Lantmännen: reports big improvement in earnings

Stockholm / SE. (lg) Lantmännen reported a full year profit of 1’246 million SEK for 2015 after net financial items and adjusted for items affecting comparability; compared to 740 million SEK in 2014. All sectors reported increased profits compared to the previous year. The Agriculture and Energy Sectors in particular achieved significant improvements. The Board has decided to raise the refund and final price adjustment.

«Adjusted for items affecting comparability, the 2015 earnings are the best Lantmännen has ever delivered. Even when you include non-recurring items, the earnings are historically high and on a par with last year when we reported large effects on earnings such as the IPO of Scandi Standard», says Per Olof Nyman, Group President and CEO, Lantmännen.

«During the course of the year we have achieved our long-term targets of an 8 percent return on shareholders’ equity and an equity ratio of 40 percent. Lantmännen continues to deliver in accordance with our strategy; we have strengthened our position in the grain value chain in the Baltic Sea region via the acquisition of Vaasan and have created a broader platform for exports to other important markets. We have also implemented measures to make our purchasing and logistics more efficient, and are continuing our efforts to create added value from Swedish grain, which strengthens Swedish agriculture», Per Olof Nyman continues.

All the figures below relate to operating profit for the full year 2015, adjusted for items affecting comparability. The previous year’s figures are in brackets.

Agriculture Sector

Agriculture Sector earnings continue to improve and amount to 237 million SEK (56 million SEK). A strong improvement in earnings within the Swedish operation is primarily the result of increased customer focus and well implemented cost reduction and efficiency programs. The 2015 harvest was the largest in many years, with a total of 2.7 million tons delivered to Lantmännen; almost 500’000 tons more than the previous year. The feed business has developed well during the year, helped by more efficient production and the successful launch of a new feed range.

Machinery Sector

All Machinery Sector businesses delivered improved earnings and total operating profit for the Sector amounted to 255 million SEK (181 million SEK). Our Machinery Sector managed to improve earnings despite yet another year with a decreasing Swedish tractor market. The market downturn has been countered by comprehensive efforts to improve efficiency and customer focus which have helped Lantmännen retain its leading position on the Swedish market. Once again, Valtra was the market leader in 2015 with a market share of around 24 percent. Lantmännen has also acquired Kalmar Lantmän’s machinery business with effect from 01 January 2016.

Energy Sector

There was a sharp improvement in earnings in the Energy Sector that amounted to 218 million SEK (61 million SEK). The most notable improvement came in Lantmännen Agroetanol, thanks to a continuing efficiency drive, a more diversified raw material base and the introduction of new products. An important breakthrough was also achieved in Germany where demand for more sustainable ethanol with low carbon dioxide emissions benefited Lantmännen Agroetanol.

Food Sector

The Food Sector increased earnings to 733 million SEK (521 million SEK), an improvement driven by efficiency gains within production, innovative new customer offers and the acquisition of the Finnish bakery group Vaasan Oy, Lantmännen’s biggest acquisition ever. The integration of Vaasan into Lantmännen Cerealia and Lantmännen Unibake is going according to plan. The combined resources and expertise of Lantmännen and Vaasan have created an even stronger food business within the grain value chain in the Baltic Sea region.

Real Estate

Lantmännen Real Estate has continued its development and delivered earnings of 314 million SEK (223 million SEK). This increase is due to improvements in day-to-day operations and from various property development projects. «We have strategically positioned Lantmännen for continued profitable growth within the framework of Strategy 2020. In 2016 we will continue to expand our business operations in our home markets and also in strategic export markets. Innovation, in terms of both new products and smarter ways of working, remains key. We will continue to improve cooperation between businesses in the grain value chain to further strengthen the competitiveness and profitability of our owners’ farms», says Nyman.

Dividend proposal

The Board has decided to raise the refund and final price adjustment of trading with Lantmännen Lantbruk Sweden by 0.5 percent, to 2.0 percent (1.5). The Board has also resolved to pay a 0.5 percent (0.5) refund to members on purchases from our Machinery Sector’s Swedish business. In total, refunds and final price adjustment are expected to amount to 189 million SEK (135 million SEK).

The Board proposes that the Annual Association Meeting resolves on an investment dividend of 9 percent (9), totalling 193 million SEK (178 million SEK) and a contribution issue of 50 million SEK (150 million SEK). Altogether, the proposed investment dividend and contribution issue amount to 11 percent (17) of the association’s investment capital. The total dividend to owners would then amount to 432 million SEK (463 million SEK). The Board proposes that the Annual Association Meeting resolves that the dividend on subordinated debentures should be 6.5 percent (9), or 16 million SEK (5 million SEK) in total.

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