TINE SA English_2012_09.indd

Transcription

Annual report 2012
Annual report from the Board
of Directors
Financial statement
TINE annual report 2012
tine
TINE aims to be a leading supplier of food and drink
brands with a main focus on dairy products.
Price to
milk producers
Vision
We will be Norway’s most important generator of value.
Our business idea
NOK PER LITRE DELIVERED
2012
2011
2010
2009
Milk price from TINE Råvare
(TINE Milk Supplies)
4.53
4.32
4.20
4.07
0.26
0.42
0.33
0.27
4.79
4.74
4.53
4.34
Subsequent payment from TINE SA
Total price achieved by
the owners
The TINE Group creates value in close interaction with nature, agriculture and the
market. The TINE Group processes pure, natural commodities into good, healthy
food, which is preferred by the consumers and is the country’s leading food supplier.
The TINE Group is owned by Norwegian dairy farmers in a cooperative society.
Our objectives
HSE figures
THE tine group
EMPLOYEES
Number of employees
Number
Absence due to illness,
Per cent
Lost time injury (LTI) rate
2012
2011
2010
2009
5 485
5 505
5 496
5 675
6,4
6,7
6,8
7,1
9,6
11,9
12,7
13,5
1.Give the owners the best possible price for their milk and an organisation with the
power to continue doing this in the future.
2. We will be an attractive employer by:
– giving the employees both professional and personal development opportunities
– ensuring that employees feel they are treated respectfully and fairly.
3. Give customers and consumers value for money.
4. Give society a company that creates growth in food production.
Key figures
The TINE Group
Revenues
Operating profit
Net profit margin
2012
2011
2010
2009
NOK million
19 769
19 387
18 834
18 712
NOK million
934
1 176
1 189
911
4.7
6.1
6.3
4.9
762
1 095
1 085
848
Operating profit/revenue in per cent
NOK million
Profit before tax
Net profit for the year
NOK million
669
937
910
674
Assets
NOK million
13 700
12 957
11 352
9 999
Equity ratio
Equity/total capital as a per cent
Net interest-bearing debt/EBITDA
40.8
41.3
44.6
46.3
2.28
1.54
0.92
0.86
Investments
NOK million
1 843
2 365
1 766
1 040
Working capital
NOK million
1 202
1 627
1 741
1 457
CONSUMPTION
PER CAPITA
Source: melk.no/january 2013
KG/LITRE
17,6
9,8
91,6
KG/LITRE
10,4
TineMelk from farms in your region.
February A new brown cheese for the
whole family, Millom, Go’Morgen Yoghurt with a Greek twist and two new
flavours of YT were a few of the new
products.
March Norvegia received the Nielsen
Brand Strength Award 2012. According to the jury, Norvegia was «the
most important contributor to growth in
its category with very good development in both value and volume».
April Sold ownership interest
in Salmon Brands.
The decision was made to remove 90
per cent of palm oil from TINE’s products in 2012, and the remainder in
2013.
May The Minister of Agriculture and
Food opened TINE Meieriet Jæren –
the largest dairy in Norway and one of
Europe’s most modern.
Distribution became a separate business unit in TINE.
800 YT-sponsored runners from TINE
participated in the Holmenkollen Relay,
«spring’s most beautiful adventure».
June TINE’s subsidiary in the US, Nor-
August New operations organisation implemented. The division into regions ended and was replaced by five
function areas. The owner organisation
and TINE Rådgiving (advisory service)
and Medlem (membership organisations) are still organised as regions.
TINE was awarded the «Grocery Supplier of the Year» award during Dagligvaredagen (Grocery Day) in Ålesund.
Ice cream/LITRE
3,2
Yoghurt/KG
Incl. import
Highlights from the past year
January Regional milk was launched,
13,0
Cheese/KG
White, brown, imported and
processed cheese
Cream/sour cream/KG
Butter/KG
Incl. mixed products
COW’S AND GOAT’S MILK
DELIVERED TO TINE
MILLION LITRES
September TINE entered into a transport agreement with Hansa Borg Bryggerier (brewery) for parts of the
country.
The new milk – TINE Styrk – was launched. TINE Styrk contains 50 per cent
more protein, 50 per cent more calcium, extra vitamin D and is fat-free, with
a shelf life of 30 days.
October TINE awarded Osteprisen
(cheese award) for 2012 to De Historiske Hotel & Spisesteder (historic
hotels & restaurants). The citation for
the award cited the chains’ efforts to
provide customers with a valuable added experience through their role as
passionate ambassadors for Norwegian
and local foods.
TINE opened its own pavilion for specialty dairy products, Melkerampa, at
Mathallen in Oslo.
seland Inc., bought Alpine Cheese Co.
– the dairy which produces Jarlsberg.
The Red Cross and TINE signed a new
partnership agreement on Galdhøpiggen. The agreement has a duration of
five years.
November TINE purchased butter
import quotas for a total of 400
tonnes.
TINE received 54 special awards and
medals from the Danish International
Food Contest in Herning.
July TINE and Sprett renewed their
December Total butter production
sponsorship agreement with the Kristiansand Zoo and Amusement Park and
organised activities for children and
families.
in 2012 ended at 14.8 million kg.
The total growth was 1.7 million kg, or
13 per cent, compared with 2011.
1453,9
Cow’s milk
19,4
Goat’s milk
Contents
CEO
Annual report from the Board of Directors
Financial statement
Auditor’s Report
Subsidiaries in the TINE Group
Contact information
2
4
20
49
50
52
TINE ANNUAL REPORT 2012 | 1
TINE ANNUAL REPORT 2012
Common sense is the
way to the future
Never before has TINE been better
poised to provide Norwegian
consumers with milk of the highest
quality
The propotion of dairy farmers who delivered elite milk to TINE has
never been higher than it was in 2012. This is the highest quality
rating Norwegian dairy farmers can achieve for their milk supply
deliveries. This means that the milk, according to objective criteria,
is considered to have outstanding quality, even on an international
scale.
Dairy farmers who deliver elite milk for 15 consecutive years are
awarded a Sølvtine (silver food container). This year, more than
100 of the farmers who deliver to TINE received such an award.
Over the last five years, nearly 500 farmers have received TINE’s
highest award.
The farmers and cows actually have to repeat this achivement, every
day, year round, for 15 years in order to qualify for such an award.
I think few of us understand what it takes to win such an award.
There is an average of 20 cows in a typical Norwegian herd. The
operation is biological, complex and multi-faceted, and there are
many elements of uncertainty. The margin of error is minimal. I
believe this is a marathon performance that can be compared with
walking up to Holmenkollen ski jump and jumping to the bottom of
the hill with three 19.5 style scores, every day.
The fact that as much as about 1.473 billion litres of the milk (cow/
goat) delivered to TINE from more than 10 000 small and large
farms throughout the country, maintains this quality, is not a matter of course. This is the result of painstaking, long-term work by
farmers, as well as TINE’s advisory services. Such a tour de force
requires particularly good operations and consummate professional skills from milk farmers.
This constitutes an obligation for us in the industry. There are no
shortcuts to ensure that this quality follows TINE’s brands all the
way to Norwegian tables. Making sure that TINE delivers brands
of the highest quality that satisfy the consumer’s expectations and
which contribute to growth and profitability for our customers, is
job number one. And we have to do it every single day. TINE’s
brands will maintain the highest quality.
2 | TINE ANNUAL REPORT 2012
Ceo
«making sure that tine delivers
brands of the highest quality that
satisfy the consumer’s expectations and which contribute to
growth and profitability for our
customers, is job number one»
TINE is currently making big changes in order to satisfy both the
customers’ and consumers’ requirements across multiple dimensions. In 2012, we renewed our technological platform at several
dairies in order to become more efficient. This improves our ability
to compete and requires even sharper market focus. Through consumer insight and innovation, we will develop new brands to meet
trends and consumer needs.
This winter we have seen that consumers in Europe, and perhaps
also in Norway, have encountered products in the frozen-goods
section whose content did not match their declarations. As a brand
supplier, high quality and trust are our most important criteria for
succeeding in tough competition. I am confident that, in the future,
Norwegian consumers will request even more information about
the products they buy and how they are produced. Both we suppliers and the grocery retailers will experience this increased demand, and TINE is eager to contribute.
starts with the farmer in the field and ends in the supermarket. It
actually stretches even further, for example with the workout food
product YT, where the consumer also gains access to TINE’s nutritional knowledge before, during and after their workout.
Information about production and applications adds value to TINE’s
brands. This is a benefit for the Norwegian consumer. We can provide this because we take responsibility for the entire value chain
and because we have consumer insight and expertise in every single product category we deliver to consumers. This type of branding is hard to emulate and builds trust.
TINE’s future competitiveness depends on our success in providing our customers with growth and profitability. TINE’s portfolio
includes some of Norway’s leading brands and maintains a strong
position in the large dairy-based product categories. Our goal is
to drive half of the growth in the categories where we have a presence. We largely succeeded with this in 2012 – and we will increase these efforts in 2013 – and beyond.
Many of us, not only within food and drink, have much to learn
from Norwegian dairy farmers. Hard work over time with a purpose
will yield results. TINE is using this lesson when we convert pride,
knowledge and skills into top-quality brands, made with what just
might be the world’s finest raw material – real, natural Norwegian
milk.
Hanne refsHolt
Consumers must have confidence in TINE’s brands. Our value chain
Ceo
Annual report
from the Board of
Directors
• Result in line with expectations
• Operations and the result are characterised by the start-up of new facilities
• Good growth for white cheese and cooking ingredients
• Decline in milk consumption
• Challenging fat balance
• New plant structure
TINE’s objectives and strategy
TINE is a food manufacturing group that processes clean and natural raw materials into good, healthy food. The parent company
TINE SA is a cooperative society owned by Norwegian milk producers. The goal is to provide the owners with the best possible milk
price. TINE works in a goal-oriented fashion to deliver according
to customers’ and consumers’ needs, and working for TINE should
be attractive.
TINE aims to be a leading supplier of food and drink brands with
a focus on dairy products. This involves an obligation to deliver
products with the right and stable quality every single time. Our
products will be available to the consumer wherever he or she may
be and in the form the consumer wants. Furthermore, TINE will be
characterised by safe food, a high ethical standard and focus on
reducing its environmental impact.
TINE’s business consists of TINE’s Domestic dairy operations,
TINE’s International dairy operations and Other activities. Purchase
and resale of the raw material milk is organised in TINE Råvare (Milk
Supplies), a department which is separate from TINE SA both administratively and as regards accounting.
TINE’s primary market is Norway, but the group is also growing
internationally. TINE has operations throughout Norway with headquarters in Oslo. Most of our international operations are based
in the US, Sweden and the UK. Our international subsidiaries are
located in the US, Sweden and the UK.
Result
TINE’s 2012 result is characterised by strong sales development in
cheese and dairy-based cooking ingredients such as cream, sour
cream and butter, continued decline in the sale of fresh milk and
costs associated with starting up new facilities. The TINE Group
can show revenues of NOK 19.8 billion, an increase of NOK 382
million, which corresponds to a 2.0 per cent increase from 2011.
The operating profit was NOK 934 million, a decline of NOK 242
million from 2011.
aNNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2012
TINE is commissioning a new dairy at Jæren in the first half of 2013,
as well as expanding its plants in Oslo, Trondheim and Verdal. The
investments will provide a basis for future growth and improved
efficiency.
In 2012, costs have been higher than anticipated, mainly as a result
of commissioning new warehouses in Oslo and at Tunga, as well as
operation of both new and old dairies at Jæren. In line with starting
up the new dairies, depreciation has increased by NOK 118 million,
whereas increased pension costs have reduced the operating profit
by NOK 185 million compared with last year.
Operating income
per business segment
NOK MILLION
2012
2011
TINE's domestic dairy operations
TINE's international dairy
operations
Other business activities
783
1 102
35
(19)
141
76
Group eliminations
(25)
18
TINE Group
934
1 176
*
In the first quarter of 2012, TINE sold its majority stake in Salmon
Brands AS to the other owner of the company, Bremnes Seashore
AS. Salmon Brands is the company behind SALMA. The sale yielded book gains.
The Company has since changed it’s name to Alpine Dairy LLC.
Operations in Alpine Cheese Co.* were purchased in the summer
of 2012 in order to ensure stable deliveries and a basis for future
growth in the sale of Jarlsberg in the US market.
For the year as a whole, the accounts have been credited with a
net of NOK 84 million in non-recurring items which consist of gains
from the sale of Salmon Brands AS and the sale of decommissioned
dairies, with deductions for reorganisation costs and depreciation
of fixed assets. Correspondingly, the accounts for 2011 were charged a net of NOK 81 million in non-recurring items.
TINE’s domestic dairy operations
TINE is a leading supplier of brands in Norway and has more than
1300 product lines in its portfolio. These are produced at 36 dairies
spread across the country. Furthermore, TINE has two central warehouses and three distribution terminals. TINE processed a total of
1.25 billion litres of cows’ and goats’ milk in 2012 (1.21 billion litres
in 2011). The largest product groups were liquid products with 474
million litres, (483 million litres in 2011) and cheese with 76 400
tonnes (67 700 tonnes in 2011).
Revenues in TINE’s domestic dairy operations for 2012 were NOK
16.4 billion, an increase of 1.0 per cent. Over the last year, TINE
has seen good development in several of its established and new
products, and the development in cheese and dairy-based cooking
ingredients categories has been particularly strong. The sale of
fresh milk, however, continued its decline in 2012, but somewhat
less sharply than in the preceding year.
The operating income for TINE’s Domestic dairy operations was
NOK 783 million, a reduction of NOK 319 million from 2011. In
2012, there has been growth in sales to grocery retailers, whereas the institutional segment has been characterised by increased
competition. The profit is also negatively influenced by increased
operating costs and depreciation as a result of starting up and commissioning new dairies. There have also been challenges associated
with product quality and delivery ratios for certain product lines,
particularly in connection with start-up and conversion measures
in production. In 2012, pension costs have increased as a result of
decline in long-term interest rate levels, as well as the stock markets in the autumn of 2011.
The most important product areas for TINE’s Domestic dairy operations are fresh milk, white cheese and cooking ingredients. Yoghurt
has also become an increasingly important category. We therefore
have a strong focus on efforts to create growth in these areas. At
the same time, it is important to keep developing other product
segments in order to satisfy the consumers’ expectation of a broad
assortment of dairy-related products.
Challenging fat balance
In the autumn of 2011, TINE discovered that the supply of milk raw
materials was lower than expected. This was due to e.g. poor feed
quality as a result of a rainy summer, which also led to a lower-thannormal fat content in the milk. This coincided with an increase in
demand for fatty products. Towards the end of 2011, TINE could
thus not meet the market’s rising demand for butter, a situation
which continued into the first quarter of 2012.
The butter supply situation is challenging, both on the short and
long term. Demand for products that «produce» fat is declining,
while the demand for products that «require» fat is growing. This is
a trend that has developed over time and will most likely continue
in the years ahead.
In the short term, increased dairy production from farmers, imports of butter and a reduction in the level of fat in various dairy
products have contributed to an improved ability to deliver butter.
One important measure is to stimulate increased fat content in the
raw material, milk. Research and development processes are also
underway with a view towards utilising the milk’s other components in a more profitable manner than today.
Robust growth in the sale of white cheese, decline in milk
consumption
Cheese consumption continued to grow in 2012 1) and several
new suppliers of cheese have established themselves in Norway
in recent years, including efforts by retailers. TINE strengthened
its category share and we are particularly happy to see the positive
development in the major brands such as Norvegia, Jarlsberg and
TINE Revet ost (grated cheese) 2). The launch of new variants has
also provided positive contributions.
The consumption of milk per capita in Norway continued its decline in 2012 and, since 2000, the decline has amounted to about
18.5 per cent, whereas the decline from 2011 to 2012 was 2.1 percent 3). The consumption pattern has undergone significant changes where fresh milk is no longer as important as before and the
spectrum of other healthy drinks has been greatly expanded. TINE
is also experiencing increasing competition in the sweet milk segment, which further contributed to the decline in volume for TINE
in 2012 4). Measured in volume, the decline in sales of other milkbased drinks in supermarkets also continued in 2012 4). Flavoured
and cultured milk as a whole also declined somewhat, whereas
TINE experienced a somewhat minor decline in these segments.
Continued solid growth in cooking ingredients, lower growth in
yoghurt
2012 was yet another positive year for dairy-based cooking ingredients such as cream, sour cream and butter. Increased demand for
natural raw materials and a desire to make food from scratch, have
a positive effect on the sale of all of TINE’s cooking ingredients. In
addition, new launches such as cottage cheese have contributed
positively to the strong development.
Yoghurt sales in Norway continue to grow, but at a somewhat lower
rate than in previous years. The growth is primarily driven by a high
pace of new launches and innovation in the category. Competition
in the Norwegian market has picked up and there are currently several suppliers of yoghurt, including large foreign players. In 2012,
the sales development for TINE’s yoghurts has been weaker than
for the category in general in Norwegian grocery retailers 5).
Organic dairy products
TINE wants to offer a wide range of organic dairy products and
secure profitable and sustainable production. TINE introduced organic school milk and relaunched TINE Økologisk Lettmelk (organic
low-fat milk) in new packaging in 2012. The demand for organic
dairy products is substantially lower than the current production
of organic milk. TINE has therefore temporarily stopped entering
into new agreements for deliveries of organic milk. TINE is working
in line with the authorities’ goals to increase the consumption of
organic products. TINE therefore wants to increase the degree of
consumption of organic milk from the current 38 per cent to 70 per
cent by 2015, and its long-term goal is for six per cent of the milk it
receives from farms to be organic.
Increased focus on goats’ milk products
Goat husbandry in Norway helps preserve the cultural landscape
and is part of Norwegian cultural heritage. This form of operation
provides a basis for concepts and products in line with the trend
favouring Norwegian and local culinary traditions.
The supply of goats’ milk still outweighs the demand for goats’
milk-based products. The brown cheeses are TINE’s most important goat products and about 75 per cent of goats’ milk is used to
produce the different brown cheeses. The brown cheese segment
has declined over the last 10-15 years. TINE is working on various
alternatives in order to reach its goal of profitable utilisation of a
greater share of goats’ milk in TINE.
The focus is on revamping brown cheese, increased efforts on Snøfrisk cream cheese and strengthened focus on specialty products
originating from goats.
Through the «Healthier goats» project, the authorities and TINE
cooperate on improving animal health in Norwegian goat husbandry. The main project is expected to be completed over the course
of 2014. A significant effort has also been undertaken in order to
improve goats’ milk quality through feed and breeding.
Structural changes and streamlining
In order to be as well-prepared as possible to meet future competition, TINE carries out continuous efficiency improvements and
streamlining programs. 2012 has been characterised by readjustments, with e.g. demanding and complex start-up of new production facilities as well as implementation of a new operations
organisation. The market in which TINE operates is undergoing
significant change and this requires TINE to adjust its activities and
organisation in order to ensure efficiency and competitiveness.
The new operations organisation was established by replacing the
regional units with the function areas raw materials handling, solid
products, liquid products, specialty products and distribution.
There have been challenges at the new dairy at Jæren throughout
2012. The start-up period has lasted longer than anticipated and
product quality has, at times, not been satisfactory. This has resulted in greater shrinkage costs than budgeted, as only goods that
maintain brand quality are brought to market. Over the course
of the year, the production of butter and margarine has reached
the anticipated level, whereas the production of white cheese and
whey protein powder was still in the commissioning phase at the
end of 2012. Production at the Nærbø and Voll dairies was maintained in order to cover demand in the market. The dairies at Kleppe
and Vikeså were decommissioned over the course of 2012. Production at Nærbø and Voll is expected to be decommissioned over
the course of 2013.
As a consequence of changes in the production of fresh foods in
Eastern Norway and the production structure for consumer milk
between Bergen and Trondheim, the distribution terminal at Mysen
and the dairy at Høgset in Møre og Romsdal county were decommissioned in 2012. The dairies in Sarpsborg, Odal and at Fossheim
in Valdres are scheduled for decommissioning during the period
leading up to the end of 2014.
aNNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2012
Parts of the new distribution warehouse in Oslo were utilised in the
first half of 2012, which signalled a comprehensive restructuring of
operations and goods supply in TINE. The plan is for the new facility to be phased in gradually and full operation cannot be expected
until the three facilities at Sarpsborg, Odal and Fossheim have been
decommissioned. Start-up of the new distribution facility has been
challenging at times, with a demanding technological integration of
automatic storage, which on certain occasions has led to delayed
transport and delivery of goods. Measures have been implemented
to reduce the risk of new operational disturbances.
Upgrades at the dairy in Verdal, including e.g. establishment of a
new churnery were finalised in 2011, whereas the new plant for
production of whey protein powder started up toward the end of
2012.
Brand export
and sales from TINE’s international dairy operations
FIGURES IN TONNES BRAND EXPORTTOTAL SALES*
2012
2011
2012
2011
US
6 481
6 440
18 449
17 604
Australia
1 889
1 772
2 116
2 092
Canada
1 436
1 415
1 650
1 594
UK
716
859
7 043
6 934
Sweden/Denmark
476
727
13 294
12 775
Other markets
Total
924
864
1 394
1 448
11 922
12 077
43 946
42 447
* Brand export consists of sales out of Norway and total sales are sales to the
consumer/end market of all brands in volume.
TINE’s international dairy operations
TINE has subsidiaries in Sweden, Denmark, the UK and the US, and
the turnover is mainly based on the sale of Norwegian and international brands of cheese. Total operating revenues for TINE’s international dairy operations amounted to approxemately ten per cent
of the TINE Group’s turnover in 2012. Of the total volume of cheese
sold abroad, approxemately 30 percent was produced from Norwegian milk. In order to ensure increased sales and the opportunity
to increase production of Jarlsberg in the US, TINE purchased the
activities of the US company Alpine Cheese Co. in 2012 6).
Jarlsberg is currently TINE’s largest brand on the international market, with separate production in Norway and the US, as well as
franchise production in Ireland. Processing, ageing and packing of
cheese also takes place at TINE’s dairies in the UK and Sweden.
TINE’s goal is for a greater share of TINE’s turnover to come from
dairy operations and sales of specialty cheeses outside Norway.
In 2012, TINE’s international dairy operations had revenues of NOK
2.0 billion, a growth of 9.2 per cent from 2011. Adjusted for changes in currency exchange rates, the growth was 6.9 per cent. The
operating profit in 2012 was NOK 35 million, an improvement of
NOK 54 million from a weak profit in 2011.
The sale of Jarlsberg wheels in the US market reached record levels
in 2012, in spite of stiff competition. Jarlsberg further strengthened
its market position in the US in 2012.
The UK business developed well in 2012, after several cost-reducing measures were implemented following the negative result in
2011. The sale of Jarlsberg was at approximately the same level as
in 2011.
In Sweden and Denmark, the good development continued in 2012,
e.g. due to marketing campaigns for Jarlsberg associated with relaunching the Jarlsberg wheel. The result is increased brand familiarity and positive sales development.
Other exports of TINE products, primarily Jarlsberg, take place
through subsidiaries and independent partners in countries such
as Canada, Australia, Russia and Germany.
Source: melk.no. The total per-capita consumption of cheese increased by
0.37 % from 2011 to 2012.
2
Source: Nielsen , ref no. 20130122-CLK, Nielsen ScanTrack, Groceries, T.
TINE SA, T. Norvegia, T. Jarlsberg, T. TINE Revet ost (grated cheese), T. Brunoster (brown cheeses), T. Snøfrisk, Sales in value (NOK 1000) and volume
(1000), share of value, value and volume change in % previous year, value
and volume change in % previous year. 2011 and 2012. TINE SA increased
its percentage in volume from 61.7 % in 2011 to 62.5 % in 2012 and correspondingly in value from 64.5 % to 65.9 %. Norvegia increased in value
from 27.7 % in share of volume to 27.8 %, whereas the share of value increased from 24.8 % to 25.2 %. Jarlsberg increased its percentage from 7.4
% in volume to 7.9 % and for value from 8.3 % to 8.7 %. TINE Revet ost
increased from a volume share of 3.1 % to 3.6 % and in value share from
3.8 % to 4.2 %.
3
Source: melk.no. The figures show total per-capita consumption of milk. The
overall volume decline was 0.69 %. The decline in non-flavoured fresh milk
alone was 14.3 % from the year 2000 to 2012.
4
Source: Nielsen , ref no. 20130122, Nielsen ScanTrack, Groceries,
T. TINE SA, T. other milk prod., T. Flavoured milk prod., T. Cultured milk,
T. TINE flavoured milk prod., T. TINE cultured milk, T. TINE milk sweet, TINE
fresh milk, TINE cultured milk, Sales in value (NOK 1000) and volume
(1000), value and volume change in % previous year, value and volume
change in figures previous year, value share. 2011 and 2012. TINE’s volume
decline in fresh milk was -2 % from 2011 to 2012. The decline in volume for
TINE’s other milk-based products was -0.5 %, whereas flavoured and cultured declined by 0.3 % and 0.6 %, respectively. The overall flavoured market
declined by -0.4 %, whereas cultured declined by -2.2 %.
5
Source: Nielsen , ref no. 20130122-CLK, Nielsen ScanTrack, Groceries, T. SA
and T. Yoghurt (NOK 1000), volume (1000), value and volume change in %
previous year, value and volume change in % previous year. 2011 and 2012.
The overall yoghurt category increased by 2.2 % in volume, whereas TINE
lost 0.5 %.
6
The company has now changed its name to Alpine Dairy LLC.
1
SALES REVENUES FROM
CONVENIENCE PRODUCTS
les of certain Sunniva products have declined somewhat in 2012,
although the total juice category has increased. With good growth
in ice tea and fruit drinks, the turnover has nevertheless increased
somewhat. The competitive situation in juice did squeeze the margins a bit and the operating income was somewhat weaker than in
2011.
PER SEGMENT TINE GROUP (MNOK) 2012
627
926
1160 142
Ice cream and
desserts
Other products
Convenience
food
Juice, fruit
drinks and
water
8083
Liquid dairy
products
Margarines and fresh convenience products are growing
TINE owns 51 per cent of Fjordland AS, a brand company that
drives the development, marketing and sale of fresh convenience
food, margarines, yoghurt and desserts in the Norwegian market.
Positive sales development contributed to an improvement in operating income for 2012. Fjordland has strong focus on product development and consumer communication in order to meet increasingly tough competition.
Finances and capital structure
Financial result and tax
7360
Solid dairy products
Other activities
TINE’s Other activities includes production and sale of food products such as ice cream and frozen desserts, juice and fruit-based
drinks, margarines and fresh convenience products. The activities
mainly take place in the wholly and partly owned subsidiaries FellesJuice AS, Diplom-Is AS and Fjordland AS. In 2012, TINE sold its
ownership interest in Salmon Brands AS to Bremnes Seashore AS.
The revenues in Other activities ended at NOK 3.2 billion, which is
NOK 16 million lower than in 2011. The reduction is due to the sale
of Salmon Brands. The operating income for Other activities was
NOK 141 million, an improvement of NOK 65 million from 2011.
Net financial items for 2012 increased from a loss of NOK 81 million
in 2011 to a loss of NOK 172 million in 2012. The net interest cost
for the large structural projects was capitalised in the construction
period leading up to commissioning of facilities in 2012. This explains NOK 48 million of the increase in net interest costs, whereas
continued increase in net interest-bearing debt explains the rest
of the increase in net interest cost. The increase in net interestbearing debt is mainly associated with the structural investments.
The result from associated companies increased from NOK 2 million in 2011 to NOK 13 million in 2012. The main reason for the
increase is the gains from the sale of Wernersson Ost’s percentage
in Skånemejerier Storhushåll AB and improved profit in Skala AS
(previously Landteknikk AS).
TINE uses currency hedging for parts of factor input imports,
mainly purchases in EUR, as well as part of the currency revenues,
mainly denominated in USD. In 2011, this resulted in a net currency
gain of NOK 7 million, while in 2012, it resulted in a currency loss
of NOK 7 million.
Tax costs for 2012 were NOK 93 million. The effective tax rate was
reduced from 14.5 per cent in 2011 to 12.2 per cent in 2012.
Ice cream and frozen desserts were affected by the poor summer
Diplom-Is AS is a wholly-owned subsidiary of TINE which produces and markets ice cream and frozen desserts. The company is
the category leader in Norway. A wet and cold summer resulted
in somewhat lower growth than anticipated in the Norwegian ice
cream market, which is also the case for the turnover in Diplom-Is.
Continued focus on structural changes in distribution, the improvement program in production and good new product launches
under familiar brands have had a positive effect on profit. Lower
sales, higher pension costs and costs for reorganisation and gains
from the sale of fixed assets in 2011, however, led to an overall
reduction in operating income for 2012.
Juice and fruit-based drinks in a tough market
FellesJuice AS is a wholly-owned subsidiary of TINE which sells
juice and fruit-based drinks. Its most familiar brand is Sunniva. Sa-
TINE’s profit before tax amounted to NOK 669 million, a reduction
of NOK 268 million from 2011.
Balance sheet
As of 31 December 2012, TINE’s balance sheet showed NOK 13.7
billion, an increase of NOK 743 million from the end of 2011.
TINE is in the process of completing the large investments associated with production and distribution. Overall, TINE made new
investments totalling NOK 1.8 billion in 2012. Work on financing
these investments has been underway throughout the year and a
new 12-year loan was taken out in 2012 from the Nordic Investment Bank totalling NOK 600 million, in addition to a new bond
issue amounting to NOK 600 million, with a term of five years.
aNNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2012
Cash flow
Net cash flow from operations contributed NOK 1202 million, a reduction of NOK 425 million from 2011. The decline was mainly due
to reduced trade and other payables, lower profit before tax costs
and increased inventories. Net cash flow to investment activities
was NOK 1638 million, a reduction of NOK 656 million from 2011.
The reduction was due to lower disbursements in the previously
mentioned investment programme than in 2011. Disbursed subsequent payments and loans to the owners in 2012 totalled NOK 606
million, an increase of NOK 72 million compared with 2011.
In sum, this entailed that net interest-bearing debt (interest-bearing
debt reduced for bank deposits, cash and money market funds)
increased by NOK 1074 million from the end of 2011 to NOK 4067
million.
Estimates and going concern
The assessments made in the consolidated and company accounts
for 2012 are based on the expectations for future earnings and
business structure that existed at the time when the financial statements were submitted. If these expectations change, the value
estimates and assessments may also have to be changed.
No events have occurred after the end of the accounting year that
are of significance for evaluating TINE SA or TINE beyond what is
stated in the annual accounts with associated notes.
The group board confirms that the financial statements have been
prepared on the basis of the going concern assumption, and that
the conditions for this are in place.
assets through our pension fund MP Pensjon. The assets in the
pension fund are invested in shares and bonds, and our accounts
are therefore also exposed to risk linked to fluctuations in the share
and bond markets. A minor increase in pension costs is expected in
2013, compared with 2012.
TINE’s customers are wholesalers and individual customers in all
customer segments. Their financial capacity is regarded as good,
which is apparent from the low level of losses on receivables over
many years.
TINE actively monitors the credit limits of all its customers. In addition, all new customers are subject to a credit check. TINE has
not found it necessary to insure against losses from its outstanding
receivables.
TINE’s liquidity is considered to be good. Overall, TINE’s financial
risk is considered moderate.
Allocation of net profit for 2012
The investment programme associated with the new plant structure
which TINE has been working on for a couple of years is expected
to be completed in 2013. The group’s tied-up capital is therefore
also expected to increase in 2013, albeit somewhat less than in
recent years. In 2010, the group board approved a subsequent payment policy where the goal was for between 50 and 65 per cent
of the group’s net profit to be allocated for subsequent payment to
the owners. The annual allocation should be affected by the level
of coming years’ investments, but the goal of at least 40 per cent
equity should have priority ahead of the subsequent payment policy. As regards 2012, 57 per cent of the group’s net profit has been
allocated for subsequent payment to the owners.
Financial risk in 2013 and beyond
TINE’s financial risk is related to uncertainty regarding changes in
interest rates, exchange rates, share prices and liquidity. Our objective is to minimise financial risk and thus contribute to stability
and predictability in TINE’s financial expenses over time. A financial
policy has been prepared for TINE that provides guidelines for how
this type of risk must be handled. TINE SA handles this task on
behalf of the entire group.
This provides an overall subsequent payment of NOK 0.26 per litre
of received milk.
The parent company TINE SA’s annual profit shows a surplus of
NOK 654 million. On the basis of the above, the group board proposes the following allocations (NOK million):
TINE is exposed to changes in exchange rates, particularly vis-à-vis
the EUR, USD, SEK and GBP. Through its international activities,
TINE receives net payments in USD, while import of various factor
inputs and purchase of machines and equipment entails net disbursements in EUR. Increased international activity with sales across
national borders contributes to increasing this exposure. However,
TINE SA has entered into forward contracts and other agreements
in order to reduce the group’s currency risk. The value of assets in
SEK, USD and GBP is hedged against currency risk.
TINE’s exposure to changes in the interest rate level has increased
in 2012 as a result of an increase in the group’s interest-bearing
debt. To minimise this exposure, the group’s debt consists of a
combination of loans with floating and fixed interest rates and/
or fixed-rate hedging. TINE SA manages the group’s interest risk
through the use of various interest rate hedging instruments.
NOK MILLION
Subsequent payment to the owners
2012
383
Allocated to other equity
271
Total allocated amount
654
TINE Råvare (milk supplies)
TINE Råvare is a separate department in TINE SA, both administratively and as regards accounting. TINE Råvare is responsible for
activities associated with handling raw materials from farm coolers
to a quoting point, where the milk is invoiced to the customer. The
duties mainly include counselling vis-à-vis milk producers, inbound
transport and inspection of the milk, settlement to producers, as
well as invoicing the milk sold to the players. TINE Råvare annually
prepares a separate accounting report which is submitted to the
Norwegian Agricultural Authority.
A credit item has been included in TINE’s accounts for pension
milk price
NOK/LITRE
2012
2011
2010
2009
2008
Milk price from TINE Råvare
(TINE Milk Supplies)
4.53
4.32
4.20
4.07
3.75
Subsequent payment from
TINE SA
0.26
0.42
0.33
0.27
0.16
Total milk price
4.79
4.74
4.53
4.34
3.91
TARGET PRICE DEVELOPMENT
PER LITRE
4,8
In 2012, TINE Råvare received 1.47 billion litres (compared with
1.43 billion litres in 2011) of cows’ and goats’ milk, of which 54
million litres were organic (51 million litres in 2011). Of the total volume, 223 million litres (compared to 219 million in 2011) was sold
to external players. Deliveries of goats’ milk were on par with 2011.
The target price is stipulated by the parties in the agricultural settlement. In the first half of 2012, the target price was NOK 4.73 per
litre of milk. A new Agricultural Agreement was not signed in 2012.
During the Storting’s processing of the Cabinet’s proposed Agricultural Agreement, the target price was increased by NOK 0.09 to
NOK 4.82 per litre as of 1 July 2012. TINE Råvare has achieved the
target price in its sales of milk to the players in the various agreement periods. For further information, reference is made to note
35 to the annual accounts.
4,6
Framework conditions
4,4
It is important for TINE that there are good and stable framework
conditions for dairy production and dairy operations in Norway.
A good dialogue with national authorities is necessary in order to
take part in shaping and predicting future framework conditions.
Furthermore, it is important to have insight into international
processes that concern trade policy and regulations for milk and
dairy products. Norwegian agriculture depends on an effective tariff protection, as the price of the milk raw materials is significantly
higher in Norway than in Europe.
4,2
4,0
3,8
3,6
3,4
3,2
1.h.12
2.h.11
1.h. 11
2.h.10
1.h.10
2.h.09
1.h.09
2.h.08
1.h.08
2.h.07
1.h.07
2.h.06
1.h.06
2.h.05
1.h.05
3,0
Distribution
women/men
EMPLOYEES
AS OF 2012
TINE SA
Subsidiaries
The TINE Group
LEADERS
WOMEN
MEN
TOTAL
WOMEN
MEN
TOTAL
1627
2991
4618
52
122
174
353
514
867
25
32
57
1980
3505
5485
77
154
231
In connection with the presentation of the 2013 national budget,
the government presented its proposition on import duties and tariffs for 2013. The government proposed changing the framework
for import fees on cheese. This means that affected products
will be liable for ad valorem duty, stated as a percentage of the
product’s value, compared with the previous fixed duty rate stated
in NOK per kg.
The market regulation system
No significant changes were made to the market scheme for milk in
2012. The competition policy instruments in the price equalisation
scheme for milk were evaluated in the autumn and potential changes will be implemented over the course of 2013.
Due to the difficult supply situation for butter during the autumn
of 2011, the Norwegian Agricultural Authority decided to continue
the reduced tariff on butter in January 2012. The market balance for
milk fat was re-evaluated towards the end of the first half of 2012,
which resulted in increased milk production quotas. The tariff on
butter was reduced in the third and fourth quarters in order to prevent a market imbalance.
Innovation, research & development
Research and development is a strategically important area for
TINE. The work is an important precondition for innovation and
growth in TINE’s categories, and for efficient and responsible production. The competitive situation is intensifying and the market
is changing, placing greater demands on innovation in order to
strengthen the TINE’s competitiveness. Research results are actively included in the company’s product launches. TINE also works
aNNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2012
to develop and implement new technology which increases utilisation of the milk’s components. The TINE Group works across the
entire value chain on innovations, value development and quality
assurance. TINE wants to strengthen its good and important cooperation with various research communities in Norway and is actively engaged in public policy in order to obtain external financing.
TINE as a corporate citizen
regarding TINE’s work on corporate social responsibility and the
environment.
Organisation and people
One of TINE’s paramount goals is to be an attractive employer by
providing employees with opportunities for both professional and
personal development. Furthermore, the employees must feel that
they are treated with respect and fairness.
Corporate social responsibility
TINE aims to create values for both owners and society at large
by exercising corporate social responsibility throughout the value
chain, with particular emphasis on Norwegian milk, sustainable
resource utilisation and correct nutrition. TINE’s corporate social responsibility will increase the company’s competitiveness,
contribute to financial value creation and support a sustainable
development.
The agricultural sector currently manages some of Norway’s most
important natural resources. TINE takes part in this management
through its activities and thus contributes to healthy and sustainable management of nature and resources. TINE depends on maintaining Norwegian dairy production in order to ensure access to
good-quality raw materials.
We therefore need to help ensure a clean environment and sustainable use of nature’s resources. The company will seek to minimise
its use of non-renewable resources and maintain focus on recycling
and optimal resource utilisation. Measures associated with sustainable resource use will, insofar as possible, be adapted to nature’s
own cycle in TINE’s value chain.
As a large food manufacturer, TINE will take responsibility for
contributing to a healthy, varied and balanced diet for the entire
population. TINE will provide a wide range of products that can satisfy the individual consumer’s nutritional needs, as well as provide
good information about the products so that consumers themselves can make informed choices.
Environment
TINE’s impact on the external environment is primarily related to
its transport activity and energy consumption in the production
process. TINE’s goal is to reduce emissions of greenhouse gases by
30 per cent from the 2007 emissions level by 2020. A conversion
to bioenergy and district heating in the production process as well
as optimisation of transport and distribution activities including increased use of biofuels, will be important measures for TINE to
reach its environmental objectives.
As a result of the previous decision by the Norwegian Water
Resources and Energy Directorate (NVE), the interruptible power
regulations were repealed as of the summer of 2012. The grid companies can still offer interruptible power where this is appropriate.
Under the current price structure, the repeal of the mentioned regulation will therefore not have a significant effect on the costs
associated with heat production at our facilities.
Reference is also made to www.tine.no for additional information
TINE relies on motivated and enthusiastic employees with correct
expertise to achieve its ambitions. Expertise development is therefore one of the company’s focus areas. TINE must expect increased
competition as regards attracting labour in the years ahead.
At the end of 2012, The TINE Group had 5485 employees, while
TINE SA had 4618. In connection with President and CEO Hanne
Refsholt being granted a leave of absence for the purpose of study
from 1 September, 2011 to 31 August, 2012, deputy CEO Stein
Øiom was appointed as President and CEO and Group director
Stein A. Aasgaard was appointed as deputy CEO. At the same time,
Kjetil Thu was appointed to group management with responsibility
for operations, purchasing, raw materials and HSE. Group director
Elisabeth Morthen resigned in April. Johnny Ødegaard was appointed to the position of Group director with responsibility for TINE
Rådgiving (consultancy)/Members and Policy/Community contact.
Two major changes were made to the operations organisation in
2012 in order to better enable TINE to meet future challenges.
Effective 1 May, TINE Distribution was established as a separate
function area, and effective 20 August 2012, the regional units
were dissolved and replaced by the function areas raw materials
handling, solid products, liquid products and specialty products.
Mobility and transition
TINE’s organisation is in the process of completing major transition
processes as a result of the new operations organisation and changes in the dairy and plant structure. Many of the company’s employees are affected by this transition, which leads to uncertainty
for the individual. TINE has therefore emphasised having a good
system set up for the transitional work, as well as to ensure fair
treatment of those who are in the transition. The framework for this
is regulated by a separate transitional scheme whose paramount
goal is to find a new permanent solution inside or outside TINE for
employees who are affected by the reorganisation.
Diversity
TINE’s Code of Conduct directs us to reject any form of harassment
or discrimination based on gender, religion, race, national or ethnic
origin, cultural background, social affiliation, disability, sexual predisposition, marital status, age or political views.
TINE practises equal wages between genders and this has been
followed up in 2012 as well in order to ensure compliance with
this principle. No significant wage differences have been identified
which can be attributed to gender. The company also has an equality contact who deals with issues such as gender equality. Equality
in TINE also concerns diversity and the belief that representation of
both genders, ethnic and age groups and disabled persons results
in an improved ability to promote innovation and positive results.
36 per cent of TINE’s employees are women. In 2012, the percentage of women in management positions in TINE was 33, while the
percentage of women in group management was 25. The percentage of women on TINE’s group board was 43 per cent.
and priorities for the HSE work and to follow them up. One of the
requirements TINE must abide by is the provision in the Working
Environment Act concerning facilitation of physical activity for our
employees. TINE is concerned with its employees’ physical and
psychological well-being. The communication and interaction between management, safety delegates and employee representatives
is generally good.
Management and employee cooperation
Absence due to illness
TINE’s management must have a good, inclusive dialogue with
employees and must build cooperation on the basis of respect for
their role and for the agreements. TINE’s management meets with
employee representatives in the group’s works council. Employee
representatives are included in the group director meeting as well
as in various director groups during processing of certain matters.
Furthermore, TINE emphasises good interaction between management, safety delegates and employee representatives.
TINE has had a steady decline in absence due to illness since 2006.
Systematic work on the basis of the agreement on an inclusive working life (IA) has yielded results. Nevertheless, the absence in several units within warehouses and distribution is high. The greatest
challenges are associated with the scope of physical work in cold
and somewhat damp surroundings. Work is continuously underway
on improvements for the physical working environment.
Approximately 75 per cent of the employees in TINE SA are organised in a trade union. Through such membership, the employees
have elected four representatives to the group board.
In 2012, TINE’s total absence due to illness was at 6.4 per cent,
which is a decline from 6.7 per cent in 2011. In 2012, absence due
to illness in TINE SA was 6.7 per cent (6.9 per cent in 2011).
Work accidents
None of the employees in TINE’s subsidiaries in the US, the UK or
Sweden are currently organised in a trade union.
Ethics
TINE’s Code of Conduct highlights the attitudes and conduct which
TINE expects from each employee with regard to respect, integrity
and loyalty. Based on our Code of Conduct, TINE has also adopted
guidelines for whistle-blowing and appointed a special contact person for whistle-blowers, the notification officer. Important issues in
the notification rules are non-discrimination, anti-corruption, good
business ethics and the duty and right to speak up about breaches
of the law and the TINE Code of Conduct. The individual employee
must feel secure enough to report potential irregularities.
TINE purchases goods and services where there will be various
challenges associated with ethical trade. It is equally important to
require principles of ethical trade in all types of purchases. For the
time being, it is not realistic that imports from all countries can
take place without a risk of directly or indirectly contributing to
breach of international principles. However, this risk can be reduced through goal-oriented work on ethical trade. TINE is a member
of the Ethical Trading Initiative Norway (IEH), and their ethical trade
guidelines have been incorporated in TINE’s procurement terms.
Health, safety and the environment
Healthy and stable employees in a good working environment are
a definite requirement if TINE is to achieve efficient production and
the right quality in all parts of our value chain. The work must be
organised in such a way that our employees are not exposed to
harmful physical or psychological strains, and so that no one is injured or becomes ill because of their work. All TINE employees are
also jointly responsible for their own and their colleagues’ safety.
TINE’s vision is that lost time injuries must be reduced to zero. It is
the group management’s responsibility to determine overall targets
TINEs paramount goal is zero work accidents. The decline in the
number of work accidents in 2012 is positive, although the absolute level is still too high. There are significant differences between
facilities, where some have seen a very positive development in
recent years, while others still have too many incidents. Following
internal HSE audits with focus on risks and safety, important points
in instructions and routines associated with risk and risk assessment have been assessed and improved for all TINE’s dairies. Work
is also underway on improving expertise in health, safety and the
environment with TINE’s internal HSE audit teams, as well as senior
management. Registration of near misses is an important precondition for reducing work accidents and measures have been implemented to contribute to this end.
A serious incident occurred in August 2011, with fatal consequences for one of our employees at TINE Meieriet Bergen. The Hordaland County Chief of Police closed the case in 2012 and TINE was
fined NOK 1 million. TINE has accepted the fine.
TINE registered 97 lost-time injuries (LTI rate: 9.61) in 2012, compared with 116 registered injuries in 2011 (LTI rate: 11.9).
Corporate governance
At the end of 2012, TINE SA had 14 170 members affiliated with 230
member societies. Within the framework of agricultural policy and
markets, TINE will seek to recoup the target price on milk, stipulated in the Agricultural Agreement. The group board emphasises
that the company must be administered and managed according to
good overall principles.
For TINE, corporate governance concerns how TINE, through constructive dialogue, will create trust with various stakeholders as
well as ensure that the group board receives sufficient information
on the activities. An important part of corporate governance relates to establishing and maintaining systems and procedures that
aNNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2012
ensure compliance with statues, regulations, standards and own
ethical guidelines.
The Norwegian Code of Practice for Corporate Governance (NUES)
stipulates principles and guidelines that contribute to clarifying responsibilities and authority in larger companies. The recommendation has been drawn up for companies that are listed in regulated
markets in Norway, but the group board decided in 2010 that TINE
will follow the principles of this recommendation insofar as they are
suitable for TINE’s business organisation and ownership. A more
detailed account of how TINE complies with the principles and
NUES guidelines can be found on www.tine.no.
TINE’s OWNERSHIP ORGANISATION
Member organisation
The regional divisions have been continued in the member organisation. The introduction of function areas in the operations organisation results in new chains of information and channels for
contact between members and the administration. Contact and
information between the regional boards and the administration
will now take place through the individual regional managers in the
member organisation. The regional managers are responsible for
consultancy work vis-à-vis milk producers and contact with the
member societies.
Absence due to illness, staff
turnover and lost time
injury (LTI) rate
ABSENCE DUE TO
2012
ILLNESS1
TURNOVER %
LTI RATE2
9.80
TINE SA
6.71
3.56
Subsidiaries
5.13
8.62
8.71
The TINE Group
6.43
4.35
9.61
1
2
Alpine Dairy LLC is not included in the basis for absence due to illness.
The number of injuries causing absence per million hours worked. Alpine
Dairy LLC has been included for six months. The company was included in
the TINE Group on 1 July 2012.
ABSENCE DUE TO ILLNESS
IN PER CENT
THE TINE GROUP
2008
7,3
2009
7,1
2010
6,8
2011
The member organisation has been very active in 2012. The 2012
annual meeting approved several minor adaptations in the bylaws.
For example, the control committee’s mandate was adjusted, and
the rights and obligations of employee representatives in the various governing bodies have been streamlined.
6,7
2012
6,4
2
0
4
6
8
10
Future outlook
As a point of departure, the food industry is not greatly affected by
economic cycles and has historically experienced a relatively stable
growth in demand. Over the next few years, however, a number
of market and political processes could significantly impact TINE’s
business.
WORK ACCIDENTS
LOST TIME INCIDENT (LTI) RATE
*
THE TINE GROUP
2008
In recent years, price differences on dairy products between the international and Norwegian market have grown. In some segments,
the Norwegian prices are now attractive for foreign players and
some have also established themselves in Norway.
We must expect that competition will become stiffer. It is challenging for TINE to meet this competition as the company operates in
a high-cost country, with demanding natural conditions for food
production and transport of raw materials and finished products
throughout the country.
13,5
2009
13,4
2010
12,7
2011
11,9
2012
TINE’s portfolio includes some of Norway’s leading brands and
maintains a strong position in the large dairy-based product categories. Market investments have increased considerably in recent
years in an effort to drive growth in TINE’s categories and secure
TINE’s strong position.
9,6
0
*
2
4
6
8
10
12
14
16
he number of injuries leading to absence per million hours worked. Alpine
T
Dairy LLC has been included for six months. The company was included in the
Group on 1 July 2012
The four major grocery retailers, which are important customers for
TINE, have also established themselves as competitors in several
1
2
3
4
TINE’S
OWNERSHIP ORGANISATION
Member societies
(230)
Regional meetings
(5)
Annual meeting
TINE SA
Council
Control committee
Group board
Regional boards
TINE East, TINE
South, TINE West,
TINE Central Norway,
TINE North
of TINE’s product groups. This takes place through vertical integration, resulting in an ever-expanding range of the grocery retailers’
own private labels (PLs). TINE’s future competitiveness is affected
by how TINE provides customers with growth and profitability.
TINEs products shall be available throughout the country. This requires efficient logistics, particularly considering the fact that our
goods require refrigeration. TINE’s transport and distribution activities are therefore a key part of our business activities. Efficiency
as regards costs and the environment in distribution is necessary
in order to ensure our future competitiveness.
Global and national environmental challenges impact TINE’s business. New national and international environmental measures and
regulations will affect both the farmers’ dairy production, as well
as TINE’s industrial production, for example through increases in
costs associated with energy, emissions, discharges and pollution.
Businesses that succeed in reducing their emissions will thus im-
5
6
7
8
prove their competitiveness. A constantly growing global population in combination with environmental challenges could limit
the opportunities for global food production. This could result in
geographical changes in the world’s arable areas and increase the
importance of national self-sufficiency.
Large parts of TINE’s investment programme are now approaching
the commissioning phase. Increased depreciation and capital expenditures as well as extensive conversion measures and commissioning will continue to have a negative impact on profits in 2013,
but to a lesser degree than what has been the case in 2012. Over
the long term, the investments will provide TINE with a substantial
lift in the ongoing work to improve efficiency in production and
distribution. However, we must expect that the efficiency gains will
not fully materialise until 2014.
Even though TINE has carried out significant investments in recent
years, additional investments may be relevant on the dairy side. A
project group has been appointed to study and suggest solutions
for supplying the Western Norway region with TINE products in
the future.
TINE’s solid market position, combined with considerable investments, gives us a good starting point for 2013 and future growth in
TINE’s core areas.
annual report
from tHe BoarD of
DireCtors 2012
9
10
11
12
13
14
15
16
grOup BOard
1. torstein grande (Member)
9. ingunn sognnes Deputy chairman (Member)
2. Helga thorvik ulven (Member)
10. svein førde (Employee)
3. askild eggebø (Member)
11. Cecilie Bjørlo (Member)
4. lars iver wiig (Employee)
12. Hanne refsholt president and Ceo (see page 16)
5. elin aarvik (Employee)
13. nina Kolltveit sæter (Member)
6. anders Johansen (Member)
14. lars woie (Member)
7. steinar Koen (Employee)
15. anne maren wasmuth (Member)
8. trond reierstad Chairman (Member)
16. nils asle Dolmseth Chairman of the Council (Member)
oslo, 18 feBruary 2013
anDers JoHansen
Helga tHorviK ulven
asKilD eggeBØ
anne maren wasmutH
nina Kolltveit sÆter
torstein granDe
lars iver wiig
CeCilie BJØrlo
lars woie
elin aarviK
steinar Koen
svein fØrDe
ingunn sognnes
Deputy chairman
tronD reierstaD
Chairman
Hanne refsHolt
Ceo
1
2
3
4
5
6
7
8
Group Management
1. Jørn Spakrud Group director business analysis, accounts, finance and ICT
Spakrud started working for TINE in 2008 and came from 11 years in Yara International ASA/Norsk Hydro ASA with experience from various positions within economy and finance. Before this, he spent six years working on financial auditing with
Deloitte AS. Spakrud is a Master of Business and Economics and a governmentauthorised accountant from the Norwegian School of Economics and Business Administration. Spakrud is the chairman of MP Pensjon and Fjordland AS, as well as a
board member in TUN Media AS.
2. Stein Øiom Deputy CEO purchasing, logistics, distribution, production (solid, specialty, liquid, raw materials handling)
Øiom started his career in TINE in 1976 and has held multiple key positions within
operations. From 1994 to 2002, he was the managing director of Fellesmeieriet.
During the period 2002-2008, he was the managing director of TINE Meieriet East
and became deputy CEO in 2008. He is also the chairman of FellesJuice AS. Øiom
is trained as a dairy engineer at the Norwegian University of Life Sciences.
3. Johnny Ødegård Group director consultancy and members, policy and
community contact
Ødegård has worked for TINE since 2011. He came from Felleskjøpet, where he
worked with industry policy. He also has experience from the Norwegian Farmers and
Smallholders Union. Ødegård was trained at Norges Landbrukshøgskole (now the
Norwegian University of Life Sciences) with specialisation in agricultural economy.
4. Hanne Refsholt CEO
Refsholt has worked for TINE since 1988, with a short break during the period
1996-1998, as Director of Kjøttbransjens Landsforbund (National meat producer
association). She started as a consultant in the TINE R&D Centre, moved on as Director of R&D from 1998-2001, and then became deputy CEO of TINE Norske
Meierier. She became deputy CEO of the TINE Group as of 2002 and was appointed
President and CEO in 2005. Refsholt received a Cand. Agric (master’s degree in
agricultural science) from the Norwegian University of Life Sciences (UMB). She
has an MBA from BI Norwegian Business School and master’ studies at HEC, Paris
and SAID, Oxford. Refsholt is the chairman of the Red Cross centres and a board
member of the Federation of Norwegian Agricultural Co-operatives, the Grocery
Manufacturers of Norway (DLF), as well as Arcus AS.
5. Stein A. Aasgaard Group director corporate governance, HR and expertise, HSE, ingredients, export, international
Aasgaard has been with TINE for a many years and has held various positions within
finance and operations, for example as managing director of TINE Central Norway.
Aasgaard became a Group director in 2002, when the TINE Group was established.
He is educated as a dairy engineer from the Norwegian University of Life Sciences,
business administration from BI, as well as an educational science exam from the
Norwegian University of Science and Technology (NTNU). Aasgaard is the chairman
of Norseland Inc., Norseland Ltd. and Wernersson Ost AB. He is also on the board of
NHO (Confederation of Norwegian Business and Industry) Food and Agriculture.
6. John Ole Skeide Group director sales Norway
Skeide came to TINE in 2009 from Orkla ASA, where he was Director of Group
development. He had then served 17 years in the Orkla Group, including as Director of Peter Möller and Sales Director in Lilleborg AS. Skeide has a Master of Business and Economics degree from the Norwegian School of Economics and Business
Administration (NHH), with specialisation in strategy and international finance.
Skeide is the chairman of Diplom-Is AS and OsteCompagniet AS, as well as a board
member of Fjordland AS and Melkerampa AS.
7. Hege Holter Brekke Group director marketing
Holter Brekke started working for TINE in 2006 and came from a position as marketing director in Plantasjen ASA. Before this, she worked eight years in key positions
in the Orkla Group, including as director of innovation in Nidar AS. She also has
experience as a consultant from McKinsey. Holter Brekke has a Master of Business
and Economics degree from BI Norwegian Business School. She is the chairman of
the Information Office for Dairy Products/melk.no and Melkerampa AS, is the deputy chairman of the board of FellesJuice AS and a board member of Nille AS.
8. Eirik Selmer-Olsen Group director, R&D and CSR
Selmer-Olsen started working for TINE in 1989 and has held multiple positions
within the TINE R&D Centre, most recently as R&D Director from 2008. He also has
a background as a consultant in Meierienes Bygningskontor. Selmer-Olsen has a
Cand. Agric degree from the Norwegian University of Life Sciences and a Dr. Scient
degree from the same university. His degree is specialised within resource use in
the food industry. Selmer-Olsen is chairman of the Bionær programme in the Research Council of Norway, deputy chairman on the Group board of the Norwegian
Institute of Food, Fisheries and Aquaculture Research (Nofima) AS, as well as a
board member of Norseland Inc. and Måltidets Hus AS.
aNNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2012
TINE'S GROUP MANAGEMENT
AS OF 1 JANUARY 2013
Hanne Refsholt
CEO
Communication
Administration
Stein Øiom
Deputy CEO
Purchasing,
logistics,
distribution,
production (solid,
specialty, liquid, raw
materials handling)
Hege
Holter Brekke
Group director
Marketing
Eirik
Selmer-Olsen
Group director
R&D and CSR
John Ole
Skeide
Group director
Sales Norway
Jørn
Spakrud
Group director
Business analysis,
accounts, finance and
ICT
Stein A.
Aasgaard
Group director
Corporate
governance, HR and
expertise, HSE,
ingredients, export,
international
Johnny
Ødegård
Group director
Consultancy and
members, policy and
community contact
TINE Råvare
(milk supplies)
as of 1 March 2013
TINE as a corporate citizen
Sustainability
TINE must consider its social and environmental surroundings. If we do this right, it will strengthen TINE in
an increasingly competitive situation.
In general, companies should have a clear interest in acting in a
socially responsible fashion. Consumers increasingly demand that
goods and services be produced in a respectful and prudent manner. The media has a critical focus on how companies follow up
suppliers and how the environment is safeguarded. Employees and
job-seekers emphasise companies’ attitudes toward corporate social responsibility.
TINE aims to be a leading supplier of food and drink brands with a
focus on dairy products. We are hard at work in multiple areas in
order to reach these goals. TINE must continue to innovate and use
its knowledge to create new and support existing brands. Products
must be produced in a safe, effective and efficient manner. TINE
must also reach consumers across the country with modern, efficient transport and distribution.
Three focus areas
TINE’s work on corporate social responsibility is linked to the following strategically important areas:
1.Norwegian milk
Presence, culinary culture and tradition
2.Sustainable resource utilisation
Transport, packaging, food waste and energy
3.Correct nutrition
The focus areas are the result of interviews with employees, opinion-shaping entities, organisations, students and experts. They
have given clear advice as to what TINE can and should take more
responsibility for.
In its efforts to strengthen TINE as a food production group for the
future, the company will influence its social and environmental surroundings. The environment is strained by far-reaching transport,
and the production of milk and cheese requires energy for both
heating and cooling. These are examples of challenges which also
provide opportunities for both environmental benefits and cost reductions, if they are solved in the right way.
TINE’s presence creates strong ties to the local community and
contributes workplaces and activities. Such proximity creates expectations for TINE to keep contributing to development of these
communities. Therefore, it is important that the company is aware
of how its surroundings are affected, and not least how we can
actively take responsibility for our surroundings.
Transport is very important for TINE. The company aims to reduce
its emissions of greenhouse gases by 30 per cent by 2020. As
transport is responsible for a significant share of the emissions,
TINE must do something about this. In 2011, TINE introduced biogas as fuel and followed this up in 2012 by using bioethanol as fuel.
TINE is also a major consumer of packaging. Material recycling and
energy recovery from packaging yields significant environmental
benefits. Optimal packaging will also reduce the cost of production,
contribute to more environmentally friendly transport, as well as
reduce damage to the products and thus also result in less food
waste.
In a society where ever-increasing demands are set for efficiency
and profitability, the Norwegian culinary culture and traditions
could be lost. TINE has developed, produced and sold Norwegian dairy products since the last half of the 1800s. With such
an important place in the lives of Norwegians, TINE’s corporate
social responsibility must include Norwegian culinary culture and
traditions, a responsibility which will also help strengthen TINE’s
competitiveness.
TINE’s corporate social responsibility reporting
TINE’s reporting practice for 2012 has changed somewhat compared with last year. The printed annual report will this year primarily cover applicable statutory requirements and will only discuss
TINE’s work on corporate social responsibility and the environment in general terms.
GRI’s reporting principles, and that the reporting satisfies level B in
accordance with the guidelines.
TINE’s corporate social responsibility reporting has been certified
by Deloitte and the auditor’s statement can be found in the online
version of the annual report.
This year, a more detailed and supplementary report concerning
TINE’s corporate social responsibility can be found in the online
version of the annual report, see www.tine.no
The GRI table on TINE’s website contains references to where information about the individual indicators can be found, whether
they have been answered in their entirety or only partially.
TINE has chosen to develop its reporting regarding corporate social responsibility based on the Global Reporting Initiative’s (GRI’s)
guidelines. This is the most widespread and internationally relevant standard for such reporting. TINE is of the opinion that the
company’s reporting practice is principally in accordance with
Do you have comments or viewpoints regarding our report on corporate social responsibility reporting or how TINE handles its corporate social responsibility?
Contact Bjørn Malm via e-mail: [email protected]
Financial Statement
notes
note 1
Segment information
note 2
Sales revenues from convenience products by geographical area
note 3
Other operating income
note 4
Cost of materials and changes in inventory
note 5
Purchase of raw cow and goat milk from milk producers
note 6
Employee benefit expenses and number of full-time equivalents
note 7
Pensions and pension obligations
note 8
Related parties and senior management
note 9
Intangible assets and goodwill
note 10
Property, plant and equipment
note 11
Auditor’s remuneration
note 12
Other operating expenses
note 13
Income from investments in subsidiaries
note 14
Investments in subsidiaries and associated companies
note 15
Change in market value of market-based financial current assets
note 16
Impairment of long-term financial assets
note 17
Financial risk and derivatives
note 18
Taxes
note 19
Equity
note 20
Obligations related to financial leasing
note 21
Long-term receivables from Group companies
note 22
Other long-term receivables
note 23
Inventories
note 24
Balances with associated companies
note 25
Other short-term receivables
note 26
Bank deposits, cash and money market securities
note 27
Minority share in the balance sheet
note 28
Long-term loans
note 29
Short-term interest-bearing liabilities
note 30
Other short-term liabilities
note 31
Mortgages
note 32
Transactions with related parties
note 33
Loans and guarantees
note 34
Outstanding accounts with the Norwegian Agricultural Authority – market regulation and subsidy schemes
note 35
TINE Råvare
Note 36
Business combinations and changes in ownership interests
Note 37
Provisions
Note 38
Other off balance sheet leaseliabilities
Note 39
Environmental issues
Note 40
Major individual transactions
Note 41
Note 42
Government grants
Discontinuation and divestment of business
TINE Annual report 2012
inncome statement
Income statement
Amounts in NOK 1000
THE TINE GROUP
2012
TINE SA
2011
Note
2012
2011
14 869 033
14 793 645
1 087 305
1 031 574
REVENUES AND OTHER OPERATING INCOME
1,2 Sales, convenience products
18 298 201
18 056 509
1 087 305
1 031 574
383 742
299 160
19 769 248
19 387 243
11 330 654
11 400 816
3 569 936
3 169 804
836 119
718 354
14 149
50 989
3 084 452
2 871 228
18 835 310
18 211 191
933 938
1 176 052
-
-
12 644
2 376
-
-
1 828
1 944
936
527
-739
-500
16 Impairment of long-term financial assets
-9 949
-52 500
-179 009
-91 734
17 Net other financial income and expenses
-104 550
-89 102
-6 598
7 303
-171 874
-80 611
762 064
92 950
669 114
936 922
Sales, raw materials
3 Other operating income
Total revenues and other operating income
444 708
465 848
16 401 046
16 291 067
9 350 891
9 581 631
3 013 090
2 659 985
722 201
596 095
OPERATING EXPENSES
4,5 Cost of materials and changes in inventory
6,7,8 Employee benefit expenses
9,10 Depreciation and amortisation
9,10 Impairment property, plant and equipment and intangible assets
13 149
34 936
11,12 Other operating expenses
2 512 685
2 315 747
Total operating expenses
15 612 016
15 188 394
789 030
1 102 673
13 Income from investments in subsidiaries
28 837
15 577
14 Result of investments in associated companies
11 037
6 359
18 971
17 086
Operating profit
FINANCIAL INCOME AND EXPENSES
Interest income from Group companies
15 Change in market value of market-based financial current assets
17 Net realised and unrealised currency gain and loss
25
2 003
Total financial income and expenses
-54 693
-100 050
1 095 441
Profit before tax
734 337
1 002 623
158 519
18 Total tax expense
80 417
138 425
653 920
864 198
19 Payment to milk producers
-383 076
-598 878
19 Allocated to other equity
-270 844
-265 320
-653 920
-864 198
1 420
13 646
15 100
8 355
19 Minority share of profits
654 014
928 567
19 Majority share of profits
Allocations
Total allocations
Net Group contributions to subsidiaries
Balance sheet
Amounts in NOK 1000
THE TINE GROUP
2012
TINE SA
2011
Note
2012
2011
ASSETS
Non-current assets
Intangible assets
18 Deferred tax asset
4 555
16 210
-
-
87 732
92 801
9 Goodwill
-
-
80 111
69 942
9 Other intangible assets
-
-
172 398
178 953
Total intangible assets
-
-
3 565 103
3 494 710
3 279 909
3 270 041
4 238 986
3 375 802
7 804 089
6 870 512
Total tangible fixed assets
-
-
-
-
107 244
120 788
5 915
11 291
1 883 594
1 930 454
Tangible fixed assets
9,10 Land, buildings and other real property
10,20 Machines, fixtures and fittings and means of transport
3 882 748
3 056 681
7 162 657
6 326 722
14 Investments in subsidiaries
799 344
841 461
21 Long-term receivables from Group companies
345 970
178 596
14 Investments in associated companies
22 717
26 773
Other shares and ownership interests
5 839
8 553
1 750 969
1 817 816
Non-current financial assets
7 Pension plan assets
22,24 Other long-term receivables
18 523
24 981
2 015 276
2 087 514
Total long-term investments
9 991 763
9 136 979
Total non-current assets
1 603 887
1 471 477
23 Inventories
1 444 487
1 438 075
24 Trade receivables
-
-
521 434
508 304
25 Other short-term receivables
472 653
435 613
1 965 921
1 946 379
Total short-term receivables
1 900 383
2 057 676
10 872
16 718
2 935 711
2 889 917
10 098 368
9 216 639
1 220 902
1 098 988
1 182 678
1 151 409
245 052
470 654
Current assets
Short-term receivables
11 991
19 004
126 128
383 271
3 707 927
3 820 131
13 699 690
12 957 110
Accounts receivable from Group companies
15 Unit trust funds and listed shares
15,26 Bank deposits, cash and money market securities
Total current assets
Total assets
11 991
19 004
4 770
206 354
3 138 046
3 382 022
13 236 414
12 598 661
tine annual report 2012
BalanCe sHeet
Amounts in NOK 1000
tHe tine group
2012
tine sa
note
2011
2012
2011
LIABILITIES AND EQUITY
EQUITY
paid-in equity
7 872
9 536
19 Cooperative share capital
7 872
9 536
7 872
9 536
total paid-in equity
7 872
9 536
340 000
340 000
5 202 667
4 952 720
5 542 667
5 292 720
35 386
55 380
5 585 925
5 357 636
retained earnings
19 Subsequent payment fund
19 Other equity
total retained earnings
27 minority share of profits
total equity
340 000
340 000
5 296 539
5 037 611
5 636 539
5 377 611
-
-
5 644 411
5 387 147
59 104
73 831
LONG-TERM LIABILITIES
provisions
85 140
89 282
67 360
81 425
531 041
499 790
683 541
670 497
1 975 560
1 609 722
1 209 000
880 000
257
257
3 184 817
2 489 979
3 868 358
3 160 476
7 Pension liabilities
Long-term financial liabilities
57 598
72 229
18 Deferred tax liabilities
470 446
432 646
total provisions
587 148
578 706
Long-term debt to financial institutions
1 969 720
1 595 363
Bond issues
1 209 000
880 000
other long-term liabilities
Other interest-bearing long-term liabilities
28 total other long-term liabilities
total long-term liabilities
257
257
3 178 977
2 475 620
3 766 125
3 054 326
SHORT-TERM LIABILITIES
trade and other payables
775 958
694 750
-
-
Short-term debt to milk producers
Other short-term liabilities to Group companies
24 Trade and other payables
910 268
1 193 344
1 686 226
1 888 094
total trade and other payables
1 008 556
886 686
29 Short-term interest-bearing debt
383 076
598 878
54 551
85 695
175 135
170 460
775 958
694 750
34 933
154 673
686 785
920 523
1 497 676
1 769 946
937 346
816 606
383 076
598 878
other short-term liabilities
-
-
937 863
809 185
2 559 181
2 550 904
4 245 407
4 438 998
13 699 690
12 957 110
5 Allocated to subsequent payment to milk producers
18 Taxes payable
Public duties payable
Other short-term debt to Group companies
40 740
75 400
158 328
156 088
2 456
19 315
806 256
720 955
total other short-term liabilities
2 328 202
2 387 242
total short-term liabilities
3 825 878
4 157 188
total equity and liabilities
13 236 414
12 598 661
30 Other short-term liabilities
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Deputy Chairman
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CEO
Cash flow
Amounts in NOK 1000
THE TINE GROUP
2012
TINE SA
2011
2012
2011
734 337
1 002 623
-72 091
-82 956
Cash flows from operating activities
762 064
-91 535
1 095 441 Profit before tax
-104 737 Taxes paid for the period
-110 299
-17 315 Profit and loss on sale of fixed assets
-26 784
-2 809
850 268
769 343 Depreciation, amortisation and impairments
735 350
631 031
-82 166
52 713
-17 822
-15 586
–
42 718
-1 607
238
-132 410
-18 644
-201 868
136 094
–
1 201 611
713 Profit and loss on sale of financial fixed assets
27 159 Unrealised change in value of financial items
– Group contributions recognised, not received
-282 999
Difference between pension charged as an expense and payments/disbursements
in pension plans
8 734 Difference between recognised and received dividend from associated companies
-584 Effect of changes in foreign currency rates and unrealised exchange gains
65 899 Changes in inventories
-124 304 Change in trade receivables and other short-term receivables
154 559 Changes in accounts payable
34 715 Change in other short-term liabilities
– Change in intercompany balances from operational activities
1 626 624 Net cash flow from operating activities
-28 487
30 167
-20 957
-10 210
52 120
-261 666
–
–
–
–
-121 914
112 495
-63 611
-102 864
-152 530
116 215
86 601
93 585
89 004
-69 416
1 128 872
1 508 908
Cash flows to investment activities
63 606
-1 842 798
7 743
131 458
-5 207
7 012
-1 638 186
56 387 Payments from the sale of tangible fixed assets
-2 364 845 Disbursements from purchase of tangible fixed assets
15 951 Change in long-term receivables
577 Payments received from the sale of financial non-current assets
-4 970 Payments to acquire financial non-current assets
3 017 Payments received from the sale of financial current assets
- Net cash inflow on intercompany long-term receivables
-2 293 883 Net cash flow to investment activities
54 412
8 670
-1 600 605
-2 250 042
7 131
19 241
118 155
577
-10 157
-29 077
7 013
3 007
-114 329
1 374
-1 538 380
-2 246 250
1 200 000
400 000
Cash flows from financing activities
1 200 000
-507 889
166 000
–
-300 000
400 000 New long-term borrowing
-131 276 Repayment of long-term borrowings
400 000 Net receipts and payments of commercial paper
300 000 New short-term debt
– Repayment of short-term debt
-27 199
-5 133 Disbursed to minorities
255 870
64 100 Net change in bank overdraft
-1 665
–
-153 Net payments and disbursements of cooperative share capital
– Payments received/made of net Group contributions to offset receivables
-499 370
-88 215
166 000
400 000
–
300 000
-300 000
–
–
–
254 741
16 606
-1 665
-153
-6 097
-16 800
-533 892
-605 685
-533 892 Disbursed subsequent payment and credit to milk producers
-605 685
179 432
493 646 Net cash flow from financing activities
207 924
477 546
-257 143
-173 613 Net change in bank deposits, cash and money market securities
-201 584
-259 796
383 271
556 884 Bank deposits, cash in hand and money market securities at 1 January
206 354
466 150
126 128
383 271 Bank deposits, cash in hand and money market securities at 31 December
4 770
206 354
statement of cash flows
Accounting principles
ACCOUNTING PRINCIPLES
Operating expenses
ACCOUNTING PRINCIPLES
The annual accounts are prepared in accordance with the Accounting Act and generally accepted accounting principles in Norway.
Costs are recognised in the income statement in accordance with the matching
principle.
Main rule for classification of assets and liabilities
Consolidation
The TINE Group accounts present the overall financial position, the result of the
year’s activity and cash flows for the parent company, TINE SA, and the subsidiaries. The subsidiaries include the companies where TINE SA directly or indirectly has
a controlling influence. Initially, controlling influence is regarded as being present
when there is direct or indirect ownership of more than 50 % of the voting capital. Uniform accounting principles are applied to all companies in the TINE Group.
All transactions between group companies, outstanding accounts and unrealised
group internal gains are eliminated in the Group accounts.
Shares in subsidiaries are included in the Group accounts according to the acquisition method. The difference between the cost price of the shares and book value
of net assets at the time of acquisition is analysed and allocated to the relevant
items in the balance sheet according to fair value. Cost price that exceeds the
fair value of net identifiable assets is capitalised as goodwill and amortised in the
income statement in accordance with the underlying circumstances and expected
economic life. For acquisitions, nominal tax rates are applied to excess value, excluding goodwill.
The minority share is included in the Group equity. Changed ownership interests
in subsidiaries are treated as equity transactions in the Group and there is thus no
gain or loss in the Group accounts.
Associated companies are companies where the Group has significant influence,
but not control, and where the interest is of a long-term strategic nature. Significant influence is normally present when the Group has an ownership interest of
between 20 % and 50 %. Associated companies are included according to the
equity method in the Group accounts. Cost prices that exceed the acquired share
of book equity are recognised in the balance sheet as excess value and are amortised in accordance with the underlying circumstances and expected economic life.
The Group’s share of the result in associated companies is based on the result after
tax in the associated company with the deduction of any depreciation on excess
values, as well as gains and losses on realisation of interests. In the income statement, the share of the result in associated companies is presented as part of the
financial result. In the balance sheet, interests in associated companies are classified as long-term investments. The share of the loss in associated companies is not
recognised in the income statement if this entails that the value of the investment
recognised in the balance sheet is negative, unless the Group has undertaken an
obligation or provided guarantees for the associated company.
In the case of recognition of investments in subsidiaries and associated companies
where the annual accounts are presented in foreign currency, the items in the balance sheet are converted to Norwegian kroner using the exchange rate on the balance sheet date. The income statement items are converted to Norwegian kroner
using the average exchange rate for the accounting year. The conversion difference
which arises when the Company’s opening equity and the result for the year are
converted at a different exchange rate than the closing equity is recognised in the
Group’s equity.
Revenues and other income
Operating revenues are measured at fair value of the compensation, net after
deductions for value added tax, returns, rebates and other public fees. Revenues
from sale of goods are recognised in the accounts when the products are delivered
to the customer and there are no unsatisfied liabilities to affect the customer’s acceptance of the delivery. Delivery is not made until the products have been sent
to the agreed location and risk of loss and obsoleteness has been transferred to
the customer. Individual assessments based on agreements are used as a basis for
estimating and accounting for provisions for volume discounts and returns at the
time of sale. Services are recognised as income as and when they are provided.
Assets intended for permanent ownership or use, are classified as non-current assets. Receivables to be repaid within one year, as well as other assets related to
goods circulation, are classified as current assets. In the classification of short-term
and long-term liabilities, the corresponding criteria are used. Current assets are
recognised at the lowest of acquisition cost or fair value. Non-current assets are
recognised at acquisition cost with the deduction of depreciation and impairment.
Long-term and short term liabilities are recognized at nominal value.
Intangible assets
Goodwill
Goodwill is the difference between the acquisition cost of the purchased business
and the fair value of the Group’s share of net identifiable assets in the purchased
business at the time of acquisition. Goodwill from acquisition of subsidiaries is
classified as an intangible asset. Goodwill at acquisition of a share in associated
companies is included in the value of investments in associated companies recognised in the balance sheet. Goodwill is tested for impairment and is recognised in
the balance sheet at acquisition cost with the deduction of accumulated amortisation and impairment. The amortisation period for goodwill is five years unless there
are special reasons for a longer lifetime.
Other intangible assets
Expenses for other intangible assets are recognised in the balance sheet to the
extent a future financial benefit connected to the development of an identifiable
intangible asset has been identified, and the expenses can be reliably measured.
Should this not be the case, such costs are expensed on an ongoing basis. Intangible assets with a limited useful economic life are amortised according to schedule.
Intangible assets are written down to fair value if the residual value is lower than
the total of the value recognised in the balance sheet and any remaining production expenses.
Research and product development costs
Own expenses for research and product development are expensed on a continuous basis.
NON-CURRENT ASSETS
Investments in production facilities and other property, plant and equipment are
recognised at cost less accumulated depreciation and impairments. Borrowing
costs related to the construction period for substantial property, plant and equipment during construction are recognised in the balance sheet as part of the cost
price. The acquisition cost for property, plant and equipment with a limited useful
economic life is depreciated according to the straight-line method over the economic lifetime. Costs associated with normal maintenance and repairs will be expensed on a continuous basis. Costs for major replacements and renovations which
substantially increase the lifetime of the fixed asset, are capitalised and depreciated in line with the fixed asset. If the recoverable amount of the fixed asset is lower
than the value recognised in the balance sheet and the impairment is not expected
to be temporary, then the asset must be written down. The recoverable amount is
the highest of the net sales value and the value-in-use. The value-in-use is the current value of the future cash flows which the asset is expected to generate.
Lease agreements
Lease agreements are classified as financial or operational leases after a concrete
evaluation of the individual agreement. Lease agreements associated with assets
leased on terms where the lessee principally bears the financial risk and control of
the ownership are classified as financial lease agreements. Non-current assets under financial lease agreements are recognised in the balance sheet and associated
lease obligations are included in the balance sheet item other long-term liabilities
at the current value of the lease payments. The fixed asset is depreciated according to schedule, and the obligation is reduced by the paid lease amount after the
deduction of calculated interest cost.
Lease agreements where a significant share of risk and returns associated with ownership are still borne by the lessor, are classified as operational lease agreements.
Lease amounts associated with operational lease agreements are expensed according to the linear method over the lease period.
Debt
Shares and interests in associated companies and subsidiaries
Investments in subsidiaries and associated companies are valued according to the
cost method in the company accounts. The investments are valued at acquisition
cost with the deduction of any impairment. Impairment to fair value is carried out if
the impairment is not temporary. Dividend and group contributions received from
subsidiaries which represent returns during the period of ownership are recognised as other financial income. Group contributions from subsidiaries are recognised in the balance sheet the same year as the subsidiary allocates this amount.
Dividend received is recognised as income when the dividend has been adopted.
Contingent liabilities
Contingent liabilities are recognised in the income statement if it is probable that
they will have to be settled. A best estimate is used to calculate the value of the
settlement sum.
Other shares and interests classified as non-current assets
Investments in long-term shareholdings and interests where the Company does
not have significant influence, are recognised in the balance sheet at acquisition
cost. The investments are written down to fair value in the event of an impairment
which is not expected to be temporary. Dividend received from the companies
which represent return in the ownership period, are entered as income and presented as other financial income when the dividend is adopted.
Long-term receivables
Long-term receivables are recorded in the balance sheet at nominal value after the
deduction of expected losses. Loss provisions are made on the basis of individual
assessments. Interest income is recognised as it is earned.
Current assets
Inventories
Inventories are valued at the lowest of acquisition cost according to the «first in
- first out» principle and fair value. The acquisition cost for self-produced goods
and goods under production consist of direct materials, direct wages as well as
other direct and indirect production costs (based on normal production). Acquisition costs are adjusted for price compensation charges/subsidies. The acquisition
cost for raw materials and goods for resale is the net cost price. Fair value is the
estimated sale price with the deduction of estimated expenses for completion, sale
and distribution.
Long-term liabilities
Long-term debt is recognised in the balance sheet at the nominal debt amount. The
costs of raising loans are continually expensed.
Restructuring provisions
When restructuring measures are adopted, a provision is made for the anticipated expenses related to implementation of the measure. The provision is based on
a best estimate and is reassessed at the end of each reporting period. Expenses
which are incurred during the implementation of the restructuring are recognised
against the provision as they are incurred.
PENSION PLAN
The Company has pension plans which give employees the right to agreed future
pension benefits. The obligations are expensed over the service period in accordance with the plan’s benefit formula. The allocation method corresponds to the
plan’s benefit formula unless most of the accrual takes place towards the end of
the service life. Straight-line accrual is then used.
The pension obligations are calculated on the basis of assumptions regarding
the number of service years, discount rate, expected returns on plan assets, future adjustment of wages and pensions and the level of the Norwegian National
Insurance’s basic amount and actuarial assumptions regarding mortality, voluntary
turnover and disability rate. The plan assets are valued at fair value. The net pension obligation consists of gross pension obligation with the deduction of fair value
of the plan assets. Net pension obligations for under-financed plans are recognised
in the balance sheet as long-term financial obligations, while net pension funds for
over-financed plans are recognised in the balance sheet as financial non-current
assets if it is probable that the net asset can be utilised. Social security tax is included in the figures for actually underfinanced plans.
Receivables
Accounts receivable and other receivables are recognised at nominal value after
the deduction of expected losses. Allocation for loss is made on the basis of individual assessments of each receivable.
Changes in obligations due to changes in the pension plan are expensed immediately if the changes in the plan are unconditional at the time of the change. Any
changes in the pension plan that are conditional upon future employment are
amortised linearly over the period up to when the benefit is vested. Changes in
the obligation and plan assets which are due to changes in and deviation from the
actuarial assumptions, are amortised over the expected remaining service period
for that part of the deviation that exceeds 10 % of the highest of the gross pension
obligation and gross pension plan assets, respectively.
Unit trust funds and money market securities
Market-based financial instruments, including unit trust funds and money market
securities, which are included in the trade portfolio are valued at fair value on the
date of the balance sheet. Other short-term investments are valued at the lowest
of average acquisition cost and fair value on the balance sheet date.
In the event of participation in defined-benefit group plans, the Company enters
its share of the defined-benefit pension obligation, plan assets and cost associated
with the pension plan, into the accounts. When insufficient information is available
for recording a group plan into the accounts as a defined-benefit pension plan, the
plan is recorded in the accounts as if it was a defined-contribution plan.
The accounting item bank deposits and cash includes cash, bank deposits and
other means of payment with a due date that is less than three months from acquisition.
Obligations within the new Fellesordningen for AFP (joint plan for contractual pension) are a defined-benefit group plan, but this is recorded in the accounts as a
contribution plan, as it is currently not measurable and cannot be allocated between the participating companies.
EQUITY
Net pension cost, which is the gross pension cost with the deduction of expected
return on the pension plan assets, adjusted for allocated effect of deviations in
estimates and changes in pension plans, is classified as ordinary operating costs
and is presented together with wages and other benefits under employee benefit
expenses in the income statement.
Cooperative share capital
TINE’s cooperative share capital is the sum of shares held by TINE’s members.
Each member has one share. The share’s face value is NOK 500. Membership in
TINE is open to milk producers with a milk quota.
Subsequent payment fund
Following a decision by the board and within the overall framework proposed by
the board, profit may be allocated to the subsequent payment fund and subsequent payments for delivered milk during the year. The annual meeting decides
potential disbursements from the subsequent payment fund. Disbursements go to
those who are members at the time of the decision and shall take place on the
basis of the delivery of milk for the previous calendar year.
Contribution plans are accrued according to the matching principle. The contributions for the year to contribution-based pension plans are recognised as costs as
they occur.
TAXES
The tax cost consists of tax payable on taxable income and wealth as well as change in deferred tax liabilities. The tax cost is offset against profit before tax. Tax
associated with equity transactions are recognized in equity. Deferred tax liabilities
Accounting principles
are calculated on the basis of temporary differences between book values and tax
values at the end of the accounting year, as well as any tax-related loss carried
forward. Nominal tax rates are used in the calculation. Positive and negative differences are evaluated against one another within the same time period. Deferred
tax liabilities and deferred tax assets are presented as net in the balance sheet. The
Group presents net deferred tax liabilities for tax positions related to companies
that are part of the same tax group.
Deferred tax assets arise if one has temporary differences which give rise to taxrelated deductions in the future. Deferred tax assets are recognised in the balance
sheet when it is probable that this can be utilised in future years.
CURRENCY
Transactions in foreign currency are converted at the exchange rate on the transaction date. Money items in foreign currency, which are not hedged, are valued at
the current exchange rate. Realised and unrealised gains and losses on currency
are recognised net in the income statement.
CHANGED ACCOUNTING PRINCIPLES AND COMPARATIVE FIGURES
Comparative figures have been prepared based on the same principles as figures
for the current accounting period.
There are no new Norwegian accounting standards resulted in accounting effects
for TINE as a result of implementation in 2012. Except to reclassify the balance
sheet line allocated to subsequent payment to milk producers from trade and other
payable to other current liabilities, it is not conducted other significant reclassifications or policy changes.
USE OF ESTIMATES AND INFORMATION REGARDING SUBSTANTIAL ESTIMATES
The accounting principles that have been described entail that TINE’s management
has applied estimates and assumptions which affect items in the income statement
and balance sheet. The estimates are based on experience and an evaluation of underlying factors. Future events and changes in the framework conditions can entail
that estimates and assumptions must be changed. Changes in accounting estimates are recognised in the income statement in the period when the estimates are
changed, unless deferred entry into the income statement is in accordance with
generally accepted accounting principles. Valuations, estimates and assumptions
which have a substantial effect on the accounts are summarised below.
Depreciation and amortisation
Depreciation and amortisation of property, plant and equipment and intangible assets are based on their assumed economic life. Changed market conditions and
future investment decisions will affect existing production capacity and expected
useful life. This can provide the basis for changed depreciation and amortisation
profiles and will affect future results. It is in 2012 conducted a review and update
of the useful lives of tangible assets.
Impairment
TINE has considerable investments in property, plant and equipment, intangible assets including goodwill, associated companies and subsidiaries. These non-current
assets are tested for impairment when indications are present for possible decline
in value. Such indicators can include changes in market prices, contract structures, negative events or other operating circumstances. Calculating the recoverable
amount requires a series of estimates concerning future cash flows, where price
paths and production volume are the most important.
The accounting treatment of financial derivatives follows the intention behind entering into the agreements. Derivatives are classified as long-term non-current assets or
long-term financial liabilities if the remaining term to maturity is longer than one year.
Pensions
Calculation of fair value of pension obligations is based on several financial and
demographic assumptions. Any change in the applied assumptions affects the calculated obligation. Reference is made to note 7 for a more detailed description of
the applied assumptions.
Interest rate derivatives
TINE uses interest rate hedging instruments to hedge against large fluctuations in
the interest rate. Recognition of gains and losses depends on whether the interest
rate derivative has been classified as a hedging instrument and, if applicable, the
type of hedging. Interest rate derivatives which are not hedging instruments are
recorded in accordance with the principle of lowest value. Unrealised losses are
expensed as financial expenses.
Fair value financial instruments
Principles for estimating fair value are mainly based on market prices and various
valuation methods. The fair value of currency futures contracts is fixed by using the
exchange rate on the balance sheet date. The fair value of currency swaps is calculated at the present value of future cash flows. The fair value of options is fixed
using option pricing models. For all of the above derivatives, fair value is confirmed
by the financial institution with which the Company has contracts.
Currency derivatives
In order to hedge against fluctuations in the foreign currency rates, TINE uses currency derivatives in line with approved financial policy. Recognition of gains and
losses depends on whether the currency derivative is designated as a hedging instrument and, if applicable, the type of hedging. Currency derivatives which are
not hedging instruments are valued at fair value. Changes in value are recognised
in the income statement as financial income or financial costs.
Deferred tax asset
The deferred tax asset is entered in the balance sheet only to the degree it is probable that there will be future taxable profits which are large enough to utilise the
tax asset, either because the entity has shown a profit recently or because there
are identifiable assets with excess value.
FINANCIAL DERIVATIVES AND HEDGING
Hedging
The accounting treatment of financial derivatives designated as hedging instruments are recorded in line with the principles for the hedging types asset hedging,
cash flow hedging or hedging of net investment in foreign business activities.
In the event of hedging of assets or liabilities recognised in the balance sheet, the
derivative is entered at fair value. The book value of the hedged asset or liability is
adjusted for the value of the financial derivative’s change in value which is related
to hedged risk.
In the event of hedging of future cash flows, the derivatives are recognised in the
balance sheet after tax at fair value. Either unrealised and realised gains or losses
on derivatives are recognised directly against the equity until the hedged cash flow
affects the income statement.
Hedging of net investment in foreign currency is used at the Group level. Derivatives are recorded in the balance sheet at fair value as for cash flow hedging. Unrealised gains and losses on the derivatives (after tax) are recognised in the accounts
directly against equity until the foreign activity is sold or the hedge is phased out.
Provisions
Regarding some income statement items in the accounts, provisions are made for
expected future costs based on estimates and information which is available at
the time the accounts are submitted. These provisions can deviate from the actual
future cost. For example, provisions are related to loss of customers, obsoleteness
of goods and contingent loss which are probable and quantifiable, including disputed circumstances and court cases.
SEGMENTS
Operational segments are reported in the same manner as for internal reporting to
the company’s top decision-maker. The company’s top decision-maker, who is responsible for allocating resources to and assessment of earnings in the operational
segments, is defined as the Group management.
CASH FLOW STATEMENT
The cash flow statement is prepared according to the indirect method.
PRESENTATION CURRENCY
All amounts are in TNOK unless otherwise indicated. Parent company (TINE SA)
functional currency is NOK and the Group presentation currency is NOK.
Noter
note 1
Segment information Amounts in NOK 1000
2012
2011
TINE's
domestic
dairy
operations
TINE’s
international
dairy
operations
Liquid dairy products
7 896 118
-
Solid dairy products
5 014 117
2 024 302
11 851
-
1 285
-
204 941
Sales revenues/operating profit
Juice, fruit drinks and water
Convenience food
Ice cream and desserts
Other products
Other
business
Other
activities
and
eliminations
186 904
Total
TINE's
domestic
dairy
operations
TINE’s
international
dairy
operations
-
8 083 022
7 923 067
-
321 912
-
7 360 331
4 760 435
1 854 243
914 219
-
926 071
7 534
-
625 911
-
627 196
1 356
-
610 281
-
611 637
-
954 848
-
1 159 790
202 861
-
951 276
-
1 154 137
Other
business
Other
activities
and
eliminations
Total
180 348
-
8 103 414
285 055
-
6 899 733
887 967
-
895 501
97 756
-
44 036
-
141 792
180 570
-
211 516
-
392 086
Sales revenues from external
convenience products
13 226 069
2 024 302
3 047 831
-
18 298 201
13 075 824
1 854 243
3 126 442
-
18 056 509
Sales revenues from external
convenience products
13 226 069
2 024 302
3 047 831
-
18 298 201
13 075 824
1 854 243
3 126 442
-
18 056 509
1 698 060
2 842
-
-1 700 902
-
1 742 228
-
-
-1 742 228
-
14 924 128
2 027 143
3 047 831
-1 700 902
18 298 201
14 818 052
1 854 243
3 126 442
-1 742 228
18 056 509
1 087 305
-
-
-
1 087 305
1 031 574
-
-
-
1 031 574
407 684
16 193
107 650
-147 785
383 742
425 525
16 458
44 426
-187 249
299 160
16 419 117
2 043 336
3 155 481
-1 848 686
19 769 248
16 275 151
1 870 701
3 170 868
-1 929 478
19 387 243
Sales revenues from internal convenience products
Total sales revenues from convenience products
Sales revenues from raw materials
Other income
Operating income
Depreciation, amortisation and
impairments
Operating profit
-735 538
-46 399
-67 331
-1 000
-850 268
-631 080
-58 224
-84 039
4 000
-769 343
-14 900 843
-1 961 817
-2 947 365
1 824 984
-17 985 042
-14 542 417
-1 831 293
-3 011 176
1 943 038
-17 441 848
782 735
35 120
140 785
-24 702
933 938
1 101 654
-18 817
75 653
17 562
1 176 052
12 957 110
Balance
Assets
12 645 181
611 272
903 155
-459 918
13 699 690
12 269 692
478 219
1 027 884
-818 685
Debt, non-interest-bearing
3 078 640
478 433
383 438
-20 118
3 920 392
3 534 600
330 143
400 034
-41 968
4 222 810
Investments
1 605 666
181 795
60 421
-
1 847 882
2 253 052
48 940
66 525
-
2 368 517
Description of activity:
The TINE’s domestic dairy operations segment consists of TINE SA, OsteCompagniet AS, Melkerampa AS, Næringsmiddelproduksjon AS and TINE Eiendom Espehaugen AS.
TINE’s international dairy operations segment consists of the sub-group corporates Wernersson Ost AB (Sweden), Norseland Inc. (USA) and Norseland Ltd. (UK). In addition
to depreciation and impairment of goodwill and other excess value in Wernersson Ost AB, Norseland Inc. and Norseland Ltd. Other business activities consist of Diplom-Is
AS, FellesJuice AS, Fjordland AS and TINE SAs other subsideries (see note 14) in addition to depreciation of goodwill and other excess value in Fjordland AS (fully depreciated
in 2012).
note 2
Sales revenues from convenience products by geographical area THE TINE GROUP
2012
16 014 179
1 044 108
2 041
1 134 161
2 782
100 930
18 298 201
Amounts in NOK 1000
TINE SA
2011 Geographical area
15 926 604 Norway
1 030 974 Other Europe
1 713 Africa
993 508 America
4 617 Asia
99 094 Oceania
18 056 509
Sales revenues from convenience products
2012
2011
14 285 499
14 188 352
159 503
179 433
147
172
332 082
338 423
654
998
91 148
86 268
14 869 033
14 793 645
Notes
Other operating income
note 3
THE TINE GROUP
Amounts in NOK 1000
TINE SA
2011 Income groups
2012
75 581 Transport income
72 376
201 478 Other income
192 057
22 101 Profit from sale of non-current assets
119 309
299 160 Total other operating income
383 742
2012
2011
93 373
96 272
315 745
364 646
35 590
4 930
444 708
465 848
Cost of materials and changes in inventory note 4
THE TINE GROUP
TINE SA
2011 Cost category
2012
11 320 772 Consumption of raw materials and goods purchased for resale
11 426 089
2012
2011
9 489 446
9 469 265
80 044 Changes in inventories in production and convenience products
-95 435
11 400 816 Total consumption of materials and changes in inventory
11 330 654
Note 5 Purchase
Amounts in NOK 1000
-138 555
112 366
9 350 891
9 581 631
of raw cow and goat milk from milk producers
Amounts in NOK 1000
TINE SA
Specification consumption of raw cow and goat milk
Total purchase of raw cow and goat milk, see specification below
2012
2011
6 661 875
6 164 874
Changes in inventories of raw cow and goat milk
-4 669
5 029
6 657 206
6 169 903
Purchase of cows' milk including addition due to quality
6 549 512
6 060 161
Purchase of goats' milk including addition due to quality
112 363
104 713
6 661 875
6 164 874
Consumption of raw cow and goat milk
Specification of purchases of raw cow and goat milk from milk producers
Total purchase of raw cow and goat milk from milk producers
Allocations in TINE Råvare
Transferred from previous year
19 701
16 291
3 812
-19 701
6 685 388
6 161 464
Transferred to next year
Total paid by TINE Råvare
Allocated to subsequent payment from TINE SA
Total paid to milk producers by TINE
383 076
598 878
7 068 464
6 760 342
1 455 241
1 406 233
Settled raw cow and goat milk in 1000 litres
Cow milk including organic milk
Goat milk
Total offset raw cow and goat milk in 1000 litres
19 617
19 667
1 474 858
1 425 900
4,79
4,74
Total milk price expressed in NOK/litre
We also refer to note 35 where indicated an explanatory description of TINE Råvare.
note 6
Employee benefit expenses and number of full-time equivalents THE TINE GROUP
2012
2 793 316
366 485
248 249
161 886
3 569 936
5 316
Amounts in NOK 1000
TINE SA
2011 Cost category
2 609 969 Wages and salaries, holiday pay and costs for temporary staff
348 058 Employers' national insurance contribution
62 849 Net pension costs including social security tax, cf. note 7
148 928 Other personnel expences
3 169 804 Total employee benefit expenses
5 364 Average number of employees calculated in full-time equivalents
2012
2011
2 393 430
2 227 500
305 868
288 707
201 717
32 102
112 075
111 676
3 013 090
2 659 985
4 363
4 409
note 7
Pensions and pension obligations
TINE SA and its Norwegian subsidiaries have a collective pension plan in MP Pensjon in accordance with the Companies Pension Act. The plan satisfies the rules
for Mandatory Occupational Pensions (Norwegian abbreviation - OTP). The group
pension plan defines the level of future benefits and the plan is recognised in the
Amounts in NOK 1000
accounts as a defined-benefit pension plan. The benefits are mainly dependent on
the number of years in service and the wage level at pension age. The service pension is in addition to the National Insurance pension and is independent of National
Insurance benefits.
The pension plan in MP Pensjon provides the following benefits with a full accrual period (30 years or more):
Pension
Calculation basis
Pension benefit
Retirement pension
Up to 6 G
20 % of the pension basis
From 6 G to 12 G
48 % of the pension basis
Survivor pension spouse/cohabitant
Calculated retirement pension
55 % of the calculated retirement pension
Survivor pension children
Pension basis
First child 10 % and thereafter 5 % for each child, up to six children
In addition to the collective pension scheme has TINE SA and the Norwegian subsidiaries an operating plan for employees who earn more than 12 G. The pension
benefits of this scheme is 66 % of salary exceeding 12 G and take effect from the
age of 62.
TINE SA and most Norwegian subsidiaries are within the agreement area LO NHO. Employees in companies, based on this, the opportunity to apply for early
retirement pension at age 62. The current pension plan is a defined benefit multi-
employer plan. The companies within the agreement area LO-NHO has a real financial liability as a result of the agreement on early retirement scheme. However,
there is not sufficient information to enable the recognition of liabilities in the financial statements. This means that no obligations for the current pension scheme
is recognized.
Old pension scheme was closed on 31 December 2010. The remaining financial liability in this plan is linked to the control of the AFP pensioners gone before 2011.
As of 31 December 2012, the various plans include the following number of people for TINE SA and the TINE Group:
THE TINE GROUP
TINE SA
Employees
Retirement
5 412
3 788
38
123
286
-
-
242
Defined benefit plans in MP Pensjon
Unfunded defined benefits plans 1)
Employees
Retirement
4 855
3 484
35
111
Defined contribution plans
-
-
AFP
-
215
1)
Unfunded schemes primarly relate to operational plan for employees with salaries exceeding 12 G and gift pensions for employees who previously fell outside the pension scheme in MP Pension.
THE TINE GROUP
TINE SA
2011 Pension costs
2012
294 818 Current value of accrued pension entitlements for the year
398 039
311 888 Interest costs on pension liabilities
268 390
-574 995 Expected net return on pension plan assets
-529 673
-33 777 Recognised actuarial loss/gain (-)
61 852
1 933 Recognised plan amendment effect
3 387
32 836 Accrued employers' contribution
16 566
30 147 Other pension costs (including premium for AFP and defined contribution plans)
29 688
62 849 Net pension costs
248 249
2012
2011
345 118
255 455
243 340
284 728
-486 903
-529 490
53 572
-32 600
3 328
1 664
11 802
27 977
31 460
24 368
201 717
32 102
Reconciliation of the pension plan’s financial status as of 31 December with the amounts in the balance sheet:
THE TINE GROUP
31.12.2012
TINE SA
31.12.2011 Pension obligations and plan assets
31.12.2012
31.12.2011
-10 755 017
-9 844 688 Accrued pension liabilities
-9 830 875
-9 009 248
11 184 115
10 167 350 Pension assets (at market value)
10 235 035
9 386 328
322 662 Net pension assets excluding actuarial gains/losses
429 098
1 456 354
1 607 792 Unrecognised actuarial gains/losses
- Emplyers contribution
-1 858
1 883 594
1 930 454 Net pension assets in overfinanced scheme
-170 970
21 175
-149 795
-179 096 Accrued pension liabilities
27 569 Pension assets (at market value)
-151 527 Net pension obligations excluding social security tax and actuarial gains/losses
404 161
377 080
1 346 808
1 440 736
-
-
1 750 969
1 817 816
-116 253
-121 363
1 317
1 358
-114 936
-120 005
18 527
39 880
28 556 Unrecognised actuarial gains/losses
31 395
41 017
52 863 Unrecognised plan amendment effect
40 283
44 080
-16 243
-19 175 Employers' national insurance contribution
-15 846
-16 434
-85 140
-89 282 Net pension obligations in underfinanced scheme
-59 104
-73 831
Note 7 continues on following page
Notes
Note 7 continued
The following assumptions are applied in Norway for the TINE Group and TINE SA.
Economic assumptions
31.12.2012
31.12.2011
Discount rate
3,00 %
2,60 %
Anticipated salary adjustment
4,00 %
3,25 %
Anticipated adjustment of the National Insurance Scheme’s basic amount (G)
3,75 %
3,50 %
Expected increase in pensions
3,00 %
2,30 %
Projected yield on pension fund assets 1)
5,50 %
5,50 %
Demographical assumptions
Applied mortality table
K2005
K2005
Applied disability tariff
Strengthened KU
Strengthened KU
Average 3-5 %
per year
Average 3-5 %
per year
Voluntary redundancy (all ages)
The calculation of pension cost is assumed to be the expected return on plan assets of 5.5 % based on historical and expected returns in the MP Pension.
1)
Economic and demographic assumptions used for calculating and accounting for pensions are based on the expectations of the actual membership, the conditions of the
pension scheme in MP Pension and TINEs expectations of future economic development.
THE TINE GROUP
TINE SA
2011 Actual return on pension plan assets in the Group pension plan
2012
-7,70 % Actual return on pension assets in the company pension scheme
11,40 %
2012
2011
11,40 %
-7,70 %
Major categories of pension plan assets in the MP Pensjon company pension
31.12.12
31.12.11 plan:
31.12.12
31.12.11
47,60 %
47,80 % Shares
47,60 %
47,80 %
49,20 %
50,40 % Bonds
49,20 %
50,40 %
3,20 %
1,80 %
3,20 %
note 8
1,80 % Other assets
Related parties and senior management
Amounts in NOK
The Group board, Council, Control Committee and group management are defined as related parties and management personnel in TINE.
Group board
Board remuneration TINE SA 1)
Other remuneration
Trond Reierstad (chairman)
500 000
256 425
Ingunn Sognnes (deputy)
340 000
100 244
Anders Johansen
269 300
194 775
Torstein Grande
290 000
148 200
Anne Maren Wasmuth
219 267
108 900
Cecilie Bjørlo
202 000
80 353
Askild Eggebø
290 000
160 800
Nina Kolltveit Sæter
227 900
130 550
Helga Thorvik Ulven
290 000
129 900
Lars Woie
238 100
105 700
Lars Iver Wiig (employee elected)
150 000
–
Steinar Koen (employee elected)
202 000
–
Elin Aarvik (employee elected)
167 333
–
Svein Førde (employee elected)
202 000
–
147 900
145 050
30 000
–
Remuneration TINE SA
Other remuneration
Nils Asle Dolmseth (chief)
152 699
125 150
Roy Erik Hetland (deputy)
72 000
57 000
Deputy member
Per Heringstad
Ottar Råd (employee elected)
Annual meeting and Council
Control Committee
Helge Sommerseth (chief)
67 100
24 950
Per Amb
56 400
122 750
Anna Stangeland
56 400
23 100
Including remuneration from internal regional boards. It is not paid remuneration from other companies.
1)
Note 8 continued
Amounts in NOK
Group senior management
Total expenses for salaries
Board remuneration subsidiaries
Pension costs
Other remuneration
Hanne Refsholt 1)
2 296 392
39 759
1 227 336
144 704
Stein Øiom 1)
2 070 717
43 500
594 683
126 095
Stein Aasgaard
1 833 366
127 365
424 065
133 326
Eirik Selmer-Olsen
1 306 507
5 667
418 601
140 497
Hege Holter Brekke
1 544 811
16 271
770 299
146 758
John Ole Skeide
1 713 287
75 500
945 594
158 466
Johnny Ødegård
1 059 291
–
614 575
73 140
Jørn Spakrud
1 748 420
65 000
952 923
148 728
Employees in TINE SA
1)
Hanne Refsholt leave of absence from 1 September 2011 to 31 August 2012. Stein Øiom was acting President and CEO for the same period. Neither the Chairman of the Board, the Group Board, the Group Chief Executive or Group seniors management receive bonuses, options or have agreements on profit
sharing. Disbursements are used as a basis in the note with the exception of pensions where the service cost is used as a basis. None of the above-mentioned management personnel or board members have loans or guarantees in TINE beyond those directors who provide milk and are included in the milk producer loan scheme on milk
deliveries, see comments in note 33. The following senior management have pension agreements which come into force upon attaining the age of 62: Hanne Refsholt,
Stein Aasgaard and Stein Øiom. The agreements are funded by operations. The amount of pension is: 80 % from age 62 to 63, 75 % from age 63 to 64, 70 % from age
64 to 65 and 66 % from age 65 to 67. From the age of 67 they are included in the operations pension plan for employees with salaries exceeding 12 G, which the Group
board approved in June 2011. Other Group managers are included in the same operations pension plan. The agreement enters into force as of age 62 and the pension is
66 % of salaries above 12 G.
note 9
Intangible assets and goodwill
THE TINE GROUP
Amounts in NOK 1000
R&D
Patents
Brand
Customers
3 279
13 248
84 175
-
141
-
-3 279
-6 804
Exchange differences
-
-465
Acquisition cost at 31.12
Accumulated depreciation and
impairments at 31.12
Book value at 31.12
-
6 121
-
-
-
6 121
Depreciation for the year
-
-
Impairments for the year
-
Acquisitions (+) during the year
Disposals (-) during the year
Economic life
Depreciation schedule
Other rights
Goodwill
Total 2012
Total 2011
70 403
7 462
254 491
433 059
426 648
-
28 778
19 733
48 652
4 551
-
-35 203
-
-31 493
-76 779
-116
-1 815
-615
-130
-4 720
-7 745
1 976
82 360
34 585
36 110
238 011
397 187
433 059
-37 981
-34 585
-6 499
-150 279
-229 344
-270 316
44 379
-
29 611
87 732
167 843
162 743
-6 601
-2 347
-2 310
-19 934
-31 192
-36 325
-
-
-
-
-
-
-19 887
5-10 years
4-15 years
10-20 years
3 years
5 years
5-10 years
Linear
Linear
Linear
Linear
Linear
Linear
31.12.2012
31.12.2011
Import licence in Norseland Inc., classified as patents, is evaluated to have an indefinite lifetime and is not amortised.
Goodwill relates to:
Salmon Brands AS
Wernersson Ost AB
-
3 276
54 431
68 035
-
396
Fjordland AS
Alpine Dairy LCC
18 746
-
Norseland Ltd.
14 554
21 094
Total goodwill
87 732
92 801
An impairment test has been performed for goodwill and other intangible assets where there are indications of a decline in value. The calculation of the recoverable
amount is based on discounting future cash flows. The cash flows are based on the budget and other available information at the time of assessment. A moderate annual
increase is expected in the sales and contribution margin ratio for the first five years. Constant figures are used for remaining life. A discount factor of 6.8 % before tax
has been applied. On this basis the goodwill related to Norseland Ltd. was impaired by NOK 20 million in 2011.
THE TINE GROUP
2012
60 855
44 090
104 945
TINE SA
2011 Expensed research and product development
56 934 Research
41 556 Production development
98 490 Total expensed research and product development
2012
2011
60 855
56 799
40 483
37 630
101 338
94 429
It is assumed that the total expected income from ongoing research and development corresponds with expenses incurred. A considerable part of on-going research and
development work is connected to our priority areas within the dairy sector, especially within health and wholesomeness.
Notes
note 10
Amounts in NOK 1000
Land/buildings/
other real property
Buildings/
installations
Machinery/furniture and fixtures
Vehicles
Total 2012
Total 2011
214 316
5 451 997
8 329 056
882 756
14 878 124
13 475 893
57 325
240 001
1 435 431
66 472
1 799 230
2 364 540
-4 441
-86 084
-635 775
-68 918
-795 218
-966 656
-20
-2 819
-10 081
-6
-12 926
4 347
267 180
5 603 095
9 118 631
880 305
15 869 210
14 878 124
THE TINE GROUP
Exchange differences
Accumulated depreciation and write-downs at 31.12
-4 603
-2 300 569
-5 130 103
-629 845
-8 065 121
-8 007 612
262 576
3 302 526
3 988 527
250 459
7 804 089
6 870 512
-2 776
-187 907
-533 165
-81 080
-804 928
-682 028
-
-7 000
-7 149
-
-14 149
-31 102
0 - 10 years
20 - 30 yeras
3 - 15 years
5 - 10 years
Linear
Linear
Linear
Linear
-82
15 504
10 173
1 947
27 542
27 738
Operating leases
-
105 126
78 696
11 494
195 316
192 336
Book value at 31.12 of lease agreements recognised
in the balance sheet
-
22 454
5 314
18
27 786
45 625
Current year depreciation of leased assets
-
-9 913
-6 147
-9
-16 069
-22 158
Land/buildings/
other real property
Buildings/
installations
Machinery/furniture and fixtures
Vehicles
Total 2012
Total 2011
111 035
5 214 159
7 638 314
769 491
13 732 999
11 965 262
57 325
162 970
1 328 100
52 210
1 600 605
2 250 052
-3 344
-76 226
-595 211
-52 423
-727 204
-482 315
165 016
5 300 903
8 371 203
769 278
14 606 400
13 732 999
Book value at 31.12
Estimated useful life
Profit (+) /loss (-) on sale of property, plant and
equipment
TINE SA
Accumulated depreciation and write-downs at 31.12
-4 093
-2 181 917
-4 710 912
-546 821
-7 443 743
-7 406 277
160 923
3 118 986
3 660 291
222 457
7 162 657
6 326 722
-2 718
-180 188
-465 532
-73 763
-722 201
-596 018
-
-7 000
-6 149
-
-13 149
-34 812
0 - 10 years
20 - 30 yeras
3 - 15 years
5 - 10 years
Linear
Linear
Linear
Linear
Profit (+) /loss (-) on sale of property, plant and
equipment
-2 304
17 955
9 299
1 832
26 782
4 877
Operating leases
-
51 494
66 443
2 814
120 751
127 777
Book value at 31.12 of lease agreements
recognised in the balance sheet
-
22 310
-
-
22 310
33 875
Current year depreciation of leased assets
-
-9 876
-
-
-9 876
-11 815
Book value at 31.12
Estimated useful life
Buildings and installations consist of own production premises, warehouses and administration buildings for use in own dairy activity and production of ice cream. Rental
to external tenants is insignificant. Tangible fixed assets where there were indications of a decline in value are tested for impairment. Impairment to recoverable amount of
property, plant and equipment is carried out as a result of decisions on future closing of plants, re-organisation of operations and projects which have been experienced
as less profitable than expected. Additions in 2012 include NOK 48 million in capitalised interest. This figure for 2011 was MNOK 70.
The table below shows the carrying value of buildings, installations and machinery under construction. Construction in progress is not depreciated until the plant is used.
THE TINE GROUP
2012
159 907
45 477
346 051
551 435
TINE SA
2011 Construction in progress
1 289 689 Buildings
414 681 Technical
900 289 Equipment
2 604 659 Total construction in progress
2012
2011
159 486
1 289 262
33 844
412 765
337 064
900 289
530 395
2 602 315
Change in assets under construction due to our investments in major new facilities are completed or partially completed. Our new facilities at Jæren is applied, Tunga
finished, Verdal and Kalbakken partially completed. Reference to note 40.
note 11
Auditor’s remuneration
THE TINE GROUP
Amounts in NOK 1000
TINE SA
2012
2011 Remuneration to elected auditor - Deloitte AS
2012
2011
5 028
5 599 Statutory audit services
3 221
3 507
438
574
485
1 405
893
7 811
578 Remuneration for certification services
1 220 Renumeration for tax advisory service
818 Renumeration for other services
8 315 Total remuneration to elected auditor - Deloitte AS
1 151
719
682
714
5 492
5 514
Remuneration for other services concerns assistance in connection with environmental audits, as well as other matters. Remuneration for other certification services are
mainly connected with certification services vis-à-vis the Norwegian Agricultural Authority and other governmental agencies. Remunerations to auditors are expensed in
the year in which they are incurred.
THE TINE GROUP
2012
2011 Remuneration to other auditors
984
886 Statutory audit services
142
296 Remuneration for tax advisory service
374
1 500
37 Remuneration for other services
1 219 Remuneration to other auditors
Remuneration to other auditors includes the companies Norseland Inc., Salmon Brands AS and Bunes Fryselager AS. Salmon Brands is included only in the 2011’s as the
company was sold in 2012.
note 12
THE TINE GROUP
2012
1 056 326
988 784
-462 876
1 492 618
TINE SA
2011 Cost category
994 582 Indirect costs associated with production and operations
941 444 Transportation costs
-443 794 Feed transport subsidy income (transport supplement and distribution supplement) 1)
1 373 579 Sales costs, marketing and other operating expenses
2012
2011
918 356
866 066
957 664
909 772
-462 876
-443 794
1 093 009
980 752
6 428
2 316 Loss on sale of property, plant and equipment
4 210
2 069
3 172
3 101 Loss on receivables and contracts
2 322
882
2 512 685
2 315 747
3 084 452
1)
Amounts in NOK 1000
2 871 228 Total other operating expenses
Reimbursement from the price equalisation scheme for raw milk transport costs for the distance from milk producer to the quoting point, see also note 34.
note 13
Income from investments in subsidiaries
Amounts in NOK 1000
TINE SA
Finance income art
2012
2011
Group contribution
7 880
10 210
Dividend
20 957
5 367
Total income from investments in subsidiaries
28 837
15 577
Notes
note 14
Investments in subsidiaries and associated companies
Amounts in NOK 1000
Ownership
interest/
voting shares
Share of equity in
the company at
31.12.2012
Registered offices
Procurement
time
Bunes Fryselager AS
Porsgrunn
1975
1)
19 %
2 776
95
95
Diplom-Is AS
Nittedal
1991
2)
100 %
240 388
471 394
471 394
FellesJuice AS
Oslo
2002
100 %
12 070
12 427
12 427
Fjordland AS
Oslo
1985
51 %
30 662
18 333
25 489
Floren Eiendom AS
Oslo
2002
100 %
1 692
1 692
1 692
Landbrukets Ferskvaredistribusjon AS
Oslo
1994
100 %
334
357
347
Maritex AS
Sortland
2001
3)
100 %
11 243
8 624
33 556
Melkerampa AS
Oslo
2002
4)
100 %
5 678
6 291
136
Norseland Holdings Ltd.
Ilchester, UK
2004
100 %
55 753
67 999
67 999
Norseland Inc.
Stamford, USA
1978
100 %
89 880
3 153
3 153
Næringsmiddelproduksjon AS
Oslo
2001
100 %
1 000
1 103
1 103
OsteCompagniet AS
Oslo
2001
100 %
6 244
3 053
3 053
Salmon Brands AS
Fitjar
2004
0%
-
-
16 399
TINE Eiendom Espehaugen AS
Bergen
2010
100 %
36 650
86 781
86 576
TINE Holding AB
Ulricehamn, Sweden
2007
100 %
79 167
118 041
118 041
573 537
799 344
841 461
Subsidiaries
Book value in TINE SA
at 31.12.2012
Book value in TINE SA at
31.12.2011
Companies directly owned by TINE SA
5)
6)
Sum
Companies owned by subsidiaries
Bunes Fryselager AS
Porsgrunn
1975 1)
Norsk Iskrem AS
Nittedal
1989
100 %
Diplom-Is HB
Gothenburg, Sweden
1998
100 %
Diplom-Is Danmark I/S
Brondby, Denmark
1999
100 %
Norseland Ltd.
Ilchester, UK
2008 7)
100 %
Phonefood Ltd.
Ilchester, UK
2009 7)
100 %
Alpine Dairy LLC
Winesburg, USA
2012 8)
100 %
Wernersson Ost AB
Ulricehamn, Sweden
2007 9)
100 %
Wernersson Ost Danmark AS
Roskilde, Denmark
2007/08/11 9)
100 %
Färskvarugruppen AL AB
Jönköping, Sweden
2007/08 9)
100 %
Wernersson Glass AB
Ulricehamn, Sweden
2003/04/06 9) 10)
100 %
40 %
Bunes Fryselager AS was founded on 1/1, 2012, after a conversion from Bunes Fryselager A/L. The company has the same owners and distribution of shares that the owners had interests in
Bunes Fryselager A/L. The total ownership for TINE SA and Diplom-Is AS is 59 %. The total share capital of the company amounts to TINE Group, TNOK 8 620.
2)
Time for establishment of limited company.
3)
The business was sold in 2011.
4)
Changed name from Gastronom AS to Melkerampa AS in 2012. Registered office and business area has also changed.
5)
The company was sold in March 2012, refer to note 42.
6)
The change of name from Wernersson Ost Holding AB to TINE Holding AB in December 2012.
7)
Owned by Norseland Holding Ltd.
8)
Owned by Norseland Inc.
9)
Owned by TINE Holding AB.
10)
The change of ownership of Diplom-Is AS to TINE Holding AB, December 2011. Changed name from Diplom-Is Sverige AB to Wernersson Glass AB in 2012.
Change in registered office from Gothenburg, Sweden to Ulricehamn, Sweden in 2012.
1)
Associated
companies
THE TINE GROUP
Registered
offices
Procurement
time
TUN Media AS 1)
Oslo
Skala AS 2)
Ownership
interest/
voting shares
No. of
shares/units
2000
25,50 %
Oslo
1948
Fjordkjøkken AS
Varhaug
1996
Skånemeierier Storhushåll
AB 3)
Other associated
companies
Total associated
companies
Malmö,
Sweden
2010
TINE SA
Share of
result 2012
Share of
equity at
31.12.2012
2011
23 523 807
-2 669
10 752
50,00 %
12 500
4 047
21,54 %
4 000
2 646
Share of
equity at
31.12.2011
Book
value at
31.12.2012
Book
value at
31.12.2011
-16 647
9 456
11 762
15 337
75 201
11 285
78 882
984
779
16 403
2 944
16 556
5 600
5 600
8 807
5 093
10 569
-186
4 888
-299
5 325
4 371
5 057
12 644
107 244
2 376
120 788
22 717
26 773
Ownership in TUN Media AS in 2012 changed from 28.52 % to 25.50 %. Changed name from Landteknikk AS to Skala AS in 2012. Ownership was changed in 2012 from 49.83 % to 50.00 %.
3)
The company was sold in December 2012. Gains on the sale included in share of result.
1)
2)
note 15
Change in market value of market-based financial current assets
Amounts in NOK 1000
THE TINE GROUP
TINE SA
2011 Unit trust funds and money market securities
2012
18 182 Acquisition cost at 01.01
13 620
2012
2011
13 620
18 182
-7 949
-4 562 – disposals during the year
-7 949
-4 562
5 672
13 620 Acquisition cost at 31.12
5 672
13 620
6 320
5 384
11 991
19 004
5 384 Accumulated value adjustment at 31.12
6 320
19 004 Book value at 31.12
11 991
936
-1 555 The year's changes in value of unrealised profit (+)/loss (–) recognised in the accounts 1)
936
-1 555
2 973
-310 The year's profit (+)/loss (–) in the event of realisation recognised in the accounts 2)
2 973
-310
Money market fund
892
3 499 The year's profit (+)/loss (–) in the event of realisation recognised in the accounts 2)
26 700
273 483 Book value at 31.12 3)
38 691
292 487 Book value at 31.12
0
2 083
0
202 674
11 991
221 678
936
527
Total unit trust funds, listed shares and money market funds
1 828
1)
1 944 Change in market value of market-based financial current assets
Included in changes in value of market-based financial current assets.
note 16
2)
Included in net other financial income and costs.
3)
Included in accounting line bank deposits, cash in hand and money market funds, see note 26.
Impairment of long-term financial assets
Amounts in NOK 1000
THE TINE GROUP
2012
TINE SA
2011 Financial cost art
– Impairment of subsidaries
-
– Impairment of associated companies
739
500 Impairment og other companies
739
500 Total impairment of long-term financial assets
2012
2011
-
52 000
9 243
-
706
500
9 949
52 500
Impairment of subsidiaries of TINE SA in 2011 relates to Norseland Ltd. This is based on an evaluation of future earnings in the company and the company’s equity situation.
Impairment of associates in 2012 mainly relates to the Tun Media A/S.
note 17
Financial risk and derivatives
TINE has a unified approach to the Group’s financial risk. The primary objective
of TINE’s financial policy is to contribute to the highest and most stable milk price
possible. TINE utilises interest rate and currency derivatives as part of managing
the Group’s currency and interest rate exposure. Interest rate swaps, forward currency exchange contracts and currency options are entered into in the interest of
achieving the desired interest rate structure for the lending portfolio as well as to
hedge cash flows in foreign currency that will affect the milk price.
Foreign currency risk
TINE’s currency risk arises from future trade transactions that are mainly related
to sale of goods and purchase of raw materials and packaging abroad as well as
investments in and dividend from subsidiaries outside Norway. Balance sheet risk
is related to ownership interests in foreign subsidiaries and associated companies
in Sweden, Denmark, the UK and the US with functional currency other than NOK.
Amounts in NOK 1000
In order to reduce risk in connection with trade transactions in foreign currency,
TINE has signed forward currency exchange contracts and currency options related to acquisitions and sales of the USD and EUR currencies, where TINE has
its main exposure. Most of the derivatives in EUR are related to purchase, while
derivatives in USD are linked to sales. The TINE Group has also defined parts of
the external loans in SEK, USD and GBP as hedging instruments for net investment
in the Group. The currency derivatives are evaluated in accordance with Section
5-9 of the Norwegian Accounting Act at fair value in the balance sheet. Realised
gain and loss, as well as unrealised changes in fair value are recognised in the
income statement. Fair value on currency derivatives is calculated based on valuation techniques where expected future cash flows are discounted to present
values. Calculation of expected cash flows and discounting of these take place
using observed exchange rates for the various currencies.
The following table specifies the fair value of currency derivatives entered at 31.12.2012:
Currency derivatives
Total foreign exchange derivatives
Unrealized gains (+)/loss (-)
Contract amount in NOK
474 539
31.12.2012
746
All contracts come to maturity by the end of august 2013. Change in the unrealized value of these instruments in 2012 MNOK 0,8. TINE Group has secured portion of
net investment in Wernersson Ost AB, Norseland Ltd. and Norseland Inc. by earmarking MGBP 5 of overdraft facilities and currency derivates amounting to MSEK 100
and MUSD 16 as a hedging instrument. Accumulated unrealized changes in value of the hedged portion of the credit facilities as at 31.12.2012 MNOK -2,7 after tax. The
cumulative profit of MNOK 2,7 is included in the balance sheet under other equity in the TINE Group. For further discussion of credit facility, see note 28.
Notes
Note 17 continued
The table below shows the net realized and unrealized gains and losses on foreign exchange:
THE TINE GROUP
TINE SA
2012
2011
51 675 Realised currency exchange profit
98 777
-45 353 Realised currency exchange loss
-73 526
981 Unrealised currency exchange profit and loss
-31 849
7 303 Net realised and unrealised currency profit and loss
-6 598
2012
2011
90 452
44 673
-66 222
-43 651
-24 205
981
25
2 003
Interest rate risk
Most of TINE’s interest rate exposure is related to the lending portfolio. The purpose of TINE’s financial policy for managing interest rate risk is to provide the Group with the most cost-effective financing possible, together with a desire for a certain amount of stability and predictability in financial expenses.
In order to reduce risk related to future interest rate payments as a result of fluctuations in market interest rates, TINE is entering into interest rate swaps, FRAs (forward
rate agreements) and interest rate options. As of 31 December 2012, TINE only has outstanding interest rate swaps.
The table below specifies the fair value of currency derivatives, by class, entered into as of 31 December 2012: INTEREST RATE DERIVATIVES
Contract amount
in NOK
Market value
31.12.2012
1 800 000
-52 041
Total interest rate derivatives where the change in value is charged to equity 1)
Total interest rate derivatives recognised in accordance with the lower of cost or market principle 2)
Total interest rate derivatives 3)
311 200
-3 153
2 111 200
-55 194
Market value at 31 December 2012 excludes accrued interest total MNOK -2,2.
Fair value of interest rate derivatives included in cash flow hedging amounts to MNOK -52,0. Fair value adjusted for tax effect, MNOK -37,5, is included in other equity. The change in fair value of
interest rate derivatives included in cash flow hedging amounted to MNOK -16,5 in 2012, of which changes following tax effect, MNOK -12,0, have been recognised directly in other equity.
2) The carrying amount of interest rate derivatives evaluated at the lowest value principle amounts to MNOK -3,2 as of 31 December 2012, compared with NOK - 35,1 million as of 31 December
2011. The change of NMOK 31,9 is recognised and included as financial expenses in the income statement.
3) Total carrying amount of interest rate derivatives MNOK -55,2 is recognised in the balance sheet as long-term financial obligations.
1)
INTEREST SENSITIVITY ANALYSIS
The analysis illustrates the interest risk connected to the Group’s interest-bearing debt and interest derivatives. pr 31.12.2012. This shows how an interest rate change
of 2 % will affect the result for the next fiscal year. Any effects on the market value of the interest rate derivatives as a result of changes in the future yield curve are
not included in the analysis. Any changes to the yield curve will affect the market value of both interest rate derivatives and interest-bearing debt with fixed interest. A
nominal tax rate of 28 % has been used.
THE TINE GROUP
Net interest
bearing debt
4 067
4 067
TINE SA
Total hedging
(fixed rate and
interest rate
swap)
1 500
1 500
Net interest
bearing debt
Total hedging
(fixed rate and
interest rate
swap)
Net exposure
to interest
rate ris
2 567
The net effect positive change in the
37 interest rate (2 %)
3 928
1 500
2 428
35
2 567
The net effect of adverse changes in
-37 interest rates (-2 %)
3 928
1 500
2 428
-35
Net exposure
to interest
rate ris
Profit after tax
CREDIT RISK
Credit risk is the risk of a party inflicting a financial loss on the other party by
not fulfilling its obligations. TINE assumes counterparty risk in the sale of
goods, in investment of surplus liquidity and in financial derivatives trading.
TINE has established routines for credit rating of customers and establishment
of credit limits in relation to the company’s credit policy. These guidelines allow
e.g for reassessment of guarantees or demanding cash payment for deliveries of
goods. The TINEs customers are wholesalers and individual customers in several
customer segments. Their capacity to pay is regarded as good and TINE’s losses on
receivables have historically been low. In connection with the fundamental changes in the economy, the follow-up of exposed customer groups has been strengthened. TINE SA has also entered into an operating guarantee scheme where TINE
guarantees maximum 50 % of outstanding credit which the milk producers have in
the Trade Credit Facility for agriculture. Historically there have been low payments
under this scheme.
Counterparty risk for financial derivatives and placement of surplus liquidity is reduced by choosing counterparties with high credit ratings, as well as diversification, see also note 33 loans and guarantees.
Profit after tax
has credits within drawing rights that can cover short-term refinancing needs, and
the available credits indicates that the liquidity risk may be considered very low.
TINE is in an investment phase and work on planning future plant structures and
financing is in progress. Reference is made to Note 28 where a further description
is given of overdraft facilities and the financing situation.
RAW MATERIALS RISK
World market prices for the main bulk products such as butter, milk powder, cheddar and Gouda dropped significantly in 2012. This was due to increased supply
of milk especially in New Zealand and falling demand in key markets. The fall in
demand hung closely together with the major economic challenges in many countries.
The international price level has great impact on the national price levels in the
U.S. and EU. As a result, milk prices fell in the EU and the U.S. significantly. The
average price of raw milk were in New Zealand at $. 2,20/kg, and in the U.S. and
the EU in £. 2,50/kg. It is expected a better balance in the market and thus a slight
price increase in 2013. For TINE primary challenge will be the price occurring in
the EU. A strong import protection is essential to limit the effect of the changes
taking place in the international market.
LIQUIDITY RISK
The liquidity risk is the risk that TINE will not be able to service its financial liabilities as they mature. TINE manages its liquidity risk by having sufficient liquid
reserves and overdraft facilities in agreed credit limits with banks and by continuous monitoring future cash flows from the Group’s financial assets and liabilities. TINE’s liquidity is considered to be good. As of 31 December 2012, TINE
Energy is a major cost to TINE, and volatile energy prices pose a commodity risk.
A significant proportion of the volume is ensured, however, so that the total risk of
TINE was still limited in 2012. For inputs in general TINE experienced some price
reduction in 2012 compared with the year before. This is largely due to a stronger
NOK.
note 18
Taxes
Amounts in NOK 1000
THE TINE GROUP
TINE SA
2011 Reconciliation from nominal to actual tax rate:
2012
1 095 441 Profit before tax
762 064
309 793 Expected income tax according to nominal tax rate in Norway
213 379
2012
2011
734 337
1 002 623
205 614
280 734
Tax effect of the following items:
12 093
12 224 Non-deductible costs
10 586
6 925
-35 515
-4 484 Non-taxable income
-42 158
-3 693
2 824 Differences in tax rates in other countries
2 073
-167 686 Payments to milk producers
-107 261
8 659 Amortisation of goodwill
5 282
-6 834 Change in impairment of deferred tax assets
-2 450
-579 Net associated companies
-3 390
140 Impairment of long-term financial assets
198
-1 887
4 313 Tax effect of change in tax rate
7 320
7 382 Wealth tax
-7 233 Other items
3 108
-
-
-107 261
-167 686
-
-
-
-
-
-
2 786
14 700
-
-
7 320
7 329
3 530
116
92 950
158 519 Total tax expense
80 417
138 425
12,2 %
14,5 % Effective tax rate
11,0 %
13,8 %
THE TINE GROUP
TINE SA
2011 Deferred tax effect of items recognised directly against equity:
2012
-13 650 Hedging of future cash flows
-4 634
-842 Equity hedging of foreign subsidiary
2 336
-14 492 Deferred tax effect of items recognised directly in equity
-2 298
THE TINE GROUP/NORWAY
2011
-13 650
-
–
-4 634
-13 650
THE TINE GROUP/INTERNATIONAL
2011 Split of income tax expense between Norway and other countries:
2012
2012
2011
7 615
881
31.12.2012
31.12.2011
33 972
73 378
-552
-5 307
157 638 Total tax expense
85 335
2012
-4 634
THE TINE GROUP
TINE SA
31.12.2011 Tax payable in the balance sheet:
31.12.2012
78 313 Income tax
47 231
- Tax effect of disbursed group contribution
-
7 382 Wealth tax
7 320
85 695 Tax payable in the balance sheet
54 551
7 320
7 329
40 740
75 400
THE TINE GROUP
31.12.2012
31.12.2011
Assets
Liabilities
-
21 056
-
9 676
Excess values through acquisitions
-
1 860
-
492 411
-
22 426
37 322
-
-
14 680
-
6 189
73 611
-
110 933
Specification of tax effect of temporary differences and loss carried forward:
Inventories
Short-term liabilities
Profit and loss account
Assets
Liabilities
25 781
-
-
15 279
3 307
-
-
512 838
-
29 255
56 299
-
-
17 115
-
6 942
Remuneration/loss carried forward
101 147
-
568 298
Total
186 536
581 430
-37 257
-37 257
Offsetting of tax assets/tax liabilities
-81 640
-81 640
73 676
531 041
Deferred tax assets/tax liabilities
104 896
499 790
Unrecognised deferred tax asset
-88 686
Net deferred tax asset/tax liability in the balance sheet
16 210
-69 121
4 555
531 041
499 790
Deferred tax assets are recognized based on future income. Tax losses carried forward have no time limit. TNOK 70 850 of tax effect of the loss per 31.12.2012 belong
to the Swedish business in TINE. Provision for deferred taxes on undistributed earnings of associated companies and foreign subsidiaries are taken to the extent that it is
expected that it will be paid dividends in the foreseeable future.
Notes
Note 18 continued
TINE SA
31.12.2012
Assets
31.12.2011
Liabilities
Assets
Liabilities
Specification of tax effect of temporary differences and loss carried forward:
note 19
-
11 744
-
492 410
16 549
-
-
17 430
30 404
-
-
511 892
20 673
-
-
23 780
Inventory
37 168
-
54 961
-
-
2 579
Profit and loss account
-
3 012
53 717
524 163
Total
106 038
538 684
-53 717
-53 717
Offsetting of tax assets/tax liabilities
-106 038
-106 038
-
470 446
Deferred tax assets/tax liability in the balance sheet
-
432 646
Equity
Amounts in NOK 1000
THE TINE GROUP
31.12.2011
31.12.2012
Cooperative share
capital
Subsequent
payment
fund
Other
equity
Minority
share
Total
equity
9 536
340 000
4 952 720
55 380
5 357 636
-
-
654 014
15 100
669 114
-
-
-383 076
-
-383 076
-1 664
-
-
-
-1 664
-
-
-11 916
-
-
-
6 007
-
-
-
-
-15 051
-
-
-
-
-
7 872
340 000
Cooperative share
capital
Subsequent
payment
fund
Other
equity
Minority
share
Total equity
9 689
340 000
4 656 266
53 273
5 059 228
Net profit for the year and minority interest
-
-
928 567
8 355
936 922
-
-
-598 878
-
-598 878
-153
-
-
-
-153
-11 916
Allocated to milk producers
Net payments and disbursements of
cooperative share capital
Hedging of future cash flows
-
-
-35 101
-
-35 101
6 007
Equity hedge of foreign subsidiaries
-
-
-2 165
-
-2 165
-15 051
Changes in minority
-
-
-1 115
-1 115
-20 043
-20 043
The minority's share of disbursed dividend
-
-
-5 133
-5 133
-15 082
-
-15 082
Currency conversion difference and
miscellaneous
-
-
4 031
-
4 031
5 202 667
35 386
5 585 925
9 536
340 000
4 952 720
55 380
5 357 636
Equity at 01.01
Change in equity for the year
Equity at 31.12
TINE SA
31.12.2012
Cooperative
share capital
Subsequent
payment
fund
Other equity
Total equity
9 536
340 000
5 037 611
5 387 147
-
-
653 920
653 920
-
-
-383 076
-383 076
-1 664
-
-
-1 664
31.12.2011
Equity at 01.01
Cooperative
share capital
Subsequent
payment fund
Other equity
Total
equity
9 689
340 000
4 807 392
5 157 081
Change in equity for the year
-
-
-11 916
-11 916
7 872
340 000
5 296 539
5 644 411
-
-
864 198
864 198
Allocated to milk producers
-
-
-598 878
-598 878
-153
-
-
-153
Net payments and disbursements of
cooperative share capital
Hedging of future cash flows
Equity at 31.12
-
-
-35 101
-35 101
9 536
340 000
5 037 611
5 387 147
note 20
Obligations related to financial leasing
THE TINE GROUP
Amounts in NOK 1000
TINE SA
31.12.2012
31.12.2011
31.12.2012
31.12.2011
27 077
45 083 Present value of lease payments
24 751
36 713
29 703
50 891 Nominal value
26 877
40 786
Estimated minimum lease payments which fall due during one year, two to five years, and over five years respectively:
THE TINE GROUP
TINE SA
1 year
2 to 5 years
more than 5 years
12 353
14 724
-
14 009
15 694
-
Total
1 year
2 to 5 years
more than 5 years
Total
27 077 Present value of lease payments
10 289
14 462
-
24 751
29 703 Nominal value
11 506
15 371
-
26 877
Book value of leased assets is specified in note 10 Tangible fixed assets. Fixed assets that are leased on terms that essentially transfer the financial rights and liabilities to
Group companies are capitalised at current value of the lease (financial lease). The liability is included in interest-bearing long-term debt. The fixed assets are depreciated
according to plan, and the liability is reduced by the paid lease amount after the deduction of calculated interest cost. For other leasing agreements the rental payment is
an operating expense which is distributed over the leasing period.
note 21
Amounts in NOK 1000
TINE SA
31.12.2012
31.12.2011
345 970
178 596
Total long-term receivables from Group companies
345 970
178 596
Long-term receivables from Group companies are loans TINE SA has issued to subsidiaries. The loans are exempt from repayment, but interest is charged on the principal.
For 2012, the average interest rate was 4,3 % p.a. and for 2011 the average interest rate was 3,9 % p.a.
note 22
Other long-term receivables
THE TINE GROUP
31.12.2012
TINE SA
31.12.2011 Other long-term receivables
3 375 Loans to associated companies
5 625
11 613
21 606 Other long-term receivables
18 523
24 981 Total other long-term receivables
31.12.2011
1 285
–
5 625
3 375
3 962
13 343
10 872
16 718
Inventories
Amounts in NOK 1000
THE TINE GROUP
TINE SA
31.12.2012
31.12.2011 Specification
31.12.2012
31.12.2011
257 295
263 069 Raw materials
221 655
226 966
434 538
493 752 Goods in production
434 201
425 104
773 775
619 126 Convenience products 1)
491 733
362 275
138 279
1 603 887
95 530 Goods for resale 1)
1 471 477 Total inventories
THE TINE GROUP
31.12.2012
1 461 151
142 736
1 603 887
1)
31.12.2012
– Carrying amount of financial derivatives classified as long-term receivables, cf. note 17
1 285
note 23
Amounts in NOK 1000
73 313
84 643
1 220 902
1 098 988
TINE SA
31.12.2011 Value assessment
1 313 433 Valued at acquisition cost
158 044 Valued at fair value
1 471 477 Total inventories
31.12.2012
31.12.2011
1 100 546
945 188
120 356
153 800
1 220 902
1 098 988
The distribution between convenience products and goods for resale are modified in the 2011 figures for the comparable distribution in line with the current allocation principles in 2012.
The Group’s inventories were written down by MNOK 103,4 as of 31.12.2012 due to obsolescence and changed market conditions for same individual product segment.
The figure for 2011 was MNOK 33,3.
Notes
note 24
Balances with associated companies
THE TINE GROUP
31.12.2012
936
5 625
6 561
27 466
note 25
TINE SA
31.12.2011 Balances with associated companies
31.12.2012
747 Receivables to associated companies
3 375 Loans to associated companies
4 122 Total receivables and loans to associated companies
55 617 Total short-term liabilities to associated companies
31.12.2012
12 248
31.12.2011
919
747
5 625
3 375
6 544
4 122
27 463
54 948
Other short-term receivables
THE TINE GROUP
note 26
Amounts in NOK 1000
Amounts in NOK 1000
TINE SA
31.12.2011 Other short-term receivables
31.12.2012
5 908 Value of financial derivatives classified as short-term receivables, cf. note 17
12 208 Quota loans to milk producers, cf. note 33
31.12.2011
-
5 908
12 248
12 208
199 128
205 935
199 128 Credit to milk producers, to be settled against subsequent payments, cf. notes 5 and 33
205 935
303 251
291 060 Other short-term receivables
254 470
218 369
521 434
508 304 Total other short-term receivables
472 653
435 613
THE TINE GROUP
31.12.2012
TINE SA
31.12.2011 Bank deposits, cash and money market securities
99 427
109 788 Bank deposits and cash
26 701
273 483 Money market securities
126 128
Amounts in NOK 1000
383 271 Total bank deposits, cash and money market securities
31.12.2012
31.12.2011
4 770
3 680
-
202 674
4 770
206 354
–
–
consisting of:
3 592
note 27
3 961 Restricted bank deposits
Minority share in the balance sheet
Minorities represent external owner’s share in subsidiaries
The minority share in the balance sheet is distributed as follows:
Bunes Fryselager AS
Fjordland AS
Salmon Brands AS
Total minority share in the balance sheet
Amounts in NOK 1000
THE TINE GROUP
31.12.2012
31.12.2011
5 990
5 795
29 396
42 116
-
7 469
35 386
55 380
Salmon Brands AS was sold in March 2012, refer to note 42.
Long-term loans
note 28
Amounts in NOK 1000
The table below shows the long-term loans in TINE and contractual loan payments date.
THE TINE GROUP
TINE SA
Total outstanding
31.12.2012
Total outstanding
31.12.2011
Total outstanding
31.12.2012
Type of loan
880 000 Bond
1 209 000
1 300 000 Other long-term debt
1 900 000
1 209 000
880 000
1 900 000
1 300 000
44 969
258 650
258 650 Multi-currency credit facilities
44 969
3 511
5 988 Bank loans
27 337
45 341 Other loans
2 489 979 Total other liabilities
3 184 817
THE TINE GROUP
Total outstanding
31.12.2011
-
-
25 008
36 971
3 178 977
2 475 620
TINE SA
Repayment in
2013
2014
2015
2016
-
609 000
-
-
-
-
400 000
438 462
3 511
-
-
-
12 610
8 561
4 800
1 366
16 121
617 561
404 800
439 828
2017
and later Type of loans
600 000 Bond
1 061 538 Other long-term debt
Repayment in
2015
2016
2017
and later
2013
2014
-
609 000
-
-
600 000
-
-
400 000
438 462
1 061 538
44 969
-
-
-
-
- Other loans
10 546
8 296
4 800
1 366
-
1 706 507 Total other liabilities
10 546
617 296
404 800
439 828
1 706 507
44 969 Bank loans
The average interest rate for long-term interest bearing loans for 2012 was 4.3 %. Similarly, the average rate was 4.8 % in 2011.
Bond issues
TINE SA has two bond issues traded on ABM (Alternative Bond Market) with a total outstanding amount of MNOK 1 209 as of 31.12.2012. Both loans are based on contracts with Norsk Tillitsmann ASA. The loans have a negative pledge clause and are on the same footing as other interest-bearing loans.
Other long-term debt
TINE SA’s remaining long-term debt as at 31.12.2012 amounts to MNOK 1 900 and consists of two loans from the Export Finance and two loans from the Nordic Investment Bank.
Multi-currency revolving credit
TINE SA has an agreement with four banks for a long-term multi-currency credit facility of MNOK 1 000 The credit facility was renegotiated in May 2011 and has a term
of 5 years. The credit facility is primarily used as a ’back-stop’ for short-term financing. As at 31.12.2012 it was drawn MNOK 45 in loan agreement. The cover is mainly
in economic hedges of net investment in Norseland Ltd. Hedge accounting is reflected in the TINE Group. See further discussion in note 17.
Loan Terms
The agreements restrict the admission of new loans with collateral without the approval of the lenders. Key covenants beyond this minimum equity capital ratio in the
TINE Group, limitation of access to the use of financial leasing and sales of assets that constitute a substantial part of the activities to be approved by the lender.
note 29
Short-term interest-bearing liabilities
THE TINE GROUP
31.12.2012
Amounts in NOK 1000
TINE SA
31.12.2011 Short-term interest-bearing liabilities
31.12.2012
31.12.2011
666 000
500 000
Certificate loans
666 000
500 000
-
300 000
Overnight loans
-
300 000
271 346
16 606
Overdraft facilities, Group account contract
271 346
16 606
71 210
70 080
Overdraft facilities, outside the Group account contract
1 008 556
674 151
-
–
886 686 Total short-term interest-bearing liabilities
937 346
816 606
924 680 Unused overdraft facilities
578 654
833 394
TINE SA has a group account contract with Danske Bank for a total overdraft facility for the whole of the group with the exception of Norseland Inc., Norseland Ltd. and
Fjordland AS, which have separate bank contracts and overdraft facilities.
note 30
Other short-term liabilities
THE TINE GROUP
31.12.2012
10 338
Amounts in NOK 1000
TINE SA
31.12.2011 Other short-term liabilities
4 542 Carrying amount of financial derivatives classified as short-term liabilities, cf. note 17
12 854 Short-term liabilites to Statens landbruksforvaltning, cf note 34
31.12.2012
31.12.2011
-
4 542
10 338
12 854
927 525
791 789 Other short-term liabilities
795 918
703 559
937 863
809 185 Total other short-term liabilities
806 256
720 955
Notes
note 31
Mortgages
Amounts in NOK 1000
THE TINE GROUP
31.12.2012
31.12.2011
37 043
40 118
15 640
16 482
Debt secured by mortgage
Carrying amount of pledged assets
Buildings and land
Machines - movable property
Inventories
Trade receivables
Total mortgaged assets
1 062
4 335
120 600
99 590
86 208
86 345
223 510
206 752
A limited part of the long-term and short-term debt at Group level is secured by mortgage. This mortgage security was provided to TINE’s subsidiaries before TINE entered in to the existing long-term and short-term loans in the Group. TINE has made a commitment to not take up new loans with mortgage security in the Group’s assets
without the lender’s consent.
note 32
Transactions with related parties
Amounts in NOK 1000
TINE SA
Transactions with subsidiaries
Sale of convenience products and services
Purchase of convenience products and services
2012
2011
1 747 125
1 935 743
25 167
207 028
Transactions with associated companies
Sale of conveniance products and services
Purchase of convenience products and services
7 538
7 242
608 477
655 788
We define related parties as our owners, senior emplyees, all subsidiaries and associated companies of TINE SA and MP Pensjon.
Concerning transactions with our owners, reference is made to note 5 Purchases of raw cow and goat milk from the milk producers. Transactions with MP Pensjon regarding payment of pension premiums is described in note 7 Pensions and pension obligations. Remuneration for senior management is described in note 8.
Receivables and liabilities from Group companies are presented in notes 13 and 21. TINE SA’s ownership in subsidiaries and associated companies are presented in note
14. Convenience products are bought and sold at the same prices and terms used for external third parties transactions. Transactions related to services to related parties
are sold at cost price added an estimated profit at commercial terms. The profit added depends on the type of service delivered.
note 33
Loans and guarantees
LOANS
The Group provides loans to employees for the purchase of vehicles and computers. As of 31.12.2012 the total lending in this connection amounts to MNOK 5.3 for the
TINE Group. TINE SA provides monthly loans to the individual milk producers based on the member’s monthly milk deliveries. Accumulated loans throughout the year are
offset against part of the member’s subsequent payment as decided at TINE’s annual meeting. As of 31.12.2012, the milk producer loan scheme amounts to MNOK 206.
The loans are granted against security in the member’s future milk deliveries. In addition, TINE SA has provided loans to members of TINE in connection with purchasing
milk quotas. As of 31.12.2012, total loans in this connection amount to MNOK 12. Scheme is to be liquidated.
GUARANTEES:
Bank guarantees
Danske Bank has provided a total guarantee limit of MNOK 200 at the disposal of TINE SA. The guarantee liability principally covers the tax withholding guarantee for
TINE SA and its subsidiaries, transportation permit guarantees and rental bond.
The utilised limit as of 31.12.2012 is MNOK 170, of which tax withholding guarantees amount to MNOK 153.
Guarantees provided by TINE
Surety on MNOK 21 provided by TINE SA vis-a-vis Danske Bank as security for the signed agreement regarding Group allocation with majority-owned subsidiaries.
Parent company guarantee on MGBP 9,25 by TINE SA to Danske Bank as security for Norseland Ltd.’s liabilities to the bank. A «Letter of Support» has been granted to
Norseland Ltd., where TINE SA guarantees the company’s operation for the next 12 months.
Parent company guarantee on MNOK 1.5 by TINE SA to Toyota Material Handling Norway AS as security for Diplom-Is AS’ liabilities relating to a signed lease agreement.
In general, TINE SA covers maximum 50 % of the current operating credits the milk producers have in the Operating Credit Scheme for Agriculture. See also note 17,
section creditrisk.
note 34
Outstanding accounts with the Norwegian Agricultural Authority – market regulation and subsidy schemes
Market schemes for milk consist of:
1)
The quota scheme for milk, which is one of the regulation measures to adjust
milk production to needs.
2)
Market regulation, which TINE handles on behalf of all the milk producers in the
country.
3)
Subsidy schemes for milk producers: Basic and district subsidies.
4)
Price compensation scheme, which equalises between milk applications and
geographic differences.
5)
Import tariffs, which are notified through the WTO agreement.
Outstanding accounts here include market regulation (2), subsidy schemes (3)
which are agreed in the agricultural agreement and where TINE also has the task of
payment to its owners, as well as the price compensation scheme (4).
Market regulation
The Sales and Marketing Council is responsible for the regulations that lay down
premises for implementation of market regulation, and the Sales and Marketing
Council manages the application of the funds. The Norwegian Agricultural Authority is the secretariat for the Sales and Marketing Council. The Authority considers
applications and proposals from the market regulator and presents recommendations for decisions to the Council.
TINE SA ensures market regulation in the dairy sector on behalf of all the milk
producers in the country. The purpose is to implement different regulatory measures for:
• on the one hand to ensure all milk producers sale of their products at agreed
target prices, and
• on the other hand, TINE Råvare shall ensure satisfactory supplies of raw milk on
equal terms to all players in the market scheme for milk.
Milk deliveries vary throughout the year and the variation is different in different
areas of the country at the same time as the domestic consumption is relatively
steady. The need for regulation therefore arises from the lack of correlation between the supply of milk and consumption.
The most important sales measures are regulatory storage, regulated transport of
milk, compensation for unused production capacity and regulatory export. In addi-
tion, funds are used for professional measures directed towards quality and breeding work at dairy farms, information work undertaken by the Information Office
for Dairy Products (melk.no) and price reduction of school milk. Administration
costs in TINE and costs for administration of the scheme in the Norwegian Agricultural Authority and Sales and Marketing Council are also incurred.
The budget for TINE’s costs including market-adjustment in 2012 was MNOK
102,1. Including professional measures and information activities, support to KSL
Matmerk and administration of market regulation in the Norwegian Agricultural
Authority and the Norwegian Agricultural Marketing Board, the budget totalled
MNOK 152,9.
Market regulation statements and cost coverage applications are not processed
by the Norwegian Agricultural Marketing Board before the end of March of the
following year. Changes may therefore occur. The uncertainty is greatest for the
regulation capacity statement.
The market regulation costs are covered by all Norwegian milk producers paying
a sales tax which is deducted in the milk settlement. The sales tax was NOK 0.08
per litre during the first half of 2012 and NOK 0.12 per litre during the second half.
The cost coverage also includes paid over-production tax and any income from
extraordinary sale of quotas.
The market regulation section is responsible for ensuring that TINE SA receives coverage for its regulation costs, as presented in the following table. TINE SA’s costs
for market regulation, including administration of the scheme, are not included in
the accounts for TINE Råvare.
Basic and district subsidies
This is a subsidy that TINE pays to its owners in accordance with an agreement
with the authorities. The amount of the subsidies is negotiated in the agricultural
agreement and varies based on the extent of production and geographical location.
The funds are transferred from the Norwegian Agricultural Authority and disbursed
to the producers via the producer settlement.
Amounts in NOK 1000
2012
2011
Available funds
Outstanding accounts at 01.01
12 854
8 236
Payments/disbursements
-3 189
-6 750
Adjustments for previous years
-9 665
-1 486
Received for professional measures and information activities
33 550
31 789
Sales tax funds
120 082
107 575
Total available funds
153 632
139 364
9 653
10 316
Other measures, excluding administration and interest
60 745
43 631
School milk scheme
29 015
29 218
Administration TINE and interest
10 332
11 053
109 745
94 722
Expenditures
Sales measures, school milk, administration and interest
Price reduction export
Price reduction domestic, excluding school milk
Total expenditures excluding professional measures
Professional measures and information activities
Total expenditures
Outstanding sales measures at 31.12
504
33 550
31 789
143 295
126 510
10 338
12 854
Collected Fees
Collected sales fee
Collected over-production fee
Collected research fee
146 270
92 954
1 249
37 425
24 600
22 910
Note 34 continued
Notes
Amounts in NOK 1000
2012
2011
-18 727
-9 927
Outstanding accounts between the Norwegian Agricultural Authority and TINE SA 31.12
Unpaid, collectable taxes
Receivable subsidy scheme
1 115
4 854
Payable compensation scheme
-7 372
-67 704
Basic and district subsidies
Basic subsidy
District subsidy
60 030
60 231
486 297
468 131
Basic and district subsidies disbursed from TINE SA to milk producers on behalf of the Norwegian Agricultural Authority (SLF).
COMPENSATION SETTLEMENT MARKET SCHEME FOR MILK
The price compensation scheme for milk is intended to regulate the price differentiation of milk as raw material for different applications in accordance with the agricultural
agreement’s provisions by ensuring a higher total market consumption and at the same time enabling milk producers to receive equal milk prices independent of milk applications and location of production. Further, it is an important premise for the scheme to ensure equal competition conditions for the players who are part of the scheme. The
statutory basis for the scheme is a Regulation relating to the price compensation scheme for milk, laid down by the Ministry of Agriculture on 18 December 2007.
Adjustment tax/addition and feed transport subsidy
In-freight addition
Distribution addition
Total in-freight addition and distribution addition (see Note 12)
2012
2011
-452 296
-433 070
-10 580
-10 724
-462 876
-443 794
596 148
694 478
Settlement in-freight addition and distribution addition previous years
Main milk/by-product application
Settlement main milk/by-product application previous years
Net adjustment tax/addition and feed transport subsidy
-51
2 949
8 238
136 221
258 871
In-freight addition and distribution addition are recognised in the income statement under other operating expenses, see note 12. Main milk and by-product application is charged as commodity cost.
note 35
TINE Råvare
The agreement signed between the Norwegian authorities and TINE SA in 2004 concerning having TINE Råvare (TINE Milk Supplies) be a separate accounting and profit
centre so as to have clear administrative and accounting separation between raw materials handling and processing in TINE. TINE Råvare performs all tasks related to
handling of milk as raw material from the milk producers and up to the individual participants in the market scheme for milk. The Norwegian Agricultural Authority ensures that all players, including TINE, are able to buy raw milk at the same price from TINE Råvare.
In order to fulfill their responsibilities TINE Råvare purchases services from various other departments of TINE SA basis of clearly defined service instructions detailing
what is performed. The instructions are based on a contractual setup originally developed and quality assured by the Norwegian Agricultural Economics Research Institute
(NILF), and approved of SLF. Service instructions were in 2012 adjusted according to the changes when regional responsibilities were taken over by new public spaces
within TINE SA. All changes in service instructions occurs only after discussions with the SLF.
Formally, TINE Råvare is included as a part of TINE’s annual accounts, but through the contract that has been entered into between TINE SA and the Government by SLF,
any surplus/deficit in TINE Milk Supplies shall be settled against the milk producers. In addition, separate reporting shall be undertaken of the accounts for TINE Råvare to
SLF which documents that TINE has met its obligations in relation to this contract.
The audit of TINE Råvare is performed by the same auditor that audits TINE SA’s annual accounts and group accounts.
Please also refer to a separate section about TINE Råvare in the Director’s report.
Accounts for TINE Råvare is presented below.
Note 35 continued
Amounts in NOK 1000
Accounts for TINE Råvare
2012
2011
Sales of raw cow and goat milk
7 088 190
6 577 814
Cost of raw cow and goat milk
-6 724 830
-6 196 756
Gross profit
363 360
381 058
Producer functions
149 970
153 644
Coordination towards farmers
21 642
22 987
132 426
128 852
Milk inspection
38 731
38 240
Collection and inbound transport (net)
36 604
30 143
Own costs in TINE Råvare
17 682
15 973
Administration and infrastructure
15 171
13 028
Interest on working capital
-8 083
-8 692
Membership fee and Geno
-17 270
-16 527
Total costs
386 873
377 648
TINE Råvare profit before carrying over profit from the preceding year
Farm tanks
-23 513
3 410
Profit/loss carried forward from last year
19 701
16 291
Profit/loss TINE Råvare to carry forward
-3 812
19 701
Accounts for TINE Råvare for 2012 show a loss of MNOK 23.5 before transfer of income from foor years. Deferred loss as per 31.12.2012 is then MNOK 3.8, and shall
be offset against milk producers in the following year. The amount is therefore the basis for determining the price paid to the producer (base price) in the coming years.
The various income, expense and balance sheet for TINE Råvare material is included in the respective accounts and balances in the financial statements of TINE SA. It is
only the profit element in TINE Råvare materials that are eliminated from the result of TINE SA.
note 36
Business combinations and changes in ownership interests
TINEs subsidiary in the U.S., Norseland Inc., acquired in June 2012 the business in Alpine Cheese Co. Alpine Cheese Co. has been tolling for Norseland Inc. in the United
States since 2000. Acquired business is located in the newly formed subsidiary of Norseland Inc. The name of the subsidary is Alpine Dairy LLC. Goodwill was calculated
to MNOK 19.7.
Wernersson Ost Holding AB acquired the remaining shares (20 %) in Wernersson Ost Danmark AS in September 2011. Goodwill was calculated to MNOK 0.5. See the
separate section of the annual report that reviews Wernersson. Wernersson Ost Holding AB changed its name to TINE Holding AB in 2012.
Gastronom AS changed its name in 2012 to Melkerampa AS. Melekrampa is a wholly owned subsidiary of TINE. Melkerampa is a shop located in Mathallen (the Food Hall)
Oslo. Melkerampa is a provider of Norwegian Food and joy of food with a focus on dairy specialties. Product range includes everything from TINE specialty cheeses to
products from small producers. The operation of the company started in October 2012.
note 37
Provisions
Amounts in NOK 1000
The following provisions for future obligations have been recognised in the balance sheet as debt:
THE TINE GROUP
31.12.2012
48 112
1 300
TINE SA
31.12.2011
Provisions
62 332 Reorganisation costs
- Production contract for cheese abroad
31.12.2012
31.12.2011
48 112
62 332
25 900
45 900
Reorganisation costs include the final payment and costs of buying out rental contracts. Reorganisation measures were carried out in TINE SA during both years. TINE SA
has signed an agreement with Dairygold Ltd. in Ireland regarding the production of Jarlsberg. The agreement expires in 2014. Provision for 2012 represents the expected
loss on the resale of the cheese.
Notes
note 38
Other off balance sheet lease liabilities Amounts in NOK 1000
TINE SA and subsidiaries in the TINE Group have rental relationships and rental contracts concerning rental of external office premises, warehouse, refrigeration plants,
production machinery, trucks, other means of transport, office machines, computers and freezers.
The table below shows the annual lease payments and the lease duration:
THE TINE GROUP
2012
2011 Rent object
2012
2011
63 736
80 348
88 885 Office premises
3 - 10 years
51 494
24 776
26 951 Warehouse and cold storage
0 - 10 years
-
-
49 002
39 482 Production machines
3 - 7 years
48 963
39 405
212
10 536
3 340
14 468
10 912
193 594
note 39
TINE SA
Agreement
duration
203 Trucks
12 873 Other transport equipment
5 860 Office equipment
16 474 Computers
371 Freezers
3 - 5 yeras
-
-
2 - 5 years
2 814
2 645
3 years
3 155
5 693
3 years
14 325
16 298
4 - 5 years
191 099 Total off-balance sheet leases
-
-
120 751
127 777
Environmental issues
The TINE Group has adopted environmental objectives within the areas of waste, discharge to water, phasing out of refrigerants, energy consumption and optimising of
packaging materials. There are both operating expenses, wage costs and investments connected to reaching these objectives. We pay taxes in connection with discharge
to water and delivery of different types of waste. There are environmental taxes on several types of packaging materials. Investments are being made to reduce TINE’s
environmental impact, e.g. by building and upgrading cleaning plants, equipment for saving energy and water and equipment for source separation of waste.
note 40
Major individual transactions
THE TINE GROUP
2012
Amounts in NOK 1000
TINE SA
2011 Balance sheet
850 870
1 641 836 Investments in lager new plants
152 048
- Gain on sales on assets
2012
2011
850 870
1 641 836
Profit and loss items
-14 149
-739
-15 551
-
-50 989 Write-down of tangible fixed assets and goodwill
-500 Impairment of financial assets
-53 000 Costs connected with reorganisation and closure
26 000 Awarded legal costs
141 403
-
-13 149
-34 936
-9 949
-52 500
-11 492
-53 000
-
26 000
Investments in major new plants for 2012 and 2011 apply to a new dairy plant at Jæren, expansion of the dairy plant at Verdal, and expansion of the terminal and
warehouse in Oslo and in Trondheim. Gain on sale of fixed assets consist primarily of gains from the sale of Salmon Brands AS and sale of discontinued equipment.
Write-down of tangible fixed assets are mainly related to discontinued products due to market development and reduced profitability. See note 16 for further comments
concerning write-down of financial fixed assets. Costs due to reorganisation and discontinuations are mainly related to TINE SA’s dairy activities. In 2011, the Norwegian
Supreme Court ruled in favour of TINE in regard to its alleged abuse of its dominant position during chain shop negotiations with REMA in 2004. TINE was awarded legal
costs and the 2011 accounts was credited MNOK 26 as a result of this.
note 41
Government grants
Amounts in NOK 1000
Regarding the TINE Group and TINE SA, innovation and other governmental and municipal grants have been received as shown in the following table. The grants are
presented net of costs incurred.
THE TINE GROUP
TINE SA
2012
2011 Government grants
1 213
1 433 Tax-related incentive scheme
2012
2011
910
1 130
15 609
20 391 Other governmental and municipal grants
15 609
20 391
16 822
21 824 Total government grants
16 519
21 521
note 42
Discontinuation and divestment of business
Amounts in NOK 1000
In March 2012 was Salmon Brands AS sold. The sale of the business generated a net gain included in other operating income in the Group and in financial income in TINE SA.
Below lists figures for Salmon Brands AS, part of TINE Group consolidated income statement and balance.
Business Outcomes
2012
2011
Sales revenues
30 053
191 308
Operating expenses
27 257
189 532
2 796
1 776
Operating profit
The entities' assets and liabilities
15.03.2012
31.12.2011
Assets
65 202
60 391
Liabilities
48 048
45 149
notes/ auditor’s report
Translation from the original Norwegian version
To the Annual Meeting of TINE SA
INDEPENDENT AUDITOR’S REPORT
Report on the Financial Statements
We have audited the accompanying financial statements of TINE SA, which comprise the financial statements of the parent company, showing a profit of NOK 653.920.000, and the financial statements of the group, showing a profit of NOK 669.114.000.
The financial statements of the parent company and the financial statements of the group comprise the balance sheet as at
December 31, 2012, and the income statement and cash flow statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
The Board of Directors and the Managing Director’s Responsibility for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these financial
statements in accordance with the Norwegian accounting act and accounting standards and practices generally accepted in
Norway, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International
Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements are prepared in accordance with the law and regulations and give a true and fair view of
the financial position of TINE SA and of the group as at December 31, 2012, and of its financial performance and its cash flows
for the year then ended in accordance with the Norwegian accounting act and accounting standards and practices generally
accepted in Norway.
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report and the the allocation of the profit
Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board
of Directors report concerning the financial statements and the going concern assumption, and that the proposal for the the allocation of the profit complies with the law and regulations and that the information is consistent with the financial statements.
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we have considered necessary in
accordance with the International Standard on Assurance Engagements (ISAE) 3000, «Assurance Engagements Other than Audits or Reviews of Historical Financial Information», it is our opinion that management has fulfilled its duty to produce a proper
and clearly set out registration and documentation of the company’s accounting information in accordance with the law and
bookkeeping standards and practices generally accepted in Norway.
Oslo, February 18, 2013
Deloitte AS
Kjetil Nevstad (signed)
State Authorised Public Accountant (Norway)
Subsidiaries
in the TINE Group
TINE’s domestic dairy operations
OsteCompagniet AS
Highlights 2012
•Strong focus on TINE Smørbar and
Snøfrisk
•Lost positions within the
institutional segment
The company markets and sells TINE’s
speciality cheeses, Norwegian farm
cheese and imported cheese from large
parts of Europe. OsteCompagniet’s vision is “Bringing cheese with character
to the people”. The goal is to develop
the market for speciality cheeses in
Norway.
KEY FIGURES (NOK million)
Revenues
Operating income
Number of employees
2012
2011
265
276
4
7
12
13
TINE’s international dairy operations
Norseland Inc.
Norseland Inc produces, ripens, markets and distributes specialty cheeses
from TINE and other producers to supermarkets and the institutional market
in the US.
Norseland Ltd.
Norseland Ltd. ripens, markets and distributes specialty cheeses from TINE
and Ilchester in the grocery retail market in England.
Highlights 2012
•Sales growth and improved operating
income
•Purchased Alpine Cheese* Co.,
which has operated franchise production of Jarlsberg cheese since 2000
•The sale of Jarlsberg wheels reached
record levels in spite of stiff competition.
Highlights 2012
•Revenues on par with 2011
•Significant profit improvement, e.g.
due to implemented cost savings
•The sale of Jarlsberg cheese was somewhat below the volume sold in
2011
KEY FIGURES (NOK million | MUSD)
2012
Revenues
Operating income
Number of employees
2011
1 056
182
907
162
26
5
24
4
85
31
The number of employees increased by 50 people as of 1 July 2012 due to the
acquisition of Alpine Dairy Co.
*
The company has subsequently changed its name to Alpine Dairy LLC
NØKKELTALL (MNOK | MGBP)
2012
Revenues
Operating income
Number of employees
2011
1 056
182
907
162
26
5
24
4
85
31
NØKKELTALL (MNOK | SEK MILLION)
Wernersson Ost AB
Wernersson Ost AB ripens, markets
and distributes a broad and international cheese selection for supermarkets
and the institutional market in the
Nordic region.
Highlights 2012
•Good growth in sales and profit
•Expansion of both inventories and
production at the dairy in Ulricehamn
•Good increase in the sale of Jarlsberg cheese after significant marketing activities
2012
Revenues
2011
589
686
571
662
Operating income
8
10
6
7
Number of employees
101
92
tHe tine group
suBsiDiaries
otHer Business aCtivities
Diplom-is as
Diplom-Is AS is a brand-name company
which manufactures and markets ice
cream and frozen desserts.
fellesJuice as
FellesJuice AS is a brand-name company which develops and markets Sunniva juice, TINE IsTe and other fruit-based
drinks. The products are produced and
sold through TINE.
fjordland as
Fjordland AS is a brand-name company
which drives the development, marketing and sale of fresh convenience
food, margarines, yoghurt and desserts
in the Norwegian market.
Highlights 2012
• In spite of a very mixed summer season, the ice cream category in
Norway showed moderate growth
and Diplom-Is drove the growth in
the category
• The company has had a good
launch programme within its core
brands and will increase its resource input in innovation and branding
• Focus on completing structural
changes in distribution and improvements in production
Highlights 2012
• In spite of increased competition in
multiple sales channels, FellesJuice
has delivered satisfactory results
• An effort to clarify additional focus
on fruit-based drinks has been completed
• Focus on the «on-the-go» market
continues, and the company has
had a strong launch programme
Highlights 2012
• Sales growth in all product categories yielded improved operating income
• Continued focus on the development of quality products which are
preferred by consumers in order to
strengthen Fjordland’s position in
the market
• Increased consumer communication, both through traditional media
and digital channels in order to
further build the brands
Key figures (noK million)
Revenues
Operating income
number of employees
2012
2011
924
929
8
38
420
436
2012
2011
181
221
Revenues
Operating income
number of employees
6
9
15
14
Revenues
2012
2011
1 190
1 130
Operating income
43
33
number of employees
82
81
Årsrapport 2012
contact
information
employee representatives
ANNUAL MEETING
The annual meeting consists of 110
member-elected delegates. The
delegates will be divided between the
regions so that there is an equal ratio
between the number of members and
the number of delegates in all regions,
based on the number of members in
each region during the year before the
annual meeting year. This is in addition
to the Group board and Council
members.
Council
The Council consists of 38 members.
The Annual Meeting elects 21
members and the employees elect 17
members.
Chairman of the Council
Nils Arne Dolmseth
Deputy chairman
Roy Erik Hetland
Other member-elected delegates
Turid Næss
Knut Johnny Enoksen
Tormod Nilsen
Bjarne Leonhardsen
Inger Lise Ingdal
Jarle Bogen
Karl Fredrik Okkenhaug
Borghild Reenskaug
Lars Istad
Norvald Dalsbø
Christian Aasland
Gunn Elise Helle
Aslak Snarteland
Arna Høyland
Rolf Øyvind Thune
Elisabeth Irgens Hokstad
Gudmund Tronsmoen
Ellen Anne Bergseng
Per Heringstad
Employee-elected delegates
Alf Einar Graven
Asbjørn Laugen
Anne Enoksen
Svein Førde
Stein Hagala
Jeffrey Thomas
Steinar Koen
Tor Arne Johansen
Dag Rune Herting
Lillian Saur
Kåre Pedersen
Jan Gaute Krokstadmo
Egil Torland
Kjell Inge Robberstad
Ingunn Engelsvoll
Kurt Haugland
John Arve Håseth
CONTROL COMMITTEE
Chairman
Helge Sommerseth
Deputy chairman
Per Amb
Member
Anna Stangeland
GROUP BOARD
The Board consists of 14 members.
The Annual Meeting elects ten members. The chairman and deputy chairman are elected every year in special
elections. The employees elect four
members in special elections.
Chairman
Trond Reierstad
Deputy chairman
Ingunn Sognnes
Other member-elected delegates
Anne Maren Wasmuth
Anders Johansen
Torstein Grande
Nina Kolltveit Sæter
Lars Woie
Askild Eggebø
Helga Thorvik Ulven
Cecilie Bjørlo
Employee-elected delegates
Lars Iver Wiig
Svein Førde
Elin Aarvik
Steinar Koen
Deputy members elected by the Annual Meeting
1st deputy member: Per Heringstad
2nd deputy member: Jarle Bogen
3rd deputy member: Birgit Oline Kjerstad
Deputy members for employee-elected delegates:
1st deputy member: Ottar Råd
2nd deputy member: Tor Arne Johansen
3rd deputy member: Anne Enoksen
4th deputy member: Kåre Pedersen
CENTRAL ELECTION COMMITTEE
The election committee has eight
members elected by the Annual Meeting:
Chairman
Marit Bårnes
Deputy chairman
Elling Ruggli
Other members
Jan Egil Skjørestad
Arild Herstad
Sigfrid Nilssen
Jon Husdal
Ole Martin Pettersen
Mari-Ann Hoff
AUDITING
Auditing will be carried out by Deloitte
AS and the auditor is elected by the
Annual Meeting.
Head office
TINE SA
Dronning Eufemias gate 6
N-0191 Oslo
P.O. Box 25, 0051 Oslo
www.tine.no
Switchboard: +47 45 66 30 80
[email protected]
WHOLLY-OWNED SUBSIDIARIES
DIPLOM-IS AS
Wernersson ost AB
P.O. Box 23, 1483 Skytta
Telephone 02001
Street address:
Brennaveien 10
1481 Hagan
Telephone +47 02001
Managing Director
Bjørn Moldskred
[email protected]
www.diplom-is.no
Industrivägen 5, 523 90
Ulricehamn, Sweden
Telephone +46 321 261 50
VD
Magnus Ekstrand
[email protected]
www.wernerssonost.se
FELLESJUICE AS
P.O. Box 113 Kalbakken,
0902 Oslo
Street address:
Bedriftsveien 7
Telephone +47 45 66 30 80
General Manager
Siw D. Steen
[email protected]
www.sunniva.no
Ostecompagniet as
P.O. Box 6678
Etterstad, 0609 Oslo
Street address:
Tevlingveien 23
Telephone +47 45 66 30 80
General Manager
Rune B. Jenssen
[email protected]
www.ostecompagniet.no
NORSELAND INC. (US)
1260 East Main Street,
Stamford, CT 06902 USA
Telephone +1 203 324 5620
President and CEO
John J. Sullivan
[email protected]
www.norseland.com
NORSELAND LTD. (UK)
Somerton Road, Ilchester,
Somerset BA22 8JU, England
Telephone +44 0 1935 842800
CEO
Nigel Meadows
[email protected]
www.norseland.co.uk
PARTLY OWNED SUBSIDIARIES
Fjordland as
Brynsengveien 10
0667 Oslo
Telephone +47 22 97 49 00
Managing Director
André Gobel
[email protected]
www.fjordland.no
tine.no/årsrapport2012
The annual report was compiled by
TINE Communication, TINE SA
Design
Itera Gazette
Photo credits
TINE Media Bank
Emil Lundgren, front cover
Yvonne Holt pp. 14-16
Kaia Means p. 3
Printing
[email protected]
Circulation
300
TINE annual report 2012
TINE SA
Dronning Eufemias gate 6
0191 Oslo
P.O. Box 25, 0051 Oslo
Telephone +47 45 66 30 80
www.tine.no

TINE SA English_2012_09.indd

Transcription

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