Implementation of IFRS 16 Leases, HKScan Corporations’s restatement for 2018

HKScan Corporation          Stock Exchange Release          3 May 2019               11:30 (EEST)

Implementation of IFRS 16 Leases, HKScan Corporations’s restatement for 2018

As of 1 January 2019, HKScan has adopted the new IFRS 16 Leases standard using the full retrospective method. According to IFRS 16 lessee is required to recognise assets and liabilities for all leases and depreciation of lease assets separately from interest on lease liabilities in the income statement. The Group elected to use the recognition exemptions for short-term leases and low-value assets. Quarterly and full-year Group and Market Area financial information for 2018 has been restated accordingly.

IFRS 16 impact to opening balance on 1 January 2018 amounted to EUR 44.0 million in tangible assets, EUR 0.4 million in deferred tax asset, EUR 45.9 million in interest-bearing liabilities and EUR -1.5 million in retained earnings. In the balance sheet of 31 December 2018 tangible assets increased by EUR 44.2 million and interest-bearing liabilities increased by EUR 46.2 million. Full year 2018 operating profit improved by EUR 1.2 million. Financial expenses increased by EUR 1.4 million. Profit for the period impact was EUR -0.2 million.

HKScan Corporation

Tero Hemmilä

CEO of HKScan

For more information please contact: HKScan Media Service Desk +358 10 570 5700 or by email to: communications@hkscan.com

HKScan is a Nordic meat and meals company. We employ nearly 7 200 professionals in striving to serve the world´s most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service,industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2018, HKScan had net sales of EUR 1.7 billion.

ATTACHMENTS

Consolidated income statement, 1-12/2018, published and restated

Consolidated statement of comprehensive income, 1-12/2018, published and restated

Consolidated balance sheet, 1-12/2018, published and restated

Cash flow statement,1-12/2018, published and restated 

Financial indicators, 1-12/2018, published and restated

Analysis by segment, 10-12/2018, published and restated

DISTRIBUTION:

Nasdaq Helsinki

Key media

www.hkscan.com

CONSOLIDATED   INCOME STATEMENTPUBLISHED
(EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
Net   sales 411.0 433.5 416.2 454.7 1 715.4
Cost   of goods sold -402.2 -424.1 -401.3 -432.9 -1 660.5
Gross   profit 8.7 9.5 14.9 21.7 54.8
Other   operating items total 1.7 1.8 1.5 1.9 6.9
Sales   and marketing costs -10.6 -11.7 -10.6 -10.7 -43.6
General   administration costs -18.3 -16.6 -16.0 -16.8 -67.6
Operating   profit -18.6 -17.0 -10.1 -3.8 -49.5
Financial   income 0.5 0.7 0.4 0.4 2.0
Financial   expenses -3.0 -3.2 -2.4 -3.4 -11.9
Share of profit/loss in   associates and joint ventures 0.4 0.0 0.4 0.2 1.1
Profit/loss   before taxes -20.6 -19.4 -11.7 -6.6 -58.3
Income   tax 4.0 3.0 2.8 -2.6 7.1
Profit/loss for the   period -16.7 -16.4 -8.9 -9.2 -51.2
Non-controlling   interests -0.1 -0.3 -0.3 -0.9 -1.7
Profit/loss for the   period -16.8 -16.7 -9.2 -10.2 -52.9
Earnings per share   calculated on profit attributable to equity holders of the parent:
EPS, undiluted,   continuing operations, EUR/share -0.31 -0.31 -0.18 -0.20 -1.00
EPS, diluted, continuing   operations, EUR/share -0.31 -0.31 -0.18 -0.20 -1.00

 

RESTATEMENT
(EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
Net   sales 411.0 433.5 416.2 454.7 1 715.4
Cost   of goods sold -402.0 -423.8 -401.0 -432.7 -1 659.5
Gross   profit 9.0 9.7 15.2 22.0 55.9
Other   operating items total 1.7 1.8 1.5 1.9 6.9
Sales   and marketing costs -10.6 -11.7 -10.6 -10.7 -43.6
General   administration costs -18.3 -16.5 -15.9 -16.7 -67.5
Operating   profit -18.3 -16.7 -9.8 -3.5 -48.3
Financial   income 0.5 0.7 0.4 0.4 2.0
Financial   expenses -3.3 -3.5 -2.8 -3.7 -13.3
Share of profit/loss in   associates and joint ventures 0.4 0.0 0.4 0.2 1.1
Profit/loss   before taxes -20.7 -19.4 -11.7 -6.7 -58.5
Income   tax 4.0 3.0 2.8 -2.6 7.2
Profit/loss for the   period -16.7 -16.4 -8.9 -9.3 -51.3
Non-controlling   interests -0.1 -0.4 -0.3 -0.9 -1.7
Profit/loss for the   period -16.9 -16.8 -9.2 -10.2 -53.0
Earnings per share   calculated on profit attributable to equity holders of the parent:
EPS, undiluted,   continuing operations, EUR/share -0.31 -0.31 -0.18 -0.20 -1.00
EPS, diluted, continuing   operations, EUR/share -0.31 -0.31 -0.18 -0.20 -1.00

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PUBLISHED

(EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
Profit/loss for the   period -16.7 -16.4 -8.9 -9.2 -51.2
OTHER COMPREHENSIVE   INCOME (after taxes):
Exchange differences on   translating foreign operations -4.2 -1.8 1.5 0.4 -4.0
Cash   flow hedging 1.1 2.4 -0.8 1.6 4.2
Actuarial   gains or losses 0.0 0.0 0.0 -6.9 -6.9
TOTAL   OTHER COMPREHENSIVE INCOME -3.1 0.7 0.6 -4.9 -6.7
TOTAL COMPREHENSIVE   INCOME FOR THE PERIOD -19.8 -15.7 -8.3 -14.1 -57.9
TOTAL COMPREHENSIVE INCOME   FOR THE PERIOD ATTRIBUTABLE TO:
Equity holders of the   parent -19.9 -16.1 -8.6 -15.0 -59.6
Non-controlling   interests 0.1 0.3 0.3 0.9 1.7
Total -19.8 -15.7 -8.3 -14.1 -57.9

RESTATEMENT

(EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
Profit/loss for the   period -16.7 -16.4 -8.9 -9.3 -51.3
OTHER COMPREHENSIVE   INCOME (after taxes):
Exchange differences on   translating foreign operations -4.1 -1.7 1.5 0.4 -4.0
Cash   flow hedging 1.0 2.4 -0.8 1.6 4.2
Actuarial   gains or losses 0.0 0.0 0.0 -6.9 -6.9
TOTAL   OTHER COMPREHENSIVE INCOME -3.1 0.7 0.6 -4.9 -6.7
TOTAL COMPREHENSIVE   INCOME FOR THE PERIOD -19.8 -15.7 -8.3 -14.2 -58.0
TOTAL COMPREHENSIVE   INCOME FOR THE PERIOD ATTRIBUTABLE TO:
Equity holders of the   parent -19.9 -16.1 -8.6 -15.1 -59.7
Non-controlling   interests 0.1 0.4 0.3 0.9 1.7
Total -19.8 -15.7 -8.3 -14.2 -58.0

CONSOLIDATED BALANCE SHEET

PUBLISHED
(EUR   million) 31.3.2018 30.6.2018 30.9.2018 31.12.2018
ASSETS
Intangible   assets 133.9 134.1 134.8 137.5
Tangible   assets 451.2 442.1 439.1 434.2
Holdings 34.7 32.0 32.4 33.0
Deferred   tax asset 36.9 39.6 42.1 42.9
Other   non-current assets 2.7 2.7 2.6 2.5
TOTAL   NON-CURRENT ASSETS 659.4 650.6 651.1 650.2
Inventories 123.0 113.1 121.8 121.4
Current   receivables 130.1 142.1 137.2 130.9
Cash   and cash equivalents 7.2 13.1 13.0 29.4
TOTAL   CURRENT ASSETS 260.3 268.3 272.1 281.7
TOTAL   ASSETS 919.6 918.9 923.2 931.9
EQUITY   AND LIABILITIES
EQUITY 329.6 309.1 340.6 326.6
Non-current loans,   interest-bearing 284.4 279.3 276.3 242.0
Non-current liabilities,   non interest-bearing 54.7 51.7 48.9 63.3
TOTAL   NON-CURRENT LIABILITIES 339.1 331.0 325.2 305.4
Current   loans, interest-bearing 36.4 51.1 42.5 77.0
Current liabilities, non   interest-bearing 214.5 227.7 214.7 223.0
TOTAL   CURRENT LIABILITIES 250.9 278.8 257.3 300.0
TOTAL   EQUITY AND LIABILITIES 919.6 918.9 923.2 931.9

 

RESTATEMENT
(EUR   million) 31.3.2018 30.6.2018 30.9.2018 31.12.2018
ASSETS
Intangible   assets 133.9 134.1 134.8 137.5
Tangible   assets 493.9 483.9 483.6 478.5
Holdings 34.7 32.0 32.4 33.0
Deferred   tax asset 37.2 40.0 42.5 43.3
Other   non-current assets 2.7 2.7 2.6 2.5
TOTAL   NON-CURRENT ASSETS 702.4 692.7 695.9 694.8
Inventories 123.0 113.1 121.8 121.4
Current   receivables 130.1 142.1 137.2 130.9
Cash   and cash equivalents 7.2 13.1 13.0 29.4
TOTAL   CURRENT ASSETS 260.3 268.3 272.1 281.7
TOTAL   ASSETS 962.7 961.1 968.0 976.5
EQUITY   AND LIABILITIES
EQUITY 328.1 307.6 339.1 325.0
Non-current loans.   interest-bearing 319.8 313.9 313.3 278.3
Non-current liabilities.   non interest-bearing 54.7 51.7 48.9 63.3
TOTAL   NON-CURRENT LIABILITIES 374.5 365.6 362.3 341.7
Current   loans. interest-bearing 45.6 60.2 51.9 86.9
Current liabilities. non   interest-bearing 214.5 227.7 214.7 223.0
TOTAL   CURRENT LIABILITIES 260.1 287.9 266.6 309.9
TOTAL   EQUITY AND LIABILITIES 962.7 961.1 968.0 976.5

CASH FLOW STATEMENT

PUBLISHED

(EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
Cash flow before change   in net working capital -4.6 -2.8 3.5 11.4 7.6
Change in net working   capital -38.2 10.9 -15.9 20.4 -22.7
Financial   items and taxes -2.3 1.1 -5.7 -2.6 -9.5
CASH FLOW FROM OPERATING   ACTIVITIES -45.2 9.3 -18.1 29.3 -24.6
Cash flow from investing   activities -58.8 -8.3 -10.0 -12.6 -89.8
CASH FLOW AFTER INVESTING   ACTIVITIES -104.0 1.0 -28.1 16.6 -114.4
Hybrid   loan - - 39.8 - 39.8
Change   in loans 61.1 9.8 -11.8 -0.4 58.6
Dividends paid -0.6 -4.9 - - -5.5
CASH FLOW FROM FINANCING   ACTIVITIES 60.4 4.9 28.0 -0.4 92.9
NET   CASH FLOW -43.5 5.9 -0.2 16.3 -21.5
Cash and cash equivalents   at beginning of period 50.9 7.2 13.1 13.0 50.9
Translation   differences -0.2 0.1 0.1 0.1 0.1
Cash and cash equivalents   at end of period 7.2 13.1 13.0 29.4 29.4

RESTATEMENT

(EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
Cash flow before change   in net working capital -1.7 0.1 6.5 14.4 19.3
Change in net working   capital -38.2 10.9 -15.9 20.4 -22.7
Financial   items and taxes -2.7 0.8 -6.1 -2.9 -10.9
CASH FLOW FROM OPERATING   ACTIVITIES -42.6 11.9 -15.4 31.9 -14.3
Cash flow from investing   activities -58.8 -8.3 -10.0 -12.6 -89.8
CASH FLOW AFTER INVESTING   ACTIVITIES -101.4 3.5 -25.5 19.3 -104.1
Hybrid   loan - - 39.8 - 39.8
Change   in loans 58.5 7.2 -14.5 -3.0 48.3
Dividends paid -0.6 -4.9 - - -5.5
CASH FLOW FROM FINANCING   ACTIVITIES 57.9 2.3 25.3 -3.0 82.6
NET   CASH FLOW -43.5 5.9 -0.2 16.3 -21.5
Cash and cash equivalents   at beginning of period 50.9 7.2 13.1 13.0 50.9
Translation   differences -0.2 0.1 0.1 0.1 0.1
Cash and cash equivalents   at end of period 7.2 13.1 13.0 29.4 29.4

FINANCIAL INDICATORS, PUBLISHED

31.3.2018 30.6.2018 30.9.2018 31.12.2018
Earnings per share (EPS),   undiluted, EUR -0.31 -0.62 -0.80 -1.00
Earnings per share (EPS),   diluted, EUR -0.31 -0.62 -0.80 -1.00
Equity   per share, EUR 5.85 5.46 6.04 5.76
Equity   ratio, % 35.8 33.6 36.9 35.1
Gross capital expenditure   on PPE, EUR mill. 10.6 18.8 28.7 41.0
Cash flow before   investments (mEUR) -42.8 -34.6 -47.0 -15.1
Cash flow before debt   service (mEUR) -102.7 -103.3 -126.1 -107.2
Cash flow before   financing activities (mEUR) -104.0 -103.0 -131.1 -114.4
Return on capital   employed (ROCE) before taxes, % -7.8 -9.1 -10.1 -7.4
Net   debt (mEUR) 313.5 317.1 305.6 289.4
Net   Gearing % 95.1 102.6 89.7 88.6

FINANCIAL INDICATORS, RESTATEMENT

31.3.2018 30.6.2018 30.9.2018 31.12.2018
Earnings per share (EPS),   undiluted, EUR -0.31 -0.62 -0.80 -1.00
Earnings per share (EPS),   diluted, EUR -0.31 -0.62 -0.80 -1.00
Equity   per share, EUR 5.82 5.43 6.01 5.73
Equity   ratio, % 34.1 32.0 35.0 33.3
Gross capital expenditure   on PPE, EUR mill. 12.3 22.4 37.5 52.2
Cash flow before   investments (mEUR) -39.9 -28.9 -38.2 -3.4
Cash flow before debt   service (mEUR) -99.8 -97.5 -117.3 -95.4
Cash flow before   financing activities (mEUR) -101.4 -97.9 -123.4 -104.1
Return on capital   employed (ROCE) before taxes, % -7.5 -8.7 -9.6 -6.7
Net   debt (mEUR) 358.0 360.8 352.0 335.6
Net   Gearing % 109.1 117.3 103.8 103.3

ANALYSIS BY SEGMENT, PUBLISHED

(EUR   million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
EBIT
-   Sweden -1.6 1.7 3.0 5.5 8.6
- Finland -10.4 -14.1 -9.5 -2.6 -36.6
-   Denmark -0.8 -1.1 -1.5 -2.5 -5.9
-   Baltics -1.0 0.2 0.9 -0.9 -0.7
Segments   total -13.8 -13.3 -7.2 -0.4 -34.6
Group   administration costs -4.8 -3.7 -3.0 -3.4 -14.9
Group   total -18.6 -17.0 -10.1 -3.8 -49.5
INVESTMENTS
- Sweden 1.3 2.5 1.1 1.5 6.4
- Finland 7.2 3.3 4.8 6.6 21.9
- Denmark 0.0 0.3 0.6 1.4 2.3
- Baltics 2.0 2.3 3.3 2.8 10.4
Total 10.6 8.3 9.8 12.3 41.0

ANALYSIS BY SEGMENT, RESTATEMENT

(EUR   million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018
EBIT
-   Sweden -1.5 1.8 3.0 5.6 8.9
-   Finland -10.3 -14.0 -9.4 -2.4 -36.1
-   Denmark -0.8 -1.1 -1.5 -2.4 -5.8
-   Baltics -1.0 0.2 0.9 -0.9 -0.7
Segments   total -13.5 -13.0 -6.9 -0.2 -33.6
Group   administration costs -4.8 -3.7 -2.9 -3.4 -14.7
Group   total -18.3 -16.7 -9.8 -3.5 -48.3
INVESTMENTS
- Sweden 1.8 3.0 1.5 1.9 8.1
- Finland 7.9 4.3 9.1 8.4 29.7
- Denmark 0.1 0.3 1.0 1.5 3.0
- Baltics 2.4 2.5 3.4 3.0 11.3
Total 12.3 10.1 15.0 14.7 52.2

About Us

HKScan is a Nordic meat and meals company. We employ over 7 300 professionals in striving to serve the world ìs most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service,industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2017, HKScan had net sales of EUR 1.8 billion, making us one of Europe’s leading meat and meals companies.www.hkscan.com

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