First quarter report 2016
10 May 2016
- Net sales increased by 6 percent to MSEK 1,386.3 (1,309.6), and by 8 percent at constant exchange rates. Net sales rose by 6 percent in Sweden, while net sales in local currency decreased by 6 percent in Denmark and increased by 32 percent in Norway. The increase in Norway was due to a recovery of the market and new customer contracts.
- Adjusted operating income* increased by 1 percent to MSEK 68.3 (67.6), corresponding to a margin of 4.9 (5.2) percent.
- Income for the period amounted to MSEK 42.4 (41.6) and earnings per share were SEK 0.71 (0.69).
- Adjusted operating cash flow* amounted to MSEK 36.7 (100.3).
- At the end of the quarter, a majority shareholding was acquired in Sødams Øko Fjerkræslagteri ApS, a Danish producer of organic and free-range chicken with annual sales of approximately MDKK 18.
| MSEK | Q1 2016 | Q1 2015 | Change | LTM | 2015 |
| Net sales | 1,386.3 | 1,309.6 | 6% | 5,499.7 | 5,422.9 |
| Operating income | 67.2 | 67.6 | -1% | 259.0 | 259.5 |
| Income for the period | 42.4 | 41.6 | 2% | 164.7 | 163.9 |
| EPS, SEK | 0.71 | 0.69 | 3% | 2.75 | 2.73 |
| Adjusted EBITDA* | 115.1 | 114.0 | 1% | 478.4 | 477.4 |
| Adjusted operating income* | 68.3 | 67.6 | 1% | 292.2 | 291.5 |
| Adjusted operating margin* | 4.9% | 5.2% | - | 5.3% | 5.4% |
| Adjusted income for the period* | 43.3 | 41.6 | 4% | 190.4 | 188.7 |
| Adjusted EPS*, SEK | 0.73 | 0.69 | 5% | 3.18 | 3.15 |
| Adjusted operating cash flow* | 36.7 | 100.3 | -63% | 260.4 | 324.1 |
*) Adjusted for non-comparable items in Q1 2016 of MSEK -1.1 (-) in EBITDA and operating income and MSEK -0.9 (-) in income for the period, for LTM of MSEK -33.1 in EBITDA and operating income and MSEK –25.7 in income for the period, and for the full year 2015 of MSEK –32.0 in EBITDA and operating income and MSEK -24.8 in income for the period. See page 3.
CEO Statement
The year has started with strong growth in net sales driven by continued good demand in Sweden and a recovery of the market in Norway. In Norway, we also benefitted from new customer contracts. We had a particularly strong development in chilled products with a growth of 16 percent at constant exchange rates. The adjusted operating margin was somewhat lower than last year due to the consolidation of the Finnish operation, which was effective as of the second quarter last year. The adjusted margin for comparable units improved to 5.7 percent.
The Swedish operation showed a continued positive trend in both net sales and adjusted operating income with a higher margin. This was achieved through product innovation, an improved product mix and efficiency gains in production. Our newly introduced products sold well including the ready-to-eat Minutkyckling products that are produced in the new processing section in the Valla facility. We also launched the first chicken bacon on the Nordic market. Chicken bacon contains substantially less fat than traditional bacon and still has great taste. As a result of the cancellation of the acquisition of Lagerbergs in Sweden and the need for further capacity to meet the demand in the Swedish market, we have signed a long-term lease contract for an industrial facility close to Kristianstad in the south of Sweden. We are now evaluating to invest in this facility to reach an annual capacity of 20 million chickens in the first phase.
The market in Denmark continued to be very competitive with price pressure both locally and on exports. Net sales and the adjusted operating income for the Danish operation declined, and the margin was lower than last year. At the end of the quarter, we acquired a majority shareholding in Sødams Øko Fjerkræslagteri in Denmark, a producer of organic and free-range chicken with annual sales of approximately MDKK 18. The acquisition is in line with our strategy to broaden the product portfolio and expand our presence in the premium segment of the Danish market.
Net sales for the Norwegian operation increased substantially as a result of strong growth in market demand compared to a weak first quarter last year. The retail market for chilled chicken products grew by approximately 22 percent in value in the quarter. We also benefitted from increased volumes to Coop Norway and the start of deliveries to Norgesgruppen. Adjusted operating income rose substantially, although from a low level, and the margin improved.
As expected, capacity utilization in the Finnish facility was low in the quarter. We have signed additional contracts for the supply of birds and will be able to increase volumes during 2016.
To summarize, we continued to deliver on our strategy, i.e. to achieve organic growth in line with our vision to inspire the Nordic consumers to eat chicken once more per week, to improve operational efficiency and to strengthen the Group through acquisitions.
Leif Bergvall Hansen
Managing Director and CEO
Further information
For further information, please contact:
Leif Bergvall Hansen, Chief Executive Officer Tel: +45 22 10 05 44
Tobias Wastensson, Head of Group Finance Tel: +46 10 456 14 86
Patrik Linzenbold, Investor Relations Tel: +46 708 25 26 30
Financial calendar
- Interim report for the second quarter 2016: 24 August 2016
- Interim report for the third quarter 2016: 3 November 2016
This interim report comprises information which Scandi Standard is required to disclose under the Securities Markets Act and/or the Financial Instruments Trading Act. It was released for publication at 07:30 CET on 10 may 2016.
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