Interim report, second quarter 2015
- Net sales increased by 3 percent to MSEK 1,341.3 (1,302.9), and by 2 percent at constant exchange rates. Net sales increased by 8 percent in Sweden, 6 percent in Denmark and decreased by 7 percent in Norway at constant exchange rates.
- Adjusted operating income increased by 1 percent to MSEK 77.0 (76.3) corresponding to an adjusted operating margin of 5.7 (5.9) percent.
- Income for the period amounted to MSEK 45.7 (-48.2) and earnings per share was SEK 0.76 (-0.95).
- Adjusted operating cash flow amounted to MSEK 136.0 (186.6) with a reduction of working capital but not as much as last year.
- Deliveries to Coop Norway under the new supply agreement, which also includes the stores acquired from ICA Norway, started as of August.
- The acquisition of Huttulan Kukko Oy’s (Huttulan) factory and business in Finland was completed on 25 May.
- An agreement was signed on 15 June to acquire Lagerbergs, the third largest producer of chicken products in Sweden, pending approval of the Swedish Competition Authority.
| MSEK | Q2 2015 | Q2 2014 | Change | H1 2015 | H1 2014 | Change |
| Net sales | 1 341.3 | 1 302.9 | 3% | 2 650.9 | 2 656.3 | 0% |
| Operating income | 72.8 | 36.9 | 97% | 140.4 | 107.3 | 31% |
| Income for the period | 45.7 | -48.2 | - | 87.3 | -18.9 | - |
| EPS | 0.76 | -0.95 | - | 1.45 | -0.38 | - |
| Adjusted* EBITDA | 123.8 | 119.3 | 4% | 237.8 | 239.4 | -1% |
| Adjusted* operating income | 77.0 | 76.3 | 1% | 144.6 | 154.9 | -7% |
| Adjusted* operating margin | 5.7% | 5.9% | - | 5.5% | 5.8% | - |
| Adjusted* income for the period | 49.0 | 22.2 | 121% | 90.6 | 57.9 | 56% |
| Adjusted* EPS | 0.82 | 0.44 | 86% | 1.51 | 1.15 | 31% |
| Adjusted* operating cash flow | 136.0 | 186.6 | -27% | 236.3 | 307.5 | -23% |
*) Adjusted for non-comparable items in the quarter of MSEK -4.2 (-39.4) in EBITDA and operating income and MSEK -3.3 (-70.5) in income for the period, as well as MSEK -4.2 (-47.6) in EBITDA and operating income and MSEK -3.3 (-76.9) in income for the period for the first half. See page 3.
CEO Statement
Trends in sales and operating income in the quarter were similar to those in the first quarter with good sales growth and improved adjusted operating income and margins in Sweden and Denmark compensating for a weak performance in Norway. Overall, Group net sales grew by 2 percent at constant exchange rates and the adjusted operating income increased slightly from the previous year.
Sales in Sweden benefitted from good market demand, strong performance of recently launched innovative products and higher sales of chilled products over frozen leading to an improved mix. The adjusted operating income and margin improved substantially, with further improvements in operating efficiencies.
Sales and adjusted operating income in Denmark were positively impacted by higher export volumes at firmer prices. The margin also benefited from further cost savings in operations. The domestic Danish market was characterised by continued pressure on pricing.
The Norwegian retail market for chicken products continued to be weak and declined by 4 percent* compared to the second quarter last year. This was an improvement from the first quarter when the market declined by 13 percent*. Stock levels were high across the industry. Operating margin for the Norwegian operation was negatively impacted by promotional activity and a higher proportion of sales of frozen products. We continue to believe that the market will recover but timing is uncertain. Deliveries to Coop Norway under the new supply agreement, which also includes the stores acquired from ICA Norway, started as of August. Deliveries will be phased in gradually as the newly acquired stores are absorbed into Coop.
On 25 May we finalised the acquisition of Huttulan’s factory and business in Finland, which began operations in May 2014. Huttulan has developed a premium concept that is sold to retail and foodservice customers. Finland is an attractive market for chicken products with many similarities to the Swedish market. Integration of the business, now called Kronfågel Oy, is proceeding according to plan and we have started to share best practice from within the Group to improve performance in different areas. The factory is operating at less than 20 percent of total capacity and will be loss-making this year. We are making progress in organising new farming capacity to increase deliveries from next year.
On 15 June, we signed an agreement to acquire Lagerbergs, the third largest producer of chicken products in Sweden with sales of approximately MSEK 300. The acquisition is subject to approval by the Swedish Competition Authority. The acquisition would improve our capacity to supply the growing Swedish market and would also create opportunities to improve efficiency in both our facility in Valla, Sweden and the Lagerbergs factory.
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
Jonny Mason, Chief Financial Officer. Tel: +45 22 77 86 18
Patrik Linzenbold, Head of Investor Relations. Tel: +46 708 25 26 30
Financial calendar
- Interim report for the third quarter 2015: 26 November 2015
- Fourth quarter and year-end report 2015: 26 February 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 28 August 2015.
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