Valio Dairy Firm Reports 2009 Sales Down 3%

Valio net sales stood at MEUR 1,787, down MEUR 57 or 3% on the previous year. Increased expenses combined with a decrease in sales resulted in the milk margin* falling to MEUR 863 (2008: MEUR 942).

12 Apr 2010 --- Valio's return on milk equivalent fell by 5 cents per litre in 2009.

2009 was a difficult year for the dairy markets. Valio net sales stood at MEUR 1,787, down MEUR 57 or 3% on the previous year. Increased expenses combined with a decrease in sales resulted in the milk margin* falling to MEUR 863 (2008: MEUR 942).

The price paid for raw milk to producers had to be reduced twice during the year to match Valio's return on milk equivalent. The average milk profit** (=return on milk equivalent) for the year fell from 44 cents to 39 cents per litre. Nevertheless, Valio paid Valio Group dairy co-operatives 40.4 cents per litre for raw milk (2008: 47.2 cents).

The MEUR 67 share issue implemented during the year and the profit for the financial year at MEUR 17.7 (2008: MEUR -5) improved the equity/assets ratio which rose to 43% (2008: 36%). Valio's investments totalled MEUR 79 (2008: MEUR 118).

The milk volume taken in by Valio from its owners totalled 1,899 million litres, up 18 million litres on the previous year.

The difficult market situation continued in early 2010. Cheap imports have pushed the prices of basic dairy products in Finland to a very low level compared with the rest of Europe. The weakening euro has improved milk profit from exports.

A good year for the Valio Pension Fund

The Valio Pension Fund's 89th year in operation was a good one. The TyEL employers' contribution percentage at 14.2% (2008: 16.2%) was over two percentage points lower compared with Finnish employment pension companies. The solvency ratio excluding reliefs stood at 45.3% (2008: 31.1%). The corresponding figure for pension companies on average was 18.8% (2008: 10.7%).

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

**Milk profit = Milk margin less the requirement for depreciation of fixed assets.