Slide 1: Scandi Standard Q2 2018 Presentation
Scandi Standard (SCST SS) Revenue by category Q2 2018 Presentation – 22 August 2018 Chilled 59% Frozen 20% Ready to eat 17% Other 5% Revenue by channel Retail 71% Food service 14% Export 8% Industry 3% Other 4% Revenues per country Sweden 27% Denmark 28% Norway 17% Ireland 22% Finland 5%
Slide 2: 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
Slide 3: Highlights Q2 2018
Highlights Q2 2018 MSEK Q2 2018 Q2 2017 LTM 2017 • 10% growth in revenues (proforma) Net sales 2,252 1,622 8,253 7,101 - 5% growth in local currency Adj. EBITDA 159 124 629 559 Adj. EBITA 103 76 412 357 - All geographic segments contributed Adj. EBIT 90 70 370 329 Proforma net sales 2,252 2,048 8,51
Slide 4: Quarterly development - Group (proforma)
Quarterly development - Group (proforma) • Higher volume and prices, increased costs • Volume - Strong volume increase across the group • Price/mix - Adverse price/mix mainly in Sweden and Denmark - Partially offset by Ireland and Finland • COGS - Raw material cost increases offset by efficiency gai
Slide 5: Product categories and sales channels (pro forma)
Product categories and sales channels (pro forma) Ingredients Other 2% (+41%) Ready-to-eat 3% • Sales mix changing towards higher value categories 17% (+16%) - Strong growth in chilled category - Volume growth in all countries - Improved value per bird primarily in Ireland and Finland 59% (+4%) 20%
Slide 6: Sweden – Market recovery, still impacted by stock clearance
Sweden – Market recovery, still impacted by stock clearance MSEK Q2 2018 Q2 2017 LTM 2017 • 4% increase in net sales Total revenue 661 637 2,583 2,557 - Some improvements in market demand Adj. EBITDA 47 53 217 228 Depreciation -18 -19 -74 -76 Adj. EBITA 29 34 143 152 • Sale from frozen inventory at
Slide 7: Denmark – Strong focus on differentiation and expansion project
Denmark – Strong focus on differentiation and expansion project MSEK Q2 2018 Q2 2017 LTM 2017 • 10% revenue growth (4% in local currency) Total revenue 688 625 2,647 2,529 Adj. EBITDA 36 46 172 182 - Driven by Retail and Ready to Eat as in Q1 2018 Depreciation -13 -17 -59 -64 Adj. EBITA 23 29 116 12
Slide 8: Norway – Strong performance
Norway – Strong performance MSEK Q2 2018 Q2 2017 LTM 2017 • 5% revenue increase and strong margin Total revenue 393 374 1,476 1,483 Adj. EBITDA 47 43 164 160 - 1% in local currency Depreciation -10 -9 -40 -38 Adj. EBITA 37 34 124 122 - Q2 seasonally the strongest quarter Amortisation -4 -4 -16 -16 A
Slide 9: Ireland – Strong performance, integration according to plan
Ireland – Strong performance, integration according to plan MSEK Q2 2018 Q2 2017 LTM 2017 • 17% revenue growth (9% in local currency) Total revenue 499 426 1,817 1,702 Adj. EBITDA 42 34 139 127 - Strong domestic market Depreciation -8 -7 -27 -25 Adj. EBITA 34 28 112 102 - Strengthened market positio
Slide 10: Finland – Further improvement - Cash generative
Finland – Further improvement - Cash generative MSEK Q2 2018 Q2 2017 LTM 2017 • 31% revenue growth (14% in local currency) Total revenue 114 87 392 329 - 7% growth compared to Q1 2018 Adj. EBITDA 2 -6 -10 -27 Depreciation -6 -3 -20 -16 Adj. EBITA -4 -9 -31 -43 • Another step towards break even Amort
Slide 11: Income statement
Income statement • Depreciation and amortisation Group Q2 2018 Q2 2017 LTM 2017 Net sales 2,252 1,622 8,253 7,101 - Increase in depreciation and Adj. EBITDA 159 124 629 559 amortisation mainly due to Manor Farm Depreciation -56 -48 -217 -202 acquisition Adj. EBITA 103 76 412 357 Amortisation -13 -6
Slide 12: Statement of financial position
Statement of financial position Adjusted return on capital employed ROCE % Average Capital Employed, BSEK • Improved adjusted ROCE, both vs. Q2 14 1 2,8 1 1 ,4 3,5 2017 and FY 2017 12 1 0,3 11,1 9,3 3,0 10 2,5 8 2,0 • Improved ROE, both vs. Q2 2017 and 6 3,0 3,3 1,5 FY 2017 4 2,4 2,5 2,6 1,0 2 0,5 •
Slide 13: Working capital
Working capital Net working capital • Strong Q2 working capital release MSEK 30-Jun-18 30-Jun-17 31-Dec-17 - Cash flow of MSEK 72 Inventory 737 680 721 Trade and other receivables 1,190 634 1,146 - All countries contributed Trade and other payables -1,288 -858 -1,211 Book working capital 639 456 656
Slide 14: Cash flow
Cash flow MSEK Q2 2018 Q2 2017 2017 Opening balance NIBD -1,939 -1,521 -1,515 • MSEK 100m quarterly NIBD increase EBITDA 136 116 559 Change in working capital 72 -69 -147 • MSEK 72m working capital release Capital expenditure -138 -52 -199 Operating cashflow 70 -5 213 • MSEK 138m capex Paid financia
Slide 15: Cash flow guidance and dividend
Cash flow guidance Dividend 2.00 3.5% 1.80 3.0% DPS/Average shareprice • Dividend policy 1.60 1.40 2.5% 1.20 - 60% of net income over time 2.0% SEK 1.00 0.80 1.5% • 2018 cash flow estimates (1) 0.60 0.40 1.0% 0.5% - Capital expenditures SEK 350m (~145% of depreciation) 0.20 0.00 0.0% 2015 2016 2017
Slide 16: Strong focus on feed conversion ratio
• Strong focus on feed conversion ratio • 0.01 improvement implies • 100 truckloads less feed
Slide 17: Q2 2018 Summary and Outlook
Q2 2018 Summary and Outlook • Very strong performance in Norway and Ireland - Both segment demonstrate combination of strong market position and improved processing efficiency • Improvements continuing in Finland - Confident of stepwise path towards break even • Promising market recovery in Sweden,
Slide 18: Appendix I
Appendix I Segments, pro-foma figures and non- comparable items 18
Slide 19: Segment information by quarter
Segment information by quarter Group (MSEK) Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Sales 1,303 1,359 1,252 1,310 1,341 1,396 1,376 1,386 1,504 1,570 1,508 1,594 1,622 1,825 2,061 2,116 2,252 Sales growth
Slide 20: Pro-forma figures by quarter (Scandi Standard excl. Ireland)
Pro-forma figures by quarter (Scandi Standard excl. Ireland) Historic accounts (MSEK) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 (excl IE) (excl IE) (excl IE) (excl IE) Net Sales 1,386 1,504 1,570 1,508 1,594 1,622 1,659 1,630 1,652 1,753 Adj. EBITDA 115 123 125 89 113 124 127 150 1
Slide 21: Pro-forma figures by quarter (Ireland only)
Pro-forma figures by quarter (Ireland only) Ireland (MSEK) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Net Sales 373 392 387 425 423 426 423 431 464 499 Adj. EBITDA 27 33 36 22 29 34 33 30 34 42 Depreciation -5 -7 -6 -7 -6 -7 -6 -6 -7 -8 EBITA 22 26 30 16 23 28 27 24 27 34 Amortisati
Slide 22: Pro-forma figures by quarter (Scandi Standard incl. Ireland)
Pro-forma figures by quarter (Scandi Standard incl. Ireland) Proforma (MSEK) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Net Sales 1,759 1,895 1,957 1,932 2,016 2,048 2,082 2,061 2,116 2,252 Adj. EBITDA 142 157 160 111 142 158 160 181 148 159 Depreciation -48 -51 -50 -56 -55 -55 -54
Slide 23: Non-recurring items
Non-recurring items Non-comparable items Q2 2018 Q2 2017 LTM 2017 Staff reduction costs -1 - -2 -1 Restructuring of production -22 - -41 -19 Costs related to fire in Södam - - -4 -4 Transcation costs - -8 -16 -25 Revaluation of contingent consideration - - 30 30 Cancelation of leasing contract - - -
Slide 24: Appendix II
Appendix II Manor Farm earn-out mechanism Other 24
Slide 25: Earn-out mechanism
Earn-out mechanism • The first earn-out tranche of EUR 0.4 million will be EUR million EBITDA Earn out payment paid if 2017 EBITDA exceeds EUR 13 million 1 0.1 3 0.6 • The three later earn-out tranches 5 1.5 7 2.7 - Nominal aggregate base amount of EUR 25 million 9 4.2 - Subject to adjustment based
Slide 26: Matrix explaining segment definitions
Matrix explaining segment definitions Product Category split Ready-to-Cook Ready-to-Eat Other Cooked chicken Wide product range, including whole chicken, cuts, marinated, sold both Mainly Chilled steaks, skewers, organic, free-range, etc. chilled and eggs and frozen, e.g. ingredie nuggets, sallad nt