A year with strong growth and improved results
· Net sales increased by 12 percent to MSEK 2,420 (2,166) in the fourth quarter 2019. Net sales increased in all segments.
· Adjusted operating income[2)] was stable at MSEK 104 (104), corresponding to a margin of 4.3 (4.8) percent.
· Income for the period decreased to MSEK 42 (74). Earnings per share decreased to
· Operating cash flow was MSEK 321 (230). The improvement is referring to an improvement in working capital.
· Net interest-bearing debt decreased by MSEK 335 from
· The Board of Directors proposes a dividend of
· 2019 is the first accounting year for which IFRS 16 Leases is applied. The change is treated as a change in accounting principles and the comparison numbers have been adjusted. For further information, see Note 1 and the
[][][][][][][][]
MSEK Q4 2019 Q4 2018 [1)] Change 2019 2018 [1)] Change
Net sales 2,420 2,166 12% 9,891 8,797 12%
Adjusted EBITDA[2)] 185 168 10% 776 714 9%
Adjusted operating 104 104 -1% 454 381 19%
income (EBIT)[2)]
Non-comparable -16 -13 -26% -30 -49 39%
items[2)]
Operating income 87 91 -4% 424 333 28%
(EBIT)
Finance net -20 -17 -19% -113 -99 -13%
Income after 67 74 -10% 312 233 34%
finance net
Income tax expense -25 -1 - -75 -33 -
Income for the 42 74 -43% 237 200 18%
period
Adjusted EBITDA 7.6% 7.7% - 7.8% 8.1% -
margin[2)]
Adjusted operating 4.3% 4.8% - 4.6% 4.3% -
margin (EBIT)[2)]
Earnings per share, 0.60 1.11 -46% 3.60 3.05 18%
SEK
Adjusted return on 11.0% 9.7% - 11.0% 9.7% -
capital
employed[2)]
Return on equity 14.2% 13.2% - 14.2% 13.2% -
Operating cash flow 321 230 39% 590 354 67%
Net interest -2,200 -2,370 7% -2,200 -2,370 7%
-bearing debt
[1)] When applicable, adjusted for changed accounting principles according to IFRS 16 Leases, see Note 1 Accounting policies and the Annual Report 2018, Note 31.
[2)] Adjusted for non-comparable items, see page 14.
CEO statement
In 2019 we experienced strong growth and improved results with net sales growing by 12 percent to MSEK 9,891 and adjusted EBIT growing by 19 percent to MSEK 454. In the fourth quarter our top line increased by 12 percent, to MSEK 2,420, compared to last year, and we report an adjusted EBIT at the same level as previous year of MSEK 104.
We continue to see a strong demand for our products in all our markets. During 2019 our top line growth has been inflated due to the successful implementation of price increases to mitigate corresponding increases in raw material costs, but our underlying growth still remains strong and higher than the average organic growth of approximately 6-7 percent annually demonstrated in recent years. This is driven by a good mix between market growth, increased market share and a more favourable product portfolio driving price realization. I am particularly pleased to report a strong volume growth for the year of 6 percent.
We continue to see a very strong growth in the Ready-to-eat product category, which generated a 34 percent growth for Q4 2019 and a 31 percent growth for 2019. Our marketing efforts combined with significant capacity investments in this area has allowed us to tap into the strong demand in the Ready-to-eat category. This has led to an increase in turnover from less than MSEK 500 in 2015 to MSEK 2,011 in 2019. The Ready-to-cook Chilled product category also contributed with a strong growth of 9 percent for the quarter and of 12 percent for the full year. As for previous quarters, the less profitable Ready-to-cook Frozen and Ready-to-cook Export product categories continued to decrease as proportion of net sales compared to the same quarter the year before, despite some stock clearance in the quarter.
In terms of sustainability and food safety, we strive to be leading in the poultry space. To secure further advances in these areas, we have set ambitious long-term targets and intermediate milestones. I am looking forward to reporting our progress from an already good level in the coming periods. As an example, feed conversion ratios have been improved compared to 2018 corresponding to a reduced feed consumption of 7,200 tons. This means we have saved approximately 250 truckloads of feed. This also corresponds to a reduction in the required farming area by about 1,100 ha making it available for other uses.
During recent years we have gained market shares in our home markets through the introduction of new innovative and healthy products and our focus on improved sustainability work. I am convinced that these drivers will continue to work in our favour and enable us to sustain significant long-term growth.
As we have previously communicated, we carried out significant investments in our business in
During the fourth quarter our net interest-bearing debt decreased by MSEK 335 to MSEK 2,200 compared to the end of the third quarter 2019. The decrease was driven by a seasonal working capital release and increased use of vendor financing, as well as by some temporary effects. Operating cash flow for 2019 was MSEK 590 compared to MSEK 354 last year. We remain committed to finding a good balance between returning capital to our shareholders and reinvesting into profitable growth. For the 2020 Annual General Meeting, the Board has resolved to propose a dividend of MSEK 147 equivalent to
We are carefully following the structural changes in our sector and believe that we are ideally positioned to take part of the consolidation of the European poultry market. Acquisitions can generate significant benefits for the Group through sharing of best practice with improved efficiency and sustainable operations as well as contribute to increased stability in earnings.
I am pleased with the way
Managing Director and CEO
Conference call
A conference call for investors, analysts and media will be held on
Dial-in numbers:
US: +1 646 664 1960
Other countries: +44 20 3936 2999
Slides used in the conference call can be downloaded at www.scandistandard.com under Investor Relations. A replay of the conference call will be available on www.scandistandard.com afterwards.
Further information
For further information, please contact:
Julia Lagerqvist, CFO Tel: +46 72 402 84 02
Financial calendar
· Annual general meeting
· Interim report for the first quarter 2020
· Interim report for the second quarter 2020
· Interim report for the third quarter 2020
This interim report comprises information which
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