Hkfoods Oyj Class A · OMXHEX:HKFOODS
Hkfoods Oyj Class A — HKScan — Q1 2021 Earnings Presentation
37 slides from Hkfoods Oyj Class A's earnings presentation, May 6, 2021
Slide 1: Interim Report Q1 2021
Interim Report Q1 2021 Tero Hemmilä, CEO Jyrki Paappa, CFO 6 May 2021
Slide 2: Profit improvement continued for 10 consecutive quarters
Profit improvement continued for 10 consecutive quarters • Comparable EBIT has improved for 10 consecutive quarters year on year • Good start of the year, the market Net sales Comparable EBIT situation clearly more difficult than expected due to the pandemic and 427.5 M€ -1.1 M€ animal diseases Chan
Slide 3: Turnaround programme is proceeding as planned
Turnaround programme is proceeding as planned 2019 2020 Q1/2021 EBIT + 44 M€ + 63 M€ + 66 M€ CASH FLOW + 74 M€ + 78 M€ + 88 M€ EBIT = Cumulative improvement of comparable quarterly EBIT from 2018 Cash flow = Cumulative improvement of cash flow from operating activities from 2018 Interim report Q1/20
Slide 4: A significant investment for Rauma and long-term financing for the company
A significant investment for Rauma and long-term financing for the company • 6 M€ investment launched to improve the production process of Rauma poultry unit - The investment allows us to focus on taking advantage of the market potential of poultry products • The extension of financing and expansion
Slide 5: Covid-19 pandemic slowed down the profit improvement
Covid-19 pandemic slowed down the profit improvement • More than a year in exceptional circumstances without significant disruptions to operations • Q1/2021 the pandemic situation difficult in the home markets • The focus is to protect the health and safety of personnel and to ensure customer satisf
Slide 6: Net sales Q1/2021: Continued sales growth for the brands
Net sales Q1/2021: Continued sales growth for the brands • Strong growth continued in retail sales 440,0 Net sales, M€ of the branded products - Clear sales increase in meat products 430,0 428.9 427.5 and meal components • Food service sales decreased 420,0 significantly due to the pandemic - The de
Slide 7: Quarterly net sales 2018–2021, M€
Quarterly net sales 2018–2021, M€ 480 473 464 460 455 439 439 441 438 440 434 429 428 420 416 411 402 400 380 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 360 2018 2019 2020 2021 Interim report Q1/2021 7
Slide 8: Comparable EBIT Q1/2021: Best in six years
Comparable EBIT Q1/2021: Best in six years EBIT, M€ • Turnaround programme progressed commercially and operationally • Finland and Sweden clear profit improvers • In Denmark, the strategy to increase +2.8 M€ added value progressed, but still continuing avian flu restricted exports throughout the ind
Slide 9: Quarterly comparable EBIT 2018–2021, M€
Quarterly comparable EBIT 2018–2021, M€ 15 12 10 8 6 5 5 1 0 -5 -2 -2 -1 -4 -10 -10 -10 -15 -17 -20 -18 -25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2020 2021 Interim report Q1/2021 9
Slide 10: Comparable EBIT rolling 12 months, M€
Comparable EBIT rolling 12 months, M€ Interim report Q1/2021 10
Slide 11: Q1/2021 net sales breakdown
Q1/2021 net sales breakdown Markets Sales channels Categories 5% 3% 5% 11% 13% 9% 10% 37% 42% 24% 77% 38% 26% Finland Retail Beef and pork Food service Charcuterie, sausages and bacons Sweden, incl. Poland Industry Baltics Poultry Export Denmark Meals and meal components Other Interim report Q1/2021
Slide 12: Positive cash flow
HKScan 2020 – Positive cash flow Cash flow from operating activities, EUR million • Working capital tied up less than before • Growth in seasonal inventories clearly lower than before compared +10.6 M€ to the comparison period 3.3 • Accounts payable increased slightly from the turn of the year while
Slide 13: Outlook 2021
Outlook 2021 HKScan estimates that the Group’s comparable EBIT in 2021 will improve compared to 2020. Interim report Q1/2021 13
Slide 14: HKScan – key figures
HKScan – key figures (EUR million) 1-3/2021 1-3/2020 2020 Net sales 427.5 428.9 1 781.0 EBITDA 14.7 12.7 78.1 EBIT -1.1 -3.9 21.3 - EBIT margin, % -0.3 -0.9 1.2 Comparable EBIT -1.1 -3.9 17.0 - EBIT margin, % -0.3 -0.9 1.0 Profit for the period -6.2 -6.9 4.8 EPS, EUR -0.07 -0.08 -0.01 Comparable EPS
Slide 15: HKScan – key figures
HKScan – key figures (EUR million) 1-3/2021 1-3/2020 2020 Cash flow from operating activities 3.3 -7.3 63.7 Cash flow after investing activities 69.6* -18.6 -21.4** Return on capital employed (ROCE) before taxes, % 4.3 -1.4 3.9 Interest-bearing net debt 308.0*** 298.0 299.6 Net gearing, % 95.6 96.8
Slide 16: Finland Q1/2021: Sales growth in branded products
Finland Q1/2021: Sales growth in branded products Net sales, M€ EBIT, M€ +3.0 M€ • The net sales increased in products with more added value such as meal components, meat products and meals • Food service sales were significantly down from the comparison period due to the pandemic • EBIT was improve
Slide 17: Our product range developing in line with the strategy
Our product range developing in line with the strategy Interim report Q1/2021 17
Slide 18: Sweden Q1/2021: Clear growth in retail sales
Sweden Q1/2021: Clear growth in retail sales Net sales, M€ EBIT, M€ +5.5% +0.9 M€ • Net sales were at the comparison period level in local currency • Retail sales of products sold under the Scan brand increased clearly • Food service sales decreased clearly due to the pandemic • EBIT strenghtened by
Slide 19: Our product range developing in line with the strategy
Our product range developing in line with the strategy Interim report Q1/2021 19
Slide 20: Baltics Q1/2021: Branded products held their position in a challenging market
Baltics Q1/2021: Branded products held their position in a challenging market situation Net sales, M€ EBIT, M€ excluding change of biological asset revaluation -1.2 M€ • Net sales decrease resulted from the low market price of pork, especially in industrial sales and food service • EBIT was weakened
Slide 21: Our product range developing in line with the strategy
Our product range developing in line with the strategy Interim report Q1/2021 21
Slide 22: Denmark Q1/2021: Sales growth in value-added products
Denmark Q1/2021: Sales growth in value-added products Net sales, M€ EBIT, M€ -0.6 M€ • Continued industry-wide restrictions on exports to non-EU countries due to the cases of avian flu detected in Denmark • Shift to fresh and cooked poultry products in line with the strategy progressed • Clear incre
Slide 23: Our product range developing in line with the strategy
Our product range developing in line with the strategy Interim report Q1/2021 23
Slide 24: Investments accelerating efficiency and strategy implementation
Investments accelerating efficiency and strategy implementation Group investments, 12 EUR million • Q1/2021 realised investments focused on 9.9 the strategic investments in the poultry 10 business in Finland and Denmark 1.6 7.9 • In Finland, the Rauma poultry unit’s 8 0.6 * investment in the beginni
Slide 25: Interest-bearing net debt and net gearing
Interest-bearing net debt and net gearing 365 309 315 323 308 305 298 300 276 120% 88% 90% 85% 97% * 101% 103% 91% * ** 96% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Interest-bearing net debt (EUR million) Net gearing (%) * Q2/2020 includes the investment to the plot of the Vantaa unit E
Slide 26: Debt profile and maturity structure as of 31 March 2021
Debt profile and maturity structure as of 31 March 2021 Maturity of the Group’s interest-bearing debt*, Interest-bearing debt by credit type, EUR million EUR million* 160 77.6 120 80 128.3 40 19.9 7.5 0 2021 2022 2023 >2023 Total interest-bearing debt without IFRS 16: Bonds Pension loans ECA loans E
Slide 27: Food that does good - because we care
Food that does good - because we care Interim report Q1/2021 27
Slide 28: Interim report Q1/21
HASCAN Feed thet dees geod - because we care
Slide 29: People: corporate responsibility work results
People: corporate responsibility work results Lost time accidents decreased for the third year in a row now 22.4 (23.3) / million working hours* Next Generation training programme • Development plans drawn up based ensures the continuity on the personnel survey 44 (38) %** of local meat • Absences 6
Slide 30: Interim report Q1/21
HASCAN NATURE Feed thet dees geod - because we care Nutrient loag NATURE
Slide 31: Nature: corporate responsibility work results
Nature: corporate responsibility work results We started climate -57% climate emissions from own production 2020 trainings target: carbon neutrality 2025 for farmers 100% renewable electricity We optimise We’ll set Science Based Targets the use of nutrients for climate actions and examine carbon Wat
Slide 32: Interim report Q1/21
HASCAN NATURE Feed thet dees geod - because we care Nutrient loag %e 8, “ONsig, - PROS
Slide 33: Responsible prosperity: results
Responsible prosperity: results TURNAROUND PROGRAMME Q1/2021: BEST FIRST QUARTER RESULT 2019 - Q1/2021 IN SIX YEARS cumulative improvement of +66 M€ comparable EBIT Net sales Comparable EBIT +88 M€ cash flow from operations cumulative improvement of 427.5 M€ -1.1 M€ Change +2.8 M€ ECONOMIC VALUE FOR
Slide 34: Food company for the future
Food company PEOPLE for the future • varied and healthy food RESPONSIBLE PROSPERITY • thriving farmer community • profitable business • employee wellbeing • responsible ownership • safe work environment • prosperous society NATURE • carbon-neutral food chain 2040 • natural water resources • environm
Slide 35: We support the world’s largest responsibility initiative
We support the world’s largest responsibility initiative We are committed to We promote the UN Sustainable the UN Global Compact Development Goals Interim report Q1/2021 35
Slide 36: HKScan is a Nasdaq ESG partner
HKScan is a Nasdaq ESG partner HKScan was certified as a Nasdaq ESG Transparency Partner in recognition of its • transparent corporate responsibility reporting • commitment to ambitious environmental goals Interim report Q1/2021 36
Slide 37: HASCAN
HASCAN