Comparable earnings in its food division increased from SEK 521m ($62m) last year to SEK 733m ($87m), the business reported in its full-year results for 2015.
The increase is largely down to continuing improvements in earnings for Lantmännen Unibake and additional income from Vaasan, a major bakery operator in Finland, Sweden, Norway and the Baltic region, with brands including Finn Crisp and Vaasan. Lantmännen previously owned around 8% of the shares in Vaasan and completed its acquisition of the remaining shares last June.
Lantmännen reported that ongoing integration of its Lantmännen Cerealia (cereals) and Lantmännen Unibake operations “has proceeded very well”, adding the sale of pet food business Lantmännen Doggy last summer had contributed to the changing composition of the food division
“Lantmännen Cerealia is showing stable development and a number of initiatives for the future were started during the year”, reported the business. Activity has included investments in the Strängnäs Valskvarn milling business in Sweden and a pancake business in Laholm.
Product development had been a focus in 2015, with launches including the Go Raw food concept and nut-based smoothies from GoGreen; Swedish-grown beans; and a new Kungsörnen wheat flour claimed to reduce the carbon footprint throughout the chain from field to fork by up to 20%.
In the third quarter of the year, Lantmännen secured a permit to import processed oat products into China, which gave Cerealia an opportunity for further growth in a new market, said the company.
International operations strengthened earnings from the Unibake business, reported Lantmännen, driven by increased production efficiency and lower purchase costs. Earnings were also boosted by much of the growth coming in high value-added categories and countries with higher margins.
The business has started production of a new bakery in Nowa Sòl, Poland, and is this year to build a new bakery in Londerzeel, in Belgium, after a fire last June destroyed the existing facility. Unibake was able to maintain deliveries to customers despite the fire, said Lantmännen, adding the plant was insured for property damage and production interruption costs.
Overall business performance
Profit across the business –including its energy, agriculture, machinery and real estate division – was SEK 1,246m ($147m) compared with SEK 740m ($88m) in 2014.
“Adjusted for items affecting comparability, the 2015 earnings are the best Lantmännen has ever delivered,” said group president and CEO Per Olof Nyman. “Even when you include non-recurring items, the earnings are historically high.”
“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,” he added. “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.”