Financial report

Strong result for Lantmännen in 2018 – although lower than last year due to the drought and a lower ethanol price

Lantmännen’s result for 2018, after net financial items and adjusted for items affecting comparability, amounts to 1 387 MSEK, compared to last year’s result of 1 552 MSEK. The decline in earnings is entirely due to the low harvests following the summer’s drought, and a lower ethanol price.

”The small harvest has been a severe challenge for our members and for several of Lantmännen’s operations – and the effects will stay with us during 2019. Lantmännen has shown a very good development over the last couple of years, and although 2018 represents a break from that trend, our ambitions are still as high as ever – and we have every opportunity to achieve them,” says Per Olof Nyman, Lantmännen’s CEO and Group President.

Figures below refer to operating profit adjusted for items affecting comparability. Last year’s result in parenthesis.

The Agriculture Sector shows a significantly lower result than the previous year: 197 MSEK (337), which is explained by the low 2018 grain harvest. The drought and heatwave have strongly impacted the last six months, and will continue to affect the business in 2019. Demand for feed has been strong during and after the summer, due to the drought and lack of roughage on farms.

The Energy Sector’s result for 2018 is lower than last year: 200 MSEK (296), which is primarily due to a lower average ethanol price compared to 2017, as well as higher grain prices towards the end of the year. Lantmännen Reppe’s production of glucose syrup has been shut down as a result of insufficient profitability.

The Food Sector shows a result higher than the previous year: 787 MSEK (708). Lantmännen Cerealia has continued its work on efficiency and cost-savings to strengthen the business platform in all markets. Lantmännen Unibake continues to develop well, with strong growth both in terms of sales and result.

Swecon Business Area shows a significantly higher result than last year: 440 MSEK (372). Sales remain on record levels, and the result is – for the second year running – the highest ever. The development in Swecon’s markets remains strong, and increasing machine populations are also driving demand on the aftermarket.

Business Area Real Estate is developing according to plan, with a result – excluding capital gains – in line with the previous year: 213 MSEK (204).

Two major acquisitions have been made in the last few months: Raisio’s cattle feed business in Finland, which has since changed its name to Lantmännen Feed – and the Australian Bakery Du Jour, which further strengthens Lantmännen Unibake’s presence in Australia.

The Board of Directors proposes a refund and supplementary payment of 1,5 percent (2,5) on trade with Lantmännen Lantbruk Sweden, and a refund of 0,5 percent (0,5) on purchases from Lantmännen Maskin’s and Swecon’s Swedish operations. In total, the proposal for refund and supplementary payment amounts to 156 MSEK (245). In addition, the Board proposes a contribution dividend of 8 percent (9) on the nominal share amount, totaling 213 MSEK (222), and a contribution issue of 250 MSEK (100). In total, the proposed dividend amounts to 619 MSEK, compared to last year’s ordinary dividend of 567 MSEK. The proposed dividend is the highest in Lantmännen’s history.

“In 2018, Lantmännen has taken a number of concrete actions to support our members – for example an extra dividend payment, extra discount and supplement, and more advantageous credit interest rates. At the same time, the proposed dividend is uniquely high, thanks to the fact that we can utilize the options and possibilities available in our dividend policy, at a time when results in different parts of Lantmännen vary considerably. In that way, we can ensure both the development of Lantmännen and on our members’ farms, which is one of the strengths of being a cooperative company,” says Per Lindahl, Chairman of Lantmännen’s Board of Directors.

“In 2019, we need to continue to be both vigorous and flexible in order to meet the continued market challenges we anticipate following the 2018 drought. At the same time, we will take further steps in line with our strategy, to become an even better and more profitable company in the coming years – thereby strengthening our position as the Swedish farmers’ best business partner,” says Per Olof Nyman.

The year-end report is available at https://lantmannen.com/en/financialinformation.

Images are available at https://lantmannen.com/en/press-and-publications.

If you have any questions, please contact:

Per Olof Nyman, CEO and Group President, Lantmännen
Phone: +46 706 57 42 47
E-mail: per.olof.nyman@lantmannen.com

Ulf Zenk, CFO, Lantmännen
Phone: +46 725 61 15 63
E-mail: ulf.zenk@lantmannen.com

Lantmännen’s press office
Phone:
+46 10 556 88 00
E-mail:
press@lantmannen.com

This information is information that Lantmännen ek för is required to disclose under the EU Market Abuse Regulation. The information was submitted by the above contact persons for publication at 08:00 CET on February 6, 2019.