ANNUAL REPORT 2019 Together we make Norway thrive TINE SA ANNUAL REPORT 2019 How to use this Annual Report? This report is created as an interactive PDF, which means that there are a number of functions to help THIS IS TINE you as users navigate. The following is a guide illustrating how to use the various functions. RESULTS SUSTAINABILITY ← THE MENU GRAPHS/DIAGRAMS ACCOUNTS LINKS FURTHER INFORMATION The menu on the left is available on Some of the graphs and diagrams have In the Annual Accounts, you can click on We differentiate between two types of every page. Here you have the option “hidden content” which you can view the Notes in the Notes Overview to go links. In some places we have links to to click on the various chapters. When by hovering your cursor over the various to that note. It is also possible to click external sources, which are websites that you are in a chapter, you can click on the elements. on the notes in, for example, the Balance are located outside of this document. various articles within the chapter you Sheet, to go to the specific note. The links will open in your internet have selected: browser. Other links are to specific pages in the document, these are internal links. CONTENT LIST External links look like this Internal links look like this HYPERLINKED ELEMENTS 8 225 NB! Exceptions to this are in the Liquid dairy products menu and accounts – all elements are hyperlinked but are formatted differently. TEXTBOXES Liquid dairy products Solid dairy products There is a number of light blue texboxes Juice, fruit drinks and water in this report. They open and close with this button: If you click on the TINE logo you will return 2 to the Content list which is on the next page. TINE SA ANNUAL REPORT 2019 THIS IS TINE Content RESULTS SUSTAINABILITY FURTHER INFORMATION THIS IS TINE 4 RESULTS 15 SUSTAINABILITY 109 FURTHER INFORMATION 156 From the CEO 5 From the Chair of the Board 16 In general 110 Key figures 7 Board of Directors’ report 18 On the farm 118 Our representatives 157 The TINE map 9 Management 43 In the industry 130 Our locations 158 TINE – the brand supplier 10 Financial statement 2019 47 In the market 143 Subsidiaries 12 Auditor’s report 97 Figures and GRI table 152 TINE Milk Supplies 99 Statistics 102 3 TINE SA ANNUAL REPORT 2019 THIS IS TINE From the CEO Key figures The TINE map TINE, the brand supplier Subsidiaries RESULTS SUSTAINABILITY This is TINE FURTHER INFORMATION 4 TINE SA FROM THE CEO ANNUAL REPORT 2019 A new beginning THIS IS TINE From the CEO Key figures The TINE map he past year has been demanding, exciting, chal- which will continue in times to come. The down-manning TINE, the brand supplier lenging and rewarding. All at once and often simul- process has been hard for many and it is not over. I know T taneously, for both TINE and for myself. There has that I speak for myself, the Board and Management when Subsidiaries been a lot of analysis and planning. We have turned every I say that this is the toughest part of our job. It is howev- stone and set a course from a to z. We have also mapped er necessary that these tough choices must be made to our course for the next years in the strategy we call “TINE ensure increased competitiveness and growth for TINE in RESULTS 2025”. If 2019 was all about analysis and planning then the years to come. 2020 is the year for action. And it is urgent! SUSTAINABILITY We have muscles and the capacity to implement our am- I am incredibly proud of the thousands of good employees bitious goals with our new strategy and to drive good we have. It is they who ensure we are in a position to es- processes, which is exactly why we are taking measures FURTHER INFORMATION tablish a culture that thrives on change. They see the need before it is too late. Some of the measures we have intro- to increase our competitiveness and create new growth duced are already showing improved ratios for our owners and not least, a culture which is identifiable and is proud and on our results. In particular, we have done especially GUNNAR HOVLAND of our new vision. Together we make Norway thrive. well with cheese and we also see that flavoured milk is Chief Executive Officer There is a lot for us to do, but it all boils down to this. showing good numbers. These are all positive trends which I hope and believe will continue in times to come and I am excited about how we can manage to stabilise the sale of Our mission is actually something which is fresh milk. It is actually the drop in the sale of fresh milk which is the catalyst for why we must think more about much bigger than ourselves. implementing our plans quickly rather than being content with improved effectivity and growth. Increased competition and a change in dietary habits is In this work, our relationships with our consumers is very something which has brought about significant upheaval important. It is therefore very pleasing to see that TINE in parts of our organisation. We must prioritise harder, continues to hold a clear position amongst Norwegians 5 cut costs and reduce our headcount. All this is a process and has a place in many hearts. We do well in our rep- TINE SA ANNUAL REPORT 2019 THIS IS TINE From the CEO Key figures The TINE map TINE, the brand supplier utation surveys and when John Doe was asked who he An important part of our strategy going forward is to work with nature and not least, in close cooperation with both thought was Norway’s most sustainable company, he re- together. This is not limited to improving cooperation inter- customers and consumers, we deliver community engage- Subsidiaries plied TINE. This is a pleasant reminder that we are doing nally but we must be even better at cooperating with our ment through both a healthy and strong brand, sustainable a lot of things right in terms of sustainability and that it is customers and consumers to give them what they want, solutions and being a part of peoples’ lives – wherever they also being noticed, but I promise that we cannot rest on when they need it – and in a way that suits them best. This are. In this way we are contributors to a widely-spread RESULTS our laurels. We are better today than we were yesterday involves cooperation with those that make the bigger de- Norway with living communities, a rich cultural heritage but not as good as we will be tomorrow. In the DNA of a cisions for our country. Our vision to make Norway thrive and not least, an agricultural heritage which is based on SUSTAINABILITY dairy farmer and in TINE there is the fundamental thought is not one we can manage alone. We need long-term focus only producing nutritious, safe and good food for future that we should leave the company, farm and not least our and we need visibility. We must think of both our short and generations. globe in a better state that when we received it. With this long-term goals simultaneously in order to succeed. FURTHER INFORMATION in mind we can never give up. One example of this thought Stop a minute and think about this. Our mission is actually process in practice is at our new dairy in Bergen – our something which is much greater than ourselves. It gives greenest and most technologically advanced plant ever. I me the energy and motivation to achieve our goals. I hope believe the innovation and environmental measures which When John Doe was asked who he and believe that this also applies to you too; whether you have been made here will be an inspiration and a learning thought was Norway’s most sustainable are an owner, employee or a partner. curve for the industry way beyond our borders. company, he replied TINE. I am looking forward to the continuation of our story. The Our untiring focus on quality pays off both in taste tests and future starts now. competitions. It is great fun to see that in 2019, we won the Norwegian Cheese Championship with a mature Norvegia® The analysis is complete and we have made plans for how and that a mature Jarlsberg® took a prestigious super gold we will face the many challenges we anticipate in con- medal at the World Cheese Championships. A number of junction with our owners. These are plans I believe in and our other cheeses also received medals in the same cham- which now need to be put into practice. Safely, well and pionships. This indicates that we have done very well with quickly. There is no time to lose. We are actually laying the quality and handiwork throughout our whole supply chain. foundations for a TINE which will last much longer than GUNNAR HOVLAND 6 we ourselves will. Together with our surroundings, in line Chief Executive Officer TINE SA ANNUAL REPORT 2019 Key figures THIS IS TINE From the CEO Key figures 23 812 1 189 5 408 574 The TINE map Operating income Operating result Number of employees Gross energy consumption TINE, the brand supplier MNOK MNOK T GWh Subsidiaries RESULTS Delivered to TINE in 2019 Consumption per inhabitant in 2019 MILL. LITRES KG/LITRE (SOURCE: MELK.NO) SUSTAINABILITY FURTHER INFORMATION 1 393.8 80.2 L 18.9 KG 3.7 KG COWS MILK MILK CHEESE INCL.