2015-05-06 07:00:01 CEST
2015-05-06 07:00:06 CEST
REGULATED INFORMATION
HKScan Oyj - Interim report (Q1 and Q3)
HKScan Group’s interim report 1 January — 31 March 2015: Upturn in performance continues – Denmark remains challenging
HKScan Corporation INTERIM REPORT
6 May 2015, at 08:00 am
HKScan Group's interim report 1 January — 31 March 2015: Upturn in performance
continues - Denmark remains challenging
* Net sales were EUR 466.0 (465.4) million in the first quarter.
* Reported EBIT was EUR -0.8 (-17.5) million. EBIT excluding non-recurring
expenses was EUR -0.8 (-7.1) million. The corresponding EBIT margin was -0.2
(-1.5) per cent.
* Cash flow before debt service was EUR -0.6 (-23.7) million.
* Profit/loss before taxes was EUR -3.1 (-16.3) million.
* EPS was EUR -0.05 (-0.23).
* Net financial expenses were EUR -2.5 (-4.5) million.
* Net debt was EUR 145.7 (363.0) million, and net gearing 32.9 (92.3) per cent.
* Outlook for 2015 (unchanged): HKScan expects operating profit (EBIT)
excluding non-recurring items to improve from 2014, and anticipates the last
quarter to be the strongest.
Hannu Kottonen, HKScan CEO, comments on the first quarter of 2015:
“HKScan's performance turnaround was seen towards the end of last year, and it
continued in the first quarter of 2015. The trend was visible in all home
market areas except Denmark. Both Group EBIT and cash flow improved clearly
from the previous year, although they still remain slightly negative. Our
improved financial performance was driven by Finland and Sweden, whereas
performance in the Baltics remained flat. Denmark continued to make a loss. The
Group's balance sheet remained strong and financial expenses declined
significantly from the previous year.
Despite tough domestic competition in Finland, better sales and completed
operational restructuring generated further clear improvement in profit and
cash flow. Sweden continued steadily on its recovery track, and the new
production setup has delivered results in full from the beginning of the year.
Denmark is suffering the most from sales challenges, especially in exports. The
restructuring of slaughtering and cutting operations were completed during the
first quarter by centralising slaughtering and cutting operations from the
Skovsgaard facility to the Vinderup plant. Overall Denmark as a whole is still
in restructuring mode after the fire. Our result in the Baltics was modest,
remaining largely unchanged from the previous year.
Group restructuring entered the home stretch, with majority of the Finnish
hatchery operations and the whole Estonian egg business divested in the first
quarter. The Group's efforts and actions to support the strategic goal of
profitable growth are advancing well. Good progress is being made in
preparations for strategic investment projects, product category development
and brand management work. Despite delays with official export permits from the
authorities, the Group is well prepared to commence exports to China, and we
plan to establish a local presence both in Hong Kong and in China.”
KEY FIGURES, Q1
(EUR million) Q1/2015 Q1/2014 2014
----------------------------------------------------------------------------
Net sales 466,0 465,4 1 988,7
----------------------------------------------------------------------------
EBIT -0,8 -17,5 55,5
----------------------------------------------------------------------------
- % of net sales -0,2 -3,8 2,8
----------------------------------------------------------------------------
Profit/loss before taxes -3,1 -16,3 51,2
----------------------------------------------------------------------------
- % of net sales -0,7 -3,5 2,6
----------------------------------------------------------------------------
Profit/loss for the period -2,8 -12,9 57,1
----------------------------------------------------------------------------
- % of net sales -0,6 -2,8 2,9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
EBIT, excluding non-recurring income and expenses -0,8 -7,1 12,4
----------------------------------------------------------------------------
- % of net sales -0,2 -1,5 0,6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
EPS, EUR -0,05 -0,23 1,05
----------------------------------------------------------------------------
Cash flow before debt service (mEUR) -0,6 -23,7 201,7
----------------------------------------------------------------------------
Cash flow before financing activities (mEUR) -3,9 -30,8 198,9
----------------------------------------------------------------------------
Return on capital employed (ROCE) before taxes, % 11,5 2,9 9,7
----------------------------------------------------------------------------
Net debt (mEUR) 145,7 363,0 141,5
----------------------------------------------------------------------------
Gearing % 37,4 97,9 35,5
----------------------------------------------------------------------------
Net gearing % 32,9 92,3 31,8
----------------------------------------------------------------------------
*) Return on capital employed (ROCE) before taxes excluding non-recurring items
was 3.8% in Q1/2015; 3.6% in Q1/2014 and 3.6% in 2014.
JANUARY - MARCH
Decline in the Group's net sales clearly slowed down in the first quarter
compared to the corresponding quarter the previous year. Majority of Easter
deliveries took place in March this year. Cash flow and EBIT saw clear
improvement from the previous year. Financial expenses decreased and the
balance sheet remained strong. Meat and inventory balances were well under
control and in good shape.
Finland and Sweden recorded clear result improvements and achieved positive
EBIT in the first quarter. The Baltics stayed close to break-even in EBIT, but
Denmark was clearly in the red, a situation further worsened by one-time costs
incurred through a Salmonella-related recall during the first quarter.
Demand remained low on all markets, but the decline is no longer as steep as it
was. The Russian ban on pork imports from the EU continued, thus continuing to
generate supply pressure on the Group's home markets. Sales price competition
remained tough. Market price level for biotech products seemed to pick up.
Some growth in market share was realized, although private label products kept
increasing their share, most of all in the Group's home markets. Animal
purchase prices and primary production costs continued to decline somewhat.
In the first quarter the Group divested its non-core businesses, i.e. 80 per
cent of hatchery operations in Finland and the egg business in Estonia. Group
restructuring, started in 2012, was thereby completed.
The Group's strategic investment plans in Finland and in Estonia proceeded on
schedule. Feasibility studies made in preparation for the investments are to be
finalized in the summer, and decisions will be made by next autumn.
Action plans based on the results of last autumn's EES (Employee Engagement
Survey) were completed during the first quarter. Implementation will continue
throughout the year and progress is being monitored by the Group management. In
the coming summer, HKScan will offer employment to 1 400 seasonal and temporary
workers throughout the Group. A majority of these job opportunities are in
production.
MARKET AREA: FINLAND
(EUR million) Q1/2015 Q1/2014 2014
-----------------------------------------------------------
-----------------------------------------------------------
Net sales 193.5 179.2 787.2
-----------------------------------------------------------
EBIT 3.6 -1.4 -4.5
-----------------------------------------------------------
- EBIT margin, % 1.8 -0.8 -0.6
-----------------------------------------------------------
-----------------------------------------------------------
EBIT excluding non-recurring items 3.6 -1.4 8.9
-----------------------------------------------------------
- EBIT margin, % 1.8 -0.8 1.1
-----------------------------------------------------------
In Finland, net sales were EUR 193.5 (179.2) million and EBIT was EUR 3.6
(-1.4) million.
In the first quarter, net sales improved clearly on the previous year, which
applied to HKScan Finland, Kivikylän Kotipalvaamo and Lihatukku Harri Tamminen.
Good sales volumes and a favourable product mix compensated somewhat for
declining prices. In spite of the declining market, HKScan Finland's own brands
continued making pleasing progress.
In January, the authorities announced that HKScan's Forssa facility is to gain
export certification for direct pork exports from Finland to China. The
certification was not, however, finalized during the first quarter.
As announced in December, HKScan Finland sold its hatchery business and related
real estate assets to DanHatch Finland, a new associated company co-owned by
HKScan Finland and DanHatch AS of Denmark. The agreement was completed on 31
March 2015. HKScan Finland has a 20 per cent minority holding in the associate,
and DanHatch owns the remaining 80 per cent.
In the first quarter the Group initiated modernization and investment in its
Finnish beef slaughterhouse in Outokumpu by renewing the entire beef cutting
area and a part of the slaughter line. The work is to be finalized in the
summer of 2015.
Statutory negotiations at the Mellilä production facility were concluded in
January. To improve efficiency, slaughter capacity is being downsized in
Mellilä and moved to the Forssa facility. The personnel reduction amounted to
about 20 employees, some of whom were offered work at HKScan's other
facilities. These changes were carried out during January, generating annual
savings of approximately EUR 1 million.
MARKET AREA: BALTICS
(EUR million) Q1/2015 Q1/2014 2014
--------------------------------------------------------------
--------------------------------------------------------------
Net sales 40.9 40.8 173.0
--------------------------------------------------------------
EBIT -0.1 0.2 2.8
--------------------------------------------------------------
- EBIT margin. % -0.2 0.4 1.6
--------------------------------------------------------------
--------------------------------------------------------------
EBIT excluding non-recurring expenses -0.1 0.2 4.8
--------------------------------------------------------------
- EBIT margin. % -0.2 0.4 2.8
--------------------------------------------------------------
In the Baltics, net sales were EUR 40.9 (40.8) million and EBIT EUR -0.1 (0.2)
million.
Net sales remained flat compared to the previous year. This was partly due to
growing availability of unprocessed meat at lower retail prices, and
intensifying competition in processed meat products. The market, however,
showed a slight improvement on the previous year.
HKScan has paid a lot of attention to building product portfolio synergies
between the three Baltic countries. During the quarter plenty of novelties were
launched, including BBQ ribs, cold-smoked English style bacon and the pulled
meat series offered under the Group brand Flodins®.
A study carried out by Nielsen related to the most successful meat product
novelties of 2014 in the FMCG (Fast Moving Consumer Goods) category in the
Baltic countries resulted in HKScan products winning the three top places both
in Estonia and in Latvia.
MARKET AREA: SWEDEN
(EUR million) Q1/2015 Q1/2014 2014
-----------------------------------------------------------
-----------------------------------------------------------
Net sales 202.1 210.4 911.0
-----------------------------------------------------------
EBIT 2.0 -12.1 1.7
-----------------------------------------------------------
- EBIT margin, % 1.0 -5.7 0.2
-----------------------------------------------------------
-----------------------------------------------------------
EBIT excluding non-recurring items 2.0 -1.7 13.4
-----------------------------------------------------------
- EBIT margin, % 1.0 -0.8 1.5
-----------------------------------------------------------
In Sweden, net sales were EUR 202.1 (210.4) million. Calculated in Swedish
crowns, net sales growth was 1.7 per cent. EBIT excluding non-recurring items
was EUR 2.0 (-1.7) million.
Net sales continued improving but were affected negatively by the weaker
Swedish crown's exchange rate. EBIT in Sweden showed again improvement from the
previous year. The profit impact of production restructuring, completed last
year, was visible in the quarter.
Import pressure of pork meat eased up during the quarter compared to the
previous year. Private label products continued to seize market share during
the quarter. Sweden will focus more on processed and other branded products in
the future.
Many new actions were taken as part of the “HKScan goes green” climate
footprint initiative. These included HKScan Sweden's pledge to use only green
electricity. Other improvements include the usage of bio steam at the Linköping
facility, the use of environmentally sound packaging, as well as the launch of
Rose® eco chicken.
As final part of a Group-wide structural harmonization process and the
strategic development programme ongoing in Sweden, HKScan sold its minor
wholly-owned subsidiary Bertil Erikssons Slakteri AB to its Swedish associate
Siljans Chark AB in January. HKScan continues to own a 39.3 per cent stake in
Siljans Chark AB.
MARKET AREA: DENMARK
(EUR million) Q1/2015 Q1/2014 2014
-----------------------------------------------------------
-----------------------------------------------------------
Net sales 48.8 54.0 204.3
-----------------------------------------------------------
EBIT -3.5 -0.7 -11.9
-----------------------------------------------------------
- EBIT margin, % -7.1 -1.3 -5.8
-----------------------------------------------------------
-----------------------------------------------------------
EBIT excluding non-recurring items -3.5 -0.7 -4.4
-----------------------------------------------------------
- EBIT margin, % -7.1 -1.3 -2.1
-----------------------------------------------------------
In Denmark, net sales in January-March amounted to EUR 48.8 (54.0) million and
the EBIT was EUR -3.5 (-0.7) million.
The market and competition remained tough through the first quarter of 2015.
Fresh chicken products generated satisfactory margin, but volumes were low. In
frozen products, sales price competition was tough and some business was lost,
leading to lower production volumes. An outbreak of Salmonella in a flock of
birds resulted in one-off recall costs of EUR 1.0 million during the first
quarter. Novelties launched in the first quarter included Rose® Majs Kylling
corn-fed chicken products, which continued to grow on the Danish market, and
the first halal brand product ‘Aafiyah(TM)' for the UK market.
The supply chain was adjusted through ongoing restructuring of the production
setup. In early January, HKScan announced the Group's restructuring of its
production capacity in Denmark. Poultry slaughtering and cutting would be
centralized at the Vinderup facility, and packaging and warehousing would
remain in Skovsgaard. The targeted annualized cost reduction and profit
improvement in excess of EUR 5 million are to materialize from the second
quarter 2015 onwards. On January 28, HKScan announced that the related
statutory employee negotiations were concluded, resulting in a net headcount
reduction of close to 90 positions.
INVESTMENTS
The Group's investments in the first quarter were EUR 9.6 (11.4) million and
divided by market area as follows:
(EUR million) Q1/2015 Q1/2014 2014
-------------------------------------
Finland 3.9 2.8 14.7
-------------------------------------
Baltics 2.3 5.1 11.7
-------------------------------------
Sweden 2.0 1.1 7.6
-------------------------------------
Denmark 1.4 2.4 14.7
-------------------------------------
Total 9.6 11.4 48.7
-------------------------------------
Group investments during the first quarter were biggest in Finland, where
modernisation in the Outokumpu production facility continued. All in all, the
Group's investments were at a lower level than in the corresponding quarter the
previous year. In the future, the annual investment level will be some EUR 20 -
25 million higher than currently.
FINANCING
The Group's interest-bearing debt at the end of March stood at EUR 165.5
(384.7) million. Net debt decreased to EUR 145.7 (as against EUR 363.0 million
in the corresponding period the previous year). The net gearing ratio decreased
significantly and was 32.9 (92.3) per cent.
The Group's liquidity was good. Undrawn committed credit facilities at 31 March
2015 stood at EUR 136.5 (161.5) million. The EUR 200.0 million commercial paper
programme had been drawn to the amount of EUR 22.0 (120.5) million.
Net financial expenses decreased due to the lower net debt level and were EUR
-2.5 (-4.5) million.
SHARES
At the end of March, the HKScan Group's share capital stood at EUR 66 820 528.
The Group's total number of shares issued, 55 026 522, were divided into two
share series as follows: A Shares, 49 626 522 (90.19% of the total number of
shares) and K Shares, 5 400 000 (9.81%). The A Shares are quoted on the NASDAQ
OMX Helsinki. The K Shares are held by LSO Osuuskunta (4 735 000 shares) and
Sveriges Djurbönder ek.för. (665 000 shares) and are not listed. The company
held 1 053 734 A Shares as treasury shares corresponding 1.9 per cent of the
company's total number of shares and 0.7 per cent of the total number of votes.
HKScan's market capitalization at the end of March stood at EUR 314.7 (234.2)
million. It breaks down as follows: Series A shares had a market value of EUR
283.2 (210.8) million, and the unlisted Series K shares a calculational market
value of EUR 31.5 (23.4) million.
In January-March, a total of 6 624 146 (3 252 242) of the company's shares with
a total value of EUR 34 489 835 (13 114 562) were traded. The highest price
quoted in the period under review was EUR 6.19 (4.34), and the lowest was EUR
3.24 (3.62). The average price was EUR 5.20 (3.91). At the end of March, the
closing price was EUR 5.83 (4.34).
BOARD OF DIRECTORS' AUTHORIZATIONS
From January to March 2015, the Board did not exercise the authorizations given
by the Annual General Meeting (AGM) on 10 April 2014. The new authorizations
granted to the Board by the AGM on 14 April 2015 are described in the section
“Resolutions passed by the Annual General Meeting”.
PERSONNEL
In the first quarter HKScan had an average of 7 303 (7 341) personnel.
The average number of personnel in each market area was as follows:
Q1/2015 Q1/2014 2014
--------------------------------
Finland 2 739 2 561 2 771
--------------------------------
Baltics 1 755 1 728 1 769
--------------------------------
Sweden 2 069 2 238 2 305
--------------------------------
Denmark 740 814 817
--------------------------------
Total 7 303 7 341 7 662
--------------------------------
The division of personnel by market area at the end of March was as follows:
31.3.2015 31.3.2014 31.12.2014
-----------------------------------------
Finland 2 789 2 652 2 644
-----------------------------------------
Baltics 1 735 1 729 1 766
-----------------------------------------
Sweden 2 096 2 226 2 152
-----------------------------------------
Denmark 704 811 765
-----------------------------------------
Total 7 324 7 418 7 327
-----------------------------------------
CLAIM BY OY PRIMULA AB'S BANKCRUPTCY ESTATE REJECTED
The District Court of Southwest Finland issued on 2 February 2015 its
interlocutory ruling by which it rejected as patently unfounded an action for
damages submitted against HKScan Corporation and HKScan Finland Oy by the
bankruptcy estate of Oy Primula Ab. Primula sued HKScan for breach of contract
concerning initial investigations carried out in 2009 and 2010 by HK Ruokatalo
(today HKScan Finland Oy) and Primula related to potential collaboration
between HKScan and Primula's Järvenpää production site (Järvenpään Herkkutehdas
Oy). The ruling is final and binding. The District Court denied the claim for
damages and additionally ordered Oy Primula Ab's bankruptcy estate to pay
HKScan's legal fees.
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
The most significant uncertainty factors in HKScan Group's business are
connected - through price increases for feed raw material in particular and
other production inputs related to primary production - to price trends and the
availability of local meat raw material, as well as to the adequacy of sales
price increases in relation to cost trends.
The risks include various unexpected actions by the authorities and political
instability both globally and locally that may impose restrictions on the
business. The risk of animal diseases in the food industry's raw meat supply or
any international or regional food scandals impacting on the overall
consumption outlook can never be fully excluded.
RESOLUTIONS PASSED BY THE ANNUAL GENERAL MEETING
The Annual General Meeting of HKScan Corporation held on 14 April 2015 in Turku
adopted the parent company's and consolidated financial statements and
discharged the members of the Board of Directors and the CEO from liability for
the year 2014. The AGM resolved that a dividend of EUR 0.10 and an additional
dividend of EUR 0.39 per share be paid for 2014.
The AGM also resolved on the annual remuneration of the Board's members, deputy
members and the chairs of the committees. In addition, compensation per meeting
will be paid for each Board and Board committee meeting attended.
The current Board members Niels Borup, Tero Hemmilä, Teija Andersen and Henrik
Treschow were re-elected for a further term of office, and Mikko Nikula and
Pirjo Väliaho were elected as new members of the Board of Directors. In
addition, the current deputy Board member Per Nilsson was re-elected for a
further term of office, and Marko Onnela was elected as new deputy member of
the Board of Directors. At the organizational meeting after the AGM, the Board
elected Mikko Nikula as Chairman and re-elected Niels Borup as Vice Chairman.
PricewaterhouseCoopers Oy, an audit firm chartered by the Central Chamber of
Commerce, with APA Jouko Malinen as the main auditor, was elected as the actual
auditor until the close of the next AGM.
The AGM authorised the Board to decide on share issue, option rights as well as
other special rights entitling to shares, on the purchase of the Company's own
Series A shares and/or on the acceptance the Company's own Series A shares as
pledge. The authorisations will be effective until 30 June 2016, revoking the
authorisations given by the AGM 2014.
The resolutions of the Annual General Meeting have been published in full in
the stock exchange release of 14 April 2015, and they are also available on the
company's website at www.hkscan.com.
EVENTS AFTER THE REPORTING PERIOD
In early April, HKScan purchased the Mikkeli production facility and related
real estate where it has been operating under lease since 2011. The purchase
price was EUR 4.2 million The Mikkeli facility is one of HKScan's newest,
state-of-the-art facilities in Finland, and active efforts have been made over
the past few years to enhance its efficiency. The facility produces processed
meats and convenience food.
As part of its strategy for profitable growth, HKScan announced in mid-April
that it will invest in its export business by establishing a sales office in
Hong Kong and China.
OUTLOOK FOR 2015
HKScan expects operating profit (EBIT) excluding non-recurring items to improve
from 2014, and anticipates the last quarter to be the strongest.
HKScan expects the economic and demand outlook and, accordingly, sales price
competition to remain tough in 2015. However, the Group's strategy work,
restructuring and development programmes together with active sales margin
management should contribute to better financial performance.
NEXT FINANCIAL REPORT
HKScan Group's interim report January-June 2015 will be published on 5 August
2015.
Vantaa, 6 May 2015
HKScan Corporation
Board of Directors
Further information is available from HKScan Corporation's President and CEO
Hannu Kottonen and CFO Tuomo Valkonen. Kindly submit a call-back request to
Marja-Leena Dahlskog, SVP Communications, firstname.surname@hkscan.com or tel.
+358 10 570 2142
HKScan is the leading Nordic meat expert. We produce, market and sell
high-quality, responsibly-produced pork, beef, poultry and lamb products,
processed meats and convenience foods under strong brand names. Our customers
are the retail, food service, industrial and export sectors, and our home
markets comprise Finland, Sweden, Denmark and the Baltics. We export to close
to 50 countries. In 2014, HKScan had net sales of approximately EUR 2.0 billion
and some 7 700 employees.
DISTRIBUTION:
NASDAQ Helsinki
Main media
www.hkscan.com
CONSOLIDATED INTERIM REPORT 1 JANUARY - 31 MARCH 2015
CONSOLIDATED INCOME STATEMENT
(EUR million) Note Q1/2015 Q1/2014 2014
--------------------------------------------------------------------------------
Net sales 466.0 465.4 1 988.7
--------------------------------------------------------------------------------
Cost of goods sold 1. -438.7 -457.1 -1 905.2
--------------------------------------------------------------------------------
Gross Profit 27.4 8.4 83.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating items total 1. 2.1 6.5 94.1
--------------------------------------------------------------------------------
Sales and marketing costs 1. -14.9 -14.8 -62.1
--------------------------------------------------------------------------------
General administration costs 1. -15.3 -17.5 -60.1
--------------------------------------------------------------------------------
Operating Profit -0.8 -17.5 55.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income and expenses -2.5 -4.5 -15.5
--------------------------------------------------------------------------------
Share of profit/loss in associates 0.2 5.7 11.2
--------------------------------------------------------------------------------
Profit/loss before taxes -3.1 -16.3 51.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income tax 0.3 3.4 5.9
--------------------------------------------------------------------------------
Profit/loss for the period -2.8 -12.9 57.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interests 0.0 0.3 -0.5
--------------------------------------------------------------------------------
Profit/loss for the period -2.7 -12.6 56.7
--------------------------------------------------------------------------------
Earnings per share calculated on profit attributable to equity holders of the
parent:
--------------------------------------------------------------------------------
-
EPS, undiluted, continuing operations, -0.05 -0.23 1.05
EUR/share
--------------------------------------------------------------------------------
EPS, diluted, continuing operations, EUR/share -0.05 -0.23 1.05
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------
(EUR million) Q1/2015 Q1/2014 2014
--------------------------------------------------------------------
Profit/loss for the period -2.8 -12.9 57.1
--------------------------------------------------------------------
--------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME (after taxes):
--------------------------------------------------------------------
Exchange differences on translating foreign 1.4 -1.3 -8.3
operations
--------------------------------------------------------------------
Cash flow hedging -0.8 -1.1 -1.9
--------------------------------------------------------------------
Actuarial gains or losses - - -4.9
--------------------------------------------------------------------
TOTAL OTHER COMPREHENSIVE INCOME 0.6 -2.4 -15.1
--------------------------------------------------------------------
--------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR -2.2 -15.3 42.1
THE PERIOD
--------------------------------------------------------------------
--------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD ATTRIBUTABLE TO:
--------------------------------------------------------------------
Equity holders of the parent -2.2 -15.0 41.6
--------------------------------------------------------------------
Non-controlling interests 0.0 -0.3 0.5
--------------------------------------------------------------------
Total -2.2 -15.3 42.1
--------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR million) Note 31.3.2015 31.3.2014 31.12.2014
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Intangible assets 2. 145.1 150.2 144.3
--------------------------------------------------------------------------------
Tangible assets 3. 366.4 404.9 369.7
--------------------------------------------------------------------------------
Holdings 36.9 38.5 35.9
--------------------------------------------------------------------------------
Other non-current assets 42.8 34.0 40.8
--------------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 591.1 627.7 590.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Inventories 4. 125.6 160.1 125.4
--------------------------------------------------------------------------------
Current receivables 131.2 134.7 122.4
--------------------------------------------------------------------------------
Cash and cash equivalents 19.6 18.7 16.4
--------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 276.5 313.5 264.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets of disposal group classified as 0.0 110.9 9.4
held for sale
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL ASSETS 867.6 1 052.0 864.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY 5. 442.7 393.1 445.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current loans. interest-bearing 118.2 235.6 121.8
--------------------------------------------------------------------------------
Non-current liabilities, non-interest- 39.7 34.9 40.8
bearing
--------------------------------------------------------------------------------
TOTAL NON-CURRENT LIABILITIES 158.0 270.5 162.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current loans, interest-bearing 47.3 149.1 36.4
--------------------------------------------------------------------------------
Current liabilities, 219.7 239.3 219.4
non-interest-bearing
--------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 267.0 388.4 255.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities of disposal group classified 0.0 0.0 0.8
as
held for sale
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 867.6 1 052.0 864.3
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
--------------------------------------------------------------------------------
(EUR 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
million)
--------------------------------------------------------------------------------
EQUITY AT 66.8 72.9 -12.7 143.5 10.1 -6.2 0.0 162.1 436.5 8.7 445.2
1.1.2015
--------------------------------------------------------------------------------
Result for - - - - - - - -2.7 -2.7 0.0 -2.8
the
financial
period
--------------------------------------------------------------------------------
Other
comprehen
sive
income (+)
/ expense
(-)
--------------------------------------------------------------------------------
Translatio - - - - - 1.4 - - 1.4 - 1.4
n
differenc
es
--------------------------------------------------------------------------------
Cash flow - - -0.8 - - - - - -0.8 - -0.8
hedging
--------------------------------------------------------------------------------
Actuarial - - - - - - - - - - -
gains or
losses
--------------------------------------------------------------------------------
Total - - -0.8 - - 1.4 - -2.7 -2.2 0.0 -2.2
comprehen
sive
income for
the
period
--------------------------------------------------------------------------------
Direct - - - - 0.0 - - -0.3 -0.3 - -0.3
recogniti
on in
retained
earnings
--------------------------------------------------------------------------------
Transfers - - - - 0.0 - - - 0.0 - 0.0
between
items
--------------------------------------------------------------------------------
Dividend - - - - - - - - - - -
distribut
ion
--------------------------------------------------------------------------------
EQUITY AT 66.8 72.9 -13.5 143.5 10.1 -4.9 0.0 159.1 434.0 8.7 442.7
31.3.2015
--------------------------------------------------------------------------------
(EUR 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
million)
--------------------------------------------------------------------------------
EQUITY AT 66.8 73.5 -10.8 143.5 32.0 2.0 0.0 93.0 400.0 9.0 409.0
1.1.2014
--------------------------------------------------------------------------------
Result for - - - - - - - -12.6 -12.6 -0.3 -12.9
the
financial
period
--------------------------------------------------------------------------------
Other
comprehen
sive
income (+)
/ expense
(-)
--------------------------------------------------------------------------------
Translatio - - - - - -1.3 - - -1.3 - -1.3
n
differenc
es
--------------------------------------------------------------------------------
Cash flow - - -1.1 - - - - - -1.1 - -1.1
hedging
--------------------------------------------------------------------------------
Actuarial - - - - - - - - - - -
gains or
losses
--------------------------------------------------------------------------------
Total - - -1.1 - - -1.3 - -12.6 -15.0 -0.3 -15.3
comprehen
sive
income for
the
period
--------------------------------------------------------------------------------
Direct - - - - - - - 0.0 0.0 - 0.0
recogniti
on in
retained
earnings
--------------------------------------------------------------------------------
Transfers - - - - - - - 0.0 0.0 - 0.0
between
items
--------------------------------------------------------------------------------
Dividend - - - - - - - - - -0.6 -0.6
distribut
ion
--------------------------------------------------------------------------------
EQUITY AT 66.8 73.5 -11.9 143.5 32.0 0.7 0.0 80.5 385.0 8.1 393.1
31.3.2014
--------------------------------------------------------------------------------
COLUMNS: 1. Share capital, 2. Share premium reserve, 3. Revaluation reserve, 4.
Reserve for invested unrestricted equity (RIUE), 5. Other reserves, 6.
Translation differences, 7. Treasury shares, 8. Retained earnings, 9. Equity
holders of the parent, 10. Non-controlling interests, 11. Total
CASH FLOW STATEMENT
(EUR million) Q1/2015 Q1/2014 2014
--------------------------------------------------------------------------
Cash flow before change in net working capital 13.7 0.4 52.6
--------------------------------------------------------------------------
Change in net working capital -12.6 -15.0 14.2
--------------------------------------------------------------------------
Financial items and taxes -1.7 -5.0 -3.6
--------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES -0.6 -19.6 63.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Cash flow from investing activities -3.3 -11.2 135.7
--------------------------------------------------------------------------
CASH FLOW AFTER INVESTING ACTIVITIES -3.9 -30.8 198.9
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Change in loans 7.4 -18.9 -244.1
--------------------------------------------------------------------------
Dividends paid 0.0 -0.6 -6.1
--------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES 7.4 -19.5 -250.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------
NET CASH FLOW 3.5 -50.3 -51.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 16.4 68.7 68.7
--------------------------------------------------------------------------
Translation differences -0.3 0.3 -1.0
--------------------------------------------------------------------------
Cash and cash equivalents at end of period 19.6 18.7 16.4
--------------------------------------------------------------------------
--------------------------------------------------------------------------
FINANCIAL INDICATORS
31.3.2015 31.3.2014 31.12.2014
-----------------------------------------------------------------------------
Earnings per share (EPS), undiluted, EUR -0.05 -0.23 1.05
-----------------------------------------------------------------------------
Earnings per share (EPS), diluted, EUR -0.05 -0.23 1.05
-----------------------------------------------------------------------------
Equity per share, EUR 8.0 7.1 8.1
-----------------------------------------------------------------------------
Equity ratio, % 51.0 37.4 51.5
-----------------------------------------------------------------------------
Adjusted average number of shares, mill. 54.0 54.0 54.0
-----------------------------------------------------------------------------
Gross capital expenditure on PPE, EUR mill. 9.6 11.4 48.7
-----------------------------------------------------------------------------
Employees, end of month average 7 303 7 341 7 662
-----------------------------------------------------------------------------
CALCULATION OF FINANCIAL INDICATORS
Return on capital Profit before tax + interest and other x 100
employed (ROCE) before financial expenses
tax (%)
------------------------------------------------
Balance sheet total -
non-interest-bearing
liabilities (average)
Equity ratio (%) Total equity x 100
------------------------------------------------
Balance sheet total -
advances received
Net gearing ratio (%) Net interest-bearing liabilities x 100
------------------------------------------------
Total equity
Earnings per share (EPS) Profit for the period attributable to equity
holders of the parent
------------------------------------------------
Average number of
outstanding shares
during period
Equity per share Equity attributable to holders of the parent
------------------------------------------------
Number of outstanding
shares at end of period
Market capitalisation The number of outstanding shares at the end of
period X the closing price on the last
trading day of the financial year
Cash flow before debt Cash flow before financing activities and
service financial items
Employee numbers Average of workforce figures calculated at the
end of calendar months
NOTES TO CONSOLIDATED INTERIM REPORT
ACCOUNTING POLICIES
HKScan Corporation's interim report for 1 January - 31 March 2015 has been
prepared in compliance with IAS 34 Interim Financial Reporting standards. The
same accounting principles have been applied in the interim report as in the
annual financial statements for 2014. Due to the rounding of the figures to the
nearest million euros in the interim report, some totals may not agree with the
sum of their constituent parts. Accounting principles are explained in the
financial statements for 2014.
The interim report is unaudited.
ANALYSIS BY SEGMENT
Net sales and EBIT by market area
----------------------------------------------------------
(EUR million) Q1/2015 Q1/2014 2014
---------------------------------------------------------------------------
NET SALES
---------------------------------------------------------------------------
- Finland 193.5 179.2 787.2
---------------------------------------------------------------------------
- Baltics 40.9 40.8 173.0
---------------------------------------------------------------------------
- Sweden 202.1 210.4 911.0
---------------------------------------------------------------------------
- Denmark 48.8 54.0 204.3
---------------------------------------------------------------------------
- Between segments -19.3 -19.0 -86.8
---------------------------------------------------------------------------
Group total 466.0 465.4 1 988.7
---------------------------------------------------------------------------
---------------------------------------------------------------------------
EBIT
---------------------------------------------------------------------------
- Finland 3.6 -1.4 -4.5
---------------------------------------------------------------------------
- Baltics -0.1 0.2 2.8
---------------------------------------------------------------------------
- Sweden 2.0 -12.1 1.7
---------------------------------------------------------------------------
- Denmark -3.5 -0.7 -11.9
---------------------------------------------------------------------------
- Between segments - - -
---------------------------------------------------------------------------
Segments total 2.0 -14.0 -11.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Group administration costs -2.8 -3.4 -10.2
---------------------------------------------------------------------------
Capital gain in sales of shares of Saturn Nordic 77.6
Holding Ab
---------------------------------------------------------------------------
Group total -0.8 -17.5 55.5
---------------------------------------------------------------------------
NOTES TO THE INCOME STATEMENT
1. NON-RECURRING ITEMS
(EUR million) Q1/2015 Q1/2014 2014
--------------------------------------------------------------------------------
Restructuring redundancy expenses COGS, - - -1,0
Finland 1)
--------------------------------------------------------------------------------
Restructuring redundancy expenses SGA, - - -0,4
Finland 2)
--------------------------------------------------------------------------------
Impairment of assets, Finland 1) - - -12,0
--------------------------------------------------------------------------------
Restructuring expenses for closed operations, - -3,7 -4,0
Sweden 1)
--------------------------------------------------------------------------------
Impairment of assets, Sweden 1) - -6,6 -6,7
--------------------------------------------------------------------------------
Impairment of inventory 2011-2012, Sweden 1) - - -0,8
--------------------------------------------------------------------------------
Losses on sales of holdings, Sweden 3) - - -0,2
--------------------------------------------------------------------------------
Impairment of assets, Denmark 1) - - -5,2
--------------------------------------------------------------------------------
Restructuring expenses COGS, Denmark 1) - - -1,5
--------------------------------------------------------------------------------
Cover of loss in associated company based on - - -0,8
SHA, Denmark 3)
--------------------------------------------------------------------------------
Capital gain in sales of shares of Saturn Nordic - - 77,6
Holding Ab 3)
--------------------------------------------------------------------------------
Impairment of assets, Latvia 1) - - -2,1
--------------------------------------------------------------------------------
Non-recurring items Total - -10,3 43,0
--------------------------------------------------------------------------------
1) Included in the Income Statement in the item ”COGS Total”
2) Included in the Income Statement in the item ”SGA Total”
3) Included in the Income Statement in the item ”Other operating items
total”
NOTES TO THE STATEMENT OF FINANCIAL POSITION
2. CHANGES IN INTANGIBLE ASSETS
(EUR million) Q1/2015 Q1/2014 2014
---------------------------------------------------------
Opening balance 144,3 152,1 152,1
---------------------------------------------------------
Translation differences 1,0 -1,0 -5,5
---------------------------------------------------------
Additions 0,3 0,4 1,4
---------------------------------------------------------
Additions, business acquisitions 0,0 0,8 0,8
---------------------------------------------------------
Disposals -0,2 0,0 -0,1
---------------------------------------------------------
Depreciation and impairment -0,6 -2,1 -4,1
---------------------------------------------------------
Reclassification between items 0,4 0,0 -0,2
---------------------------------------------------------
Closing balance 145,1 150,2 144,3
---------------------------------------------------------
3. CHANGES IN TANGIBLE ASSETS
(EUR million) Q1/2015 Q1/2014 2014
---------------------------------------------------------
Opening balance 369,7 411,5 411,5
---------------------------------------------------------
Translation differences 0,8 -0,7 -3,5
---------------------------------------------------------
Additions 9,4 11,3 51,3
---------------------------------------------------------
Additions, business acquisitions 0,0 0,0 0,9
---------------------------------------------------------
Disposals -0,5 -0,8 -13,3
---------------------------------------------------------
Depreciation and impairment -12,9 -17,1 -77,3
---------------------------------------------------------
Reclassification between items -0,2 0,6 0,0
---------------------------------------------------------
Closing balance 366,4 404,9 369,7
---------------------------------------------------------
4. INVENTORIES
(EUR million) Q1/2015 Q1/2014 2014
---------------------------------------------------------
Materials and supplies 71,3 93,4 73,2
---------------------------------------------------------
Semi-finished products 4,3 4,2 5,3
---------------------------------------------------------
Finished products 41,4 46,0 36,9
---------------------------------------------------------
Other inventories 1,0 4,9 1,8
---------------------------------------------------------
Inventories, advance payments 0,6 1,4 0,5
---------------------------------------------------------
Biological asset, IFRS 41 7,0 10,2 7,7
---------------------------------------------------------
Total inventories 125,6 160,1 125,4
---------------------------------------------------------
5. NOTES TO EQUITY
Share capital Number of Share Share Reserve for Treasu Total
and share outstanding capita premium invested ry
premium reserve shares l reserve unrestricted
equity
--------------------------------------------------------------------------------
1.1.2015 53 972 788 66,8 72,9 143,5 0,0 283,1
--------------------------------------------------------------------------------
31.3.2015 53 972 788 66,8 72,9 143,5 0,0 283,1
--------------------------------------------------------------------------------
DERIVATIVE INSTRUMENT LIABILITIES
(EUR million) 31.3.2015 31.3.2014 31.12.2014
--------------------------------------------------------------------------
Nominal values of derivative instruments
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Foreign exchange derivatives 67.6 72.5 70.5
--------------------------------------------------------------------------
Interest rate derivatives 148.1 210.5 157.6
--------------------------------------------------------------------------
Electricity derivatives 7.7 8.6 7.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Fair values of derivative instruments
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Foreign exchange derivatives -0.5 -0.1 0.3
--------------------------------------------------------------------------
Interest rate derivatives -16.5 -17.3 -15.7
--------------------------------------------------------------------------
Electricity derivatives -1.8 -2.5 -1.7
--------------------------------------------------------------------------
CONSOLIDATED OTHER CONTINGENT LIABILITIES
(EUR million) 31.3.2015 31.3.2014 31.12.2014
--------------------------------------------------------------------------
Debts secured by pledges or mortgages
--------------------------------------------------------------------------
- loans from financial institutions 25.9 262.8 29.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------
On own behalf
--------------------------------------------------------------------------
- Mortgages given 10.7 12.3 10.7
--------------------------------------------------------------------------
- Assets pledged 3.2 0.3 3.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------
On behalf of others
--------------------------------------------------------------------------
- guarantees and other commitments 14.2 27.6 13.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Other contingencies
--------------------------------------------------------------------------
Leasing commitments 13.8 17.1 14.7
--------------------------------------------------------------------------
Rent liabilities 34.2 48.1 39.8
--------------------------------------------------------------------------
THE FAIR VALUE DETERMINATION PRINCIPLES APPLIED BY THE GROUP ON FINANCIAL
INSTRUMENTS MEASURED AT FAIR VALUE
Derivatives
The fair values of currency derivatives are determined by using the market
prices for contracts of equal duration at the reporting date. The fair values
of interest rate swaps are determined using the net present value method
supported by the market interest rates at the reporting date. The fair value of
commodity derivatives are determined by using publicly quoted market prices.
31.3.2015 Level 1 Level 2 Level 3
--------------------------------------------------------------------------------
Assets measured at fair value
--------------------------------------------------------------------------------
Financial assets recognised at fair value
through profit or loss
--------------------------------------------------------------------------------
- Trading securities - - - -
--------------------------------------------------------------------------------
- Trading derivatives
--------------------------------------------------------------------------------
- Interest rate swaps - - - -
--------------------------------------------------------------------------------
- Foreign exchange derivatives 0.1 0.0 0.1 0.0
--------------------------------------------------------------------------------
- Commodity derivatives - - - -
--------------------------------------------------------------------------------
Available-for-sale financial assets
--------------------------------------------------------------------------------
- Investments in shares 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
Total 0.1 0.0 0.1 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities measured at fair value
--------------------------------------------------------------------------------
Financial liabilities recognised at fair
value
through profit or loss
--------------------------------------------------------------------------------
-Trading derivatives
--------------------------------------------------------------------------------
- Interest rate swaps -16.5 0.0 -16.5 0.0
--------------------------------------------------------------------------------
of which subject to cash flow hedging -16.3 0.0 -16.3 0.0
--------------------------------------------------------------------------------
- Foreign exchange derivatives -0.6 0.0 -0.6 0.0
--------------------------------------------------------------------------------
of which subject to net investment - - - -
hedging
--------------------------------------------------------------------------------
- Commodity derivatives -1.8 0.0 -1.8 0.0
--------------------------------------------------------------------------------
of which subject to cash flow hedging -1.8 0.0 -1.8 0.0
--------------------------------------------------------------------------------
Total -18.9 0.0 -18.9 0.0
--------------------------------------------------------------------------------
BUSINESS TRANSACTIONS WITH RELATED PARTIES
----------------------------------------------
(EUR million) Q1/2015 Q1/2014 2014
---------------------------------------------------
Sales to associates 16.8 15.8 65.9
---------------------------------------------------
Purchases from associates 8.1 10.5 40.2
---------------------------------------------------
Trade and other receivables 2.2 2.8 2.4
---------------------------------------------------
Trade and other payables 3.1 4.2 2.8
---------------------------------------------------
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