Valio performance 2011

Valio Group milk return* for 2011 hit its highest ever level at 44.9 cents/litre (2010: 41.1 c/l).

The price paid to producers for raw milk was raised by 2.5 cents/litre as of the beginning of April and by 2 cents/litre as of the beginning of August, paid over the whole year at 44.1 cents per litre, which is 3.2 cents up on the previous year, and the second highest in Valio’s history.

The increase in the price paid to milk producers was enabled by the increased demand for products highly valued by consumers in Finland and Russia. The volume and profitability of basic milks in Finland decreased due to extensive imports from Sweden, but operating profit nevertheless stood at MEUR 11.

Valio Group net sales for 2011 increased by 5.9 per cent on the previous year to MEUR 1,929. Net sales increased at the same rate in both international markets and in Finland. The Valio Group milk margin** stood at MEUR 961 (2010: MEUR 901). Valio Group’s book profit for 2011 after taxes rose to around MEUR 54 (2010: MEUR 39).

Loans from financial institutions at the end of 2011 totalled MEUR 90 (20109: MEUR 114). Valio Group’s equity/assets ratio rose to 48% (2010: 45%). Investments totalled MEUR 85 (2010: MEUR 68).

The milk volume taken in by Valio from its owners totalled 1,870 million litres, down 1.5% on the previous year.

The biggest risk challenging the development of the milk return is related to the instability in the global economy and the rapid fluctuations in exchange rates that may result from that.

*Milk return = (Milk margin less the requirement for depreciation of fixed assets i.e. financing requirement for investments) / milk volume supplied by the owners.

**Milk margin = Net sales less other costs excluding depreciation and the price paid for raw milk and interest on shareholder loan paid to owners.