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2016-05-10

Scandi Standard: First quarter report 2016

10 May 2016

· Net sales increased by 6 percent to MSEK 1,386.3 (1,309.6), and by
8 percent at constant exchange rates. Net sales rose by 6 percent in
Sweden, while net sales in local currency decreased by 6 percent in
Denmark and increased by 32 percent in Norway. The increase in Norway
was due to a recovery of the market and new customer contracts.

· Adjusted operating income* increased by 1 percent to MSEK 68.3
(67.6), corresponding to a margin of 4.9 (5.2) percent.

· Income for the period amounted to MSEK 42.4 (41.6) and earnings
per share were SEK 0.71 (0.69).

· Adjusted operating cash flow* amounted to MSEK 36.7 (100.3).
· At the end of the quarter, a majority shareholding was acquired in
Sødams Øko Fjerkræslagteri ApS, a Danish producer of organic and
free-range chicken with annual sales of approximately MDKK 18.

+-------------------------------+-------+-------+------+-------+-------+
|MSEK |Q1 2016|Q1 2015|Change| LTM| 2015|
+-------------------------------+-------+-------+------+-------+-------+
|Net sales |1,386.3|1,309.6| 6%|5,499.7|5,422.9|
+-------------------------------+-------+-------+------+-------+-------+
|Operating income | 67.2| 67.6| -1%| 259.0| 259.5|
+-------------------------------+-------+-------+------+-------+-------+
|Income for the period | 42.4| 41.6| 2%| 164.7| 163.9|
+-------------------------------+-------+-------+------+-------+-------+
|EPS, SEK | 0.71| 0.69| 3%| 2.75| 2.73|
+-------------------------------+-------+-------+------+-------+-------+
|Adjusted EBITDA* | 115.1| 114.0| 1%| 478.4| 477.4|
+-------------------------------+-------+-------+------+-------+-------+
|Adjusted operating income* | 68.3| 67.6| 1%| 292.2| 291.5|
+-------------------------------+-------+-------+------+-------+-------+
|Adjusted operating margin* | 4.9%| 5.2%| -| 5.3%| 5.4%|
+-------------------------------+-------+-------+------+-------+-------+
|Adjusted income for the period*| 43.3| 41.6| 4%| 190.4| 188.7|
+-------------------------------+-------+-------+------+-------+-------+
|Adjusted EPS*, SEK | 0.73| 0.69| 5%| 3.18| 3.15|
+-------------------------------+-------+-------+------+-------+-------+
|Adjusted operating cash flow* | 36.7| 100.3| -63%| 260.4| 324.1|
+-------------------------------+-------+-------+------+-------+-------+

*) Adjusted for non-comparable items in Q1 2016 of MSEK -1.1 (-) in
EBITDA and operating income and MSEK -0.9 (-) in income for the
period, for LTM of MSEK -33.1 in EBITDA and operating income and MSEK
-25.7 in income for the period, and for the full year 2015 of MSEK
-32.0 in EBITDA and operating income and MSEK -24.8 in income for the
period. See page 3.

CEO Statement

The year has started with strong growth in net sales driven by
continued good demand in Sweden and a recovery of the market in
Norway. In Norway, we also benefitted from new customer contracts. We
had a particularly strong development in chilled products with a
growth of 16 percent at constant exchange rates. The adjusted
operating margin was somewhat lower than last year due to the
consolidation of the Finnish operation, which was effective as of the
second quarter last year. The adjusted margin for comparable units
improved to 5.7 percent.

The Swedish operation showed a continued positive trend in both net
sales and adjusted operating income with a higher margin. This was
achieved through product innovation, an improved product mix and
efficiency gains in production. Our newly introduced products sold
well including the ready-to-eat Minutkyckling products that are
produced in the new processing section in the Valla facility. We also
launched the first chicken bacon on the Nordic market. Chicken bacon
contains substantially less fat than traditional bacon and still has
great taste. As a result of the cancellation of the acquisition of
Lagerbergs in Sweden and the need for further capacity to meet the
demand in the Swedish market, we have signed a long-term lease
contract for an industrial facility close to Kristianstad in the
south of Sweden. We are now evaluating to invest in this facility to
reach an annual capacity of 20 million chickens in the first phase.

The market in Denmark continued to be very competitive with price
pressure both locally and on exports. Net sales and the adjusted
operating income for the Danish operation declined, and the margin
was lower than last year. At the end of the quarter, we acquired a
majority shareholding in Sødams Øko Fjerkræslagteri in Denmark, a
producer of organic and free-range chicken with annual sales of
approximately MDKK 18. The acquisition is in line with our strategy
to broaden the product portfolio and expand our presence in the
premium segment of the Danish market.

Net sales for the Norwegian operation increased substantially as a
result of strong growth in market demand compared to a weak first
quarter last year. The retail market for chilled chicken products
grew by approximately 22 percent in value in the quarter. We also
benefitted from increased volumes to Coop Norway and the start of
deliveries to Norgesgruppen. Adjusted operating income rose
substantially, although from a low level, and the margin improved.

As expected, capacity utilization in the Finnish facility was low in
the quarter. We have signed additional contracts for the supply of
birds and will be able to increase volumes during 2016.

To summarize, we continued to deliver on our strategy, i.e. to achieve
organic growth in line with our vision to inspire the Nordic
consumers to eat chicken once more per week, to improve operational
efficiency and to strengthen the Group through acquisitions.

Leif Bergvall Hansen
Managing Director and CEO

Further information
For further information, please contact:

Leif Bergvall Hansen, Chief Executive Officer Tel: +45 22 10 05 44
Tobias Wastensson, Head of Group Finance Tel: +46 10 456 14 86
Patrik Linzenbold, Investor Relations Tel: +46 708 25 26 30

Financial calendar

· Interim report for the second quarter 2016: 24 August 2016
· Interim report for the third quarter 2016: 3 November 2016

This interim report comprises information which Scandi Standard is
required to disclose under the Securities Markets Act and/or the
Financial Instruments Trading Act. It was released for publication at
07:30 CET on 10 may 2016.

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http://news.cision.com/scandi-standard/r/first-quarter-report-2016,c2005596
http://mb.cision.com/Main/7156/2005596/513335.pdf

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