STC Greenfood Annual Report 2013 by STC GreenFood AB

STC GREENFOOD ANNUAL REPORT

2013 ”Our motto is that we only purchase what we would want to eat ourselves”

We’re food lovers!

Contents Our roots

STC GreenFood in brief

This is STC GreenFood 2013

CEOâ&#x20AC;&#x2122;s comments

Strengths that match the trends

Our three business areas

Fresh Cut continues to grow

The Finnish market

Back office

Annual financial statements 2013

ANNUAL REPORT 2013

OUR HISTORY

Our roots Over a quarter of a century we have created what is now STC GreenFood – a leading independent Nordic player in fruit and vegetables. With 535 employees, we conduct operations in three business areas: Trading, Fresh Cut and Eden Salladsbar. Scandinavian Trading Company (STC) was acquired from Volvo in 1989 by AB Interfinans – a privately owned Swedish investment company which creates growth in value through long-term portfolio management of SMEs. Even back then, there was some fruit and vegetable trading, and 25% of Ewerman was acquired in 1991. The remaining shares in Ewerman were acquired a few years later, together with 33% of Salico, thereby intensifying the focus on fruit and vegetables. At the same time, Interfinans and STC merged to form the parent company STC Interfinans. In the late 1990s, the remaining shares in Salico were acquired, together with Allfrukt and the Finnish company Salico Oy. A few years later, the Finnish company Satotukku was also acquired. In 2009, all fruit and vegetable companies were gathered

in the subsidiary group STC GreenFood to ensure continuing growth in imports, wholesale activities and fresh cut. The newly established company STC Iberica was also incorporated into the group. STC Iberica was established as a common purchasing organisation for goods produced in Spain. Hemberg Group and Wermfood were acquired in 2011. The Eden Salladsbar business area was established in the same year. In 2012, Lars Åström took over as President and CEO. STC GreenFood acquired the remaining 30 percent minority stake in TFC Fruit in Sweden AB, which became a wholly-owned subsidiary. The business was integrated with Ewerman AB.

s 1989 Interfinans AB acquire y (STC), Scandinavian Trading Compan and and the establishment in fruit vegetables begins. of fruit 1991 STC acquires 25 percent rman. Ewe y pan com le etab veg and ge to form 1994 Interfinans and STC mer ns. rfina Inte STC y pan com nt the pare g ainin rem The Company acquires the 33 a ding inclu n rma Ewe of 75 percent s on fruit percent stake in Salico. The focu and vegetables intensifies. s the 1998 STC Interfinans acquire remaining shares in Salico. s Allfrukt. 1999 STC Interfinans acquire d. uire acq is Oy o Salic

The Group’s current strong position in the market has been achieved through its ability to identify relevant trends and to build an organisation that creates a competitive advantage in responding to these trends. In many cases, the Group has not only followed trends, but has also been a major player in creating and reinforcing trends. Specifically in the business areas Fresh Cut and Salladsabars where the group drives an hole new segment around convenience food. With Sweden and Finland as its main markets, STC GreenFood is currently well positioned to meet the market’s needs – particularly in the sector’s growth areas.

companies 2009 All fruit and vegetables ed are gathered in the newly form . ood enF Gre STC p grou ry subsidia STC Iberica is established. s Hemberg 2011 STC GreenFood acquire od. mfo Wer and up Gro Eden Salladsbar is established. as 2012 Lars Åström takes over President and CEO.

remaining STC GreenFood acquires the TFC Fruit in 30 percent minority stake in grated Sweden AB. The business is inte AB. with Ewerman blished in A central finance centre is esta panies. com dish Swe Helsingborg for the

d. 2000/2002 Satotukku is acquire

ANNUAL REPORT 2013

2013 IN BRIEF

STC GreenFood in brief

Net sales

3.0 billion

STC GreenFood is the Nordic region’s leading player in the development of fruit and vegetables, with Finland and Sweden as its main markets. We have the market’s widest range, while also conducting product range development for fresh cut.

Increase in net sales

EIN

U N AT

I UM

INNO V

FO O

E DI

DI S C

I EN T

ION AT

LT H

ANNUAL REPORT 2013

HEA

STC GreenFood sells fresh and processed fruit and vegetables to customers in Scandinavia and around the Baltic Sea. With our product range, efficiency and proximity we are always able to meet the unique needs of our customers.

We developed products under the Eden brand in the consumer market and the SallaCarte brand in the HoReCa (hotel, restaurant and catering) market. Eden Salladsbar in Sweden and Eden Salaattibaari in Finland provide time-saving healthy meals, while also creating awareness of the Eden brand. We also have a large number of asso-

Business concept

ciated launches in the three business areas. We are seeing products under the Eden brand increasing their proportion of our sales, while also achieving a higher sales margin for our customers and in our companies.

S I MP

3.9 %

STC GreenFood refined its offering in 2013, focusing on healthy meals – a clear objective of our strategy, which in recent years has focused on Food connoisseur, Local, Healthy and Innovation.

2013 IN BRIEF

This is STC GreenFood 2013

January, a new production line with automatic root removal is installed at Salico AB.

May, new high-efficiency dryer is installed at Salico AB.

September, the arbitration dispute with an ERP supplier is lost.

October, Eden Salladsbar installs its 100th salad bar in Sweden.

September, Magnus Johansson is appointed as logistics manager.

November, many of the staff of Allfrukt i Stockholm AB leave and go to a competing business.

February, the majority of Hembergs Trädgårdsprodukter’s business is transferred to Ewerman.

STC GreenFood acquires the remaining 49 percent minority stake in Eden Salladsbar AB. June, the range of health products (salad and fruit) is expanded to McDonald’s menus.

Satotukku takes into use a modern logistics system (WMS) in Helsinki.

Johan Bengtsson takes over as new CEO of Ewerman AB.

Net sales

David Ottoson takes over as CEO of Allfrukt i Stockholm AB.

Operating profit/loss*

Cash flow from operating activities

MSEK

3000

100

2,694 2000

2,894

3,007

2,113 40

1000

2011

2012

2013

600

2011

512

537

535

2012

2013

400

2012

2013

200

2010

Average number of employees

2010

The final stage of the administration and finance centralisation in Helsingborg is implemented in STC GreenFood’s Swedish operations.

December, STC GreenFood forms the company Eden Salaattibaari Oy.

14 2010

2011

2012

2013

240

2010

2011

*Operating profit before depreciation, amortisation and impairment, adjusted for non-recurring items.

ANNUAL REPORT 2013

CEO’S COMMENTS

An exciting food Group in the making I have been with STC GreenFood for two years now and much has changed. We have created a group made up of a number of independent companies which have historically been run in a holding company structure. We have taken many steps in the right direction. The sector is in the process of rapid consolidation and, as always, success is linked to the ability to change. The Group reported net sales of SEK 3,007 (2,894) million, an increase of 3.9% in a very competitive market. Although we are satisfied with the level of net sales, it was unfortunately counteracted by costs of the changes we implemented in 2013. The costs were mainly associated with projects and recruitment of new specialist staff. Operating profit amounted to SEK 65.1 (70.3) million. Despite the major change in the Group, the underlying operations are stable and profit/loss after financial items was SEK 34.3 (-33.4) million*. Profit/loss for the year was affected by non-recurring costs of SEK 7.5 million relating to a dispute with the previous ERP supplier. In 2013, we worked hard to create a platform for the future. We focused on the following areas: • Clarifying our offering – the Eden brand has grown into a common identity for our companies, while our customers and consumers have become aware of the added value. • Creating purchasing transparency, with more joint purchasing and a common supplier base. • Introducing a common business system, with a central finance function, a common HR function and a common switchboard for our Swedish operations, centralised in Helsingborg.

What makes our Group exciting We have essentially taken the consumer perspective in the choices we have made. Our sector has traditionally focused on suppliers and logistics. These are important components but must be regarded as hygiene factors. A good example of how the consumer focus has driven our development is Eden Salladsbar. Eden Salladsbar AB

”The sector is in the process of rapid consolidation and, as always, success is linked to the ability to change.” underwent further development in 2013 and we also established Eden Salaattibaari Oy in Finland. The salad bar concept has been very well received in the market and new units are quickly achieving high sales without major marketing efforts. STC GreenFood is driving the development of the Salladsbar range and many synergies are passing from Eden Salladsbar to our other businesses. We are currently investing heavily in Salico’s food factory where we are tripling

the capacity to meet demand – demand that is driven by Salladsbar as well as other factors! The fresh cut concept covers several product groups. Pre-packed salads are obviously an important product, with strong growth in sales in Sweden over the last 10 years. But we see many other product groups with major potential. One example is side salads, which are an exciting and healthy complement to a meal. We have also launched a brand new deli range, which helps stores to offer top-class fruit and vegetable products at their deli counter. We also believe that there will soon be a stronger trend towards solutions that focus on convenience for the consumer, such as fruit salads, savoury salads and in particular new Grab & Go products. We have a solid development platform for these items and our Group is currently the market leader in the new products in our range.

* The previous year’s figures were affected by goodwill impairment of SEK 72.4 million and restructuring costs of SEK 2.9 million. ANNUAL REPORT 2013

CEO’S COMMENTS

Structure was an important keyword in 2013 and we made changes that developed human capital into structural capital. This has resulted in a reduced dependence on individuals in companies, and we have built strong teams instead. Openness between the companies has also increased, and we look forward with confidence to 2014 for our three business areas: Trading, Fresh Cut and Eden Salladsbar. Our business areas are described in more detail later on in this report.

Structure is the basis of economies of scale While developing our business, we have also taken several steps in Sweden to build a common platform for accounting, financial monitoring, payroll administration and a common contact centre with a central switchboard. We have decided to call these functions the back office. The same type of change has been initiated in all our departments. Warehouse operations have been modernised and are now more efficient and well structured, while in marketing and sales we have built a market team in order to better serve different customer groups. Overall, the work has resulted in an organisation with higher efficiency and improved delivery quality. To succeed in a highly competitive market, we need to increase cooperation between the business units.

A functional common back office is an infrastructure that allows such collaboration and this is now in place in Sweden. Later on in the annual report, Staffan Rosenblad, the Group’s CFO, will report on what has been done with regard to back office. In 2013, Tomi Hakkarainen was appointed head of operations in Finland. We made a large IT investment in a new, modern WMS system in Finland during the year. Although the markets in the two countries have many similarities, there are also differences. One of the major challenges in Finland is that it has been hit harder by the recession than has Sweden. Tomi explains more about our development in Finland later on in the annual report.

It should be said, however, that the main competitor has funded the defection. STC GreenFood AB has implemented major changes in a highly competitive market and created a solid platform for economies of scale. The Group currently stands out as an innovative player with a clear consumer focus.

Lars Åström President and CEO STC GreenFood

Challenges and opportunities Reorganising autonomous companies in a holding company structure into a group cannot be done without friction. In 2013, the majority of Allfrukt’s employees decided to leave and start a company of which our main competitor is the principal owner. It is always sad when longstanding colleagues decide to leave, but at the same time is not unexpected in a time of reorganisation.

ANNUAL REPORT 2013

TRENDS

INTERVIEW WITH LARS ÅSTRÖM, PRESIDENT AND CEO

Strengths that match the trends Interest in food is growing in parallel with the health trend. More and more people are seeing the connection between what we eat and how we feel, and at the same time we want simple solutions that taste good. And demand for natural ingredients without additives is constantly increasing. How does STC GreenFood respond to market demands? – The prevailing trends in fruit and vegetables are Health & Wellbeing, Natural & Local, Simple & Convenient and Discount & Premium. At STC GreenFood, we have identified our four main strengths – Food connoisseur, Local, Healthy and Innovation – and have found that they meet these trends well.

Let’s go into this. What do you mean by ”Food connoisseur”? ”This strength corresponds particularly well to the discount and premium trend. STC GreenFood represents competence in this area and rejects what is bad. Our golden rule is that we only purchase what we would want to eat ourselves. Let me take an example. Fruit that is picked too early can have problems ripening. But because all types of fruit have different maturity points in different cultivation zones, we always buy at the moment when they are at their best. This means we can ensure that there is always good, ripe fruit on the shelf. That benefits everyone. The consumer gets a good product that tastes good, which generates repeat purchases from the retailer.

What about ”Local”? – This corresponds mainly to the natural and local trend. This trend is equally strong in Finland and Sweden. People have lost confidence in the large international producers. The debate about additives in food also means that they

ANNUAL REPORT 2013

want to know what they are eating. We believe in local sourcing. We are keen to buy locally grown food when in season and we are always careful to look for talented producers. Our aim to build longterm relationships with our growers also means that we are happy to share our knowledge – about different varieties, for example. Organic production will most certainly increase. At present, it only represents about 5% of total consumption. The exception is bananas, where the organic proportion is already 30%.

”Healthy” is the next strength. Can you elaborate on that? – Health and wellbeing is one of the clearest trends we are seeing. There is a never-ending stream of new diets, and many people seem to want to find a ”quick fix”. But whatever the diet, fruit and vegetables always work. We know that every meal should contain a large proportion of vegetables for our wellbeing. A product experiencing dramatic growth at the moment is berries. Consumption has risen by 40% in recent years and there is every indication that this growth will continue.

What do you mean by ”Innovation”? – We are convinced that the simple and convenient trend is here to stay. Demand is constantly increasing in what is known as convenience food – meal solutions that save time and make life easier. We are leading market development in this area with Salico and Eden Salladsbar. In 2014, we are launching a new Grab & Go range containing bean salads, fruit salads and other good food, making it even more easy for people to eat more healthily.

TRENDS

”Demand is constantly increasing in what is known as convenience food - meal solutions that save time and make life easier.”

ANNUAL REPORT 2013

BUSINESS AREAS

Our three business areas STC GreenFoodâ&#x20AC;&#x2122;s business is based on three areas, which complement each other well and have clear synergies. Together they give us a strong market position and leave us well equipped to respond to demand from consumers and the professional market.

Trading The industry is highly competitive in this area and there has been a dramatic level of consolidation in recent years. In Sweden, four of us share the majority of the market, with two of the players being fully integrated into food retail companies (ICA and Axfood). A similar situation exists in Finland. Value-added is low and

very important both for the transferred business and for Ewerman, in view of the market consolidation. Trading includes STC Iberica, which handles all our fruit and vegetable purchases in Spain including the logistics solution. Our Spanish office handles a large number of European customers. In 2013, STC Iberica developed a range including organic products and berries, for example. With a high level of expertise and high volumes, STC Iberica generates significant competitiveness for STC GreenFood AB.

Fresh Cut 2013 was a successful year with good profitability. We have a very high focus on quality, with food safety we conduct our business development by focusing on the end consumer through the Eden brand and with consumer trends as key factors (Simple & convenient, Discount & premium, Natural & local and Health & wellbeing). Our structure of small companies is a challenge for which we must compensate. The focus for 2014 is to push down our costs and develop our range and added value, while ensuring differentiation through a local presence with a high service level. In February 2013, we integrated large parts of Hembergâ&#x20AC;&#x2122;s business into Ewerman. The integration was

ANNUAL REPORT 2013

as a central component, with a passion for good food. We increased our volumes in Finland, although earnings for 2013 were adversely affected by the factory expansion, including new production equipment, which was completed in December 2012. In Sweden, we invested in new dryer for baby leaf, automatic core removal in the salad line and we also designed the expansion of the food factory, which started at the end of the year. We are very proud of the way we have advanced our positions in this business area.

BUSINESS AREAS

Here too, there is intense competition and volume is a prerequisite for success. We look forward with continuing optimism to the future, with continuing growth predicted for the fresh cut market. Later on in the annual report, the head of Fresh Cut, Björn Johansson, describes the business area in detail.

Eden Salladsbar As mentioned earlier, this business area has grown rapidly. Our success is based on the best range in the market sold through an attractive sales solution, coupled with logistics where goods produced today reach the point of sale tomorrow.

In view of the suitability of the distribution solution for several sales concepts, we launched a deli concept towards the end of 2013. This helps the retail stores to offer their customers good, healthy products in a way that enhances the store’s attractiveness and increases it’s sales. In 2014, we are launching several new products for which we look forward with confidence to the future.

Based on business structure, we conduct continuous development.

Sales by business area 2013

Growth of each business area

MSEK

3000

500

MSEK 100

391 2250

2,345

2,552

Trading Fresh cut Eden Salladsbar

2,505

375

2,552

349

365

391 63

1500

250

750

125

24 2011

2012

2013

Trading

2011

2012

Fresh cut

2013

2011

2012

Eden Salladsbar

ANNUAL REPORT 2013

2013

FRESH CUT

INTERVIEW WITH BJÖRN JOHANSSON, HEAD OF FRESH CUT

Fresh Cut continues to grow Time saving and convenience are becoming increasingly important, both for consumers and in HoReCa (hotels, restaurants and catering). But at the same time, people want good, tasty products. This is why fresh products are taking increasing market shares from frozen products. How is it that Fresh Cut is growing year after year?

Is Eden Salladsbar following the same trend?

How are things going with pre-packed products in stores?

–There are many reasons, of course. The HoReCa sector is demanding more and more ready-prepared products. This is not just because they reduce the workload in the kitchen. It has also been noted that the quality is very high, thanks to sophisticated technology and better handling. New packaging technology and efficient logistics have also helped to raise the quality and safety of food – obviously an incredibly important factor in HoReCa.

– Yes, the salad bar is a great example of people wanting simple meal solutions that are both healthy and tasty. The number of salad bars is constantly growing and Eden Salladsbar is currently present at more than 150 locations in the Nordic region. We believe that this concept has been so well received that it meets consumer needs and expectations. The salad bars contain a good assortment, and we regularly launch new products. This means that retailers have a positive view of the concept, because the salad bar gives store customers clearer added value.

– We see major growth potential here. Although fresh cut and mixed salads have been around for quite a long time on the shelves, they still account for a small proportion of total consumption. This is particularly the case in comparison with other countries. The proportion of fresh cut in-store per capita is four times higher in the United States and many EU countries than in Sweden.

What is driving development on the consumer side? – It’s largely about all of us becoming more and more particular about what we eat. Many people have preconceived ideas about ready-cooked food, but there is obviously nothing to indicate that a meal is less healthy when cooked in advance. How healthy or unhealthy food is depends on what it consists of and how it is cooked. Most people realise this, which means that there is increased demand for healthy chilled dishes such as bean salads.

Are locally grown products important in fresh cut? – Not to the same extent as with traditional fruit and vegetables, as the fresh cut products are made at our salad factories in Helsingborg and Juva before being distributed throughout the Nordic region. However, the organic sector will certainly grow. The problem in the current situation is insufficient supply. At the same time, the valueadded per kilo price is increasing and the consumer is not always willing to pay it.

In early 2014, we launched our new in-store deli concept, which we believe will grow rapidly.

ANNUAL REPORT 2013

FRESH CUT

How do you see the future? – The healthy-eating trend is here to stay and favours fresh cut even more than the traditional areas. With this in mind, we are investing heavily in developing new solutions for convenience and ready salad dishes. There will be considerable focus on side salads and Grab & Go in 2014. We have launched our new concept in-store deli concept, which we believe will grow rapidly.

What is the most exciting thing we’ll see in the future? – Fruit and berries! Fresh cut fruit in different forms is showing annual growth of 100%, albeit from small volumes so far. However, I am convinced that fresh fruit and berries in the fairly near future will be bigger than their frozen counterparts.

ANNUAL REPORT 2013

THE FINNISH MARKET

”We have invested in new production lines at Salico Oy in order to maintain top quality and efficiency.”

ANNUAL REPORT 2013

THE FINNISH MARKET

INTERVIEW WITH TOMI HAKKARAINEN, COUNTRY MANAGER, FINLAND

The healthy trend is also evident in Finland People in Finland eat less fruit and vegetables per capita than in any other EU country. Consequently, Satotukku, the largest independent player in the market, has an important public health mission: to offer good fruit and vegetables that get consumers to choose more healthy food. What are the biggest challenges for fruit and vegetables in Finland? – The Finnish market is much smaller than the Swedish market. It is only about 50% of the size of the Swedish market. At the same time, there is intense competition. There used to be several small players, but many disappeared when the big supermarket chains decided to buy from wholesalers who are part of the same group.

How do you resond to the challenges? – Specialisation! The stores are struggling with low margins and to increase their competitiveness, they must offer their customers a good and exciting range. This is why niche products are becoming increasingly important. We want to be a service provider for the stores in this area, and offer products such as organic food, berries and various types of high-quality products. Thanks to Salico Oy, we can offer fresh cut alongside conventional fruit and vegetables.

How is it going for Eden Salladsbar in Finland? – It has been received with open arms by Finnish consumers. We set up the first salad bar in June 2013, followed by one or two new ones every week. At the end of the year we had 35 salad bars in place. In December 2013, the salad bar concept was established as a separate company, Eden Salaattibaari Oy, and a new CEO was appointed on 1 March

2014. The salad bar drive will continue and we expect a continuing high rate of expansion during 2014.

Did the salad bars act as something of a driving force for the rest of the business? – As would be expected, the increase in consumption through the salad bars is having a positive impact on demand. This is one of the reasons why we have invested in new production lines at Salico Oy in order to maintain top quality and efficiency. We also have a brand new warehouse management system in Satotukku, in order to obtain even better control and greater efficiency in the supply chain.

How do things look for fresh cut in HoReCa? – We are actually seeing faster growth here than on the consumer side, as individuals tend to hold on to their wallets when the economy isn’t the best. However, there is fierce competition. In Finland there are several fresh cut players, so we must be at the top in terms of both quality and service. Because we also have a strong conventional fruit and vegetable offering for HoReCa, we are well placed in the competitive arena.

optimum quality at the best possible price. This channel accounts for about 90% of purchases from Spain. Because all of the Group companies use the channel, we obviously obtain economies of scale, which our customers can benefit from.

How do you see the future for fruit and vegetables in Finland? – We are seeing growing demand for locally sourced food. This is particularly the case for Finnish apples, as well as greenhouse-grown tomatoes, cucumbers and lettuce. And in Finland, people are willing to pay a little extra for locally grown fruit and vegetables. I am confident that demand will gradually increase throughout the fruit and vegetable segment. The health trend is clear – particularly among the young – and this bodes well for the future.

What are the benefits of being a part of STC GreenFood? – With STC Iberica, which is also part of the Group, serving as our buyer in Spain, we know that we are always getting 15

ANNUAL REPORT 2013

BACK OFFICE

INTERVIEW WITH STAFFAN ROSENBLAD, CFO

Cost control means profitability Active work on the implementation of a new ERP (enterprise resource planning) system for the Group has been in progress for more than a year. Beginning in August 2012, the new system has been introduced in stages in company after company. The process of bringing all Group companies into the same system structure is expected to be completed in 2014. In parallel, other support functions have been centralised on a common platform which we call the back office.

The efficiency is most evident in the financial area, with all corporate finance now managed by the CFO, Group Financial Controller and Group Chief Accountant. The centralisation has also resulted in more efficient payroll administration.

Why a common platform?

What are the main benefits?

– It is mainly about efficiency. More or less all of the Group companies previously had different systems. This was resource-intensive and made it hard for management to obtain an overview. We have now centralised all of the Swedish companies’ administration in Helsingborg. This also means that we now only need 10 people to do what previously required 18.

– Cost control is the be-all and end-all for every company. This is particularly true in our highly competitive sector. And this is even more the case in our Group, with several companies and a geographical spread. Common systems give us better scope for comparing the different companies.

In practical terms, what’s different from before? – We are trying to use e-transactions as far as possible and to establish EDI flows between companies, both on an intra-Group basis and with customers and suppliers. Where this is not possible, we use PDF files. Incoming paper invoices are scanned into the system, where they are automatically matched against the order details and delivery information. In fact, we never even see about 70% of the incoming invoices! Not surprisingly, this brings an increase in efficiency and a positive environmental effect.

What other support functions apart from the ERP system does the back office have? – As I said earlier, we are now handling payroll administration centrally for all our Swedish companies. This is the first stage of the process to develop a more professional HR function. Another important component is our new contact centre, with a central switchboard system. This is part of our efforts to increase the level of service for our customers, and the new system brings a considerable improvement in response times. At the same time, the switchboard has many practical functions, such as a queuing system and the facility for customers to be connected to someone else when their regular contact person is occupied.

ANNUAL REPORT 2013

BACK OFFICE

”Food from all the

world’” Staff party

at Salico

Back to the ERP system – is it only designed for financial monitoring?

What opportunities do you see in the future platform?

– Absolutely not. Because the system provides us with relevant and accurate information, we can reduce the work input in this area and instead focus our efforts where they are needed. Early identification of trends enables us to be proactive and point the way forward.

– NAV FoodWare allows new solutions. This gives us more opportunities to build new web applications and smartphone apps, which will further streamline our operations.

What system are you using? – We have selected Pyramid, but we also introduced Microsoft NAV FoodWare in 2013. Salico AB and Salico Oy were the first to implement NAV. It might seem strange to go for two different systems, but the reason is simple: we have moved from 14 different systems to two. We chose Pyramid mainly because it is easy to implement. When all companies are in sync, it will then be easier to move over to NAV as a future Group-wide platform.

Do you have any other economic control tools? – We use QlikView, which provides us with quick monitoring on a daily basis. Every morning, the CEO of each company receives an up-to-date indication of the situation, which represents important decision-support material. This means we lose no time with respect to key measures. QlikView is also an excellent tool for benchmarking between companies.

Do you use QlikView for anything else?

rary. With QlikView, we are able to match data from the payroll system with ERP, and every morning time-recording data is compared with planned deliveries. This provides us with a perfect basis for optimising staff availability.

What is there left to do? – Increased HR functionality is at the top of the wish list at the moment – designing a methodology based on shared values and creating an optimal work environment. We want to build systems that improve employees’ opportunities to develop and grow. Some of our companies have a proud tradition of career opportunities within the company. We want to implement this throughout the entire Group. We want to be there competing to be Sweden’s most attractive workplace!

– Yes, we also use it for staffing planning. At our warehouse, we have about 80% permanent employees and 20% tempo-

ANNUAL REPORT 2013

FINANCIALS

â&#x20AC;?In 2013, the focus was on getting companies to exploit our common strengths. These initiatives create the conditions for competitiveness in a highly consolidated sectorâ&#x20AC;?

ANNUAL REPORT 2013

FINANCIALS

Annual financial statements 2013 Contents Multi-year overview

Board of Directorsâ&#x20AC;&#x2122; report

Income statement

Balance Sheet

Cash flow statement

General information

Notes 29 Audit report

STC GreenFood Board of Directors

STC GreenFood Management Group 37 Management groups subsidiaries

Our locations

ANNUAL REPORT 2013

FINANCIALS

Multi-year overview Group * SEK thousands Net sales

2013

2012

2011

2010

3,006,742

2,893,738

2,694,192

2,113,034

EBITDA

57,645

67,393

33,105

40,106

Operating profit/loss **

65,135

70,315

50,838

40,106

Profit/loss after financial items

34,329

-33,427

142

35,067

Profit/loss for the year after tax Total assets Equity

4,057

-65,475

-4,840

25,741

617,419

618,588

622,404

332,756

50,798

44,171

107,495

26,139

Equity ratio (%)

Return on capital employed (%)

neg

535

537

512

240

Number of employees

Parent Company * SEK thousands

2013

2012

2011

2010

Net sales

8,690

16,120

5,121

3,500

EBITDA

-26,649

-16,802

-15,200

-2,920

Profit/loss after financial items

-15,437

-115,584

-21,074

-4,621

Profit/loss for the year after tax

14,644

-83,258

-1,690

-3,411

259,372

242,225

332,746

135,530

64,024

49,380

139,231

40,921

neg

Total assets Equity Equity ratio (%) Return on capital employed (%)

* For definitions of key ratios, see general information. ** Operating profit before depreciation, amortisation and impairment, adjusted for non-recurring items.

ANNUAL REPORT 2013

FINANCIALS

Board of Directors’ Report The Board of Directors and CEO of STC GreenFood AB, reg. no. 556115-6778, hereby submit the annual report for the financial year 2013. The annual financial statements are presented in SEK thousands. continued to develop our Eden brand. Eden is increasingly in demand and Eden Salladsbar has made a strong impact, with a presence in more than 100 locations in Sweden and about 40 locations in Finland under the name Eden Salaattibaari. Goods for resale have also experienced a large impact from the Eden brand.

STC GreenFood AB is the Parent Company of STC GreenFood Group, which is one of the largest players in fruit and vegetable trading in the Nordic countries. Operations encompass imports, wholesaling and distribution as well as production and sales of fresh cut, value-added products. Sweden and Finland are the main markets. The main customer segments are wholesalers, retailers and restaurants, hotels and catering.

In 2013, we acquired the remaining 49% minority stake in Eden Salladsbar AB. We established Eden Salaattibaari in Finland and appointed Hannu Hovi as CEO of the company. We invested in a large number Salad bars in 2013. We continue to see strong demand for salad bars and expect continuing expansion, which will also drive sales in the Salico companies.

STC GreenFood Group consists of three business areas – Trading, Fresh Cut and Eden Salladsbar. Trading includes the subsidiaires Ewerman, Allfrukt, Satotukku, STC Iberica, Hembergs Trädgårdsprodukter, Örebro Trädgårdshall, Växjö Partiaffär and STC GreenFood Sourcing. The Fresh Cut business area comprises Salico Sweden, Salico Finland and Swedecut. Eden Salladsbar consists of the Swedish company Eden Salladsbar and the newly established Finnish company Eden Salaattibaari.

The Salico companies continue to expand and the share of processed fruit and vegetables (fresh cut) is increasing at the expense of traditional products. Looking at the countries with the highest share of processed fruit and vegetables, the share may be up to 25%. In Sweden, the share is about 6%, which means that we expect continuing volume growth for the Salico companies. To meet this expansion, we have invested in an efficient salad line with automatic root removal and a high-efficiency dryer for Salico. Both of these measures will strengthen our competitiveness and give scope for a broader focus on the consumer market in 2014.

STC GreenFood AB is owned by STC Interfinans AB, which is a privately held, Swedish investment company engaged in long-term value growth. STC Interfinans has worked in the area of fruit and vegetable trading since the 1980s. What is now STC GreenFood Group began to be established in the 1990s. STC GreenFood AB is mainly engaged in business development, Group management and corporate functions.

In November 2013, a large number of Allfrukt AB employees decided to terminate their employment and move to a new company owned by our main competitor.

Significant events during the year The Group worked hard in the area of structure in 2013. STC GreenFood Group has historically been run in a holding company structure with a number of independent companies. In 2013, the focus was on getting companies to exploit our common strengths, while at the same time we developed a common IT, ERP and communications structure. All of these initiatives create the conditions for competitiveness in a highly consolidated sector. Infrastructure linked to increased inter-company cooperation is conducive to future success, while change creates friction. We now have a common telephone system with a common switchboard function and a common payroll system in the Swedish operations. We have coordinated use of Pyramid as a business system for all trading companies in Sweden in parallel with our implementation of NAV/SI FoodWare at Salico AB in Sweden. Our entire IT structure in Sweden has been integrated, and at the same time we have introduced transparent monitoring, with QlikView providing effective decision support. This platform is a prerequisite for generating economies of scale in a fiercely competitive sector. The focus has been on IT platforms and IT structure in Sweden. In 2014, some of this work will be carried out for our Finnish companies under the leadership of Tomi Hakkarainen, our newly appointed head of the Finnish operations. At Satotukku in Finland, we have invested in a new WMS (warehouse management system) enabling us to support Finnish retail chains as a service provider. This has resulted in us taking more responsibility in the Finnish market for organic and exotic products. Alongside our infrastructure focus, we have also

Despite significant costs incurred in relation to the change process as well as the turbulence at Allfrukt AB, we were able to report an operating profit of SEK 65.1 million, which is marginally lower than in 2012 when the figure was SEK 70.3 million. Profit for the year was adversely affected by non-recurring costs of SEK 7.5 million associated with a dispute on a previous IT system project.

How we see the Group’s future We see a bright future for STC GreenFood. In the consolidated market we are in, the leading players will create the conditions for sustainable profitability in trading operations over time. At the same time, we are developing our Fresh Cut business area into more of a food company, for which we see a very exciting development linked to the four driving consumer trends. For the salad bar concept, we see development in the area of food retailing over the next few years, while we see ourselves constantly expanding the items we deliver to each store, with everything from fruit salads, Grab & Go products and side salads. With all of these factors, we see an exciting development for STC GreenFood and we are well positioned here with links to consumer trends, although we can see from this development that many countries are ahead of Sweden’s present development.

Investments 21

ANNUAL REPORT 2013

FINANCIALS

Currency risk Currency risk is divided into flow risk and balance sheet risk. Flow risk exists in the subsidiaries that import fruit and vegetables, and pay in foreign currency. These subsidiaries work actively with forward contracts as well as with currency clauses to safeguard trading profits in cases where the exposure is substantial. Balance sheet risk is the risk of changes in the value of assets and liabilities attributable to exchange rate movements. In such cases, an individual assessment is made of the risk in each transaction before a decision is made to take out a forward contract or a foreign currency loan. Foreign subsidiaries’ net assets were not hedged against exchange rate movements in 2013.

The Parent Company’s investments in property, plant and equipment and intangible assets during the year amounted to SEK 4.5 (0.3) million, while investments in Group companies were SEK 2.4 (1.2) million. The Group’s investments in property, plant and equipment and intangible assets during the year amounted to SEK 54.8 (46.0) million.

Report on the work of the Board STC GreenFood AB’s Board has four directors. The CEO does not serve on the Board. Six minuted meetings were held during the year. The Board’s work is regulated by annually adopted rules of procedure that include instructions for the CEO, the Company’s decision-making structure and the information procedures for matters between Company management and the Board.

Credit risk Credit risk refers to the credit risk associated with trade receivables. Customer credit risk is managed within the subsidiaries on the basis of each subsidiary’s operations and customer structure. Possible or confirmed customer credit losses are recognised in the income statement as they arise and amounted to SEK 2.2 (3.5) million during the year.

Environmental impacts Some of the STC GreenFood subsidiaries have operations that are subject to notification or permit requirements under the Environmental Code. The permits are for emissions to water, chemicals handling, waste management and noise. The subsidiaries work actively to minimise transport – their own as well as via external shipping firms – to reduce the adverse environmental impacts that these transports generate.

Interest rate risk Interest rate risk is the risk of a negative impact on the Group’s earnings caused by variations in the value of a financial instrument as a result of changes in market interest rates. STC GreenFood Group’s interest rate risk is not of such scope that interest forwards or similar instruments are considered to be warranted and it is therefore considered part of business risk.

The companies in STC GreenFood Group work continuously to reduce energy use in their own areas, in order to reduce costs and ensure environmentally sustainable operations.

Financing risk Financing risk is the risk associated with inability to discharge financial obligations. As STC GreenFood AB is wholly owned by STC Interfinans, financing risk is a function of the owners’ financing risk. As STC Interfinans currently has a very strong financial position, financing risk is considered to be very low.

Research and development STC GreenFood and its subsidiaries have high ambitions to be driving forces and leaders in developing products and services in their respective areas. This work is exemplified daily in the contacts they have with their customers and suppliers. R & D expenditure is recognised in continuing operations in the income statement.

Foreign branches At present, neither STC GreenFood AB nor its subsidiaries conduct any operations through foreign branches.

Financial position and financial risks Cash and cash equivalents at the reporting date were SEK 40.8 (103.9) million for the Group and SEK 0.0 (2.1) million for the Parent Company. The Group’s net debt amounted to SEK 135.0 (98.4) million, although cash and short-term investments exceeded external interest-bearing liabilities by SEK 24.5 (87.9) million. The Parent Company did not have any external interest-bearing liabilities at the reporting date. During the year, the Group Parent STC Interfinans introduced a central account structure in order to improve liquidity management for the Swedish part of the business. Consequently, STC GreenFood Group’s cash and cash equivalents have to an extent been replaced by offsetting receivables/ decreased liabilities to the Group Parent STC Interfinans. The companies within STC GreenFood Group are mainly financed by the holding company STC Interfinans. The Group’s financial risks are categorised as follows:

ANNUAL REPORT 2013

Distribution of profit (SEK) Proposed distribution of the Company’s profits

The following amounts are available for distribution by the Annual General Meeting: Retained earnings 34,376,166 Profit for the year 14,643,965 49,020,131 The Board of Directors proposes: to be carried forward

49,020,131

The earnings and financial position of the Company are presented in the following income statement and balance sheet, along with the accompanying cash flow statement, supplementary disclosures and comments on the financial statements.

FINANCIALS

Income statement Group SEK thousands

Parent

1/1/2013

1/1/2012

1/1/2013

1/1/2012

Note

31/12/2013

31/12/2012

31/12/2013

31/12/2012

3,006,742

2,893,738

8,690

16,120

16,715

8,955

3,023,457

2,902,693

8,690

16,120

-230,313

-186,755

-6,810

-2,126,335

-2,092,116

Operating income Net sales Other operating income

Operating expenses Raw materials and consumables Goods for resale Other external expenses Personnel expenses

2, 3

-313,395

-285,851

-11,855

-14,196

-288,853

-270,578

-16,891

-11,904

-20,933

-97,860

-60

-7,747

Depreciation/amortisation and impairment of property, plant and equipment and intangible assets Other operating expenses

Operating profit/loss

-6,916

-6,593

-2,986,745

-2,933,160

-35,399

-40,657

36,712

-30,467

-26,709

-24,537

Result from financial investments Result from investments in Group companies

Result from other securities and receivables Interest income, external Interest income from Group companies Interest expenses, external Interest expenses to Group companies

Profit/loss after financial items

14,903

-86,383

205

746

1,380

1,525

1,292

215

-939

-1,334

-276

-754

-3,759

-4,503

-3,676

-4,263

-2,383

-2,960

11,272

-91,047

34,329

-33,427

-15,437

-115,584

Appropriations Change in accelerated depreciation Group contributions made Group contributions received

Profit/loss before tax Tax on profit/loss for the year

1,988

-28,780

-28,849

-33,997

-31,849

64,078

62,639

-28,780

-28,849

30,081

32,778

5,549

-62,276

14,644

-82,806 -452

-2,253

-3,083

Non-controlling interest

761

-116

Profit/loss for the year

4,057

-65,475

14,644

-83,258

ANNUAL REPORT 2013

FINANCIALS

Balance sheet ASSETS

Group

SEK thousands

Note 31/12/2013

Parent

31/12/2012

31/12/2013 31/12/2012

Non-current assets Intangible assets Licences and capitalised expenditure

14,038

2,757

4,773

Goodwill

4,372

250 -

18,410

2,757

4,773

250

Property, plant and equipment Land and buildings

32,750

32,224

4,177

Plant and machinery

44,044

26,295

Equipment, tools, fixtures and fittings

27,517

20,410

Work in progress

6,755

13,287

111,066

92,216

4,215

4,234

Financial assets Investments in Group companies

164,898

162,528

137,132

94,851

8,253

3,877

150

Other non-current receivables

2,727

2,799

1,038

1,213

Deposits

1,163

603

141,172

98,403

174,339

167,768

270,648

193,376

183,327

172,252

Receivables from Group companies Investments in associates

Total non-current assets Current assets Inventories etc. Raw materials and consumables

10,306

9,988

Finished products and goods for resale

34,393

30,226

44,699

40,214

228,729

240,274

167

73,890

64,626

Current receivables Trade receivables Receivables from Group companies Current tax assets

136

Other receivables

15,715

20,016

1,760

2,889

Prepayments and accrued income

16,714

20,608

177

266

261,226

281,065

76,036

67,891

40,846

103,933

2,082

Total current assets

346,771

425,212

76,045

69,973

TOTAL ASSETS

617,419

618,588

259,372

242,225

Cash and bank balances

ANNUAL REPORT 2013

FINANCIALS

EQUITY AND LIABILITIES SEK thousands

Group Note 31/12/2013

Equity

Parent

31/12/2012

31/12/2013 31/12/2012

Restricted reserves/restricted equity 15,000

15,000

Statutory reserve

Share capital (150,000 shares)

Restricted reserves

511

15,004

15,511

15,004

31,737

94,135

34,376

117,634

Unrestricted reserves/unrestricted equity Unrestricted reserves Retained earnings Profit/loss for the year

4,057

-65,475

14,644

-83,258

35,794

28,660

49,020

34,376

50,798

44,171

64,024

49,380

5,670

6,855

Provisions

1,475

2,922

899

Deferred tax liabilities

1,758

2,993

3,233

5,915

899

Total equity Non-controlling interest Provisions

Non-current liabilities

Liabilities to credit institutions

16,026

15,734

Liabilities to Group companies

159,524

186,257

150,056

182,941

Other liabilities

638

175,550

202,629

150,056

182,941

Current liabilities Liabilities to credit institutions Trade payables Liabilities to Group companies Current tax liabilities Other liabilities Accruals and deferred income

TOTAL EQUITY AND LIABILITIES MEMORANDUM ITEMS

304

293

187,570

203,271

1,664

2,777

29,218

971

34,141

3,487

921

1,011

41,400

35,859

3,158

673

122,755

117,613

5,430

2,967

382,168

359,018

44,393

9,903

617,419

618,588

259,372

242,225

Pledged assets Pledges and comparable security provided for own liabilities and for obligations reported as provisions Property mortgages

20,587

19,835

Floating charges

25,875

26,460

626

603

47,088

46,898

Other pledged assets

Contingent liabilities

ANNUAL REPORT 2013

FINANCIALS

Cash flow statement Group SEK thousands

Parent

1/1/2013

1/1/2012

1/1/2013

1/1/2012

31/12/2013

31/12/2012

31/12/2013

31/12/2012

Operating profit/loss

36,712

-30,467

-26,709

-24,537

Adjustments for non-cash items

20,933

97,860

7,112

2,271

2,672

277

353 -5,017

Note Operating activities

Interest received Interest paid

-4,698

-5,837

-3,952

Income tax paid

-2,343

-4,380

-99

-19

52,875

59,848

-30,423

-22,108

Cash flow from operating activities before changes in working capital Cash flow from changes in working capital Decrease(+)/increase(-) in inventories/work in progress

-4,485

-6,339

Decrease(+)/increase(-) in trade receivables

11,545

-26,582

-9,264

-73

8,294

4,755

1,218

-36,222

Decrease(+)/increase(-) in receivables

-15,701

20,408

-1,113

544

Decrease(-)/increase(+) in current liabilities

Decrease(-)/increase(+) in trade payables

37,494

22,991

36,501

3,296

Cash flow from operating activities

90,022

75,081

-3,081

-54,563

-250

Investing activities

Acquisition of intangible assets

-11,869

-1,638

-4,523

Acquisition of property, plant and equipment

-42,935

-44,438

205

205 -57

Sale of land and buildings Acquisition of fixtures & fittings, tools and equipment

-268

1,085

227

-2,370

-1,200

-2,370

-1,200

Sale of interests in Group companies

7,085

Change in non-current receivables, Group

-4,376

Change in non-current receivables

-41,216

-20,411

175

14,466

Cash flow from investing activities

-97,261

-67,482

-11,091

20,249

Sale of fixtures & fittings, tools and equipment Acquisition of Group companies

Financing activities -

10,771

Group contributions

New share issues, subsidiaries

-28,780

-28,849

30,081

30,790

Long-term loans

-27,079

89,923

73,488

-78,011

-32,885

-78,000

Change in financial liabilities Dividend received Cash flow from financing activities

14,903

9,135

-55,848

-6,166

12,099

35,413

Change in cash and cash equivalents

-63,087

1,433

-2,073

1,099

Cash and cash equivalents at beginning of year

103,933

102,500

2,082

983

40,846

103,933

2,082

Cash and cash equivalents at end of year*

* During the year, the Group Parent STC Interfinans introduced a central account structure in order to improve liquidity management for the Swedish part of the business. Consequently, STC GreenFood Groupâ&#x20AC;&#x2122;s cash and cash equivalents have to an extent been replaced by offsetting receivables/decreased liabilities to the Group Parent STC Interfinans. Short-term and long-term financing for Swedish companies in STC GreenFood Group has been secured by loans from the Group Parent STC Interfinans AB.

ANNUAL REPORT 2013

FINANCIALS

General information Accounting policies

Other provisions Provisions include obligations attributable to the financial year or previous financial years, which on the reporting date are certain or likely to arise, although the amounts and settlement dates are unknown. These include provisions for warranty obligations and restructuring costs.

The accounting policies applied are consistent with the Swedish Annual Accounts Act and the statements and general recommendations of the Swedish Accounting Standards Board. When such is not case, this is indicated below. The Group contribution has been accounted for as an appropriation of profit or loss in accordance with the Swedish Accounting Standards Boardâ&#x20AC;&#x2122;s general recommendation 2012:1.

Income taxes Reporting of income tax includes current tax and deferred tax. For items recognised in the income statement, related tax effects are also recognised in the income statement. For items recognised directly in equity, related tax effects are also recognised in equity. Current tax is the amount of income taxes payable or recoverable in respect of the taxable profit or loss for the current year, and the portion of income tax for prior periods not yet recognised. Deferred tax is calculated on all temporary differences. A temporary difference exists when the tax base of assets and liabilities differs from their carrying amount. Deferred tax assets relating to loss carryforwards or other future tax deductions are recognised to the extent that it is probable that the deductions can be offset against future taxable profit.

Measurement principles etc. Assets, provisions and liabilities are measured at cost unless otherwise indicated below.

Intangible assets and property, plant and equipment Intangible assets and property, plant and equipment are recognised at cost less accumulated amortisation/depreciation and any impairment. Assets are amortised/depreciated on a straight-line basis over their useful lives. Receivables Receivables are recognised at the amounts expected to be received. Inventories etc. Raw materials and purchased finished and semi-finished goods are measured at the lower of cost and the estimated net realisable value. Self-produced and semi-finished goods are measured as the goodsâ&#x20AC;&#x2122; production costs, including a reasonable proportion of indirect costs. Net realisable value includes an assessment of obsolescence. Cost is calculated using the first-in, first-out method.

Revenue recognition Revenue from the sale of goods and services is recognised when the significant risks and rewards have been transferred to the buyer. Where applicable, revenues are reduced by the value of discounts. Rental income from property management is recognised in the rental period, and in accordance with the conditions laid down in the lease agreement.

Definition of key ratios

Foreign currency receivables and liabilities Receivables and liabilities are translated at the closing rate, apart from hedged receivables/liabilities, which are measured at the hedged rate. Exchange differences are recognised in profit or loss. Exchange differences on borrowings are reported as financial items, while other exchange differences on receivables and liabilities are reported in operating profit or loss.

Equity ratio Adjusted equity as a percentage of total assets Operating profit/loss Operating profit before depreciation, amortisation and impairment, adjusted for non-recurring items. Return on capital employed Profit after financial items + financial items + group contributions as a percentage of average capital employed (adjusted equity + interest bearing liabilities).

Financial instruments Financial assets and liabilities are measured at cost less any impairment. Leases All leases are accounted for as operating leases, which means that lease payments are recognised as an expense on a straightline basis over the lease term.

Return on equity Profit after financial items as a percentage of average adjusted equity.

ANNUAL REPORT 2013

FINANCIALS

Basis of consolidation The consolidated financial statements have been prepared in accordance with the Annual Accounts Act and the Swedish Accounting Standards Board’s general recommendations. The accounting policies applied are unchanged from previous years. The consolidated financial statements have been prepared in accordance with the acquisition method. This requires the assets and liabilities of acquired subsidiaries to be recognised at the acquisition-date market value in accordance with a purchase price allocation. If the cost of shares in a subsidiary exceeds the estimated market value of the company’s net assets according to the PPA, the difference is reported as goodwill. Amortisation of goodwill is based on the estimated useful life. Subsidiaries are consolidated from the date on which control is obtained until the date on which it ceases. In addition to the Parent Company, the consolidated financial statements include all companies in which the Parent directly or indirectly holds more than 50 percent of the votes or has some other form of control, cf. chapter 1, section 4, of the Annual Accounts Act.

Associates Investments in associates, in which the Group has a substantial shareholding but not more than 50 percent, are reported in the consolidated financial statements using the equity method. The increase or decrease in the associate’s value that arises using the equity method has increased the Group’s restricted reserves and decreased its unrestricted reserves.

Translation of foreign subsidiaries The accounts of foreign subsidiaries are translated to Swedish kronor using the current method. According to this method, all assets, provisions and other liabilities are translated at the closing rate, and all income statement items are translated at the average rate for the year. Translation differences that arise are recognised directly in the Group’s equity.

ANNUAL REPORT 2013

NOTES

Notes Disclosures for individual items The annual financial statements are presented in SEK thousands

Note 1 Net sales

Group

SEK thousands

Parent

2013

2012

2013

2012

Sweden

2,181,125

2,128,058

6,880

15,115

Finland

773,257

694,732

1,710

930

39,544

59,326

3,442

5,267

Net sales by geographic area

Denmark Estonia Other

9,374

6,355

100

3,006,742

2,893,738

8,690

16,120

The Parent Company’s other income has been reclassified to Net sales and refers to consulting services for company management, organisation, marketing, administration etc.

Note 2 Net leases

Group

SEK thousands

Parent

2013

2012

2013

2012

13,685

12,786

490

341

2013

2012

2013

2012

Audit services

1,280

1 201

224

219

Other services

386

367

1,666

1,259

591

219

The Company’s lease payments for the year

Note 3 Auditors’ fees

Group

SEK thousands

Parent

Grant Thornton

Audit services include the examination of the annual report and accounting records, and the administration of the Board and CEO. They also include other procedures required to be carried out by the Company’s auditors, as well as advice or other assistance arising from observations made during the performance of such other procedures. Everything else is classified as other services.

Note 4 Personnel

Group

SEK thousands

Parent

2013

2012

2013

2012

Average number of employees

535

537

Number of female employees

176

161

Average number of employees The average number of employees is based on the number of hours paid by the Company in relation to normal working hours.

ANNUAL REPORT 2013

NOTES

Note 4 Personnel, contâ&#x20AC;&#x2122;d

Group

SEK thousands

Parent

2013

2012

2013

2012

Salaries and employee benefits

9,789

9,634

1,987

1,811

Bonuses

3,726

4,994

630

Pension costs

2,053

1,577

444

465

15,568

16,205

3,061

2,906

189,609

180,130

6,176

5,587

17,883

16,942

1,030

710

207,492

197,072

7,206

6,297

Salaries, employee benefits etc. Salaries, employee benefits, social security contributions and pension costs: Board of Directors and CEO

Other employees Salaries and employee benefits Pension costs

Social security contributions

Total Board and other employees

50,233

49,296

3,738

2,737

50,233

49,296

3,738

2,737

273,293

262,573

14,005

11,940

Note 5 Result from investments in Group companies

Parent

SEK thousands Dividend Impairment of subsidiary shares

Note 6 Tax on profit/loss for the yeart

Group

SEK thousands Current tax Deferred tax

Note 7 Licences and capitalised expenditure SEK thousands

2013

2012

14,903

9,135

-95,518

14,903

-86,383

Parent

2013

2012

2013

2012

-2,253

-5,590

-452

414

2,507

-2 667

-3,083

-452

Group

Parent

31/12/2013

31/12/2012

31/12/2013

31/12/2012

Opening cost

14,912

13,489

250

7,112

Purchases

11,869

1,638

4,523

250

-7,112

Sales/disposals Translation differences for the year Closing accumulated cost Opening amortisation

266

-215

27,047

14,912

4,773

250 -

-4,519

-4,326

Amortisation for the year

-662

-355

Translation differences for the year

-192

162

Closing accumulated amortisation

-5,373

-4,519

Opening impairment

-7,636

-438

-7,198

Closing accumulated impairment

-7,636

Closing carrying amount

14,038

2,757

4,773

250

Impairment for the year

ANNUAL REPORT 2013

NOTES

Note 8 Goodwill

Group

SEK thousands Opening cost Purchases Translation differences for the year

Parent

31/12/2013

31/12/2012

31/12/2013

86,382

86,510

31/12/2012 -

4,372

-128

Closing accumulated cost

90,842

86,382

Opening amortisation

-21,038

-13,068

-8,056

Amortisation for the year

Closing accumulated amortisation

Translation differences for the year

-21,028

-21,038

Opening impairment

-65,344

-59

-65,285

Impairment for the year Translation differences for the year

-98

Closing accumulated impairment

-65,442

-65,344

4,372

31/12/2013

31/12/2012

31/12/2013

31/12/2012

37,065

18,368

4,177

599

19,215

-5

Closing carrying amount

Notet 9 Land and buildings

Group

SEK thousands Opening cost Purchases Sales/disposals Translation differences for the year

Parent

1,239

-513

38,903

37,065

4,177

Opening depreciation

-4,841

-4,262

Depreciation for the year

-1,098

-738

Closing accumulated cost

-214

159

Closing accumulated depreciation

Translation differences for the year

-6,153

-4,841

Closing carrying amount

32,750

32,224

4,177

Carrying amount, buildings

31,923

31,397

4,177

827

32,750

32,224

4,177

31/12/2013

31/12/2012

31/12/2013

73,157

73,993

9,120

2,819

Sales/disposals

-6,263

-3,366

Reclassifications

18,368

595

Carrying amount, land

Note 10 Plant and machinery

Group

SEK thousands Opening cost Purchases

Translation differences for the year

Parent 31/12/2012

897

-884

Closing accumulated cost

95,279

73,157

Opening depreciation

-46,862

-42,470

5,541

3,366

-9,099

-8,569

Sales/disposals Reclassifications Depreciation for the year

-815

722

Closing accumulated depreciation

Translation differences for the year

-51,235

-46,862

Closing carrying amount

44,044

26,295

ANNUAL REPORT 2013

NOTES

Note 11 Equipment, tools and fixtures & fittings SEK thousands

Group

Parent

31/12/2013

31/12/2012

31/12/2013

Opening cost

84,788

78,863

Purchases

21,851

11,314

268

-16,631

-4,427

-268

-665

Sales/disposals Reclassifications Translation differences for the year

31/12/2012

226

-297

Closing accumulated cost

90,234

84,788

Opening depreciation

-64,378

-61,170

12,025

4,225

-10,074

-7,659

-60

-290

226

Closing accumulated depreciation

-62,717

-64,378

-19

Closing carrying amount

27,517

20,410

31/12/2013

31/12/2012

31/12/2013

Opening cost

13,321

2,317

Purchases

11,365

11,090

Sales/disposals Depreciation for the year Translation differences for the year

Non-depreciable equipment amounted to 105 (105).

Note 12 Work in progress

Group

SEK thousands

Reclassifications

31/12/2012

-18,368

473

-86

6,791

13,321

Translation differences for the year Closing accumulated cost

Parent

-34

-36

Translation differences for the year

Opening impairment

-2

Closing accumulated impairment

-36

-34

6,755

13,287

Closing carrying amount

Note 13 Investments in Group companies

Parent Carrying amount

Companies

Reg. number

Domicile

Share of equity, %

31/12/2013

31/12/2012

Ewerman AB

556095-5840

Helsingborg

100%

45,931

Allfrukt AB

556381-2451

Årsta

100%

32,353

Salico AB

556320-8874

Helsingborg

100%

24,074

Salico Oy

FI 1568507-01

Juva, Finland

100%

22,435

Satotukku Oy

FI-0113698-9

Helsingfors, Finland

100%

14,330

AB Hembergs Trädgårdsprodukter

556241-5538

Halmstad

100%

12,413

Örebro Trädgårdshall AB

556047-3042

Örebro

100%

6,265

STC GreenFood Sourcing AB

556759-6811

Helsingborg

100%

3,673

Wermfood AB

556856-6698

Årsta

100%

480

Eden Salladsbar AB

556856-9866

Årsta

100%

2,603

255

Växjö Partiaffär AB

556290-0927

Växjö

100%

215

215 104

STC GreenFood Export Iberica SLU

ES B-65002453

Pals, Spanien

100%

104

Eden Salaattibaari Oy

FI 2590747-7

Helsingfors, Finland

100%

164,898

162,528

ANNUAL REPORT 2013

NOTES

Note 13 Investments in Group companies, cont’d

Parent

SEK thousands Opening cost Purchases

31/12/2013

31/12/2012

258,046

268,259

2,370

1,200

Change in Group structure

-11,413

Closing accumulated cost

260,416

258,046

Opening impairment

-95,518

Impairment for the year Closing accumulated impairment

-95,518

Closing carrying amount

164,898

162,528

Indirectly owned companies

Reg. number

Oy Avant Niko AB

0907534-1

Share of equity, % 50%

Valintavarkaus Oy

0811202-3

78%

Note 14 Investments in associates Company

Carrying amount

Reg. number

Domicile

556772-0759

Åhus

Share of equity, %

31/12/2013

31/12/2012

Group Swedecut AB

50%

150

Parent Swedecut AB

556772-0759

Åhus

50%

Note 15 Equity Group

Share capital

Equity, 1 January

15,000

Transfers between restricted and unrestricted equity

Restricted reserves

Unrestricted reserves

511

28,660

-507

507

Profit/loss for the year

4,057

Translation differences for the year

2,570

Equity, 31 December

Parent

15,000

35,794

Share capital

Statutory reserve

Unrestricted equity

15,000

34,376

15,000

49,020

Equity, 1 January Profit/loss for the year

14,644

Equity, 31 December

Parent SEK thousands Conditional shareholder contributions at the reporting date

Note 16 Non-current liabilities

Group

SEK thousands Repayments 2-5 years Repayments after 5 years

31/12/2013

31/12/2012

130,000

Parent

31/12/2013

31/12/2012

31/12/2013

31/12/2012

164,783

191,867

150,056

182,941

10,767

10,762

175,550

202,629

150,056

182,941

ANNUAL REPORT 2013

NOTES

Note 17 Overdraft facility

Group

SEK thousands

Parent

31/12/2013

31/12/2012

31/12/2013

31/12/2012

4,710

Overdraft facility granted

Note 18 Contingent liabilities Group A surety of SEK 2,100,000 has been provided for the Parent Company. The Parent Company did not have any liabilities or contingent liabilities that could be invoked against the surety at 31 December 2013 Parent A general surety has been provided for subsidiaries. The subsidiaries did not have any liabilities or contingent liabilities that could be invoked against the surety at 31 December 2013

Note 19 Acquisitions of non-current assets

Group

SEK thousands

Parent

31/12/2013

31/12/2012

31/12/2013

31/12/2012

2,370

1,200

2,370

1,200

599

19,215

30,971

14,133

268

Work in progress

11,365

11,090

Licences and capitalised expenditure

11,869

1,638

4,523

250

57,174

47,276

7,161

1,507

Shares in subsidiaries/goodwill Land and buildings Machinery, equipment, tools and vehicles

Helsingborg, 23 April 2014

Anders Hallberg Chairman

Peter Norlindh

Thomas Blades

Boris Lennerhov

Lars Ă&#x2026;strĂśm Chief Executive Officer

Our audit report was submitted on 30 April 2014 Grant Thornton Sweden AB

Mats Fridblom Authorised Public Accountant

ANNUAL REPORT 2013

AUDIT REPORT

Audit Report To the Annual General Meeting of STC GreenFood AB, reg. no. 556115-6778 Report on the annual accounts and consolidated accounts We have audited the annual accounts and consolidated accounts of STC GreenFood AB for the year 2013. The Company’s annual accounts and consolidated accounts are included in the printed version of this document on pages 21-34.

We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.

Report on other legal and regulatory requirements Responsibilities of the Board of Directors and the President for the annual accounts and consolidated accounts

In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company’s profit or loss and the administration of the Board of Directors and the President of STC GreenFood AB for the year 2013.

The Board of Directors and the President are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with the Annual Accounts Act, and for such internal control as the Board of Directors and the President determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Responsibilities of the Board of Directors and the President The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss, and the Board of Directors and the President are responsible for administration under the Companies Act.

Auditor’s responsibility Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the annual accounts and consolidated accounts 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 company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the President, as well as evaluating the overall presentation of the annual accounts and consolidated accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor’s responsibility Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company’s profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden. As a basis for our opinion on the Board of Directors’ proposed appropriations of the company’s profit or loss, we examined whether the proposal is in accordance with the Companies Act As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the President is liable to the company. We also examined whether any member of the Board of Directors or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinions We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the President be discharged from liability for the financial year.

Opinions In our opinion, the annual accounts and consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company and the group as of 31 December 2012 and of their financial performance and cash flows in accordance with the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

Stockholm, 30 April 2014 Grant Thornton Sweden AB

Mats Fridblom Authorised Public Accountant

ANNUAL REPORT 2013

BOARD OF DIRECTORS

STC GreenFood Board of Directors

Boris Lennerhov (Director), Lars ร strรถm (President and CEO), Peter Norlindh (Director), Anders Hallberg (Chairman), Thomas Blades (Director)

ANNUAL REPORT 2013

MANAGEMENT GROUPS

STC GreenFood Management Group

Tomi Hakkarainen, Johan Bengtsson, Lars Åström, Björn Johansson, David Ottoson, Staffan Rosenblad

Tomi Hakkarainen CEO Satotukku, Country Manager Finland

Björn Johansson Head of Fresh Cut

Tel. +358 9 25159 101 Mob. +358 040 9009 101

Vxl. + 46 (0)42 400 54 20 Mob. +46 (0)705 81 58 47

tomi.hakkarainen@satotukku.fi

bjorn.johansson@stcgreenfood.se

Johan Bengtsson CEO Ewerman

David Ottoson CEO Allfrukt

Tel. +46 (0)42 490 11 01 Mob. +46 (0)721 66 27 00

Tel. +46 (0)8 501 007 02 Mob. +46 (0)733 41 00 11

johan.bengtsson@ewerman.se

david.ottoson@allfrukt.se

Lars Åström President and CEO STC GreenFood

Staffan Rosenblad CFO STC GreenFood

Vxl. + 46 (0)42 400 54 20 Mob. +46 (0)707 45 70 50

Vxl. +46 (0)42 400 54 20 Mob. +46 (0)706 95 67 80

lars.astrom@stcgreenfood.se

staffan.rosenblad@stcgreenfood.se

ANNUAL REPORT 2013

MANAGEMENT GROUPS

Management groups subsidiaries

Salico AB

Ewerman AB

Johan Andersson, Kim Bröchner, Helena Fäldt, Anna Görnebrand, Marcus Lehtonen, Susanne Ohlsson, Göran Fries

Johan Bengtsson, Magnus Eriksson, Johan Åkesson, Linda Hugosson, Magnus Falk, Magnus Johansson

Allfrukt i Stockholm AB

Växjö Partiaffär AB

Egron Edlund, Johan Andersson, David Ottoson, Lena Franzén, Mikael Bäckström

Fredric Eriksson, Bitte Torlegård, Magnus Göransson, Dan Hörberg

AB Hembergs Trädgårdsprodukter

Örebro Trädgårdshall AB

Peter Johansson, Peter Nilsson, Thorbjörn Gustafsson, Martin Karlsson

Urban Kropp, Ulrika Thell, Anton Bichis, Johnny Nilsson, Kristian Leppimaa

ANNUAL REPORT 2013

MANAGEMENT GROUPS

Salico Oy

Satotukku Oy

Arja Immonen, Jari Laaksonen, Maija Paattakainen, Arja Laaksonen

Kristiina Kovalainen, Jussi Mikkola, Tomi Hakkarainen, Annika Hongell

STC Iberica

Eden Salladsbar AB

Isabel Bona Puig, Jussi Alitalo

Johan Wohlin, Pontus Klenell

ANNUAL REPORT 2013

Group Office STC GreenFood AB Lars Åström, President and CEO lars.astrom@stcgreenfood.se Switch: + 46 42-4005420 www.stcgreenfood.se STC GreenFood AB Knut Påls väg 7 SE-256 69 Helsingborg SWEDEN

Växjö Partiaffär AB Magnus Göransson, CEO magnus@vaxjopartiaffar.se Switch: + 46 470-76 59 90 www.vaxjopartiaffar.se Växjö Partiaffär AB Arabygatan 53 SE-352 56 Växjö SWEDEN

STC Iberica Jussi Alitalo, CEO jussi@stciberica.es Switch: +34 972 66 72 16 www.stciberica.es STC Iberica C/ Pere Coll Rigau 2 17256 Pals (Girona) ES-Catalonia SPAIN

Ewerman AB Johan Bengtsson, CEO (from 1 June 2013) johan.bengtsson@ewerman.se Switch: + 46 42-490 11 00 www.ewerman.se Ewerman AB Knut Påls väg 9 SE- 256 69 Helsingborg SWEDEN

AB Hembergs Trädgårdsprodukter Thorbjörn Gustafsson, Acting CEO thorbjorn.gustafsson@hembergs.se Switch: + 46 35-14 49 00 www.hembergs.se AB Hembergs Trädgårdsprodukter Svetsaregatan 18 SE-302 50 Halmstad SWEDEN

Salico AB Björn Johansson, Head of Business Area bjorn.johansson@stcgreenfood.se Switch: + 46 42-37 04 40 www.salico.se Salico AB Knut Påls väg 7 SE-256 69 Helsingborg SWEDEN

Allfrukt i Stockholm AB David Ottoson, CEO david.ottoson@allfrukt.se Switch: + 46 8-501 00 720 www.allfrukt.se Allfrukt i Stockholm AB Partihandlarvägen 50 SE-120 44 Årsta SWEDEN

Örebro Trädgårdshall AB Urban Kropp, CEO urban.kropp@tradgardshallen.nu Switch: + 46 19-27 32 00 www.tradgardshallen.nu Örebro Trädgårdshall AB Skvadronvägen 3 SE-702 27 Örebro SWEDEN

Salico Oy Jari Laaksonen, CEO jari.laaksonen@salico.fi Switch: +358 15 321 450 www.salico.fi Salico Oy Puutarhatie 26 FI-51900 Juva FINLAND

Satotukku Oy Tomi Hakkarainen, CEO tomi.hakkarainen@satotukku.fi Switch: +358 9 251 59100 www.satotukku.fi Satotukku Oy Tuupakantie 32, FI-01740 Vantaa FINLAND

Eden Salladsbar AB Pontus Klenell, CEO pontus.klenell@edensalladsbar.se Switch: + 46 20 140 10 30 www.edensalladsbar.se Eden Salladsbar Partihandlarvägen 50 SE-120 44 Årsta SWEDEN

Eden Salaattibaari Oy Hannu Hovi, CEO hannu.hovi@edensalaattibaari.fi Switch: +358 9 2515 9100 www.edensalaattibaari.fi Eden Salaattibaari Oy Stubbackavägen 32 01740 Vanda FINLAND

Learn more about the companies at: stcgreenfood.se

STC GREENFOOD AB Tel: 020 18 18 10 www.stcgreenfood.se

TH O R N R E K L AM BYR Å

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