Scandi Standard Ab · OMXSTO:SCST
Scandi Standard Ab — Q4 2024 Earnings Presentation
49 slides from Scandi Standard Ab's earnings presentation, Feb 6, 2025
Slide 1: Q4 2024 Presentation
Scandi Standard Q4 2024 Presentation Feb 6, 2025
Slide 2: Net Sales and EBIT margin
Scandi Standard Net Sales and EBIT margin Net sales 1) Pro forma including Manor Farm (% change vs LY in parenthesis)
Slide 3: Q4 2024: Strong organic and structural growth
Q4 2024: Strong organic and structural growth Q4 Q4 MSEK • 5% growth in net sales 2024 2023 • Supported by consumer trend Net sales 3,170 3,011 • Q4 seasonally weakest quarter Operating income (EBIT) 107 105 • Start-up of acquired low-cost RTC platform in Lithuania Operating margin (EBIT) % 3.4% 3.5
Slide 4: Growth and value drivers
Growth and value drivers
Slide 5: Strong consumer trend in favour of chicken products
Strong consumer trend in favour of chicken products Poultry consumption Nordics & Ireland +13% CAGR 1.7% k tonnes 1,000 964 830 828 855 798 • Strong poultry growth in the Nordics and 800 677 687 714 738 773 779 Ireland 600 400 • 44% poultry growth from 2010-2023 200 • 13% poultry growth expected fro
Slide 6: Chicken is an affordable product
Chicken is an Relative pricing to consumer affordable product 500 400 SEK per kg 300 • Price has always been important for 200 consumers 100 • Chicken affordable across segments 0 Low end cut Average cut High end cut • Fillets also competitively priced vs. Chicken Pork Beef Salmon average- and low-e
Slide 7: Increasing the value of our protein
Increasing the value of our protein EBIT SEK/kg (GW) Ingredients RTC Target >3.00 RTE Corp • EBIT/kg good measurement of value creation 1.82 • Positive momentum towards 2027 target 1.69 0.11 0.25 0.53 • Q4 2024 EBIT/kg 1.55 SEK/kg 0.59 • Seasonally weakest quarter due to Christmas season • 1% increa
Slide 8: Leading positions in five domestic markets
Leading positions in five domestic markets • Strong consumer preference for domestic produce Market position • Each country highly consolidated 3 1 NAAPURIN • Large hurdle for new entrants MAALAISKANA 1 FINLAND DEN STOLTE • Requirement for domestic footprint HANE NORWAY KRONFÅGEL • Long term relatio
Slide 9: Start-up of acquired low-cost RTC platform in Lithuania
Start-up of acquired low-cost RTC platform in Lithuania • Missing RTC piece to utilise potential of existing markets • 20-25 ktonne (GW) state of the art processing plant (1) • Best in class cost position • Intention to build fully integrated hub • Allow control of cost, welfare and food safety • We
Slide 10: Main Ready-to-cook Plants
Main Ready-to-cook Plants Ready-to-cook Title Five Title Six Sweden Norway Finland Valla Title Two Jæren Title Three Lieto Our online marketing and search Our online marketing and search optimization services were designed. optimization services were designed. Chickens per year: 50 million Chickens
Slide 11: Ready-to-eat – Chicken becoming the preferred convenience choice
Ready-to-eat –Chicken becoming the preferred convenience choice Ready-to-eat Net Sales (MSEK) • Tremendous organic growth last ten years • Growth has materialised in uneven steps MSEK 3,500 • Positive momentum after loss of continental European contract in 2H 2023 3,000 2,949 2,873 5.3x 18% CAGR 2,6
Slide 12: Healthy market growth expected in European breaded market
Healthy market growth expected in European breaded market European Frozen Breaded Market(1) 500 • Market players divided into tiers 450 440 450 400 430 • European players 400 400 410 420 350 • Regional players 300 319 321 310 312 314 316 318 Ktonnes • Local players 250 200 • Scandi Standard has been
Slide 13: Acquisition takes Scandi Standard to the top tier
Acquisition takes Scandi Standard to the top tier • Two of Europe’s largest and most efficient breaded product lines (Factory C) • 48 ktonne annual capacity • One of few with advanced formed product(1) capability • Total investment 28 MEUR • Acquisition price + required investments(2) • Replacing pl
Slide 14: Lithuania + Breaded RTE Prerequisites to gain market share
Lithuania + Breaded RTE Prerequisites to gain market share • Low cost and high quality - End-to-end • Low feed, labour and slaughtering cost • Quality control of RTC value chain • Efficient logistics • State-of-the-art breaded capability • Scalable platform • Lithuania slaughter capacity highly flex
Slide 15: Q4 2024: 2% increase in adj. EBIT
Q4 2024: 2% increase in adj. EBIT Change in Adj. EBIT Net sales Q4 2024 per segment (% change vs LY in parenthesis) Ready-to-cook Ready-to-eat Other Total MSEK Q4 2024 Q4 2023 Q4 2024 Q4 2023 Q4 2024 Q4 2023 Q4 2024 Q4 2023 Net sales 2,399 2,278 644 600 127 134 3,170 3,011 EBIT 63 77 40 20 4 6 107 1
Slide 16: Ready-to-cook – Strong growth in seasonally weakest quarter
Ready-to-cook – Strong growth in seasonally weakest quarter MSEK Q4 2024 Q4 2023 R12M 2023 • 5% increase in net sales Net sales 2,399 2,278 9,923 9,577 • 1% increase in chicken processed (GW) EBIT 63 77 368 261 • Positive mix effect EBIT margin, % 2.6% 3.4% 3.7% 2.7% Non-comparable items1) - - - 0 A
Slide 17: Ready-to-cook – Historic development
Ready-to-cook – Net sales and EBIT/kg (GW) Historic development 40 35.5 35.1 1.60 33.9 35 27… 1.37 1.40 28.6 26.9 30 1.35 1.18 1.20 25 0.97 1.00 20 0.80 15 0.60 10 0.40 • Historic track record of strong growth and stable 0.39 5 0.18 0.20 margins 0 2019 2020 2021 2022 2023 2024 0.00 Net sales/kg EBIT
Slide 18: Export prices
Export prices Export price achievement - Development +51% 152 152 151 146 145 146 • Positive trend in realised export prices 144 140 143 134 • Continued uncertainty 117 • Efforts to improve our market performance 100 105 99 • Strategic client relationships 93 94 89 • Improved sales and operations pl
Slide 19: Stable feed price
Feed cost development (Index vs avg 2020) FC Stable feed price Feed price Q1 22 143 Q2 22 165 Q3 22 161 Q4 22 159 Q1 23 156 Q2 23 146 Q3 23 139 Q4 23 136 Q1 24 134 Q2 24 134 Q3 24 130 Q4 24 129 Q1 25 129 • Feed ~1/3 of cost base Feed composition and inclusion ranges • Changes largely transferred to
Slide 20: Ready-to-cook – Strong demand in most markets/segments
Ready-to-cook – Strong demand in most markets/segments Retail Net sales development, (MSEK) Net sales per country +4.8% +5.4% 2019 +4.7% +5.6% 1,922 1,915 1,887 1,915 2020 1,818 1,861 1,562 1,759 1,712 1,804 1,575 2021 1,519 1,590 1,668 1,582 1,671 1,581 1,479 1,477 1,512 1,475 1,515 2022 1,373 1,39
Slide 21: Ready-to-eat – Strong performance
Ready-to-eat – Strong performance • Net sales up 7% MSEK Q4 2024 Q4 2023 R12M 2023 Net sales 644 600 2,601 2,873 • Driven by combination of existing and new clients EBIT 40 22 148 158 • EBIT 40 MSEK (22) EBIT margin, % 6.2% 3.7% 5.7% 5.5% Non-comparable items1) - - - - • 6.2% EBIT margin Adj. EBIT1)
Slide 22: Ready-to-eat – Q3 improvement driven by retail sales
Ready-to-eat – Q3 improvement driven by retail sales Retail Net sales development, MSEK Net sales per country +12.9% +11.0% +11.2% +12.7% 193 185 2019 172 165 166 172 2020 149 149 156 146 139 135 125 2021 123 123 114 110 112 95 96 105 105 101 109 2022 2023 2024 Q1 Q2 Q3 Q4 Foodservice Net sales deve
Slide 23: CFO Comments
CFO Comments
Slide 24: Q4 2024 P&L – Increased EBIT
Q4 2024 P&L – Increased EBIT Q4 Q4 MSEK Δ R12M 2023 2024 2023 Net sales 3,170 3,011 5% 13,024 13,014 EBITDA 219 206 6% 931 880 • Net sales above LY driven by volume, and mix effect Depreciation -106 -93 14% -388 -376 • EBIT 107 MSEK (105) Amortization -9 -10 -10% -37 -47 Operating income EBIT 107 10
Slide 25: Increased returns
Capital Employed and ROCE Increased returns Average Capital Employed, MSEK ROCE% 6,000 11.8% 12.0% 11.0% 10.0% 4,000 8.0% • Last twelve months 6.0% 2,000 4,188 4,356 4.0% • ROCE 11.8% (11.0%) 2.0% • ROE 11.0% (11.4%) 0 0.0% Q4 2023 Q4 2024 Equity and ROE • Equity ratio 35.9% (36.0%) Average Equity,
Slide 26: Strong cash flow
MSEK Q4 2024 Q4 2023 2024 2023 Opening balance NIBD 1, 696 1,678 1,571 1,983 Strong cash flow EBITDA 219 206 931 880 Change in working capital 27 87 -62 228 Net capital expenditure -111 -165 -367 -338 Other operating items -8 -19 -59 -99 Operating cash flow 127 109 443 671 • Strong operating cash fl
Slide 27: Quarterly Working capital remains strong
Quarterly Working December 31, December 31, MSEK 2024 2023 Inventory 959 936 capital remains strong Trade receivables Trade payables 1,043 -1,532 1,044 -1,620 Other working capital, net -604 -558 Working capital -135 -197 • Inventory increased 2% vs last year due to operations inventory and live ani
Slide 28: Cash flow guidance
Capital expenditure and Depreciation Cash flow guidance Capital expenditure (MSEK) Capex/Depreciation • 2025 capital expenditures estimated at 550 MSEK 800 2.5 600 2.0 1.5 400 1.0 500 • Oosterwolde will require approximately 28 MEUR in total 200 265 371 419 355 306 311 338 367 0.5 206 199 during 202
Slide 29: Ensuring welfare - Cornerstone in licence to operate
Ensuring welfare - Cornerstone in licence to operate Nutritious Health and wellbeing Responsible of our consumers Responsible animal welfare • Rearing mortality • Antibiotics use, foot pad scores and transport mortality • Primary data from growers Welfare Safety for consumer and employees • Salmonel
Slide 30: Sustainability scorecard
Sustainability scorecard LTI per million hours worked Use of antibiotics (% of flocks treated) Animal welfare indicator (Foot Pad Score) 34.0 11.1 11.3 11.0 14.9 10.6 13.4 28.8 9.9 12.5 28.0 28.4 27.8 9.3 8.8 11.6 11.4 24.8 24.1 24.7 25.1 22.5 23.3 9.9 9.9 20.3 6.6 6.2 8.4 8.4 4.6 4.9 5.0 4.3 2.5 1.
Slide 31: Strategic pillars to achieve our goals
Strategic pillars to achieve our goals Ramp up Build a winning our efficiency culture together – end-to-end
Slide 32: Our 2027 targets
Objectives and investment priorities Our 2027 targets 5-7% Organic Net >6 >15 We want to be the leading provider of high- sales ROCE % growth p.a. % EBIT quality and sustainable chicken, setting the industry standard for excellence in animal welfare, environmental responsibility, and customer satisf
Slide 33: Structured approach receiving recognition
Structured approach receiving recognition Sustainability focus areas ESG ratings Focused work with transparency has Value chain focus (Scope 1-3) led to significant improvements in farm to fork with focus on data quality, target investor ESG ratings. setting and reduction initiatives. Rating framewo
Slide 34: Clear roadmap to >3 SEK EBIT/kg
Clear roadmap to > 3 SEK EBIT/kg SEK per kg “Grill weight” SEK/kg >3.00 3.0 Climb the value ladder • Balance supply to domestic fillet demand 2.5 • Value creation through increased consumer convenience • Differentiation and branding opportunities 2.0 1.82 • Utilise further part of potential in Ingre
Slide 35: Summary and outlook
Summary and outlook • Strongest fourth quarter • Supported by strong consumer trend across segments • Material step towards financial targets in 2024 • Another significant step expected in 2025 • Large potential in newly acquired businesses • Dividend proposal of SEK 2.50 (2.30) per share
Slide 36: Scandi Standard
‘S Scandi Standard
Slide 37: Appendix
Appendix
Slide 38: EBIT: Ready-to-cook
EBIT: Ready-to-cook • EBIT Q4 2023 – Q4 2024 (MSEK) Note: Start up costs of MSEK 14 materially booked in COGS and partly in OPEX
Slide 39: EBIT: Ready-to-eat
EBIT: Ready-to-eat • EBIT Q4 2023 – Q4 2024 (MSEK)
Slide 40: Main Processing Plants
Main Processing Plants Ready-to-eat Farre Oosterwolde Stokke Honkajoki Stokke Honkajoki 40
Slide 41: Setting the direction with the 2030 Sustainability Goals
Setting the direction with the 2030 Goal Key Performance Indicators Target 2030 Sustainability Goals • • Critical complaints and recalls Quality & Food Safety Survey • • 0 Response rate >90%, Providing local, healthy, scoring >75% safe and affordable protein • Clean label policy compliance • 100% •
Slide 42: Useful links and conversions
Useful links and conversions Commodity prices • Wheat CBOT • Soy CBOT • Maize CBOT • Rape seed ZMP Ross 308 chicken conversions • Live Weight to GW 0.72 • Live Weight to edible meat ~0.4
Slide 43: Chicken feed composition and substitutes
Chicken feed composition and substitutes Standard feed % Low-range High-range Main substitutes Main origin Wheat 54% 40% 63% Maize, oats Local, EU Soy 22% 11% 27% Peas, beans, high protein vegetable South America products Maize 10% 0% 10% Wheat, oats EU Fats 4% 4% 4% N.a. Local, EU Grain bi-products
Slide 44: Price segments
Price segments Meat High end cut Average cut Low end cut Breast fillet Drumstick Chicken legs & wings Chicken Thigh fillet Minced (chicken) Pork tenderloin Pork spare ribs Pork chops Pork Pork chops Minced (pork) Filet mignon Roast Beef Stew pieces Beef Entrecote Minced (Beef)
Slide 45: Segment information by quarter
Segment information by quarter Ready-to-cook, MSEK 2019 2020 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Net sales 7,467 7,619 7,611 2,046 2,199 2,265 2,164 8,674 2,373 2,495 2,431 2,278 9,577 2,441 2,546 2,536 2,399 9,923 Adjus
Slide 46: Other, MSEK
Other, MSEK 2019 2020 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Net sales 381 411 377 104 109 135 149 496 146 142 143 134 564 125 118 129 127 499 Adjusted EBITDA 18 11 15 10 19 23 26 79 24 25 12 10 71 8 6 11 10 36 Depreciation
Slide 47: Continued focus on inventory management
Continued focus on inventory management • Inventory increase with 54 MSEK vs Q3 Inventory Value (MSEK) & Finished products volume (ton) Ton • Driven by volume and FX MSEK 1,800 18,668 20,000 18,516 17,631 • Continued Focus area 1,500 15,971 16,625 16,616 16,578 16,683 15,850 16,659 15,312 15,156 14,
Slide 48: New sustainability-linked financing
New sustainability- linked financing • Highly competent bank group • 5-year tenor • Amount and flexibility to facilitate organic and strategic growth • Amount increased >50% to ~3.2bn SEK • Accordion option of up to 1.5bn SEK • Main covenants • NIBD/EBITDA < 4.0x (1) • Interest cover > 3.5x • Streng
Slide 49: Forward looking statements
Forward looking statements This presentation contains various forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “should,” “could