19.9 | 22.2 | 20.8 |
--------------------------------------------------------------------------------
| Change in working capital | -6.0 | -0.5 | -7.3 |
--------------------------------------------------------------------------------
| Financial items and taxes | 0.5 | 1.0 | 1.7 |
--------------------------------------------------------------------------------
| Cash flow from business operations | 14.4 | 22.6 | 15.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments | -23.1 | -23.2 | -32.2 |
--------------------------------------------------------------------------------
| Divestment of subsidiaries | 4.1 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets | 2.8 | 0.0 | 0.3 |
--------------------------------------------------------------------------------
| Loans granted | 0.0 | -0.6 | -1.5 |
--------------------------------------------------------------------------------
| Repayment of loan receivables | 1.4 | 0.0 | 0.1 |
--------------------------------------------------------------------------------
| Cash flow from investments | -14.8 | -23.7 | -33.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in non-current loans | -8.7 | -9.3 | -12.6 |
--------------------------------------------------------------------------------
| Change in current loans | -3.1 | -1.6 | 0.8 |
--------------------------------------------------------------------------------
| Repurchase of own shares | -3.4 | -2.6 | -2.6 |
--------------------------------------------------------------------------------
| Dividends paid to equity holders of the | -4.8 | -8.0 | -8.0 |
| parent company | | | |
--------------------------------------------------------------------------------
| Dividends paid to minority interests | -0.3 | -2.5 | -2.5 |
--------------------------------------------------------------------------------
| Cash flow from financial operations | -20.4 | -24.3 | -24.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustment to translation difference | -0.5 | -0.5 | 0.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in liquid funds | -21.2 | -25.9 | -43.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid funds at the beginning of the | 78.8 | 122.9 | 122.9 |
| period | | | |
--------------------------------------------------------------------------------
| Impact of change in market value on liquid | 0.3 | -0.4 | -1.0 |
| funds | | | |
--------------------------------------------------------------------------------
| Liquid funds at the end of the period | 58.0 | 96.5 | 78.8 |
--------------------------------------------------------------------------------
NOTES TO THE INTERIM REPORT
This interim report has been prepared in accordance with the IFRS accounting
policies. The report does not comply with all of the requirements laid out in
IAS 34 Interim Financial Reporting. The same accounting principles and
calculating methods has been complied in this interim report as in 2006 annual
financial statements. The financial statements are shown in EUR millions.
The Group has adopted the amendment to IAS 1 (Presentation of Financial
Statements - Capital Disclosures). The amendments to the standard introduce
requirements concerning note disclosures about the company's capital management.
Raisio estimates that the adoption of the standard will mainly affect the notes
to the consolidated financial statements.
The preparation of interim reports requires company management to use estimates
and assumptions that affect the amounts of reported assets and liabilities, as
well as income and expenses. Actual results may differ from these estimates.
SEGMENT INFORMATION
TURNOVER BY SEGMENT (EUR million)
--------------------------------------------------------------------------------
| | 7-9/07 | 7-9/06 | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| Food | 48.6 | 49.6 | 146.8 | 146.5 | 196.5 |
--------------------------------------------------------------------------------
| Feed & Malt | 61.7 | 50.9 | 156.2 | 139.8 | 186.5 |
--------------------------------------------------------------------------------
| Ingredients | 10.2 | 12.6 | 33.3 | 39.6 | 49.7 |
--------------------------------------------------------------------------------
| Other operations | 0.1 | 0.2 | 0.3 | 0.5 | 0.6 |
--------------------------------------------------------------------------------
| Interdivisional turnover | -7.6 | -5.3 | -19.4 | -16.4 | -21.5 |
--------------------------------------------------------------------------------
| Total turnover | 112.9 | 108.0 | 317.3 | 309.9 | 411.8 |
--------------------------------------------------------------------------------
OPERATING RESULT BY SEGMENT (EUR million)
--------------------------------------------------------------------------------
| | 7-9/07 | 7-9/06 | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| Food | -5.7 | -1.4 | -8.3 | -5.7 | -37.9 |
--------------------------------------------------------------------------------
| Feed & Malt | 6.8 | 2.7 | 9.6 | 6.8 | 6.3 |
--------------------------------------------------------------------------------
| Ingredients | 2.1 | 2.2 | 7.1 | 6.2 | 7.8 |
--------------------------------------------------------------------------------
| Other operations | -0.4 | -0.1 | -1.7 | -3.0 | -5.3 |
--------------------------------------------------------------------------------
| Eliminations | 0.0 | 0.0 | -0.1 | -0.1 | 0.0 |
--------------------------------------------------------------------------------
| Total operating result | 2.8 | 3.3 | 6.6 | 4.3 | -29.2 |
--------------------------------------------------------------------------------
NET ASSETS BY SEGMENT (EUR million)
--------------------------------------------------------------------------------
| | 30.9.07 | 30.9.06 | 31.12.06 |
--------------------------------------------------------------------------------
| Food | 88.4 | 112.2 | 85.5 |
--------------------------------------------------------------------------------
| Feed & Malt | 78.9 | 57.9 | 65.3 |
--------------------------------------------------------------------------------
| Ingredients | 43.8 | 40.2 | 44.5 |
--------------------------------------------------------------------------------
| Other operations, | | | |
--------------------------------------------------------------------------------
| discontinued operations | | | |
--------------------------------------------------------------------------------
| and unallocated items | 71.0 | 127.1 | 95.0 |
--------------------------------------------------------------------------------
| Total net assets | 282.1 | 337.4 | 290.4 |
--------------------------------------------------------------------------------
INVESTMENTS BY SEGMENT (EUR million)
--------------------------------------------------------------------------------
| | 7-9/07 | 7-9/06 | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| Food | 1.5 | 3.3 | 5.8 | 11.2 | 15.3 |
--------------------------------------------------------------------------------
| Feed & Malt | 5.8 | 1.1 | 10.5 | 3.7 | 5.5 |
--------------------------------------------------------------------------------
| Ingredients | 1.6 | 0.8 | 5.7 | 2.6 | 4.3 |
--------------------------------------------------------------------------------
| Other operations | 0.3 | 0.6 | 1.0 | 2.1 | 3.2 |
--------------------------------------------------------------------------------
| Eliminations | 0.0 | 0.0 | -1.6 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total investments | 9.2 | 5.9 | 21.4 | 19.6 | 28.2 |
--------------------------------------------------------------------------------
TURNOVER BY MARKET AREA (EUR million)
--------------------------------------------------------------------------------
| | 7-9/07 | 7-9/06 | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| Finland | 70.7 | 66.3 | 194.5 | 186.6 | 252.9 |
--------------------------------------------------------------------------------
| Poland | 9.8 | 11.2 | 30.5 | 33.2 | 41.1 |
--------------------------------------------------------------------------------
| Russia | 14.8 | 10.2 | 33.3 | 26.8 | 33.3 |
--------------------------------------------------------------------------------
| Other Europe | 16.1 | 18.2 | 54.9 | 58.0 | 77.6 |
--------------------------------------------------------------------------------
| ROW | 1.5 | 2.1 | 4.1 | 5.3 | 6.9 |
--------------------------------------------------------------------------------
| Total | 112.9 | 108.0 | 317.3 | 309.9 | 411.8 |
--------------------------------------------------------------------------------
DISCONTINUED OPERATIONS AND NON-CURRENT ASSETS HELD FOR SALE
Discontinued operations
The Group announced its intention to divest the diagnostics business on 16
January 2007. The contract of sale was signed and the divestment of the
diagnostics business was concluded at the beginning of September 2007.
On 7 February 2007, the Group signed a preliminary agreement on the divestment
of its food potato business. The contract of sale was signed on 15 March 2007.
The divestment of the potato business was concluded in May 2007 and the business
was transferred to the new owner at the beginning of June 2007.
Both the diagnostics and the food potato businesses are treated as discontinued
operations in the Group's income statement. There are no assets and liabilities
classified as held for sale in the balance sheet for the review period.
--------------------------------------------------------------------------------
| | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result for the discontinued operations | | | |
--------------------------------------------------------------------------------
| Income from ordinary operations | 11.2 | 18.6 | 29.3 |
--------------------------------------------------------------------------------
| Expenses | -12.3 | -16.0 | -34.8 |
--------------------------------------------------------------------------------
| Result before taxes | -1.1 | 2.7 | -5.5 |
--------------------------------------------------------------------------------
| Taxes | -0.1 | -1.2 | -1.1 |
--------------------------------------------------------------------------------
| Result after taxes | -1.2 | 1.5 | -6.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result from discontinued operations | -2.4 | | |
--------------------------------------------------------------------------------
| Taxes | 0.0 | | |
--------------------------------------------------------------------------------
| Result after taxes | -2.4 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result for the discontinued operations | -3.6 | 1.5 | -6.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow for the discontinued operations | | | |
--------------------------------------------------------------------------------
| Cash flow from business operations | -0.5 | 4.1 | 3.1 |
--------------------------------------------------------------------------------
| Cash flow from investments | 6.1 | -2.0 | -3.0 |
--------------------------------------------------------------------------------
| Cash flow from financial operations | -0.1 | 0.0 | 0.1 |
--------------------------------------------------------------------------------
| Total cash flow | 5.5 | 2.1 | 0.2 |
--------------------------------------------------------------------------------
TANGIBLE ASSETS
--------------------------------------------------------------------------------
| | 30.9.07 | 30.9.06 | 31.12.06 |
--------------------------------------------------------------------------------
| Acquisition cost at the beginning of the | 450.5 | 430.0 | 430.0 |
| period | | | |
--------------------------------------------------------------------------------
| Conversion differences | -1.4 | -2.1 | -2.5 |
--------------------------------------------------------------------------------
| Increase | 20.3 | 17.6 | 26.3 |
--------------------------------------------------------------------------------
| Decrease | -36.6 | -0.7 | -2.9 |
--------------------------------------------------------------------------------
| Reclassifications between items | 0.0 | -0.1 | -0.3 |
--------------------------------------------------------------------------------
| Acquisition cost at the end of the period | 432.8 | 444.7 | 450.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation and write-downs | 332.8 | 299.5 | 299.5 |
| at the beginning of the period | | | |
--------------------------------------------------------------------------------
| Conversion difference | -0.9 | -1.2 | -1.5 |
--------------------------------------------------------------------------------
| Decrease and transfers | -32.5 | -0.6 | -2.0 |
--------------------------------------------------------------------------------
| Depreciation for the period | 11.3 | 14.4 | 19.1 |
--------------------------------------------------------------------------------
| Write-downs | -1.5 | 0.0 | 17.7 |
--------------------------------------------------------------------------------
| Accumulated depreciation and write-downs | 309.2 | 312.0 | 332.8 |
| at the end of the period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Book value at the end of the period | 123.7 | 132.7 | 117.7 |
--------------------------------------------------------------------------------
RESERVES
--------------------------------------------------------------------------------
| | 1-9/07 | 1-9/06 | 2006 |
--------------------------------------------------------------------------------
| At the beginning of the period | 5.1 | | |
--------------------------------------------------------------------------------
| Increase in provisions | 0.4 | | 5.1 |
--------------------------------------------------------------------------------
| Provisions used | -3.3 | | |
--------------------------------------------------------------------------------
| At the end of the period | 2.3 | | 5.1 |
--------------------------------------------------------------------------------
CONTINGENT LIABILITIES (EUR million)
--------------------------------------------------------------------------------
| | 30.9.07 | 30.9.06 | 31.12.06 |
--------------------------------------------------------------------------------
| Assets given for security | | | |
--------------------------------------------------------------------------------
| For the company | | | |
--------------------------------------------------------------------------------
| Mortgages on real estate | 17.1 | 16.9 | 16.9 |
--------------------------------------------------------------------------------
| Securities pledged | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Corporate mortgages | 33.5 | 34.2 | 34.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent off-balance sheet liabilities | | | |
--------------------------------------------------------------------------------
| Non-cancelable other leases | | | |
--------------------------------------------------------------------------------
| Minimum lease payments | 2.2 | 2.8 | 2.7 |
--------------------------------------------------------------------------------
| Contingent liabilities for the company | 1.5 | 1.5 | 1.5 |
--------------------------------------------------------------------------------
| Contingent liabilities for associated | | | |
| companies | | | |
--------------------------------------------------------------------------------
| Guarantees | 3.1 | 2.9 | 3.0 |
--------------------------------------------------------------------------------
| Contingent liabilities for others | | | |
--------------------------------------------------------------------------------
| Guarantees | 0.2 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Other liabilities | 2.2 | 1.9 | 2.8 |
--------------------------------------------------------------------------------
DERIVATIVE CONTRACTS (EUR million)
--------------------------------------------------------------------------------
| | 30.9.07 | 30.9.06 | 31.12.06 |
--------------------------------------------------------------------------------
| Nominal values of derivative contracts | | | |
--------------------------------------------------------------------------------
| Raw material futures | 2.3 | 1.2 | 5.4 |
--------------------------------------------------------------------------------
| Currency forward contracts | 24.4 | 30.7 | 25.5 |
--------------------------------------------------------------------------------
QUARTERLY PERFORMANCE (EUR million)
--------------------------------------------------------------------------------
| | 7-9/ | 4-6/ | 1-3/ | 10-12 | 7-9/ | 4-6/ | 1-3/ |
| | 2007 | 2007 | 2007 | / | 2006 | 2006 | 2006 |
| | | | | 2006 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Turnover by segment | | | | | | | |
--------------------------------------------------------------------------------
| Food | 48.6 | 48.5 | 49.8 | 50.1 | 49.6 | 49.5 | 47.4 |
--------------------------------------------------------------------------------
| Feed & Malt | 61.7 | 53.6 | 40.9 | 46.7 | 50.9 | 50.3 | 38.6 |
--------------------------------------------------------------------------------
| Ingredients | 10.2 | 10.7 | 12.5 | 10.1 | 12.6 | 13.8 | 13.2 |
--------------------------------------------------------------------------------
| Other operations | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 | 0.1 | 0.2 |
--------------------------------------------------------------------------------
| Interdivisional | -7.6 | -5.9 | -5.9 | -5.1 | -5.3 | -5.5 | -5.6 |
| turnover | | | | | | | |
--------------------------------------------------------------------------------
| Total turnover | 112. | 107. | 97.5 | 101.9 | 108.0 | 108.1 | 93.8 |
| | 9 | 0 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating result by | | | | | | | |
| segment | | | | | | | |
--------------------------------------------------------------------------------
| Food | -5.7 | -1.7 | -0.9 | -32.2 | -1.4 | -2.3 | -2.0 |
--------------------------------------------------------------------------------
| Feed & Malt | 6.8 | 2.2 | 0.6 | -0.5 | 2.7 | 3.6 | 0.5 |
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| Ingredients | 2.1 | 2.6 | 2.5 | 1.5 | 2.2 | 2.3 | 1.8 |
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| Other operations | -0.4 | -0.5 | -0.8 | -2.3 | -0.1 | -1.5 | -1.4 |
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| Eliminations | 0.0 | 0.0 | -0.1 | 0.1 | -0.1 | 0.0 | 0.0 |
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| Total operating | 2.8 | 2.5 | 1.3 | -33.4 | 3.3 | 2.0 | -1.0 |
| result | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income and | | | | | | | |
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| expenses, net | 0.2 | 0.1 | 0.5 | -3.5 | 0.4 | 0.5 | 0.6 |
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| Share of result of | | | | | | | |
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| associated companies | -0.1 | -0.1 | -0.2 | -2.3 | -0.2 | -0.1 | 0.0 |
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| Result before taxes | 2.9 | 2.6 | 1.7 | -39.3 | 3.5 | 2.4 | -0.5 |
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| Income tax | -1.5 | -0.7 | -0.3 | 0.8 | -1.0 | -0.5 | 0.1 |
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| Result for the | | | | | | | |
| period from | | | | | | | |
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| continuing | 1.4 | 1.9 | 1.5 | -38.5 | 2.5 | 1.8 | -0.4 |
| operations | | | | | | | |
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ONE-OFF ITEMS (EUR million)
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| | 7-9/ | 4-6/ | 1-3/ | 10-12 | 7-9/ | 4-6/ | 1-3/ |
| | 2007 | 2007 | 2007 | / | 2006 | 2006 | 2006 |
| | | | | 2006 | | | |
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| Food | | | | | | | |
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| Impairments | -3.6 | | | -21.7 | | | |
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| Withdrawal from the | | | | -5.8 | | | |
| investment | | | | | | | |
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| Feed & Malt | | | | | | | |
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| Impairments | -2,1 | | | -1,1 | | | |
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| Reversal of | 5,5 | | | | | | |
| impairments | | | | | | | |
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| Compensation | | | | | | 1.8 | |
| resulting from the | | | | | | | |
| contractual lease | | | | | | | |
| transfer | | | | | | | |
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| Impact on operating | -0.3 | 0.0 | 0.0 | -28.5 | 0.0 | 1.8 | 0.0 |
| result | | | | | | | |
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| Financial income and | | | | -4,3 | | | |
| expenses, net | | | | | | | |
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| Share of result of | | | | -2,2 | | | |
| associated companies | | | | | | | |
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| Impact on result | -0,3 | 0,0 | 0,0 | -35,0 | 0,0 | 1,8 | 0,0 |
| before taxes | | | | | | | |
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KEY INDICATORS
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| | 30.9.07 | 30.9.06 | 31.12.06 |
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| Return on equity, ROE, % | 2.2 | 1.5 | -10.8 |
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| Return on investment, ROI, % | 3.6 | 2.4 | -9.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-bearing liabilities at the end of | 11.2 | 23.8 | 23.2 |
| the period, EURm | | | |
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| Gross investments, EURm | 21.4 | 19.6 | 28.2 |
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| % of turnover | 6.7 | 6.3 | 6.8 |
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| Depreciation, EURm | 13.8 | 16.4 | 21.8 |
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| R & D expenses, EURm | 4.3 | 7.2 | 9.8 |
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| % of turnover | 1.4 | 2.3 | 2.4 |
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| Average personnel | 1,197 | 1,296 | 1,277 |
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| Equity ratio, % | 76.9 | 77.9 | 75.0 |
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| Gearing, % | -16.6 | -21.6 | -19.1 |
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| Earnings/share from continuing operations, | 0.03 | 0.02 | -0.22 |
| EUR | | | |
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| Cash flow from operations/share, EUR | 0.09 | 0.14 | 0.09 |
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| Equity/share, EUR | 1.70 | 2.02 | 1.73 |
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| Average number of shares during the | | | |
| period, in 1,000s*) | | | |
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| Free shares | 125,184 | 126,906 | 125,843 |
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| Restricted shares | 34,502 | 34,525 | 34,524 |
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| Total | 159,686 | 160,431 | 160,367 |
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| Average numer of shares at the end of the | | | |
| period, in 1,000s*) | | | |
--------------------------------------------------------------------------------
| Free shares | 125,045 | 125,655 | 125,655 |
--------------------------------------------------------------------------------
| Restricted shares | 34,383 | 34,522 | 34,522 |
--------------------------------------------------------------------------------
| Total | 158,428 | 160,177 | 160,177 |
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| Market capitalisation of shares at the end | | | |
| of the period, EURm*) | | | |
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| Free shares | 240.6 | 183.5 | 224.9 |
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| Restricted shares | 66.7 | 51.8 | 62.1 |
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| Total | 307.3 | 235.2 | 287.1 |
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*)Number of shares without own shares
CALCULATION OF INDICATORS
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| Return on | Result before taxes - income taxes*) |
--------------------------------------------------------------------------------
| equity (ROE), % | ---------------------------------------- x 100 |
--------------------------------------------------------------------------------
| | Shareholders' equity (average |
--------------------------------------------------------------------------------
| | over the period) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | Result before taxes + interest and |
--------------------------------------------------------------------------------
| investment (ROI), % | other financial expenses*) |
--------------------------------------------------------------------------------
| | ---------------------------------------- x 100 |
--------------------------------------------------------------------------------
| | Balance sheet total - non-interest- |
--------------------------------------------------------------------------------
| | bearing liabilities (average over |
--------------------------------------------------------------------------------
| | the period) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | Shareholders' equity |
--------------------------------------------------------------------------------
| | ---------------------------------------- x 100 |
--------------------------------------------------------------------------------
| | Balance sheet total - advances received |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net interest- | Interest-bearing liabilities - liquid |
--------------------------------------------------------------------------------
| bearing liabilities | assets and financial assets recorded |
--------------------------------------------------------------------------------
| | at fair value in the income statement |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gearing, % | Net interest-bearing liabilities |
--------------------------------------------------------------------------------
| | ----------------------------------------- x 100 |
--------------------------------------------------------------------------------
| | Shareholders' equity |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share* | Result for the year of parent company |
--------------------------------------------------------------------------------
| | shareholders |
--------------------------------------------------------------------------------
| | ------------------------------------------- |
--------------------------------------------------------------------------------
| | Average number of shares for the year, |
--------------------------------------------------------------------------------
| | adjusted for share issue |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | Cash flow from business operations |
--------------------------------------------------------------------------------
| business operations | ------------------------------------------- |
--------------------------------------------------------------------------------
| per share | Average number of shares for the year, |
--------------------------------------------------------------------------------
| | adjusted for share issue |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | Equity of parent company shareholders |
--------------------------------------------------------------------------------
| equity per share | -------------------------------------------- |
--------------------------------------------------------------------------------
| | Number of shares at the end of the period |
--------------------------------------------------------------------------------
| | adjusted for share issue |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Market | Closing price, adjusted for issue |
--------------------------------------------------------------------------------
| capitalisation | x number of shares without own shares |
--------------------------------------------------------------------------------
| | at the end of the period |
--------------------------------------------------------------------------------
*)The calculation of key indicators uses continuing operations result
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