2015-11-04 07:00:01 CET
2015-11-04 07:00:06 CET
REGULATED INFORMATION
HKScan Oyj - Interim report (Q1 and Q3)
HKScan Group’s interim report for 1 January–30 September 2015: Third quarter EBIT on par with previous year – strategic poultry investment approved
HKScan Corporation INTERIM REPORT
4 November 2015, at 08:00 am
HKScan Group's interim report for 1 January-30 September 2015:
Third quarter EBIT on par with previous year - strategic poultry investment
approved
* Net sales were EUR 1 415.6 (1 465.6) million for January-September, and EUR
474.9 (498.4) million in the third quarter.
* EBIT for January-September was EUR 10.2 (48.3) million. EBIT excluding
non-recurring income and expenses was EUR 10.2 (-1.0) million. The
corresponding EBIT margin was 0.7 (-0.1) per cent.
* For the third quarter, EBIT was EUR 7.3 (7.3) million, and EBIT margin was
1.5 (1.5) per cent.
* Cash flow before debt service was EUR 23.4 (173.5) million for
January-September, and EUR 4.3 (16.3) million for the third quarter.
* Profit before taxes was EUR 4.5 (46.9) million for January-September, and EUR
6.4 (5.8) million in the third quarter.
* EPS was EUR 0.05 (0.97) for January-September, and EUR 0.09 (0.10) in the
third quarter.
* Net financial expenses were EUR -6.9 (-11.8) million for January-September,
and EUR -2.1 (-2.1) million in the third quarter.
* Net debt was EUR 147.0 (170.9) million and net gearing 34.6 (38.1) 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 third quarter of 2015:
“The Group's net sales in the third quarter were lower than in the
corresponding quarter last year. Finland exceeded the prior year's net sales
but other market areas lagged behind. Group operating profit for the quarter
was on a par with the previous year. Sweden continued on a good track improving
its performance from the previous year. In Finland, operating profit was eroded
by illegal strikes and pork oversupply. Denmark continued to suffer from a
tough market situation, as did the Baltics, where also risks related to African
Swine Fever started to materialize.
The operating environment remained challenging, and global economic and
political uncertainties continued to plague the industry throughout the
quarter. Price competition remained fierce especially in the food retail market
in Finland. The Russian ban on meat import continued, and permits for direct
pork meat imports to China did not materialize as anticipated. However, HKScan
sales operations advanced in Hong Kong.
Implementation of the Group's strategy for profitable growth advanced. On 1
October, HKScan announced that Rauma, Finland will be the location of its new
poultry production facility. This strategic growth investment is valued at EUR
80 million. In July, HKScan announced the acquisition of a 50 per cent stake in
Paimion Teurastamo. The beef slaughterhouse became an associated company of the
Group.”
KEY FIGURES, Q3
(EUR million) Q3/201 Q3/201 Q1-Q3/201 Q1-Q3/201 2014
5 4 5 4
--------------------------------------------------------------------------------
Net sales 474.9 498.4 1 415.6 1 465.6 1 988.7
--------------------------------------------------------------------------------
EBIT 7.3 7.3 10.2 48.3 55.5
--------------------------------------------------------------------------------
- % of net sales 1.5 1.5 0.7 3.3 2.8
--------------------------------------------------------------------------------
Profit/loss before taxes 6.4 5.8 4.5 46.9 51.2
--------------------------------------------------------------------------------
- % of net sales 1.3 1.2 0.3 3.2 2.6
--------------------------------------------------------------------------------
Profit/loss for the period 5.1 5.6 3.3 52.0 57.1
--------------------------------------------------------------------------------
- % of net sales 1.1 1.1 0.2 3.5 2.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT, excluding non-recurring 7.3 7.3 10.2 -1.0 12.4
income and
expenses
--------------------------------------------------------------------------------
- % of net sales 1.5 1.5 0.7 -0.1 0.6
--------------------------------------------------------------------------------
Profit/loss before taxes, 6.4 5.8 4.5 -2.4 8.2
excluding non-
recurring income and expenses
--------------------------------------------------------------------------------
- % of net sales 1.3 1.2 0.3 -0.2 0.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EPS, EUR 0.09 0.10 0.05 0.97 1.05
--------------------------------------------------------------------------------
Cash flow before debt service 4.3 16.3 23.4 173.5 201.7
--------------------------------------------------------------------------------
Cash flow before financing 2.8 14.0 21.1 166.8 198.9
activities
--------------------------------------------------------------------------------
Return on capital employed (ROCE) 3.4 10.3 9.7
before
taxes, %
--------------------------------------------------------------------------------
Net debt 147.0 170.9 141.5
--------------------------------------------------------------------------------
Gearing % 37.8 41.8 35.5
--------------------------------------------------------------------------------
Net Gearing % 34.6 38.1 31.8
--------------------------------------------------------------------------------
JANUARY-SEPTEMBER 2015
The Group's net sales for January-September declined on the corresponding
period the previous year. A decline in sales was seen in Sweden and Denmark,
mainly because of planned restructuring, but also due to lower sales prices in
Denmark and a weaker value of SEK. The Group's comparable operating profit,
however, improved from the corresponding period the previous year. Sweden and
Finland were the market areas that improved, whereas Denmark and the Baltics
were behind the previous year. Comparable cash flow improved in all market
areas.
The balance sheet improved further and financial expenses declined. Inventories
and the meat balance were managed efficiently, except the frozen pork stock in
Finland. Animal raw material costs for both pork and poultry were below the
previous year but higher for beef.
Global economic and political uncertainties continued, and price competition
was fierce. Fierce retail discount campaigns increased price competition in
Finland. The Russian ban on meat imports caused oversupply and price pressure
on pork both on the home and export markets. African Swine Fever (ASF) was
spreading in Estonia, which caused risks and required additional workload.
The Group continued to make good progress with the implementation of the
Group's strategy for profitable growth. On 1 October, the Group announced its
forthcoming greenfield investment in a new poultry production facility to be
built in Rauma, Finland. Also Group's investments in innovation, brand and
category work continued.
MARKET AREA: FINLAND
------------------------------------------
(EUR million) Q3/2015 Q3/2014 Q1-Q3/201 Q1-Q3/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 196.4 194.7 585.4 573.4 787.2
--------------------------------------------------------------------------------
EBIT 2.8 3.0 10.2 -11.2 -4.5
--------------------------------------------------------------------------------
- EBIT margin, % 1.4 1.5 1.7 -1.9 -0.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring 2.8 3.0 10.2 0.8 8.9
items
--------------------------------------------------------------------------------
- EBIT margin, % 1.4 1.5 1.7 0.1 1.1
--------------------------------------------------------------------------------
In Finland, net sales were EUR 585.4 (573.4) million for January-September and
EUR 196.4 (194.7) million in the third quarter. Comparable EBIT excluding
non-recurring expenses totalled EUR 10.2 (0.8) for January-September and EUR
2.8 (3.0) million in the third quarter.
In the third quarter, net sales and operating profit were approximately at the
same level as the previous year. Cash flow and profit improved during the
reporting period. Sales product mix and operational efficiency continued to
improve. Inventory levels increased in the third quarter due to oversupply of
pork. The illegal strikes at the Forssa and Mellilä plants in September caused
an additional net cost of approximately EUR 1 million during the quarter. Sales
of HK® branded Finnish pork meat to Swedish retail and industrial customers
commenced during the quarter.
The total Finnish meat market grew slightly during the third quarter compared
to the previous year. Tough competition in retail continued, the Russian border
remained closed and oversupply of pork led to tougher price competition.
HKScan's own brands continued making positive progress, although private labels
increased their overall share in retail. HK® filet cold cuts and many new
products in Kariniemen® poultry product offering were among the novelties
launched in the third quarter.
On 2 July, HKScan issued a stock exchange release on acquisition of a 50% stake
in Paimion Teurastamo. On 1 October, HKScan announced that Rauma will be the
location of its new poultry production facility. (See more under Events after
the reporting period.)
MARKET AREA: BALTICS
------------------------------------------
(EUR million) Q3/2015 Q3/2014 Q1-Q3/201 Q1-Q3/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 44.8 47.3 130.3 129.2 173.0
--------------------------------------------------------------------------------
EBIT 1.9 2.8 4.4 4.8 2.8
--------------------------------------------------------------------------------
- EBIT margin, % 4.2 6.0 3.4 3.7 1.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring 1.9 2.8 4.4 4.8 4.8
items
--------------------------------------------------------------------------------
- EBIT margin, % 4.2 6.0 3.4 3.7 2.8
--------------------------------------------------------------------------------
In the Baltics, net sales were EUR 130.3 (129.2) million in January-September
and EUR 44.8 (47.3) million in the third quarter. EBIT was EUR 4.4 (4.8)
million in January-September and EUR 1.9 (2.8) million in the third quarter.
Demand was good on the domestic markets considering the circumstances, but the
export market struggled in the third quarter. The Baltic and Estonian pork
markets in particular were affected by ASF. The control zones set up by the EU
limited the movement and handling of both live animals and meat, resulting in
oversupply of pork meat in Estonia. This additionally brought about a decline
in animal prices and market sales prices of pork. Price competition
intensified and also reached to poultry meat and processed meat products.
Production volumes of pork have started to decrease in Estonia.
Despite ASF and other challenges on the export market, HKScan managed its pork
meat balance successfully in Estonia, and its sales volumes grew. HKScan's own
brands especially processed and seasonal products, kept selling well.
Baltic product novelties launched in the third quarter included e.g. Tallegg®
fried chicken wings and Mini nuggets, as well as Rakvere® liver pâtés and
Lihakas smoked ham.
MARKET AREA: SWEDEN
------------------------------------------
(EUR million) Q3/2015 Q3/2014 Q1-Q3/201 Q1-Q3/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 208.6 227.4 619.0 670.5 911.0
--------------------------------------------------------------------------------
EBIT 7.2 5.1 12.7 -6.4 1.7
--------------------------------------------------------------------------------
- EBIT margin, % 3.5 2.2 2.0 -1.0 0.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring 7.2 5.1 12.7 4.8 13.4
items
--------------------------------------------------------------------------------
- EBIT margin, % 3.5 2.2 2.0 0.7 1.5
--------------------------------------------------------------------------------
In Sweden, net sales were EUR 619.0 (670.5) million for January-September, and
EUR 208.6 (227.4) million in the third quarter. Comparable EBIT excluding
non-recurring expenses totalled EUR 12.7 (4.8) million for January-September,
and EUR 7.2 (5.1) million in the third quarter.
Net sales declined due to lower volumes and the weaker SEK exchange rate. EBIT
improved in the third quarter thanks to completed production restructuring and
a better product mix. Inventories were reduced clearly from the corresponding
period the previous year.
Swedish consumers favour domestic meat, which continued selling well. Organic
and vegetarian food trends are picking up momentum. Private labels are
increasing their market share regardless of the meat type and degree of
processing. White meat consumption in general grew faster than that of red
meat.
Product novelties launched in the third quarter included Flodins® brand chicken
nuggets, and organic cold cuts products sold under the Pärsons® brand.
MARKET AREA: DENMARK
------------------------------------------
(EUR million) Q3/2015 Q3/2014 Q1-Q3/201 Q1-Q3/2014 2014
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 43.8 51.6 138.2 158.1 204.3
--------------------------------------------------------------------------------
EBIT -1.5 -1.5 -7.4 -8.2 -11.9
--------------------------------------------------------------------------------
- EBIT margin, % -3.5 -3.0 -5.4 -5.2 -5.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT excluding non-recurring -1.5 -1.5 -7.4 -3.1 -4.4
items
--------------------------------------------------------------------------------
- EBIT margin, % -3.5 -3.0 -5.4 -1.9 -2.1
--------------------------------------------------------------------------------
In Denmark, net sales for January-September amounted to EUR 138.2 (158.1)
million and EUR 43.8 (51.6) million in July-September. Comparable EBIT
excluding non-recurring expenses was EUR -7.4 (-3.1) million in
January-September and EUR -1.5 (-1.5) million in the third quarter.
Production restructuring was completed, and the resultant cost savings began to
materialize towards the end of the third quarter. The operational focus is on
increasing sales, and completing the operational excellence programme in
production. Strengthening of the Danish organization was completed.
The market and competition, especially in Denmark and Sweden, remained tough in
the third quarter. Sales price decreased on certain export markets. Demand for
organic chicken meat increased but the volumes were still relatively modest.
In September, the Rose® brand introduced a campaign with new packaging design,
visuals and marketing activities. Rose® Crispy Chicken Bites (BBQ and plain)
were launched in the Danish retail during the third quarter. The Rose® Organic
Filet also received a Danish food award, Børsens Smagsprisen 2015 (Taste Award
2015).
INVESTMENTS
The Group's investments in the third quarter totalled EUR 10.6 (10.0) million.
The breakdown per market area is as follows:
(EUR million) Q3/2015 Q3/2014 Q1-Q3/2015 Q1-Q3/2014 2014
-------------------------------------------------------------
Finland 3.2 3.3 16.5 9.8 14.7
-------------------------------------------------------------
Baltics 3.2 1.9 8.5 9.3 11.7
-------------------------------------------------------------
Sweden 2.4 1.6 6.8 3.6 7.6
-------------------------------------------------------------
Denmark 1.7 3.1 4.4 8.4 14.7
-------------------------------------------------------------
Total 10.6 10.0 36.2 31.2 48.7
-------------------------------------------------------------
The investments of the third quarter included efficiency improvements in all
plants throughout the Group.
FINANCING
The Group's interest-bearing debt at the end of September stood at EUR 161.0
(187.3) million. Net debt decreased to EUR 147.0 (170.9) million. The net
gearing ratio decreased to 34.6 (38.1) per cent.
The Group's liquidity was good. Committed credit facilities at 30 September
stood at EUR 100.0 (161.5) million, and were entirely undrawn. The EUR 200.0
million commercial paper programme had been drawn to the amount of EUR 19.0
(117.5) million.
Net financial expenses were EUR -2.1 (-2.1) million in the third quarter and
EUR -6.9 (-11.8) million in January-September.
SHARES
At the end of September, 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 September stood at EUR 211.7
(182.0) million, breaking down as follows: Series A shares had a market value
of EUR 190.4 (163.7) million, and the unlisted Series K shares a calculational
market value of EUR 21.2 (18.2) million.
In January-September, a total of 14 717 180 (10 084 409) of the company's
shares with a total value of EUR 77 804 999 (39 020 690) were traded. The
highest price quoted in the period under review was EUR 6.26 (4.49), and the
lowest was EUR 3.24 (3.37). The average price was EUR 5.28 (3.82). At the end
of September, the closing price was EUR 3.92 (3.37).
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 a 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 January-September, HKScan had an average of 7 568 (7 776) personnel.
The average number of employees in each market area was as follows:
Q1-Q3/2015 Q1-Q3/2014 2014
---------------------------------------------------------------------------
Finland 2 891 2 816 2 771
---------------------------------------------------------------------------
Baltics 1 722 1 770 1 769
---------------------------------------------------------------------------
Sweden 2 217 2 349 2 305
---------------------------------------------------------------------------
Denmark 738 841 817
---------------------------------------------------------------------------
Total 7 568 7 776 7 662
---------------------------------------------------------------------------
Division of employees by market area at the end of September is as follows:
30.9.2015 30.9.2014 31.12.2014
---------------------------------------------------------------------------
Finland 2 719 2 682 2 644
---------------------------------------------------------------------------
Baltics 1 624 1 767 1 766
---------------------------------------------------------------------------
Sweden 2 108 2 203 2 152
---------------------------------------------------------------------------
Denmark 692 752 765
---------------------------------------------------------------------------
Total 7 143 7 404 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 authorities
or pressure groups, which may cause restrictions to the business or volatility
in demand. 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 cannot be fully excluded.
EVENTS AFTER THE REPORTING PERIOD
On 1 October HKScan issued a stock exchange release announcing that the new
poultry production facility will be built in Rauma, Finland. The investment is
valued at approximately EUR 80 million, and the new facility is scheduled for
completion approximately at the end of 2017.
The investment entails a non-cash impairment of assets amounting to about EUR
11 million resulting from the termination of production at the current Eura
plant.
OUTLOOK (UNCHANGED)
HKScan expects operating profit (EBIT) excluding non-recurring items to improve
from 2014, and anticipates the last quarter to be the strongest.
NEXT FINANCIAL REPORT
HKScan Group's financial statements 2015 bulletin will be published on 10
February 2016.
Vantaa, 4 November 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 SEPTEMBER 2015
CONSOLIDATED INCOME STATEMENT
(EUR million) Note Q3/201 Q3/201 Q1-Q3/201 Q1-Q3/201 2014
5 4 5 4
--------------------------------------------------------------------------------
Net sales 474.9 498.4 1 415.6 1 465.6 1 988.7
--------------------------------------------------------------------------------
Cost of goods sold 1. -442.2 -466.2 -1 323.4 -1 417.1 -1 905.2
--------------------------------------------------------------------------------
Gross profit 32.6 32.2 92.2 48.5 83.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating items 1. 3.0 1.8 7.8 91.4 94.1
total
--------------------------------------------------------------------------------
Sales and marketing costs 1. -13.5 -14.4 -43.5 -46.7 -62.1
--------------------------------------------------------------------------------
General administration 1. -14.8 -12.3 -46.3 -44.8 -60.1
costs
--------------------------------------------------------------------------------
Operating profit 7.3 7.3 10.2 48.3 55.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income and -2.1 -2.1 -6.9 -11.8 -15.5
expenses
--------------------------------------------------------------------------------
Share of profit/loss in 1.2 0.7 1.1 10.4 11.2
associates
--------------------------------------------------------------------------------
Profit/loss before taxes 6.4 5.8 4.5 46.9 51.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income tax -1.2 -0.2 -1.1 5.0 5.9
--------------------------------------------------------------------------------
Profit/loss for the period 5.1 5.6 3.3 52.0 57.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interests -0.4 -0.1 -0.7 0.1 -0.5
--------------------------------------------------------------------------------
Profit/loss for the period 4.7 5.5 2.6 52.1 56.7
--------------------------------------------------------------------------------
Earnings per share calculated on profit attributable to
equity holders of the parent:
------------------------------------------------------------
EPS, undiluted, continuing 0.09 0.10 0.05 0.97 1.05
operations,
EUR/share
--------------------------------------------------------------------------------
EPS, diluted, continuing 0.09 0.10 0.05 0.97 1.05
operations,
EUR/share
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
(EUR million) Q3/201 Q3/201 Q1-Q3/201 Q1-Q3/201 2014
5 4 5 4
--------------------------------------------------------------------------------
Profit/loss for the period 5.1 5.6 3.3 52.0 57.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME
(after taxes):
--------------------------------------------------------------------------------
Exchange differences on translating -2.6 0.4 -0.3 -4.9 -8.3
foreign
operations
--------------------------------------------------------------------------------
Cash flow hedging -1.2 -0.3 -0.1 -1.5 -1.9
--------------------------------------------------------------------------------
Actuarial gains or losses 0.0 0.0 0.0 0.0 -4.9
--------------------------------------------------------------------------------
TOTAL OTHER COMPREHENSIVE -3.8 0.1 -0.4 -6.4 -15.1
INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR 1.3 5.7 2.9 45.6 42.1
THE PERIOD
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Equity holders of the parent 0.9 5.6 2.2 45.7 41.6
--------------------------------------------------------------------------------
Non-controlling interests 0.4 0.1 0.7 -0.1 0.5
--------------------------------------------------------------------------------
Total 1.3 5.7 2.9 45.6 42.1
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR million) Note 30.9.2015 30.9.2014 31.12.2014
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Intangible assets 2. 145.7 147.4 144.3
--------------------------------------------------------------------------------
Tangible assets 3. 372.5 377.9 369.7
--------------------------------------------------------------------------------
Holdings 36.8 41.6 35.9
--------------------------------------------------------------------------------
Other non-current assets 35.7 36.5 40.8
--------------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 590.7 603.5 590.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Inventories 4. 120.7 140.8 125.4
--------------------------------------------------------------------------------
Current receivables 119.8 132.4 122.4
--------------------------------------------------------------------------------
Cash and cash equivalents 13.7 14.3 16.4
--------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 254.2 287.5 264.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets of disposal group classified as - - 9.4
held for sale
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL ASSETS 844.8 890.9 864.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY 5. 425.3 448.5 445.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current loans, interest-bearing 116.7 58.5 121.8
--------------------------------------------------------------------------------
Non-current liabilities, 34.1 31.4 40.8
non-interest-bearing
--------------------------------------------------------------------------------
TOTAL NON-CURRENT LIABILITIES 150.8 89.9 162.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current loans, interest-bearing 44.3 128.8 36.4
--------------------------------------------------------------------------------
Current liabilities, 224.4 223.8 219.4
non-interest-bearing
--------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 268.7 352.6 255.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities of disposal group classified - - 0.8
as held for sale
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 844.8 890.9 864.3
--------------------------------------------------------------------------------
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 -6,3 0,0 162,2 436,5 8,7 445,2
1.1.2015
--------------------------------------------------------------------------------
Result - - - - - - - 2,6 2,6 0,7 3,3
for the
financia
l
period
--------------------------------------------------------------------------------
Other
comprehe
nsive
income
(+)/expe
nse (-)
--------------------------------------------------------------------------------
Transl. - - - - - -0,3 - - -0,3 - -0,3
diff.
--------------------------------------------------------------------------------
Cash flow - - -0,1 - - - - - -0,1 - -0,1
hedging
--------------------------------------------------------------------------------
Actuarial - - - - - - - - - - -
gains or
losses
--------------------------------------------------------------------------------
Total - - -0,1 - - -0,3 - 2,6 2,2 0,7 2,9
comprehe
nsive
income
for the
period
--------------------------------------------------------------------------------
Acquisiti - - - - - - - - - 3,8 3,8
on of
subsidiar
y
--------------------------------------------------------------------------------
Direct -. - - - 0,0 - - 0,2 0,2 - 0,2
recognit
. 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 -12,8 143,5 10,1 -6,6 0,0 138,6 412,4 12,9 425,3
30.9.201
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 - - - - - - - 52,1 52,1 -0,1 52,0
for the
financia
l
period
--------------------------------------------------------------------------------
Other
comprehe
nsive
income
(+)/expe
nse (-)
--------------------------------------------------------------------------------
Transl. - - - - - -4,9 - - -4,9 - -4,9
diff.
--------------------------------------------------------------------------------
Cash flow - - -1,5 - - - - - -1,5 - -1,5
hedging
--------------------------------------------------------------------------------
Actuarial - - - - - - - - - - -
gains or
losses
--------------------------------------------------------------------------------
Total - - -1,5 - - -4,9 - 52,1 45,7 -0,1 45,6
comprehe
nsive
income
for the
period
--------------------------------------------------------------------------------
Direct - - - - - - - 0,0 0,0 - 0,0
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 -12,4 143,5 10,1 -2,9 0,0 162,2 440,3 8,2 448,5
30.9.201
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-Q3/2015 Q1-Q3/2014 2014
--------------------------------------------------------------------------------
Cash flow before change in net working capital 53.5 29.4 52.6
--------------------------------------------------------------------------------
Change in net working capital 3.3 -6.5 14.2
--------------------------------------------------------------------------------
Financial items and taxes -3.9 -6.2 -3.6
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES 52.9 16.7 63.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities -31.8 150.1 135.7
--------------------------------------------------------------------------------
CASH FLOW AFTER INVESTING ACTIVITIES 21.1 166.8 198.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in loans 2.9 -214.7 -244.1
--------------------------------------------------------------------------------
Dividends paid -26.7 -6.1 -6.1
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES -23.8 -220.8 -250.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET CASH FLOW -2.7 -54.0 -51.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 16.4 68.7 68.7
--------------------------------------------------------------------------------
Translation differences 0.0 -0.4 -1.0
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period 13.7 14.3 16.4
--------------------------------------------------------------------------------
FINANCIAL INDICATORS
30.9.2015 30.9.2014 31.12.2014
-----------------------------------------------------------------------------
Earnings per share (EPS), undiluted, EUR 0.05 0.97 1.05
-----------------------------------------------------------------------------
Earnings per share (EPS), diluted, EUR 0.05 0.97 1.05
-----------------------------------------------------------------------------
Equity per share, EUR 7.64 8.16 8.09
-----------------------------------------------------------------------------
Equity ratio, % 50.4 50.3 51.5
-----------------------------------------------------------------------------
Adjusted average number of shares, mill. 54.0 54.0 54.0
-----------------------------------------------------------------------------
Gross capital expenditure on PPE, EUR mill. 36.2 31.2 48.7
-----------------------------------------------------------------------------
Employees, end of month average 7 568 7 776 7 662
-----------------------------------------------------------------------------
CALCULATION OF FINANCIAL INDICATORS
Return on capital employed Profit before tax + interest and x 100
(ROCE) before tax (%) other financial
expenses
--------------------------------------
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 service Cash flow before financing
activities and
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 September 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) Q3/2015 Q3/2014 Q1-Q3/201 Q1-Q3/2014 2014
5
--------------------------------------------------------------------------------
NET SALES
--------------------------------------------------------------------------------
- Finland 196.4 194.7 585.4 573.4 787.2
--------------------------------------------------------------------------------
- Baltics 44.8 47.3 130.3 129.2 173.0
--------------------------------------------------------------------------------
- Sweden 208.6 227.4 619.0 670.5 911.0
--------------------------------------------------------------------------------
- Denmark 43.8 51.6 138.2 158.1 204.3
--------------------------------------------------------------------------------
- Between segments -18.8 -22.5 -57.4 -65.7 -86.8
--------------------------------------------------------------------------------
Group total 474.9 498.4 1 415.6 1 465.6 1 988.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT
--------------------------------------------------------------------------------
- Finland 2.8 3.0 10.2 -11.2 -4.5
--------------------------------------------------------------------------------
- Baltics 1.9 2.8 4.4 4.8 2.8
--------------------------------------------------------------------------------
- Sweden 7.2 5.1 12.7 -6.4 1.7
--------------------------------------------------------------------------------
- Denmark -1.5 -1.5 -7.4 -8.2 -11.9
--------------------------------------------------------------------------------
- Between segments - - - - -
--------------------------------------------------------------------------------
Segments total 10.4 9.3 19.8 -21.0 -11.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Group administration costs -3.1 -2.0 -9.6 -8.3 -10.2
--------------------------------------------------------------------------------
Capital gain in sales of - - - 77.6 77.6
shares of
Saturn Nordic Holding Ab
--------------------------------------------------------------------------------
Group total 7.3 7.3 10.2 48.3 55.5
--------------------------------------------------------------------------------
NOTES TO THE INCOME STATEMENT
1. NON-RECURRING ITEMS
(EUR million) Q3/2015 Q3/2014 Q1-Q3/201 Q1-Q3/2014 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
--------------------------------------------------------------------------------
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
2012, Sweden 1)
--------------------------------------------------------------------------------
Losses on sales of holdings, - - - - -0.2
Sweden 3)
--------------------------------------------------------------------------------
Impairment of assets, Denmark 1) - - - -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
of
Saturn Nordic Holding Ab 3)
--------------------------------------------------------------------------------
Impairment of assets, Latvia 1) - - - - -2.1
--------------------------------------------------------------------------------
Non-recurring items Total - - - 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) Q3/2015 Q3/2014 2014
------------------------------------------------------------
Opening balance 144.3 152.1 152.1
------------------------------------------------------------
Translation differences -0.2 -3.0 -5.5
------------------------------------------------------------
Additions 0.9 1.0 1.4
------------------------------------------------------------
Additions, business acquisitions 2.2 0.8 0.8
------------------------------------------------------------
Disposals -0.2 0.0 -0.1
------------------------------------------------------------
Depreciation and impairment -2.0 -3.6 -4.1
------------------------------------------------------------
Reclassification between items 0.6 0.1 -0.2
------------------------------------------------------------
Closing balance 145.7 147.4 144.3
------------------------------------------------------------
3. CHANGES IN TANGIBLE ASSETS
(EUR million) Q3/2015 Q3/2014 2014
------------------------------------------------------------
Opening balance 369.7 411.5 411.5
------------------------------------------------------------
Translation differences -0.1 -1.9 -3.5
------------------------------------------------------------
Additions 35.3 30.5 51.3
------------------------------------------------------------
Additions, business acquisitions 7.8 0.0 0.9
------------------------------------------------------------
Disposals -1.3 -1.4 -13.3
------------------------------------------------------------
Depreciation and impairment -38.4 -61.2 -77.3
------------------------------------------------------------
Reclassification between items -0.5 0.4 0.0
------------------------------------------------------------
Closing balance 372.5 377.9 369.7
------------------------------------------------------------
4. INVENTORIES
(EUR million) Q3/2015 Q3/2014 2014
------------------------------------------------------------
Materials and supplies 67.4 71.0 73.2
------------------------------------------------------------
Semi-finished products 5.3 8.8 5.3
------------------------------------------------------------
Finished products 39.7 48.5 36.9
------------------------------------------------------------
Other inventories 0.4 2.5 1.8
------------------------------------------------------------
Inventories, advance payments 1.1 0.7 0.5
------------------------------------------------------------
Biological asset. IFRS 41 6.7 9.4 7.7
------------------------------------------------------------
Total inventories 120.7 140.8 125.4
------------------------------------------------------------
5. NOTES TO EQUITY
Share capital Number of Share Share Reserve for Treasury Total
and share outstanding capital premium invested
premium reserve shares reserve unrestricted
equity
-----------------------------------------------------------------------------
1.1.2015 53 972 788 66.8 72.9 143.5 0.0 283.1
-----------------------------------------------------------------------------
30.9.2015 53 972 788 66.8 72.9 143.5 0.0 283.1
-----------------------------------------------------------------------------
DERIVATIVE INSTRUMENT LIABILITIES
(EUR million) 30.9.2015 30.9.2014 31.12.2014
--------------------------------------------------------------------------
Nominal values of derivative instruments
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Foreign exchange derivatives 55.3 77.2 70.5
--------------------------------------------------------------------------
Interest rate derivatives 127.5 158.7 157.6
--------------------------------------------------------------------------
Electricity derivatives 9.1 7.0 7.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Fair values of derivative instruments
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Foreign exchange derivatives 0.1 -0.3 0.3
--------------------------------------------------------------------------
Interest rate derivatives -14.6 -15.5 -15.7
--------------------------------------------------------------------------
Electricity derivatives -2.6 -1.4 -1.7
--------------------------------------------------------------------------
CONSOLIDATED OTHER CONTINGENT LIABILITIES
(EUR million) 30.9.2015 30.9.2014 31.12.2014
--------------------------------------------------------------------------
Debts secured by pledges or mortgages
--------------------------------------------------------------------------
- loans from financial institutions 0.2 31.6 29.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------
On own behalf
--------------------------------------------------------------------------
- Mortgages given 0.4 12.3 10.7
--------------------------------------------------------------------------
- Assets pledged 3.2 3.2 3.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------
On behalf of others
--------------------------------------------------------------------------
- guarantees and other commitments 13.6 11.0 13.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Other contingencies
--------------------------------------------------------------------------
Leasing commitments 11.2 14.3 14.7
--------------------------------------------------------------------------
Rent liabilities 32.1 50.2 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.
30.9.2015 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 0.2 0.0 0.2 0.0
--------------------------------------------------------------------------------
- Commodity derivatives - - - -
--------------------------------------------------------------------------------
Available-for-sale financial assets
--------------------------------------------------------------------------------
- Investments in shares 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
Total 0.2 0.0 0.2 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities measured at fair value
--------------------------------------------------------------------------------
Financial liabilities recognised at fair
value
through profit or loss
--------------------------------------------------------------------------------
-Trading derivatives
--------------------------------------------------------------------------------
- Interest rate swaps -14.6 0.0 -14.6 0.0
--------------------------------------------------------------------------------
of which subject to cash flow hedging -14.6 0.0 -14.6 0.0
--------------------------------------------------------------------------------
- Foreign exchange derivatives -0.1 0.0 -0.1 0.0
--------------------------------------------------------------------------------
of which subject to net investment - - - -
hedging
--------------------------------------------------------------------------------
- Commodity derivatives -2.6 0.0 -2.6 0.0
--------------------------------------------------------------------------------
of which subject to cash flow hedging -2.6 0.0 -2.6 0.0
--------------------------------------------------------------------------------
Total -17.3 0.0 -17.3 0.0
--------------------------------------------------------------------------------
BUSINESS TRANSACTIONS WITH RELATED PARTIES
----------------------------------------------------
(EUR million) Q1-Q3/2015 Q1-Q3/2014 2014
---------------------------------------------------------
Sales to associates 51.2 50.1 65.9
---------------------------------------------------------
Purchases from associates 34.5 29.6 40.2
---------------------------------------------------------
Trade and other receivables 2.4 3.0 2.4
---------------------------------------------------------
Trade and other payables 5.5 3.1 2.8
---------------------------------------------------------
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