Scandi Standard Ab · OMXSTO:SCST
Scandi Standard Ab — Investor Day (November 2023)
112 slides from Scandi Standard Ab's investor day presentation, Nov 28, 2023
Slide 1: Capital Market Day
Capital Market Day 28 November 2023
Slide 2: Agenda
Agenda Introduction Responsible, safe and 1 4 nutritious Convenient, versatile Climbing the value 2 & tasteful 5 ladder Affordable because it´s Objectives and 3 sustainable 6 investment priorities
Slide 3: The leading chicken player in Northern Europe
Introduction The leading chicken player in Northern Europe Strong positions in 5 countries characterized by 13 billion net sales (SEK) - Strong consumer preference for local produce - Limited cross border trade 1 billion meals - 2-3 main players in each market and large entry barriers 160 million bi
Slide 4: Successful turnaround process behind us
Introduction Successful turnaround process behind us 2016- 2019 Net Sales and EBIT margin − High organic growth 14,000 +8.2 % CAGR 8% 12,119 12,000 − Stable margins ~4% and ROCE of ~10% 10,000 7,544 8,207 8,707 9,891 9,940 10,101 6% 8,000 4.1 % 4.3 % 4.3 % 4.4 % 4.1 % 4.2 3.9 % % 2020-1H 2023 6,000
Slide 5: Taking Scandi Standard to the next level
Taking Scandi Standard Introduction to the next level Ramp up Build a winning our efficiency culture together – end-to-end 5
Slide 6: Leading position in five domestic markets
Leading position in Introduction five domestic markets 3 1 1 1 2 Note: Estimate based on retail sales per market
Slide 7: Strong Brands
Introduction Strong Brands Ramp up Build a winning our efficiency culture together – end-to-end 7
Slide 8: Product differentiation improves basis brand capitalisation
Product differentiation improves basis brand capitalisation Well established brands in all markets − High brand recognition − Consumers linking brands to domestic products Limited excess return on brands in the past Group sales (2022) Strong basis to increase value of brands − Rapid evolution toward
Slide 9: Reliance on preference for local produce
Reliance on preference Introduction for local produce • The Nordics and Ireland is not a low-cost environment • Consumers have a strong confidence in their local agriculture industries • Successful generic marketing and provenance labelling • Consumers responsive to superior domestic ESG performance
Slide 10: Domestic products require domestic footprints
Domestic products require Introduction domestic footprints Ready-to-cook plant Ready-to-eat plant Hatching Feed Oslo Local management Lieto Jaeren Shercock Stokke Stockholm Dublin Aars Valla Farre Vädersta Flyinge 10
Slide 11: Main Processing Plants
Introduction Main Processing 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
Slide 12: Anatomic parts of a chicken
Introduction Anatomic parts of a chicken Anatomic parts - Weight & Revenue 1% 100% 1% Other parts Rendering: Feathers - Blood 9% 6% Pet Food: Carcass – Bones 33% Human consumption: Heart, Liver, Gizzard, Feet, Back, Downgrades 23% 9% 9% 7% 20% Main parts 60% 21% Weight (%) Revenue (%) Other - Render
Slide 13: Optimising price - Require integrated skills and capabilities
Optimising price - Require integrated skills and capabilities Illustrative volume allocation • Fillets by far most valuable chicken part Fillets Legs • Generally large premium in domestic Wings markets Other % - Underlines the strong preference for local produce 0 10 20 30 40 50 60 70 80 90 100 Dome
Slide 14: Forward integration to structurally climb the value ladder
Forward integration to Secondary processing of chicken raw material Introduction structurally climb the value Independent, profitable business in its own right ladder Mix of external and internal sourcing on arms-length basis Tool to • Stimulate growth through convenience and versatility • Upgrade p
Slide 15: Expecting strong growth in consumption
Expecting strong Introduction growth in Poultry consumption Nordics & Ireland consumption +15% CAGR 1.8% Ktonnes 1,000 955 798 830 828 738 773 779 800 714 Strong poultry growth in the Nordics and 677 687 600 Ireland 400 − 36% poultry growth from 2010-2022 200 0 2014 2015 2016 2017 2018 2019 2020 202
Slide 16: Growth and value drivers
Growth and value Introduction drivers
Slide 17: Convenient, versatile & tasteful
Convenient, versatile & tasteful
Slide 18: Convenient, versatile and tasteful
Convenient, versatile Convenient, versatile and tasteful and tasteful Rapid product evolution driving growth and value − Convenience – Shorter preparation time − Versatility – Convenience allows inclusion in more dishes and meals Chicken has always been popular as core ingredient in a meal − Favoura
Slide 19: Convenience – Product categories
Convenient, versatile and tasteful Convenience – Product categories Low Convenience High 19
Slide 20: Chicken increasingly becoming a chilled category
Convenient, versatile and tasteful Chicken increasingly becoming a chilled category Dinner for four - Defrosting Shift from 50% to 80% fresh share Whole chicken (2.0 kg) Leg (1.2 kg) Long term trend expected to continue Wing (1.0 kg) Fillet (0.8 kg) − Currently some reversal from price sensitive cus
Slide 21: Consumption trending rapidly in direction of convenience
Consumption trending rapidly in direction of convenience Preparation time Whole chicken Fresh leg Fresh wing Frozen nuggets Fresh fillet Precooked legs Precooked wings Fresh deboned leg Ready-to-eat 0 20 40 60 80 100 Minutes Sales by product categories 100% 90% 80% 70% 44% 43% 44% 43% 41% 43% 60% 50
Slide 22: Convenience products increase the versatility
Convenient, versatile and tasteful Convenience products increase the versatility MEDIUM Convenience and Versatility HIGH 22
Slide 23: Shorter preparation time and increased relevance allow inclusion on more occasions
Shorter preparation time and increased Convenient, versatile and tasteful relevance allow inclusion on more occasions BREAKFAST LUNCH DINNER 23
Slide 24: Evolution supporting growth and product differentiation
Convenient, versatile and tasteful Evolution supporting growth and product differentiation • Chicken products have historically appeared as uniform − Packs of frozen or fresh fillets or legs − Good basis for price comparisons • Convenience products basis to de-commoditise • Movement from meal input
Slide 25: The Innovation Process
Convenient, versatile and tasteful The Innovation Process Trend watching Consumer Research Identify, acknowledge, understand Drivers and barriers Creating the future of chicken Understanding the consumer products require a solid drivers and barriers to our understanding of current and category is ke
Slide 26: Trigger for price and brand capitalisation
Convenient, versatile and tasteful Trigger for price and brand capitalisation 26
Slide 27: Category evolution strong basis to develop brands
Category evolution strong Convenient, versatile and tasteful basis to develop brands About 36% of Ready-to-cook products branded Important for retailers to drive chicken category − Seen to be driver for innovation − Supporting overall category growth incl. private label Group sales (2022) Well estab
Slide 28: Domestic markets – Retail and food service
Convenient, versatile and tasteful Domestic markets – Retail and food service Retail • Retail sales about 5x food service 8,000 7,000 6,000 - Largest provenance loyalty in retail 5,000 MSEK 4,000 3,000 2,000 • Positive dynamics between market channels 1,000 0 2018 2019 2020 2021 2022 Ready-to-cook R
Slide 29: Expecting ~1.8% annual growth in domestic consumption
Expecting ~1.8% annual Convenient, versatile and tasteful growth in domestic Consumption per capita (kg) consumption Ireland Finland Average Consumption increase from ~25.6 to ~27.8 per Denmark capita Sweden Norway 0 10 20 30 40 3% population growth (1.3m) by 2030 2022 2030E − Driven by immigration
Slide 30: Affordable because it´s sustainable
Affordable because it´s sustainable
Slide 31: Chicken is an affordable product
Affordable because it’s sustainable Chicken is an affordable product Relative pricing to consumer • Price has always been important for consumers 500 400 SEK per kg 300 • Chicken affordable across segments 200 100 0 • Fillets even competitive in lower segments Low end cut Average cut High end cut Ch
Slide 32: How come chicken is so affordable?
How come chicken is so Affordable because it’s sustainable affordable? Illustrative lifecycle - Protein peers Chicken 1.3 Short production cycle Pork 7 - Just over a month Cattle 20 Resources required correspondingly low Salmon 32 - Feed -60 -40 -20 0 20 40 Months - Emissions Gestation/hatching Age
Slide 33: High edible output per kg feed
High edible output per kg feed Affordable because it’s sustainable Economic feed conversion ratio Similar EFCR as salmon Chicken 1.50 - …but in 4% of the time Pork (1) 2.70 Cattle (1) 6.00 ~50% more edible meat per kg feed vs. pork Salmon 1.55 0 1 2 3 4 5 6 7 Edible meat per kg feed ~400% more edibl
Slide 34: Cost/kg delivered processing plant – Converted edible meat
Cost/kg delivered processing plant – Affordable because it’s sustainable Converted edible meat Chicken 22 Pork 34 Cattle 107 Salmon 70 0 20 40 60 80 100 120 SEK Sources: Scandi Standard, Swedish Board of Agriculture, Kontali 34 Note: Conversion rate from live weight to edible meat 0.59 assumed for C
Slide 35: Cost structure (Ready-to-cook)
Cost structure Affordable because it’s sustainable (Ready-to-cook) SEK per kg (Grill weight) 2020 2021 2022 2023E • Measuring cost based on grill weight Day old chick 2.6 2.7 2.9 3.2 • Almost 50% cost inflation last years Feed 7.2 7.9 10.7 10.8 Energy 0.4 0.5 0.7 0.5 Other farming costs 3.9 2.9 4.5
Slide 36: Cost cyclicality absorbed by dynamic pricing
Cost cyclicality absorbed by Affordable because it’s sustainable dynamic pricing ~80% of sales negotiated with relationship client - Typically, annually/bi-annual intervals Include picture Price changes typically incorporate cost changes - Feed cost - Other input costs Mechanics form low exposure to
Slide 37: Significant cost potential
Significant cost potential Affordable because it’s sustainable • Large cost variation between countries Country spread vs Group average • Structural differences 160% − Size and number of farms 150% 140% − Variation in ability to use bargaining power (e.g. 130% feed) 120% 110% − Political farming pol
Slide 38: Ready-to-cook – Illustrative EBIT sensitivities
Affordable because it’s sustainable Ready-to-cook – Illustrative EBIT sensitivities 2% general cost efficiency - MSEK ~80 2% efficiency in personnel costs - MSEK ~20 Reducing feed conversion ratio by 0.67%* (e.g. 1.50-1.49) - MSEK ~20 Note: Assuming cost changes are not transferred to price for dome
Slide 39: Broad trade and coordination with external parties
Affordable because it’s sustainable Broad trade and coordination with external parties Genetics / Parents Hatching Feed Growing Ready-to-cook Ready-to-eat Other Grandparent Contract farmers / Lantmännen / Svenska Farmfood JV / Aviagen Swehatch ~40 contract farmers Valla Valla/Farre Swehatch foder Th
Slide 40: Large reliance on third party
Sustainability and cost – Affordable because it’s sustainable Large reliance on third party Generally good cooperation and performance − However, large variation in ability to manage performance Reliance on third party − Improvements require joint effort in the value chain Costs Commercial discussio
Slide 41: Example: Reducing CO2 by changing feed composition
Affordable because it’s sustainable Example: Reducing CO2 by changing feed composition Feed composition and inclusion ranges Wheat Fats 4% (4-4%) 54% (40-63%) Grain by-products 3% (0-4%) 20% Protein Rape seed Nutritional 54% Carbohydrates Soy 3% composition of feed 7% Fat 22% (11-27%) Minerals, vita
Slide 42: Soy reduction & feed efficiency key to lower climate impact
Affordable because it’s sustainable Soy reduction & feed efficiency key to lower climate impact CO2 emissions per kg edible meat • Science Based Target to reduce CO2e emissions by 50% • 78% of emissions originate from feed Chicken 2.1 • Soy constitutes 22% of feed volume and 65% of feed- Pork 4.2 re
Slide 43: Key initiatives – climate and environment
Affordable because it’s sustainable Key initiatives – climate and environment Scandi Standard’s own operations Scandi Standard’s value chain Replacing natural gas with district heating Reducing the climate impact of the feed • Cooperation with local district heating company in Give will • Reducing t
Slide 44: Sustainability Goals 2030 – Resource Efficiency & Climate
Affordable because it’s sustainable Sustainability Goals 2030 – Resource Efficiency & Climate Goal Key Performance Indicators Target 2030 Integrated sustainability is a cornerstone in Scandi Standard’s strategy • • Critical complaints and recalls Quality & Food Safety Survey • • 0 Response rate >90%
Slide 45: Structured approach receiving recognition
Affordable because it’s sustainable 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 r
Slide 46: 2024 priorities – environment & climate
Affordable because it’s sustainable 2024 priorities – environment & climate Biodiversity Forest, Land & Human Rights & Climate ISO 14001 strategy Agriculture (FLAG) & Environmental Transition Plan Certification Net-zero target Due Dilligence Following the launch of the Our biodiversity strategy To f
Slide 47: Chicken Breeds
Affordable because it’s sustainable Chicken Breeds Ross 308 the most common breed in Europe and globally Economic feed conversion ratio − Developed to optimize overall performance. − High feed conversion, and high edible yield. Ranger Gold 1.81 Political and retail driven discussions of slower growi
Slide 48: Scandi Standard welcoming increased welfare focus
Scandi Standard welcoming Affordable because it’s sustainable increased welfare focus • Good husbandry and practices always main welfare determinant − Quality of day-old chicks, growing practices and transportation − To be further elaborated in the next section • Breed is one of eight key areas impa
Slide 49: Similar bird composition – Fillet to carry cost differential
Affordable because it’s sustainable Similar bird composition – Fillet to carry cost differential 100% Estimated bird cost delivered plant 90% 100% Ranger gold 80% 42% 41% 70% 100% Ross 308 60% 0 2 4 6 8 10 12 14 16 9% 10% SEK 50% 6% 7% Implied fillet price/kg (SEK) 40% 30% 20% 24% Ranger gold 20% 10
Slide 50: Lessons learned from radical implementation in Denmark
Affordable because it’s sustainable Lessons learned from radical implementation in Denmark 100% implementation of slow grow breeds − Ranger Gold and Rustic Gold Adj. EBIT Ready-to-cook Denmark 50 Large part of market unwilling to compensate 12 cost differential 0 -4 − Downgrading a significant parts
Slide 51: Environmental and affordable choice – Regardless of breed
Affordable because it’s sustainable Environmental and affordable choice – Regardless of breed CO2 emissions per kg edible meat Price relative to peers 450 Ross 308 400 350 Ranger Gold 300 250 Pork 200 150 Cattle 100 50 Salmon 0 Low end cut Average cut High end cut 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Ro
Slide 52: Responsible, safe and nutritious
Responsible, safe and nutritious 52
Slide 53: Meat and poultry value chains subject to high public attention
Meat and poultry value Responsible, safe and nutritious chains subject to high public attention High expectations to the meat we eat - Has it been produced in a responsible way? - Is it safe? - What does it do to our bodies? Large negative media attention when expectations are not met - Shortfall in
Slide 54: Ensuring welfare - Cornerstone in licence to operate
Ensuring welfare - Responsible, safe and nutritious Cornerstone in licence to operate utritious Responsible animal welfare ealth and wellbein - Rearing mortality Responsible of our consumers - Antibiotics use, foot pad scores and transport mortality - Primary data from growers elfare Safety for cons
Slide 55: Managing Animal Welfare Is Much More Than Breeds
Managing Animal Responsible, safe and nutritious Welfare Is Much More Than Breeds Breed one of eight main factors determining welfare − Breed forms basis for somewhat improved animal welfare − Other factors shown to be more important Key focus areas – irrespective of breed − Grower skills & commitme
Slide 56: Multiple benefits of optimizing animal welfare
Responsible, safe and nutritious Multiple benefits of optimizing animal welfare Lower feed conversion ratio and lower mortality Reduced requirement to use antibiotics Low variation in bird weights − Pricin and “ ive-away” benefits − Lower processing costs and higher yields Stable meat/product qualit
Slide 57: We have good regional practices
We have good regional Responsible, safe and nutritious practices Illustrative mortality during growing Chicken has a relatively low mortality Best practice 3 % − Short lifecycle in protected, standardized, yet highly populated, environment Chicken 3.7 Nordic region in the forefront on welfare Pigs (
Slide 58: We have a lot to be proud about
We have a lot to be proud about Responsible, safe and nutritious Foot pad score Foot pad score (key animal welfare indicator) Normal Best practice − Quality of feet measured at processing plants 10-year target Europe (excl. Nordics) Europe level 40-60 (excl. Nordics) − Low score sign of good animal
Slide 59: …and have proven ability to export welfare practices
…and have proven ability to Responsible, safe and nutritious export welfare practices % of flocks treated, antibiotics - Nordic Resistance to antibiotics form danger to mankind Average European level 40-60% 2017 0.2 − Preventive use common in European meat industry 2018 0.0 2019 0.1 − Stimulates gro
Slide 60: Food safety – Strong performance mirroring practices
Food safety – Strong Responsible, safe and nutritious performance mirroring practices % Salmonella 20,0 European level High Very low occurrence of harmful bacteria 1,5 - Reflecting zero tolerance culture and good practices 1,0 European level low 0,5 0,3% - No reason to lift the guard 0,1% 0,2% 0,2%
Slide 61: Still undesired deviations occur
Responsible, safe and nutritious Still undesired deviations occur Scandi Standard has a complex and long value Regular performance audits of external part of value chain chain − Together with monitoring by government bodies − Large number of external parties Requirement for improvements in culture;
Slide 62: Ensuring a safe workplace with good working environment
Responsible, safe and nutritious Ensuring a safe workplace with good working environment A chicken processing plant is a risky Lost time incidents (LTI) workplace Target 2030 Target 2023 - Higher frequency, but less serious injuries compared to heavy industry 2019 38.0 - High attention on securing a
Slide 63: Nutritious – broadly recommended vs. other meats
Nutritious – broadly Responsible, safe and nutritious recommended vs. other meats Protein per 100g portion Chicken Primary nutrition in meat Pork − Energising nutrient (protein and fat) Beef − Vitamins Salmon % 0 5 10 15 20 25 30 Protein level similar across proteins Fat per 100g portion Chicken sta
Slide 64: 2030 targets – Responsible, safe and nutritious
Responsible, safe and nutritious 2030 targets – Responsible, safe and nutritious Goal Key Performance Indicators Target 2030 Integrated sustainability is a cornerstone in Scandi Standard’s strategy • • Critical complaints and recalls Quality & Food Safety Survey • • 0 Response rate >90%, Providing l
Slide 65: Responsible, safe and nutritious – Summary
Responsible, safe and nutritious Responsible, safe and nutritious – Summary Proud of being in the forefront in key areas utritious Methodology of continual improvement Responsible ealth and wellbein of our consumers − Meeting standards also lowers costs elfare Consumers expect domestic best practice
Slide 66: Climbing the value ladder
Climbing the value ladder A” * Scandi 66 6S Standard
Slide 67: Selling chicken is about value creation – climbing the value ladder…
Climbing the value ladder Selling chicken is about value creation – climbing the value ladder… • A full chicken is purchased • Our job is to take it apart and sell the pieces • Each part has an optimal commercial value • Value creation delivered through better fit with consumer and customer demands
Slide 68: Anatomic parts of a chicken
Climbing the value ladder Anatomic parts of a chicken Anatomic parts - Weight & Revenue Other parts Rendering: Feathers - Blood 1% 100% 1% 9% Pet Food: Carcass – Bones 6% 33% Human consumption: Heart – Liver – Gizzard - Feet - Back 23% 9% 9% 7% +89% Main parts 20% 60% +49% 21% Weight (%) Revenue (%)
Slide 69: Sales allocation by markets channels
Sales allocation by markets channels Illustrative volume allocation Fillets most valuable chicken part Fillets Legs Large premium in domestic markets Wings Other − Underlines the strong preference for local produce % 0 10 20 30 40 50 60 70 80 90 100 Domestic Strategic Export Commodity Ready-to-eat O
Slide 70: ~80% of net sales largely detached from global commodity pricing
Climbing the value ladder ~80% of net sales largely detached from global commodity pricing Commodity exposure Other, 10% High commodity exposure Medium commodity exposure Commodity export, 5% Low commodity exposure Ready-to-eat - raw material, 4% Strategic export, 2% Domestic food service / industry
Slide 71: Manage supply of birds to domestic demand for fresh fillets
Manage supply of birds to Climbing the value ladder domestic demand for fresh fillets Domestic supply Domestic of birds fillet demand Price Total cost per kg other parts Price other parts Domestic fresh fillet Commodity price export fillet price Fillets to domestic and Fillets to commodity markets s
Slide 72: Supply to match domestic fillet demand - Exception
Climbing the value ladder Supply to match domestic fillet demand - Exception Market balance by market Good market balance in Sweden, Norway, Finland and Ireland 300 250 - Highly consolidated industry 200 - Capacity dimensioned and expanded based on Ktonnes domestic demand 150 - Strong preference for
Slide 73: Sales organized to secure optimal price achievement
Climbing the value ladder Sales organized to secure optimal price achievement Strong commercial teams in each country − Commercial backbone Sales and operations planning systems being improved − Aimed at managing throughput to meet domestic fillet demand − Identification of strategic export opportun
Slide 74: High agility to adapt to market changes
Climbing the value ladder High agility to adapt to market changes Ability to match domestic fillet demand is a key KPI Illustrative lifecycle - Protein peers Chicken 1.3 Performance challenged by demand variation Pork 7 Chicken offer high supply flexibility compared to peers Cattle 20 − Short produc
Slide 75: Deboning of legs - Powerful way of climbing the ladder
Climbing the value ladder Deboning of legs - Powerful way of climbing the ladder Preparation time Whole chicken Fresh leg Example – The Ultimate Leg Deboner Fresh wing Frozen nuggets − X-ray measuring system to precisely measure each leg Fresh fillet − Automatic adjustment for each leg, speed of 6,0
Slide 76: Sales value ladder – illustrative EBIT sensitivities
Climbing the value ladder Sales value ladder – illustrative EBIT sensitivities • 10% increase share of legs being deboned ~ 100mSEK • 10% switch from Commodity exports to strategic exports ~ 10 mSEK • 10% change in commodity export price - MSEK ~40 76 Note: Ready-to-cook revenue
Slide 77: Forward integration to structurally climb the value ladder
Forward integration to Climbing the value ladder Secondary processing of chicken raw structurally climb the value material Independent, profitable business in ladder its own right Mix of external and internal sourcing on arms-length basis Tool to • Stimulate growth through convenience and versatilit
Slide 78: Ready-to-eat – Main product categories
Ready-to-eat – Main product categories Products for direct Breaded products Pre-cooked parts consumption 78
Slide 79: Ready-to-eat sites
Ready-to-eat sites Climbing the value ladder Farre Stokke Valla • International sales • Domestic sales • Domestic sales • Breaded products • Cooked and fried ready to • Cooked and fried ready to • 57,000 tonnes p.a. product eat products eat products weight • 4,000 tonnes p.a. • 3,000 tonnes p.a. • 5
Slide 80: Ready-to-eat – Strong, fluctuating growth expected to continue
Climbing the value ladder Ready-to-eat – Strong, fluctuating growth expected to continue Two main types of business Ready-to-eat - Net sales (MSEK) − Integrated, local businesses in Sweden and Norway 3 500 − Breaded processing in Denmark (scaling sales across Europe) 3 000 6x organic growth in 7 yea
Slide 81: Ready-to-eat – Temporary reduced activity level
Climbing the value ladder Ready-to-eat – Temporary reduced activity level Ready-to-eat - Net sales Loss of breaded contract to Continental Europe 3,500 3,000 − High volume, low margin business phased out 1/7 and 2,500 1/10 2,000 1,500 EBIT likely to bottom out in Q4 2023 1,000 500 − Somewhat below Q
Slide 82: Forward integration to structurally climb the value ladder
Forward integration to Climbing the value ladder Secondary processing of chicken raw structurally climb the value material Independent, profitable business in ladder its own right Mix of external and internal sourcing on arms-length basis Ready-to-eat Tool to (RTE) • Stimulate growth through conveni
Slide 83: Ingredients– Commercial utilisation of the whole animal
Ingredients– Commercial Climbing the value ladder utilisation of the whole Ingredients breakdown animal 100% 10% 90% Ingredients parts 51% of a conventional bird’s live 9% 80% weight - ~5% of combined Ready-to-cook and Ingredients net 70% 65% sales (2022) 60% 50% Low current utilization of high valu
Slide 84: Ingredients – Initiatives to utilise larger part of the potential
Ingredients – Initiatives to Other - Net sales Climbing the value ladder utilise larger part of the 700 potential 600 500 400 Extraction 300 − Further improve quality of input (ref. footpad score) 200 100 − Secure required logistics, priority on high value parts 0 2019 2020 2021 2022 LTM Q3 2022 Q3
Slide 85: Ingredients - 1/3 ownership in Farmfood AS
Ingredients - 1/3 ownership Climbing the value ladder in Farmfood AS • Securing full commercial utilization of harvested birds • Owned equally by Scandi Standard, BHJ A/S and HKScan • Largest chicken-based rendering plant in Scandinavia • >150.000 kt raw materials annually • Raw material sourcing fr
Slide 86: Plenty of room for value creation
Climbing the value ladder Plenty of room for value creation Allocation to highest paying Forward integration Enhanced RTC processing market/channel capabilities Sales and operations Product development and Customer relationship planning branding management 86
Slide 87: Objectives & investment priorities
Objectives & investment priorities 87
Slide 88: A better, more structured Scandi Standard is ramping up investments for the future
Objectives and investment priorities A better, more structured Scandi Standard is ramping up investments for the future Net Sales and EBIT margin 2016 - 2019 14,000 +8.2 % CAGR 8% 12,119 12,000 9,891 9,940 10,101 − High organic growth 10,000 7,544 8,207 8,707 4.1 % 4.3 % 4.3 % 4.4 % 4.1 % 4.2 6% 8,0
Slide 89: Strong volume growth expected in our region
Objectives and investment priorities Strong volume growth expected in our region Poultry consumption Nordics & Ireland +15% CAGR 1.8% Chicken consumption has grown significantly Ktonnes 955 at the expense of other proteins 1,000 773 798 779 830 828 800 714 738 677 687 600 400 Rabobank expects about
Slide 90: Financial Targets & Strategy
Objectives and investment priorities Financial Targets & Strategy 90
Slide 91: Scandi Standard to be proud of, trusted by everyone, where people can develop
Objectives and investment priorities Scandi Standard to be proud of, trusted by everyone, where people can develop 5-7% Organic Net >6 >15 sales We want to be the leading provider of high-quality and % EBIT ROCE % growth p.a. sustainable chicken, setting the industry standard for excellence in anima
Slide 92: Policy for dividend and leverage ratio unchanged
Objectives and investment priorities Policy for dividend and leverage ratio unchanged • Dividend policy: Around 60% of net income • Leverage ratio: <2.5x EBITDA 92
Slide 93: Strategic pillars to achieve our goals
Objectives and investment priorities Strategic pillars to achieve our goals Ramp up Build a winning our efficiency culture together – end-to-end 93
Slide 94: Increase value and efficiency
Increase value and efficiency Objectives and investment priorities Increasing the value of our protein Ramp up our efficiency and quality end-to-end • Improving utilization of the entire bird • Upholding efficiency without ever compromising • Drive growth in our ready to eat business safety, quality
Slide 95: Integrated sustainability and better together
Integrated sustainability and better Objectives and investment priorities together Integrated sustainability Better together • Target setting, standardisation and management • Develop with us in a safe and healthy workplace • Local roadmaps with sustainability as part of all day- • Tar ets and KPI’s
Slide 96: Clear roadmap to > 3 SEK EBIT/kg target
Clear roadmap to > 3 SEK Objectives and investment priorities EBIT/kg target SEK per kg “Grill weight” Climb the value ladder SEK/kg >3.00 3.0 − Balance supply to domestic fillet demand − Value creation through increased consumer convenience 2.5 71% − Differentiation and branding opportunities − Uti
Slide 97: ~2 bn investment programme
~2 bn investment programme 2023-2027 Capacity –Ready-to-cook (Grill weight) • Facilitating ~2% p.a. increase in Ready-to-cook Ktonnes +12% throughput and increased headroom 300 250 − Aligned with anticipated market growth 200 150 • Supporting ramp-up of Ingredients performance 100 50 • Preparing for
Slide 98: Evolution of our risk management framework, designed to protect our business goals
Objectives and investment priorities Evolution of our risk management framework, designed to protect our business goals Steady risk structures, integrated with Enterprise Risk Management Framework business strategy and ongoing Infrastructure Business strategy management: • Corporate • Long term Mana
Slide 99: Building a competence organization and a safe and healthy workplace
Objectives and investment priorities Building a competence organization and a safe and healthy workplace Group CEO/COO CEO SE and NO CEO DK Group CFO Group CIO Group Group Live Group HR Director Jonas Tunestål Fredrik Strömmen Kasper Lenbroch Fredrik Sylwan Göran Matz Communications Operations Direc
Slide 100: Q&A
5-7% Organic Net >6 >15 sales % EBIT ROCE % Q&A growth p.a. -50% CO2e <1% Antibiotics emissions use Employee LTIFR satisfaction <15 >75
Slide 101: Appendix
Appendix A (5 * Scandi Standard 101
Slide 102: Seasonal dynamics and commodity exposure (RTC)
Seasonal dynamics and Appendix commodity exposure (RTC) Net sales- 2019-2022 26.0% Seasonal dynamics 25.5% − High season in Q3 – Barbeque season 25.0% − Low season Q4 – Traditional food in December 24.5% (pork/fish) 24.0% − Variation in Q1/Q2 based on timing of Easter 23.5% vacation 23.0% Q1 Q2 Q3 Q
Slide 103: Dimensions of the value ladder
Dimensions of the value ladder Appendix Skill area Objective Example Indication of status Use flexibility in value chain to Manage number of birds to meet adapt supply of birds to the Sales and operations planning demand for the highest priced demand for highest priced parts anatomic parts (normally
Slide 104: EBIT/kg building blocks
EBIT/kg building blocks Appendix Management supported by systems and investments Ready-to-cook Ready-to-eat Other Systems Convenient, versatile & tasteful: Drive demand, product differentiation and brand value Affordable because it’s sustainable: Realising ambitious sustainability goals through the
Slide 105: Useful links and conversions
Appendix 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 ~0.4 105
Slide 106: Chicken feed composition and substitutes
Appendix 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
Slide 107: Price segments
Price segments Appendix 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) 107
Slide 108: The Innovation Process
The Innovation Process Appendix 108
Slide 109: ~2 bn investment programme
~2 bn investment programme Objectives and investment priorities 2024-2027 Investment estimates • We are building a robust vehicle to serve our MSEK 1.3x Depreciation home markets and beyond while utilizing the 2,200 2,001 whole bird with increasing margins 2,000 217 1,800 • Total investments ~130% o
Slide 110: Historic financials
Appendix Historic financials Other, MSEK 2019 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Net sales 381 411 88 85 102 103 377 104 109 135 149 496 146 142 143 Adjusted EBITDA 18 11 -1 0 5 11 15 10 19 23 26 79 24 25 12 Depreciations -7 -4 0 -1
Slide 111: Historic financials
Appendix Historic financials Ready-to-cook, MSEK 2019 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Net sales 7,467 7,619 1,938 1,943 1,942 1,789 7,611 2,046 2,199 2,265 2,164 8,674 2,373 2,495 2,431 Adjusted EBITDA 621 622 147 142 88 47 424 8
Slide 112: Historic financials
Appendix Historic financials TOTAL, MSEK 2019 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Net sales 9,891 9,940 2,469 2,564 2,632 2,435 10,101 2,793 3,056 3,202 3,069 12,119 3,284 3,411 3,308 Adjusted EBITDA 753 756 180 171 139 98 589 136 17