2015-08-05 07:00:00 CEST
2015-08-05 07:00:06 CEST
REGULATED INFORMATION
HKScan Oyj - Interim report (Q1 and Q3)
HKScan Group’s interim report for 1 January–30 June 2015: Comparable EBIT and cash flow improved – Denmark still making a loss
HKScan Corporation INTERIM REPORT
5 August 2015, at 08:00 am
HKScan Group's interim report for 1 January-30 June 2015: Comparable EBIT and
cash flow improved - Denmark still making a loss
* Net sales were EUR 940.8 (967.1) million for January-June, and EUR 474.8
(501.7) million in the second quarter.
* EBIT for January-June was EUR 2.9 (41.1) million. EBIT excluding
non-recurring income and expenses was EUR 2.9 (-8.2) million. The corresponding
EBIT margin was 0.3 (-0.9) per cent.
* For the second quarter, EBIT was EUR 3.7 (58.5) million. EBIT excluding
non-recurring income and expenses was EUR 3.7 (-1.1) million. The corresponding
EBIT margin was 0.8 (-0.2) per cent.
* Cash flow before debt service was EUR 19.2 (157.2) million for January-June,
and EUR 19.7 (180.9) million in the second quarter.
* Profit before taxes excluding non-recurring income and expenses was EUR -1.9
(-8.2) million for January-June, and EUR 1.2 (-2.2) million in the second
quarter.
* EPS was EUR -0.04 (0.86) for January-June, and EUR 0.01 (1.10) in the second
quarter.
* Net financial expenses were EUR -4.8 (-9.6) million for January-June, and EUR
-2.3 (-5.2) million in the second quarter.
* Net debt was EUR 150.4 (185.0) million, and net gearing 35.8 (41.8) per cent.
* The 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's CEO, comments on the second quarter 2015:
“HKScan's performance continued to recover also in the second quarter of 2015.
All market areas improved their comparable cash flow, and also comparable EBIT
improved, except in Denmark. Our Danish business has lost volume including one
major export customer. Actions to improve performance are continuing. Group's
balance sheet strengthened further in spite of the slightly higher investment
level and the dividends paid. Net financial expenses declined clearly from the
previous year.
The overall business environment remained challenging due to ongoing political
and economic uncertainties. Russian embargo and price wars in retail have
continued and clearly depressed the food and meat value chain, especially for
pork meat in Finland and the Baltics. The Chinese meat export licence for
Forssa pig slaughterhouse in Finland is still open, but HKScan continues to
develop its Asian export businesses further from the new sales office in Hong
Kong.
The Group's efforts and actions to support the strategic goal of profitable
growth are advancing. Good progress was recorded related to preparations for
strategic investment projects, product category development and brand
management work.”
KEY FIGURES, Q2
(EUR million) Q2/201 Q2/201 Q1-Q2/2 Q1-Q2/2 2014
5 4 015 014
--------------------------------------------------------------------------------
Net sales 474.8 501.7 940.8 967.1 1 988.7
--------------------------------------------------------------------------------
EBIT 3.7 58.5 2.9 41.1 55.5
--------------------------------------------------------------------------------
- % of net sales 0.8 11.7 0.3 4.2 2.8
--------------------------------------------------------------------------------
Profit/loss before taxes 1.2 57.4 -1.9 41.1 51.2
--------------------------------------------------------------------------------
- % of net sales 0.3 11.4 -0.2 4.2 2.6
--------------------------------------------------------------------------------
Profit/loss for the period 1.0 59.3 -1.8 46.4 57.1
--------------------------------------------------------------------------------
- % of net sales 0.2 11.8 -0.2 4.8 2.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT, excluding non-recurring income 3.7 -1.1 2.9 -8.2 12.4
and expenses
--------------------------------------------------------------------------------
- % of net sales 0.8 -0.2 0.3 -0.9 0.6
--------------------------------------------------------------------------------
Profit/ loss before taxes, excluding 1.2 -2.2 -1.9 -8.2 8.2
non-recurring income and expenses
--------------------------------------------------------------------------------
- % of net sales 0.3 -0.4 -0.2 -0.8 0.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EPS (EUR) 0.01 1.10 -0.04 0.86 1.05
--------------------------------------------------------------------------------
Cash flow before debt service 19.7 180.9 19.2 157.2 201.7
(mEUR)
--------------------------------------------------------------------------------
Cash flow before financing 22.2 183.6 18.3 152.8 198.9
activities (mEUR)
--------------------------------------------------------------------------------
Return on capital employed (ROCE) 3.3 10.0 9.7
before taxes, %
--------------------------------------------------------------------------------
Net debt (mEUR) 150.4 185.0 141.5
--------------------------------------------------------------------------------
Gearing, % 38.6 45.1 35.5
--------------------------------------------------------------------------------
Net Gearing, % 35.8 41.8 31.8
--------------------------------------------------------------------------------
JANUARY-JUNE 2015
HKScan's performance continued to improve during the first half of the year,
though net sales declined from the corresponding period in 2014. Group's
comparable EBIT turned to positive. Market areas Finland and Sweden were
clearly ahead of the previous year, and the Baltics also improved. Market area
Denmark remained in the red.
Improved cash flow lowered Group's net gearing and net debt, and financial
expenses were significantly lower than in the comparison period. The Group's
inventories and the meat balance were tightly managed throughout the reporting
period.
The Russian ban on meat imports from the EU continued exerting continuous
pressure on pork supply and prices. Cases of African swine fever have somewhat
increased in the Baltics and Poland. Animal purchase prices in poultry and pork
continued to decline, as did some primary production costs.
Implementation of the Group's strategy for profitable growth advanced as
planned. Preparations for strategic investment projects proceeded during the
second quarter.
A sales office was established in Hong Kong, and the General Manager was
appointed to head HKScan's business in Asia. When the applicable export permits
have been received from the authorities, HKScan will open sales office in
China. Group's investments in innovation, brand and category work continued.
HKScan started its Leadership Academy, a new executive training programme
designed to strengthen leadership skills and harmonize Group-wide leadership
culture.
MARKET AREA: FINLAND
------------------------------------------
(EUR million) Q2/2015 Q2/2014 Q1-Q2/201 Q1-Q2/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 195.5 199.5 389.0 378.7 787.2
--------------------------------------------------------------------------------
EBIT 3.8 -12.7 7.4 -14.1 -4.5
--------------------------------------------------------------------------------
- EBIT margin, % 2.0 -6.4 1.9 -3.7 -0.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring 3.8 -0.7 7.4 -2.2 8.9
items
--------------------------------------------------------------------------------
- EBIT margin, % 2.0 -0.4 1.9 -0.6 1.1
--------------------------------------------------------------------------------
In Finland, net sales were EUR 389.0 (378.7) million for January-June and EUR
195.5 (199.5) million in the second quarter. Comparable EBIT excluding
non-recurring expenses totalled EUR 7.4 (-2.2) for January-June and EUR 3.8
(-0.7) million in the second quarter.
In the second quarter, net sales declined due to lower prices and volume.
Barbeque season started weak. However, profitability was strengthened by a
better sales product mix together with operational efficiency actions. Also
cash flow improved.
HKScan's own brands continued making pleasing progress in spite of the declined
market. Tough price competition between retailers intensified fierce price
pressure further and also challenged demand and supply management. Examples of
the novelties in the second quarter were Kariniemen® chicken cutlets and HK®
barbeque meats.
The modernization and investment in the beef slaughterhouse in Outokumpu,
including renewal of the entire beef cutting area and part of the slaughter
line, was finalized at the end of the second quarter. HKScan purchased its
previously rented production facility and land area in Mikkeli for EUR 4.2
million in April.
MARKET AREA: BALTICS
------------------------------------------
(EUR million) Q2/2015 Q2/2014 Q1-Q2/201 Q1-Q2/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 44.6 41.2 85.5 82.0 173.0
--------------------------------------------------------------------------------
EBIT 2.6 1.8 2.5 2.0 2.8
--------------------------------------------------------------------------------
- EBIT margin, % 5.8 4.5 2.9 2.4 1.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring 2.6 1.8 2.5 2.0 4.8
expenses
--------------------------------------------------------------------------------
- EBIT margin, % 5.8 4.5 2.9 2.4 2.8
--------------------------------------------------------------------------------
In the Baltics, net sales were EUR 85.5 (82.0) million in January-June and EUR
44.6 (41.2) million in the second quarter. EBIT was EUR 2.5 (2.0) million in
January-June and EUR 2.6 (1.8) million in the second quarter.
Net sales were upon the previous year in spite of the divested egg business
thanks to higher volumes in the domestic market. Demand remained soft on the
export markets. Price competition continued to be tough. HKScan's own brands,
especially processed and seasonal products, kept selling well, which eased out
the negative impact of the low market price level of non-processed product
categories. Lower costs in primary production and other operational cost
controls contributed to profit improvement in the second quarter.
Rakvere brand's smoked, bacon and jerky products, Tallegg® barbeque products,
as well as Rigas Mieksnieks® shaslik and barbeque products were the main
novelties for the second quarter. In May, HKScan Estonia gained approval for
exporting poultry to Hong Kong.
MARKET AREA: SWEDEN
------------------------------------------
(EUR million) Q2/2015 Q2/2014 Q1-Q2/201 Q1-Q2/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 208.3 232.7 410.4 443.1 911.0
--------------------------------------------------------------------------------
EBIT 3.4 0.6 5.4 -11.4 1.7
--------------------------------------------------------------------------------
- EBIT margin, % 1.6 0.3 1.3 -2.6 0.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring 3.4 1.5 5.4 -0.3 13.4
items
--------------------------------------------------------------------------------
- EBIT margin, % 1.6 0.6 1.3 -0.1 1.5
--------------------------------------------------------------------------------
In Sweden, net sales were EUR 410.4 (443.1) million for January-June, and EUR
208.3 (232.7) million in the second quarter. Comparable EBIT excluding
non-recurring expenses totalled EUR 5.4 (-0.3) million for January-June and EUR
3.4 (1.5) million in the second quarter.
Net sales declined as a result of lower volumes and the weaker SEK exchange
rate. EBIT improvement was based on the completed production restructuring and
a better product mix. Inventories were also reduced compared to the
corresponding period.
Consumer demand for meat of Swedish origin has recovered, which also eased up
pressure from imported meat. Price competition continued, and private label
products still continued to seize market share. HKScan gained some market share
in processed meat subcategories.
Major launches during the second quarter included the re-launch of Swedish
meatballs in the UK market, the organic deli-counter assortment, small size
packages for thin slices of cold cuts, a new packaging solution and design for
cold cuts, and new barbeque products for the summer season. Product development
work will be intensified further.
HKScan started cooperation with North European Oil Trade related to byproducts
of bioethanol production. They are utilized in pig feed offered to HKScan's
Swedish contract producers.
MARKET AREA: DENMARK
------------------------------------------
(EUR million) Q2/2015 Q2/2014 Q1-Q2/201 Q1-Q2/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 45.6 52.6 94.5 106.6 204.3
--------------------------------------------------------------------------------
EBIT -2.4 -6.0 -5.9 -6.7 -11.9
--------------------------------------------------------------------------------
- EBIT margin, % -5.3 -11.4 -6.2 -6.3 -5.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring -2.4 -0.8 -5.9 -1.5 -4.4
items
--------------------------------------------------------------------------------
- EBIT margin, % -5.3 -1.6 -6.2 -1.4 -2.1
--------------------------------------------------------------------------------
In Denmark, net sales for January-June amounted to EUR 94.5 (106.6) million and
EUR 45.6 (52.6) million in April - June. Comparable EBIT excluding
non-recurring expenses was EUR -5.9 (-1.5) million in January-June and EUR -2.4
(-0.8) million in the second quarter.
The market and competition, especially in Denmark and Sweden, remained tough
through the second quarter. Denmark lost volume including one major export
customer. Sales price competition was tough, and together with lowered volumes,
this led to a clear loss. Only fresh chicken products kept generating
satisfactory margins, but volumes in the home market were lower than expected
in the second quarter.
The new production setup was completed, and the related cost savings have begun
to materialize. Efforts are ongoing to generate profitable new sales,
strengthen the Danish organization and achieve further operational cost
savings.
Demand for organic chicken meat increased. Several barbeque chicken products
marketed under the Rose® brand were introduced to the local market.
INVESTMENTS
The Group's investments in the second quarter totalled EUR 16.0 (9.8) million.
The breakdown per market area is as follows:
(EUR million) Q2/2015 Q2/2014 Q1-Q2/2015 Q1-Q2/2014 2014
-------------------------------------------------------------
Finland 9.4 3.7 13.2 6.5 14.7
-------------------------------------------------------------
Baltics 3.0 2.4 5.3 7.5 11.7
-------------------------------------------------------------
Sweden 2.4 0.9 4.4 2.0 7.6
-------------------------------------------------------------
Denmark 1.3 2.9 2.7 5.3 14.7
-------------------------------------------------------------
Total 16.0 9.8 25.6 21.2 48.7
-------------------------------------------------------------
The Group's biggest investments also during the second quarter of 2015 were
targeted at Finland, where modernization of the Outokumpu production facility
was completed. Additionally, the Mikkeli production facility and land area were
bought (EUR 4.2 million).
FINANCING
The Group's interest-bearing debt at the end of June stood at EUR 162.1 (199.8)
million. Net debt decreased to EUR 150.4 (185.0) million. The net gearing ratio
decreased and was 35.8 (41.8) per cent. In the second quarter, a total amount
of dividend and additional dividend of EUR 26.4 million was paid for 2014 (EUR
5.4 million in 2013).
During the reporting period, HKScan rearranged its committed credit facilities.
The new bilateral committed credit facility agreements replaced the syndicated
credit facility of EUR 136.5 million maturing in 2017. The agreements amount to
EUR 100 million in total and they will mature during 2018-2020.
The Group's liquidity was good. Undrawn committed credit facilities at 30 June
stood at EUR 100.0 (161.5) million. The EUR 200.0 million commercial paper
programme had been drawn to the amount of EUR 15.0 (126.5) million.
Net financial expenses were EUR -2.3 (-5.2) million in the second quarter and
EUR -4.8 (-9.6) million in January-June.
SHARES
At the end of June, HKScan Group's share capital stood at EUR 66 820 528. The
Group's total number of shares issued, 55 026 522, was divided into two share
series as follows: A Shares, 49 626 522 (90.2% of the total number of shares)
and K Shares, 5 400 000 (9.8%). The A Shares are quoted on the NASDAQ 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 to 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 June stood at EUR 287.7 (213.7)
million, breaking down as follows: Series A shares had a market value of EUR
258.9 (192.3) million, and the unlisted Series K shares a calculational market
value of EUR 28.8 (21.4) million.
In January-June, a total of 12 606 842 (7 896 690) of the company's shares with
a total value of EUR 68 257 415 (31 214 934) were traded. The highest price
quoted in the period under review was EUR 6.25 (4.49), and the lowest was EUR
3.24 (3.47). The average price was EUR 5.41 (3.94). At the end of June, the
closing price was EUR 5.33 (3.96).
ANNUAL GENERAL MEETING AND BOARD OF DIRECTORS' AUTHORIZATIONS
The Annual General Meeting of HKScan Corporation was held on 14 April 2015 in
Turku. The resolutions of the AGM, including authorizations given to the Board,
are reported in full in a stock release the same day. The Board has not
exercised the authorizations given by the AGM.
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.
PERSONNEL
During the first half of the year, HKScan had an average of 7 544 (7 717)
personnel.
The average number of employees in each market area was as follows: Q1-Q2/2015 Q1-Q2/2014 2014
----------------------------------------------------------------------
Finland 2 878 2 786 2 771
----------------------------------------------------------------------
Baltics 1 749 1 767 1 769
----------------------------------------------------------------------
Sweden 2 180 2 323 2 305
----------------------------------------------------------------------
Denmark 738 841 817
----------------------------------------------------------------------
Total 7 544 7 717 7 662
----------------------------------------------------------------------
Division of employees by market area at the end of June is as follows:
30.6.2015 30.6.2014 31.12.2014
----------------------------------------------------------------------
Finland 3 194 3 225 2 644
----------------------------------------------------------------------
Baltics 1 759 1 791 1 766
----------------------------------------------------------------------
Sweden 2 569 2 681 2 152
----------------------------------------------------------------------
Denmark 806 961 765
----------------------------------------------------------------------
Total 8 328 8 658 7 327
----------------------------------------------------------------------
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
The most significant uncertainty factors in the HKScan Group's business are
related to sales and raw material prices, as well as management of global and
local meat balances.
The risks include various unexpected actions potentially taken by the
authorities which may cause restrictions to the business. Additionally, the
Group's ongoing development projects may create uncertainties and unforeseen
extra costs.
The risks of animal diseases in the food industry's raw meat supply or eventual
international or regional food scandals impacting the overall consumption
outlook can never be fully excluded.
EVENTS AFTER THE REPORTING PERIOD
Early July HKScan announced the acquisition of a 50 per cent stake in Paimion
Teurastamo as part of Group's strategy to boost profitable growth. The beef
slaughterhouse was owned by Turku-based Kaivon Liha Kaunismaa Oy, which retains
50 per cent of the company. Paimion Teurastamo is now HKScan Group's
subsidiary.
OUTLOOK (UNCHANGED)
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-September 2015 will be published on 4
November 2015.
Vantaa, 5 August 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-30 JUNE 2015
CONSOLIDATED INCOME STATEMENT
(EUR million) Note Q2/201 Q2/201 Q1-Q2/201 Q1-Q2/201 2014
5 4 5 4
--------------------------------------------------------------------------------
Net sales 474.8 501.7 940.8 967.1 1 988.7
--------------------------------------------------------------------------------
Cost of goods sold 1. -442.6 -493.9 -881.2 -951.0 -1 905.2
--------------------------------------------------------------------------------
Gross profit 32.2 7.8 59.6 16.2 83.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating items 1. 2.7 83.1 4.8 89.6 94.1
total
--------------------------------------------------------------------------------
Sales and marketing costs 1. -15.1 -17.5 -30.0 -32.3 -62.1
--------------------------------------------------------------------------------
General administration 1. -16.1 -14.9 -31.4 -32.4 -60.1
costs
--------------------------------------------------------------------------------
Operating profit 3.7 58.5 2.9 41.1 55.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income and -2.3 -5.2 -4.8 -9.6 -15.5
expenses
--------------------------------------------------------------------------------
Share of profit/loss in -0.3 4.0 0.0 9.7 11.2
associates
--------------------------------------------------------------------------------
Profit/loss before taxes 1.2 57.4 -1.9 41.1 51.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income tax -0.2 1.9 0.1 5.3 5.9
--------------------------------------------------------------------------------
Profit/loss for the period 1.0 59.3 -1.8 46.4 57.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interests -0.3 -0.1 -0.2 0.2 -0.5
--------------------------------------------------------------------------------
Profit/loss for the period 0.7 59.2 -2.0 46.6 56.7
--------------------------------------------------------------------------------
Earnings per share calculated on profit attributable to
equity holders of the parent:
------------------------------------------------------------
EPS, undiluted, continuing 0.01 1.10 -0.04 0.86 1.05
operations,
EUR/share
--------------------------------------------------------------------------------
EPS, diluted, continuing 0.01 1.10 -0.04 0.86 1.05
operations,
EUR/share
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
(EUR million) Q2/201 Q2/201 Q1-Q2/201 Q1-Q2/201 2014
5 4 5 4
--------------------------------------------------------------------------------
Profit/loss for the period 1.0 59.3 -1.8 46.4 57.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME
(after taxes):
--------------------------------------------------------------------------------
Exchange differences on translating 0.9 -3.9 2.3 -5.3 -8.3
foreign
operations
--------------------------------------------------------------------------------
Cash flow hedging 1.9 -0.1 1.1 -1.2 -1.9
--------------------------------------------------------------------------------
Actuarial gains or losses - - - - -4.9
--------------------------------------------------------------------------------
TOTAL OTHER COMPREHENSIVE 2.8 -4.1 3.4 -6.5 -15.1
INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR 3.8 55.2 1.6 39.9 42.1
THE PERIOD
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Equity holders of the parent 3.5 55.1 1.4 40.1 41.6
--------------------------------------------------------------------------------
Non-controlling interests 0.3 0.1 0.2 -0.2 0.5
--------------------------------------------------------------------------------
Total 3.8 55.2 1.6 39.9 42.1
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR million) Note 30.6.2015 30.6.2014 31.12.2014
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Intangible assets 2. 145.5 147.3 144.3
--------------------------------------------------------------------------------
Tangible assets 3. 369.5 381.9 369.7
--------------------------------------------------------------------------------
Holdings 35.9 40.9 35.9
--------------------------------------------------------------------------------
Other non-current assets 39.8 34.9 40.8
--------------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 590.6 604.9 590.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Inventories 4. 115.5 140.8 125.4
--------------------------------------------------------------------------------
Current receivables 120.8 142.3 122.4
--------------------------------------------------------------------------------
Cash and cash equivalents 11.6 13.1 16.4
--------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 247.8 296.3 264.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets of disposal group classified as - - 9.4
held for sale
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL ASSETS 838.4 901.2 864.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY 5. 419.9 442.9 445.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current loans, interest-bearing 121.8 62.2 121.8
--------------------------------------------------------------------------------
Non-current liabilities, 38.5 32.9 40.8
non-interest-bearing
--------------------------------------------------------------------------------
TOTAL NON-CURRENT LIABILITIES 160.4 95.1 162.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current loans, interest-bearing 40.2 137.5 36.4
--------------------------------------------------------------------------------
Current liabilities, 218.0 225.7 219.4
non-interest-bearing
--------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 258.2 363.2 255.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities of disposal group classified - - 0.8
as held for sale
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 838.4 901.2 864.3
--------------------------------------------------------------------------------
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 - - - - - - - -2.0 -2.0 0.2 -1.8
for the
financia
l
period
--------------------------------------------------------------------------------
Other
comprehe
nsive
income
(+) /
expense
(-)
--------------------------------------------------------------------------------
Transl. - - - - - 2.3 - - 2.3 - 2.3
differen
ces.
--------------------------------------------------------------------------------
Cash flow - - 1.1 - - - - - 1.1 - 1.1
hedging
--------------------------------------------------------------------------------
Actuarial - - - - - - - - - - -
gains or
losses
--------------------------------------------------------------------------------
Total - - 1.1 - - 2.3 - -2.0 1.4 0.2 1.6
comprehe
nsive
income
for the
period
--------------------------------------------------------------------------------
Direct - -- - - 0.0 - - -0.2 -0.2 - -0.2
recognit
ion in
retained
earnings
--------------------------------------------------------------------------------
Transfers 0.0 - - - 0.0 - - - - - -
between
items
--------------------------------------------------------------------------------
Dividend - - - - - - - -26.4 -26.4 -0.3 -26.7
distribu
tion
--------------------------------------------------------------------------------
EQUITY AT 66.8 72.9 -11.7 143.5 10.1 -4.0 0.0 133.5 411.2 8.7 419.9
30.6.201
5
--------------------------------------------------------------------------------
(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 - - - - - - - 46.6 46.6 -0.2 46.4
for the
financia
l
period
--------------------------------------------------------------------------------
Other
comprehe
nsive
income
(+) /
expense
(-)
--------------------------------------------------------------------------------
Transl. - - - - - -5.3 - - -5.3 - -5.3
differen
ces
--------------------------------------------------------------------------------
Cash flow - - -1.2 - - - - - -1.2 - -1.2
hedging
--------------------------------------------------------------------------------
Actuarial - - - - - - - - - - -
gains or
losses
--------------------------------------------------------------------------------
Total - - -1.2 - - -5.3 - 46.6 40.1 -0.2 39.9
comprehe
nsive
income
for the
period
--------------------------------------------------------------------------------
Direct - - - - - - - 0.1 0.1 - 0.1
recognit
. in
retained
earnings
--------------------------------------------------------------------------------
Transfers - -0.6 - - -21.9 - - 22.5 0.0 - 0.0
between
items
--------------------------------------------------------------------------------
Dividend - - - - - - - -5.4 -5.4 -0.7 -6.1
distribu
tion
--------------------------------------------------------------------------------
EQUITY AT 66.8 72.9 -12.0 143.5 10.1 -3.3 0.0 156.8 434.8 8.1 442.9
30.6.201
4
--------------------------------------------------------------------------------
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-Q2/2015 Q1-Q2/2014 2014
--------------------------------------------------------------------------------
Cash flow before change in net working capital 30.9 7.0 52.6
--------------------------------------------------------------------------------
Change in net working capital 6.1 -10.2 14.2
--------------------------------------------------------------------------------
Financial items and taxes -2.2 -4.0 -3.6
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES 34.8 -7.2 63.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities -16.5 160.0 135.7
--------------------------------------------------------------------------------
CASH FLOW AFTER INVESTING ACTIVITIES 18.3 152.8 198.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in loans 4.0 -202.1 -244.1
--------------------------------------------------------------------------------
Dividends paid -26.7 -6.1 -6.1
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES -22.7 -208.2 -250.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET CASH FLOW -4.4 -55.4 -51.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 16.4 68.7 68.7
--------------------------------------------------------------------------------
Translation differences -0.4 -0.2 -1.0
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period 11.6 13.1 16.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FINANCIAL INDICATORS 30.6.2015 30.6.2014 31.12.2014
-----------------------------------------------------------------------------
Earnings per share (EPS), undiluted, EUR -0.04 0.86 1.05
-----------------------------------------------------------------------------
Earnings per share (EPS), diluted, EUR -0.04 0.86 1.05
-----------------------------------------------------------------------------
Equity per share, EUR 7.62 8.06 8.09
-----------------------------------------------------------------------------
Equity ratio, % 50.1 49.1 51.5
-----------------------------------------------------------------------------
Adjusted average number of shares, mill. 54.0 54.0 54.0
-----------------------------------------------------------------------------
Gross capital expenditure on PPE, EUR mill. 25.6 21.2 48.7
-----------------------------------------------------------------------------
Employees, end of month average 7 544 7 717 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-30 June 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 thesum 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) Q2/2015 Q2/2014 Q1-Q2/201 Q1-Q2/2014 2014
5
--------------------------------------------------------------------------------
NET SALES
--------------------------------------------------------------------------------
- Finland 195.5 199.5 389.0 378.7 787.2
--------------------------------------------------------------------------------
- Baltics 44.6 41.2 85.5 82.0 173.0
--------------------------------------------------------------------------------
- Sweden 208.3 232.7 410.4 443.1 911.0
--------------------------------------------------------------------------------
- Denmark 45.6 52.6 94.5 106.6 204.3
--------------------------------------------------------------------------------
- Between segments -19.3 -24.3 -38.6 -43.2 -86.8
--------------------------------------------------------------------------------
Group total 474.8 501.7 940.8 967.1 1 988.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT
--------------------------------------------------------------------------------
- Finland 3.8 -12.7 7.4 -14.1 -4.5
--------------------------------------------------------------------------------
- Baltics 2.6 1.8 2.5 2.0 2.8
--------------------------------------------------------------------------------
- Sweden 3.4 0.6 5.4 -11.4 1.7
--------------------------------------------------------------------------------
- Denmark -2.4 -6.0 -5.9 -6.7 -11.9
--------------------------------------------------------------------------------
- Between segments - - - - -
--------------------------------------------------------------------------------
Segments total 7.4 -16.2 9.4 -30.3 -11.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Group administration costs -3.7 -2.8 -6.5 -6.3 -10.2
--------------------------------------------------------------------------------
Capital gain in sales of - 77.6 - 77.6 77.6
shares
of Saturn Nordic Holding Ab
--------------------------------------------------------------------------------
Group total 3.7 58.5 2.9 41.1 55.5
--------------------------------------------------------------------------------
NOTES TO THE INCOME STATEMENT
1. NON-RECURRING ITEMS
(EUR million) Q2/2015 Q2/2014 Q1-Q2/201 Q1-Q2/2014 2014
5
--------------------------------------------------------------------------------
Restructuring redundancy - - - - -1.0
expenses COGS, Finland 1)
--------------------------------------------------------------------------------
Restructuring redundancy - - - - -0.4
expenses SGA, Finland 2)
--------------------------------------------------------------------------------
Impairment of assets, Finland 1) - -12.0 - -12.0 -12.0
--------------------------------------------------------------------------------
Restructuring expenses for - - - -3.7 -4.0
closed operations, Sweden 1)
--------------------------------------------------------------------------------
Impairment of assets, Sweden 1) - - - -6.6 -6.7
--------------------------------------------------------------------------------
Impairment of inventory 2011- - -0.8 - -0.8 -0.8
2012, Sweden 1)
--------------------------------------------------------------------------------
Losses on sales of holdings, - - - - -0.2
Sweden 3)
--------------------------------------------------------------------------------
Impairment of assets, Denmark1) - -5.2 - -5.2 -5.2
--------------------------------------------------------------------------------
Restructuring expenses COGS, - - - - -1.5
Denmark 1)
--------------------------------------------------------------------------------
Cover of loss in associated - - - - -0.8
company based on SHA,
Denmark 3)
--------------------------------------------------------------------------------
Capital gain in sales of shares - 77.6 - 77.6 77.6
of
Saturn Nordic Holding Ab 3)
--------------------------------------------------------------------------------
Impairment of assets, Latvia 1) - - - - -2.1
--------------------------------------------------------------------------------
Non-recurring items Total - 59.6 - 49.3 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) Q2/2015 Q2/2014 2014
------------------------------------------------------------
Opening balance 144.3 152.1 152.1
------------------------------------------------------------
Translation differences 1.7 -3.3 -5.5
------------------------------------------------------------
Additions 0.6 0.6 1.4
------------------------------------------------------------
Additions. business acquisitions 0.0 0.8 0.8
------------------------------------------------------------
Disposals -0.2 0.0 -0.1
------------------------------------------------------------
Depreciation and impairment -1.3 -2.9 -4.1
------------------------------------------------------------
Reclassification between items 0.4 0.0 -0.2
------------------------------------------------------------
Closing balance 145.5 147.3 144.3
------------------------------------------------------------
3. CHANGES IN TANGIBLE ASSETS
(EUR million) Q2/2015 Q2/2014 2014
------------------------------------------------------------
Opening balance 369.7 411.5 411.5
------------------------------------------------------------
Translation differences 1.1 -2.1 -3.5
------------------------------------------------------------
Additions 25.1 20.9 51.3
------------------------------------------------------------
Additions, business acquisitions 0.0 0.0 0.9
------------------------------------------------------------
Disposals -0.5 -1.1 -13.3
------------------------------------------------------------
Depreciation and impairment -25.6 -47.9 -77.3
------------------------------------------------------------
Reclassification between items -0.2 0.5 0.0
------------------------------------------------------------
Closing balance 369.5 381.9 369.7
------------------------------------------------------------
4. INVENTORIES
(EUR million) Q2/2015 Q2/2014 2014
------------------------------------------------------------
Materials and supplies 67.4 78.8 73.2
------------------------------------------------------------
Semi-finished products 4.9 4.2 5.3
------------------------------------------------------------
Finished products 34.6 42.9 36.9
------------------------------------------------------------
Other inventories 0.5 3.2 1.8
------------------------------------------------------------
Inventories, advance payments 1.2 1.9 0.5
------------------------------------------------------------
Biological asset, IFRS 41 6.9 9.8 7.7
------------------------------------------------------------
Total inventories 115.5 140.8 125.4
------------------------------------------------------------
5. NOTES TO EQUITY
Share capital and Number of Share Share Reserve for Treasury Total
share premium outstanding capital premium invested
reserve shares reserve unrestricted
equity
-------------------------------------------------------------------------------
1.1.2015 53 972 788 66.8 72.9 143.5 0.0 283.1
-------------------------------------------------------------------------------
30.6.2015 53 972 788 66.8 72.9 143.5 0.0 283.1
-------------------------------------------------------------------------------
DERIVATIVE INSTRUMENT LIABILITIES
(EUR million) 30.6.2015 30.6.2014 31.12.2014
--------------------------------------------------------------------------
Nominal values of derivative instruments
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Foreign exchange derivatives 61.9 85.4 70.5
--------------------------------------------------------------------------
Interest rate derivatives 148.4 180.4 157.6
--------------------------------------------------------------------------
Electricity derivatives 8.6 7.8 7.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Fair values of derivative instruments
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Foreign exchange derivatives -0.1 0.5 0.3
--------------------------------------------------------------------------
Interest rate derivatives -13.9 -14.8 -15.7
--------------------------------------------------------------------------
Electricity derivatives -2.0 -1.9 -1.7
--------------------------------------------------------------------------
CONSOLIDATED OTHER CONTINGENT LIABILITIES
(EUR million) 30.6.2015 30.6.2014 31.12.2014
--------------------------------------------------------------------------
Debts secured by pledges or mortgages
--------------------------------------------------------------------------
- loans from financial institutions 0.2 72.1 29.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------
On own behalf
--------------------------------------------------------------------------
- Mortgages given 0.6 12.3 10.7
--------------------------------------------------------------------------
- Assets pledged 3.2 0.4 3.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------
On behalf of others
--------------------------------------------------------------------------
- guarantees and other commitments 12.6 16.2 13.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Other contingencies
--------------------------------------------------------------------------
Leasing commitments 12.5 15.3 14.7
--------------------------------------------------------------------------
Rent liabilities 33.7 45.5 39.8
--------------------------------------------------------------------------
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.
30.6.2015 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 -13.9 0.0 -13.9 0.0
--------------------------------------------------------------------------------
of which subject to cash flow hedging -13.8 0.0 -13.8 0.0
--------------------------------------------------------------------------------
- Foreign exchange derivatives -0.2 0.0 -0.2 0.0
--------------------------------------------------------------------------------
of which subject to net investment - - - -
hedging
--------------------------------------------------------------------------------
- Commodity derivatives -2.0 0.0 -2.0 0.0
--------------------------------------------------------------------------------
of which subject to cash flow hedging -2.0 0.0 -2.0 0.0
--------------------------------------------------------------------------------
Total -16.1 0.0 -16.1 0.0
--------------------------------------------------------------------------------
BUSINESS TRANSACTIONS WITH RELATED PARTIES
----------------------------------------------------
(EUR million) Q1-Q2/2015 Q1-Q2/2014 2014
---------------------------------------------------------
Sales to associates 33.4 32.2 65.9
---------------------------------------------------------
Purchases from associates 21.2 20.3 40.2
---------------------------------------------------------
Trade and other receivables 2.2 2.4 2.4
---------------------------------------------------------
Trade and other payables 4.5 2.9 2.8
---------------------------------------------------------
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