Scandi Standards AB (publ) interim report January - December 2021

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Focus on price increases and improvement program

October – December 2021

  • Net sales amounted to MSEK 2,435 (2,393) in the fourth quarter 2021. At constant exchange rates net sales increased by 1 percent.
  • Operating income (EBIT) decreased by 47 percent to MSEK 30 (56), corresponding to a margin of 1.2 (2.3) percent. Adjusted operating income (adj. EBIT)1) decreased by 96 percent to MSEK 3 (83), corresponding to a margin of 0.1 (3.5) percent.
  • Income for the period amounted to MSEK 4 (21). Earnings per share amounted to SEK 0.08 (0.32).
  • Operating cash flow was MSEK 69 (-23).

January – December 2021

  • Net sales amounted to MSEK 10,101 (9,940) in the year of 2021. At constant exchange rates net sales increased by 3 percent.
  • Operating income (EBIT) decreased by 37 percent to MSEK 222 (351), corresponding to a margin of 2.2 (3.5) percent. Adjusted operating income (adj. EBIT)1) decreased by 48 percent to MSEK 213 (410), corresponding to a margin of 2.1 (4.1) percent.
  • Income for the period amounted to MSEK 103 (208). Earnings per share amounted to SEK 1.60 (3.16).
  • Operating cash flow was MSEK 347 (476).

Significant events after the close of the quarter

  • Jonas Tunestål will join the company as managing director and CEO on 1 April 2022.

Key metrics

MSEK Q4 2021 Q4 2020 Δ 2021 2020 Δ
Net sales 2,435 2,393 2% 10,101 9,940 2%
EBITDA 125 147 -15% 598 699 -14%
Operating income (EBIT) 30 56 -47% 222 351 -37%
EBITDA margin % 5.1% 6.1% -1.0ppt 5.9% 7.0% -1.1ppt
EBIT margin % 1.2% 2.3% -1.1ppt 2.2% 3.5% -1.3ppt
Non-comparable items1) 26 -28 - 9 -59 -
Adjusted EBITDA1) 98 173 -43% 589 756 -22%
Adjusted operating income (Adj. EBIT)1) 3 83 -96% 213 410 -48%
Adjusted EBITDA margin1) % 4.0% 7.2% -3.2ppt 5.8% 7.6% -1.8ppt
Adjusted EBIT margin1) % 0.1% 3.5% -3.3ppt 2.1% 4.1% -2.0ppt
Income after finance net 8 33 -76% 140 260 -46%
Income for the period 4 21 -80% 103 208 -50%
Earnings per share, SEK 0.08 0.32 -74% 1.60 3.16 -49%
Return on capital employed % 5.2% 8.4% -3.1ppt 5.2% 8.4% -3.1ppt
Return on equity % 5.5% 11.5% -6.0ppt 5.5% 11.5% -6.0ppt
Operating cash flow 69 -23 - 347 476 -27%
Net interest-bearing debt 1,980 1,933 2% 1,980 1,933 2%
NIBD/Adj. EBITDA 3.4 2.6 31% 3.4 2.6 31%
Lost time injuries (LTI) per million hours worked 38.0 28.7 32% 39.2 31.0 26%
Feed efficiency (kg feed/live weight) 1.52 1.51 0% 1.52 1.52 0%

1) Restated non-comparable items. see note 6 and 8.

CEO Comments

Scandi Standards net sales during the fourth quarter 2021 were MSEK 2,435 (2,393), in line with the previous year. Operating income was MSEK 30 (56). The operating income was positively affected by items affecting comparability of MSEK 26 (-28).

The ready-to-cook segment has during the quarter been affected by a number of external and internal challenges. Net sales amounted to MSEK 1,789 and the operating income for the segment declined substantially to MSEK -32 (56). The operating income was, also in this quarter, negatively affected by significant price increases on several input factors, a continued challenging price situation in export markets as well as consequences from the measures taken to address the production challenges in Sweden and Ireland, in particular significant production reductions. The ready-to-cook segment in Denmark continue to make major losses and reported a negative operating income of MSEK -59 for the quarter.

The ready-to-eat segment reported a continued improvement with net sales for the quarter increasing 14 percent to MSEK 543 (476) with a slightly improved operating income. The development was driven by increased sales in the Foodservice sales channel and we note an increasing demand within this profitable segment. Scandi Standard has good capacity to meet the increasing demand during 2022, and in order to take advantage of growth opportunities, investments are planned to increase capacity further in Farre – the largest production plant for ready-to-eat products.

Improvement program

The work within the group-wide improvement program that was initiated in the third quarter 2021 continued in the fourth quarter. The aim initially is to swiftly return Scandi Standard to profitability in line with the years 2016 to 2020 as well as to lay the foundation for long-term sustainable and profitable growth and returns. Scandi Standard is following a detailed action plan to significantly improve both commercial and operational efficiency on all markets. The focus in the fourth quarter was mainly on continued price adjustments in all countries, measures to improve profitability within the Ready-to-cook in Denmark, address the production challenges in Sweden and Ireland as well as cost reductions in the entire group.

Price adjustments

Scandi Standard’s operating income for the fourth quarter is significantly affected by considerable cost increases on feed and other input goods. Successfully negotiated price increases to customer which will gradually become effective in the first quarter 2022 will to a large extent compensate for the effects on operating income due to cost increases.
Additional cost increases have emerged during the beginning of 2022 and renewed negotiations are currently ongoing with customers to compensate also for these. Scandi Standard’s business model allows for fluctuations in input prices to be transferred to the customer and provides good possibilities to manage price and cost increases over time.

Improve profitability within Ready-to-cook Denmark

Ready-to-cook Denmark reported an operating income of MSEK -59 during the quarter. The negative outcome is mainly related to the implementation of the strategy for slow growing birds, low export prices and cost increases. We are now implementing, in close cooperation with our customers, comprehensive changes in the strategy for slow growing birds to meet a demand that is expected to grow. Significant staff reductions are also being made and the company is increasing the flexibility in its supplier contracts. The positive effects of these measures are expected primarily during second half of 2022.

Addressing production challenges in Sweden and Ireland

As a part of the improvement program, Scandi Standard reduced the intake of birds for production in Sweden and Ireland with approximately 8 percent during the fourth quarter. This was to address the production challenges and ensure a good operational capability. The company has also initiated a structured process for early discovery of potential future deviations in the production plants. The reduced volume has had a negative impact on the operational income, but improved control. The production reduction has moreover created conditions for long-term operational improvement through more efficient working methods. The company’s assessment is that the attention in the Swedish market regarding the production challenges has had a negative effect on the demand in the chicken category, but that the structural improvements that are now being implemented will strengthen the competitiveness of the Group's consumer brands over time.

Organisational changes and investments

As part of the work with the improvement program, Scandi Standard has carried out a number of personnel changes at management level in the company. New country managers have been appointed in Denmark, Ireland and Finland and the manager for the successful Norwegian market is also acting country manager for Sweden in order to strengthen the Swedish Business. Furthermore, the organisation for Sales and Operations Planning (S&OP) has been further developed and a restructuring of the organisation for Group Supply Chain and Group Operations is ongoing.

The current investment plan for 2022 is about MSEK 330 and will be continuously evaluated during the year. Under this framework, we have decided to prioritise facilitation of profitable growth within the Ready-to-eat and commencement of a three year roll out of a new ERP system, which has a framework of MSEK 100 in 2022. The new ERP system will in the longer term drive efficiencies throughout the value chain by, among other things, harmonized business processes and an increased degree of automation throughout the group. New accounting principles regarding investments in cloud-based solutions may lead to a portion of the ERP investments being expensed. The Board has resolved not to propose a dividend for the financial year 2021.


The effect of the improvement program this far and the trends we see strengthen our assessment on a gradual improvement in earnings during 2022. When the price increases on input factors now also are having an effect in categories with a longer production cycle such as beef and pork, we can also expect increased tailwinds from the market due to more favourable competitive conditions. The effect of the challenges that Scandi Standard faced in 2021 is expected to gradually diminish from the second quarter of 2022.

I am convinced that the new management that is now being formed has the right competence and prerequisites to continue Scandi Standard’s development journey and that the powerful measures we are implementing will result in the expected outcome. I am looking forward to on the first of April, welcoming our new CEO Jonas Tunestål to a company that is significantly better equipped than before to take advantage of the full potential in the market.

Stockholm, 11 February 2022

Otto Drakenberg, Interim managing director and CEO

Conference Call

A conference call for investors, analysts and media will be held on 11 February 2022 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 under Investor Relations. A recording of the conference call will be available on afterwards.

Further information

For further information, please contact:
Otto Drakenberg, Interim managing director and CEO
Tel: + 46 70-864 55 04

Julia Lagerqvist, CFO
Tel: +46 72 402 84 02

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

Financial calendar

Annual General Meeting May 4, 2022
Interim report for Q1 2022 May 4, 2022
Interim report for Q2 2022 August 25, 2022
Interim report for Q3 2022 October 28, 2022

This interim report comprises information which Scandi Standard is required to disclose pursuant to EU market abuse regulation and the Securities Markets Act. It was released for publication at 07:30 AM CET on 11 February 2022.

About Scandi Standard
Scandi Standard is the leading producer of chicken-based food products in the Nordic region and Ireland. 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 3,000 employees with annual sales of more than SEK 10 billion.