annual report

Transcription

annual report

ANNUAL REPORT
ANNUAL REPORT FROM THE BOARD OF DIRECTORS
Together we create
genuine culinary
experiences
people want
FINANCIAL STATEMENT
TINE ANNUAL REPORT 2013
COW’S AND GOAT’S MILK
DELIVERED TO TINE
TINE
CUNSUMPTION PER CAPITA
KG/ LITRE
MILLION LITRES
18,9
GOAT’S MILK
91,0
MILK/LITRE
11,4
YOGHURT/KG/INCL. IMPORT
1 447,6
1453,9
COW’S MILK
HIGHLIGHTS FROM THE PAST YEAR
Vision:
Together we create genuine culinary
experiences people want.
January TINE meets 400,000
Germans at Grüne Woche in Berlin.
February The new whey plant
opens in Verdal. Whey is refined into
protein-rich food products.
March The average fat content
PRICE TO MILK PRODUCERS
NOK PER LITRE DELIVERED
2013
2012
2011
2010
Milk price from TINE Råvare
(TINE Milk Supplies)
4,65
4,53
4,32
4,20
Subsequent payment from TINE SA
0,26
0,26
0,42
0,33
Total price achieved by
the owners
4,91
4,79
4,74
4,53
TINE aims to be a leading suppli
er of food and drink brands with
a main focus on dairy products.
HSE/ENVIRONMENTAL FIGURES
HSE
Our business idea
2013
2012
2011
2010
Number of employees
Number
5 600
5 485
5 505
5 496
Absence due to illness,
Per cent
6,2
6,4
6,7
6,8
9,9
9,6
11,9
12,7
530
501
457
471
28 834
29 436
28 784
29 204
96 684
90 773
82 842
90 759
Lost time injury (LTI) rate
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.
ENVIRONMENTAL
Gross energy consumption
(GWh)
Packaging materials
consumption (tons)
Discharge CO2-ekv. total (tons)
The TINE Group is owned by Norwegian
dairy farmers in a cooperative society.
KEY FIGURES
2013
2012
2011
2010
Revenues
NOK million
20 449
19 769
19 387
18 834
Operating profit
NOK million
948
934
1 176
1 189
Net profit margin
reaches 4.23 per cent – the highest
ever measured in a month in Norway.
TINE expands its commitment to
environmentally friendly transport
with new vehicles in Oslo and Bergen
fuelled by bioethanol.
An impressive 410 applicants to
TINE’s trainee programme.
April 102 milk producers receive the
Silver Tine (Sølvtina) – a distinction
awarded to those who have delivered
elite milk every single day, for 15
straight years.
May Record participation in the TINE
Relay – 101,000 participants.
TINE signs a two-year partnership
agreement with Norwegian cross-
country skier, Marit Bjørgen.
November Final day of production
Valdres, TINE launches Norway’s
first mountain dairy milk in stores.
E+ was a finalist in the Dairy Inno
vation Awards in the category ”Best
new business concept”.
at TINE Dairy Odal.
TINE makes Universum’s top 30 list
of dream employer companies for
experienced employees.
Minister of Agriculture and Food
Sylvi Listhaug visits TINE’s dairy at
Jæren.
4,6 %
4,7 %
6,1 %
6,3 %
790
762
1 095
1 085
Net profit for the year
NOK million
685
669
937
910
Assets
NOK million
14 323
13 700
12 957
11 352
August TINE’s Norwegian specialty
41,3 %
40,8 %
41,3 %
44,6 %
2,14
2,28
1,54
0,92
brown cheese celebrates 150 years.
TINE was voted Grocery Supplier of
the Year, for the second year
running.
TINE’s mountain dairy milk tops
Investments
NOK million
905
1 843
2 365
1 766
Working capital
NOK million
1 325
1 202
1 627
1 741
2 | TINE ANNUAL REPORT 2013
October At the request of the
July Together with local farmers from
NOK million
Net interest-bearing debt/EBITDA
celebrates 60 years.
With financial support from TINE,
’Matsentralen’ opens in Oslo, distributing food to various volunteer
organisations.
TINE launches food blog ’Mine
Middager’ (my dinners).
The Norwegian Press Complaints
Commission (PCC) agrees with TINE,
ruling that TV 2 Nyhetskanalen had
violated the code of ethics for the
Norwegian press when TINE was not
given an opportunity to participate
and respond to accusations.
TINE’s Football School.
Chairman of TINE’s board, Trond
Reierstad, goes ”To the Top” of
Galdhøpiggen, Norway’s highest
peak, along with the Red Cross and
850 immigrants.
June 70,000 children take part in
Operating profit/revenue in per cent
Equity/total capital as a per cent
September TINE Meieriet Setesdal
orwegian Association of the Blind
N
and Partially Sighted, TINE changes
the contrast on the informative
label on several products, including
Go’morgen yoghurt.
Bondens Marked (farmers’ market)
is awarded TINE’s annual Ostepris
(cheese award).
The ’milk moustache’ ad campaign is
relaunched.
Decision to proceed with mountain
dairy milk commitment.
Profit before tax
Equity ratio
VG’s blind taste test of lowfat milk,
earning six stars.
TINE changes the labelling on the milk
cartons, adding a ”Best by” to help
reduce food waste.
9,7
CREAM/SOUR CREAM/KG
2,9
BUTTER/KG
INCL. MIXED PRODUCTS
18,2
CHEESE/KG WHITE, BROWN, IMPORTED
AND POCESSED CHEESE
13,9
ICE CREAM/LITRE
CONTENTS
CEO
Annual report from the Board of Directors
Financial statement
Auditor’s Report
Subsidiaries in the TINE Group
Contact information
2
6
22
51
52
54
December Following the success in
Oslo, the Red Cross and TINE
expand nutrition courses offered to
immigrants in Bergen.
TINE ANNUAL REPORT 2013 | 3
CEO
SETTING COURSE FOR
HEALTHY CONSUMERS
TINE puts the consumer first. Our innovations
are based on consumer dialogue and insight
into what Norwegians want and demand. Every
year, we launch from 60 to 90 new products in
Norwegian grocery retailers.
“Health and wholesomeness” is perhaps the biggest consumer trend in recent years, which goes
hand in hand with the authorities’ recommendations. TINE has seen these signals and shares the
health authorities’ concern over the growth in lifestyle diseases. We are dedicated to reducing fat
and sugar consumption in the population.
When the notorious low carb wave washed over
Norway, TINE felt this through high sales of our
cooking ingredients. The attention surrounding
this type of diet has declined somewhat. The typical high-fat products are still selling well, but
we have noticed a shift in the demand for products that are leaner and contain more proteins
like cottage cheese, kesam and cooking yogurt.
Last year, TINE responded to this trend shift by
launching a light cooking cream and extra light
sour cream and through a re-launch of TINE Cottage Cheese. Kesam, which is quark, and cottage
cheese contributed growth of more than NOK
100 million for Norwegian grocery retailers in
2013.
TINE also launched several products without or
with a lower content of added sugar in 2013. TINE
Sprett Naturell without added sugar and the variant with little added sugar are among the healthiest children’s yogurts in the category.
In 2014, what may be TINE’s most visible innovation is our new series of snacks called 14. Norwegians’ meal habits have changed. Earlier, we typically ate breakfast in the morning, lunch in the
middle of the day and dinner right after work, and
then supper later at night. Today, we eat breakfast
and lunch at about the same time as before, but
dinner is pushed back and is often eaten later in
the day. This leads to many of us having a long
period between lunch and dinner where we are
often feeling a little “low on fuel”, increasing the
risk of making unhealthy decisions. TINE therefore offers an alternative which improves meal regularity by eating a healthier snack that will keep
you full between lunch and dinner. With 14, we
are promoting new and healthier meal habits.
Sensible labelling
Responsibility also includes what we don’t eat. To
encourage people to throw away less food, TINE
has changed the labelling on all of our products.
- TINE works diligently
to help bringing down
especially fat and sugar
consumption in the
population
Now it says “Best before” and not “Expiration
date”. The difference many seem slight, but with
“Best before” we are telling consumers that it
is quite possible that the product is still safe to
eat, even if the product has exceeded the “Best
before” date. TINE has actively gone out in the
media to encourage people to do the “smell
test” before throwing out any of our products.
Our goal is to help Norwegians waste less food.
The improvement project relates to all of TINE.
We are united in the project. Just like we are united to create real food for real people. This is our
recipe for how we can continue in the future to
generate value for the more than 12 000 milk
producers that own the company – and for our
society.
Improvement entices
We have started an improvement programme
to strengthen competitiveness even further
and better enable TINE to meet new consumer
and market needs. TINE will realise measures
that will improve our results by a total of NOK
750 million by the end of 2015.
HANNE REFSHOLT
PRESIDENT AND CEO
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
REPORT FROM THE
BOARD OF DIRECTORS
RESULT
TINE’s result for 2013 continues to be characterised by high costs
associated with starting up new dairies. Nevertheless, sustained
good sales development in several product areas gives us a result
on par with 2012. The Group’s revenues were NOK 20.4 billion in
2013, an increase of NOK 680 million, or 3.4 per cent, from 2012.
The operating profit was NOK 948 million, an increase of NOK 14
million from 2012.
In 2013, TINE has emphasised the commissioning of a new dairy
at Jæren, as well as work associated with expanding the dairies in
Oslo, Trondheim and Verdal. This work has taken longer than expected, has been more demanding, and resulted in higher costs
than anticipated. These investments will form the foundation for
future growth and streamlining, and the additional costs associated
with the start-up activities have had a decreasing impact on the
result in 2013.
•Challenging start phase for new
dairies – improvement in the last
two quarters
•Styrk (fortify) improvement
project initiated
•Innovation leads to happy con
sumers and builds categories
•Good butter delivery capacity
•Lower absence due to illness –
focus on preventing injuries
TINE’S GOALS AND STRATEGY
TINE is a food corporation which refines pure, 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 price for their milk. TINE
works diligently to satisfy the needs of customers and consumers,
while also ensuring that TINE is an attractive employer. TINE also
aims to provide sustainable food production for society.
TINE shall be a leading supplier of branded food and beverage products, with particular focus on dairy products. This entails a pledge
to deliver products with correct and stable quality, every single
day. Our products have to be available to consumers when and
where they need them, and in the form the consumer wants. TINE
shall also be characterised by safe food, high ethical standards and
focus on reducing environmental impact.
TINE’s activities consist of Domestic Dairy, International Dairy and
Other Activity. Purchase and re-sale of milk as a commodity is organised in TINE Råvare, a separate administrative and accounting
department of TINE SA.
TINE’s primary market is Norway, and TINE’s activities take place
throughout the country. TINE’s headquarters moved into new offices in Oslo toward the end of the year. The group is also growing
internationally, with the bulk of activity in the US, Sweden, Denmark and the United Kingdom.
TINE works to maintain an active presence throughout Norway.
This is an important part of the overall TINE structure. The contribution we make towards providing a foundation for living and working in a wide range of geographic areas and local communities,
together with the work we invest to ensure the quality of our milk,
are just part of what backs up our claim of ”quite possibly the finest
milk in the world”.
Costs are expected to decline further in the coming year as a consequence of more efficient operations and planned phase-out of
dairies in 2014. This relates to wage costs and other operating
costs such as energy and maintenance. The structural investments
have largely been implemented, and given current investment
plans, total depreciation and amortisation is expected to stabilise
over the next few years. Based on the operation of new, more efficient facilities, TINE will begin to realise the effects that formed
the basis for these investment decisions. Part of this process was
the closing of the distribution terminal in Namsos in the first half of
2013, while production at the dairies at Voll and in Odal was shut
down in the last half of 2013.
SALES REVENUES FROM
CONVENIENCE PRODUCTS
PER SEGMENT TINE GROUP (MNOK) 2013
678
938
1246 77
Ice cream and
desserts
Other products
8258
Convenience
food
Liquid dairy
products
Juice, fruit
drinks and
water
7734
Solid dairy products
In 2012, TINE bought the Alpine Cheese Co. Integration in TINE
has been successful, and in 2013, the acquisition has contributed
to securing stable deliveries and growth in sales of Jarlsberg in the
US market.
TINE has decided to change future rules for earning pensions, starting from January 2014. The reason for the change is that the pension reform, particularly the transition to lifetime AFP (contractual
pension) meant that future disbursements would be significantly
higher than the original intention. TINE has a defined benefit plan
in addition to the national insurance and AFP. The good returns
on MP Pensjon in 2013, along with the change in pension earning
rules contribute to expectations for lower pension costs in 2014.
Pension costs charged to the accounts were NOK 16 million higher
than last year.
In total, the 2013 accounts have been credited with a net NOK 35
million in non-recurring effects which consist of gains on sales of
phased-out dairies, adaption costs and depreciation of fixed assets.
Correspondingly, the 2012 accounts were credited with a net NOK
84 million.
OPERATING PROFIT PER BUSINESS AREA
MILLION NOK
Domestic dairy
International dairy
Other activities
Group eliminations
TINE Group
2013
2012
826
783
44
35
92
141
-14
-25
948
934
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
DOMESTIC DAIRY
TINE is a leading supplier of branded goods in Norway, with a portfolio of more than 1300 product lines. At year-end 2013, TINE had
34 dairies located around the country, in addition to two central
warehouses and three distribution terminals. TINE processed a total of 1260 million litres of cows’ and goats’ milk in 2013 (1250 million litres in 2012). The largest product groups were liquid products
with 503 million litres (511 million litres in 2012) and cheese with
74,300 tonnes (75,500 tonnes in 2012).
Domestic dairy revenues in 2013 amounted to NOK 17.0 billion, an
increase of 3.9 per cent compared with last year. TINE has experienced good value development for several established and new
products over the past year, with particularly good development in
the cheese and flavoured milk categories. However, consumption
of sweet milk continued its decline in 2013, but it is gratifying to
see that this decline has started to level off.1
The operating profit for Domestic dairy was NOK 826 million, an
increase of NOK 43 million from 2012. Sales growth has been observed in 2013 in the grocery retail and institutional segments.
Higher operating costs and depreciation as a consequence of delayed start-up and run-in of new plants have had a negative impact
on profit for the year. There have also been challenges associated
with product quality and deliveries for some product lines, particularly in connection with start-up and reorganisation of production.
’Styrk’ improvement project and new vision
TINE launched a comprehensive programme in 2013 aimed at
creating improved results and developing a more agile and marketoriented organisation. TINE enjoys a solid position, but in a Norway where competition is on the rise and framework conditions are
under pressure, we must constantly be on the leading edge, and
embrace change and improvement.
The goal is to realise profit improvement measures worth NOK 750
million by the end of 2015 and bolster TINE’s ability to respond
to new market and consumer needs. Seventeen sub-projects have
been adopted under the Styrk umbrella in the last half of 2013 and
the beginning of 2014. We cannot rule out the possibility that this
process will reveal a need for adjustment. TINE has good systems
in place for adaptation and adjustment, and emphasises good
processes in this work.
TINE adopted a new vision in 2013: ”Real food for real people”.
This is designed to provide us with the inspiration and energy to
achieve our goals, and is an important key to TINE’s success. TINE
has also adjusted its code of conduct as follows:
•
•
•
•
Building confidence
Creating opportunities
Taking responsibility
Achieving results
Continued growth in white cheese sales
More yoghurt imports
Cheese consumption continued to grow in 2013. Dairy is a very important category in retail grocery trade, and cheese is the second
largest category, measured in store sales2. This category experienced volume growth of 3.8 per cent3 in 2013. Norvegia and Jarlsberg
were important contributors to the growth in this category.
Competition in the yoghurt category continues to intensify, with a
number of suppliers offering products. Yoghurt sales grew by 10
per cent measured in volume, while imports of yoghurt were up 34
per cent14. Sales development for TINE’s yoghurts in the grocery
retail trade was weaker in 2013 than for the category as a whole,
with a growth of 4 per cent15.
The total volume of consumer milk exhibited growth of 0.15 per
cent in 2013, compared with 2012.4 Per capita consumption was
down 0.6 per cent 5 in 2013, compared with a decline of more than
2 per cent over the two previous years. TineMelk Ekstra Lett (extra
light) exhibited growth in the grocery retail market6, while the other
varieties continued their decline.
Consumption patterns have undergone dramatic change. Sweet
milk no longer plays the key role it used to, and there has been a
considerable expansion in the number of other healthy beverages
on offer. TINE is also experiencing sharper competition, which has
led to a lower segment share 7 for TINE.
The flavoured milk segment has shown robust growth, as much
as 6.7 per cent 8 in 2013. The varieties featuring lower sugar are
particularly important here. The re-launch of TINE Milkshake was
successful, accounting for 56 per cent of volume growth in the flavoured milk drink segment. The trend in flavoured milk is positive,
as the segment previously experienced decline as recently as in
2012.
The cultured milk segment has grown in volume and TINE has entrenched its position somewhat 9. Biola’s positive trend is evident
here, and helps drive volume growth 10.
We have also seen increased demand for milk products targeting
niche markets. Styrk, Laktosefri (lactose-free), and KaffemakerMelk (coffee-maker) are all growing and delivering well in relation
to current market trends.
From full-fat to lighter, high-protein products
2013 brought a shift away from the so-called low-carb trend focusing on full-fat products, back towards leaner products. This was
particularly evident in the sour cream and cream segment where
we have seen lower volumes overall, while TINE’s market shares
are also falling 11.
This development has not been observed as regards butter, which
continues to strengthen its market share, at the expense of margarine. This is due to a continued strong underlying trend towards
”pure and natural” products. TINE has increased its share in the
butter/margarine segment overall 12.
The focus on wholesomeness and health is accompanied by greater concentration and knowledge about high-protein diets. We see
this, for example, in the very strong growth for fresh cheeses such
as TINE Cottage Cheese and TINE Kesam, which grew by 21 and 50
per cent13 respectively in volume, compared with last year.
Norway has the lowest per capita consumption of yoghurt in the
Nordic region, which means opportunities for further growth, both
for the category and for TINE.
Organic dairy products
TINE wants to offer a wide range of organic dairy products, and
ensure profitable and sustainable production. TINE works diligently
to contribute to growth in the consumption of organic products.
Turnover continues to grow for organic food products in the grocery retail sector. This is a result of the grocery chains’ focus on
reducing the price of organic products, while increasing the number of organic products offered. Sales of TINE Økologisk Lettmelk
(organic low-fat milk) can boast volume growth of as much as 59
per cent in 2013 16 in the grocery retail trade.
TINE’s goal is to increase the use of organic milk from the current
43 per cent (38 per cent in 2012)17 to 70 per cent by 2015. TINE has
a long-term goal of six per cent of the milk we receive from farms
being organic.
Continued commitment to goats’ milk products
Goat husbandry in Norway contributes to preservation of our cultural landscape, and is part of the Norwegian cultural heritage.
These operations provide a basis for concepts and products that
address trends and demands for Norwegian and local food traditions. In the ”Healthier goats” project, TINE cooperates with agricultural authorities to improve animal health in Norwegian goat
husbandry. The main project will be concluded in 2014. A major
effort has also been made to improve the quality of goats’ milk
through feed and breeding programmes.
Access to goats’ milk is still greater than the demand for products
based on goats’ milk. The Norwegian specialty brown cheeses are
the most important goats’ milk-based products in TINE, and around
three-quarters of all goats’ milk is used to make the various types of
brown cheese. TINE has made considerable progress in developing
new goats’ milk products that address the market trends towards
”local” and Norwegian food. Sales of Snøfrisk cream cheese have
also shown extremely good development in 2013 with a growth in
excess of 20 per cent 18.
Source: Melk.no. Sales of sweet milk (volume) declined by 0.07 % from
2012.
2
Source: Nielsen Market Trends 2013
3
Source: 20140107-TFP, Nielsen ScanTrack, Grocery retail. Norway Total.
Product group Cheese. Volume % chg YA. YTD TY- Period ending 29 Dec.
2013.
4
Source: Melk.no. The total volume of consumer milk showed growth of
0.15 % from 2012.
5
Source: Melk. No. Milk consumption per capita in 2013: 91 litres per person
6
Product group Milk. Sweet milk. Sub-segment. Volume % share Chg YA.
YTD TY- Period ending 29 Dec. 2013. TINE’s segment share for sweet
milk (81.2 %) declined by 0.6 %. Of the sub-segments, TINE Ekstra lett
showed the greatest volume growth at 2.1 % compared with 2012.
7
Product group Milk, T. TINE Sweet milk. Volume % Chg YA. YTD TY- Period ending 29 Dec. 2013. TINE’s volume share declined by 0.6 %
throughout 2012, and is now 81.2 %.
8
Source: 20140107-TFP, Nielsen ScanTrack, Grocery retail, Product group
Milkshake, Volume sales 1000. YTD TY, period ending 29 Dec. 2013. Volume decline in the flavoured milk beverage segment was -0.5 % in 2012
compared with 2011.
9
Product group Milk, T. TINE Flavoured, T. TINE Cultured. Volume % Share,
volume%Share YA. YTD TY- Period ended 29 December 2013. The market share in the cultured milk segment rose by 0.5 percentage points to
98.4 %. The share in the flavoured segment is unchanged from 2012, ending at 81.0 %.
10
Product group Milk, Cultured Milk. Volume % Chg YA. YTD TY- Period ending 29 Dec. 2013. Biola showed volume growth of 0.3 % compared with
2012 and is the largest product line in the segment.
11
Sour cream/Cream, Volume Sales 1000 L/chg YA and +/- Value % Share
YA. YTD- period ending 29 Dec. 2013. The segment declined by 2.6 %
compared with 2011, while TINE experienced a volume decline of 6.1 %.
12
Butter/Margarine. Volume sales, +/- volume sales 1000. Whole year
2013. The butter/margarine category declined by 0.65 % by volume,
while butter from TINE increased by 4.7 %.
13
Cheese, Volume sales 1000kg, volume % chg YA. YTD TY period ending
29 Dec. 2013.
14
Source: Melk.no
15 Source: 20140107-TFP, Nielsen ScanTrack, Grocery retail, Product group
Yoghurt, Volume/value sales 1000. Volume/value % Chg YA. YTD TY period ending 29 Dec. 2013.
16 Source: 20140107-TFP, Nielsen ScanTrack, Grocery retail, Product group
Milk, volume sales 1000 L, Volume % Chg YA. YTD. Period ending 29
Dec. 2013.
17 Source: Internal figures, TINE Råvare
18
Cheese, volume sales 1000, volume % chg YA. Whole year 2013.
1
Structural changes and streamlining
Competition in the food industry intensifies every year, and the
market is undergoing considerable change. TINE implements continuous streamlining and structural programmes to ensure that it
is well-equipped to meet competition in the years to come. TINE
will be present throughout Norway, with production plants and our
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
BRAND EXPORT AND SALES FROM
TINE’S INTERNATIONAL DAIRY
OPERATIONS
TOTAL SALES*
FIGURES IN TONS BRAND EXPORT*
2013
2012
2013
2012
US
6 580
6 481
18 104
18 449
Australia
2 173
1 889
2 578
2 116
Canada
1 523
1 436
1 761
1 650
UK
548
716
6 678
7 043
Sweden/Denmark
591
476
13 607
13 294
Other markets
Total
*
998
924
2 113
1 395
12 413
11 922
44 841
43 947
rand export consists of sales out of Norway and total sales are sales to the
B
consumer/end market of all brands in volume.
own distribution system to ensure that our products are available
everywhere in Norway.
TINE has placed great emphasis on commissioning new production
and distribution facilities in 2013. This has been a demanding task,
but after several years of investments, the plants are now well on
their way to becoming fully operational.
The new dairy at Jæren required considerable resources in the
work to move from the investment phase to full operation. This
has entailed greater operating costs than expected. The management structure was changed in May 2013, and use of resources increased, both to complete the investment project and to build new
routines, expertise and systems for stable and efficient operation
of the new plant. Production has increased gradually since the first
test production in January 2012, and the plant took over production
from the plants at Kleppe and in Vikeså in 2012. Final production
from the plant at Voll was transferred in June 2013, while production of white cheese continues at the Nærbø dairy to ensure our
ability to deliver in the run-up period.
Delayed phase-out of plants which were scheduled for shutdown
has resulted in higher costs in 2013. At the same time, productivity
and energy consumption at the Jæren dairy showed positive development in the last part of 2013. The plan is to phase out production at the Nærbø dairy during the second half of 2014.
Development of the new distribution warehouse in Oslo is nearing
completion, marking a considerable adjustment in TINE’s operations and inventory supply. The new facility will be phased in gradually, and full operations cannot be expected until the three dairies
at Sarpsborg, Odal and Fosheim have been phased out. Start-up
of the new distribution facility has posed certain challenges, with
exacting technological integration of automated storage, which has
caused delays in product deliveries on a few occasions. Production
at the Odal dairy was shut down in November 2013, while warehousing and distribution from Odal was concluded in January 2014.
The plan is to phase out the dairies in Sarpsborg and Fosheim in the
first half of 2014.
FAT PERCENTAGE IN MILK
PERCENT
4,30
but also as a producer of speciality cheeses. TINE specialties are
important in meeting consumer demand, and building a product
portfolio with the desired diversity.
INTERNATIONAL DAIRY
TINE has subsidiaries in Sweden, Denmark, the United Kingdom
and the United States. International Dairy accounted for approxe
mately ten per cent of the Group’s revenues in 2013, mainly based
on sales of Norwegian and international cheese brands. About 25
per cent of the total cheese volume sold abroad is produced from
Norwegian milk. To secure increased sales and the opportunity to
boost production of Jarlsberg in the US, TINE purchased all activities in the US-based company Alpine Cheese Co. in 2012. Integration into other activity in the US has been successful, resulting in
important synergy effects.
Jarlsberg is currently TINE’s largest brand on the international market, with production in Norway and the US, as well as hired production in Ireland. Processing, refining and packing of cheese also
takes place at TINE’s own plants in Norway, the US, the UK and
Sweden.
TINE’s objective is for a larger share of revenues to come from
dairy activities and sale of cheese outside Norway.
International Dairy had revenues of NOK 2.1 billion in 2013, a growth
of 4.8 per cent from 2012. Adjusted for changes in exchange rates,
this growth amounted to 2.3 per cent. The operating profit in 2013
was NOK 44 million, an improvement of NOK 9 million from 2012.
In spite of tough competition in 2013, sales of Jarlsberg wheels in
the US market were satisfactory, with Jarlsberg maintaining its US
market position for the year.
The UK activities showed good development in 2013, both for the
Ilchester products and specialty cheeses from TINE. Jarlsberg sales
remained at about the same level as in 2012, due to price hikes and
somewhat lower retail sales activity.
4,25
A major step was taken in 2013, when refining of whey into permeate and protein powder at Verdal and Jæren now allows most of
the whey volume to go to high-value food for human consumption.
A new churnery was started in 2011 at the dairy in Verdal, while
a new whey refining plant was started in December 2012. Whey
refining increased in the first half of 2013, with addition of whey
concentrates from the Elnesvågen and Sømna dairies. The plant
was in full operation from September 2013. At Jæren, whey refining has increased throughout 2013, with added whey concentrate
from the dairy at Byrkjelo, and whey refining at full capacity from
November 2013.
4,20
4,15
4,10
4,05
2011
2012
2013
December
November
October
September
August
July
June
May
April
March
February
January
4,00
TINE has a number of special plants which are the sole producers
of ”small-scale” cheese. For example, Gamalost is only produced
in Vik and Pultost only in Trysil. Viewed together with TINE’s major
plants, TINE emerges as a large industrial concern on the one hand,
Developments in Sweden and Denmark in 2013 were satisfactory,
with a product portfolio and sales efforts that play an important
role in the supermarket sector. This has resulted in greater brand
awareness for Jarlsberg and positive development in sales. Sweden
is also the largest export market for the ”Gudbrandsdalen” specialty brown cheese.
Other exports of TINE’s speciality cheese products, mainly Jarlsberg, take place through our own subsidiaries and independent
distribution partners in countries such as Canada, Australia, Russia
and Germany. Minor volumes are also sold to markets including
Japan, South Africa and Singapore.
OTHER ACTIVITY
TINE’s Other Activity comprises production and sale of food products such as ice cream and frozen desserts, juice and fruit-based
beverages, margarine and fresh convenience products. This activity mainly takes place in the wholly and partly owned subsidiaries
Sunniva Drikker AS, Diplom-Is AS and Fjordland AS.
Revenues in Other Activity were NOK 3.2 billion, which is NOK
24 million higher than in 2012. Despite good performance for
Diplom-Is and Fjordland, the loss of revenue from Salmon Brands
AS, company sold in 2012, entailed that the change could have
been even greater. The operating profit for Other Activity was NOK
92 million, a decline of NOK 49 million from 2012. The operating
profit in 2012 included profit on the sale of Salmon Brands. If we
adjust for this factor, there was an improvement in operating profit
for Other Activity from 2012 to 2013.
Solid improvement for ice cream and frozen desserts
Diplom-Is AS is a wholly-owned subsidiary of TINE, which produces and markets ice cream and frozen desserts. Good summer
weather in large parts of the country in 2013, solid relaunches and
sales campaigns, along with good cost control, resulted in growth
in sales revenues and profit for the company. Diplom-Is has undergone a significant restructuring in recent years. This included
a decision to phase out the plant in Breivik and further develop
the plant at Gjelleråsen during the course of 2014. Adaption costs
associated with this decision have been charged to the result for
the year. In the time ahead, the company will maintain its focus on
good product launches, structural streamlining in production, as
well as improvement programmes in distribution and inventories.
This is expected to yield additional profit improvement in 2014.
Tough competition in juice and specialty beverages
Sunniva Drikker AS (formerly FellesJuice AS) is a wholly-owned
subsidiary of TINE, which aims to be the market leader in juice and
healthy beverages. The company changed its name from Felles
Juice AS to Sunniva Drikker AS in 2013, in part to build a stronger
identity link with the TINE Group’s non-milk-based beverages. The
overall Norwegian juice market was stable in 2013, in terms of volume, while the premium segment and retailers’ own brands were
stronger. Sunniva Presset was launched in 2013, creating growth
in the bottled juice segment. Limo lemonade was also launched
successfully. The tough competition in juice and speciality beverages, combined with rising costs, led to a weaker result for 2013
compared with 2012.
Healthy increase in porridge
TINE owns 51 per cent of Fjordland AS, a brand name company
engaged in developing, marketing and selling fresh convenience
food, margarines, yoghurt and desserts in the Norwegian market.
Positive development in sales revenue, particularly for the various
types of porridge, contributed to the improved operating profit for
2013. Fjordland will continue to concentrate on product development and consumer communication in order to counter steadily
tougher competition.
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
increase in working capital resulted in moderate debt reduction,
despite lower investment activity.
Financial result and tax
TINE uses currency hedging for parts of factor input imports,
mainly purchases in EUR, and parts of foreign currency sales,
mainly denominated in US dollars (USD). This entailed a net loss
in 2012 of NOK 7 million, and a net loss of NOK 1 million in 2013.
Tax costs for 2013 were NOK 105 million. The effective tax rate
was 13.2 per cent in 2013, an increase from 12.2 per cent in 2012.
TINE posted a profit of NOK 685 million after taxes, an increase of
NOK 16 million from 2012.
Balance sheet
As of 31 December 2013, the TINE Group’s balance sheet showed
NOK 14.3 billion, an increase of NOK 623 million from the end of
2012. Total restricted working capital grew by NOK 429 million
in 2013, which is the main reason for the balance sheet growth.
TINE had good butter delivery capacity throughout 2013, which
also contributed to an increase in butter inventories. This factor,
along with increased production of cheese, higher commodity prices and a weaker Norwegian krone, were the main reasons for the
inventory growth of NOK 22 million since the end of December
2012. Receivables increased by NOK 214 million in the same period. Higher sales and a weaker Norwegian krone in December
2013 compared with December 2012, was the main reason for this
development. The Group’s equity was 41.3 per cent at year-end
2013.
NOK 500 million was recorded in a new bond issue in 2013, with a
term of five years. The new funds were used to finance an increase
in working capital, as well as to refinance short-term debt. Net
interest-bearing debt was reduced by NOK 99 million from the end
of December 2012 to the end of December 2013. The significant
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.
TINE’s overall financial risk is deemed to be moderate.
4,5
4,0
3,5
Allocation of net profit for 2013
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. TINE is exposed to changes in exchange
rates, particularly vis-à-vis the Euro (EUR), US dollar (USD), Swedish kroner (SEK) and pound sterling (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 2013 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. A
credit item has been included in TINE’s accounts for pension as-
2.h.13
1.h.13
2.h.12
2.h.11
1.h. 12
1.h.11
2.h.10
1.h.10
3,0
2.h.09
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 2014. The Group’s tied-up capital is therefore
also expected to increase in 2014, 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.
1.h.09
The assessments made in the consolidated and company accounts for 2013 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.
2.h.08
Estimates and going concern
1.h.08
The result from associated companies was reduced from a gain
of NOK 13 million in 2012 to a loss of one million in 2013. Nine
million of the 2012 gain relates to Wernersson Ost selling its interest in Skånemejerier Storhushåll. Associated companies delivered
weaker results in 2013 compared with 2012.
5,0
2.h.07
Other financial items in 2013 amounted to a loss of NOK 9 million,
a reduction from NOK 40 million in 2012. Buy-back of bonds and
negative value development on interest swap agreements caused
the particularly high financial costs in 2012.
Net cash flow from operations contributed NOK 1 325 million, an
increase of NOK 122 million from 2012. An improved result before
tax and higher depreciations and amortisations are the primary reasons for this development. Net cash flow to investment activities
was NOK 826 million, a reduction of NOK 812 million from 2012.
The reduction was caused by the fact that the major structural investments were generally completed in 2012. Net cash flow from
funding activities was minus NOK 215 million in 2013, a decline
of NOK 394 million from 2012. The change in net cash flow from
funding activities is due to lower funding in 2013 than in 2012. Disbursed subsequent payments and loans to owners in 2013 totalled
NOK 382 million, a decline of NOK 224 million compared to 2012.
NOK PER LITRE
5,5
1.h.07
Net interest costs rose from NOK 138 million in 2012 to NOK
147 million in 2013. Capitalisation of interest costs on the major
structural investments were substantially lower in 2013, as the facilities are now in use. This is the main reason for the increased
costs. Average interest-bearing debt has also been about ten per
cent higher in 2013 than in 2012. Generally lower interest rates in
2013 contributed to lower interest costs.
Cash flow
TARGET PRICE DEVELOPMENT
2.h.06
Net financial items were NOK 158 million in 2013, a reduction from
NOK 172 million in 2012.
sets 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. As of 2013, some of the pension funds are invested in real estate. On the basis of strong returns in 2013, we
expect a reduction in pension costs in 2014, compared with 2013.
1.h.06
FINANCES AND CAPITAL STRUCTURE
MILK PRICE
2013
2012
2011
2010
2009
Milk price from TINE Råvare
(TINE Milk Supplies)
4,65
4,53
4,32
4,20
4,07
As regards 2013, 56 per cent of the Group’s net profit has been
allocated for subsequent payment to the owners.
Subsequent payment from
TINE SA
0,26
0,26
0,42
0,33
0,27
The parent company TINE SA’s annual profit shows a surplus of
NOK 615 million. The Group board proposes the following allocations (NOK million):
Total milk price
4,91
4,79
4,74
4,53
4,34
NOK MILLION
Subsequent payment to the owners
NOK/LITRE
2013
381
Allocated to other equity
234
Total allocated amounts
615
TINE RÅVARE
TINE Råvare is a separate department in TINE SA, both administratively and as regards accounting, and presents its own revised annual accounts. 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.
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
In 2013, TINE Råvare received 1 467 million litres (1 473 million
litres in 2012) of cows’ and goats’ milk, of which 1 448 million litres
were cows’ milk and 19 million litres were goats’ milk. 55 million
litres of the cows’ milk was organic (54 million litres in 2012). Of
the total volume, 209 million litres (compared with 223 million in
2012) were sold to external players. Deliveries of goats’ milk totalled 19 million litres, which is on par with 2012.
The target price is stipulated by the parties in the agricultural settlement. In the first half of 2013, the target price was NOK 4.82 per
litre of milk. In the second half of the year, the target price was
increased by NOK 0.23 to NOK 5.05 per litre. 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 31 to the annual accounts.
Throughout 2013 TINE Råvare has focused on clarifying TINE’s
role as market regulator and TINE Råvare’s responsibility, as well
as keeping the players informed about the market situation and
outlook.
FRAMEWORK CONDITIONS
INNOVATION, RESEARCH AND DEVELOPMENT
TINE’s Research and Development community (R&D) is one
of Norway’s strongest R&D communities in the food industry.
Research and development has a long tradition as a focus area
for TINE. This focus has provided the basis for many of Norway’s
strongest brands. 2013 has been characterised by stronger competition and a changing market. New insight, our own expertise and
targeted efforts throughout the value chain are necessary in order
to strengthen innovation capacity going forward. Our focus is on
top line growth and streamlining production. Securing intellectual
property rights helps build a competitive advantage when research
results are actively used in the company’s product and concept
launches. In an effort to succeed in our brand building and securing profitable production, we use technology to solve customer
and consumer needs. Input and recommendations are consistently
based on science and solid professional expertise. TINE also wants
to strengthen its good and important cooperation with various research communities, both domestic and abroad. TINE is actively
engaged with the public policy apparatus in order to obtain external
financing.
TINE AS A CORPORATE CITIZEN
It is highly important for the entire milk value chain that there are
good and stable framework conditions for dairy production and
dairy operations in Norway. A good dialogue with national authorities is necessary. 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 milk raw materials is
significantly higher in Norway than in Europe.
In connection with the 2013 Fiscal Budget, the Government proposed a change in the tariff framework for certain types of cheese.
This entailed that affected products are subject to ad valorem duty
as a percentage of product value, as opposed to the former fixed
duty rate given in NOK per kilo. This change was implemented on
1 January 2013.
Throughout the election year 2013, many of TINE’s various facilities have been visited by politicians. These visits have given TINE
the opportunity to clarify the importance of a stable, predictable
framework in order to ensure a stable, profitable value chain.
Furthermore, the food industry and the Norwegian Food and Allied
Workers Union (NNN) have joined forces around an initiative that
will help provide the various stakeholders with a comprehensive
overview of the value chain, and promote joint interests.
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 contribute to improved competitiveness in a
sustainable manner.
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’s strategy stakes out a clear direction and describes how to
further develop the business. First and foremost, TINE will be a
leading supplier of food and beverage brands with focus on dairy
products. Continuous solid, effective work along multiple axes is
needed in order to reach the company’s goals. Our social and environmental surroundings will be affected by the effort to strengthen TINE as an industrial player. The environment will be affected
by our wide-reaching transport activities, and the production of
milk and cheese requires energy for both heating and cooling. TINE
must also manage its relationships with employees, human rights,
as well as more general social issues linked to consumers and local
communities.
The market regulation system
The competition policy instruments in the price equalisation
scheme for milk were evaluated in the autumn of 2012. The
Ministry of Agriculture and Food made minor adjustments to these
instruments, which came into force as of 1 July 2013.
TINE must therefore seek to combine the profitability requirement
with the social and environmental responsibility. It is important for
TINE to take active responsibility for its surroundings, while at the
same being clear as to the content of this responsibility and how it
can be best safeguarded.
TINE depends on a vigorous agricultural sector in order to secure
access to good quality milk. An agile Norwegian milk production
helps maintain a vibrant rural and regional Norway. This creates
and secures jobs and settlement patterns in rural areas. It gives us
a vibrant society, which is an important collective benefit for the
entire Norwegian population. TINE also contributes professional
knowledge and expertise, as well as funding for the Norwegian Red
Cross and other volunteer organisations.
TINE will contribute to preserving a clean environment and sustainable use of nature’s resources. The company will focus on recycling and optimal resource utilisation, as well as minimising the use
of non-renewable resources.
As a major food manufacturer, TINE will take responsibility in connection with society’s nutritional challenges and contribute to a
healthy, varied and balanced diet. TINE will contribute various measures, for example aimed at a lower intake of sugar, salt and fat, as
well as help the population consume enough important nutrients.
DISTRIBUTION WOMEN/MEN
EMPLOYEES
AS OF 2013
LEADERS
WOMEN
MEN
TOTAL
WOMEN
MEN
TOTAL
1 675
3 055
4 730
58
122
180
349
521
870
21
25
46
2 024
3 576
5 600
79
147
226
TINE SA
Subsidiaries
The TINE Group
ABSENCE DUE TO ILLNESS
IN PER CENT
THE TINE GROUP
2009
7,1
2010
6,8
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. By the end
of 2013, emissions have increased by 14 per cent compared with
2007. The Styrk improvement programme has, among other things,
worked to optimise the company’s use of various resources, including energy. A successful result of this process will be evident in
lower greenhouse gas emissions. Furthermore, a continued transition to bioenergy and district heating in production, as well as optimisation of transport and distribution, will be important stepping
stones on TINE’s journey toward reaching its environmental goals.
New statutory rules were introduced in 2013 which obligate large
enterprises to report how they follow up their corporate social responsibility. TINE has reported on corporate social responsibility
and environment for a number of years, and has reported in line
with international standards since 2010 19.
2011
6,7
2012
6,4
2013
6,2
2
0
4
6
8
10
WORK ACCIDENTS LOST TIME
INCIDENT (LTI) RATE *
THE TINE GROUP
2009
13,4
Reference is also made to www.tine.no for additional information
regarding TINE’s work on corporate social responsibility.
2010
ORGANISATION AND PEOPLE
2011
12,7
11,9
One of TINE’s paramount goals is to be an attractive employer by
providing employees with opportunities for both professional and
personal development. 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.
At the end of 2013, the TINE Group had 5600 employees, 4730
of which were employed in TINE SA. As a result of deputy CEO
2012
9,6
2013
9,9
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 in the figures from July 1, 2012.
TINE
19
INE Reports its corporate responsibility according to standard ”Global
T
Reporting Initiative, level B+.
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
Stein Øiom’s retirement in 2013, there have been changes in the
company’s Group management. Group director for production Per
Ivar Berg was hired in the summer of 2013 with responsibility for
production, raw materials and purchasing. Aniela Gjøs was also
hired as Group director for logistics, with responsibility for distribution and value chain management. Group director for marketing
Hege Holter Brekke has left TINE. Frode Fimreite has been given
temporary responsibility for this position.
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, the main goal of
which is to find new, permanent solutions inside or outside TINE
for employees who are affected by this. The mentioned guidelines
were adjusted somewhat in 2013 in collaboration with employee
representatives.
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
2013 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. The percentage of
women in management positions was 35, while the percentage of
women in Group management was 20 in 2013. The percentage of
women on TINE’s Group board, including employee representatives, was 36.
Management and employee cooperation
TINE must have a good, inclusive dialogue with employees and
must build cooperation on the basis of respect for their role and
for the agreements. Employees’ rights in Norway will generally be
well-regulated in established legislation and practice for cooperation between management and employee organisations.
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.
Approximately 75 per cent of the employees in TINE SA are orga-
nised in a trade union. Through such membership, the employees
have elected four representatives to the Group board. None of the
employees in TINE’s subsidiary in the US 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. An effort was initiated in 2013 to review TINE’s Code
of Conduct.
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.
Ethical trade is business activity that respects and supports human
rights, labour rights, environment and development throughout the
value chain, regardless of the state’s own ability and/or inclination
to live up to its responsibility to protect its own citizens against
abuses. 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 employees and a stable workforce 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 ambition is that lost time injuries must be reduced to zero.
The Group management, along with the Group Working Environment Committee, is responsible for setting overall targets and priorities within HSE work, as well as following this up. 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, and TINE’s
overall working environment is sound.
Absence due to illness
TINE has had a steady decline in absence due to illness since 2006.
Systematic work on the basis of the agreement on an inclusive wor-
king life (IA) has yielded results. In 2013, TINE’s total absence due
to illness was 6.2 per cent, which is a decline from 6.4 per cent in
2012. In 2013, absence due to illness in TINE SA was 6.5 per cent
(6.7 per cent in 2012). TINE’s goal is to reduce absence due to
illness to six per cent. This means that this goal was not achieved
in 2013. Continuous efforts are under way to improve the physical
working environment.
Work accidents
TINEs paramount goal is zero work accidents. TINE SA had 88 incidents in 2013. There are significant differences between facilities, where some have seen a very positive development in recent
years, while others still have too many incidents. Our focus is on
building competence within health, safety and the environment
through TINE’s internal HSE audits. Active efforts are also under
way to develop the same competence in TINE’s managers. One
new development this year is that HSE has become a separate section in the first level of Management School. Registration of HSE
incidents and hazardous conditions are important preconditions
for reducing work accidents and measures have been introduced
to intensify these efforts in TINE in 2014.
TINE registered 102 lost-time injuries (LTI rate: 9.89) in 2013, compared with 97 registered injuries in 2012 (LTI rate: 9.61).
CORPORATE GOVERNANCE
ABSENCE DUE TO ILLNESS, STAFF
TUROVER AND LOST TIME INJURY
(LTI) RATE
2013
ABSENCE DUE TO
TURNOVER %
LTI RATE
TINE SA
6,5
3,2
10,3
Subsidiaries
4,8
6,3
7,9
The TINE Group
6,2
3,8
9,9
ILLNESS
TINE’S OWNERSHIP ORGANISATION
Member societies
(228)
Control committee
Annual meeting
TINE SA
Regional meetings
(5)
Council
Group board
Regional boards
TINE East, TINE
South, TINE West,
TINE Central Norway,
TINE North
At the end of 2013, TINE SA had 12 944 owners organised in 228
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 ensure compliance with statutes, 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
TINE’s current ownership organisation was primarily developed in
connection with the group formation in 2002. The TINE owner’s
strength are the local member societies. The number of TINE
ANNUAL REPORT
FROM THE BOARD OF
DIRECTORS 2013
1
2
3
4
members is declining, while the overall milk production is being
maintained. This is a result of an ongoing structural change in milk
production.
The member organisation is very active. This is reflected in good
turnout at annual meetings and consultation matters, as well as
active regional meetings and passionate regional boards. Focus
has been on the milk price, particularly in light of the changed
fat compensation, changes in basic price and assessment of milk
utilisation.
New member pages (medlem.tine.no) were launched on TINE’s
website in early 2013. These pages are an important channel for
communication with and between members. Information and relevant news on TINE’s organisation and industry can be spread
quickly, and this is also an important channel for the members to
provide viewpoints and feedback to the organisation.
Passionate and knowledgeable members is one of TINE’s most
important competitive advantages. It is important to combine this
resource with effective, clear ownership. TINE must have the ability to make decisions and follow through in the face of changing
national and international framework conditions. The process of
developing the ownership organisation will be front-and-centre
leading up to the 2015 Annual Meeting.
5
6
7
8
gian prices are now attractive for foreign players and more of them
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.
TINE’s portfolio includes some of Norway’s leading brands and
maintains a strong position in the large dairy-based product categories. TINE will continue to focus efforts on insight, innovation
and consumer communication to drive growth and secure TINE’s
strong position.
The four major grocery retailers, which are TINE’s largest customers, have also established themselves as competitors in several
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.
9
10
11
12
13
14
15
16
GROUP BOARD
1. Torstein Grande (Member)
9. Tor Arne Johansen (Employee)
2. Helga Thorvik Ulven (Member)
10. Svein Førde (Employee)
3. Askild Eggebø (Member)
11. Cecilie Bjørlo (Member)
4. Norvald Dalsbø (Member)
12. Hanne Refsholt, President and CEO (see page 21)
5. Elin Aarvik (Employee)
13. Nina Kolltveit Sæter, Deputy chairman (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)
project. Even though TINE has completed
major investments in recent years, new investments will always be considered in order to achieve our desired development in
strengthening TINE’s 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 incre-
ases in costs associated with energy, emissions, discharges and pollution. International players in the food sector are highly
focused on the environment, and link these
efforts closely to their general business
strategy. 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.
In light of all the mentioned opportunities
and challenges, there will be a continuous
desire to deliver ‘quite possibly the finest
milk in the world’.
TINE’s solid market position, combined with
significant investments, provides a good foundation for 2014 and further growth within the Group’s core areas.
OSLO, FEBURARY 17, 2014
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.
Price differences between the Norwegian and international dairy
markets are somewhat significant. In some segments, the Norwe-
The majority of TINE’s investment programme is nearing completion. Increased depreciation and capital costs, as well as extensive transitioning and commissioning will continue to affect our
results and operations in 2014, but to a lesser extent than what has
been the case for 2013. Over time, these investments will provide
a significant boost for TINE in our continuous work on efficiency
improvements within production and distribution. However, the
efficiency gains are not expected to fully materialise until 2015.
TINE’s future profitability and competitiveness will also depend
on succeeding with implementation of the Styrk improvement
ANDERS JOHANSEN
HELGA THORVIK ULVEN
ASKILD EGGEBØ
ANNE MAREN WASMUTH
NORVALD DALSBØ
TORSTEIN GRANDE
TOR ARNE JOHANSEN
CECILIE BJØRLO
LARS WOIE
ELIN AARVIK
STEINAR KOEN
SVEIN FØRDE
NINA KOLLTVEIT SÆTER
Deputy chairman
TROND REIERSTAD
Chairman
HANNE REFSHOLT
CEO
GROUP MANAGEMENT
1. 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.
2. Per Ivar Berg, Group director for production
Berg started working for TINE in the summer of 2013. He came from the position
as managing director in Skala AS (previously Landteknikk), which he had held since
2008. Per Ivar Berg has considerable management experience from more than 20
years in both Norwegian and international industrial production. Berg started his
career in Peterson AS, followed by Norske Skog AS, where he e.g. served as factory manager at Norske Skog Follum. He was also production and maintenance
manager at Norske Skog Saugbrugs, and then factory manager at Norske Skog Parenco BV in the Netherlands. Per Ivar Berg is a chartered engineer from the Institute of Chemical Engineering at NTNU in Trondheim. He has also completed various
management development programmes in Norway and abroad. Berg serves as
chairman of Skala Foodtech AS.
3. Frode Fimreite, interim Group director for marketing
Fimreite started working for TINE in 1999 and has since held various position in
TINE’s market categories. Over the last two years, he has headed the beverage area
as category manager, until he transitioned into the position of interim Group director for marketing in the autumn of 2013. Frode Fimreite holds a Master of Business
and Economics from Buskerud University College (HIBU), as well as a Master of
Marketing and Strategy from the same institution. He serves as board member for
the Information Office for Dairy Products and the Norwegian Association of Advertisers (ANFO).
FROM LEFT: 1. JOHN OLE SKEIDE, 2. PER IVAR BERG, 3. FRODE FIMREITE, 4. ANIELA GJØS, 5. JØRN SPAKRUD, 6. HANNE REFSHOLT,
7. JOHNNY ØDEGÅRD, 8. EIRIK SELMER-OLSEN, 9. STEIN A. AASGAARD
TINEs GROUP MANAGEMENT AS OF 01.01.2014
John Ole Skeide
Deputy CEO
Sales Norway
Per Ivar Berg
Group director
Production
Frode Fimreite
interim Group
director
Marketing
Jørn Spakrud
Group director
Business analysis,
accounts, finance,
ICT and TINE
Råvare
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.
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.
9. Stein A. Aasgaard, Group director corporate governance, HR and exper
tise, 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.
TINE Råvare
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.
TINE Communication
Aniela Gjøs
Group director
Logistics
Gjøs started working for TINE in December 2013. She has spent her entire working
life focusing on logistics, and came from the position of CEO of Ontime Logistics
AS. Before this, she held multiple management positions, including logistics director of Ringnes AS and CEO of Distribusjonsnett in Norway Post. Aniela Gjøs is a
charted engineer from the Silesian University of Technology, an MBA from BI Norwegian Business School and continuing professional development from Stanford
University and INSEAD. She is a board member of Tomra Systems ASA and is a
member of NHO’s election committee.
7. Johnny Ødegård, Group director consultancy and members, policy and
5. Jørn Spakrud, Group director business analysis, accounts, finance, ICT and
Hanne Refsholt
CEO
Administration
4. Aniela Gjøs, Group director for logistics
6. 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.
Johnny Ødegård
Group director
consultancy and
members, policy
and community
contact
Eirik
Selmer-Olsen
Group director,
R&D and CSR
Stein A. Aasgaard
Group director,
corporate
governance, HR
and expertise,
HSE, ingredients,
export,
international
INNCOME STATEMENT
FINANCIAL
STATEMENTS
INCOME STATEMENT
Amounts in NOK 1000
THE TINE GROUP
TINE SA
2013
2012
Note
2013
2012
15 311 761
14 715 612
1 035 437
1 087 305
REVENUES AND OTHER OPERATING INCOME
1,2 Sales revenues convenience products
18 930 465
18 144 779
1 035 437
1 087 305
482 879
537 164
20 448 782
19 769 248
11 494 606
11 330 654
3 835 815
3 569 936
902 369
836 119
7 886
14 149
3 260 114
3 084 452
19 500 790
18 835 310
947 992
933 938
-
-
-612
12 644
-
-
-382
1 828
218
-739
-156 034
-179 009
-1 222
-6 598
-158 032
-171 874
789 960
104 603
685 357
669 114
16 929
15 100
19 Minorities share of profits
668 428
654 014
Sales revenues raw materials
3 Other operating income
Total revenues and other operating income
633 763
598 129
16 980 961
16 401 046
9 464 977
9 350 891
3 234 434
3 013 090
783 581
722 201
OPERATING EXPENSES
NOTE 1
NOTE 2
NOTE 3
NOTE 4
NOTE 5 NOTE 6 NOTE 7 NOTE 8 NOTE 9 NOTE 10 NOTE 11 NOTE 12 NOTE 13 NOTE 14 NOTE 15
NOTE 16 NOTE 17 NOTE 18 NOTE 19 NOTE 20 NOTE 21
NOTE 22 NOTE 23 NOTE 24 NOTE 25 NOTE 26 NOTE 27 NOTE 28 NOTE 29 NOTE 30 NOTE 31 NOTE 32
NOTE 33 NOTE 34 NOTE 35 NOTE 36 NOTE 37 NOTE 38 Segment information
31
Sales revenues from convenience products by geographical area
31
Other operating income
32
Cost of materials and changes in inventory
32
Purchase of raw cow and goat milk from milk producers
32
Personnel expenses and number of full-time equivalents
32
Pensions and pension obligations
33
Related parties and senior management
34
Intangible assets and goodwill
35
Property, plant and equipment
36
Auditor’s remuneration
37
Other operating expenses
37
Income from investments in subsidiaries
37
Investments in subsidiaries and associated companies
38
Unit trust funds and listed shares
39
Impairment of long-term financial assets
39
Financial risk and derivatives
39
Taxes41
Equity43
Obligations related to lease agreements in the balance sheet
43
Long-term loans to Group companies
44
Inventories44
Balances with associated companies
44
Bank deposits, cash and money market securities
44
Other long-term liabilities
44
Short-term interest-bearing liabilities
45
Pledges45
Transactions with related parties
46
Loans and guarantees
46
Outstanding accounts with the Norwegian Agricultural Authority – market regulation and subsidy schemes
46
TINE Råvare 48
Business combinations and changes in ownership interests
49
Carrying provisions
49
Off balance sheet lease liabilities
49
Environmental issues
49
Major individual transactions
50
Government grants
50
Discontinuation and divestment of business
50
4,5 Cost of materials and changes in inventory
6,7,8 Personnel expenses
9,10 Depreciation and amortisation
9,10 Impairment property, plant and equipment and intangible assets
6 873
13 149
11,12 Other operating expenses
2 654 556
2 512 685
Total operating expenses
16 144 421
15 612 016
836 540
789 030
52 440
28 837
8 793
11 037
8 501
18 971
Operating profit
FINANCIAL INCOME AND EXPENSES
13 Income from investments in subsidiaries
14 Result of investments in associated companies
Interest income from Group companies
Change in market value of market-based financial current assets
-816
936
16 Impairment of long-term financial assets
-1 534
-9 949
17 Net other financial income and expenses
-153 290
-104 550
17 Net realised and unrealised currency gain and loss
-64 583
25
Total financial income and expenses
-150 489
-54 693
762 064
Profit before tax
686 051
734 337
92 950
18 Total tax expense
70 912
80 417
615 139
653 920
19 Payments to milk producers
-381 294
-383 076
19 Allocated to other equity
-233 845
-270 844
-615 139
-653 920
2 461
1 420
19 Majority share of profits
Allocations:
Total allocations
Net Group contributions to subsidiaries
BALANCE SHEET
BALANCE SHEET
Amounts in NOK 1000
THE TINE GROUP
2013
TINE SA
2012
Note
Amounts in NOK 1000
THE TINE GROUP
2013
2012
2013
TINE SA
Note
2012
2013
ASSETS
LIABILITIES AND EQUITY
NON-CURRENT ASSETS
EQUITY
Intangible assets
Paid-in equity
-
-
7 319
7 872
19 Cooperative share capital
7 319
7 872
9 Goodwill
-
-
7 319
7 872
Total paid-in equity
7 319
7 872
80 111
9 Other intangible assets
-
-
172 398
Total intangible assets
-
-
340 000
340 000
5 526 887
5 202 667
5 281
4 555
75 094
87 732
77 689
158 064
18 Deferred tax asset
2012
Tangible fixed assets
Retained earnings
3 234 818
3 279 909
5 866 887
5 542 667
3 891 378
3 882 748
40 080
35 386
7 126 196
7 162 657
5 914 286
5 585 925
1 273 540
799 344
21 Long-term loans to Group companies
-
345 970
63 519
85 140
107 244
14 Investments in associated companies
21 027
22 717
56 669
67 617
6 449
5 915
Other shares and ownership interests
6 395
5 839
572 620
531 041
1 850 862
1 883 594
1 722 673
1 750 969
692 808
683 798
31 260
18 523
22 518
10 872
1 986 520
2 015 276
Total long-term investments
3 046 153
2 935 711
10 005 290
9 991 763
Total non-current assets
10 172 349
10 098 368
2 176 369
1 975 560
1 499 000
1 209 000
3 675 369
3 184 560
4 368 177
3 868 358
9,10 Land, buildings and other real property
3 570 306
3 565 103
4 290 400
4 238 986
7 860 706
7 804 089
Total tangible fixed assets
-
-
14 Investments in subsidiaries
-
-
97 949
10,20 Machines, fixtures and fittings and means of transport
19 Subsequent payment fund
19 Other equity
Total retained earnings
19 Minorities share of equity
Total equity
Non-current financial assets
7 Pension plan assets
Other long-term receivables
1 603 887
22 Inventories
1 658 016
1 444 487
23 Trade receivables
-
-
419 532
521 434
2 077 548
1 965 921
-
11 991
Long-term financial liabilities
413 932
126 128
3 707 927
14 322 762
13 699 690
59 104
57 855
470 446
Total provisions
610 991
587 405
Long-term liabilities to financial institutions
2 156 776
1 969 720
Bond issues
1 499 000
1 209 000
3 655 776
3 178 720
4 266 767
3 766 125
743 445
775 958
25 Total other long-term liabilities
218 213
245 052
743 445
775 958
29 Other short-term receivables
381 503
472 653
-
-
Total short-term receivables
1 940 300
1 900 383
949 595
910 268
-
11 991
1 693 040
1 686 226
Total trade and other payables
26 Short-term interest-bearing liabilities
Total assets
46 540
511 891
1 182 678
Total current assets
5 644 411
18 Deferred tax liabilities
1 340 584
15,24 Bank deposits, cash and money market securities
-
5 894 982
Total long-term liabilities
Short-term receivables
4 317 472
5 636 539
-
52 560
1 220 902
15 Unit trust funds and listed shares
5 887 663
Provisions
7 Pension liabilities
1 356 095
Accounts receivable from Group companies
340 000
5 296 539
LONG-TERM LIABILITIES
CURRENT ASSETS
1 825 992
340 000
5 547 663
SHORT-TERM LIABILITIES
Trade and other payables
304 001
4 770
3 600 396
3 138 046
706 155
1 008 556
13 772 745
13 236 414
381 294
383 076
52 304
54 551
184 723
175 135
Short-term liabilities to milk producers
Other short-term liabilities to Group companies
23 Trade and other payables
10 818
34 933
741 933
686 785
1 496 196
1 497 676
669 929
937 346
381 294
383 076
Other short-term liabilities
-
-
1 022 783
937 863
2 347 259
2 559 181
4 040 299
4 245 407
14 322 762
13 699 690
5 Allocated to subsequent payment to milk producers
18 Taxes payable
Public duties payable
Other short-term liabilities to Group companies
36 547
40 740
170 540
158 328
3 418
2 456
853 072
806 256
Total other short-term liabilities
2 114 800
2 328 202
Total short-term liabilities
3 610 996
3 825 878
Total equity and liabilities
13 772 745
13 236 414
Other short-term liabilities
OSLO, FEBRUARY 17, 2014
ANDERS JOHANSEN
HELGA THORVIK ULVEN
ASKILD EGGEBØ
ANNE MAREN WASMUTH
NORVALD DALSBØ
TORSTEIN GRANDE
TOR ARNE JOHANSEN
CECILIE BJØRLO
LARS WOIE
ELIN AARVIK
STEINAR KOEN
SVEIN FØRDE
Deputy Chairman
TROND REIERSTAD
Chairman
HANNE REFSHOLT
CEO
TTINE ANNUAL REPORT 2013 25
ACCOUNTING PRINCIPLES
CASH FLOW
Amounts in NOK 1000
THE TINE GROUP
2013
TINE SA
2012
2013
2012
Cash flows from operating activities
789 961
762 064 Profit before tax
686 052
734 337
-60 409
-91 535 Taxes paid for the period
-38 797
-72 090
-49 368
-110 299 Profit and loss on sale of fixed assets
-44 929
-26 784
910 254
850 268 Depreciation, amortisation and impairments
790 454
735 350
1 566
-82 166
3 119
-63 156
22 873
9 132
-105
-222 105
-112 569
6 812
90 729
1 325 168
-17 822 Profit and loss on sales of financial fixed assets
-15 586 Unrealised change in value of financial items
- Group contributions recognised, not received
Difference between pension charged as an expense and payments/disbursements in
42 718
pension plans
-1 607 Difference between recognised and received dividend from associated companies
238 Effect of changes in foreign currency rates and unrealised exchange gains
-132 410 Changes in inventories
-18 644 Change in trade receivables and other short-term receivables
-12 791
-28 487
8 617
-20 957
15 732
52 120
-
-
-
-
-135 193
-121 914
-67 698
-63 496
-201 868 Changes in accounts payable
22 634
-152 530
137 329 Change in other short-term liabilities
61 579
86 485
34 009
89 004
1 321 235
1 128 872
- Change in intercompany balances from operational activities
1 202 846 Net cash flow from operations
Cash flows to investment activities
66 379
-905 407
-1 198
19 566
-17 524
11 991
-826 193
63 606 Payments from the sale of tangible fixed assets
-1 842 798 Disbursements from purchase of tangible fixed assets
7 743 Change in long-term receivables
131 458 Payments received from the sale of financial non current assets
-5 207 Payments to acquire financial non-current assets
7 012 Payments received from the sale of financial current assets
- Net cash inflow on intercompany long-term receivables
-1 638 186 Net cash flow to investment activities
58 436
54 412
-767 499
-1 600 605
-196
7 131
-
118 155
-416
-10 157
11 991
7 013
-112 974
-114 329
-810 658
-1 538 380
Cash flows to / from financing activities
704 619
-222 353
-366 000
1 200 000 New long-term borrowing
-807 889 Repayment of long-term borrowings
166 000 Net receipts and payments of commercial paper
-12 235
-27 199 Disbursed to minorities
63 600
255 870 Net change in bank overdraft
-554
-
-1 665 Net payments and disbursements of cooperative share capital
- Payments received/made of net Group contributions to offset receivables
688 969
1 200 000
-220 289
-799 370
-366 000
166 000
-
-
98 582
254 741
-554
-1 665
-30 322
-6 097
-605 685
-381 732
-605 685 Disbursed subsequent payment and credit to milk producers
-381 732
-214 655
179 432 Net cash flow to/ from financing activities
-211 346
207 924
284 320
-255 908 Net change in bank deposits, cash and money market securities
299 231
-201 584
126 128
383 271 Bank deposits, cash in hand and money market securities at 01.01
4 770
206 354
3 484
413 932
-1 235 Currency effect on bank deposits, cash in hand and money market securities
126 128 Bank deposits, cash in hand and money market securities at 31.12
-
-
304 001
4 770
REVENUES AND OTHER INCOME
The annual accounts are prepared in accordance with the Accounting
Act and generally accepted accounting principles in Norway.
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 esti
mating 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.
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.
Costs are recognised in the income statement in accordance with the
matching principle.
Assets intended for permanent ownership or use, are classified as noncurrent 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
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.
OPERATING EXPENSES
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
Long-term receivables
Restructuring provisions
TAXES
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
EQUITY
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.
DEBT
Other shares and interests classified as non-current assets
Long-term liabilities
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 debt is recognised in the balance sheet at the nominal debt
amount. The costs of raising loans are continually expensed.
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.
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.
Deferred tax assets arise if one has temporary differences which give
rise to tax-related 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.
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.
There is no new Norwegian accounting standards resulted in accounting
effects for TINE as a result of implementation in 2013. It is not conducted significant reclassifications or policy changes.
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.
Interest rate derivatives
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.
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.
FINANCIAL DERIVATIVES AND HEDGING
The accounting treatment of financial derivatives follows the intention
behind entering into the agreements. Derivatives are classified as longterm non-current assets or long-term financial liabilities if the remaining
term is longer than one year.
TINE uses interest rate hedging instruments to hedge against large fluctuations in the interest rates. 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.
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.
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.
NOTES
Hedging
Pensions
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.
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.
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.
Fair value financial instruments
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.
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.
Deferred tax asset
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.
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.
Provisions
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.
Impairment
TINE has considerable investments in property, plant and equipment,
intangible assets including goodwill, associated companies and subsi
diaries. 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
and production volume are the most important.
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.
NOTES
NOTE 1
Segment information The TINE Group’s business consists of three operating segments. The segmentation is based on the product and geography, and in agreement with
the organizational structure used in the Group’s internal performance measurement and resource allocation. The dairy segment is divided into Norwegian and international business.
2013
2012
TINE's do
mestic dairy
operations
TINE’s
interna
tional dairy
operations
Liquid dairy products
8 073 674
-
Solid dairy products
5 262 455
2 123 003
21 215
-
1 187
-
226 512
Sales revenues / operating
profit
Juice, fruit drinks and water
Convenience food
Ice cream and desserts
Other products
Other
business
Other
activities
and
eliminations
184 674
-
348 343
916 503
676 361
-
Total
TINE's do
mestic dairy
operations
TINE’s
interna
tional dairy
operations
Other
business
Other acti
vities and
eliminations
Total
8 258 348
7 894 023
-
186 904
-
8 080 928
-
7 733 800
4 862 790
2 024 302
321 912
-
7 209 004
-
937 717
11 851
-
914 219
-
926 071
-
677 548
1 285
-
625 911
-
627 196
1 019 264
-
1 245 777
204 941
-
954 848
-
1 159 790
67 974
-
9 300
-
77 274
97 756
-
44 036
-
141 792
Total sales revenues from ex
ternal convenience products
13 653 017
2 123 003
3 154 445
-
18 930 465
13 072 647
13 072 647
3 047 831
-
18 144 779
Sales revenues from external
convenience products
13 653 017
2 123 003
3 154 445
-
18 930 465
13 072 647
2 024 302
3 047 831
-
18 144 779
Sales revenues from internal
1 769 771
2 743
-
-1 772 514
-
1 698 060
2 842
-
-1 700 902
-
15 422 789
2 125 746
3 154 445
-1 772 514
18 930 465
14 770 707
2 027 143
3 047 831
-1 700 902
18 144 779
1 035 437
-
-
-
1 035 437
1 087 305
-
-
-
1 087 305
597 063
15 120
24 875
-154 178
482 879
561 105
16 193
107 650
-147 785
537 164
17 055 289
2 140 865
3 179 320
-1 926 692
20 448 782
16 419 117
2 043 336
3 155 481
-1 848 686
19 769 248
Total sales revenues from
Sales revenues from raw materials
Other income
Operating income
Depreciation, amortisation
and impairments
Operating profit
-791 393
-51 370
-66 492
-1 000
-910 255
-735 538
-46 399
-67 331
-1 000
-850 268
-15 437 646
-2 045 232
-3 021 008
1 913 351
-18 590 535
-14 900 843
-1 961 817
-2 947 365
1 824 984
-17 985 042
826 250
44 263
91 820
-14 341
947 992
782 735
35 120
140 785
-24 702
933 938
13 433 114
757 652
921 063
-789 066
14 322 762
12 645 181
611 272
903 155
-459 918
13 699 690
3 504 177
591 875
377 940
-439 982
4 034 011
3 078 896
478 433
383 438
-20 118
3 920 649
786 346
55 278
103 450
-
945 074
1 605 666
181 795
60 421
-
1 847 882
Balance
Assets
Liabilities, non-interestbearing
Investments
Description of the segments:
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 depreciation and impairment of goodwill and other excess values in Wernersson
NOTE 2
Ost AB, Norseland Inc. and Norseland Ltd. are included. Other business
activities consist of Diplom-Is AS, Sunniva Drikker 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). Other activities and eliminations includes TINE Holding AB.
Sales revenues from convenience products by geographical area THE TINE GROUP
2013
16 465 989
1 149 306
2 212
1 184 202
816
127 941
18 930 465
Amounts in NOK 1000
Amounts in NOK 1000
TINE SA
2012 Geographical area
15 860 757 Norway
1 044 108 Other Europe
2 041 Africa
1 134 161 America
2 782 Asia
100 930 Oceania
18 144 779 Sales revenues from convenience products
2013
2012
14 619 195
14 132 078
226 170
159 503
234
147
359 440
332 082
816
654
105 906
91 148
15 311 761
14 715 612
NOTES
NOTE 3
Other operating income THE TINE GROUP
2012 Income groups
2013
72 376 Transport income
104 215
323 154
55 510
482 879
NOTE 4
345 479 Other income
119 309 Profit from sale of non-current assets
537 164 Total other operating income
2013
2012
108 370
93 373
471 188
469 166
54 205
35 590
633 763
598 129
Cost of materials and changes in inventory THE TINE GROUP
11 505 160
-10 554
11 494 606
Amounts in NOK 1000
TINE SA
2012 Cost category
2013
NOTE 5
Amounts in NOK 1000
TINE SA
11 426 089 Consumption of raw materials and goods purchased for resale
2013
2012
9 577 356
9 489 446
-95 435 Changes in inventories in production and convenience products
11 330 654 Total cost of materials and changes in inventory
-112 379
-138 555
9 464 977
9 350 891
Purchase of raw cow and goat milk from milk producers
Amounts in NOK 1000
TINE SA
Specification of consumption of raw cow and goat milk
Total purchase of raw cow and goat milk, see specification below
2013
2012
6 830 353
6 661 875
Changes in inventories of raw cow and goat milk
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 accounts as a defined-benefit
pension plan. The benefits are mainly dependent on the number of years
Pension
Calculation basis
Pension benefit
Retirement pension
Up to 6 G
16 % of the pension basis
1)
From 6 G to 12 G
44 % of the pension basis
1)
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
1) Until 31.12.2013 the pension benefits were respectively 20 % and 48 % of the pensionable salary.
In addition to the collective pension scheme has TINE SA and the Norwegian subsidiaries an operating plan for employees earning 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 or 67. 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
-475
-4 669
6 657 206
Purchase of raw cow milk including addition due to quality
6 718 625
6 549 512
Employees
Retirement
Purchase of raw goat milk including addition due to quality
111 728
112 363
5 532
3 847
6 830 353
6 661 875
43
94
255
-
-
114
Specification of purchases of raw cow and goat milk from milk producers
Total purchase of raw cow and goat milk from milk producers
THE TINE GROUP
Profit/loss carried forward from last year
-3 812
Profit/loss TINE Råvare to carry forward
19 701
-3 600
3 812
6 822 941
6 685 388
Allocated to subsequent payment from TINE SA to milk producers
Total paid to milk producers by TINE
381 294
383 076
7 204 235
7 068 464
1 447 599
Goat milk
Total offset raw cow and goat milk in 1000 litres
1 455 241
18 917
19 617
1 466 515
1 474 858
4,91
4,79
Total milk price expressed in NOK/litre
We also refer to note 31 for a description of TINE Råvare.
NOTE 6
2013
3 000 920
Amounts in NOK 1000
2012 Expense category
2 793 316 Wages and salaries, holiday pay and costs for temporary staff
2013
2012
2 567 139
2 393 430
422 182
337 037
-593 674
3 868
23 460
37 926
263 799
86
Defined contribution plans
-
-
AFP
-
99
TINE SA
398 039 Present value of accrued pension entitlements for the year
268 390 Interest costs on pension liabilities
-529 673 Projected yield return on pension plan assets
61 852 Recognised actuarial loss (+) / gain (-)
3 387 Amortisation of plan amendment effect
16 566 Accrued employers' contribution
29 688 Other pension costs (including premium for AFP and defined contribution plans)
248 249 Net pension expenses
2013
2012
366 484
345 118
305 650
243 340
-541 739
-486 903
30 788
53 572
3 328
3 328
17 749
11 802
30 486
31 460
212 746
201 717
31.12.2012
Reconciliation of the pension plan’s financial status as of 31.12 with the amounts in the balance sheet:
TINE SA
31.12.2013
31.12.2012 Pension obligations and plan assets
31.12.2013
-11 628 397
-10 755 017 Present value of pension entitlements
-10 736 710
-9 830 875
12 986 043
11 184 115 Pension assets (at fair value)
11 963 430
10 235 035
495 343
-2 127
1 850 862
401 293
366 485 Employers' national insurance contribution
336 662
305 868
248 249 Net pension expenses including social security tax, cf. note 7
212 746
201 717
-163 566
169 803
161 886 Other personnel expenses
117 887
112 075
42 127
3 835 815
3 569 936 Total personnel expenses
3 234 434
3 013 090
-121 439
4 450
4 363
5 316 Average number of employees calculated in full-time equivalents
3 554
38
2012 Pension expenses
2013
263 799
5 414
Retirement
4 931
Unfunded defined benefits plans 1)
THE TINE GROUP
1 357 646
TINE SA
Employees
Defined benefit plans in MP Pensjon
THE TINE GROUP
Personnel expenses and number of full-time equivalents
THE TINE GROUP
TINE SA
1) Unfunded schemes primarily 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.
32 999
Settled raw cow and goat milk in 1000 litres
Cow milk including organic milk
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. The previous early retirement pension scheme was closed on
31.12.2010. The remaining financial liability in this plan is linked to the
control of the AFP pensioners gone before 2011.
As of 31.12.2013, the various plans include the following number of people for TINE SA and the TINE Group:
Allocations of result in TINE Råvare
Total paid to milk producers by TINE Råvare
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 level of pension benefits in the MP Pension is
reduced by 4 % to future accrual with effect from 1.1.2014. It is issued
paid-up policies until 31.12.2013 equivalent to 4 % of accrued pension
basis.
The pension plan in MP Pensjon provides the following benefits with a full accrual period (30 years or more):
6 829 878
Consumption of raw cow and goat milk
Amounts in NOK 1000
429 098 Net pension assets excluding taxes and actuarial gains/losses
1 456 354 Unrecognised actuarial gains/losses
-1 858 Employers national insurance contribution
1 883 594 Net pension assets in overfinanced scheme
-170 970 Present value of pension liabilities
21 176 Pension assets (at fair value)
-149 794 Net pension obligations excluding tax and actuarial gains/losses
1 226 720
404 161
495 952
1 346 808
-
-
1 722 673
1 750 969
-98 948
-116 253
901
1 317
-98 046
-114 936
31 395
30 017
32 614 Unrecognised actuarial gains/losses
28 719
44 040
48 283 Unrecognised plan amendment effect
36 487
40 283
-16 137
-16 243 Employers' national insurance contribution
-13 700
-15 846
-63 519
-85 140 Net pension obligations in underfinanced scheme
-46 540
-59 104
Note 7 continues on the following page
NOTES
Note 8 continued
Note 7 continued
The following assumptions are applied in Norway for the TINE Group and TINE SA:
Amounts in NOK 1000
Economic assumptions
31.12.2013
31.12.2012
Discount rate
3,00 %
3,00 %
Anticipated salary adjustment
4,00 %
4,00 %
Anticipated adjustment of the National Insurance Scheme’s basic amount (G)
3,75 %
3,75 %
Expected increase in pensions
3,00 %
3,00 %
Projected yield on pension fund assets 1)
5,50 %
5,50 %
Demographical assumptions
Applied mortality table
K2013
K2005
Strengthened KU
Strengthened KU
Average 3-5 %
per year
Average 3-5 %
per year
2)
Applied disability tariff
Voluntary redundancy (all ages)
1) The
Group senior management
Total expenses for salaries
Board remuneration
subsidiaries
Pension costs
Other remuneration
Employed in TINE SA
Hanne Refsholt
2 411 842
–
1 063 237
154 847
Stein Øiom
1 594 402
43 000
262 856
100 289
Johnny Ødegård
1 287 263
–
575 729
115 140
Stein Aasgaard
1 880 113
150 200
437 368
133 156
Eirik Selmer-Olsen
1 392 665
22 750
422 129
138 664
Hege Holter Brekke 7)
1 604 852
21 500
660 481
164 022
Jørn Spakrud
1 827 274
65 000
835 037
155 487
John Ole Skeide
1 871 456
145 167
825 715
164 496
6)
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.
2) New mortality table K2013 is applied with effect from 31.12.2013 by 5 % margin for initial mortality and no margin for dynamic subsidence.
Per Ivar Berg 8)
804 949
–
461 904
80 836
Aniela Gjøs 9)
144 167
–
76 984
929
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 TNEs expectations of future economic development.
6)
THE TINE GROUP
TINE SA
2012 Actual return on pension plan assets in the Group pension plan
2013
11,40 % Actual return on pension assets in the company pension scheme
18,60 %
31.12.2013
The pension funds in the corporate scheme in MP Pensjon has the following
31.12.2012 composition:
2012
11,40 %
31.12.2013
31.12.2012
50,50 %
47,60 % Shares
50,50 %
47,60 %
44,60 %
49,20 % Bonds
44,60 %
49,20 %
- Property
3,40 %
1,50 %
NOTE 8
2013
18,60 %
3,20 % Other assets
Related parties and senior management 3,40 %
-
1,50 %
3,20 %
Amounts in NOK
The Group board, Council, Control Committee and group management are defined as related parties and management personnel in TINE. Up to and
including 2012, the directors’ fees were paid as one amount. From 2013 directors fees will be paid quarterly. This implies it is paid 3/4 of an annual
directors’ fee in 2013.
Group board
Trond Reierstad (chairman)
Board remuneration TINE SA 1)
386 250
2)
Other remuneration
Retired 17.09.2013
7)
Left 22.11.2013
8)
Started 17.06.2013
9)
Started 01.12.2013
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 TINE Group board approved in June 2011. Other Group
managers are included in the same operations pension plan. The agree
ment enters into force as of age 62 and the pension is 66 % of salaries
above 12 G.
Neither the Chairman of the Board, the Group Board, the Group Chief
Executive nor the 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 29. The following senior management have pension agreements which come into force upon
NOTE 9
Intangible assets and goodwill
THE TINE GROUP
Acquisition cost at 01.01
Acquisitions (+) during the year
Disposals (-) during the year
Exchange differences
357 694
Accumulated depreciation and impairments at 31.12
Amounts in NOK 1000
Patents
Brand
Customers
Andre
rettigheter
Goodwill
Total 2013
Total 2012
6 121
82 360
34 585
36 110
238 011
397 187
433 059
–
–
-
952
–
952
48 652
-429
-5 354
-36 490
-1 752
–
-44 025
-76 779
554
8 861
1 905
3 559
25 963
40 842
-7 745
6 245
85 867
-
38 870
263 974
394 956
397 187
-
-43 774
-
-9 519
-188 880
-242 172
-229 344
6 245
42 093
-
29 351
75 094
152 783
167 843
235 966
132 650
Book value 31.12
Anders Johansen
252 917
224 992
Depreciation for the year
–
-6 864
-
-4 025
-20 699
-31 588
-31 192
Anne Maren Wasmuth
198 467
98 000
Impairments for the year
–
–
-
–
–
–
-
Torstein Grande
252 917
174 900
Economic period of depreciation
0-15 years
10-20 years
3 years
5 years
5-10 years
Cecilie Bjørlo
206 250
170 176
Depreciation schedule
Linear
Linear
Linear
Linear
Linear
Askild Eggebø
206 250
141 750
Import licence in Norseland Inc., classified as patents, is evaluated to have an indefinite lifetime and is not amortised.
Lars Woie
172 500
154 050
Helga Thorvik Ulven
206 250
136 600
Goodwill relates to:
31.12.2013
31.12.2012
Norvald Helge Dalsbø 3)
161 250
90 970
Wernersson Ost AB
47 077
54 431
Svein Førde (employee elected)
161 250
–
Alpine Dairy LCC
18 332
18 746
Steinar Koen (employee elected)
205 000
–
Norseland Ltd.
9 685
14 554
131 250
–
Total goodwill
75 094
87 732
Nina Kolltveit Sæter (deputy chairman)
3)
Elin Johanne Husby Aarvik (employee elected)
Lars Iver Wiig (employee elected)
58 333
–
102 917
–
Rolf Øyvind Thue
82 500
64 100
Ottar Råd (employee elected)
37 500
–
Annual meeting and Council
Remuneration TINE SA
Other remuneration
Nils Asle Dolmseth (chief)
125 108
178 400
Roy Erik Hetland (deputy)
76 350
55 448
4)
Tor Arne Johansen (employee elected) 5)
Deputy member
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. It is used required return before tax (WACC) that reflects the risks that are relevant for the companies.
THE TINE GROUP
2013
61 849
48 991
110 840
Control Committee
Helge Sommerseth (chief)
51 825
30 250
Per Amb
43 575
17 550
43 575
20 500
Anna Stangeland
TINE SA
2012 Expensed research and product development
60 855 Research
44 090 Production development
104 945 Total expensed research and product development
2013
2012
61 849
60 855
44 192
40 483
106 041
101 338
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.
Including remuneration from internal regional boards. It is not paid remuneration from other TINE Group companies. The payment to Trond Reierstad is distinguished between NOK 386 250 in
directors’ fees and NOK 339 450 in payments to self-employed business (included in other allowances). 3) Started 25.04.2013. 4) Left 31.08.2013. 5) Started 01.09.2013
1)
2)
NOTES
NOTE 10
THE TINE GROUP
Amounts in NOK 1000
Auditor’s remuneration
Remuneration to elected auditor - Deloitte AS
Land/buildings/
other real property
Buildings/
installations
Machinery/furniture and fixtures
Vehicles
Total 2013
Total 2012
NOTE 11
Amounts in NOK 1000
TINE SA
270 180
5 600 095
9 118 631
880 305
15 869 210
14 878 124
2013
2012 Remuneration to elected auditor - Deloitte AS
2013
2012
21 429
205 091
647 383
70 219
944 122
1 799 230
5 118
5 028 Statutory audit services
3 101
3 221
-1 616
-186 781
-274 007
-109 117
-571 520
-795 218
421
146
15 177
21 429
23
36 776
-12 926
907
Exchange differences
290 139
5 633 582
9 513 436
841 430
16 278 587
15 869 210
888
-8 124
-2 345 292
-5 463 247
-601 219
-8 417 881
-8 065 121
7 333
282 015
3 288 291
4 050 189
240 211
7 860 706
7 804 089
-3 607
-198 790
-588 209
-80 176
-870 782
-804 928
-7 886
-14 149
Accumulated depreciation and write-downs at 31.12
Book value at 31.12
-
-
-7 886
–
0 - 10 years
20 - 30 years
3-15 years
5-10 years
Linear
Linear
Linear
Linear
-
40 767
1 917
3 383
46 067
27 542
Operating leases
-
82 216
80 417
16 354
178 987
195 316
-
-
13 849
–
13 849
27 786
1 273
-16 069
135
-
-
-11 561
–
-11 561
2013
84
Land/buildings/
other real property
Buildings/
installations
Machinery/furniture and fixtures
Vehicles
Total 2013
Total 2012
165 016
5 300 903
8 371 203
769 278
14 606 400
13 732 999
1 600 605
2 499
153 731
553 388
57 881
767 499
-1 390
-163 925
-226 405
-91 211
-482 932
-727 204
166 125
5 290 709
8 698 186
735 948
14 890 968
14 606 400
Accumulated depreciation and write-downs at 31.12
Book value at 31.12
-5 015 522
-527 234
-7 764 772
-7 443 743
THE TINE GROUP
3 076 188
3 682 665
208 713
7 126 196
7 162 657
2013
-3 546
-188 604
-520 086
-71 344
-783 581
-722 201
1 124 309
-6 873
-13 149
1 018 218
-
-
-6 873
–
0 - 10 years
20 - 30 years
3-15 years
5-10 years
Linear
Linear
Linear
Linear
-
40 098
2 107
2 723
Book value at 31.12 of lease agreements recognised
in the balance sheet 1)
Current year depreciation of leased assets
-469 710
1 579 205
44 928
26 782
-
50 542
52 213
2 208
104 963
120 751
-
-
12 945
–
12 945
22 310
-
-
-9 365
–
-9 365
-9 876
804
682
4 982
5 492
2012 Remuneration to other auditors
984 Statutory audit services
142 Remuneration for tax advisory service
374 Remuneration for other services
1 500 Remuneration to other auditors
-2 214 521
Profit (+) /loss (-) on sale of property, plant and
equipment
Operating leases
1)
NOTE 12
-7 495
1 151
Remuneration to other auditors includes the companies Norseland Inc., Alpine Dairy LLC and Bunes Fryselager AS.
158 630
438
674
THE TINE GROUP
1 492
TINE SA
893 Remuneration for other services
7 811 Total remuneration to elected auditor - Deloitte AS
402
Remuneration for other services concerns assistance in connection with environmental audits. Remuneration for other certification services are
mainly linked to certification services due to SLF and other governmental authorization. Remunerations to auditors are expensed in the year in which
they are incurred.
Profit (+) /loss (-) on sale of property, plant and equipment
Book value at 31.12 of lease agreements recognised
in the balance sheet 1)
Current year depreciation of leased assets
485 Remuneration for certification services
1 405 Remuneration for tax advisory service
TINE SA
2012 Cost category
1 056 326 Indirect costs associated with production and operations
988 784 Transportation costs
-462 876 Feed transport subsidy income (transport supplement and distribution supplement) 1)
1 492 618 Sales costs, marketing and other operating expenses
2013
2012
983 461
918 356
982 417
957 664
-469 710
-462 876
1 152 716
1 093 009
4 483
6 428 Loss on sale of property, plant and equipment
4 313
4 210
3 609
3 172 Loss on receivables and contracts
1 359
2 322
2 654 556
2 512 685
3 260 114
1)
Amounts in NOK 1000
3 084 452 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 30.
Reference to note 34.
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 are tested for impairment where indications of a decline in value.
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 2013 include MNOK 5 in capitalised interest.
This figure for 2012 was MNOK 48.
The table below shows the carrying value of buildings, technical installations and machinery under construction. Construction in progress is not
depreciated until the plant is used. Refer to investment in lager new plants in note 36.
TTHE TINE GROUP
2013
45 663
48 375
Income from investments in subsidiaries
Amounts in NOK 1000
TINE SA
Finance income art
Group contribution
2013
2012
39 649
7 880
Dividend
12 791
20 957
Total income from investments in subsidiaries
52 440
28 837
TINE SA
2012 Construction in progress
159 907 Buildings
45 477 Technical installation
2013
2012
45 197
159 486
44 276
33 844
267 719
346 051 Machinery
237 774
337 064
361 757
551 435 Total construction in progress
327 247
530 395
NOTE 13
NOTES
NOTE 14
Investments in subsidiaries and associated companies
Amounts in NOK 1000
NOTE 15
Unit trust funds and listed shares
Amounts in NOK 1000
THE TINE GROUP
Registered
offices
Subsidiaries
Ownership
interest/
voting shares
Procurement
time
Share of equity in
the company at
31.12.2013
Book value in
TINE SA at
31.12.2013
Book value in
TINE SA at
31.12.2012
31.12.2013
COMPANIES DIRECTLY OWNED
BY TINE SA
Bunes Fryselager AS
Porsgrunn
1975
1)
19 %
2 883
95
95
Diplom-Is AS
Nittedal
1991 2)
100 %
235 329
471 394
471 394
TINE SA
31.12.2012 Unit trust funds and listed shares
31.12.2013
13 620 Acquisition cost
–
13 620
–
11 991 Book value of unit trust funds and listed shares
–
11 991
Impairment of long-term financial assets Fjordland AS
Oslo
1985
51 %
35 398
18 333
18 333
Floren Eiendom AS
Oslo
2002
100 %
1 692
1 692
1 692
THE TINE GROUP
Landbrukets Ferskvaredistribusjon AS
Oslo
1994
100 %
338
367
357
2013
Maritex AS
Oslo
2001
100 %
10 852
8 624
8 624
–
Melkerampa AS
Oslo
2002 3)
100 %
5 674
8 590
6 291
-218
739 Impairment of other companies
Norseland Holdings Ltd.
Ilchester, UK
2004
100 %
34 368
67 999
67 999
-218
739 Total impairment of long-term financial assets
Norseland Inc.
Stamford, USA
1978
100 %
119 605
3 153
3 153
Næringsmiddelproduksjon AS
Oslo
2001
100 %
1 000
1 103
1 103
OsteCompagniet AS
Oslo
2001
100 %
5 585
3 053
3 053
Sunniva Drikker AS
Oslo
2002
100 %
11 535
12 427
12 427
TINE Eiendom Espehaugen AS
Bergen
2010
100 %
36 650
86 933
86 781
TINE Holding AB
Ulricehamn, Sweden
2007
100 %
594 626
589 777
118 041
1 095 535
1 273 540
799 344
4)
5)
Total
COMPANIES OWNED BY
SUBSIDIARIES
Bunes Fryselager AS
Porsgrunn
1975 1)
40 %
Norsk Iskrem AS
Nittedal
1989 6)
100 %
Norseland Ltd.
Ilchester, UK
2008 7)
100 %
Phonefood Ltd.
Ilchester, UK
2008 7)
100 %
Ridgebrick Ltd.
Ilchester, UK
2013 7)
100 %
Alpine Dairy LLC
Winesburg, USA
2012 8)
100 %
Wernersson Ost AB
Ulricehamn, Sweden
2007 9)
Wernersson Glass AB
Ulricehamn, Sweden
2003/04/06
Färskvarugruppen AL AB
Jonkoping, Sweden
2007/08 11)
100 %
Wernersson ETC Ost AB
Ulricehamn, Sweden
2007 11)
100 %
Wernersson Ost Danmark AS
Roskilde, Denmark
2007/08/11 11)
100 %
TINE SA
– Impairment of associated companies
2013
2012
1 800
9 243
-266
706
1 534
9 949
Impairment of associated companies in 2012 and 2013 mainly relates to Tun Media AS. Change of other companies is net income as a result of the
reversal of previous years impairment.
NOTE 17
Fanancial risk and derivatives
TINE has an 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 exchange rate contracts and currency options are used to achieve 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.
TINE’s currency risk arises from trade transactions that are mainly related to sale of goods and purchase of raw and packaging material 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.
100 %
Amounts in NOK 1000
2012 Financial cost art
FOREIGN CURRENCY RISK
100 %
9), 10)
NOTE 16
In order to reduce risk in connection with trade transactions in foreign
currency, TINE has entered into forward exchange rate contracts and
currency options related to purchases 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. Furthermore, TINE Holdings AB currency loans is hedged with
exchange rate swaps or loans. 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 v alue 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.
Amounts in NOK 1000
Bunes Fryselager AS founded 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 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 8 951.
2)
Time for establishment of limited company.
3)
Changed name from Gastronom AS to Melkerampa AS in 2012. Registered office and business area are also changed.
4)
Changed name from FellesJuice AS to Sunniva Drikker AS in 2013.
5)
Changed name from Wernersson Ost Holding AB to TINE Holding AB in December 2012 . The company is provided MSEK 550 in new equity from TINE SA in 2013.
6)
Owned by Diplom-Is AS.
7)
Owned by Norseland Holdings Ltd. 8)
Owned by Norseland Inc.
9)
Owned by TINE Holding AB.
10)
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.
11)
Owned by Wernersson Ost AB.
1)
ASSOCIATED
COMPANIES
THE TINE GROUP
31.12.2013
Ownership
interest/ vo
ting shares
No. of sha
res/units
Share of
result 2013
Share of
equity at
31.12.2013
Share of
result 2012
2013
-77 680
Share of
equity at
31.12.2012
Book
value at
31.12.2013
Book
value at
31.12.2012
2000
25,50 %
23 523 807
-536
10 216
-2 669
10 752
10 212
11 762
Skala AS 2)
Oslo
1948
50,00 %
12 500
-5 029
64 172
4 047
75 201
984
984
Fjordkjøkken AS
Varhaug
1996
21,54 %
4 000
3 745
17 628
2 646
16 403
5 600
5 600
Skånemeierier
Storhushåll AB 3)
Malmö,
Sweden
2010
–
–
–
–
8 807
–
–
–
Other associated companies
1 208
5 933
-186
4 888
4 231
4 371
Total associated companies
-612
97 949
12 644
107 244
21 027
22 717
3)
31.12.2012
354
648
Amounts in NOK 1000
Oslo
2)
31.12.2013
648 Unrealised profit (+) / loss (-)
THE TINE GROUP
TUN Media AS 1)
1)
31.12.2012 Market value of currency derivatives
All currency derivatives is due within end of December 2014. Change in unrealized values recognised in the financial statement amounts to MNOK
-0,4 in 2013. TINE Group has hedged a portion of the net investment in TINE Holding AB, Wernersson Ost AB, Norseland Ltd. and Norseland Inc.
with loans. Accumulated unrealized changes in value of the net investment hedge as at 31.12.2013 is MNOK -49,7 after tax and is included in other
equity in the TINE Group.
TINE SA
Procurement
time
TINE SA
273
THE TINE GROUP
Registered
offices
31.12.2012
–
76 458
-1 222
1)
TINE SA
2012 Realised and unrealised currency profit and loss
25 251 Realised currency exchange loss
-31 849 Unrealised currency exchange profit and loss
-6 598 Net realised and unrealised currency profit and loss 1)
2013
2012
-77 548
24 230
12 965
-24 205
-64 583
25
Currency profit and loss is recorded as part of the profit accounting in TINE SA. Hedge accounting is used in the TINE Group so that effects of currency is included in other equity. Reference
made to note 19 for specification.
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 %.
The company was sold in 2012. Profit on the sale included in share of result in 2012.
Note 17 continued
NOTES
Note 18 continued
INTEREST RATE RISK
COMMODITY RISK
Most of TINE’s interest rate exposure is related to long-term liabilities.
The purpose of TINE’s financial policy for managing interest rate risk is
to provide the TINE Group with the most cost-effective financing possible, together with a desire for a certain amount of stability and predictability in the financial expenses.
In order to reduce risk related to future interest rate payments as a
result of fluctuations in the market interest rates, TINE can enter into
interest rate swaps, FRAs (forward rate agreements) and interest rate
options. As of 31.12.2013, TINEs interest rate deriative porfolio consist of only intererst rate swaps. The interest rate hedge ratios matches
the expected net interest-bearing liabilities. The interest rate derivatives
mature up to 15 years from entering the contracts.
THE TINE GROUP
31.12.2013
TINE SA
31.12.2012 Market value interest rate derivatives
-30 814
31.12.2012
-30 814
-52 041
–
-3 153
-30 814
-55 194
-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
-3 153
market principle
–
-55 194 Total interest rate derivatives
-30 814
Amounts in NOK 1000
31.12.2013
2)
World market prices for the major bulk products such as butter, milk
powder, cheddar and Gouda rose significantly in 2013. There have been
various regional changes for the year in which climate is one of the main
factors and where extreme weather has affected production. It has also
been changes in production costs, where the price of feed has been significant. There has also been an increase in demand that has risen faster
than production.
Although the production for the year 2014 will increase, there is great
uncertainty in how prices will develop. The management of China ’s milk
NOTE 18
deficit and India’s role in the future are important factors for the development of the world market.
Furthermore feed prices combined with the weather have a significant
impact on prices also in 2014. The challenge for TINE will primarily be
the changes in prices that will take place in the EU. A strong import
protection is essential to limit the effect of the changes taking place in
the international market.
Of significant inputs TINE ensures the energy prices in the future where
approximately 50 % is hedged on a one-year horizon.
Taxes
Amounts in NOK 1000
THE TINE GROUP
1)
2)
Interest rate derivatives where change in value is recorded in equity is linked to cash flow hedging. Fair value is adjusted for tax effect. MNOK -20,2 is included in other equity.
Total carrying amount of interest rate derivatives is recognised in the balance sheet as long-term financial obligations and long-term claims.
INTEREST RATE SENSITIVITY ANALYSIS
The analysis illustrates the interest rate risk connected to the TINE
Group’s interest-bearing liabilities and interest derivatives pr
31.12.2013. This shows how an interest rate change of 2 % will affect
the result for the next fiscal year (amounts in MNOK). Any effects on
the market value of the interest rate derivatives as a result of changes in
TINE SA
2012 Reconciliation from nominal to actual tax rate
2013
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 liabilities with fixed interest. In the calculations
the nominal tax rate of 28 % is used.
2013
2012
789 960
762 064 Profit before tax
686 051
734 337
221 189
213 379 Expected income tax according to nominal tax rate in Norway
192 094
205 614
Tax effect of the following items
12 093 Non-deductible costs
9 884
-35 515 Non-taxable income
-3 696
2 073 Differences in tax rates in other countries
1 249
-107 261 Payments to milk producers
-106 762
5 018
THE TINE GROUP
Net interest
bearing
liabilities
3 698
3 698
TINE SA
Total hedging
(fixed rate and
interest rate
swap)
Net exposure
to interest
rate risk
1 200
1 200
Profit after tax
2 768
The net effect positive change in the
40 interest rate (2 %)
2 768
The net effect of adverse changes in
-40 interest rates (-2 %)
CREDIT RISK
The 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 evaluating 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.
Net interest
bearing
liabilities
Amounts in MNOK 1000
Total hedging
(fixed rate and
interest rate
swap)
1 500
1 500
Net exposure
to interest
rate risk
2 428
2 428
-5 776
171
Profit after tax
35
-35
Counterparty risk for financial derivatives and placement of surplus liquidity is reduced by choosing counterparties with high credit ratings, as
well as diversification.
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 with banks, and by
continuous monitoring future cash flows from the TINE Group’s financial
assets and liabilities. TINE’s liquidity is considered to be good. As of
31.12.2013, TINE 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 has during last years made considerable investments in new plants,
which led to an increased need of financing. These extraordinary investments are completed. Reference is made to note 25 where a further description is given of overdraft facilities and the financing situation.
–
–
–
-3 390 Net associated companies
–
–
430
2 786
3 108 Other items
-1 658
–
-107 261
–
7 320 Wealth tax
6 695
–
-106 762
5 282 Amortisation of goodwill
-1 887 Change in tax rate
-21 650
10 586
-42 158
-2 450 Change in impairment of deferred tax assets
198 Impairment of long-term financial assets
-61
8 183
-8 039
-19 202
–
6 695
7 320
-2 487
3 530
104 603
92 950 Total tax expense
70 912
80 417
13,2 %
12,2 % Effective tax rate
10,3 %
11,0 %
THE TINE GROUP
TINE SA
2012 Deferred tax effect of items recognised directly against equity
2013
-4 634 Hedging of future cash flows
7 103
2 336 Equity hedging of foreign subsidiary
-19 438
-2 298 Deferred tax effect of items recognised directly in equity
-12 335
THE TINE GROUP/NORWAY
2013
95 425
45 609
–
6 695
52 304
2012
-4 634
–
–
7 103
-4 634
THE TINE GROUP/INTERNATIONAL
2012 Split of income tax expense between Norway and other countries
2013
2012
9 178
7 615
31.12.2013
31.12.2012
34 386
33 972
THE TINE GROUP
31.12.2013
2013
7 103
TINE SA
31.12.2012 Tax payable in the balance sheet:
47 231 Income tax
– Tax effect of disbursed group contribution
7 320 Wealth tax
54 551 Tax payable in the balance sheet
-4 534
-552
6 695
7 320
36 547
40 740
NOTES
Note 18 continued
NOTE 19
THE TINE GROUP
31.12.2013
Assets
Liabilities
–
71 704
Equity
THE TINE GROUP
Specification of tax effect of temporary differences and loss carried forward
Assets
Liabilities
–
21 056
–
9 631
–
9 676
5 444
–
Long-term liabilities
5 904
–
Cooperative share
capital
8 224
–
Financial derivatives
15 287
–
7 872
340 000
–
465 122
–
490 270
Excess values through acquisitions
Pension funds
Revaluation account for currency
–
2 140
Inventories
–
22 426
672
–
–
–
–
29 253
1 287
–
14 905
–
Short-term liabilities
–
16 624
–
9 982
–
105 744
602 316
-29 696
-29 696
76 048
572 620
-70 767
–
5 281
572 620
Total equity
5 202 667
35 386
5 585 925
Cooperative share
capital
Other
equity
Minorities
share
Total equity
9 536
340 000
4 952 720
55 380
5 357 636
Net profit for the year and minorities share
–
–
654 014
15 100
669 114
–
–
-383 076
–
-383 076
-1 664
–
–
–
-1 664
-11 916
Equity at 01.01
Change in equity for the year
–
–
668 428
16 929
685 357
–
–
-381 294
–
-381 294
-553
–
–
–
-553
–
6 189
–
–
17 277
–
17 277
–
–
-11 916
–
–
–
–
-52 416
–
-52 416
Equity hedge of foreign subsidiaries
–
–
6 007
–
6 007
102 156
559 521
–
–
–
–
–
Changes in minorities
–
–
–
-15 051
-15 051
–
–
–
-12 235
-12 235
–
–
-20 043
-20 043
–
72 225
–
72 225
–
–
-15 082
–
-15 082
7 319
340 000
5 526 887
40 080
5 914 286
The minorities share of disbursed dividend
Currency conversion difference and
miscellaneous
Equity at 31.12
–
–
7 872
340 000
5 202 667
35 386
5 585 925
–
–
7 764
Offsetting of tax assets/tax liabilities
-28 480
-28 480
Deferred tax assets/tax liabilities
73 676
531 041
Unrecognised deferred tax asset
-69 121
–
4 555
531 041
Net deferred tax asset/tax liability in the balance sheet
Mino
rities
share
73 611
6 682
Profit and loss account
Total before offsetting
Other
equity
Subsequent
payment
fund
Allocated to milk producers
Net payments and disbursements of
cooperative share capital
Hedging of future cash flows
Pension liabilities
Remuneration/loss carried forward
31.12.2012
31.12.2013
Subsequent
payment
fund
75 884
Amounts in NOK 1000
31.12.2012
Deferred tax assets are recognized based on future income. Tax losses carried forward have no time limit. TNOK 72 434 of tax effect of the loss per
31.12.2013 belong to the Swedish business in TINE.
Minorities represent external owner’s share of subsidiaries.
THE TINE GROUP
The minorities share in the equity is distributed as follows.
TINE SA
31.12.2013
Assets
Liabilities
–
55 260
31.12.2012
Specification of tax effect of temporary differences and loss carried forward
Assets
–
–
Revaluation account for currency
8 224
–
Financial derivatives
–
465 122
–
2 140
–
–
490 270
Inventory
–
23 419
–
12 566
–
17 720
11 744
15 287
Pension funds
497
Liabilities
–
5 990
Fjordland AS
33 860
29 396
Total minorities share of the equity
40 080
35 386
TINE SA
31.12.2013
Cooperative
share capital
Subsequent
payment
fund
Other equity
Total equity
7 872
340 000
5 296 539
5 644 411
–
17 430
–
Pension liabilities
16 549
–
–
21 362
–
–
7 097
Profit and loss account
–
2 579
–
–
615 139
615 139
39 007
550 898
Total before offsetting
53 717
524 163
–
–
-381 294
-381 294
Offsetting of tax assets / tax liabilities
-53 717
-53 717
-
470 446
-553
–
–
-553
-39 007
-
511 891
Deferred tax assets/tax liability in the balance sheet
THE TINE GROUP
2013
TINE SA
2012 Distribution of tax at different tax types
2013
2012
53 189
45 204 Deferred tax
34 342
42 434
45 609
47 231 Income tax payable
29 852
33 420
6 695
-890
104 603
7 320 Wealth tax
-6 805 Change in tax payable previous years
6 695
7 320
23
-2 757
70 912
80 417
31.12.2012
6 220
519
-39 007
31.12.2013
Bunes Fryselager AS
31.12.2012
Cooperative
share capital
Subsequent
payment
fund
Other equity
Total equity
9 536
340 000
5 037 611
5 387 147
Equity at 01.01
Change in equity for the year
–
–
17 277
17 277
7 319
340 000
5 547 663
5 894 982
NOTE 20
–
–
653 920
653 920
Allocated to milk producers
–
–
-383 076
-383 076
-1 664
–
–
-1 664
Net payments and disbursements of
cooperative share capital
Hedging of future cash flows
Equity at 31.12
–
–
-11 916
-11 916
7 872
340 000
5 296 539
5 644 411
Obligations related to lease agreements in the balance sheet
THE TINE GROUP
Amounts in NOK 1000
TINE SA
31.12.2013
31.12.2012
31.12.2013
31.12.2012
14 786
Present value of lease pay27 077
ments
14 462
24 751
15 635
29 703 Nominal value
15 371
26 877
Estimated minimum lease payments which fall due during one year, two to five years, and over five years respectively.
THE TINE GROUP
TINE SA
more than
1 year
2 to 5 years
8 620
6 166
–
14 786
9 217
6 419
–
15 635 Nominal value
5 years
Total
Present value of minimum
lease payments
more than
1 year
2 to 5 years
8296
6 166
–
14 462
8953
6 419
–
15 371
5 years
Total
Book value of assets related to lease agreements in the balance sheet is specified in note 10 tangible fixed assets.
NOTES
Note 25 continued
NOTE 21
Amounts in NOK 1000
The table below shows the contractual loan payments per yerar
THE TINE GROUP
TINE SA
31.12.2013
31.12.2012
Repayment
in: 2014
TINE SA
2015
2016
2017
–
345 970
399 000
–
–
600 000
Total long-term loans to Group companies
–
345 970
–
400 000
438 462
76 924
–
–
242 481
–
2 553
1 089
1 089
1 089
8 562
4 800
1 366
–
410 115
405 889
683 398
Long-term loans from TINE SA to Group companies were settled in March and June 2013. Intercompany loans previously provided by TINE SA have
been replaced by intercompany loans by TINE Holding AB. All outstanding interests to TINE SA were paid at the time of settlement. For 2012 the
average interest rate was 4,3 % pro annum.
NOTE 22
Inventories
2018
and later Type of loan
500 000 Bonds
984 614 Other long-term interest-bearing debt
– Multi-currency credit facility
13 340 Bank loans
– Other loans
678 013 1 497 954 Total other liabilities
TINE SA
The average interest rate in 2013 for long-term interest bearing dept
was 3,4 %. In 2012 the average rate was 4,3 %.
31.12.2013
31.12.2012 Specification
31.12.2013
31.12.2012
301 142
257 295 Raw materials
266 924
221 655
Bond issues
507 534
434 538 Goods in production
468 018
434 201
711 333
773 775 Convenience products
570 295
491 733
TINE SA has four bond issues traded on ABM (Alternative Bond Market) with a total outstanding amount of MNOK 1 499 as of 31.12.2013.
All loans are based on contracts with Norsk Tillitsmann ASA. The loans
have a negative pledge clause and are co-ordinated with other interestbearing loans.
305 983
138 279 Goods for resale
1 603 887 Total inventories
THE TINE GROUP
31.12.2013
1 699 672
126 321
1 825 992
50 858
73 313
1 356 095
1 220 902
TINE SA
31.12.2012 Principle for valuation of inventory
1 461 151 Valued at acquisition cost
31.12.2013
31.12.2012
1 251 871
1 100 546
142 736 Valued at fair value
1 603 887 Total inventories
104 224
120 356
1 356 095
1 220 902
Other long-term interest-bearing debt
TINE SA’s remaining long-term interest-bearing debt as at 31.12.2013 is
MNOK 1 900 and consists of two loans from the Export Finance and two
loans from the Nordic Investment Bank.
The Group’s inventories were written down by MNOK 59,2 as of 31.12.2013 due to obsolescence and changed market conditions for some indi
vidual product segment. The impairment applies mainly to butter and cheese. The figure for 2012 was MNOK 103,4.
Balances with associated companies
Amounts in NOK 1000
THE TINE GROUP
31.12.2012 Balances with associated companies
–
242 313
–
–
–
–
–
–
–
8 297
4 800
1 366
–
–
407 297
404 800
682 141
676 924 1 484 614
666 000
271 346
71 210
706 155
3 768
6 544
36 104
27 463
Amounts in NOK 1000
TINE SA
31.12.2012 Bank deposits, cash and money market securities
104 245
99 427 Bank deposits and cash
309 687
26 701 Money market fund
31.12.2013
31.12.2012
126 128 Total bank deposits, cash and money market securities
1 448
4 770
302 553
–
304 001
4 770
–
–
consisting of:
3 592 Restricted bank deposits
615 519
NOTE 27
THE TINE GROUP
–
669 929
937 346
530 071
578 654
Pledges
Amounts in NOK 1000
THE TINE GROUP
Booked value of debt secured by pledge
31.12.2013
31.12.2012
37 690
37 043
15 345
15 640
Carrying amounts of assets pledged as security for this debt
Inventories
Trade receivables
The table below shows the long-term loans in TINE.
674 151 Unused overdraft facilities
–
TINE SA has a group account contract with Danske Bank A/S for a overdraft facility for the whole of the group with the exception of Norseland Inc.
and Fjordland AS. They have separate bank contracts and overdraft facilities.
Machines - movable property
Amounts in NOK 1000
Overdraft facilities, outside the Group account contract
1 008 556 Total short-term interest-bearing liabilities
Buildings and land
Amounts in NOK 1000
369 929
271 346
6 561 Total receivables to associated companies
The loan agreements restrict the admission of new loans with collateral without the approval of the lenders. Key covenants beyond this is
a minimum equity ratio at the TINE Group level, restrictions to use of
financial leasing and restrictions to sales of assets that constitute a substantial part of the activities to be approved by the lenders.
Overdraft facilities, Group account contract
369 929
27 466 Short-term liabilities to associated companies
Covenants
TINE SA
31.12.2012
5 625
Total pledged assets
1 220
1 062
149 197
120 600
97 721
86 209
263 483
223 510
TINE SA
31.12.2012 Type of loan
31.12.2013
31.12.2012
1 499 000
1 209 000 Bonds
1 499 000
1 209 000
1 900 000
1 900 000 Other long-term interest-bearing debt
1 900 000
1 900 000
242 313
44 969
44 969 Multi-currency credit facilities
19 160
3 511 Bank loans
14 896
27 080 Other loans
3 675 369
984 614
–
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 31.12.2013 MNOK 242
were drawn under the credit facility.
31.12.2012 Short-term interest-bearing liabilities
31.12.2013
2 875
242 313
500 000
76 924
31.12.2012
5 625 Long-term receivables to associated companies
31.12.2013
600 000
438 462
300 000
2 875
THE TINE GROUP
NOTE 25
–
400 000
31.12.2013
36 226
9 619
–
–
Certificate loans
919
413 932
399 000
666 000
893
31.12.2013
2018
and later
300 000
936 Short-term receivables to associated companies
3 768
NOTE 24
TINE SA
893
36 090
2017
Multi-currency revolving credit
THE TINE GROUP
31.12.2013
31.12.2013
2016
Short-term interest-bearing liabilities
NOTE 26
NOTE 23
2015
Amounts in NOK 1000
THE TINE GROUP
1 825 992
Repayment
in: 2014
3 184 560 Total other liabilities
–
–
14 463
24 751
3 655 776
3 178 720
A limited part of the long-term and short-term debt at Group level is secured by pledge. This pledge security was provided to TINE’s subsidiaries before TINE entered into the existing long-term and short-term loans in the Group. TINE has made a commitment to not take up new loans with pledge
security in the Group’s assets without the lender’s consent.
Note 30 continued
NOTE 28
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
2013
2012
1 812 322
1 747 125
23 106
25 167
Transactions with associated companies
Sale of convenience products and services
Purchase of convenience products and services
We define related parties as our owners, senior employees, all subsidiaries and associated companies of TINE SA and MP Pensjon.
Concerning transactions with our owners, reference is made to note 5
which specify transactions linked to subsequent payment and purchase
of raw cow and goat milk from milk producers, and note 29 which specify balance with owners linked to loan scheme. 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.
NOTE 29
7 538
608 477
Receivables and liabilities from Group companies are presented in sepa
rate lines in the income statement and in the balance sheet and in notes
13 and 21. Outstanding amount with associated companies are des
cribed in note 23. 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.
The TINE Group provides loans to employees for the purchase of vehicles and computers. As of 31.12.2013 this amounts to MNOK 2 for the
TINE Group. TINE SA provides monthly loans to the individual milk producers based on the their monthly milk deliveries. Accumulated loans
throughout the year are offset against part of the member’s subsequent
payment as decided at TINE’s general meeting. As of 31.12.2013, the
milk producer loan scheme amounts to MNOK 205. The loans are granted against security in the milk producers future milk deliveries. In addition, TINE SA has provided loans to milk producing members of TINE
in connection with purchasing milk quotas. As of 31.12.2013, total loans
related to this amounts to MNOK 2. The scheme is to be liquidated. No
further loans are granted.
GUARANTEES:
Bank guarantees
In 2013 guarantee commitments are mainly moved from Danske Bank
A/S til Euler Hermes Norge. Danske Bank A/S and Euler Hermes Norge
have provided a total guarantee limit of MNOK 400 at the disposal of
TINE SA. The guarantee liability mainly covers the tax withholding gua-
Outstanding accounts included in this note consist of market regulation
(2), subsidy schemes (3) which are agreed in the agricultural agreement
and where TINE handles payment to its owners, as well as the price
compensation scheme (4).
Statements for market regulation initiatives and subsidy applications
are processed by the Sales and Marketing Council in April the following
year. Adjustments may therefore occur after the balance sheet date.
The final settlement of balance with SLF is carried out in the first half of
the following year.
Amounts in NOK 1000
2013
2012
10 338
12 854
5 489
-9 665
AVAILABLE FUNDS TO MARKET REGULATION
Balansces with SLF related to market regulation at 01.01
Adjustments for previous years
Settlement of balance with SLF previous year
-15 827
-3 189
Funds to market regulation activities handled by TINE SA
138 589
120 082
Allocated to professional measures and information activities
Total allocated funds to market regulation
Price reduction export
rantee for TINE SA and its subsidiaries, transportation permit guarantees.
34 301
33 550
172 890
153 632
–
–
Price reduction domestic, excluding school milk
14 495
9 653
Other initiatives, excluding administration and interest
53 841
60 745
School milk scheme
28 022
29 015
9 777
10 332
Administration cost TINE and interest
The utilised limit as of 31.12.2013 were MNOK 1 by Danske Bank A/S
and MNOK 166 by Euler Hermes Norge, of which tax withholding guarantees amount to MNOK 153.
GUARANTEES PROVIDED BY TINE
Professional initiatives and information activities
Total used funds in market regulation
Balances with SLF related to market regulation at 31.12
34 301
33 550
140 436
143 294
32 454
10 338
Surety on MNOK 18,3 provided by TINE SA vis-a-vis Euler Hermes
Norge as security for guarantees given to majority-owned subsidiaries.
All milk producers pay sales fee and over-production fee. The fees are reduced from amount paid out to milk producers in the monthly milk settlements. In 2013 the sales fee was NOK 0,17 per litre for the first half year and NOK 0,10 per litre for the second half year. Fee for overproduction was
NOK 3,20 per litre. Additionally research fee is collected from TINE SA and other actors and paid to SLF. TINEs collection of fees are on behalf of SLF.
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 tenancy agreement.
The table below specify accumulated fees collected by TINE SA.
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 credit risk.
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 marked demand.
2)
Market regulation, which TINE SA handles on behalf of all the milk
producers in Norway.
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.
the Norwegian Agricultural Authority and Sales and Marketing Council are
also incurred.
USED FUNDS TO MARKET REGULATION
Loans and guarantees
LOANS
NOTE 30
10 392
574 846
Allocated funds to market regulation activities handled by TINE was in 2013
MNOK 172,9. Total expenditures for market regulation was MNOK 140,4
in 2013.
Sales initiatives within market regulation consists of price reduction export,
price reduction domestic and other initiatives. In addition funds are allocated for price reduction school-milk, professional initiatives directed towards quality- and breeding work at diary farms and information activities
undertaken by the Information Office for Dairy Products (melk.no). Administration costs in TINE SA and costs for administration of the scheme in
NOTES
Market regulation
The Sales and Marketing Council (Omsetningsrådet) is responsible for
market regulation in Norway. The Sales and Marketing Council also manages the use 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.
Amounts in NOK 1000
2013
2012
200 943
146 270
COLLECTED FEES
Collected sales fee
Collected over-production fee
38 484
1 249
Collected research fee
25 190
24 600
SUBSIDY SCHEMES
TINE SA pays basic and district subsidies to milk producers on behalf of the Norwegian Agriculture Authority (SLF). The level of this subsidy is negotiated in the agricultural agreement and will vary dependent of production capacity and geographical location. The subsidy is transferred from SLF
to TINE SA and paid the milk producers in the milk producers settlement.
Amounts in NOK 1000
The table bellow specify the subsidy paid by TINE SA.
2013
2012
BASIC AND DISTRICT SUBSIDIES
Basic subsidy
District subsidy
58 209
60 030
511 666
486 297
THE PRICECOMPENSATION 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 December 18, 2007.
Note 30 continued
NOTES
Note 31 continued
Amounts in NOK 1000
Adjustment addition/subsidy and feed transport subsidy
In-freight addition
Distribution addition
Total in-freight addition and distribution addition (see note 12)
Main milk/by-product application
Settlement main milk/by-product application previous years
Net adjustment addition / subsidy and feed transport subsidy
2013
2012
-459 376
-452 296
-10 334
-10 580
-469 710
-462 876
552 663
596 148
-46
2 949
82 907
136 221
In-freight addition and distribution addition are recognised in the income statement under other operating expenses, see note 12.
The table bellow specify outstanding amounts between SLF and TINE SA liked in connection the arrangements described above:
Amounts in NOK 1000
31.12.2013
31.12.2012
-16 017
-18 727
BALANCE BETWEEN SLF AND TINE SA
Liability collected fees
Liability price compensation
NOTE 31
-1 556
1 115
-25 803
-7 372
TINE Råvare
Based on a signed agreement between the Norwegian authorities and
TINE SA, TINE Råvare (TINE Milk Supplies) was established 1.1.2004 as
a separate accounting and profit centre with a clear cut-off of administrative and accounting procedures between raw material 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 fulfil their responsibilities TINE Råvare purchases services
from various other departments of TINE SA based on 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 app
roved of Norwegian Agricultural Authority (SLF). Service instructions
were in 2012 adjusted according to the changes when regional respon-
sibilities were taken over by new functional areas within TINE SA. All
changes in service instructions occurs only after discussions with the
SLF.
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 the year 2000. Acquired business is located in the newly formed subsidiary of Norseland Inc. The
name of the subsidiary is Alpine Dairy LLC. Goodwill was calculated to
MNOK 19,7. 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
food outlet located in Mathallen (the Food Hall) Oslo. Melkerampa is a
provider of Norwegian food culture and delight with a focus on dairy specialties. Product range includes everything from TINE specialty cheeses
to products from small scale producers. The operation of the company
started in October 2012.
Norseland Holdings Ltd. made an acquisition of Ridgebrick Ltd. in 2013.
This is a property company that owns the site of the production facility.
Carrying provision
NOTE 33
Amounts in NOK 1000
The following provisions for future obligations have been recognised in the balance sheet as debt:
Formally, TINE Råvare is included as a part of TINE’s official annual report, but through the contract that was agreed upon 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.
2013
THE TINE GROUP
31.12.2013
54 904
4 100
TINE SA
31.12.2012 Carrying provision
TINE SA and subsidiaries in the TINE Group have rental relationships and rental contracts concerning rental of external office premises, warehouses,
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.
2012
7 265 005
7 088 190
THE TINE GROUP
-6 724 829
2013
Gross profit
416 133
363 360
82 216
80 348 Office premises
3 - 10 years
Producer functions
162 209
149 970
26 733
24 776 Warehouse and cold storage
0 - 10 years
21 740
21 642
35 338
49 002 Production machines
3 - 7 years
129 336
132 426
886
Raw milk controll
41 479
38 731
15 468
Collection and inbound transport (net)
38 231
36 603
1 686
Own costs in TINE Råvare
18 273
17 682
15 597
Administration and infrastructure
13 664
15 171
1 063
Interest on working capital
-6 275
-8 083
178 987
-9 938
-17 270
408 721
386 873
TINE Råvare profit before carrying over profit from the preceding year
7 412
-23 513
Profit/loss carried forward from last year
-3 812
19 701
Profit/loss TINE Råvare to carry forward
3 600
-3 812
Total expenses
NOTE 35
25 900
Amounts in NOK 1000
-6 848 872
Membership fee and Geno (Geno only for 2012)
48 112
16 400
Off balance sheet lease liabilitie Sales of raw cow and goat milk
Farm tanks
31.12.2012
42 097
1 300 Production contract for cheese abroad
Cost of raw cow and goat milk
Coordination towards farmers
31.12.2013
51 721 Reorganisation costs
Reorganisation costs include the final payment and pensions. Reorganisation measures were carried out in TINE SA and Diplom-Is AS 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 2013 represents the expected loss on the resale of the cheese.
NOTE 34
Please also refer to a separate section about TINE Råvare in the
Board of directors’ report.
Amounts in NOK 1000
ACCOUNTS FOR TINE RÅVARE
income, expense and balance sheet for TINE Råvare 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.
Business combinations and changes in ownership
NOTE 32
Main milk and by-product application are charged as commodity cost.
Liability / claim (+) subsidy arrangements
The accounts for TINE Råvare for 2013 shows a gain of MNOK 7,4 before adjustment of last years profit. Deferred result at 31.12.2013 is
MNOK 3,6 and will be offset against milk producers in the following
year. The amount is therefore included in the basis for determining the
price paid to the producer (base price) in the coming year. The various
TINE SA
2012 Rent object
866 Trucks
11 495 Other transport equipment
3 449 Office equipment
Agreement duration
2013
2012
50 542
51 494
–
–
35 156
48 963
3 - 5 years
–
–
2 - 5 years
2 208
2 814
3 years
1 460
3 155
14 468 Computers
3 years
15 597
14 325
10 912 Freezers
4 - 5 years
195 316 Total other off-balance sheet leases
–
–
104 963
120 751
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 p
ackaging 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. For further information please refer to
separate review in the annual report.
KAPITTEL
TITTEL
Translation from the original Norwegian version
NOTE 36
Major individual transactions
Amounts in NOK 1000
THE TINE GROUP
2013
111 202
INDEPENDENT AUDITOR’S REPORT
TINE SA
2012 Balance sheet
2013
2012
111 202
850 870
152 048 Gain on sales on assets
49 242
141 403
-14 149 Impairment of tangible fixed assets and goodwill
-6 873
-13 149
850 870 Investments in lager new plants
Profit and loss items
50 595
-7 886
Investments in major new plants for 2013 and 2012 apply to a new dairy plant at Jæren, expansion of the dairy plant at Verdal, and expansion of the
terminal and warehouses in Oslo and in Trondheim. Gain on sale of fixed assets consist primarily of gains from the sale of dairy plants. Impairments of
tangible fixed assets are mainly related to discontinued products due to market development and reduced profitability, as well as structural rationali
zation. See note 16 for further comments concerning impairments of financial fixed assets.
NOTE 37
Government grant
Amounts in NOK 1000
For the TINE Group and TINE SA funds from tax-related incentive scheme (Skattefunn) and other governmental and municipal grants have been
received as shown in the following table.
THE TINE GROUP
NOTE 38
TO THE ANNUAL MEETING OF TINE SA
TINE SA
2013
2012 Government grants
2013
1 542
1 213 Tax-related incentive scheme
1 007
910
2012
22 670
15 609 Other governmental and municipal grants
22 670
15 609
24 212
16 822 Total government grants
23 677
16 519
Discontinuation and divestment of business
In 2013 Diplom-Is AS wholly owned subsidiaries in Sweden and Denmark were discontinued, as part of the simplification process of the corporate
structure of Diplom-Is. The closure has resulted in a loss of TNOK 697. Diplom-Is Sverige HB and Diplom-Is Danmark I/S have in recent years
accounted for a insignificant portion of the TINE Group’s income statement and balance sheet.
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 615.139.000, and the financial statements of the group, showing a profit of NOK 685.357.000.
The financial statements of the parent company and the financial statements of the group comprise the balance sheet as at 31
December 2013, 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 31 December 2013, 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.
DECLARATION FROM THE GROUP BOARD AND CEO
The Group board and CEO today processed and stipulated the annual accounts for TINE SA and the TINE Group for the period from 1
January to 31 December 2013. We confirm to the best of our ability that:
-The 2013 annual accounts have been prepared in line with applicable accounting standards
- The information in the annual accounts provides a true and fair view of the company and Group’s assets, debt, financial position and
result overall.
- The annual report provides a true and fair view of the company and Group’s development, result and position.
- The annual report provides a description of the key risks and uncertainty faced by the company and Group.
ANDERS JOHANSEN
HELGA THORVIK ULVEN
ASKILD EGGEBØ
ANNE MAREN WASMUTH
NORVALD DALSBØ
TORSTEIN GRANDE
TOR ARNE JOHANSEN
CECILIE BJØRLO
LARS WOIE
ELIN AARVIK
STEINAR KOEN
SVEIN FØRDE
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report and in the statement on Corporate Social Responsibility
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 in the statement on Corporate Social Responsibility, the going concern assumption and the proposal for the allocation of the profit is consistent with the financial statements and complies with
the law and regulations.
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.
DELOITTE AS
KJETIL NEVSTAD (signed)
State Authorised Public Accountant (Norway)
Deputy Chairman
TROND REIERSTAD
Chairman
HANNE REFSHOLT
CEO
TINE ANNUAL
TINE årsrapport
REPORT 2013 | 51
THE TINE GROUP
SUBSIDIARIES
THE TINE GROUP
– SUBSIDIARIES
TINE’S DOMESTIC DAIRY OPERATIONS
OsteCompagniet AS
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.
OTHER BUSINESS ACTIVITIES
Highlights 2013
• Strong focus on Snøfrisk
• Relaunching the series from goat’s milk cheese
specialties
• Launch of the concept Fryd and the Norwegian
salad cheese Solvår
KEY FIGURES (MNOK)
Revenues
Operating
income
Number of
employees
2013
2012
271
265
1
4
11
12
Diplom-Is AS
Diplom-Is AS is a brand-name company which
manufactures and markets ice cream and frozen
desserts.
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.
Highlights 2013
• Sales growth and improved operating income
• Successful integration and first full fiscal year with
Alpine Cheese Co.*, purchased in 2012
• Launch of Mini-Jarlsberg at the end of the year
2013
Revenues
Operating
income
Number of
employees
190
1 056
182
34
6
28
5
85
85
Sunniva Drikker AS
* The company has subsequently changed its name to Alpine Dairy LLC
Norseland Ltd. ripens, markets and distributes
specialty cheeses from TINE and Ilchester in the
grocery retail market in England.
Wernersson Ost AB
Wernersson Ost AB ripens, markets and distributes a
broad and international cheese selection for super
markets and the institutional market in the Nordic region.
Highlights 2013
• Sales growth and improved operating income,
despite the challenging high cheese prices
• Good increase in the sales of Jarlsberg cheese
Revenues
Operating
income
Number of
employees
2013
2012
991
924
41
8
409
420
2013
2012
154
181
3
6
14
15
2012
1 114
2012 due to the acquisition of Alpine Dairy Co.
Norseland Ltd.
KEY FIGURES (MNOK)
KEY FIGURES (MNOK | MUSD)
The number of employees increased by 50 people as of 1 July
Highlights 2013
• Sales revenues and operating result at the level of
2012
• Made an acquisition of Ridgebrick Ltd. This
company owns the site the production facility is
located at in Ilchester, and the purchase gives
financial and strategic flexibility
• The sales of Jarlsberg cheese was somewhat
below the volume sold in 2012
Highlights 2013
• The company had a strong growth in sales
revenues and operating profit due to the fine
summer weather and cost control as well as great
product launches and promotions
• The board decided as part of developing DiplomIs, an investment program for the manufacturing
plant located at Gjelleråsen with the goal of gather
all production at this site.
• The company will have focus on further growth,
innovation and good product launches, structure
simplifications in productions, as well as
improvement programs within distribution/
warehouse
Sunniva Drikker 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.
KEY FIGURES (MNOK | MGBP)
2013
Revenues
Operating
income
Number of
employees
2012
413
45
414
45
13
1
13
1
171
152
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.
KEY FIGURES (MNOK | MSEK)
2013
Revenues
Operating
income
Number of
employees
2012
633
701
589
686
11
12
8
10
96
Highlights 2013
• The volume of the juice market in Norway was
stable in 2013. The private label within juice did
increase and continuing growth for “the-go drinks”
• Sunniva Drikker launched in 2013 the exciting
news Sunniva Presset creating growth in the bottle
juice segment and the lemonade Limo contributing
positively into the segment healthier small drinks
• The tough competition in the market for juice and
healthier small drinks combined with increased
costs has resulted in an operating profit in 2013
weaker than in 2012
Highlights 2013
• Growth in sales revenues within all major product
categories and focus on profit did contribute to a
good operating profit
• Continued focus on developing quality products
preferred by consumers to enhance Fjordland
products in the market
• Increased consumer communication through
traditional media and digital channels to build
brands further
KEY FIGURES (MNOK)
Revenues
Operating
income
Number of
employees
KEY FIGURES (MNOK)
Revenues
Operating
income
Number of
employees
2013
2012
1 263
1 190
48
43
84
82
101
CONTACTINFORMATION
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
Birgit Oline Kjerstad
Lars Istad
Reidar Berge
Christian Aasland
Gunn Elise Helle
Aslak Snarteland
Arna Høyland
Rolf Øyvind Thune
Elisabeth Irgens Hokstad
Gudmund Tronsmoen
Ellen Anne Bergseng
Even Solhaug
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 Haukeland
John Arve Håseth
CONTROL COMMITTEE
Chairman
Helge Sommerseth
Deputy chairman
Per Amb
Member
Anna Stangeland
Other member-elected delegates
Anne Maren Wasmuth
Anders Johansen
Torstein Grande
Lars Woie
Askild Eggebø
Helga Thorvik Ulven
Cecilie Bjørlo
Norvald Dalsbø
Employee-elected delegates
Tor Arne Johansen
Svein Førde
Elin Aarvik
Steinar Koen
Deputy members elected by the An
nual Meeting
1st deputy member: Rolf Øyvind Thune
2nd deputy member: Jarle Bogen
3rd deputy member: Birgit Oline Kjerstad
Deputy members for employee-elec
ted delegates:
1st deputy member: Ottar Råd
2nd deputy member: Anne Enoksen
3rd deputy member: Kåre Pedersen
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
Nina Kolltveit Sæter
CENTRAL ELECTION COMMITTEE
The election committee has eight
members elected by the Annual Meeting:
Chairman
Elling Ruggli
Deputy chairman
Jon Husdal
Other members
Jan Egil Skjørestad
Sigfrid Nilssen
Ole Martin Pettersen
Mari-Ann Hoff
Nina Engelbrektson
Rune Myklebust
AUDITING
Auditing will be carried out by Deloitte
AS and the auditor is elected by the
Annual Meeting.
HEAD OFFICE
WHOLLY-OWNED SUBSIDIARIES
PARTLY OWNED SUBSIDIARIES
TINE SA
DIPLOM-IS AS
WERNERSSON OST AB
FJORDLAND AS
Lakkegt. 23
0187 Oslo
P.O. Box 25, 0051 Oslo
www.tine.no
Switchboard: +47 45 66 30 80
firmapost@tine.no
P.O. Box 23, 1483 Skytta
Telephone 02001
Street address:
Brennaveien 10
1481 Hagan
Managing Director
Bjørn Moldskred
bjorn.moldskred@diplom-is.no
www.diplom-is.no
Industrivägen 5, 523 90
Ulricehamn, Sweden
Telephone +46 321 261 50
VD
Magnus Ekstrand
magnus.ekstrand@wernerssonost.se
www.wernerssonost.se
Brynsengveien 10
0667 Oslo
Telephone +47 22 97 49 00
Managing Director
André Gobel
andre.gobel@fjordland.no
www.fjordland.no
SUNNIVA DRIKKER AS
P.O. Box 113 Kalbakken,
0902 Oslo
Street address:
Bedriftsveien 7
Telephone +47 45 66 30 80
General Manager
Lise Falkfjell
lise.falkfjell@tine.no
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
rune.jenssen@tine.no
www.ostecompagniet.no
tine.no/årsrapport2013
NORSELAND INC. (US)
1260 East Main Street,
Stamford, CT 06902 USA
Telephone +1 203 324 5620
President and CEO
John J. Sullivan
jsullivan@norseland.com
www.norseland.com
NORSELAND LTD. (UK)
Somerton Road, Ilchester,
Somerset BA22 8JU, England
Telephone +44 0 1935 842800
CEO
Nigel Meadows
nigel.meadows@tine.no
www.norseland.co.uk
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
digitaltrykk@tine.no
Circulation
200
TINE SA
Lakkegt. 23
0187 Oslo
P.O.Box, 0051 Oslo
www.tine.no

annual report

Transcription

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