Stockholm / SE. (lg) The results of the Swedish Lantmännen Group after financial items for the first quarter 2009 show a loss of 113 million Swedish Crowns (SEK), adjusted for items affecting comparability. The result for the corresponding period in 2008 was a profit of 70 million SEK. The exceptional cases involving glass in Kronfagel´s products resulted in a quarterly charge for costs of 30 million SEK, the Group said in a statement.
Net revenues during the period were 8’605 million SEK (9’847), a 13 percent decrease. For the period there was a loss of minus 113 million SEK (70) in results after financial items, adjusted for items affecting comparability, which is a decline of 183 million SEK. «We had already seen the effect of the global economic downturn during the fourth quarter of 2008, so the decline in Q1 2009 was expected», said Lantmännen President and CEO Per Strömberg.
The sharp drop in results is connected to a large extent with the economic downturn. A general drop in demand and desire to invest is hitting Lantmännen Anläggnings- och Lantbruksmaskiner hard. The results for Lantmännen Energi are affected by production volumes that were lower than planned and start-up costs for the ethanol plant in Norrköping. The weak Swedish currency affects all of Lantmännen´s businesses, but the food business in particular is experiencing a noticeable lag in necessary price increases. Results for the quarter are also affected by a decline in volume in Lantmännen Lantbruk´s Swedish operations, primarily in fertiliser and grain.
The exceptional cases involving glass in a small number of Lantmännen Kronfagel´s products caused comprehensive product recalls of all frozen chicken under the Kronfagel brand; as a result, new frozen chicken has not been delivered. This will have a large impact on earnings, but Lantmännen´s focus has been the safety of the consumer and long-term confidence in the Kronfagel brand. Lantmännen is employing both short-term and long-term measures in all of its businesses in order to address the increasingly difficult economic situation.
Strömberg: «In the executive team we established a new short-term savings programme to save approximately 300 million SEK in 2009 on items including administrative costs. In addition we are employing specific measures in all of the business areas. Our efforts in the longer term are focused on three overall areas: capital efficiency, supply chain efficiency and organisational efficiency».
Lantmännen Unibake
Lantmännen Unibake is one of Europe´s largest manufacturers of frozen bakery products. Products are marketed to the catering/food service and retail trade. It operates in Denmark, Norway, Sweden, Finland, the U.K., Germany, Belgium, Poland, the U.S. and Russia, with sales units in Spain, Korea and Japan. Lantmännen Unibake also has fresh bread businesses in Denmark and Poland.
In the period January to March net sales were 1’842 million SEK (1’753), an increase of five percent. Adjusted for the Swedish fresh bread business, which was sold at the beginning of 2009, net sales rose by 27 percent. The increase is primarily due to the acquisition of Euro-Bake, Eurobuns and Baco and the fact that sales are mainly in currencies other than Swedish kronor. The downturn has reduced travel and hotel stays, resulting in lower sales. Sales performance at Unibake Belgium was good, though exports to the United Kingdom are lower.
Fresh bread operations (excluding the Swedish fresh bread business) are reporting a six percent increase in net sales. The increase is chiefly driven by changes in exchange rates.
Operating income for the period January-March was 22 million SEK (0). Cumulative earnings the previous year adjusted for the sale of the Swedish fresh bread business was 37 million SEK. In frozen bread, earnings in Scandinavia were lower than the previous year, owing to lower volumes and currency effects.
In Danish fresh bread operations, earnings were appreciably higher than the previous year, because the production problems during the corresponding period in 2008 have now been solved.
Lantmännen Cerealia
Lantmännen Cerealia develops, produces and markets grain-based products such as flour, flour mixes, meal, muesli, pasta and ready-to-eat foods. Operations are in Sweden, Norway, Denmark, Latvia, Finland, Russia and Ukraine. Products are distributed through grocery stores, restaurants, catering/food service, bakeries, wholesalers and the food industry. Strong consumer brands are Axa, Kungsörnen, Start and GoGreen.
Net sales for the period January to March totaled 1’113 million SEK (1’123), a decrease of one percent. Volumes increased in the grocery segment despite heavy price pressure from retailers, but decreased somewhat in the industry and bakery segment. Sales in Ukraine decreased, owing to domestic market weakness and lower exports to Russia.
Operating income for the period January to March was 42 million SEK (56). The lower operating income compared with the previous year is chiefly due to lower volumes in the industry and bakery segment. In addition, the cost of materials increased, since commodity grain, at higher prices, were imported to Sweden owing to a shortage of domestic grain of sufficiently high quality.
Info: Lantmännen Interim Report January to March 2009 • PDF • 20 pages • 531 KB
