Annual report 2003 - shareholder and Central and Eastern Europe (CEE), where ... dishes, condiments, sauces, ... ANNUAL REPORT 2003

Annual report 2003

Last yearwe servedmore than1.5 billion

meals.

Wraps”Wraps has already establisheda place in Norwegian eatinghabits. The Wraps success willbe broadened this spring withthe introduction of two newtastes, in order to maintaininterest in the product andcreate category growth”

Overview

FinancialreportPresentationsof

operationsChallenges inthe m

arketStrategy

AdressessEnvironm

entand

food safetyD

irectors’ report

1

Heading forward 2CEO remarksAbout Rieber & Son 5 Business Units 6Brands 8

Western Europe 10Central and Eastern Europe 12

Consumers in change 14Changing markets 16

Value drivers 18Product development 20Brand building 22Value-creating acquisitions 24Internal improvements 26Reduced capital employed 27

Quality and food safety 28Environmental report 30

Directors’ report 33Corporate governance 40

Accounts 42Key figures 74Management of foreign exchangeand interest rate risk 77Shares and shareholders 78

Adressess 80

Our aim is to serve evenmore delicious mealsin the future.

R I E B E R & S Ø N - A N N U A L R E P O R T 2 0 0 3

2003 was a mixed year. It is gratifying that inWestern Europe both sales and EBITA were above ourstrategic objectives, but in CEE we have had to dealwith a lower top line and weak results. Some costshave been reduced in order to improve future earningsand strengthen our competitive position.

In order to extract economies of scale across nationalboundaries the Group has been reorganised and nowcomprises nine business units. It has been importantto focus on a better and increased level of internalcommunication, in order to promote the transfer of

expertise and stimulate co-operation between business areas and across borders.

In line with our strategy, Nopal was acquired in June2003, and a key priority was to integrate the companyquickly and effectively in order to extract cost synergi-es. After seven months the process of integration wascompleted, and our new colleagues and five newbrands will be important for our further growth.

The establishment of common, integrated systems forkey work processes is important. The introduction of anew ERP-system (the RIGHT project) in the periodfrom 2002 to 2005 is therefore a project of strategicsignificance. It will lead to greater integration, facilitatethe transfer of ”best practice” and contribute to thedismantling of language barriers.

As a focused food company, the objectives and theway ahead are clearly defined in our strategy. Fourmain areas of attention have been identified: internalimprovements, organic growth, reduce capital

Heading forward

Vitana Bouillon”Bouillon powder in a jarwill attract new consumersin the younger age groupand thus strengthen itsposition in the bouilloncategory in the Czech andSlovak markets. The sameconcept has already beenlaunched in Norway underthe Toro brand in 2004”

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employed, and value-creating acquisitions. Focus onthese value drivers will result in more added value forour shareholders. Projects have been initiated andsteps taken in each of these areas.

This will make great demands of our competent personnel, and I take the opportunity to thank themall for their commitment and untiring efforts in 2003.

Through our strong brands and close co-operationwith customers we seek to achieve category growth.Our consumers shall perceive us as exciting, reliable

and innovative, and we shall contribute to profitablegrowth for our customers. The high pace of productlaunches will be maintained and we will continue tofocus on making the existing products even betteralso going forward.

Asbjørn ReinkindPresident and CEO

Figures in NOK m 2003| 2002| 2001| 2000| 1999|

Net sales 3 222 3 031 2 920 2 789 2 687Change from previous year 6.3 % 3.8 % 4.7 % 3.8 % -2.4 %EBITA 330 326 299 260 267EBITA-margin 10.2 % 10.7 % 10.2 % 9.3 % 9.9 %Gross ROCE % 17.4 20.1 19.8 16.5 16.0Earnings per share (EPS) NOK 2.35 2.48 1.87 1.72 4.36Dividend per share NOK 1.10 7.00 0.85 0.80 1.85

Definitions page 74

Key figures

In 85% of Czech householdsit is the womanwho makes the food.


1. Geir-Arne Åsnes,Director King Oscar(b. 1962). Graduate of the NorwegianSchool of Economics and BusinessAdministration (NHH). Formerly withInternational dep. in DnB, he joinedRieber & Søn as head of managementaccounting in 1992. He has workedon business development with in foods.Director of King Oscar since 1997

2. Tor Lund, CFO(b. 1949 ). State Authorised PublicAccountant. Joined the Rieber & SønGroup in 1969, working in the area ofaccounts, controller functions andfinance. CFO since 1994.

3. Morten Vike,Director - Foods CEE(b. 1971). Graduate of the NorwegianSchool of Economics and BusinessAdministration (NHH) and CEMS mas-ter (St. Gallen). Started to work instaff group management. Later, part ofmanagement in Natural Stone Division.Business developer and member of thesenior management team in CEE. Headof CEE since 2001.

4. Asbjørn Reinkind,President & CEO(b. 1960). Graduate of theNorwegian School of Economics andBusiness Administration (NHH) andAMP INSEAD.Headed business development at Torofrom 1984, head of Denja then Toro.Managing director of Hydro Seafood1997-2001. President & CEO ofRieber & Søn since 1 January 2002.

5. Stein Klakegg,Group Director - Western Europe(b. 1957). Graduate of the NorwegianSchool of Economics and BusinessAdministration (NHH). Joined Rieber &Søn in 1989 after various positionswith Nevi Finans in Norway and theNetherlands. Among various positions,he headed the Natural Stone Divisionand then Toro from 1997. Head ofsegment Western Europe since 2003.

6. Bjørnar Gulliksen,Director - Strategic Development(b. 1965). Graduate in economics andbusiness management and MSc fromthe University of Aalborg, Denmark.Joined Rieber & Søn in 1990, firstly asproduct manager. Subsequently headof Nordic Market for Denja andAssistant Divisional Director, Toro.Director of Treschow Fritzøe 2000-01. Director of Strategic Development,Rieber & Søn, since 2002.

Group Management1 2 3 4 5 6


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Rieber & Søn is one of Norway’s leading foodgroups. The main markets are Norway, the otherNordic countries and selected countries in WesternEurope and Central and Eastern Europe (CEE), wherethe Group has a considerable market share for foodproducts in the retail market. Rieber & Søn is also a major supplier to the food service market, as well as being a producer of ingredients to foodmanufacturers.

In August 2001, after 161 years as an industrialconglomerate, the Board of Rieber & Søn decidedto concentrate the company’s activities on foods.This was done in order to be more competitive andthereby create greater shareholder value.

Rieber & Søn has leading brands such as Toro,Denja, Mr.Lee, King Oscar, Vossafår, Vestlandslefsa,Sopps, Black Boy, Geisha, Ming, Trondhjems,Mrs.Cheng’s, Cronions, Delecta, Anatol, Vitana,Bask, Chaka and Emarko.

For reporting purposes, Rieber & Søn’s activities aresplit into two main segments - Western Europe andCentral and Eastern Europe (CEE) - which wereorganised into nine business units in 2003.

Local Taste Champion:Vision: ”We shall be the Local Taste Champion andleading Brand Builder, and will develop attractivefood based on consumer needs.”

Business concept: “We shall inspire people to prepareand enjoy exciting and tasty food in an easier way.”

This means that Rieber & Søn shall be the local tastechampion. We shall have the best understandingof national tastes and adapt both national andinternational dishes to local taste preferences andmake the products easier to prepare. Rieber & Sønshall drive and develop the categories throughcontinuous improvement of existing productsand the introduction of new ones.

Rieber & Søn– an international food group

CEO

King Oscar

King Oscar

FoodService

Rieber Food Ingredients

CEE

Vitana

Strategyand businessdevelopmentWestern Europe

Toro

DelectaDenja

RieberRussia

Cronions

CFO

Western Europe CEE

Organisation chart

Group Management Business Units

ToroToro produces and markets soups, casseroles, pastadishes, condiments, sauces, bouillons etc. for theNorwegian consumer market and for export marketssuch as Sweden and Iceland. The production plantsare at Indre Arna close to Bergen and in Elverum. Inaddition to the main brand - Toro - the business unitalso has well known brands such as Sopps, Black Boy,Ming, Trondhjems, Mrs.Cheng’s and Mr.Lee.

DenjaDenja has strong brands in the area of chilledsalads, dressings and herring which are sold underthe Denja brand name, as well as Vossafår which abrand name for smoked sausage. The main marketsare the consumer markets in Scandinavia. Denja hasthree factories, of which two are in Norway (Larvikand Voss) and one in Denmark (Randers).

CronionsCronions produces and markets crispy onion. The

production takes place at Randers (Denmark) and St. Maartensdijk (the Netherlands). Cronions are soldas a taste additive in the consumer and industrialmarkets in most European countries, the main mar-kets being Germany, Denmark, Sweden and Norway.

King OscarKing Oscar sells tinned seafood, including familiarproducts such as sardines, mackerel in tomatosauce, cod roe and cod liver. King Oscar sardines are sold worldwide, with the USA as the biggestmarket. The production is at Askøy outside Bergenand in Gniewino, Poland.

Rieber Food IngredientsRieber Food Ingredients produces and exports tasteingredients to other food manufacturers. The mainproducts are spice mixes and bouillons as tasteadditives, as well as a range of different tastesbased on fish and shellfish. Production takes placeat the Toro factory in Indre Arna, but during 2004

Business Units

Lasagne”Toro was first on theNorwegian market withLasagne and set thetaste standard. Today,Toro Lasagne is themarket leader andone of Rieber & Søn’sbiggest Italian products”

In 2050, 50% of thepopulation will be overthe age of 46.

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production will also be started at Vitana’s plant inBysice in the Czech Republic.

FoodServiceFoodService has responsibility for the development,sale and marketing of products for the food servicemarket in Norway, Denmark, Sweden, the CzechRepublic and Slovakia. The products supplied havewell known brand labels such as Toro, Black Boy, KingOscar, Vestlandslefsa, Denja, and Vitana, all adaptedto the foodservice market. Parts of the range are trading products.

VitanaThe Czech- and Slovak business unit Vitana is themarket leader in several areas, including soups, bouil-lons, condiments, cake mixes, sauces, noodles andrice in the Czech Republic. Vitana is the country’sthird largest food manufacturer, producing around300 million consumer units annually at four factories.The main brand - Vitana - is one of the most familiar

food brands in the Czech Republic. The company’sother brands are Emarko (snacks), Klasik (liquid tasteadditives) and Bask (rice). Vitana products are alsosold in Slovakia (No. 2 position). There we also havethe sub-brand name Tatranska, in addition to thisthere are exports to neighbouring countries in CEE.

DelectaSince 1816 Delecta has been producing and marke-ting products such as cakes, cake mixes, bakeryingredients, desserts and ready-made dinners etc.under the Delecta brand name, as well as the hotdrink Anatol for the Polish consumer market.Production takes place at four factories in Wloclawekand one near Bydgoszcz in Poland.

Rieber RussiaRieber Russia produces and markets a variety of nutsunder the Emarko and Chaka brand names. The rangeincludes peanuts, pistachio nuts, cashew nuts etc. Theproduction plant is located at Elektrostal, east of Moscow.

Rieber & Søn has brands with a long history and strong positions, both in theNordic region and in Central and EasternEurope. A fully stocked grocery store inNorway has approximately 600 differentproducts from Rieber & Søn, while thecorresponding figure is 320 in the CzechRepublic.

The brands can be split into main brandsand product brands:

Main brands:Vitana - one of the strongest brands inthe Czech Republic with long traditionsand a broad assortment of products,ranging from soups, bouillons and casse-roles to cake mixes.

Delecta – a strong brand name in Polandfor cakes, cake mixes, bakery ingredients,desserts and ready-made dishes. Toro – one of Rieber & Søn’s strongestbrands with an assortment of more than250 products. King Oscar – a brand name for tinnedseafood since 1903, with worldwide salesand distribution. Mrs.Cheng’s – a brand name in the gro-wing category of Asiatic food in Sweden

Product brands:Mr.Lee – the Noodle King in Norway Sopps – pasta and Italian food in NorwayBlack Boy – a broad selection of spices,spice mixes and marinades in NorwayMing and Geisha – rice brands in Norway

Trondhjems – tinned meals in NorwayDenja – a brand name for salad, dressingand herring products for the Norwegianand Swedish markets Vossafår – a well known cured meatbrand in Norway Vestlandslefsa - a traditional brand Chaka and Emarko - brand names fornuts in Russia Anatol – a brand name for chicory coffee in Poland with long traditions Bask – rice, lentils, dumplings etc. in the Czech RepublicJ.C. Horn – our second brand for spices in the Czech RepublicMasox – bouillon in the Czech Republicand Slovakia


Bergensk Fiskesupppe (BergenFish Soup) is launched, mar-king the start of a new epochin Toro’s history where thepreparation of establishednational dishes and productsis simplified, making themaccessible for the consumer.

Paul GottliebRieber setsup a tradingcompany andvinegar fac-tory inBergen.

Toro stock cubesare launched,marking the basisof what was tobecome one ofNorway’s strong-est brands.

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64

Rieber & Søn, the buil-ding materials compa-ny Jacob Neumann andNodest Industrier deci-de to merge. Followingthe merger Rieber &Søn is listed on theOslo Stock Exchange. 1

98

7

Denja gainsaccess to theSwedish mar-ket throughthe acquisitionof Salat-mästeren.1

99

1

Denja, asalad pro-ducer sincethe 1950s,is acquired.

18

39

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48

19

85 Rieber & Søn

acquires BøeLefsebakeri ASand theVestlandslfsabrand.

19

89 Rieber & Søn’s involve-

ment in Central andEastern Europe startswith the acquisition ofVitana (established in1919) in the CzechRepublic in connectionwith the process ofprivatisation after thefall of communism.

19

92 Denja takes over

the Danish saladand onion pro-ducer Dacapoand its producti-on plant atRanders,Denmark (esta-blished in 1923).

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97

Delecta, the Polish food companyfounded in 1816, is acquired. Mr.Lee becomes a part ofRieber & Søn. King Oscar is acquired. Bask and Emarko in theCzech Republic are acquired andco-ordinated with Vitana.

Rieber & Sønventures intothe foodindustry withersatz coffeeas its firstproduct.1

93

3

CEE

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96

20 brands in 12 countries

Rieber & Søn -a historicalperspective

Vossafår(establis-hed in1936) istaken over.

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Geographic overview – brands and production units

Western Europe

CEE

Export *

Rieber & Søn acquires Big Fish in Poland,tinned seafood (established in 1991). Rieber & Søn Salesforce Polska establis-hed as a joint sales organisation forDelecta and Big Fish.Alamar, which produces tinned seafood(cod roe and cod liver) with productionplant in Svolvær, is acquired and integra-ted with King Oscar.

19

98 An onion factory in the

Netherlands is taken overand together with ouronion business in Randers(Denmark) this streng-thens our position in theEuropean market.

20

02 Rieber & Søn is a focused food company with

22 factories in 7 countries and sales and mar-keting offices in a further 5 countries.2

00

4

Anja Cake (established in 1991) is acquiredand integrated with Delecta. Rieber & Søn acquires Chaka, a plant and brand forsnacks and peanuts in Russia (established in 1996).Decision to focus on food. Divestment of non-corebusinesses (turnover NOK 5bn and 4000 employees).

FoodService and Ingredients are establishedas business units.Acquisition of Nopal AS, which includes the brandsBlack Boy, Ming, Geisha, Trondhjems and Sopps.

Western Europe2

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0

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03

*Also export to USA, Australia and Japan

Norway

Ukraina

Denmark

Germany

Poland

The Czech Rep.The Slovak Rep.

LithuaniaLatvia

Russia

HungaryRomania

Bulgaria

Albania

Sweden

UKThe Netherlands

Belgium

Iceland

Prod. units

Prod. Units decided closed/moved 2003/2004


Presentation of operations

Western Europe

Rieber & Søn’s operations in WesternEurope comprise businesses with production and sales in Western Europe,and some exports. In 2003, the seg-ment had total sales of NOK 2 221mand EBITA of NOK 336m.

Structural changesNopal AS was taken over by Rieber &Søn in June. With factories in Elverumand Eskilstuna (Sweden), Nopal produ-ces brands such as Black Boy (spices),Sopps (pasta), Geisha and Ming (rice)and Trondhjems (tinned foods). Vitaplex,the health food’s part of Nopal, wassold in December 2003. The acquisitionwas followed by a process of integrati-on whereby Nopal’s sales organisationwas co-ordinated with Toro’s andDenja’s external sales network andNopal’s head office was closed. Theco-ordination of activities has reducedthe number of full-time positions by50. Nopal is now fully integrated withthree of Rieber & Søn’s business units -Toro, Rieber Food Ingredients andFoodService. A jointNorwegian/Swedish organisation hasalso been established to focus on theretail/catering market by merging the

management of Grillfagmannen andEurospice. The steps taken are expectedto provide net cost synergies of aroundNOK 30m annually, with accountingeffect from 2004. The acquisition ofNopal will strengthen Rieber & Søn’sproduct range and provide a better basisfor product development.

Structural changes are taking place within the trade in the Nordic region,with hard discounters entering the market, increasing the focus on priceand putting margins under furtherpressure. This in turn highlights the needfor greater productivity. We must there-fore take steps to ensure that ourcustomers have competitive terms and receive higher margins throughinternal improvements and a betterproduct mix.

In order to increase efficiency andreduce the future cost levels and reinvestment requirements, the Grouphas concentrated production among asmaller number of plants.Two factories in Norway were closed in2003 and one in Sweden is due toclose in 2004.

Rieber & Søn has operations in 7 countries in Western Europe, withNorway the largest by far when measured by turnover. The company’sbrands have performed well, in terms of both market development andresults. The acquisition and integration of Nopal has been a success.

Geographical distributionof turnover 2003

Norway 73.1%

Sweden 6.0%

Germany 4.9%

USA 4.9%

Denmark 2.1%

Others 9.0%

1 69

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01 02 03

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Net sales NOK mEBITA-margin


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Toro Toro is one of Norway’s strongestbrands with around 250 productvariants. A continuous focus onproduct development and brandbuilding has resulted in averageorganic sales growth of 9% annu-ally over the last 25 years. 2003saw growth in all Toro categories,as well as higher market shares.The launch of new products andrevitalisation of the existing rangeare key stimulants to growth. ToroWraps is an example of the first.The combination of wheat tortillas,a marinade mix and a dressing mixhas been a success in the market-place, presenting considerablescope for broadening the range.Toro was first to launch Wraps onthe Norwegian market. The firm of analysts AC-Nielsenselected Tortilla Wraps as one ofthe year’s most successful productlaunches. Cake mixes illustrate how Toro drives and develops a ”new” cate-gory, by introducing new productssuch as cheese cake and long-form chocolate cake in a way thatmakes them much easier for theconsumers to make. The revitalisa-tion of established categories isanother important stimulant togrowth.

Mr.Lee noodles has over 70% ofthe noodle market in Norway, andthe brand enjoyed good salesgrowth in 2003. Three variants ofMr.Lee Sumo Dinner, a new dinnerdish, were launched during theyear.

Rieber & Søn strives to be a goodand dynamic business partner forother players in the trade, and in2003 Toro and Denja were crow-ned ”Supplier of the Year” byNorgesgruppen.

Denja2003 was a good year for Denja,inspiring the organisation to makefurther improvements. In 2003Denja launched four salad mixvariants - salads with a finerconsistency - in the Norwegianand Swedish markets. Denja has taken an aggressiveposition in both Norway andSweden. Through improvementprojects a sound economic basewill be established which will beused in the coming years for cost-effective brand building and thelaunch of innovative products.

Vossafår is a market leader in thearea of cured meat, with a marketshare of 28%. In 2003 the pro-duct range was broadened withthe introduction of four new variants of smoked sausage.

King OscarIn Norway, King Oscar mackerel intomato has created good categorygrowth, with a market share of12%. During the year the KingOscar range was strengthened withthe launch of two mackerel pro-ducts and three variants of tuna.

CronionsRieber & Søn is Europe’s largestproducer of crispy onion. Parts of

the business that was bought fromDanisco Foods in 2002 have beenfully integrated with our otheronion business. Cronions, the brand name for crispyonion, is a niche product whichhas enjoyed good growth in theconsumer, foodservice and indus-trial markets. In 2004, the focuswill be on reinforcing market positions and improving margins.

FoodServiceFoodService covers all sales tohotels, restaurants, canteens, cate-rers, institutions, petrol stations andkiosks, - in one word all food thatis consumed outside the home. Itis a segment growing faster thanthe retail segment in several of thecountries where Rieber & Søn isactive. It is a growth area whereRieber & Søn intends to participa-te. Organisationally, Food Servicetranscends national borders, withsales in Norway, Sweden,Denmark, the Czech Republic andSlovakia.

Rieber Food Ingredients Rieber & Søn is also an internatio-nal supplier of ingredients to otherfood manufacturers. Main productgroups are bouillons, stock, marinepowder and spice mixes. Therewas a slight dip in demand in thefirst half of 2003, partly due toimport restrictions in the USA, butsales recovered in the second half-year. We are investing in increasedcapacity for ingredients and a newplant is due to open in the CzechRepublic in 2004.

The segment represented by Central andEastern Europe (CEE) covers businesseswith production and sales in the CzechRepublic, Slovakia, Poland and Russia, andsome exports. In 2003, the segment hadsales of NOK 1 030m, while EBITA stoodat NOK 13m. Vitana and Rieber Russiaproduced good results, but the performancein Poland was poor.

Rieber & Søn’s total sales in CEE, based onthe number of consumer units, was around730 million, compared with 180 millionunits in the Nordic region. Despite this, the CEE market is much smaller than theNordic market in terms of turnover, as thevalue per unit is lower in CEE. The higherstandard of living that will result from EUmembership, combined with a higherdegree of product processing, will lead tohigher prices and potentially increase thevalue of each unit sold.

Structural changesThe factories in CEE have now been upgraded and approved in accordance withquality standards set by the EU.

At the same time, steps have been takento increase production efficiency. One factory in the Czech Republic and two inPoland will be closed in 2004 and theproduction transferred to other plants.

RIGHTIn 2003 the implementation of a newEnterprise Resource Planning system (ERP)started within the Group, firstly in Poland.The project, designated RIGHT, is intendedto establish ”best practice” in all businessunits and thus simplify and improve Rieber & Søn’s work practices. RIGHT was introduced at Delecta and King Oscar in Poland in 2003. The project has required considerableresources.

VitanaThe Czech Republic is the CEE countrywhere Rieber & Søn has the strongestposition. Vitana is one of the strongestbrands in the Czech Republic, with longtraditions. Despite a drop in sales, Vitanamaintained acceptable profitabilityin 2003.


Presentation of operations

Central andEastern EuropeThe market in Central and Eastern Europe is changing rapidly, and this pre-sents a number of challenges. The results in 2003 were varied. In the CzechRepublic and Slovakia our market shares were stable, but the decline in size ofsome of our main categories has continued. Developments in Poland were farfrom satisfactory in the first half of the year, but various steps taken reversedthe trend in the second half-year.

Geographical distributionof turnover 2003

The Czech Rep. 49.7%

Poland 27.4%

Slovakia 8.9%

Russia 7.4%

Others 6.6%

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01 02 03

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2.1%

5.2%

1.3%

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There was a decline in the totalmarket for some of Vitana’s maincategories, but market shares weremaintained. Among the measurestaken in response to the declinewere quality improvements, upgrading of design and thelaunch of new products. Vitana also intends to develop new categories, such as snacking products, main meal solutions andcakes. A good example is theinstant soup product ”Bistro” which Czech consumers voted the product of the year in the fastfood category. The trend in condiments and cake mixes waspositive, and the new cake variant”Tiramisu” was voted the productof the year by the Czech magazineModerní Obchod.

Positive sales growth was recorded in Slovakia as a result ofhigher market shares. 2003 saw the launch of a sub-brand byVitana, with soups and bouillonusing specially adapted Slovakrecipes. The launch was in line with Rieber & Søn’s philosophywhich seeks to provide productsadapted to local taste preferences. The sub-brand is called Tatranská,after the large mountain range inSlovakia with the same name.

Delecta Delecta has strong positions inPoland, mainly in the area of cakes,

cake mixes, baking ingredients anddesserts. Delecta had a poor firsthalf-year, due to a decline in thetotal market for the product catego-ries, stock reductions among retailersand wholesalers, and lower sales ofthe jam powder ”Dzemix”.

In response to the decline, improve-ments were made to the sales net-work. At the same time, Delectadeveloped a common design for allof its dessert products in order tocreate greater appeal and establish auniform profile in the shops. Thesteps taken have produced a positiveeffect on sales. Delecta’s series ofready dinners in jars were given newrecipes which improved profitabilityand increased Delecta’s competitiveposition in a category focused onprice. As yet, the desired resultshave failed to materialise.

Vitina, a corn-based between mealsnack, was launched at the end of2002. Considerable resources wereallocated to the introduction, but sofar the product has not been a suc-cess.

Piotr Sienko was appointed ManagingDirector of Delecta in April 2003.

King OscarKing Oscar’s market shares in Polandhave fallen, while the loss of privatelabel contracts resulted in a sharpdecline in exports to the USA and

Australia. Activities in Poland contin-ue to run at a loss. The transfer ofproduction entailed some costs of anon-recurring nature. The Big Fishbrand name is now being convertedto King Oscar in order to have onebrand name for tinned seafood. Theturnaround initiated in the autumnof 2002 has not been sufficientlyeffective, and steps have been takento reduce costs further. The benefitsof these measures will materialise in2004. Part of the production ofKing Oscar sardines was transferredfrom Norway to Poland in 2003.

Rieber RussiaIn Russia Rieber & Søn has twostrong nut brands: Emarko andChaka. 2003 got off to a slow start,but changes to the system of distri-bution in Moscow led to a goodlevel of sales in the second half ofthe year.

Natalia Strelbina has been appointedManaging Director of Rieber Russiawith effect from January 2004.

Western EuropeThe traditional family structures and core families arechanging. The trends are clear in all the WestEuropean countries: more but smaller households,more couples with no children, more divorced parents,and an increase in the elderly. The number of single-person households has increased.

Norway is no exception. While slightly more than 150 000 people lived alone in 1960, today theynumber almost 750 000. The most common type offamily in Oslo is a single mother with one child. At thesame time, the population is getting older: in 2050every second Norwegian will be over 50 and probably

slightly less able to prepare food. This will lead toincreased consumption of processed food. At the same time there is a big difference betweenweekdays and weekends. While people prefer easymealtime solutions and quick snacks in a stressfulworking week, the weekend is regarded as the timefor making food, eating together and enjoyment.

All this tells us something about consumer needs.They want exciting, delicious food, but they do notalways have the time or the ability to make it. Rieber& Søn’s possibility lays in offering the consumers tastymeals that can be prepared in an easy way. Our foodshall be good and simple enough for everyday needs,and interesting and exotic enough for the weekend.

Consumers in changeIn Western Europe households are becoming smaller and the pace of life is increasing. There is anincreasing interest in food, but at the same time the ability to prepare food is diminishing. In CEE,traditional family dinner still have a strong position. In most cases, meals continue to be preparedfrom the basic ingredients, but in the cities the way of life is undergoing major changes, as areeating habits. At the same time, EU membership may well bring about further significant changes.

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Central and Eastern Europe (CEE)Today the CEE-markets ,with a population of 53 millionpeople in the Czech Republic, Slovakia, Poland and 145million in Russia, are considerably bigger than the Nordicmarket with a total of 23 million people. In CEE the tradi-tional family dinners are more important than in WesternEuropa. Preparing meals and cakes/desserts from scratchis a matter of pride. Stock cubes, taste enhancers (such asspices) and bakery ingredients are therefore still the domi-nating products. The trend shows that there is an increa-sing acceptance of more processed foods. Lower costlevels means that the competition from restaurants andother kinds of eating places in CEE is greater for our pro-ducts than is the case in the western european markets.

In the Czech market we also see trend towards simplermeals. The large family dinners with three courses arelosing ground. This poses challenges for us, including ourability to get people to regard soup as a main courseinstead of a starter. These are changes that we haveexperienced in Norway, and we know that the conversionperiod can be demanding.

At the same time, there is big difference between built up areas and the countryside. In cities like Praguethere are large groups with a decidedly urban lifestyle,demanding jobs and a great need for easily preparedfood. Outside the large cities, the approach to food is still more traditional.

There is scope for growth by getting people to acceptsolutions that make it easier to prepare traditional dishes.This can be done by offering the consumers productsthat are just as good as, and preferably better, than theones they make themselves.

From May 2004 Poland, the Czech Republic and Slovakiawill all be members of the EU. One consequence of thiswill be the abolishment of custom barriers on exports tothe EU. Together with investment in infrastructure, thiscan contribute to higher economic growth, which in turnshould result in increased purchasing power and thereforea greater need for processed food.

Chow Mein”With a modern design, authentictaste adapted to Norwegian tastepreferences, an ethnic flavour attractiveto the Norwegian palate, and moreovereasy to prepare, Toro will create growthin the category for Asiatic sauces”

Norway has around 750 000single-person households.

Western EuropeIn the Nordic region, 3-4 chains dominate more than90% of the grocery market. To an increasing extent,the players in the trade collaborate across nationalborders and there is a trend towards chains with aNordic or a European profile. At the same time, interna-tional hard discounters are establishing new positions.

”Hard discounters” are defined as chains with low prices,few brands and a high proportion of own labels. It is stilltoo early to say how they will affect the Nordic market,but if experience in Finland is anything to go by thenew ”hard discounters” will to some extent be stockistsof a limited number of product groups. From Central

Europe we see that chains of this kind have low marketshares in Rieber & Søn’s main product categories.

In the Nordic region, Rieber & Søn has good contactwith the players in the trade. As a supplier of strongbrands, we have worked closely with the grocery chainsto create growth and profitability in product categories.

New structures in the retail sector bring not only risks,but also opportunities. Competition with the trade’s ownbrands presents a challenge, making it necessary to bein a strong first or second place and at the same timeproviding our customers with good earnings. Eatinghabits are more local than many people think, and there is a high preference for branded products.

The structure of the retail market has changed greatly in the last few decades. The market isdominated by a small number of major players, but in Central and Eastern Europe the pictureis more complex: International hypermarket and hard discount chains have been present fora long time, but there is still a large number of traditional, independent small shops. Thetrend is towards fewer but larger units.

Changing markets

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Central and Eastern Europe (CEE)In CEE there are great contrasts between theshops. Pan-European chains have been in placefor a long-time, typically in the form of vast, modernhypermarkets with a huge range of goods and highquality. International ”hard discounters” are also wellrepresented in the marketplace. But at the sametime, the market is still dominated by small units andthe traditional shop on the corner. In the CzechRepublic small units make up 45% of the total,while in Slovakia the figure is 54% and in Poland63%.

The structure is changing, with the chains graduallyincreasing their market shares. In the Czech Republicthe chains increased their market shares by 7 per-centage points in 2002, at the expenses of smallerentities. In the CEE countries there are usually 2-5 smallsuppliers in each category, and often the three largestsuppliers in a category have no more than 50-60% ofthe market. In Western Europe it is common to find

three players in a typical category: a market leaderwith more than 50% of the market, a runner-up, andanother supplier or a private label in third place. Weenvisage a similar development in CEE. With the gradualemergence of a stronger chain structure, the chains will also prefer to have a smaller number of nationwidesuppliers in each category, also to act as category drivers. This will present interesting opportunities.

Future growth will call for strong category and brandpositions. Vitana and Delecta are both strong players in their respective markets. There is great potential fordriving the categories and establishing close co-opera-tion with the trade in order to benefit from categorydevelopment and increase market shares as smallersuppliers fall by the way, and also to establish an earlyposition in new categories.

The first Czech hypermarketwas opened in 1998. In 2003they accounted for 38% ofsales in the grocery sector.

Gyros”Vitana shall be a ”category driver” in thecategory for ready-made dinner solutionswhich is relative new in the Czech Republic.The launch of exciting new high-qualityproducts is designed to stimulate consumerinterest in this category. It is importantto establish positions early in categories withgrowth potential”

18 R I E B E R & S Ø N - A N N U A L R E P O R T 2 0 0 3

Improve internaloperations

Organic growth

Reduce capitalemployed

Value-creatingacquisitions

?

LON

G T

ERM

CA

P.M

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CAP.

M.

2002

Strategy for growth


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Rieber & Søn’s strategy aims to promoteshareholder value. Internal improvements,organic growth, reduced capital employedand value-creating acquisitions are the fourmain elements of our strategy.

Internal improvements shall be made to enhance theoperations, while focusing on synergies that can beextracted in production, product development, marke-ting and distribution. Through better logistics, betterprocedures and fewer and more efficient productionunits the level of capital employed shall be reduced.

Organic growth will play a central role in the creationof value in the future. Category driving and the creati-on of growth will be mainly based on a strong focuson product development and brand building.

Rieber & Søn aims to double the size of the companywithin 3-5 years. In order to achieve this goal, organicgrowth will be supplemented through value-creatingacquisitions. Acquisitions in the other Nordic countriesand some of the countries of CEE will have priority. In

the food industry it is important to have a criticalmass in the markets where we operate.

The performance of the Group Management will bemeasured against and bonuses paid in relation to theextent to which the goals of the Group strategy havebeen met.

Long-term objectives: Growth

• Organic growth of over 5%• Double the size of the company within 3-5 years

Profitability• EBITA-margin from around 10% towards 15%• ROCE (return on capital employed) of more

than 17.5%• EPS-annual growth of more than 10%

Leading brand positions• Strong no.1 or no.2 brand positions• Drive and develop product categories

Value drivers:

Product development is key in maintainingand developing a brand. Rieber & Søn shall be”The Local Taste Champion”, with a deep under-standing of how products can be developed andrenewed in order to meet consumer preferencesand the needs of our customers.

A business philosophy seeking to be “The Local TasteChampion”, with products specially tailored for each market, distinguishes us from our international competitorswho often have identical products in many countries. It is a strategy which creates strong product associationsamong the consumers, while bringing a good turnoverand earnings for our customers.

Even between neighbouring countries there are conside-rable differences in consumer taste preferences. Oneexample that illustrates this: Tomato soup is the favouritesoup in Norway and the largest variant in Toro’s range ofsoups. In Sweden, tomato soup is a marginal product,while aspargus soup is the favourite. The taste preferenceof the same variant also varies from country to country.

We are careful to note differences of this kind. WhenVitana was planning to increase its market share inSlovakia in 2003, the sub-brand Tatranskà was developedwith recipes adapted to Slovak taste preferences. Thelaunch has been a success.

Where international dishes are involved, it is importantto be among the ”first movers” in the market. The

Product development:”Local Taste Champion”

Organic growth

Poland has a populationof more than 38 million.Cakes are an importanttradition.

Karpatka”Delecta has animpressive 40% shareof the market forbakery ingredients andcake mixes in Poland.A delicious taste andeasy preparation haveturned Delecta Karpatkacake into a best-seller”

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launch of Wraps in 2003 was a case in point. Here,we were the first on the Norwegian market with aninternational trend. This enabled us to set both thetaste and the standard for the category, making itmore difficult for competitors to enter the market.

We also add a national touch to other dishes. Theoriginal Indian tandoori chicken and Greek moussakaare adjusted according to the Norwegian taste prefe-rences. And when ”Norwegian” casseroles were to be launched in the Czech Republic under the Vitananame, the taste was adapted to Czech taste prefe-rences. Conversely, Czech goulash soup was adaptedto the Norwegian taste before being launched inNorway.

In order to find the right taste, Rieber & Søn workssystematically, using tasting panels in the differentcountries. Toro early started this practice, and it isnow implemented in other business units.

Product development is an important factor in drivingcategories and to maintain/increase sales and createtop-line growth. Product development also plays a

key role in the process of steering the product mixtowards high margin products.

We have an ongoing process which measures theorganic growth in business units, product groups and markets. The share of sales recorded by newproducts is also measured.

Organic growth

Faster preparationknown products

New eatinghabits/situations

New tastes

New dishes

Ex. Tiramisu

Ex. ThaiChickensoup

Ex. Noodles

Ex. Wok & Wrap

DEVELOPMENT OVER TIME

INN

OV

ATIO

NLO

WH

IGHSystematic product

development

Brand building is a core competence atRieber & Søn. Through long-term brandbuilding Rieber & Søn creates added valuefor the consumers, the trade and theshareholders.

Brand building is about creating value that goesbeyond the physical product. The brand is the set of perceptions and associations that the consumerhas in relation to a specific product. A strong brandtherefore means more than just being well known. A strong brand means that the name arouses positiveassociations. It means that the brand is reliable andliked, and that the consumers identify with the brandand associate it with qualities which make them choosethis brand rather than other goods. The stronger thesepreferences are, the stronger is the brand.

For the trade it is also important to have recognisedbrands on the shelves. They boost sales and enhancethe customer’s impression of the shop. A strongbrand is thus necessary to be sure of good shelfspace in strong competition with other branded products and private labels.

But positive brand associations can never be establishedunless the product is right. Brand building goes handin hand with product development. On of the mainfactors in the long-term development of a brand isthe ability to improve, renew and develop the pro-ducts in line with changes in the market. Innovationplays a crucial role in making the products attractiveto new consumers and in category development. A strong brand provides a sound basis for productdevelopment and makes it easier to introduce new


Brand building:Creating confidence and preferences among consumers

Organic growth

Soup*Norway

73

Sauce*Norway

Spices Norway

Cake mixes Norway

Salads Norway

Salads Sweden

SardinesUSA

56

40

47

31

23

17

73

56

42

53

31

18 18

* The category includes both dry, chilled and frozen products

2003

2002

Mar

ket

shar

e in

%

Diagram: Market shares in chosencategories in Western Europe

Source : AC-Nielsen


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products. If the product is good, repeat orders are placed. The brand strength gives the consumerconfidence in the product - confidence that theywill be able to prepare it and that they will like thetaste. We strive to ensure that nothing we do reduces the level of confidence in our brands.

Rieber & Søn is represented in markets with a totalof 250 million people. We communicate with thesemarkets through advertising and product exposure,and to ensure that this communication is as consis-tent and effective as possible, Rieber & Søn hasdeveloped its own branding school. The need tothink in terms of brand building is not somethingthat only applies to the market departments. Itmust be actively implemented throughout the organisation, pervading all activities and present atevery stage in the value chain. Rieber BrandingSchool represents a programme that has been specially established for the transfer and development

of expertise and brand building across both nationaland functional boundaries throughout the Group.

King Oscar is one example of the benefits that havebeen gained by Rieber & Søn from the transfer ofbrand building expertise. King Oscar did exist as asardine brand in the export market for almost 100years, but it was not launched in the Norwegianmarket until 1998, and two years after it was takenover by Rieber & Søn. Nevertheless, the consumersquickly came to regard King Oscar as a high qualitybrand with long traditions, and as such one that theycould rely upon. Gradually this acceptance of KingOscar has been used to broaden the name as ageneral brand name for all tinned seafood. The latestaddition to the product range is mackerel in tomatosauce which has won large market shares in a shortspace of time. Similar steps are being taken to broa-den other brand lines. This includes the launch of fournew ”Vossafår” cured meat products in 2003.

Soup The Czech Rep.

51

Soup The Slovak Rep.

Spices The Czech Rep.

Canned seafood Poland

Desserts Poland

Cake mixes Poland

17

52

20

15

43

48

21

52

2016

43

2003

2002

Mar

ket

shar

e in

%

Diragram: Market sharesin chosen categories in CEE

Source: Memrb

In the food industry it is important to have acertain size, so that we rank among the mainbusiness partners for the retailers in the vari-ous countries where we are represented. Thisis why one of Rieber & Søn’s goals is to dou-ble in size within 3-5 years. Around one thirdof the growth shall be organic, while twothirds will be through acquisitions.

Potential acquisitions and related product categorieshave to be compatible with our strategy and addvalue for the shareholders. A rapid integration is decisive for a successfull acquisition.

In June 2003 Rieber & Søn acquired Nopal. Nopalhas leading market positions with strong brand namessuch as Black Boy (spices), Sopps (pasta), Ming andGeisha (rice) and Trondhjems (tinned meals). Thehealth food part of Nopal, Vitaplex is also a verystrong brand, but as we did not have the right kind of expertise to be a category driver, Vitaplex wasdivested in December 2003.

Nopal’s product categories fit in well with Rieber & Søn’sexisting product categories in Norway, the CzechRepublic and Slovakia. Seven months after the acquisition Nopal is fully integrated with three businessunits and a separate organisation has been established

Value-creating acquisitions

Value-creatingacquisitions

In Norway, 55% ofall main meals are stillprepared from scratch.

Sopps Spaghetti Sauce”Sopps is the brandname for everydayItalian food, with aspecial focus on childrenand young families.Sopps Spaghetti waslaunched in 2004”

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to focus on sales to deli-counters. Integration wasachieved at a rapid pace and Nopal made a positivecontribution to EPS in the fourth quarter.

The concept of Wok & Wrap launched for the foodservice market is an example of synergies that havebeen extracted in connection with the acquisition ofNopal. Wok & Wrap is a total concept where ethnicdishes and specialities are combined with spicemixes, sauces, dressings and wheat tortillas. Thesauces were a joint development project betweenToro and Nopal. Denja supplied the dressings, thespice mixes were developed by Toro, while packingwere done by Nopal in Elverum.

The Wok & Wrap project is a practical illustration of what a successful acquisition is all about: As well as integrating administration, production andsales functions, we have also managed to extract co-ordination benefits based on an internal transferof expertise and pooled creativity to develop newproducts and create growth.

In 2002 Rieber & Søn acquired a Dutch producerof crispy onion. At the time, Rieber & Søn was already producing crispy onion at a plant inDenmark. After the acquisition the two productionunits were integrated and re-organised as a singlebusiness unit, Cronions, the product name Cronionshas been launched in several countries under theTORO, Denja and Vitana brand names.

Future acquisitions will take place primarily in markets where we need to strengthen our positionand acquire critical mass: We will grow in the Nordicregion and increase our market penetration in selected countries of CEE.

In a period after large acquisitions the return on capital employed (ROCE) can be slightly reduced. Ourtarget is that within 18 months after a business isacquired it shall have a positive contribution on EPS.

Rieber & Søn has been a focused food com-pany since 2001, with operations in severalcountries. There is great potential for inter-nal improvements through rationalisation,better procedures and uniform practiceacross national boundaries.

Rieber & Søn has production plants in seven coun-tries and sales and market offices in a further five.One of our challenges is to establish a good flow of expertise between departments, transcendingnational cultural identities and language barriers. Inorder to ensure that the Group’s front-line expertiseis applied and that it is ”best practice” that sets thestandard, the Group has set up special schools forbrand management and management development– Rieber & Søn Branding School and Rieber & SønManagement School. Rieber & Søn also has aninternal online newspaper and a printed version,both in six different languages.

2003 also saw the introduction of a new EnterpriseResource Planning system (ERP) within the Group.The aim is to establish common work processes inall business units. The project is named the RIGHTproject (”Rieber & Søn Goes Harmonised Together”).

The project seeks to harmonise Rieber & Søn’s business processes in the area of purchasing, production, orders, financial functions and personnelthrough common procedures and information systems.

So far, the RIGHT project has been implemented byDelecta and King Oscar in Poland. While the initialphase was not without problems, it provided uswith useful experience that can be drawn on whenthe project is implemented in other parts of Rieber& Søn continuing to the end of 2005.

Other kinds of projects that will provide synergiesinclude co-operation between market and productdevelopment departments, joint purchasing by thebusiness units and concentration of production infewer factories. For example, the cake mix Tiramisufor the Czech, Slovak, Norwegian and Polish mar-kets will be produced in Poland, but of course withdifferent recipes to take account of local taste preferences.

Much of the restructuring being carried out withinthe Group is very demanding. But at the same timeit is necessary if we are to be competitive and reinforce our position in the market.

Carrying out internal improvements is important inorder to improve the EBITA-margin towards ourstrategic goal at 15%.


Internal improvementsCoordination of competence and resources

Improveinternal

operations


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As the RIGHT project is implemented, we expect to have tools to increase thecashflow.

One specific example is stock control. Traditionally,large stocks have been considered necessary inorder to have a reliable delivery capability, and pro-duction has therefore been aimed at covering salesrequirements for several months ahead. As a result,considerable amounts have been tied up in stocks.With more effective logistics it is possible to releasesome of this capital.

Similarly, there are gains to be made from productionrationalisation. In 2003, the production of KingOscar Sardines at Eikelandsosen and in Stavanger

was terminated and moved to Gniewino in Poland.It has also been decided to close one factory inSweden, as well as one in the Czech Republic andtwo in Poland in 2004. Production is being concen-trated on fewer factories.

Fewer production units give reduction in cost,reinvestment requirement, workforce, andadministration.

Through the RIGHT project and the introduction of common systems there will be improvements inboth the flow of goods and administrative procedures.Fewer and bigger production units will provide abetter return for Rieber & Søn’s shareholders.

Reduce capital employed: Releasing capital and increase cashflow

Reducecapital

employed

Rieber & Søn is right in the middle of a longquality chain stretching ”from field to table”or ”from fjord to table”, where the focus onquality starts as soon as the seeds are sownor the fish spawn. As we are only involved inpart of the chain it is of key importance thatwe have proof of quality when we purchaseour raw materials.

It is important that Rieber & Søn’s purchasing teamonly selects suppliers who can show that the qualityrequirements have been met in the first part of thechain, especially when raw materials are involved.There is no place for doubtful raw materials in ourproducts. When the raw materials have arrived, andhave been checked, it is up to Rieber’s productdevelopers, production plants, inspection units andsales team to ensure that quality is maintained within our sphere of responsibility.

When the food is served at the table it must beappealing to the eye and delicious to taste, and theremust be no doubt about the basic quality - what maybe called the ”technical quality”. The products shall bereliable. But the way the consumer experiences thequality is just as important: ”I succeed when I preparea product from Rieber & Søn. I get it right, and I getwhat I have paid for. My family and friends knowwhat they like, and they like what I serve.”

Quality initiatives in 2003The focus on quality has also brought clear internalbenefits. As well as being motivating, it makes thestaff proud to work in company that is not preparedto compromise on customer expectations, publicrequirements or its own quality standards. Wheneach of us is responsible for the quality produced at our own work station, not leaving it to aninspection unit, it is easier to avoid the productionof non-conforming and sub-standard products. Wefeel that we are co-responsible.

The preparations for the extended EU were amongthe main driving forces behind quality assurancework in 2003. Our factories in the Czech Republicand Poland have considerably heightened the levelof motivation and commitment to ensure that theymeet the new EU requirements, and they havereceived ISO certification. Vitana has also receivedHACCP certification (HACCP = Hazard Analysis ofCritical Control Points). This means that the companyhas demonstrated that it has control of the criticalpoints in the production process. At the same time,Delecta in Poland is building a modern productionplant which will ensure that there is a better flow ofgoods. On 1 May 2004 the EU gates will be openedto the Czech Republic and Poland, and when thattime comes, our business will be properly equippedto benefit from the new situation.

R I E B E R & S Ø N - Å R S B E R E T N I N G 2 0 0 328

Food safety: The highest possible safety for the food we serve


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Improvements are also being made in Norway.Denja Larvik is upgrading its plant. Toro Elverum is planning new solutions to meet hygiene require-ments contained in new food legislation, and theproposed measures have been approved by the authorities. At the same time, Toro Arna is engagedin an ”allergy project” in conjunction with the construction of a new mixing unit. Further steps are being taken to ensure that there is no accidentalmixing of products that contain allergens with those that do not.

Risk awarenessRisk is a crucial element in all quality work. In our business activity, we must constantly be awareof concepts such as risk analyses, risk assessment,risk management and risk communication. As wellas managing the technical and objective risk (riskthat can be responded to on the basis of scientificdocumentation), we have to relate to individualcustomers and groups which create their own riskscenarios, influencing the media, politicians and thetrade. Among the risks we encounter are emotionsand fear, and it is just as necessary to respond toreactions of this kind. Many people are guided bythe view that ”I have already made up my mind, sodon’t bother me with facts”. A considerable numberof our analyses, investments and other initiatives aremotivated against a backdrop of emotionally createdrisk perceptions. Such perceptions arise becausemany people have little faith in science or the authorities. It is therefore important that indepen-

dent scientific committees are involved to a signifi-cant extent in the new food legislation in the EUand Norway, in conjunction with the establishmentof forums where risk can be properly understood.This topic will also be taken up in both national andinternational branch organisations, and Rieber willbe involved in this work.

Common quality systemsIn order to implement Rieber & Søn’s strategyaimed at extracting synergies across nationalboundaries, the respective units must have establis-hed common quality control systems and a uniformperception of quality. In conjunction with the RIGHTproject, steps are therefore being taken to developsystems of this kind that can be used by all businessunits. The platform has already been selected (ISOwith a link to SAP), and the certification mentionedabove will facilitate this process. In this respect,2004 will be an important year. One of the mainprojects is to train a group of us to be skilled qualityauditors, primarily to ensure that raw materials havea uniform and high quality. At the same time, new quality standards are in the pipeline. Requirements within the trade arebecoming gradually stricter, and a new ISO standardis being developed for the food manufacturingindustry. Rieber & Søn will have to consider its relevance for each factory, but a number of newrequirements will be of decisive importance for ouractivities in the near future.

Rieber & Søn produces food under brand namesin the Nordic region and in certain countries inCentral and Eastern Europe. Strong brands arebased on the trust of the consumers. We arecontinuously developing better systems tomonitor and improve the various internaland external environmental factors.

Rieber & Søn’s environment policyEnvironmental awareness is part of the Group’scorporate culture.The environmental consequences of our productionmethods and products shall be constantlyassessed in relation to the consumption ofresources and the use of the products. We constantly seek to reduce any negativeeffect our activities may have on the environ-ment by using new knowledge and technology.Rieber & Søn’s activities shall give priority to theuse of renewable and recycled input factors inoperations and value creation.We set environmental standards for our suppliers

and business partners.Consideration for the internal and externalenvironment is a management responsibility.

Value chainRieber & Søn has production units in seven countrieswith different regulatory frameworks. Locally, the production management complies with the terms andlicence conditions set by the authorities. In 2003 noviolations were reported in any of the businesses conducted by Rieber & Søn.Our production processes are designed to meet a number of fundamental requirements. Common to allproduction is that the raw materials are handled to givethe best possible utilisation and least possible waste.Input in the value chain consists of raw materials fromthe agricultural and fisheries sectors, water and energy.Processing is controlled by highly qualified personneland automated technology. In addition to the afore-mentioned resources, we use ready-made packagingwhich is a prerequisite for the distribution of finishedproducts. The value chain output consists of processed

Environmental Report

King Oscar Tuna” In the USA tuna fish accountsfor 72% of the tinned seafoodcategory. In Australia the figureis 60%, but in Norway it is only12%. King Oscar is the firstbrand supplier of tuna fish inNorway and intends to creategrowth in a ”sleeping” categorywhich so far has consisted ofprivate label products”

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and portion packed food products, waste and water.

Environmental certificationIn the autumn of 2003 the Toro plant in Arna recei-ved ISO 14001certification in accordance with therequirements of the Danish Standard for environmentalmanagement and control. The Arna plant already hadISO 9001 certification, in line with most of Rieber &Søns’ production plants.

Facts about ISO:The international Organization for Standardization (ISO)is engaged in the international development of stan-dards and certificates for quality, safety and the envi-ronment. ISO certification systematises and sets outrequired standards, consumer and public requirements,and company-specific requirements for enterprisesengaged in industry, trade and commerce.

Health, environment and safety HES activities are well integrated in all the Group’sbusiness areas.

In 2003 the Group recorded 73 injuries involvingabsence from work and 36 injuries with no absencefrom work. This corresponds to an injury incidence rateof 21, which means the number of injuries involvingsick leave per 1 000 full-time positions.

At year-end, the Group had 3 498 employeesconsisting of 1 921 women and 1 577 men - and67% of the workforce worked outside Norway.

The incidence of sick leave rose from 6.7% in 2002to 7.2% in 2003. There is active co-operation betweenthe management, the personnel/HES functions andemployee representatives to reduce the factors whichlead to absence from work and focus on initiatives thatcan increase the work attendance rate. Action plansare drawn up and revised regularly, and systematicwork in this area continues to have a high priority.

33% of Norway’s population areconcerned about food safety.

32 R I E B E R & S Ø N - A N N U A L R E P O R T 2 0 0 3

1. Barbara R. ThoralfssonPresident, NetCom AS, formerlywith Midelfart & Co AS asManaging Director and Kraft USA.Board member since 2001.

2. Terje H. SparboSales consultant with Rieber & SønASA since 1972. Employee-elec-ted Board member since 2003.

3. Connie Astrup-LarsenInternational Director,Bryggerigruppen A/S, Denmark.Formerly Managing Directorof Dandy AS and Cadbury.Board member since 2003

4. Adler EkangerSection Manager, Packing Plantat Toro factory in Arna.Employee-elected Board membersince 2000.

5. Torgny ErikssonSenior Partner at Booz AllenHamilton, Sweden. Formerly withUnilever, Arvid Nordquist and Modo.Board member since 1999.

6. Bjarne RieberVice-Chairman of the BoardChairman of A/S Atlantis Vest.Member of governing bodies ofthe Rieber Group since 1968.Board member since 1986.

7. Leiv L. NergaardChairman of the BoardFormerly with Norsk Hydro wherepositions included CFO, member ofGroup Management, and Presidentof Norsk Hydro Germany.Board member since 1997 andChairman since 2000.

8. Fritz T. RieberPartner, Borea AS and ManagingDirector of A/S Atlantis Vest Board member since 1996.

9. Tore NielsenOperator at Toro factory in ArnaEmployee-elected Board membersince 2003.

The Board ofDirectors 2003

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Rieber & Søn provided the shareholders with an overall return of +20% in 2003 (Oslo Stock ExchangeBenchmark Index (OSEBX): +48%). Since the strate-gic decision was taken in August 2000 to focus onfoods, the Rieber share has shown a return of +24%(OSEBX -16%).

Sales and profits in Western Europe have developedwell, and the acquisition of Nopal has given us addedstrength. The acquisition was part of our strategy toincrease our critical mass in our main markets. Theresults from operations in Central and Eastern Europe(CEE) reflect falling sales and a weak performance inPoland, although the decline flattened out to someextent in the second half of the year. The trend inboth sales and results in Slovakia and Russia was posi-tive, while Czech activities showed acceptable results,despite a decline in sales. After a poor first half-year,the Group recorded EBITA growth of +18% in the lastsix months of the year.

Market shares were stable or increasing in all markets. InWestern Europe, the launch of new products has helpedto develop the total market and boost sales. In spite ofstable market positions, 2003 was a challenging year forour businesses in Poland and the Czech Republic due toan overall market decline in the Group‘s categories aswell as a general decline in stock levels within the trade.In total, our target growth figure was not reached.

Market segment - Western Europe:Market shares in Western Europe were affected by low GNP growth of 1-2% in 2003. Private consumption remains stagnant and the level of retailsales was largely unchanged throughout 2003.

In Norway, there was a sharp fall in interest rates in2003, and a corresponding weakening of the kroneexchange rate. This has increased the level of domes-tic disposable income, and consumption increased byaround 3% in 2003. At the same time, sales of foodproducts have risen by 4.9%.

The structure of the trade in the Nordic region haslong been characterised by a small number of retailchains in each country, accounting for more than90% of the market. International hard discountershave established positions in the Nordic countries,competing mainly on price. These chains account forrelatively small shares of Rieber & Søn‘s main productgroups.

In 2003, sales in Western Europe totalled NOK 2 221m (1 881m), of which NOK 235m wasattributable to the acquisition of Nopal (consolidatedfrom 1 June 2003). Sales were 18% up, with organicgrowth accounting for 3.3%. EBITA for the year stoodat NOK 336m (284m), with Nopal accounting forNOK 17m. The EBITA margin in this segment was15.1% (15.1%).

The continuous improvement of existing products andthe launch of new products contributed to Toro’s posi-tive sales trend in 2003. Toro has had a high pace ofproduct launches, creating growth in both new andestablished categories. Toro’s market shares have been stable or slightly up onthe previous year. The introduction of new conceptshas contributed to sales growth.

Sales to the food service market, as represented byrestaurants, hotels, institutions, schools etc. show ahigher growth rate than the grocery sector. In order tobe better placed to benefit from the expected growthin this area, FoodService has been organised as aseparate Business Unit, with operations in Scandinavia,the Czech Republic and Slovakia.

The overall sales recorded by FoodService were slightlydown. While the trend was positive in Norway, hardercompetition led to a decline in the Czech market. Anumber of steps have been taken to increase the rateof growth in the future.

King Oscar’s sales were down on 2002, reflecting theloss of private label deliveries to the USA. The transfer

Directors' report 2003Group profits in 2003 were in line with the previous year. Rieber & Søn’s strategy as a focu-sed food company is to increase shareholder value by focusing on four main areas; internalimprovements, organic sales growth, a reduction in the level of capital employed, and value-creating acquisitions. A number of improvement initiatives are under way, some of which havethe effect of increasing costs in the short term. Altogether, these projects have had only alimited effect on the results for 2003. The acquisition of Nopal has increased our critical massin Norway, and the company has been rapidly integrated.

of sardine production from Norway to Poland haspositively affected King Oscar’s results.

Denja’s sales failed to match 2002 due to the loss ofdistribution to one of the major chains in Sweden, butthe negative trend was reversed in the course of theyear. A better product mix and lower costs have had apositive effect on the results, with EBITA showing aconsiderable improvement on the previous year.

The sales recorded by Rieber Food Ingredients were in linewith 2002, but the overall results were negatively affectedby problems related to sales to the USA and the strengthof the Norwegian krone in the early part of the year.

Cronions experienced a positive trend in both sales andprofits, despite the phase-out of trading products thatwere part of the portfolio on takeover.

Acquisition and integration of NopalRieber & Søn acquired Nopal with effect from 1 June.Seven months after the acquisition Nopal was fully integrated in three different business units. Specificationof Nopal’s share of business activities will not be prepared in the future.

The sales organisations were co-ordinated in August and Nopal’s head office in Billingstad was closed in theautumn, resulting in the shedding of 50 full-time positions. Along with other steps taken, this will bringnet cost synergies of NOK 30m which will be fullyreflected in the results for 2004.

The Group aims to co-ordinate more brands over time inorder to extract further synergies.

Market segment - Central and Eastern Europe (CEE):Growth in GNP has declined considerably in CEE inthe last 2-3 years and was between 2% and 5% inour main markets in 2003. The economic situation inthe region varies greatly from country to country.Russian and Slovakia are still in a positive phase ofdevelopment, and in the Czech Republic the situationis stable. Poland has been hit especially hard byrecession in recent years and as a result there is highand increasing unemployment, currently close to20%.

Food accounts for a high proportion of consumption per capita, and the demand for processed food is affec-ted by overall economic developments. In a period of

Bergen Fish Soup”Product quality on a par withthe home-made equivalent andcontinuous improvements intaste and packaging design havebeen a recipe for success forBergen Fish Soup for 40 years”

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increasing unemployment this impacts negatively onthe demand for processed food.

Within the trade itself, international chains have beenoverinvesting in new retail outlets in the last fewyears, and as a result competiton has intensified. Theirshare of the total market is steadily increasing. 2003was also characterised by significant stock reductionsby both retailers and wholesalers, especially in the firsthalf-year, which had a negative effect on Group sales.

The market situation for our products in CEE is com-plex, and remains challenging. Group sales in Polandfell in 2003, but the decline slowed up towards year-end. The sales trend in the Czech market was alsonegative due to a further fall in sales in our maincategories. In both Russia and Slovakia sales increased.

Group sales in 2003 totalled NOK 1 030m (1 164m), reflecting a decline of 12% and a 10%drop in organic sales. EBITA came to NOK 13m(61m), after charges of NOK 16m for write-downsand non-recurring costs related to factory closuresplus ERP costs of NOK 13m. The EBITA margin was1.3% (5.2).

Vitana’s sales in the Czech and Slovak markets were7.6% down on the previous year. There was a furtherdecline in the total market for some of our main cate-gories, mainly due to competition from other foodcategories. As yet, new launches have not compensa-ted for this decline.

Vitana’s market shares in the Czech Republic andSlovakia were stable or increased in 2003. Changes inthe product mix have increased the gross margin by4.3 percentage points. Despite the decline in sales,the EBITA margin was maintained, and at a satisfac-tory level. Sales and marketing work is being directedtowards a higher level of activity on site at retaillevel in order to increase the effectiveness.

Delecta‘s organic sales in Poland fell by 13% in2003. Delecta’s market shares have been relativelystable, but sales were substantially down on 2002due to a reduction in the total market for our productcategories and stock reductions within the value chain.EBITA improved in the second half-year, but becauseof the poor performance in the first half of the yearthe overall result for the year was a considerable dropin profits.

Products launched by Toro in theperiod 1995 - 2003 made up40% of Toro’s sales in 2003.

36

Delecta‘s main factory in Wloclawek has received ISO9001 certification which will strengthen Delecta’s position as producer of high quality food and offers the prospect of exports to the EU.

King Oscar‘s market shares in Poland have fallen slightlyin a flat total market. Exports of canned seafood fromPoland to the USA and Australia have declined becauseof the loss of private label contracts.

For a transitional period, the transfer of production fromNorway to Poland resulted in lower productivity andsome non-recurring costs. King Oscar’s results in Polandare still negative. The turnaround initiated in the autumnof 2002 has not been sufficiently effective, and stepshave been taken to reduce costs further. The benefits of these measures will materialise in 2004.

The Group’s business in Russia can report rising sales,and this together with an improvement in the EBITAmargin has provided a good result.

Group resultsSales in 2003 totalled NOK 3 222m (3 031m), including the figures for Nopal from 1 June. In nominalterms, sales rose by 6.3%, but underlying organicgrowth was negative at –1.2% after adjusting forcurrency effects, acquisitions and the a planned phase-out of trading products. Currency conversion effectsmade a positive contribution, adding NOK 5m to salesrevenues in 2003. Sales outside Norway made up50% of the Group‘s turnover in 2003.

The gross margin improved in 2003, rising by 1.2 percentage points to 57.6%, despite the fact thatNopal deluted the average gross margin. Since 2000,when Rieber & Søn became a focused food company,the gross margin has risen by 6 percentage points. Newproduct launches and the phase-out of low margin products have been major contributors to this develop-ment. In order to increase the gross margin, sales and

marketing costs have risen from 10.4% of net sales in2000 to 11.6% in 2003, which has helped to streng-then our brand positions.

At the end of 2002 a three-year project was startedaimed at establishing common work processes and systems in all business units, partly by adapting to and using a new ERP system. The establishment of auniform platform can bring cost savings and reduce thelevel of capital employed. The system was implementedin Poland in 2003, but the process required considerableresources. It has already made it possible to establish aShared Service Center for the Group‘s businesses inPoland. Project costs of NOK 21m have been chargedagainst profits in 2003.

On an accumulated basis, EBITA totalled NOK 330m(326m) in 2003. The EBITA margin for the year as awhole fell by 0.5 percentage points from 10.7% to10.2%. After a poor first half-year, EBITA rose by 18%in the last six months of the year.

The Group‘s net financial costs totalled NOK 9m, compared with net income of NOK 5m in 2002. Thechange reflects the fact that the Group was a netinvestor in 2002, changing into a net borrower in 2003due to the payment of an extraordinary dividend andthe acquisition of Nopal.

After taxes of NOK 100m, the accounts show a netprofit of NOK 177m for the year (190m).

The gross return on capital employed was in line with thestrategic target of 17.5% (20.1). The decline was due anincrease in the capital base following the acquisition ofNopal. The cash flow from operations was NOK 404m(320m), but NOK 70m of the improvement relates to therefund of a disputed tax claim which was paid in 2002.

Rieber & Søn ASA paid an ordinary and an extraordinarydividend totalling NOK 528m in 2003. EPS for 2003


50%

3 22

2

59%

2 68

7

59%

2 78

9

57%

2 92

0

56%

3 03

1

0300 01 0299

Net sales ( NOK m)Sales outside Norway (%)

330

267

260

299

326

0300 01 0299

10.2

%

9.9%

9.3% 10

.2% 10

.7%

EBITA NOK mEBITA-margin (%)

17.5

%

16.0

%

16.5

%

19.8

%

20.1

%

0300 01 0299

Gross ROCE (%)


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totalled NOK 2.35 (2.48). The reduction correspondsto the effect of the extraordinary dividend of NOK 6per share which was paid in May 2003.

In accordance with section §3-3 of the AccountancyAct, the Board confirms that the annual accountshave been prepared on a going concern basis.

Organisation and equalityIn order to stimulate profitable growth and facilitate theextraction of synergies, the Group is split into businessunits, each with separate responsibility for profits. Thereare currently nine business units, organised to someextent across geographical borders and segments.

In 2003 Nopal was integrated with the Rieber & Sønorganisation, and at the same time manpower reduc-tions were effected.

At year-end the Group had workforce of 3 498, consisting of 1 921 women and 1 577 men. Ofthese, 1 617 women were in full-time employmentwhile 304 worked part-time. The corresponding figures for men were 1 540 full-time and 37 part-time employees.

Women make up 22% of the Board of Directors,and all the female representatives are shareholder-elected.

Two of the nine business units are headed by women,and one of the staff functions is led by a woman. Atintermediate management level the number ofwomen is increasing, which is important for recruit-ment to higher management levels.

Rieber & Søn is considered to have a good workingenvironment. The incidence of sick leave in 2003stood at 7.2% (6.7) and the Group as a whole recorded 73 (71) injuries involving absence from work.There is a continuous programme of initiatives aimed

at maintaining and improving the working environ-ment and Health, Environment & Safety (HES)through training and social and cultural activities.

A share subscription programme for employees inNorway has been implemented for the fifth consecu-tive year. A total of 485 employees (42%) purchased153 shares each in 2003.

The Board wishes to thank the employees for theiruntiring efforts throughout the year.

EnvironmentToro’s factory in Arna received ISO 14001 environ-mental certification in 2003.

In common with the other production units, the fac-tories in CEE have now been approved in accordancewith the quality standards set by the EU.

Environmental awareness is part of the Group’s corporate culture. In 2003 there were no reports ofdischarges or pollution in contravention of currentlegislation and regulations in any of the countries. For further information, please refer to the separateenvironmental report on page 30.

Food safetyRieber & Søn places a strong emphasis on quality and food safety. Raw materials, production processesand packaging are subject to strict controls and secureprocedures. The Group has contingency plans forproduct recalls and crisis management. For furtherinformation, please refer to the separate article onfood safety on page 28.

ProductivityThe Board wishes to concentrate production onfewer plants in order increase productivity, reducecost levels and reduce future reinvestment require-ments.

3 35

73 65

4 3 90

3

3 34

3

3 40

9

0300 01 0299

1 01

4

856

932

877

930

2 34

3

2 79

8

2 97

1

2 46

6

2 47

9

No. of man-years, NorwayNo. of man-years, outside Norway

45.7

%

40.2

%

47.2

%

52.8

%

37.8

%

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Equity ratio (%)


The process of restructuring sardine production wassuccessfully completed in 2003. The factory atEikelandsosen closed in January and the plant inStavanger closed in June. Production has been transfer-red to Gniewino in Poland and Askøy outside Bergen.

A further four factories are due to close in 2004 andthe production will be transferred and concentrated atother plants. Implementation will require an investmentof NOK 35m, but the annual cost level will be reducedby more than NOK 10m. There is scope for furtherproductivity gains through reorganisation of the production structure.

Cash flowIn 2003, the cash flow from operations was NOK404m, of which NOK 35m represents the effect of adisputed tax demand.

Rieber & Søn is involved in tax disputes for a totalamount of NOK 20m. The disputed amounts relate tothe financial years 2001 and 2002 and no provisionshave been made in the accounts for these items (ref. note 22).

Investments (excl. acquisitions) in 2003 amounted to NOK 291m. The largest individual investmentswere a new mixing unit at the Toro factory in Arna,the ERP system and a processing plant for tasteingredients in the Czech Republic. Capital employedtotalled NOK 1 892m (1 619m), with net workingcapital accounting for NOK 504m (468m).

The purchase price for the share capital of Nopal ASwas NOK 258m. On takeover, Nopal had net interest-bearing debt of NOK 179m. Vitaplex, which was a partof Nopal, was sold in December which reduced theenterprise value of Nopal by NOK 60m to NOK 377m.

Dividends totalling NOK 528m were paid in 2003,consisting of an ordinary dividend of NOK 1 and an

extraordinary dividend of NOK 6, corresponding to atotal dividend of NOK 7 per share.

The Rieber & Søn shareAt the end of 2003, the Rieber & Søn Group had a market capitalisation of NOK 3 979m, based on 79.6 million shares and a traded price ofNOK 50.00, and NOK 3 775m after adjusting forthe company‘s holdings of its own shares. In 2003,the total return to the shareholders, including divi-dends paid, stood at 20%, while the Oslo StockExchange (OSEBX) rose by 48% in the same period.

The Board proposes an ordinary dividend of NOK 1.10(1,00) per share for 2003, corresponding to 47% of EPS.

At year-end, the company owned 4.1 million of itsown shares.

Profit for the year and allocationsThe parent company - Rieber & Søn ASA - recorded aprofit for the year of NOK 186m. The Board proposesan ordinary dividend of NOK 1.10 per share and thefollowing allocation of the profit for the year:

Ordinary dividend NOK 83mOther equity NOK 103mTotal allocations NOK 186m

The equity ratio at year-end stood at 46%, whichincludes positive currency conversion effects totallingNOK 66m due to the weakening of the Norwegiankrone. Provided that the AGM approves the dividendproposed by the Board, Rieber & Søn ASA will havefree equity of NOK 327m (367m).

Corporate GovernanceFor the Board, it is important to ensure that the Groupis managed on the basis of sound governing principles.For further information, please refer to the separatearticle on corporate governance on page 40.

2.35

4.36

*

1.72 1.

87

2.48

0300 01 0299

Earnigs per share NOK (EPS)* Includes profit from sales of non-core businesses

11.7

%

14.9

%*

5.4%

7.3%

13.0

%

0300 01 0299

Return on equity (%)


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Strategic objectives and prospectsThe objectives of Rieber & Søn‘s strategy are to createadded value for the shareholders by focusing on fourmain areas: internal improvements, organic growth, areduction in the level of capital employed and value-creating acquisitions. For further information pleaserefer to pages 18-27.

The objective of the Group‘s overall financial strategyis to hedge the interest rate and foreign currencyexposure related to balance sheet items and parts ofthe company‘s revenues/costs denominated in foreigncurrency (further information is provided on page 77).Liquid assets are invested in interest-earning instru-ments with a limited credit risk.

Considerable resources have been allocated by theGroup to the establishment of a new and integratedERP system which will allow cost savings to bemade longer term. The system has been fullyimplemented in Poland and is due for installation in the other business units in the course of 2004and 2005. This is one of a number of measures designed to reduce the level of capital employedand ensure higher profitability in the long term.

A more efficient production structure is necessary inorder to reduce cost levels, and in 2004 one morefactory will be closed in Sweden and three in CEE.

High wage growth in Norway in the last few years hascontributed to a substantial increase in pension costs.In consultation with the employee organisations theterms and conditions related to pensions and pensioninsurance have been changed. This will reduce pensioncosts by about NOK 10m annually with effect from2004.

In January 2004 Mrs. Cheng’s was acquired. Mrs. Cheng’s is one of Sweden‘s leading brands in the growing Asiatic food niche market. The business willbe integrated with the Group‘s other operations inSweden. Mrs. Cheng‘s had sales of SEK 32.4m in2003 and EBITA of approximately SEK 2.5m. Theacquisition is in line with a strategy which seeks toincrease the critical mass in selected countries wherethe Group has a market position.

In Western Europe the Group has had satisfactoryorganic growth over a long period, but in CEE this haspresented a challenge. The co-ordination of activitiesand transfer of expertise across national borders willcontinue to be a main focus of attention. A high levelof activity will be maintained in the area of productdevelopment, market initiatives and sales promotion inorder to develop our categories. The launch of newproducts and concepts supported by market invest-ments will help to create a basis for future growthin both sales and profits.

Leiv L. Nergaard

Chairman

Bergen, 31 December 2003

18 March 2004

Bjarne Rieber

Vice-Chairman

Barbara Thoralfsson

Tore Nielsen

Torgny Eriksson

Terje H. Sparbo

Fritz T. Rieber

Adler Ekanger

Connie Astrup-Larsen

Asbjørn Reinkind

President and CEO

40

Objectives and governing principlesRieber & Søn is managed according to objectives andgoverning principles that shall ensure openness, integrityand accountability. Openness is assured through a flow of correct informationbetween business units, the Management and theBoard, and to the various partners (owners and theexternal environment). Integrity is achieved through theestablishment of uniform norms and regulations and byfollowing moral and ethical principles. Honesty is centralto our activity. In relation to accountability, we strive tohave a correct division of responsibility between thevarious levels of the organisation (business units, theManagement and the Board).

Rieber & Søn’s set of valuesOur customers, employees, shareholdersand the public at large can rely on us.We are open and trustworthy as regards communi-cation and attitudes to individuals and groups.We are innovative and interested in finding bettersolutions and new ways of dealing with challenges.Our products and ideas inspire the consumer to servea tasteful dishes in an easier way.

Equal treatment of shareholdersand shareholder communication The Group emphasises the importance of giving correctand detailed information about the Company’s financialand commercial position. This done through quarterlyand annual reports, investor presentations and regularcontact with analysts and the press. The Group also has an Investor Relations function whichattends to shareholder matters. Rieber & Søn ASA has strict requirements concerning theprovision of information and the equal treatment of allshareholders. As a listed company, Rieber & Søn ASAobserves the strict standard set by the Oslo StockExchange in this area.

AGM The AGM exercises the highest authority in the company,and among its functions it elects the members anddeputy members of the Corporate Assembly. Thecompany has only one class of shares, and all shares

carry the same shareholder rights. The documentationrelating to matters to be considered by the AGM is sentout not later than 14 days before the date of the AGM.Where shareholders are prevented from attending, theymay appoint a proxy to attend the AGM in their place.

Corporate AssemblyThe AGM appoints the Corporate Assembly who in turnelects the Board of Directors of Rieber & Søn ASA. TheCorporate Assembly has 15 members, ten of whom areelected by the shareholders and five by the employees.The Corporate Assembly may make recommendations tothe Group Board of Directors on any matter. It may alsomake recommendations to the AGM on proposals madeby the Board concerning the consolidated accounts.

Election CommitteeThe company has an Election Committee which proposes candidates for the Corporate Assembly andthe Board of Directors. It has four members. TheChairman of the Board and the Chairman of theCorporate Assembly are permanent members of theElection Committee in order to ensure continuity ofcommunication and Management responsibility. TheAGM in May 2004 will be asked to approve a reso-lution proposing that the Chairman of the Board ofDirectors shall no longer be a permanent member ofthe Election Committee. This is being done in orderto prevent a possible conflict of roles. In determining the composition of the Board ofDirectors the Election Committee attaches importanceto experience, competence and diversity, with represen-tation from the food industry and consumer products,and including financial and strategic experience andgeographical diversity. CVs for proposed Board candidateswill be distributed.

The remuneration to the Board of Directors and theCorporate Assembly is proposed by the ElectionCommittee and approved by the AGM.

Board of DirectorsThe Board of Directors of Rieber & Søn is fully aware ofits responsibilities in relation to the Management andsupervision of the Company’s activities. The Board is


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responsible for the strategic development of the Group, and in this connection it has established internalprocedures and controls to ensure that the business isrun within the parameters and in accordance with thestrategies approved by the Board. The Board ensures thatit is fully informed about the financial position of thecompany at all times and is responsible for drawing upplans and budgets for the Company’s business activities.

The Board appoints the Managing Director and determi-nes the systems of remuneration for the Management.

The Board has an established board strategy, boardinstructions and an annual plan. Each year the Boardmakes an assessment of its work. The SeniorManagement group also makes an overall assessment of the Board’s work and its co-operation with theManagement.

IndependenceIf other renumeration than Board fees for services are tobe paid to any member, this shall be approved in advan-ce be the superior body. No Board members have beenemployed by the company in the last few years, nor dothey have any family links with the Managing Director.With the exception of two board members from theRieber family, non of the other members have cross rela-tionships with other Board members or the ManagingDirector. The Board members do not have performance-linked Board fees or options in the company, and theyhave no significant commercial links with the company.

Remuneration to ManagementThe notes to the accounts contain information pertainingto remuneration to the Managing Director and the bonusschemes to Management. The salary and other remune-ration to the Managing Director is set by the Board ofDirectors. The Managing Director’s options agreementrequires him to have direct ownership of the underlyingshares in order to increase the degree of symmetricalinterest with the Company’s shareholders. In both formand size, the bonus schemes for the Management aredesigned to contribute to a concurrence of interests between the owners, the Managing Director and otherManagement.

Control functionsThe Group carries out control functions in all businessunits. The company also has a central accountingdepartment and a finance department with responsibilityfor drawing up the internal control and reporting guideli-nes. The accounting and finance departments ensurethat the company is in compliance with current laws andregulations and good accounting practice, and that theparameters and strategies set by the Board are followed.

Good systems provide a basis for and contribute to goodcontrols and reporting. In order to strengthen work in thisarea, the process of implementing an ERP system in allbusiness areas started in 2003. Using this tool, theManagement will have a basis for better understandingof the Company’s risk profile in relation to its currentstrategy, operations and transactions, while strengtheningits ability to meet business challenges in the periodahead.

EquityThe Company’s equity is adequate to support itsobjectives, strategy and risk profile, as communicated tothe market. In this light, an extraordinary dividend waspaid in 2003 in order to bring the share capital into linewith current strategic objectives.

DividendThe Board has a clearly defined dividend policy whichforms the basis of the dividend proposed to the AGM.The dividend is defined as around 40% of EPS.

AuditingErnst & Young is Rieber & Søn’s independent auditor.The Group has guidelines limiting the use of the auditor for other services. The auditor also participatedin board meetings in order to present special problemsand conclusions related to the audit.

The notes to the accounts contain full disclosure ofremuneration to the auditor, split between audit andother services.


Figures in NOK 1 000 Note| 2003| 2002| 2001|

Net sales 6 3 221 506 3 030 758 2 920 455Cost of sales 4 -1 393 302 -1 356 090 -1 373 432Gross profit 1 828 204 1 674 668 1 547 023

Other operating revenues 27 249 36 100 20 811Payroll costs 7,8 -701 983 -653 656 -627 851Depreciation 10 -181 558 -160 214 -160 443Other operating expenses 9 -685 949 -609 160 -553 911Operating profit 285 963 287 739 225 630

Other items 5 - - -9 991Net financial items 4,18 -8 530 5 272 11 437Profit before taxes 277 433 293 011 227 076

Taxes 22 -99 962 -102 920 -81 982Group profit for the year 177 471 190 091 145 094

Minority interests 15 59 -10 52

Earnings per share *) (NOK) 2,35 2,48 1,87Proposed dividends per share (NOK) 1,10 1,00 0,85Extraordinary dividends per share (NOK) 6,00Proposed dividends 15 83 044 527 945 65 331

*) See the definition of key figures on page 74.

Profit and Loss Account 2003 for the Rieber & Søn Group


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ASSETS

CAPITAL ASSETSIntangible fixed assetsLicences, concessions and trademarks 10 81 298 10 630 15 650Goodwill 10,11 235 886 152 959 215 840Total intangible fixed assets 317 184 163 589 231 489

Tangible fixed assetsLand, buildings and other real estate 10 668 894 486 454 499 980 Ships, machinery and plant 10 522 654 403 415 430 964 Operating assets, fittings, office equipment etc. 10 102 119 57 768 25 553 Total tangible fixed assets 1 293 667 947 637 956 496

Financial assetsShareholdings and investments 12 11 745 7 352 24 409 Pension plan assets 8 23 353 9 018 15 074 Other long-term receivables 13 7 692 21 214 89 284 Total financial assets 42 791 37 584 128 767 Total capital assets 1 653 641 1 148 810 1 316 753

CURRENT ASSETSStocks 14 413 795 409 862 430 299

ReceivablesAccounts receivable 457 522 371 976 370 619 Other receivables 27 098 23 249 34 226 Total receivables 484 620 395 225 404 845 Cash and bank deposits 21 357 192 1 301 679 1 073 671 Total current assets 1 255 607 2 106 766 1 908 816 TOTAL ASSETS 2 909 248 3 255 576 3 225 569

Balance sheet at 31 Dec. 2003 for the Rieber & Søn Group



LIABILITIES AND SHAREHOLDERS' EQUITY

Shareholders' equityPaid-in capital 15,16,17 754 949 766 620 767 431 Retained earnings 15 573 815 458 995 930 810 Minority interests 15 1 057 5 114 5 124 Total shareholders' equity 1 329 821 1 230 729 1 703 365

LiabilitiesProvisions for obligationsPension obligations 8 110 093 65 050 38 019 Deferred taxes 22 59 634 79 640 109 699 Total provisions for obligations 169 726 144 691 147 718 Other long-term liabilities 18 779 968 758 017 750 117

Current liabilitiesBank overdrafts 4,21 80 138 198 379 152 611 Accounts payable 209 426 172 567 132 474 Taxes payable 22 66 556 73 858 76 031 Public debt 10 645 2 898 12 216 Dividends payable 15 83 044 527 945 65 331 Other current liabilities 179 924 146 491 185 705 Total current liabilities 629 733 1 122 139 624 368 Total liabilities 1 579 427 2 024 847 1 522 203 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2 909 248 3 255 576 3 225 569

Balance sheet at 31 Dec. 2003 for the Rieber & Søn Group

Leiv L. Nergaard

Chairman


18 March 2004

Bjarne Rieber

Vice-Chairman

Barbara Thoralfsson

Tore Nielsen

Torgny Eriksson

Terje H. Sparbo

Fritz T. Rieber

Adler Ekanger


Asbjørn Reinkind

President and CEO


Overview

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Cash flow from operationsProfit before taxes 277 433 293 011 227 076Taxes paid -119 214 -158 084 -153 728Depreciation, incl. gain/loss on disposal of fixed assets 10 181 551 160 282 147 347Pension costs accrued not paid 22 863 21 913 1 841Change in stocks, accounts receivable and accounts payable 36 486 72 529 -47 896Change in other accruals 4 651 -69 990 -80 524Net cash flow from operations 403 770 319 661 94 116

Cash flow from investment activitiesFixed assets sold 10 25 687 10 785 142 664Fixed assets bought 10 -648 867 -178 603 -117 030Net purchases/sales of shares and investments in other companies -3 400 7 484 26 379Net proceeds of other investment activities -30 453 83 611 168 724Net cash flow from investment activities -657 032 -76 722 220 737

Cash flow from financing activitiesChange in long-term interest-free debt 1 485 -64 -1 691New interest-bearing debt (short and long-term) 9 405 54 952 1 016Repayment of interest-bearing debt (short and long-term) 18 -111 886 -1 220 -84 341Inflow of equity (issue) 15 - - 47 232Inflow of equity (sale of own shares) 17 4 859 8 039 3 083Outflow of equity (purchase of own shares) 17 -62 071 -11 307 -230 782Dividends paid -527 945 -65 331 -62 745Minority interests -5 072 - -Net cash flow from financing activities -691 225 -14 931 -328 228Net change in liquid assets -944 487 228 008 -13 375

Liquid assets at 1 Jan. 1 301 679 1 073 671 1 087 046Net change in liquid assets -944 487 228 008 -13 375Liquid assets at 31 Dec. 357 192 1 301 679 1 073 671

Cash Flow Statement 2003 for the Rieber & Søn Group

Acquisitions are classified as cash flowfrom investment activities, split onfixed assets bought, net

purchases/sales of shares and invest-ments in other companies and netproceeds of other investment activities.


Note 1 | Accounting principles

The annual accounts have been preparedin accordance with the Accounting Act of1998 and generally accepted accountingpractice. The accounts are based on thefollowing basic accounting principles inaccordance with generally acceptedNorwegian accounting practice; thetransaction principle, the earned incomeprinciple, the matching principle, the prudence concept, the congruence principle, hedging and use of estimates,the going concern assumption togetherwith a uniform use of principles.

Consolidation principlesThe consolidated accounts include theparent company Rieber & Søn ASA and itssubsidiaries, as shown in note 2. The consolidated accounts incorporate companies where the parent companydirectly or indirectly owns more than 50%of the voting share capital, and/or has acontrolling interest. Acquired subsidiaries orpart of subsidiaries meant for temporaryownership are not consolidated.

The gross method of accounting isapplied to jointly controlled activities.The equity method of accounting isapplied to companies where the Grouphas a significant influence and long-term owner interests.

In the accounts of the parent company,shareholdings in subsidiaries, jointlycontrolled activities and associatedcompanies are incorporated using thecost method of accounting.

Companies acquired during the year areconsolidated from the date of acquisition.Companies sold during the year are consolidated for the period up to thedate of sale.

The consolidated accounts are preparedapplying uniform accounting principles,with subsidiaries applying the sameaccounting principles as the parentcompany. All material inter-companytransactions and balances are reconciledand eliminated.

When subsidiaries are acquired, the costprice of the shares in the parent companyis eliminated against the subsidiary’s equity at the date of acquisition. Wherethe purchase price exceeds the bookequity of the subsidiary, the difference is posted to the identifiable assets and liabilities and they are thereby stated at their actual value at the date ofacquisition. Any surplus value that cannotbe attributed to assets or liabilities, isposted as goodwill. In posting surplusvalue to assets and liabilities, deferredtaxes are taken into account and postedin the balance sheet. Goodwill is postednet. Surplus values and goodwill attribu-table to foreign subsidiaries are restated in the relevant foreign currency at theexchange rate at the date of acquisition.

Investments in associated companies areconsidered as a strategic, operating-rela-ted investment, in such a way that theshare of the profit is entered as incomeon the line other operating revenues.

Translation of foreign subsidiariesFor consolidation purposes, the profit andloss accounts of foreign subsidiaries aretranslated into Norwegian krone at theaverage exchange rate for the accountingperiod. The balance sheets are translatedat the year-end rates. Surplus values andgoodwill are correspondingly translatedinto Norwegian krone at the same rateused for the subsidiary to which theyrelate. Any translation differences areposted directly to Group equity.

Minority interestsMinority's share of equity is calculated at actual value of identified assets andliabilities at the date of acquisition. Theshare of profits and tax attributable tominority interests is shown separatelyafter the Group profit for the year. Theshare of equity attributable to minorityinterests is shown separately underspecification of the Group equity.

Recording of incomeAs a main rule, income is recorded in theaccounts on the basis of the amountearned at the transaction date. Income is thus not posted until both control andrisk have been transferred.

Cut-offCut-off is based on matching of incomeand expenses during the period, whileexercising prudence in accordance withgenerally accepted accounting practice.Unrealised losses which are likely andquantifiable, and unqualified liabilities andimposes are charged in the accounts inaccordance with generally acceptedaccounting practice.

Valuation and classification principlesAssets which are meant for permanentownership or use are classified as fixedassets. Other assets are classified as current assets. Debt which is due morethan one year after year-end, and thefirst year’s instalment on this debt, isclassified as long-term debt. Other debtis classified as short-term debt.

Other itemsThe Group’s profit and loss account down to operating profit is presented for continued activities. This also appliesfor the comparative figures for previousyears. Activities which are to be sold orwhich have been sold before the rendering of accounts 2003 are presented as Other items. Other items are specified in Note 5.

Activities which are to be sold are writtendown to fair market value when this islower than book value. Gain on disposal and write downs regarding activities which are to be sold

or which have been sold, are included inOther items.

ReceivablesAccounts receivable and other receiva-bles are stated at nominal value in thebalance sheet, after deducting provisionsfor expected losses. The Group’s lossprovisions are determined on the basis ofa specific assessment of each accountreceivable, in addition to an assessmentof the accounts receivable as a whole.

StocksStocks of purchased goods are valued at the lower of purchase cost and fairmarket value. Manufactured goods arevalued at full production cost. Provisionsare made for obsolete stock.

Foreign exchangeCash items, receivables and liabilities in foreign currency are recalculated at the year-end exchange rates. The Group’sforeign exchange policy is to balance outdifferences between receivables and liabilities in foreign currencies by usingfinancial instruments such as foreignexchange bank accounts, forward foreigncurrency transactions and options. Foreign exchange effects on cash itemsin foreign subsidiaries which are not independent enterprises, are charged tothe profit and loss accounts as financialitems.

Foreign exchange gains/losses related to the flow of goods are included in thegross profit. Foreign exchange gains/losses not related to the flow of goodsare classified in correspondence with theunderlying transaction. Unrealised gainson foreign exchange positions intended tohedge against unrealised losses on corres-ponding foreign exchange positions, andwhich are effective in doing so, are offset.

Intangible assetsCosts related to research and develop-ment are charged directly to the profitand loss account.

Goodwill is depreciated over the expecteduseful life, estimated by calculationsmade at the time of the acquisition. Thevalue of goodwill is assessed regularly toconsider any factors or events since theacquisition which require the book valueof goodwill to be written down.

Payment for concessions, rights and otherintangible assets is depreciated over theperiod for which the rights apply/extractionperiod, or over its expected lifetime.

Fixed assetsFixed assets are entered in the balancesheet at historical cost less depreciation.Direct maintenance of fixed assets ischarged as an operating expense as itarises, while additions or improvementsare added to the cost price of the fixedasset in question, and are depreciated inpace with the fixed asset. The straight-


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line method of depreciation is used,based on an assessment of the technical/economical lifetime of theindividual fixed assets.

Fixed assets are written down when anindividual assessment indicates that thefair market value is less than the bookvalue. A fair market value is the higher ofthe sales price and the discounted valueof the expected future cash-flow.Write-downs of this kind are charged tooperating profit as part of depreciation.Gains and losses on the disposal orobsolescence of fixed assets are includedin depreciation in the profit and lossaccount, as a correction of insufficient orexcessive depreciation in previous years.

Leasing agreements where the companyhas most of the risk and the benefits of the fixed assets are entered in thebalance sheet as fixed assets and liabilities.

Shareholdings andlong-term investmentsShareholdings and other securities areclassified as fixed assets and valued athistorical cost. Write downs are carriedout on individual shareholdings if themarket value is less than historical cost,and this is not of a temporary nature.Gains and losses on shareholdings andother securities are included as financialitems.

TaxesTaxes in the profit and loss account consist of the change in net deferredtaxes and taxes payable for the year.Deferred tax in the balance sheet is calculated applying the nominal tax rateto the temporary timing differences arising between the accounting and taxvalues, and taking account of the taxloss carried forward at the end of theaccounting year. Temporary positive andnegative differences which will or can bereversed in the same period are netted.Deferred tax on surplus values due tothe acquisition of subsidiaries is not netted. Deferred tax that cannot benetted is entered in the balance sheet if it can be established that the deferredtax asset can be applied in the future.Deferred tax and deferred tax assets are netted in the balance sheet.

Pension costs and obligationsThe basis for calculating benefit planbased pension costs, is a linear distributionof pension entitlements and the expectedfinal salary. Changes in plan benefits areamortised over the expected remainingaccretion period, as are deviations inestimates in excess of 10% of the largest of pension obligations and pension funds (corridor).

Net pension costs for the period areincluded in payroll and social securitycosts and are the total of pension benefits earned during the period,

interest expenses on the calculated obli-gation and the expected return on pension funds, in addition to amortisationof changes in plan benefits and deviationsin estimates. The pension obligations arecalculated on the basis of long-termexpectations of the future discount rate,rate of return, wage and salary growth,inflation and pension regulation.

The Group’s various pension schemes are valued individually and classified asnet pension funds to the extent that thisrepresents overfunding which can beused in the future to cover premium orre-allocated to the company.Underfunded schemes are classified as net pension obligations.

Extraordinary itemsOnly items which are unusual, irregularand material to the overall activities ofthe Group are treated as extraordinaryitems.

Statement of cash flowsThe Group statement of cash flowsshows the aggregate cash flow fromoperations, investments and financingactivities. The statement shows theeffect of the individual activities on thelevel of liquid assets. Liquid assets includecash, bank deposits and other liquidinvestments which can be convertedinto cash immediately and with nomaterial conversion risk. The cash flowfrom sales of fixed assets and intangibleassets in companies sold, is classified as«Fixed assets sold». Net cash flow related to the remaining assets and liabilities is included in «Net proceeds of other investment activities».

Differences in accouting principlesaccording to IAS/IFRS and theaccounting principles of Rieber & Søn.In February 2001 the EU Commissionresolved that all companies listed on thestock exchange should present the consolidated accounts according to IFRS(International Financial ReportingStandards) published by IASB(International Accounting StandardsBoard), effectively from 1 Jan. 2005.This implies that companies listed on thestock exchange in Norway, under theEEA-agreement are subject to the samerequirements when presenting theaccounts as companies within the EU.Rieber & Søn will based on this reportaccording to IFRS as from 2005.

One year of comparative information is required, and the identification ofdifferences in accounting principles between IAS and the NorwegianAccounting Act has started. Rieber & Sønaim at adapting the opening balancesheet at 1 Jan. 2004 to IFRS within thefirst half year of 2004, to be able topresent one year of comparative figures.Work is in progress to collect informationand establish new routines to meet therequirements according to IFRS.

However, Rieber & Søn will not presentthe accounts according to IFRS before1Q 2005, due to continuously develop-ment of both IFRS and NorwegianAccounting Act. The work with theAccounting Standards will probablycontinue during 2004, and the principlesto be implemented in 2005 will basedon this not be identical to existing IAS(International Accounting Standards).NRS will in the period up to 2005 adapttheir Standards to changes in IAS, andRieber & Søn will in high degree complywith these recommendations.

IFRS is more focused on balances thanthe Norwegian Accounting Act as it istoday, and IFRS makes it possible to usefair market values more extensively.Preliminary analysis indicate that thereare no material differences between theprinciples used by Rieber & Søn todayand the principles according to IFRS.

Rieber & Søn will principally be influenced in the following areas whenadapting to IFRS:

Income statement,balance sheet and notes:• More flexible format as regards topresentation, but Rieber & Søn willprobably continue to present expense by nature.• Some items such as long term debtwill be reclassified.• The notes will be extended.

Intangible assets:Goodwill will not be depreciated, buttested periodically for impairment.

Pensions:Economic assumptions regarding discount rate and return on pension assetsis continuously adjusted according to themarket rate. The practice in Norway andfor Rieber & Søn has been to change theinterest rate only in case of materialchanges compared to the market rate.

Financial instruments:Financial instruments to manage financialexposure should be recognised in thebalance sheet at fair value, and un-realised gains/losses are charged directlyto equity. This does not necessarily leadto material effects in the profit andloss account compared to the principlesused today. The requirements of docu-mentation and additional information areconsiderably extended.

Research and development costs:According to the principles of today,research and development costs arecharged as they arise. According toIFRS, development costs should becapitalized and depreciated if certaincriteria are met. Rieber & Søn presumethat the company does not havematerial development costs thatshould have been capitalized accordingto IFRS.

Note 1 | continued


Note 1 | continued

Fixed assets:Compounded fixed assets are oftendepreciated based on one commondepreciation rate. IFRS requires a greater degree of decomposition offixed assets with different depreciationrates. The effect for Rieber & Søn isassumed to be immaterial.

DividendsAccording to IFRS, dividends should berecognised when approved, while

practice in Norway is to recognise the dividends in the year it relates to (i.e. one year previous).

Opening balance sheet 1 Jan. 2004:When establishing the opening balanceat 1 Jan. 2004, IFRS 1 on first timeadoption gives several options. Rieber& Søn will probably not choose torevalue fixed assets at fair value, butthe following permitted simplificationswill probably be used:

• Business combinations prior to 1 Jan.2004 will not be restated.• Deviations in estimates not amortisedrelated to pensions at 1 Jan. 2004 willbe reset to equity. This is not applicablefor changes in plan benefits not amortised kept for future amortization. • Accumulated translation differences at1 Jan. 2004 are reset. This will have noimpact on equity as at 1 Jan. 2004, butwill influence the calculations of gain/losses on future disposals of businesses.

The consolidated accounts for 2003 comprise the following companies:Nominal Share and voting

Registered share rights of the GroupFigures in currency 1 000 office capital at 31 Dec. 2003

Parent companyRieber & Søn ASA Norway NOK 795 757

SubsidiariesAlamar AS Norway NOK 4 000 100 %Anja Cake Sp. z o.o. Poland PLN 135 100 %Delta-Nor Sp. z o.o. Poland PLN 100 100 %Denja AB Sweden SEK 950 100 %Denja AS Norway NOK 0 0 %Denja A/S Denmark DKK 800 100 %Denja BV The Netherlands EUR 2 000 100 %Eurospice AB Sweden SEK 100 100 %Fellesfrost AS Norway NOK 2 800 100 %Grillfagmannen AS Norway NOK 100 100 %Helsetorget AS Norway NOK 100 60 %King Oscar Inc. USA USD 50 100 %King Oscar Sardiner AS Norway NOK 100 100 %Nature Pharma AS Norway NOK 460 100 %Nopal AS Norway NOK 428 100 %Norway Foods AS Norway NOK 0 0 %Norway Foods(Europe) b.v. Belgium EUR 62 100 %Phønix AB Sweden SEK 0 0 %Przedsiebiorstwo Magazynowania Ryb. Sp. z o.o. Poland PLN 4 49 %Ren Jord A/S Denmark DKK 5 000 100 %Rieber Foods Polska S.A. Poland PLN 4 377 100 %Rieber & Son AB Sweden SEK 2 000 100 %Rieber & Son GmbH Germany EUR 26 100 %Rieber & Son Oy Finland EUR 6 438 100 %Rieber & Son Plc. United Kingdom GBP 200 100 %Rieber & Son Production Russia ZAO Russia RUR 21 112 100 %Rieber & Son Sales Russia ZAO Russia RUR 1 712 100 %Rieber & Søn A/S Denmark DKK 50 000 100 %Rieber Folie AB Sweden SEK 0 0 %Storaneset 12 AS Norway NOK 9 000 100 %Toro AS Norway NOK 0 0 %Veiservice AB Sweden SEK 0 0 %Vitana a.s. Czech Rep. CZK 526 402 100 %Vitana AS Norway NOK 100 100 %Vitana Slovensko s.r.o. Slovakia SKK 340 100 100 %

Note 2 | Shares in subsidiaries

Eurospice AB, Grillfagmannen AS,Helsetorget AS and Nature Pharma ASwere taken over in connection with theacquisition of Nopal AS 1 June 2003.When acquiring Nopal AS, the mostessential part of the business wasdemerged. Norway Foods AS took over

the demerged business. Then theassets and liabilities were sold fromNorway Foods AS to Rieber & Søn ASA,with subsequent liquidation of NorwayFoods AS. Rieber Folie AB, VeiserviceAB and Phønix AB are merged intoRieber & Son AB in 2003. The minority

in Fellesfrost AS was bought out in2003, and the share increased from50% to 100%. For companies whichare liquidated, merged or sold duringthe year, the holding of shares is set to0% at 31 Dec. 2003.


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Nopal is acquired and consolidatedfrom 1 June 2003. Denja BV is consolidated in the Group accountswith effect from 1 April 2002. TheRieber and Son Group demerged in2001 in such a way that the Group's

87.79% share of SE Labels ASA,together with the wholly-owned subsidiaries Etikett Service AS andRiflex Film AS, and an increase of thecapital of NOK 226.4m, were trans-ferred to Nye SE Labels AS for a

settlement to the shareholders ofRieber & Søn ASA in the form ofshares in Nye SE Labels AS. Nopal andDenja BV are included in the Group'saccounting figures with the followingamounts;

Note 3 | Effect of changes in Group composition

Figures in NOK m 2003| 2002| 2001|

Share of Group profit for the year 3 1 -

Fixed assets 392 39 - Current assets 138 20 - Provisions -14 -11 - Long-term debt -50 -29 - Short-term debt -445 -3 -

Note 4 | Items merged in the accounts

Figures in NOK 1 000 2003| 2002| 2001|

Profit and Loss Account - continued activitiesCost of sales -1 359 442 -1 351 278 -1 367 841 Change in stocks of work-in-progress and finished goods -33 860 -4 812 -5 591 Total cost of sales -1 393 302 -1 356 090 -1 373 432

Profit and Loss Account - GroupDividends 89 61 156 Gains on shareholdings 6 - 14 177 Interest income 315 434 4 642 Financial income on liquid funds 43 758 85 707 81 498 Other financial income 2 615 260 8 616 Total financial income 46 784 86 461 109 088

Loss on shareholdings - -68 -Interest on long-term debt -39 929 -51 431 -57 981 Interest on short-term credit facilities -13 711 -27 336 -32 980 Other financial expenses -1 675 -2 353 -6 691 Total financial expenses -55 314 -81 189 -97 652 Net financial items -8 530 5 272 11 437

All bank credits are debt tocredit institutions.

Note 5 | Other Items

Other items include a cost of NOK10.0m in 2001. This transactionrepresents an increase of existing

provisions related to sold units as aconsequence of two disputes whichwere unsettled 31 Dec. 2001. Later

these disputes have been solved within the frame of the provisions.


Note 6 | Net sales

Figures in NOK 1 000 2003| 2002| 2001|

Gross sales 4 022 688 3 721 683 3 528 254Sales deductions -801 183 -690 925 -607 799Net sales 3 221 506 3 030 758 2 920 455

Sales deductions include outgoing freights, insurance, discounts, claims and customer bonuses/commisions.

Net sales, divided into product groupsSoups, sauces, Casa d'Italia, kits etc. 1 858 551 1 632 260 1 556 213Seafood 424 613 480 142 450 253Ingredients 95 605 68 165 71 060Baking ingredients, cakes and sweets 330 552 361 488 388 138Salads 261 976 265 119 257 244Fried onion 153 335 113 732 63 354Snacks 96 873 109 853 134 193Net sales 3 221 506 3 030 758 2 920 455

Net sales, divided into sales channelsConsumer 2 667 216 2 543 619 2 470 449Food service 421 804 366 524 355 315Industry 132 485 120 615 94 691Net sales 3 221 506 3 030 758 2 920 455

Segment information is presented on page 75 and 76.

Figures in NOK 1 000 2003| 2002| 2001|

Salaries 537 309 497 310 483 527National insurance contributions 61 552 56 246 60 456Pension costs (incl. payroll tax) 43 592 47 756 39 240Other benefits 59 531 52 344 44 627Total payroll costs 701 983 653 656 627 851

Loans to employees 4 752 3 808 6 371

Average number of employees in continued activities 3 533 3 519 3 772

Note 7 | Salaries, number of employees, remuneration, loans to employees etc.

Annual salary to President and CEOAsbjørn Reinkind in 2003 amounts toNOK 3 282 971, of which bonus relatedto 2002 amounts to NOK 624 999.Pension premium paid amounts toNOK 678 804, together with otherreported taxable payments of NOK150 831. Under a bonus schemedependent on the results of the Group,the CEO is entitled to an amount notexceeding 50% of the annual salary. In2003 the acquired bonus amounts toNOK 437 500. This amount will bepaid in 2004. When his employmentterminates, the CEO will be entitled toleaving pay on pre-defined conditions,

corresponding to two times his annualsalary. The CEO`s early retirementagreement gives him the right andobligation to retire when reaching the age of 60, with remuneration equivalent to 66% of the pensionbase. The early retirement agreement is based on 30 years earning in theNorwegian National Insurance.The CEO has an option to buy 100 000Rieber & Søn shares yearly from 2002to 2006, adding up to 500 000 shares.The option is to be executed in theperiod from publication of the preliminary annual accounts the yearfollowing the year of assignment, to

three years after the date of assign-ment. The exercise price of the optionis NOK 47.99, plus 12 month NIBORdeducted for dividends paid up to thedate of exercise. Calculated call price asof 31 Dec. 2003 is NOK 44.94. Thevalue of this option per 31 Dec. 2003was NOK 1 012 000.

CEO Asbjørn Reinkind has according tohis contract of employment undertakento possess his own holding of Rieber-shares equivalent to the value of hisannual gross salary. Per 31 Dec. 2003the CEO owned 20 976 shares.


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The other five Directors in the Groupmanagement all have a bonus schemedependent on the development in the rate of the share. Each of themacquire a right to bonus paymentbased on 30 000 underlying sharesper year, from 2002 to 2006, a totalof 150 000 shares per person. Thebonus may be required paid in the period from publication of the prelimi-nary annual accounts the year followingthe year of assignment, to three yearsafter the date of assignment. The bonusis determined as the difference betweenthe market price and the exercise priceper share multiplied with the number ofunderlying shares at the date of exercise.The exercise price is equal to the exerciseprice for the CEO. The value of thebonus schemes per 31 Dec. 2003 wereNOK 1 366 200.

The Group has a bonus scheme, thatin addition to the CEO`s already mentioned arrangement, includes 59of the managers in the Group. Each ofthese can achieve a bonus maximizedto 25-35% of their annual salary. For

2003 acquired bonus , included socialsecurity costs, amounts to NOK 2.8m.

CFO Tor Lund, together with theDirectors Stein Klakegg, Morten Vikeand Geir Arne Åsnes, have all onpredefined conditions an agreementwhereby they are entitled to severancepay equal to two years salary whenthe conditions of employment cometo an end.Tor Lund and Stein Klakegg are coveredby an early retirement scheme underwhich they will retire at the age of 64.The matter of early retirement fromthe age of 60 may be taken up by Mr Lund and Mr. Klakegg or by thecompany.Tor Lund has an interest-free loanfrom the company amounting to NOK937 500 with fixed instalments andmaturity.

In 2003 all the Norwegian employeeswere offered to buy shares for NOK7 500 each, with 20% discount fromthe company. 485 employees acceptedthe offer. In this connection, the

employees were offered to borrow the net amount from the company. As of 31 Dec. 2003 the aggregateremaining amount of the loan wasNOK 2 127 610 with the last instal-ment due in August 2004. Some ofthese employees are members of thecompany’s Corporate Assembly andBoard of Directors. Apart from this, thecompany has not rendered any loansor loan security for members of theBoard of Directors or CorporateAssembly.

Remuneration to the Board ofDirectors is paid after the GeneralMeeting in May. Total remuneration tothe Board of Directors for the periodfrom 1 May 2003 to 30 April 2004amounts to NOK 1 810 000, ofwhich NOK 400 000 applies for theChairman Leiv L. Nergaard. TheChairman has received additionalNOK 50 000 for consultancy servicesin 2003.Remuneration to the CorporateAssembly and Nomination Committeetotalled NOK 244 800.

Note 8 | Pension benefit costs, obligations and plan assets

Rieber & Søn has pension schemeswhich provide the employees withfuture pension benefits. The benefitsare in accordance with the conditionsgoverning the pension schemes at anygiven time. The pension benefitswhich, according to the «NorwegianAccounting Standard for the Account-ing Treatment of Pension Costs», areregarded as benefit plans, are actuariallycalculated based on the employee’ssalary at the date of retirement andthe number of years of accrued pensionrights. The Accounting Standard formsthe basis of the calculation of pensioncosts and pension obligations on benefit based schemes as they appearin the accounts and in this note. TheGroup’s legal obligations are unaffectedby the Accounting Standard.Overfunding has been assessed, andthe accounting treatment assumes thatall overfunding can be utilized.

The Rieber & Søn Group has the following pension schemes which aremanaged by Norwegian life insurancecompanies: • A Group pension scheme whichcovers salaries up to 12G (G = socialsecurity contribution ceiling) foremployees engaged in the company’sNorwegian businesses. The schemecovers 1 185 employees at the endof 2003.• A pension scheme with a retirementage of 67 for employees in Norwaywith a pensionable base in excess ofthe maximum limit under Norwegiantax law. This scheme covers the difference between 12G and the current salary. This scheme covers 28employees at the end of 2003.• For members of the Group’s manage-ment team, the retirement age is 64.Both the company and the employeecan raise the question of early retire-

ment pension from the age of 60.This scheme covers three employeesat the end of 2003. In addition, provisions have beenmade for the company’s own contribution and gift pension relatedto CPAs (contractual pension agree-ments) in Norwegian businesses,together with individual operationalpensions.

Benefit based schemes in othercountries:• A Group pension scheme forbusinesses in the Netherlands. Thescheme includes 54 employees.• A statutory pension scheme for thebusiness in Poland corresponding onemonths salary for personel employedat achieved retirement age.

Figures in NOK 1 000 2003| 2002| 2001|

Defined in contribution-based plans:Cost of contribution-based pension schemes 4 139 1 773 1 698

Defined benefit plans:Present value of benefits earned during the year incl. payroll tax 27 419 32 554 34 468Interest cost on benefit obligations 37 952 34 814 30 417Return on pension plan assets -33 628 -33 522 -33 582Net amortisations and deferrals 7 709 12 137 6 239Net pension cost of benefit-based schemes 39 453 45 983 37 542Aggregate pension cost in Group accounts 43 592 47 756 39 240

Note 7 | continued


Figures in NOK 1 000 2003| 2002| 2001|

Financial status pension plans:Accumulated benefit obligations incl. payroll tax -678 717 -628 971 -541 233Projected effect of future salary increases -88 055 -67 980 -56 114Projected benefit obligations -766 772 -696 951 -597 347Plan assets at market value 539 319 539 444 503 009Plan assets larger/less than projected benefit obligations -227 452 -157 507 -94 338Unrecognised net actuarial gain and loss 102 139 59 438 42 748Unrecognised part of pension plan alteration 38 573 42 037 28 645Net pension plan assets/pension liabilities -86 740 -56 032 -22 945

Balance sheet value of overfunded schemes 23 353 9 018 15 074Balance sheet value of underfunded schemes -110 093 -65 050 -38 019Net financial status of pension schemes -86 740 -56 032 -22 945

Cost for contribution-based pension schemes is related to foreign subsidiaries.

Economic assumptions:Discount rate 5.5% 5.5% 5.5%Return on pension assets 6.5% 6.5% 6.5%Salary increase 3.0% 3.0% 3.0%Pension increase 2.5% 2.5% 2.5%Inflation/increase in social security contribution ceiling (G) 2.5% 2.5% 2.5%Turnover 2.0% 2.0% 2.0%

Note 8 | continued

Note 9 | Other operating costs and expenses

Figures in NOK 1 000 2003| 2002| 2001|

Production costs 163 850 152 915 138 738Sales and marketing costs 374 814 343 184 304 292Bad debts 5 625 5 896 3 268Other operating costs *) 141 661 107 164 107 613Total other operating costs and expenses 685 949 609 160 553 911

*) Includes auditor's fee and other fees, research and development, leasing and rent of administration buildings, together with other operating costs.

The 2003 figures include the acquisitionof Nopal from the time of acquisition.

Nopal is not included in the correspondingfigures for 2002 and 2001.

Estimated rate of participation in CPA:10% at the age of 62 and further75 % at the age of 64.

The actuarial calculations were made inyear 2003 based on death rate tableK63 and disability rate table IR73.


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Transactions with related partiesRieber & Søn ASA rents office premisesfrom AS Inventor Eiendommer, whichalong with AS Atlantis Vest is part ofthe Bjarne Rieber Group. AS AtlantisVest is the largest shareholder ofRieber & Søn ASA. Rent amounting toNOK 11.3m was paid in 2003, NOK11.1m in 2002 and NOK 10.8m in2001. The leasing agreement expiresat 31 Dec. 2007.

Research and development costsResearch and development costs arecharged as they arise. There is anassumption that aggregated expectedearnings from ongoing research anddevelopment is at least equal to theaggregate costs charged. Product development is organised inthe respective areas of activity. Productdevelopment is a driver to develop thebrands in the Rieber & Søn Group.Through continuous renewal of the

products, our brands are added newenergy and value. Product develop-ment is carried out along differentpaths, which can lead to new utilisationof existing products, new packagingand portions, development of new tastes within existing categories or bydeveloping new product categories.TheGroup aim at a offensive care ofassortments, where products that donot increase their volume is replaced by new products and solutions.

Note 9 | continued

Auditor's fee Subsidiariesaudited by Subsidiaries

Parent parent com- audited byFigures in NOK 1 000 company pany’s auditor others

Auditor's fee 1 645 1 664 474Audit related services 1 087 206 13Tax advisory services 1 555 298 8Other accounting related services 38 104 306

Note 10 | Intangible and fixed assets

Figures in NOK 1 000 2003| 2002| 2001|

Depreciation 175 719 156 487 157 606Write down 12 567 4 000 24 622Net gain on disposals -6 729 -273 -21 785Depreciation in profit and loss account 181 558 160 214 160 443

Licences,concessions,

Intangible assets: other rights Trademarks Goodwill Total

Cost at 1 Jan. 2003 4 452 22 760 442 488 469 700Added through acquisitions 76 600 108 514 185 114 Additions 2003 115 66 181Cost at 31 Dec. 2003 4 567 99 426 551 002 654 995

Acc. depreciation and write down at 1 Jan. 2003 3 509 12 418 274 136 290 063Ordinary depreciation 528 6 239 40 980 47 748Acc. depreciation and write down at 31 Dec. 2003 4 037 18 658 315 116 337 811Balance sheet value at 31 Dec. 2003 529 80 769 235 886 317 184

Economic lifetime 10 - 20 years 10-20 years 10-20 yearsDepreciation method Linear Linear Linear


Buildings and Operatingother real Machinery assets,

Fixed assets: Ship Land property and plant fittings etc. Total

Cost at 1 Jan. 2003 12 833 27 769 728 351 942 871 124 299 1 836 122Revaluated before 1 Jan. 2003 1 617 18 360 19 977 Added through acquisitions 7 500 67 957 75 943 2 282 153 683 Additions 2003 1 154 127 194 125 989 55 541 309 878Disposals 2003 -3 724 -5 202 -38 193 -2 091 -49 210Cost at 31 Dec. 2003 12 833 34 315 936 660 1 106 610 180 032 2 270 449

Acc. depreciation at 1 Jan. 2003 5 757 264 380 530 876 65 483 866 497Disposals -1 540 -26 814 -1 898 -30 252Ordinary depreciation 1 206 26 673 85 765 14 327 127 971Write down *) 469 12 098 12 567Acc. depreciation at 31 Dec. 2003 6 963 469 301 612 589 826 77 912 976 783Balance sheet value at 31 Dec. 2003 5 870 33 846 635 047 516 784 102 119 1 293 667

Annual rent, assets not included in balance sheet: 17 564 8 844 5 166 31 574

Economic lifetime 10 - 12 years 5 - 40 years 3 - 20 years 3 - 10 yearsDepreciation method Linear Linear Linear Linear

*) Write downs in 2003 concern assets that are redundant for future operations. These are written down to expected market value.

Note 10 | continued

Note 11 | Goodwill on acquisition

Acquisition cost Book value at DepreciationFigures in NOK 1 000 Year of acquisition 31 Dec. 2003 31 Dec. 2003 period

Nopal 2003 108 514 104 872 20 yearsBig Fish 1998 62 207 30 891 10 yearsDelecta 1996 74 667 20 791 10 yearsDenja 1996 126 666 21 948 10 yearsVitana / Emarko / Bask 1992/1998 101 658 31 470 10 yearsOthers 77 290 25 914 10 yearsTotal 551 002 235 886

Individual transactionsNopal was acquired at 1 June 2003.Additions on intangible and fixed

assets related to the opening balanceof Nopal, are presented as "Addedthrough acquisitions" in this note.

Goodwill and surplus values attribu-table to foreign subsidiaries are trans-lated to NOK at the exchange rate at31 Dec. 2003. The original goodwilland the book value at 31 Dec. 2003have been translated to NOK at the

same rate as used for the subsidiaryto which they relate.

Goodwill is amortised over theexpected lifetime, estimated for eachacquisition. The value of goodwill is

assessed regularly to consider anyfactors or events after the acquisitionwhich require the book value to bewritten down.


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Figures in NOK 1.000 2003| 2002| 2001|

Receivables due more than 1 year later than the balance sheet date 7 692 21 214 89 284

Acquisition Balance sheetFigures in NOK 1 000 Holding costs value

Severofrukt Travcice Czech Rep. 30.6 % 1 074 1 074Naturkost S. Rui AS Norway 20.0 % 3 400 3 400Sundry shareholdings where holding is less than 10% 12 655 7 271Value of other long-term shareholdings 17 129 11 745

Note 12 | Other shareholdings

Note 13 | Other long – term receivables

Figures in NOK 1.000 2003| 2002| 2001|

Raw materials and packaging 200 692 207 928 227 018Work-in-progress and semi-manufactured goods 37 080 24 652 19 227Finished goods 176 024 177 282 184 054Stocks 413 795 409 862 430 299

Note 14 | Stocks

Figures in NOK 1.000 2003| 2002| 2001| 2000| 1999|

Majority shareholders' equity at 1 Jan. 1 225 615 1 698 241 2 235 125 2 305 528 2 331 163Group profit for the year 177 471 190 091 145 094 123 848 352 458Minorities' share of profit -59 10 -52 12 204 -1 432Allocated to dividends -83 044 -527 945 -66 962 -61 114 -147 694Effect of purchase/sale of own shares -57 212 -3 424 -227 418 -182 929 -47 416Preferred issue 47 232Demerger of Nye SE Labels -489 216Minorities’ share of demerged values 24 622Allocation of shares in Nye SE Labels on demerger 16 834Change due to previous years consolidation 24 823Currency translation differences 65 993 -131 358 12 981 12 765 -181 551Majority shareholders' equity at 31 Dec. 1 328 764 1 225 615 1 698 241 2 235 125 2 305 528Minorities' equity at 31 Dec. *) 1 057 5 114 5 124 29 694 41 549Shareholders' equity at 31 Dec. 1 329 821 1 230 729 1 703 365 2 264 819 2 347 077

*) The minorities' equity at 31 Dec.2002 was solely related to Fellesfrost. During the year the rest of the shares in Fellesfrostis bought. As a consequence of the acquisition of Nopal 1 June 2003 the Group acquired 60% of Helsetorget AS.

Note 15 | Equity

Based on total stocks at 31 Dec. 2003,NOK 404.9m is valued at initial cost,

while NOK 8.9m is valued atactual value.

The Board of Directors proposes a dividendof NOK 1.10 per share for year 2003.

Dividends payable are reduced with divi-dends to own shares per 18 March 2004.

The company has not bought own shares inthe period from 2 Jan. to 18 March 2004.


Development of share capital / RISK informationRISK recalcu-

No. of shares Issue Share capital Adjust. RISK lated forYear (x 1.000) Nom. value Type of change ratio NOK x 1.000 factor per share adjust.factor

A-shares B-shares1987 3 324 0 25 83 1131989 3 324 0 30 Bonus share issue 99 7361989 9 973 0 10 Split 3:1 99 7361990 9 973 1 994 10 Bonus share issue (B-shares) 1:5 119 6831991 10 970 2 194 10 Bonus share issue 1:10 131 6511992 12 068 2 413 10 Bonus share issue 1:10 144 817 11.25 1.751993 13 274 2 654 10 Bonus share issue 1:10 159 298 0.90909 11.62 1.991994 13 274 2 654 30 Bonus share issue 477 8951994 13 274 13 274 30 Bonus share issue (B-shares) 2:3 796 491 0.60000 8.00 2.281995 13 274 13 274 30 796 491 5.89 1.681996 13 274 13 274 30 796 491 8.90 2.541997 13 274 13 643 30 Issue for employees (B-shares) 807 555 3.03 0.861998 39 824 40 930 10 Split 3:1 807 555 0.33333 0.97 0.831999 39 824 40 930 10 807 555 1.50 1.282000 39 824 40 930 10 807 555 6.38 5.452001 80 755 10 Merging A- and B-shares 807 5552001 85 576 10 Issue (23 March 01) 855 7572001 85 576 10 Demerger (SE Labels) and following 855 757 0.85485

bonus issue (13 July 2001)2001 79 576 10 Cancellation of own shares (13 Aug. 01) 795 7572001 79 576 10 795 757 3.24 3.242002 79 576 10 795 757 -3.41 -3.412003 79 576 10 795 757

Figures in NOK 1.000 Dividend 2003|

Dividend all shares at 31 Dec. 2003 -87 533Effect on dividends of own shares per 18 March 2004 4 489Allocated dividends in financial statement for 2003 -83 044

Note 16 | Share capital and paid-in equity

Figures in NOK 1.000 2003| 2002| 2001|

Number of shares 79 575 740 79 575 740 79 575 740Share capital (number of shares at face value NOK 10) 795 757 795 757 795 757Value of own shares at face value -40 809 -29 137 -28 326Paid-in equity 754 949 766 620 767 431

The columns for adjustment factor, RISKper share and RISK recalculated foradjustment factor show the change forthe year.

When estimating the taxable gain basedon sold shares, accumulated RISK fromand including the year of purchase, toand including the year prior to sales,must be added to the cost price. Withrespect to the adjustment factor, theaccumulated RISK-amount up to andincluding the year prior to the adjust-ment factor year, must be multiplied by the adjustment factor.

RISK-amount for accounting year 2003will be set by the Directorate of Taxes in2005, but has been provisionally calcu-lated to NOK 1.53 per share.

Rieber & Søn ASA terminated own shares 13 Aug. 2001. According to theview of the company RISK related tothese shares should be distributed to therest of the shareholders. This impliesthat all shareholders in Rieber & SønASA at 13 Aug. 2001 have to add NOK0.28 in RISK per share. The taxationauthorities disagree with the opinion ofRieber & Søn ASA, and their view is that

the RISK by termination of own sharesshall be discharged. This decision hasbeen appealed to the tax appeal boardby Rieber & Søn ASA.The RISK-amount which is a result ofthe termination of own shares, is notincluded in the figures above and willnot appear in the RISK-register of theDirectorate of Taxes. Each shareholdermust by themselves, by later realizationof shares in Rieber & Søn ASA, take thisRISK into consideration.

An overview of the company's 20 largestshareholders appears on page 79.

The CEO has an option to buy 100 000Rieber & Søn shares yearly from 2002 to

2006, adding up to 500 000 shares. Pleaserefer to note 7 for further information.

Note 15 | continued


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Number of shares Options

Corporate Assembly, representatives elected by the shareholders:Didrik Munch, Bergen (Chairman) *) - - Gunn Wærsted, Oslo (Vice-chairman) *) 200 - Herman Friele jr., Bergen - - Einar Jørgen Greve, Oslo - - Paal Chr. Mowinckel, Bergen 3 255 - Anne Kristine Neumann Lending, Bergen 871 143 - Marianne Lie, Oslo - - Tore Lindholt, Oslo - - Jan Reinås, Lysaker - - Ulf Johan Rieber, Surrey, UK *), **) 1 801 180 -

Corporate Assembly, representatives elected by the employees:Magnus Andreassen, Ytre Arna - - Roar Sejersted, Fyllingsdalen 2 411 - Magnar Svellingen, Laksevåg 960 - Ingunn Soltvedt, Garnes - - Kristine Aasheim, Bergen 496 -

Board of DirectorsLeiv L. Nergaard, Oslo (Chairman) *) 116 564 - Bjarne Rieber, Bergen (Vice-chairman) **) 509 081 - Connie Astrup-Larsen, Århus, Denmark - Adler Ekanger, Indre Arna 1 760 - Torgny Eriksson, Stockholm, Sweden - - Terje H. Sparbo, Lillestrøm 626 Tore Nielsen, Os 528 Fritz T. Rieber, Bergen **) 2 022 219 - Barbara Thoralfsson, Oslo - -

Group managementPresident and CEO Asbjørn Reinkind 20 976 200 000 Chief Financial Officer Tor Lund 10 137 - Group Director Stein Klakegg 8 259 - Director CEE Morten Vike 908 - Director King Oscar Geir-Arne Åsnes 1 506 - Director for strategic development Bjørnar Gulliksen 1 458 -

*) Nominating committee for the Corporate Assembly and the Board of Directors.**) Bjarne Rieber, Fritz Rieber, Ulf Johan Rieber and Marianne Rieber (deputy member of the Corporate Assembly) own 100% of Atlantis Vest, and AtlantisVest owned 25 779 670 shares at 31 Dec. 2003. Please refer to page 79 for an overview of the company's 20 largest shareholders. In addition, AtlantisVest has entered into a total return swap agreement with JP Morgan Chase Bank, and this implies economical exposure for 5 777 586 shares.

Note 17 | Own shares

In 2003 the Group bought 1 241383 of its own shares in the marketat an average price of NOK 50.00(incl. charges). A total of 74 205own shares were sold to the Group'semployees at a market price ofNOK 49.07 per share.

At 31. Dec. 2003 the Group owned4 080 871 of its own shares, boughtat an average price of NOK 47.49(FIFO). The purchase of own sharesis considered advantageous for theshareholders.

The purchase and sale of own sharesin 2003 reduced the equity of theGroup by NOK 57.2m.

The tabular below shows the numberof shares and share options held,and/or represented, by members ofthe Corporate Assembly, Board of

Directors and Group management at31 Dec. 2003. The tabular also includes shares owned by a live-in,spouse and children younger than

18 years, as well as shares owned by companies in which the individualparties have a controlling interest.

Note 16 | continued


Figures in NOK 1.000 2003| 2002| 2001|

Interest-bearing debt at 1 Jan. 754 980 747 016 748 461 New loans 132 352 9 184 1 016 Repayment of loans -107 167 - -1 821 Ordinary instalments -4 719 -1 220 -640 Interest-bearing debt at 31 Dec. 775 446 754 980 747 016 Other interest-free long-term debt at 31 Dec. 4 522 3 037 3 101 Total long-term debt at 31 Dec. 779 968 758 017 750 117

Repayment structure on interest-bearing debt

Year 2004 2005 2006 2007 After 2007 TotalInstalments 712 016*) 4 687 2 813 2 908 53 022 775 446

*) One single loan, amounting to NOK 700m, is due in Dec. 2004. The process of re-financing this loan has started, and offers on long-term loans of equal or higher amounts have been received from financial institutions.

Note 18 | Other long-term debt

Note 19 | Mortgages

The Rieber & Søn Group has givenplegde to its main bankers regardinglimited mortgaging. This pledge limitsthe Group's mortgaging of its

Norwegian and Swedish property andfixed assets to 60% of the aggregateloan value.

Figures in NOK 1.000 2003| 2002| 2001|

Nominal value guarantee liabilities 466 729 534 873 444 928Actual guarantee liabilities 142 009 287 052 322 419

Note 20 | Guarantee liabilities

Note 21 | Bank credit facilities and liquid assets

The Group’s committed credit facilitiesat 31 Dec. 2003 amounted to NOK874.4m, of which NOK 100.0m wasdrawn. Overdrafts in the Group's cashpool in the different banks are off-setagainst deposits in the same bank. Thismethod results in net overdraft ofNOK 80.1m.

Committed lines related to cash poolamount to NOK 281.9m, while theremaining balance is credit lines renewable annually.

The companies in the Rieber & SønGroup are jointly and severally liable forthe Group's liabilities.

The Group's average balance of liquidassets in 2003 was NOK 583.0m.

The acquisition of Nopal at 1 June2003 implied an increase of NOK125.1m in long-term debt to financialinstitutions. Of this NOK 107.2m wasrepaid after the acquisition.

Average rate of interest in 2003was 5.15%. Interest amounts toNOK 39.9m.


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Figures in NOK 1.000 2003| 2002| 2001|

Taxes in the profit and loss account:Taxes payable 120 589 132 092 127 169 Change in deferred taxes -20 627 -29 172 -45 187 Taxes in the profit and loss account 99 962 102 920 81 982

Division of taxes:Norway 70 010 70 505 70 218 Abroad 29 952 32 415 11 764 Total 99 962 102 920 81 982

Taxes payableTaxes payable in profit and loss statement 91 789 90 619 107 389 Prepaid taxes -25 233 -16 761 -31 358 Taxes payable at 31 Dec. 66 556 73 858 76 031

Taxes payable have been adjusted for the effect of sales of own shares:Tax effect from gain/loss on sale of own shares -1 218 155 -282 Expected tax effect for the year -1 218 155 -282

Reconciliation of nominal and actual rate of tax:Profit before tax 277 433 293 011 227 076

Expected income tax at nominal rate of tax: 27.4 % 28.1 % 27.7 %

Tax effect of items affecting actual rate of tax: 76 017 82 336 62 829 Permanent differences *) 15 148 11 189 9 031 Amortiasation of non-allowable goodwill 8 797 9 395 10 122 Actual tax charge 99 962 102 920 81 982Actual rate of tax 36.0% 35.1% 36.1 %

*) Permanent differences consist of non allowable costs / taxable income and deferred tax assets which according to the Accounting Actdo not qualify as an asset in the balance sheet.

Specification of tax effect of temporary differences and tax loss to be carried forward:Fixed assets 44 741 44 116 45 530 Current assets -4 597 -7 128 -8 989 Net pension obligations -18 460 -12 395 -6 400 Gains/losses on sales of fixed assets 58 500 67 113 93 014 Tax loss to be carried forward -12 144 -10 622 -14 142 Other provisions -8 406 -1 444 686Total deferred taxes in balance sheet 59 634 79 640 109 699Average rate of tax for deferred taxes: 27.4 % 28.1 % 27.7 %

Expiration of tax loss carried forward (tax effect):

Figures in NOK 1.000 2004| 2005| 2006| 2008| 2009| 2010| 2012| Infinite| Total|

Amount carried forward -1 283 -44 -9 164 -1 364 -4 -70 -9 -206 -12 144

Note 22 | Taxes

By the tax assessment of Rieber & SønASA for the fiscal year 2002 the taxauthorities disagreed with some of thecompany’s evaluations. This has causedan increase of about NOK 20m inassessed taxes which were paid in2003. Rieber & Søn ASA disagree withthe judgement of the tax authorities,

and the amount is therefore entered asnegative taxes payable in the balancesheet. If the view of the tax authoritiesis going to be the final result, the taxesin the profit and loss account willincrease with the above mentionedamount.At the end of 2002 Rieber & Søn ASA

had a disputed tax claim of about NOK35m. By the appeal, Rieber & Søn ASAwas given judgement in favour of thecompany’s view. About NOK 8m ofthis amount was not repaid beforeMarch 2004 and consequently thiswas also entered as negative taxespayable in the balance sheet.


Average ex- UnrealizedFigures in NOK 1.000 Sold Bought change rates loss/gain*)

Currency swaps and currency futures:USD 12 800 NOK 109 842 8.581 23 117 NOK 58 884 EUR 7 150 8.235 1 368 NOK 31 164 USD 4 550 6.849 -700 CZK 69 600 PLN 10 220 0.147 -230 CZK 300 000 NOK 78 041 26.014 41 USD 2 400 PLN 9 756 4.065 1 125 NOK 24 489 PLN 13 600 180.064 -513 PLN 8 000 NOK 14 180 177.245 -18 NOK 33 780 DKK 30 000 112.600 132 JPY 75 000 NOK 5 215 6.953 434 SEK 21 000 DKK 17 432 1.205 260 SEK 5 000 NOK 4 558 91.150 -74 EUR 907 GBP 657 0.724 18 GBP 600 NOK 7 093 11.821 -65 AUD 3 600 NOK 17 615 4.893 -159 DKK 6 583 SEK 8 000 1.215 -33 CZK 96 420 USD 3 600 26.783 -924 CZK 19 758 EUR 600 32.930 -22 EUR 3 900 NOK 32 462 8.323 -401

The Rieber & Søn Group had per 31 Dec. 2003 entered into the following FRA - contract:

UnrealizedBought Interest Start End loss/gain*)

NOK 400 000 3.39 % 30.06.04 30.12.04 -1 893NOK 300 000 3.29 % 30.06.04 30.12.04 -1 163

*) Unrealized loss/gain is not charged to the profit and loss account.

Note 23 | Financial instruments

The Rieber & Søn Group uses variousfinancial instruments to manage itsfinancial exposure.

Foreign currency exposure Development in foreign exchange rates represents both a direct and an

indirect economic risk for the company.Foreign currency income and expensesdenominated in foreign currencies arehedged using hedging instrumentssuch as forward foreign exchangetransactions and options. As at 31Dec. 2003 the Group had entered into

the following net forward foreignexchange contracts, foreign exchangeswap contracts and foreign exchangeoption contracts for 2003, 2004 and2005:

Interest rate exposureThe Rieber & Søn Group has hedgedthe interest rate by buying FRA-contracts for the above-mentionedloan of NOK 700m for all of 2004.The contract for the period fromJanuary to June 2004 for the same

loan was settled 30 Dec. 2003 andimplied a loss of NOK 2.7m. This losswill be charged to the profit and lossaccount linearly over the term of theFRA-contract in 2004. The averageinterest rate for all of 2004 will be3.22%

InformationFor further information we refer to thearticle on the Group’s interest rate andforeign exchange strategy on page 77.


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Operating incomeNet sales 5 1 756 902 1 569 265 1 469 746 Other operating income 5 359 11 854 7 877 Total operating income 1 762 261 1 581 119 1 477 623

Operating expensesCost of sales -643 839 -561 490 -539 719 Change in inventories of work in progress and finished goods -2 739 3 371 -4 879 Payroll costs 6,8 -445 970 -418 473 -405 907 Depreciation 10 -62 146 -55 637 -37 433 Other operating expenses 7,9 -356 006 -306 239 -292 939 Total operating expenses -1 510 701 -1 338 467 -1 280 877 Operating profit 251 560 242 652 196 747

Financial income and financial expensesInterest from subsidiaries 13 2 358 6 608 15 506 Other interest income 36 108 75 195 70 115 Dividends from subsidiaries 8 000 44 573 6 893 Other financial income 572 15 19 959 Total financial income 47 039 126 391 112 473

Interest expenses 17 -40 370 -62 562 -68 813 Other financial expenses -59 067 -281 -3 346 Total financial expenses -99 437 -62 843 -72 160 Profit before taxes 199 162 306 201 237 059

Taxes 20 -13 175 -68 821 -58 024 Profit for the year 185 987 237 380 179 036

Provision for dividends 83 044 527 945 65 331 Other equity 102 943 -290 565 113 705 Total allocations 185 987 237 380 179 036

Profit and Loss account 2003 for Rieber & Søn ASA



ASSETS

CAPITAL ASSETSIntangible fixed assetsTrademarks 10 73 953 - - Goodwill 10,11 104 789 18 716 21 389 Total intangible fixed assets 178 742 18 716 21 389

Tangible fixed assetsLand, buildings and other real estate 10 340 005 200 580 191 017 Machinery and equipment 10 307 484 206 389 210 463 Operating assets, fittings, tools, office equipment etc. 10 91 073 46 430 14 717 Total tangible fixed assets 738 561 453 398 416 197

Financial assetsShares in subsidiaries 2 857 003 798 231 853 427 Loans to group companies 13 93 763 104 640 233 613 Shares and investments 3 6 404 5 413 5 627 Pension plan assets 8 23 353 9 018 15 074 Other receivables 14 7 606 11 117 63 655 Total financial assets 988 130 928 420 1 171 396 Total capital assets 1 905 433 1 400 534 1 608 982

CURRENT ASSETSStocks 12 236 076 202 103 185 523

Accounts receivable 228 730 153 123 144 979 Other receivables 13 12 692 5 394 5 390 Total receivables 241 422 158 517 150 369 Cash and bank deposits 21 252 900 1 226 298 962 608 Total current assets 730 398 1 586 918 1 298 500 TOTAL ASSETS 2 635 830 2 987 452 2 907 482

Balance sheet at 31 Dec.2003 for Rieber & Søn ASA


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LIABILITIES AND SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITYPaid-in capitalShare capital 4,16 795 757 795 757 795 757 Own shares (nominal value) 4,15 -40 809 -29 137 -28 326 Total paid-in capital 754 949 766 621 767 431

Retained earningsOther equity 4 473 578 416 176 709 354 Total retained earnings 473 578 416 176 709 354 Total shareholders' equity 1 228 527 1 182 796 1 476 786

LIABILITIESProvisions for obligationsPension obligations 8 96 357 53 064 37 772 Deferred taxes 20 28 594 34 037 66 577 Total provisions for obligations 124 951 87 102 104 349

Other long-term liabilitiesLong-term debt 17 775 254 754 849 746 952 Other long-term liabilities 17 870 1 062 1 254 Total other long-term liabilities 776 124 755 911 748 206

Current liabilitiesDebt to financial institutions 21 65 252 157 336 128 861 Loans from group companies 13 12 088 12 299 105 132 Accounts payable 101 840 80 256 60 088 Taxes payable 20 50 189 59 249 72 866 Public debt 30 761 28 929 20 874 Dividends 4 83 044 527 945 65 331 Other short-term liabilities 163 053 95 630 124 989 Total current liabilities 506 228 961 644 578 140 Total liabilities 1 407 303 1 804 656 1 430 696 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2 635 830 2 987 452 2 907 482

Balance sheet at 31 Dec.2003 for Rieber & Søn ASA



Cash flow from operationsProfit before taxes 199 162 306 201 237 059Taxes paid -86 980 -114 977 -127 904Depreciation, incl. gains/losses on disposals of fixed assets 10 62 146 55 637 37 433Pension costs accrued, not paid 22 865 21 347 1 971Gain(-)/loss (+) on sale of shares -4 270 81 -13 095Change in stocks, accounts receivable and accounts payable -2 181 -4 995 -19 640Change in other accruals 66 104 -29 237 -106 982Net cash flow from operations 256 845 234 057 8 842

Cash flow from investment activitiesFixed assets sold 10 818 2 566 38 270Fixed assets bought 10 -187 046 -92 732 -88 256Sale of shares and investments in other companies - 55 324 58 294Investments in other companies -411 114 - -9 612Change in purchase/sale of other investments 6 795 60 755 -21 210Net cash flow from investment activities -590 547 25 913 -22 514

Cash flow from financing activities Repayment of long-term interest-free debt - -192 -192New interest-bearing debt (short and long-term) 91 919 37 528 117 223Repayment of interest-bearing debt (short and long-term) -152 932 -1 157 -227 040Change in inter-company receivables/liabilities 6 472 36 140 134 129Inflow of equity (sale of own shares and new issue) 15 3 641 8 039 50 316Outflow of equity (purchase of own shares) 15 -60 853 -11 307 -230 782Dividends paid -527 945 -65 331 -62 745Net cash flow from financing activities -639 697 3 720 -219 091Net change in liquid assets -973 398 263 690 -232 763

Liquid assets at 1 Jan. 1 226 298 962 608 1 195 371Net change in liquid assets -973 398 263 690 -232 763Liquid assets at 31 Dec. 252 900 1 226 298 962 608

Cash Flow Statement 2003 for Rieber & Søn ASA

Leiv L. Nergaard

Chairman


18 March 2004

Bjarne Rieber

Vice-Chairman

Barbara Thoralfsson

Tore Nielsen

Torgny Eriksson

Terje H. Sparbo

Fritz T. Rieber

Adler Ekanger


Asbjørn Reinkind

President and CEO


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Holding Balance sheet valueFigures in NOK 1 000 Country 31 Dec. 2003 2003 2002 2001

Alamar AS Norway 100 % 9 342 9 342 9 342Big Fish S.A. Poland 0 % - - 137 442Delecta S.A. Poland 0 % - - 149 377Denja AS Norway 0 % - 100 100Denja AS Denmark 100 % 98 519 98 519 98 519Eurospice AB Sweden 100 % 6 300 - - Fellesfrost AS Norway 100 % 6 572 1 500 1 500Grillfagmannen AS Norway 100 % 38 500 - - King Oscar Inc. USA 100 % 342 342 342King Oscar Sardiner AS Norway 100 % 100 100 100Nature Pharma AS Norway 100 % 4 300 - - Nopal AS Norway 100 % 4 900 - - Norway Foods AS Norway 0 % - 100 100Norway Foods (Europe) b.v. Belgium 100 % 121 121 121Przedsiebiorstwo Magazynowania Ryb.Sp z o.o. Poland 49 % 4 4 4Ren Jord AS Denmark 100 % 4 098 4 098 4 098Rieber & Son AB Sweden 100 % 22 531 22 531 67 569Rieber & Son GmbH Germany 100 % 94 94 2 789Rieber & Son Oy Finland 100 % 50 753 50 753 58 216Rieber & Son Plc. United Kingdom 100 % 2 223 2 223 2 223Rieber Foods Polska S.A. Poland 74 % 286 819 286 819 - Rieber & Søn A/S Denmark 100 % 112 050 112 050 112 050Storaneset 12 AS Norway 100 % 18 691 18 691 18 691Toro AS Norway 0 % - 100 100Vitana a.s. Czech Rep. 100 % 190 644 190 643 190 643Vitana AS Norway 100 % 100 100 100Total balance sheet value of shareholdings in subsidiaries 857 003 798 231 853 427

Note 1 | Accounting principles

Please refer to the statement ofaccounting principles in note 1 forconsolidated accounts.

Note 2 | Shareholdings in subsidiaries

The companies Big Fish S.A. andDelecta S.A. merged with effect fromFebruary 2002. The new name onthe merged company is Rieber FoodsPolska S.A. Eurospice AB,Grillfagmannen AS, Nature Pharma AS

and Nopal AS were acquired 1 June2003. When acquiring Nopal AS, themost essential part of the businesswas demerged. Norway Foods AS tookover the demerged business. Then theassets and liabilities were sold from

Norway Foods AS to Rieber & SønASA, with subsequent liquidation ofNorway Foods AS. For companieswhich are sold or terminated duringthe year, the holding of share is setto 0% at 31 Dec. 2003.

Note 3 | Other shareholdings / investments

Figures in NOK 1 000 Country Holding 2003| 2002| 2001|

Sarsia Innovation AS Norway 6.1 % 4 700 3 700 3 700 Other shareholdings/investments with less than 10% holding 1 704 1 713 1 927 Balance sheet value of other shareholdings/investments 6 404 5 413 5 627


Share Own OtherFigures in NOK 1 000 capital shares equity Total

Equity at 1 Jan. 2003 795 757 -29 137 416 176 1 182 796Profit for the year 185 987 185 987Allocated to dividends -83 044 -83 044Effect of purchase/sale of own shares -11 672 -45 540 -57 212Equity at 31 Dec. 2003 795 757 -40 809 473 578 1 228 527

Note 4 | Equity

The Board of Directors proposes adividend of NOK 1.10 per share for

year 2003.Dividends payable are reduced with

dividends to own shares per18 March 2004.

Figures in NOK 1 000 Dividend 2003|

Dividend all shares at 31 Dec. 2003 -87 533Effect on dividends of own shares per 18 March 2004 4 489Allocated dividends in financial statement for 2003 -83 044

Note 5 | Net sales

Figures in NOK 1 000 2003| 2002| 2001|

Gross sales 2 197 272 1 948 262 1 792 586Sales deductions -440 370 -378 996 -322 839Net sales 1 756 902 1 569 265 1 469 746Sales deductions include outgoing freights, insurance, discounts, claims and customer bonuses/commisions.

Net sales, geographical breakdownNordic region 1 551 114 1 362 507 1 284 073Central- and Eastern-Europe 10 493 13 594 8 446Other areas 195 295 193 164 177 227Net sales 1 756 902 1 569 265 1 469 746

Net sales, split by sales channelConsumer 1 458 275 1 290 091 1 195 739Food service 217 038 203 957 197 713Industry 81 589 75 218 76 294Net sales 1 756 902 1 569 265 1 469 746

Note 6 | Salaries, number of employees, remuneration, loans to employees etc.

Figures in NOK 1 000 2003| 2002| 2001|

Salaries 339 093 309 841 304 600 National insurance contributions 48 926 44 830 49 397 Pension costs (incl. payroll tax) 38 593 43 946 37 269 Other benefits 19 358 19 855 14 640 Total payroll costs 445 970 418 473 405 907

Loans to employees 4 408 3 304 6 098 Average number of employees: 1 089 1 081 1 132

Further details of salaries etc. to executives, Board of Directors and

Corporate Assembly are shown innote 7 for consolidated accounts.


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Note 7 | Individual transactions

When acquiring Nopal 1 June 2003the most essential part of the businesswas demerged. Norway Foods AStook over the demerged business. Thenthe assets and liabilities were sold from

Norway Foods AS to Rieber & Søn ASA,with subsequent liquidation of NorwayFoods AS. Nopal is fully integrated intoremaining business.

Note 8 | Pension benefit costs, obligations and plan assets

Figures in NOK 1 000 2003| 2002| 2001|

Defined benefit plans:Present value of benefits earned during the year incl. payroll tax 26 563 30 977 34 197Interest cost on benefit obligations 37 339 34 309 30 404Annual return on pension plan assets -33 018 -33 475 -33 571Net amortisations and deferrals 7 709 12 135 6 239Net pension cost for the period 38 593 43 946 37 269

Financial status of pension plans:Accumulated benefit obligations incl. payroll tax -663 018 -615 261 -540 893Effect of projected future salary increases -87 981 -67 909 -56 045Projected benefit obligations -750 999 -683 171 -596 938Plan assets at market value 537 278 537 660 502 836

Plan assets bigger than / less than projected benefit obligations -213 721 -145 511 -94 102Unrecognised net actuarial gain and loss 102 143 59 429 42 759Unrecognised part of pension alteration 38 573 42 037 28 645Net pension plan assets/pension liabilities -73 004 -44 046 -22 698

Balance sheet value of overfunded schemes 23 353 9 018 15 074Balance sheet value of underfunded schemes -96 357 -53 064 -37 772Net financial status of pension schemes -73 004 -44 046 -22 698This year's figures include Nopal from 1 Oct. 2003. Nopal is not included in the comparative figures for 2002 and 2001.

Economic assumptions:Discount rate 5.5% 5.5% 5.5%Return on assets 6.5% 6.5% 6.5%Salary increase 3.0% 3.0% 3.0%Pension increase 2.5% 2.5% 2.5%Inflation/increase in social security contribution ceiling (G) 2.5% 2.5% 2.5%Turnover 2.0% 2.0% 2.0%

Further details of the employee pension scheme are shown in note 8for consolidated accounts.

Estimated rate of participation in CPA:10% at the age of 62 and further 75 %at the age of 64.

The actuarial calculations were made in2003 based on death rate table K63 anddisability rate table IR73.


Figures in NOK 1 000 2003| 2002| 2001|

Production costs 67 915 70 198 67 416 Sales and marketing costs 205 641 180 931 163 699 Bad debts -350 304 380 Other operating expenses *) 82 799 54 806 61 444 Total other operating costs and expenses 356 006 306 239 292 939 *) Includes auditor's fee and other fees, research and developement, leasing and rent of administration buildings, together with other operating costs.

Note 9 | Other operating costs and expenses

Transactions with related partiesPlease refer to note 9 to the consolidated accounts.

Research and development costsPlease refer to note 9 to the consolidated accounts.

Auditor's feePlease refer to note 9 to the consolidated accounts.

Note 10 | Intangible and fixed assets

Figures in NOK 1 000 2003| 2002| 2001|

Depreciation 62 351 52 071 52 595Write down 4 000Net gain on disposals -205 -435 -15 162Depreciation in the profit and loss account 62 146 55 637 37 433

Intangible assets: Trademarks Goodwill Total

Cost at 1 Jan. 2003 49 941 49 941Added through acquisitions 75 087 92 246 167 334 Cost at 31 Dec. 2003 75 087 142 188 217 275

Acc. depreciation at 1 Jan. 2003 31 225 31 225Ordinary depreciation 1 134 6 174 7 308Acc. depreciation at 31 Dec. 2003 1 134 37 399 38 533Balance sheet value at 31 Dec. 2003 73 953 104 789 178 742

Economic lifetime 10-20 years 10-20 yearsDepreciation method Linear Linear

Buildings and Operatingother real Machinery assets,

Fixed assets: Land property and plant fittings etc. Total

Cost at 1 Jan. 2003 7 099 309 907 494 127 90 917 902 050Accumulated revaluation prior to 1 Jan. 2003 1 500 18 360 19 860 Added through acquisitions 7 500 68 280 76 317 1 676 153 773 Additions 2003 76 794 66 660 50 964 194 418Disposals 2003 -42 -1 847 -13 802 -265 -15 957Cost at 31 Dec. 2003 16 057 471 493 623 302 143 292 1 254 144

Acc. depreciation at 1 Jan. 2003 135 876 288 148 44 488 468 512Disposals 2003 -1 277 -6 439 -256 -7 972Ordinary depreciation 12 946 34 108 7 988 55 043Acc. depreciation at 31 Dec. 2003 - 147 545 315 818 52 220 515 583Balance sheet value at 31 Dec. 2003 16 057 323 947 307 484 91 073 738 561

Annual rent, assets not included in balance sheet: 15 521 8 679 3 861 28 061

Economic lifetime 10 - 40 years 5 - 20 years 3 - 10 yearsDepreciation method Linear Linear Linear


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Figures in NOK 1 000 2003| 2002| 2001|

Raw materials and packaging 103 331 89 271 88 534Work-in-progress and semi-manufactured goods 20 992 14 598 10 489Finished goods 111 752 98 234 86 499Stocks 236 076 202 103 185 523

Note 11 | Goodwill on acquisition

Figures in NOK 1 000

Original Book value at DepreciationActivity: Year of acquisition goodwill 31 Dec. 2003 period

Nopal 2003 92 246 91 074 20 yearsSmaks/Denja 1996 25 962 5 192 10 yearsOthers 23 979 8 523 10 yearsTotal 142 188 104 789

Goodwill is amortised over theexpected useful life, estimated bycalculations made at the time of the

acquisition. The value of goodwill isassessed regularly to consider anyfactors or events since the acquisition

which require the book value ofgoodwill to be written down.

Note 12 | Stocks

Based on total stocks at 31 Dec.2003, NOK 230m is valued at initial

cost, while NOK 6m is valued atactual value.

Note 13 | Inter-Group balances

Figures in NOK 1 000 2003| 2002| 2001|

Receivables from Group companies 9 423 11 382 4 080Debt to Group companies -48 063 -9 482 -2 619Total short-term balances incl. in other current receivables -38 640 1 900 1 460

Loans to Group companies 93 763 104 640 233 613Loans from Group companies -12 088 -12 299 -105 132Total long-term balances 81 675 92 340 128 481Net inter-company balances 43 035 94 240 129 941

Interest to/from Group companies arepresented as net financial income in

the account "Interest from subsidiaries",interest income amounts to

NOK 2.9m and interest expensesamounts to NOK 0.6m.

Note 14 | Other receivables

Figures in NOK 1 000 2003| 2002| 2001|

Receivables due more than 1 year after year-end 7 606 11 117 63 655


Repayment structure on interest-bearing debt

Year 2004 2005 2006 2007 After 2007 TotalInstalments 712 016*) 4 687 2 813 2 908 52 829 775 254

*) One single loan, amounting to NOK 700m, is due in Dec. 2004. The process of re-financing this loan has started, and offers on long-term loans of equal or higher amounts have been received from financial institutions.

Note 15 | Own shares

Please refer to note 17 for consolidatedaccounts.

Please refer to note 16 for consolidatedaccounts.

Note 16 | Share capital

Note 17 | Long-term debt

Figures in NOK 1 000 2003| 2002| 2001|

Interest-bearing debt at 1 Jan. 754 849 746 952 746 576New loans 132 352 9 053 1 016Repayment of loans -107 167Ordinary instalments -4 780 -1 157 -640Interest-bearing debt at 31 Dec. 775 254 754 849 746 952Other long-term liabilities at 31 Dec. 870 1 062 1 254Total other long-term debt at 31 Dec. 776 124 755 911 748 206

The acquisition of Nopal at 1 June2003 implied an increase of NOK125.1m in long-term debt to financial

institutions. Of this NOK 107.2m wasrepaid after the acquisition.Average rate of interest in year 2003 was

5.15%. Interest amounts to NOK 37.5mand is included as financial expenses inthe account “Interest expenses”.

Note 18 | Mortgages

The Rieber & Søn Group has givenplegde to its main bankers regardinglimited mortgaging. This pledge limits

the Group's mortgaging of itsNorwegian and Swedish property andfixed assets to 60% of the aggregate

loan value. The debt of the companyper 31.Dec. 2003 is not secured bymortgaging of assets.

Note 19 | Guarantee liabilities

Figures in NOK 1 000 2003| 2002| 2001|

Nominal value guarantee liabilities 466 729 534 873 444 928Actual guarantee liabilities 142 009 287 052 322 419


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Figures in NOK 1 000 2003| 2002| 2001|

Taxes in the profit and loss account:Taxes payable 18 459 102 437 73 148Change in deferred taxes -5 443 -32 540 -36 763Difference between calculated and assessed taxes in previous years 160 -1 077 21 639Taxes in the profit and loss account 13 175 68 821 58 024

Taxes payableGross taxes payable -10 055 59 094 73 148Taxes payable transferred from subsidiary which was liquidated *) 61 462Tax effect of sale of own shares -1 218 155 -282Taxes payable as at 31 Dec. 50 189 59 249 72 866

Reconciliation of nominal and actual rate of tax:Profit before taxes 199 162 306 201 237 059Nominal rate of tax 28 % 28 % 28 %

Expected income tax at nominal rate of 28% 55 765 85 736 66 377Write off/disposal of shares in SE Labels ASA -12 153Effect of liquidation of subsidiary *) -44 747Other non-allowable expenses 4 610 4 479 5 800Dividends without taxation -2 244 -12 485 -1 947Other non-taxable income **) -210 -8 909 -53Actual taxes 13 175 68 821 58 024Actual rate of tax 6.6 % 22.5 % 24.5 %*) In 2003 Rieber & Søn ASA bought all assets and liabilities from the subsidiary Norway Foods AS which was liquidated after the transaction.

Due to the RISK-regulations, Rieber & Søn ASA got a considerable tax loss. Corresponding to this, Norway Foods AS had a taxable gain.**) NOK 7 768t of other non-taxable income in 2002, is the tax effect of the temporary differences per 1 Jan. 2002 that

was not included into the accounts of 2001.

Specification of tax effect of temporary timingdifferences and tax loss carried forward:Fixed assets -3 159 -12 526 -7 314Current assets 3 487 2 873 3 619Net pension obligations -18 384 -12 333 -6 355Profit and loss account 52 727 66 605 92 379Other provisions -6 077 -10 581 -15 752Total deferred tax in balance sheet 28 594 34 037 66 577Average tax rate for deferred tax: 28 % 28 % 28 %

Note 20 | Taxes

In the tax assessment of Rieber & SønASA for the fiscal year 2002 the taxauthorities disagreed with some of thecompany’s evaluations. This has causedan increase of about NOK 20m inassessed taxes which were paid in2003. Rieber & Søn ASA disagree withthe judgement of the tax authorities,

and the amount is therefore entered asnegative taxes payable in the balancesheet. If the view of the tax authoritiesis going to be the final result, the taxesin the profit and loss account willincrease with the above mentionedamount.At the end of 2002 Rieber & Søn ASA

had a disputed tax claim of about NOK35m. By the appeal, Rieber & Søn ASAwas given judgement in favour of thecompany’s view. About NOK 8m ofthis amount was not repaid beforeMarch 2004 and consequently thiswas also entered as negative taxespayable in the balance sheet.


Note 21 | Bank credit facilities and liquid assets

Rieber & Søn ASA`s committed creditfacilities on 31 Dec. 2003 amountedto NOK 281.9m, of which NOK 8.7 m.were drawn. The commited credit facilities are overdraft facilities relatedto cash pool. Overdraft in Rieber & SønASA's cash pool in the different banks

are off-set against deposit in thesame bank. This method results ina net overdraft of NOK 65.3m.

The company is jointly and severallyliable for the Group debt.

Rieber & Søn ASA's averagebalance of liquid assets in 2003was NOK 514.9 m.

Note 22 | Financial instruments

Please refer to note 23 forconsolidated accounts.


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Def.| 2003| 2002| 2001| 2000| 1999| 1998|PROFIT AND LOSS ACCOUNTNet sales NOK m 3 222 3 031 2 920 2 789 2 687 2 754Of which sales outside Norway % 50 56 57 59 59 62Gross profit NOK m 24 1 855 1 711 1 568 1 433 1 353 1 344Operating and payroll costs NOK m -1 388 -1 263 -1 150 -1 069 -992 -973Ordinary depreciation NOK m -138 -122 -119 -104 -94 -84EBITA NOK m 5 330 326 299 260 267 286Amortisation of goodwill and trademarks NOK m 15 -44 -38 -41 -39 -38 -40Non-recurring items NOK m 25 -32EBIT NOK m 286 288 226 222 229 246Other items NOK m 26 - - -10 175 466 324Net financial items NOK m -9 5 11 -113 -135 -129Profit/loss before taxes NOK m 277 293 227 284 560 441Profit/loss NOK m 177 190 145 124 352 291

BALANCE SHEETGroup equity at 31 Dec. NOK m 11 1 330 1 231 1 703 2 265 2 347 2 363Equity ratio % 12 45.7 37.8 52.8 47.2 40.2 43.8Total assets at 31 Dec. NOK m 2 909 3 256 3 226 4 796 5 817 5 400Capital employed* NOK m 22 1 892 1 619 1 609 1 554 1 621 1 515Net investments* NOK m 17 630 169 91 162 108 282Net interest-bearing debt NOK m 18 498 -348 -173 92 1 724 1 284Capitalised value at 31 Dec. NOK m 7 3 775 3 641 3 684 3 788 3 933 4 494Gross capitalisation NOK m 6 4 273 3 293 3 511 3 880 5 657 5 778

PROFITABILITYGross margin % 8 57.6 56.4 53.7 51.4 50.4 48.8EBITA margin % 4 10.2 10.7 10.2 9.3 9.9 10.4EBIT margin % 10 8.9 9.5 7.7 7.9 8.5 8.9ROCE, excl. "Other items"* % 2 15.2 17.8 15.3 14.5 14.2 16.4ROCE, incl. "Other items" % 2 15.1 17.0 13.8 9.2 14.3 14.1Return on equity % 13 11.7 13.0 7.3 5.4 14.9 13.3

PERSONELLNo of man-years at 31 Dec.* 1 3 357 3 409 3 343 3 903 3 654 3 326Payroll and social security costs* NOK m 702 654 628 569 557 513

* Concerns continued activities This year's figures include Nopal from 1 June 2003.

DEFINITIONS:

1. Number of man-years2. Return on capital employed (ROCE)

3. Gross return on capital employed (Gross ROCE)

4. Gross operating margin/EBITA margin 5. Gross operating profit/EBITA6. Gross capitalisation 7. Capitalised value 8. Gross margin 9. Direct return 10. Operating margin/EBIT margin 11. Shareholders’ equity 12. Equity ratio 13. Return on equity 14. Earnings per share 15. Goodwill16. Net working capital17. Net investments 18. Net interest-bearing debt 19. Share price/recorded equity 20. Price/earnings ratio (P/E) 21. RISK

22. Capital employed23. Payout ratio24. Gross profit

25. Non-recurring items26. Other items

Group key figures

Number of employees converted into man-years.Operating profit plus net financial revenues (exclusive financial revenues on liquid assets)as a percentage of capital employed (see point 22).Gross operating profit plus net financial revenues (exclusive financial revenues on liquid assets)as a percentage of capital employed (see point 22).Gross operating profit (see point 5) as a percentage of net sales.Operating profit before amortisation of goodwill and trademarks and non-recurring items (see point 25).Shareholder value at 31 Dec. plus net interest-bearing debt.Total number of shares multiplied by quotation at 31 Dec.Gross profit (see point 24) as a percentage of net sales.Last year’s dividends per share as a percentage of quotation at 31 Dec.Operating profit as a percentage of net sales.Recorded shareholders’ equity (incl. minority interests)Shareholders’ equity as a percentage of total assets.Profit for the year as a percentage of average shareholders’ equity.Profit for the year before extraordinary items, divided by the total average number of shares.Not identified surplus value connected to acquisitions of companies, as well as purchased goodwill.Trade debtors plus stocks less interest-free current liabilities.Investments less book value of fixed assets sold.Interest-bearing debt less liquid assets.Shareholder value at 31 Dec. divided by book value shareholders’ equity.Quotation at 31 Dec. divided by earnings per share.The RISK amount for 2003 is provisional. The figure will be finally set after the tax assessmentis decided. The RISK supplements for previous years have been adjusted for bonus share issues.Total operating capital and capital invested in fixed assets as a weighted average of the year.Dividends per share as a percentage of earnings per share.Net sales and other operating income less cost of raw materials, packaging and other variablematerial costs (excl. non-recurring items).Costs/income with one-time effect.Activities which are to be sold or have been sold before rendering of the accounts are presentedas Other items


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1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Figures in NOK m Def.| 2003 2002| 2003 2002| 2003 2002| 2003 2002|

THE RIEBER & SØN GROUP*)

Net sales 753 769 748 790 842 716 878 755Of which sales outside Norway 391 425 401 485 403 394 402 406Gross profit 24 441 425 429 440 473 410 512 435Operating and payroll costs -320 -302 -346 -333 -343 -296 -378 -332Ordinary depreciation -31 -31 -35 -36 -36 -31 -36 -23EBITA 5 90 92 48 71 94 83 98 80Amortisation of goodwill and trademarks 15 -9 -10 -10 -10 -14 -9 -11 -9EBIT 81 82 38 61 80 74 87 71Net financial items 2 - -1 1 -6 1 -4 3Profit before taxes 83 82 37 62 74 75 83 74Taxes -29 -29 -14 -22 -26 -26 -31 -26Profit 54 53 23 40 48 49 52 48

KEY FIGURESGross Margin 8 58.6 % 55.3 % 57.3 % 55.7 % 56.2 % 57.3 % 58.3 % 57.7 %EBITA margin 4 12.0 % 11.9 % 6.4 % 9.0 % 11.1 % 11.6 % 11.1 % 10.6 %Gross ROCE 3 23.6 % 23.3 % 11.3 % 17.4 % 17.4 % 20.4 % 18.1 % 19.6 %Capital employed 22 1 531 1 581 1 700 1 638 2 166 1 625 2 172 1 631



WESTERN-EUROPE*)

Net sales 492 460 501 473 586 452 642 495Gross profit 1) 24 311 288 303 287 343 280 392 311Operating and payroll costs 2) -206 -190 -233 -216 -230 -188 -274 -224Ordinary depreciation 2) -17 -16 -17 -21 -20 -16 -16 -11Gross operating profit/EBITA 5 88 82 53 50 93 76 102 76Amortisation of goodwill and trademarks 15 -3 -3 -4 -3 -8 -3 -4 -3Operating profit/EBIT 85 79 49 47 85 73 98 73

KEY FIGURESGross Margin 8 63.3 % 62.6 % 60.5 % 60.6 % 58.4 % 61.8 % 61.1 % 62.7 %EBITA margin 4 17.8 % 17.9 % 10.6 % 10.6 % 15.9 % 16.8 % 15.9 % 15.3 %Gross ROCE 3 46.4 % 41.1 % 23.3 % 24.6 % 28.3 % 37.6 % 30.7 % 36.9 %Capital employed 22 825 799 912 818 1 315 808 1 340 8241) Compensation-fee related to a closed distribution-agreement in Nopal (NOK 7m in 4th Quarter) is included in 2003. A similar amount

related to integration of Nopal is charged to operating costs in 4th Quarter 2003. Compensation-fee related to a closed distribution-agreement in Toro (NOK 7m in 2nd Quarter) is included in gross profit in 2002.

2) Costs related to the restructuring of King Oscars' sardine-production affect operating costs and wages (NOK -9m) and depreciations(NOK -4m) in 2nd Quarter in 2002.



CEE (Central- and Eastern-Europe)Net sales 266 313 254 318 261 268 248 265Gross profit 24 130 138 125 152 130 131 120 126Operating and payroll costs -107 -107 -107 -111 -108 -103 -100 -106Ordinary depreciation 1) -15 -15 -17 -15 -15 -15 -23 -13Gross operating profit/EBITA 5 8 16 1 26 7 13 -3 7Amortisation of goodwill and trademarks 15 -6 -7 -5 -6 -6 -7 -6 -6Operating profit/EBIT 2 9 -4 20 1 6 -9 1

KEY FIGURESGross Margin 2) 8 48.7 % 44.2 % 49.3 % 47.7 % 49.8 % 49.0 % 48.2 % 47.4 %EBITA margin 4 2.9 % 5.0 % 0.6 % 8.2 % 2.6 % 4.7 % - 2.6 %Gross ROCE 3 3.8 % 7.0 % 0.8 % 11.2 % 3.3 % 5.7 % - 3.2 %Capital employed 22 809 925 816 926 825 893 785 8591) Due to planned consolidation of production facilities, ordinary depreciations are influenced by write-downs of NOK 10m in 4th Quarter 2003.2) Gross margin in 3rd Quarter 2002 is positively influenced by insurance claims settlements in the Czech Republic.

*) This year's figures include Nopal from 1 June 2003.

Interim results


Def.| 2003| 2002| 2001| 2000| 1999| 1998

Face value per share NOK 10 10 10 10 10 10Quoted price at 31 Dec. NOK 50 48 48 49 49 56Highest quoted price NOK 59 54 55 62 62 84Lowest quoted price NOK 45 41 42 39 41 48Capitalised value NOK m 7 3 775 3 641 3 684 3 788 3 933 4 494

Average no. of shares (ex. own shares) 1 000 75 515 76 785 77 419 78 957 80 449 80 755Total number of shares 31 Dec. (ex. own shares) 1 000 75 495 76 662 76 743 76 893 79 835 80 755

Gross operating profit per share NOK 4.4 4.2 3.9 3.3 3.3 3.5Earnings per share NOK 14 2.35 2.48 1.87 1.72 4.36 3.56Dividend per share NOK 1.10 7.00 0.85 0.80 1.85 1.85Payout ratio % 23 46.8 282.8 45.4 46.5 42.4 51.4Price/earnings ratio 20 21.3 19.2 25.6 28.6 11.3 15.6Direct return % 9 2.2 14.7 1.8 1.6 3.8 3.3

Book equity per share NOK 18 16 22 29 29 29Share price/recorded equity 19 2.8 3.0 2.2 1.7 1.7 1.9Gross capitalisation/operating profit 13.0 10.1 11.7 14.9 21.2 20.2RISK NOK 21 1.5 -3.9 3.2 6.4 1.5 1.0

Share related key figures

Bridge yearly

Profit and loss account Western Europe CEE HQ/ELIM Group(Figures in NOK m) 2003 2002| 2003 2002| 2003 2002| 2003 2002|

Net sales 2 221 1 881 1 030 1 164 -29 -14 3 222 3 031Gross profit 1 3491 1 1651 505 547 2 -1 1 855 1 711Operating and payroll costs -943 -8182 -422 -427 -23 -18 -1 388 -1 263Ordinary depreciation -70 -632 -703 -59 2 -1 -138 -122EBITA 336 284 13 61 -19 -20 330 326Amortisation of goodwill and trademarks -20 -13 -24 -25 - - -44 -38EBIT 316 271 -11 36 -19 -20 286 288

KEY RATIOSGross margin 60.7% 61.9 % 49.0% 47.0 % - - 57.6% 56.4 %EBITA margin 15.1% 15.1 % 1.3% 5.2 % - - 10.2% 10.7 %EBIT margin 14.2% 14.4 % - 3.1 % - - 8.9% 9.5 %Gross ROCE 31.4% 35.0 % 1.6% 6.8 % - - 17.5% 20.1 %ROCE 29.6% 33.5 % - 4.0 % - - 15.2% 17.8 %

CAPITAL EMPLOYEDAverage net current capital 320 254 264 325 -80 -111 504 468Average goodwill 140 38 104 134 - - 244 172Average other capital assets 638 520 440 442 66 18 1 144 980Net capital employed 1 098 812 809 901 -15 -94 1 892 1 619

INVESTMENTSAcquisition investments 339 32 - - - - 339 32Other investments 156 64 88 40 47 33 291 137Total investments 495 96 88 40 47 33 630 169

1 Includes compensation-fee related to a closed distribution-agreement in Nopal (NOK 7m) in 4th Quarter 2003. Compensation-fee relatedto a closed distribution-agreement in Toro (NOK 7m) is included in gross profit in 2nd Quarter 2002.

2 Costs related to the restructuring of King Oscars' sardine-production affect operating costs and wages (NOK -9m) and depreciations(NOK -4m) in 2nd Quarter 2002.

3 Due to planned consolidation of production facilities, ordinary depreciations are influenced by write-downs of NOK 10m in 4th Quarter 2003.

This year's figures include Nopal from 1 June 2003.


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Management of foreign exchange and interest rate risk

The central finance department isresponsible for managing the Group’sforeign exchange and interest rateexposure with the aim of reducingthe commercial risk in accordancewith defined guidelines.

Foreign exchange riskRieber & Søn has direct and indirectrisks related to exchange rate deve-lopments. The direct foreignexchange exposure relates to theimport and export of goods. TheGroup comprises businesses whichexport from their home country andother businesses which import forproduction and sales in their homecountries. The Group’s foreignexchange exposure related to theequity of its foreign subsidiaries isnormally not covered and changesare posted in accordance with gene-rally accepted accounting practice.

Wherever possible, contractualaccounts receivable and payable arehedged, and the related foreignexchange transactions are carried outby the Group’s central financedepartment.

The expected future net cash flow for each currency is hedged, based on the competitive situation for theactivity in question. Separate foreigncurrency strategies are drawn up foreach area of activity, with a definedhedging horizon and hedging propor-tion. The analysis includes the indirectforeign exchange risk which arisesbecause our competitive ability isaffected by changes in the value ofour competitors’ domestic currency.Foreign currency strategies are drawnup by the finance department inclose collaboration with the businessunits, and they are considered andapproved by the Group management.Wherever possible, contractualaccounts receivable and payable are hedged.

The commercial foreign exchangeexposure is covered using hedginginstruments such as forward foreignexchange transactions, options andloans in foreign currency. All foreigncurrency hedging transactions arecarried out by the Group’s centralfinance department.

As a main rule, the Group’s foreignsubsidiaries cover their financingrequirements in local currency. Thefinancing requirement is partly coveredthrough internal financing from theGroup’s central finance departmentand partly through working capitalfacilities in the country where thesubsidiary is located. Facilities of thiskind are negotiated centrally. Wheregrants are available locally or regio-nally within the respective countries,

these are also applied. Rieber & SønASA normally provides a guarantee forthe local credit facilities, ensuring thatthe pricing reflects Rieber & Søn`soverall credit standing.

In June 2003 the Group acquired theNopal group. This has increased theabsolute value of our foreignexchange exposure, but the composi-tion of group exposure is unaffected.

The Group’s total foreign exchangeexposure, defined as the net annualcash flow in each currency, amountsto approximately NOK 730m equiva-lent and is distributed as followsamong the main currency pairs:

Foreign exchange sensitivityA change of +/- 5% in exchangerates between the Group’s main crosscurrencies has the following accoun-ting effect (taken separately):

Effect of +/- 5%Cross currencies change in NOK mill.

USD / NOK 2.6EUR / NOK 4.1SEK / DKK 5.9SKK / CZK 1.8EUR / CZK 4.9USD / CZK 2.4USD / PLN 4.5EUR / PLN 1.3

The above calculations assume thatthere is no correlation between thechanges and that there are no hedgingcontracts, and that changes inexchange rates do not result in achange in the price to the customeror from the supplier.

Interest rate risk / credit riskFollowing the payment of an extraor-dinary dividend of NOK 6 per share in2003, the Group no longer in theposition of having net surplus liquiditybut is a net borrower.

Liquidity is managed in accordancewith the governing investment strategy. Funds are invested in short-terminterest-earning securities and bankdeposits with a low credit risk. Thereis a pre-defined credit risk require-ment and a maximum exposure perissuer.

In 2003 the Group entered into for-ward foreign exchange agreementsfor debt denominated in NOK payablein 2004. The conditions that applyare shown in note 23, page 60. Debtdenominated in foreign currency is ata floating rate.

At 31 December 2003 the interestpayable by Rieber & Søn had an average net duration of approximately0.75 years. The relatively short inte-rest-rate horizon should be seen inrelation to the Group’s overall activity.The Group is primarily a manufacturerof consumer goods and other goodswith a short processing time. An economic situation with rising interestrates is often linked to higher inflationwhich could normally result in highersales prices within a relatively shortperiod of time.

Interest-rate sensitivity:As stated above, debt denominated in NOK has been hedged for thewhole of 2004. At floating rate anincrease/decrease of 1% in Nordicmoney market rates would haveimplied an increase/decrease in interest costs of approximately NOK 3m p.a.

An increase/decrease of 1% inEastern European money marketrates means an increase/decreasein interest costs of approximatelyNOK 2m p.a.

USD/NOK 15%

EUR/NOK 16%

SEK/DKK 16%

SKK/CZK 5%

EUR/CZK 14%

USD/CZK 7%

USD/PLN 12%

EUR/PLN 6%OTHER 9%


Shares and shareholders

Shareholder policyThrough its commercial operations,Rieber & Søn shall provide the share-holders with a competitive return oninvested capital over time. The returnon shareholders’ capital means thetotal of the share price appreciationand the dividends paid.

Rieber & Søn has one class of shares,and all shares carry equal rights.

Share price development in 2003The Rieber & Søn share provided anoverall return of 20% in 2003, inclu-ding dividends paid. During the sameperiod, the Oslo Stock ExchangeBenchmark Index (OSEBX) rose by48%.

The Rieber & Søn share peaked in May when it was listed at NOK59.00 and its lowest listing was NOK 45.10 in January. (The dividendof NOK 7 per share was paid on 23 May).

At 31 December 2003 the Rieber &Søn share was listed at NOK 50.00(47.50), corresponding to a rise of5.3% in the course of the year.

The company’s A and B shares weremerged into one share class in 2001,and there has been only one shareclass since 29 March 2001.

Market capitalisationand share liquidityAt year-end 2003 Rieber & Søn had amarket capitalisation of NOK 3 979m,based on the total number of outstan-ding shares (NOK 3 775m afterdeducting holdings of own shares).

In 2003, 16.7 million of the company’s shares were traded withan aggregate market value of NOK843m, corresponding to a turnoverrate of 21%. The shares were tradedon 95.6% of the total number ofstock exchange trading days, and theaverage number of transactions perday was 9.2. One stock exchange lotconsists of 200 shares.

Dividend policy andpayment to shareholders The dividend level is a balance betweenthe shareholders’ wish for a regulardirect return and the company’s needto retain capital for its own develop-ment. It is the stated objective of theBoard of Rieber & Søn that the divi-dend shall be stable over time – and ataround 40% of earnings per share, aslong as the company’s capital require-ments are adequately met. In order toachieve dividend stability, the payoutratio may deviate from the targetfigure in any single year.

Rieber & Søn seeks to pay the divi-dend into the Norwegian Registry ofSecurities as soon as is practicallypossible after the AGM.

An ordinary dividend of NOK 1.10(1.00) has been proposed for 2003,corresponding to 47% of EPS. TheAGM will be held on 12 May 2004and the dividend will be paid on 2June 2004.

In 2001, in addition to the dividendthe shareholders also received a cashpayment of NOK 3.77 for eachRieber share owned in connectionwith the sale of SE Labels, providedthat the shareholder still owned theshares in SE Labels in December2001 and accepted the total take-over bid from Skanem Industrier AS.

In August 2000 Rieber & Søn decided to focus solely on foods, and as a result all other businesseswere sold. Following these divest-ments, the Group had a high equityratio in real terms and a balancesheet characterised by considerablesurplus liquidity. An extraordinary dividend was paid for 2002 amoun-ting to NOK 6 per share in order totransfer liquidity back to the share-holders that was in excess of theGroup’s expected capital requirementas provided for in its strategy as afocused food company. (See chapterson value drivers/strategy in theAnnual Report). The Group will be

Share price development last 5 years

3 77

5

3 93

3

3 78

8

3 68

4

3 64

1

99 01 02 0300

1.10

1.85

0.80

0.85

7.00

0300 01 0299

1.00

46.8

%

42.4

%

46.5

%

45.4

%

40.3

% *

Capitalized value(MNOK)

180

160

140

120

100

80

60

Jan.

99

May

99

Sep.

99

Jan.

00

May

00

Sep.

00

Jan.

01

May

01

Sep.

01

Jan.

02

May

02

Sep.

02

Jan.

03

May

03

Sep.

03

Jan.

04

Rieber & Søn Oslo Exchange All Share Index Standard & Poor's Consumer Europe 350

Index 1.1.1999=100

40

140

130

120

110

100

90

80

Index 1.1.2003=100

70

Jan.

03

Feb.

03

Mar

. 03

Apr.

03

May

03

Jun.

03

Jul.

03

Aug.

03

Sep.

03

Nov

. 03

Dec

. 03

150

Share price development 2003

Dividend per share (NOK)

Extraordinary dividend (NOK)

Payout ratio (%)* Inkl. extraordinarydividend 282.3%

No. of shares No. of shareholders % No. of shares %

1 -100 470 14.2 11 084 0.01101 -1 000 1947 58.9 824 766 1.041 001 -10 000 730 22.1 1 879 885 2.3610 001 -100 000 125 3.8 4 072 635 5.12100 001 -1 000 000 25 0.8 7 939 572 9.981 000 001 -100 000 000 10 0.3 64 847 798 81.49Total 3307 100.0 79 575 740 100.00

Shareholder structure at 31 Dec. 2003

At the end of 2003 Rieber & Søn had 3 307 shareholders (3 263). The company had 3 175Norwegian shareholders and 132 foreign shareholders. At the same date, 9.6% of the company’sshares were held by foreign investors, compared with 5.7% at the end of 2002.


Overview

Directors’ report

Presentationsof


arketStrategy


entand


79

able to make acquisitions to help itrealise its strategy while at the sametime maintaining the equity ratio atthe target level of at least 40%.

Own sharesAt 1 January 2003 the Group owned2 913 690 of its own shares.

On 8 May 2003 the AGM authorisedthe Board of Directors to allow Rieber& Søn ASA to acquire and own its ownshares, but not exceeding 7 957 574shares, corresponding to 10% of theshare capital.

In 2003 Rieber & Søn ASA purchased1 241 383 of its own shares.

In October, 74 205 shares were sold in connection with a share purchaseoption for the employees. At the endof 2003 the Group owned 4 080 871of its own shares, bought at an average price of NOK 45.49 per share.

For information related to equitymovements please refer to notes15,16 and 17.

Sale of shares to employeesThe Board encourages employees to become shareholders of the company. A share subscription programme for the Norwegianemployees offering a tax-free discount was offered in 2003 for thefifth successive year. In October2003 485 (43.3%) of the employ-ees took up the offer to purchase 153shares in Rieber & Søn at a price ofNOK 49.07 per share. The companysold a total of 74 205 of its ownshares to the employees.

RISK supplementUnder current tax legislation inNorway, shareholders liable to tax inNorway are entitled to apply a RISKsupplement to adjust the cost priceof their shares. The RISK supplementfor 2003 will be finally determinedby the Directorate of Taxes in 2005.The RISK supplement/deduction forthe last three years is as follows(NOK per share):

Accounting year RISK supplement 2001 3.242002 -3.412003 (estimated) 1.53

In August 2001 Rieber & Søn ASAcancelled 6 000 000 of its own shares. It is the view of the companythat the RISK related to these sharesshould be divided among the othershareholders. Accordingly, all the share-holders of Rieber & Søn ASA shouldhave added NOK 0.28 to the RISKamount per share. The tax authoritiesdisagree with the company’s view andbelieve that the RISK amount relatedto cancellation of the shares should beeliminated. Rieber & Søn ASA has takenlegal action on this point and the mat-ter is expected to come before BergenMunicipal Court in 2004. For furtherinformation please refer to note 16 tothe consolidated accounts.

Investor RelationsThe objective of our Investor Relationsactivity is to provided the stock marketwith the best prerequisites for a correctpricing of the Rieber & Søn share.Specific steps are therefore taken tocreate a greater understanding of theGroup’s operations, strategy and busi-

ness among investors and analysts inNorway and abroad. We strive to ensurethat information which may be ofimportance to shareholders is commu-nicated immediately to the financemarket in Norway and abroad. Rieber &Søn gives regular presentations inBergen, Oslo and London in connectionwith presentation of the annual andinterim accounts. In January 2004 thefourth quarter accounts for 2003 werealso published on the Internet for thefirst time in the form of a web-cast inNorwegian and English.

Contact person: Benedicte SchilbredFasmer, Director of Finance & Investorrelations, tel. +47 5596 7330Mob. +47 9506 0034, [email protected] registrar for Rieber & Søn ASA:DnB Verdipapirservice, Stranden 21,0021 OSLO, Tel.: +47 2248 3580

Name No. of shares (%)

AS Atlantis Vest 25 779 670 32.40 %Orkla ASA 11 395 907 14.32 %Folketrygdefondet 9 018 700 11.33 %JP Morgan Securities 5 777 586 7.26 %Rieber & Søn ASA, egenbeholdning 4 080 871 5.13 %Mowinckel Management A/S 2 329 709 2.93 %Rieber, Fritz T. 2 021 039 2.54 %A/S Flu 1 700 000 2.14 %Rieber, Marianne 1 609 681 2.02 %Frank Mohn AS 1 134 635 1.43 %Bank of New York 993 050 1.25 %Ankris A/S 816 252 1.03 %Vital Forsikring ASA 764 657 0.96 %G.C. Rieber & Co A/S 599 441 0.75 %Norsk Hydros Pensjonskasse 491 575 0.62 %Skagen Vekst 430 000 0.54 %Den norske Bank ASA 423 282 0.53 %Rieber, Bjarne 406 101 0.51 %J.P. Morgan Bank 307 400 0.39 %Sig. Bergesen d.y. og almennyttige stiftelse 301 887 0.38 %Total 20 largest shareholders 70 381 443 88.4 %Others 9 194 297 11.6 %Total 79 575 740 100.0 %

20 largest shareholders at 31 Dec. 2003

93 94 95 96 97

22.5%

98 99 00 01 02 03

10.2%

6.3%

0.4%0.1%

5.7%6.7%

5.5%

8.1%

11.0%

Time of purchase

9.6%

Average annulised true rateof return on purchase of RIEup to and including 2003

Assumption: The share is purchased beforedividend payment in the year of purchaseDividend is reinvested same year as receivedand purchase price is based on average shareprice previous year.

The figure illustrates the true rate of return upto and including 2003 based on the date ofpurchase of the Rieber & Søn share. Forexample, if the share was bought in 1993the annual true rate of return up to andincluding 2003 was approximately 11,0%The true rate of return is defined as the shareappreciation and the annual dividend contin-uously reinvested in Rieber shares.

Financial calendar 200429 January4th Quarter Report 20036. May1st Quarter Report 200412. MayAnnual General Meeting12. August2nd Quarter Report 200428. October3rd Quarter Report 2004

Investor presentations will beheld on the stated dates, andthe second and fourth quarterreports will also be published byonline video via webcast.

Iceland

Denmark

UK

The Netherlands

Belgium

The Czech Rep.

HEADQUARTER

Rieber & Søn ASAAdministrationOffice: Nøstegt. 58P.O.Box 987 Sentrum,N-5808 BergenTel: + 47 55 96 70 00Fax: + 47 55 32 11 15E-mail: [email protected]://www.rieberson.no

Contact persons Investor RelationsTor Lund, Chief Financial OfficerTel: +47 55 96 70 00E-mail: [email protected] Schilbred Fasmer, Director ofFinance and Investor RelationsTel: +47 55 96 70 00E-mail: [email protected]

ToroOffice: Nøstegt. 58

P.O.Box 987 Sentrum,N-5808 Bergen

Tel: + 47 55 96 70 00Fax: + 47 55 96 73 93

E-mail: [email protected]://www.toro.no

King OscarOffice: Nøstegt. 58


Tel: + 47 55 96 70 00Fax: + 47 55 96 76 99

E-mail: [email protected]://www.kingoscar.no

Rieber Food IngredientsOffice: Nøstegt. 58


Tel: + 47 55 96 70 00Fax: + 47 55 96 76 91

FoodServiceOffice: Nøstegt. 58


Tel: + 47 55 96 70 00Fax:+ 47 55 96 74 90

Denja NorwayOffice: Yttersøveien 21P.O.Box 2025 Stubberød,3255 LarvikTel: + 47 33 13 32 00Fax: + 47 33 13 32 10

Cronions Denja B.V.Office: Nijverheldsweg 5St. MaartensdijkP.O. Box 57NL-4695 ZH St. MaartensdijkThe NetherlandsTel: +31 166 66 36 44 Fax: + 31 166 66 36 54

Norway

Vitana a.s. (HQ)Vitana a.s. (HQ)

Office: Armady 245Armady 245,

155 00 Praha 5 – Stodulky,The Czech Rep.

Tel: +420 2 5161 7920-4Fax: +420 2 5161 7929E-mail: [email protected]

http://www.vitana.cz

Vitana a.s. Office: Melnicka 133,

277 32 Bysice,The Czech Rep.

Tel: +420 206 696 220-4Fax: +420 206 696 229E-mail: [email protected]

http://www.vitana.cz

Denja SwedenOffice:Karl Johansgatan66-70Mail:Karl Johansgatan66-70,414 55 Göteborg,SwedenTel:+46 317 072430Fax:+46 317 072439

Denja DenmarkOffice: Smedevenget 4-6,

Øster BjerregravP.O. Box 76,

8900 Randers,Denmark

Tel: +45 864 54111Fax: +45 864 54731

Germany

Rieber & Søn - administration, production and sales

Rieber & Søn - sales

Sweden

Polen

Litauen

Latvia

Russland

Ungarn

Romania

Bulgaria

Albania

Slovakia

King Oscar Gniewino Rieber Foods Polska S.A.Office: 84-250 GniewinoPostadresse: 84-250 Gniewino,PolenTelefon: +48 58 67 06500Telefaks: +48 58 67 06506E- post: [email protected]://www.bigfish.pl

DelectaRieber Foods Polska S.A.Office: 87-800 Wloclawek,ul. Prymasa St. Wyszynskiego 14,Postadresse: 87-800 Wloclawek,ul. Prymasa St. Wyszynskiego 14,PolenTelefon: +48 54 41 26000Telefaks: +48 54 23 14647E- post: [email protected]://www.delecta.pl

Vitana SlovakiaOffice: Chovatelska 1,917 01 TrnavaPostadresse: Chovatelska 1,917 01 Trnava,SlovakiaTelefon: +421 33 591 1146Telefaks: +421 33 591 1144E- post: [email protected]://www.vitana.sk

Rieber & Son RussiaKontor: Rabochaya st. 41,144 001 Electrostal,Moscow RegionPostadresse: P.O. Box 41,144 001 Electrostal,Moscow Region,RussiaTelefon: +7 096 57 50 816Telefaks: +7 096 57 70 520

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Nøstegaten 58P.O.Box 987 Sentrum

N-5808 BergenT +47 55 96 70 00F +47 55 32 11 15

www.rieberson.no

Documents

Annual report 2003 - shareholder and Central and Eastern Europe (CEE), where ... dishes, condiments, sauces, ... ANNUAL REPORT 2003