Scandi Standard

Strong quarter and a positive development of profit during the year

October - December 2024

• Chicken processed (grill weight) amounted to 69 (68) thousand tonnes which corresponded to a 1 per cent increase.
• EBIT/kg amounted to 1.55 (1.54)
• Net sales amounted to MSEK 3,170 (3,011). At constant exchange rates, net sales increased by 5 per cent.
• Operating income (EBIT) increased to MSEK 107 (105), corresponding to a margin of 3.4 (3.5) per cent.
• Income for the period amounted to MSEK 40 (66). Earnings per share amounted to SEK 0.61 (1.01).
• Operating cash flow was MSEK 127 (109).

January - December 2024

• Chicken processed (grill weight) amounted to 280 (270) thousand tonnes which corresponded to a 4 per cent increase.
• EBIT/kg amounted to 1.82 (1.69)
• Net sales amounted to MSEK 13,024 (13,014). At constant exchange rates, net sales increased by 1 per cent.
• Operating income (EBIT) increased to MSEK 509 (457), corresponding to a margin of 3.9 (3.5) per cent.
• Income for the period amounted to MSEK 275 (273). Earnings per share amounted to SEK 4.20 (4.11)
• Operating cash flow was MSEK 443 (671).
• The Board of Director proposes a dividend for the financial year 2024 of SEK 2.50 (2.30) per share, corresponding to MSEK 163 (150).

Significant events during and after the quarter

• Scandi Standard acquired in October 2024 an integrated state-of-the-art poultry processor in Lithuania
• During the quarter, a significant investment was completed in the Swedish hatchery operations, which means greater control and higher product quality.
• During 2024, major work was carried out to increase capacity in the Norwegian Ready-to-eat operation, which was completed at the end of the quarter.
• After the close of the period Scandi Standard acquired a production facility in Oosterwolde, Netherlands from Tyson Foods. The facility has two of Europe's largest and most efficient product lines for Ready-to-eat products.

Key metrics¹⁾

1) For details about alternative KPIs, see note 4.
2) Adjusted for non-comparable items, see note 5.
3) Previously reported figures showed live weight, tonne. Historical data converted by a factor of 0.72.

For definitions of key figures, see page 22.

CEO Comments

We can reflect on a year where we continued to execute our strategy to meet our financial and sustainability goals. The last quarter of the year also performed well, with Scandi Standard reporting its highest-ever operating income for a fourth quarter. The fact that earnings were charged with the previously announced start-up costs for the operations acquired in Lithuania shows how strong the development is in the underlying operations. Operating income amounted to MSEK 107 (105) and the earnings improvement was driven by a significantly stronger performance in Ready-to-eat compared with the previous year. The takeover and start-up in Lithuania has proceeded as planned and was well received by existing and new customers. The Group's net sales for the quarter increased 5 per cent based on a continued positive trend in demand for our products, both in our local domestic markets as well as in our export markets.

Ready-to-cook (RTC) reported an 5 per cent increase in net sales, corresponding to MSEK 2,399. The increase is a result of strong demand and we experienced growth in all sales channels during the quarter. Operating income amounted to MSEK 63 (77), charged with start-up costs for the operations in Lithuania.

Production started at our new facility in Lithuania in the fourth quarter and operational and commercial work have both gone as expected. Production is to gradually increase during the coming quarters and customer volumes are secured for the planned production going forward. The acquisition in Lithuania will help accelerate organic growth and is a catalyst for reaching the financial targets we set for 2027.

In the fourth quarter, we also made a significant investment in the Swedish hatchery operations to increase control and improve product quality.

Ready-to-eat (RTE) posted an increase of MSEK 644 (600) in net sales and operating income improved to MSEK 40 (22) for the fourth quarter. The earnings improvement was due in part to successful work to increase and diversify the customer base.

During 2024, a major project was carried out to increase capacity in the Norwegian operations and was completed at the end of the quarter. We are positive about RTE's performance in 2025. Our expectation is that a broader and more attractive product offering that meets customer demands will help increase growth and profitability.

The ingredients business in the Other segment contributed operating income of MSEK 9 (10) in the quarter.  Ingredients represents an area with considerable profit potential going forward. Adding value through processing the raw material provides opportunities to create an important contribution to the Group's total profitability.

Approved climate targets - an important milestone

By reducing Scandi Standard's impact on the climate, we want to make chicken a sustainable and responsible part of future food production. That is why we are pleased to be one of the few Swedish companies who has their climate targets approved by the Science Based Targets initiative (SBTi) according to the new guidelines for the forest, land and agricultural sector (FLAG) and the Net-Zero Standard. The targets are part of our long-term commitment to reducing our climate impact and helping to mitigate global warming according to the Paris Agreement.  

In addition to the climate, animal welfare and safe workplaces are two prioritised areas for us. Healthy animals with good living conditions do not need antibiotics and during the quarter we report continued low antibiotics use, which is a result of Scandi Standard's long-term work with animal welfare. We did not meet our target for lost time injuries (LTIs) during the year. We have made significant improvements since 2021 and are now further strengthening the work and knowledge in the organisation by developing Group-wide processes for risk assessment, root cause analysis and training.

Financial position

Net interest-bearing debt increased MSEK 239 to MSEK 1,935 in the quarter, with a negative impact on cash flow of MSEK 267 due to the acquisition in Lithuania. Investments for the quarter and the full year amounted to MSEK 111 and MSEK 367, respectively. The assessment is that Scandi Standard will invest MSEK 550 in 2025, primarily in continuing to increase the capacity in Ready-to-cook and Ready-to-eat as well as in continued work to streamline production. Scandi Standard's efforts to decrease tied-up working capital are ongoing, including initiatives such as improving synergies between bird purchases, and our sales and operational planning

Strategi och outlook

Our ambition is to increase the value of our protein, to improve efficiency and to integrate sustainability throughout our value chain. We are well equipped to drive growth and profitability with robust financing and solid plans in place. The combination of cost efficiency and high quality at the Lithuanian operations plays an important role in Scandi Standard's ambition to meet growing demand in our domestic markets as well as the rest of Europe.

In the beginning of 2025, we acquired a production facility with two of Europe's largest and most efficient product lines for Ready-to-eat products. This strategically important acquisition strengthens our market position and increases our production capacity to meet the growing European demand in the long term. In the short term, the ramp-up period will have some impact on earnings, but in the longer term we secure a robust and efficient platform for sustainable growth, which will also contribute to improving our key performance indicator EBIT/kg.

Scandi Standard performed well in 2024, thanks to a strong consumer trend in combination with successful work to optimise our local operations, Group-wide processes and collaborations. We follow our plan and I expect that in 2025 we will take further significant steps towards our financial targets and sustainability goals. I am convinced that we have the right prerequisites to achieve our targets and generate a favourable return for our shareholders. Given the improved profitability and positive outlook, the Board proposes a dividend of SEK 2.50 (2.30) per share.

Stockholm, 6 February 2025

Jonas Tunestål,

Managing Director and CEO,
Scandi Standard

Conference Call

A conference call for investors. analysts and media will be held on 6 February 2025 at 8.30 AM CET.

Dial-in numbers:

UK: 020 3936 2999
Sweden: 010 884 80 16
US: +1 646 664 1960
Other countries: +44 20 3936 2999

Slides used in the conference call can be downloaded at www.scandistandard.com under Investor Relations. A recording of the conference call will be available on www.scandistandard.com afterward.

Further information

For further information. please contact:
Jonas Tunestål. Managing director and CEO and Fredrik Sylwan. CFO
Tel: +46 10 456 13 00

Henrik Heiberg. Head of M&A. Financing & IR
Tel: +47 917 47 724

This interim report comprises information which Scandi Standard is required to disclose pursuant to EU market abuse regulation. It was released for publication at 07:30 AM CET on 6 February 2025. 

Financial calendar

 
Annual General Meeting 2025

Scandi Standard's annual general meeting will take place on 29 April 2025 at 7A Posthuset, Vasagatan 28 in Stockholm. Notice will be published no later than four weeks before the meeting.

Nomination Committee

The Nomination committee for the AGM 2025 consists of Anders Wennberg, who after a unanimous decision by the nomination committee, was elected chairman, and appointed by Investment AB Öresund, Avelino Gaspar, appointed by Grupo Lusiaves, Henrik Sundell, appointed by Lantmännen Animalieinvest AB, Nicklas Paulson, appointed by Eva Qviberg and Johan Bygge, Chairman of Scandi Standard AB (publ).

Forward-looking statement

This report contains forward-looking information based on the current expectations of company management. Although management deems that the expectations presented by such forward-looking information are reasonable, no guarantee can be given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably compared with what is stated in the forward-looking information, due to such factors as, but not limited to, changed conditions regarding finances, market and competition, supply and production constraints, changes in legal and regulatory requirements and other political measures, and fluctuations in exchange rates.

About Scandi Standard

Scandi Standard is the leading producer of chicken-based food products in the Nordic region, Ireland and Lithuania. The company produces, markets, and sells ready-to-eat, chilled, and frozen products under the well-known brands Kronfågel, Danpo, Den Stolte Hane, Manor Farm, and Naapurin Maalaiskana. Eggs are also produced and sold in Norway. We are approximately 3.200 employees with annual sales of more than SEK 13 billion.