HKFoods Plc, Financial Statements Bulletin 14 February 2025, at 8.30 am. EET
HKFoods' Financial Statements Bulletin 1 January-31 December 2024
October-December 2024
· HKFoods' net sales from continuing operations increased by 6.9 per cent to
EUR 266.9 (249.7) million. HKFoods increased its sales in all other sales
channels except industrial sales, where sales declined as planned. Consumer
demand in Finland remained at the comparison period's level but was particularly
focused on lower-priced products. HKFoods was able to meet demand with its
comprehensive product portfolio, which increased sales in the retail sector.
Sales in the food service channel developed strongly, enabling HKFoods to
strengthen its position in the market.
· The Group's EBIT from continuing operations totalled EUR 6.5 (3.1) million.
· The Group's comparable EBIT from continuing operations was EUR 10.3 (3.0)
million. The improved performance was driven by a better sales mix, production
efficiency measures and cost savings. Especially Christmas season sales were
successful. Sales to the retail sector increased, especially to the food service
channel. In addition, the structure of export sales was strengthened by growth
focused on added-value products.
· Cost levels remained high in October-December. In addition to the cost
increases in energy and external services, wage costs were pushed up by
previously agreed general pay rises. HKFoods was able to cover the impact of the
cost increase through production efficiency measures and cost savings.
Particularly the investment in the Rauma poultry cutting department increased
production efficiency.
· The comparable EBIT of the Business Unit Finland was EUR 14.5 (6.3) million.
· Cash flow from business operations including discontinued operations was EUR
38.4 (33.1) million.
· The company's extensive restructuring was completed on 31 October 2024 when
HKFoods sold its Danish business to Plukon Food Group B.V. from the
Netherlands.
January-December 2024
· HKFoods' net sales from continuing operations increased by 7.4 per cent to
EUR 1,001.8 (933.0) million.
· Sales increased due to good consumer demand and successful commercial
activities. Sales increased especially in the Finnish retail channel in the
early part of the review period, with the food service channel showing more
pronounced sales growth towards the end of the period. Exports from Finland
remained at the previous year's level; exports of red meat fell while exports of
poultry meat and meat products increased significantly.
· The Group's EBIT from continuing operations totalled EUR 22.4 (14.3)
million.
· The Group's comparable EBIT from continuing operations was EUR 27.7 (11.6)
million. An improved sales mix, increased production efficiency and cost savings
improved EBIT during the review period.
· HKFoods strengthened its position in the Finnish consumer market, which
reduced the need for less profitable meat exports. Growth in exports of meat
products also strengthened the structure of export sales.
· Cost levels remained high, with the cost of external services in particular
rising from the comparison period. Profitability of red meat, especially beef,
continued to be challenging in Finland, but improved towards the end of the
review period. Increased production volumes, investments in production and
efficiency measures enhanced operational efficiency and improved the company's
profitability.
· The comparable EBIT of the Business Unit Finland was EUR 37.7 (20.5)
million.
· Cash flow from operating activities including discontinued operations was
EUR 60.8 (50.6) million. Cash flow improved because of better working capital
development performance and lower financing costs than in the comparison
period.
· Interest-bearing net debt was EUR 149.8 (287.9) million and net gearing 69.5
(121.0) per cent.
· Interest-bearing net debt excluding IFRS 16 lease liabilities was EUR 62.2
(184.3) million.
· The sale of the Swedish business was completed on 27 March 2024.
· The Board of Directors proposes to the Annual General Meeting that no
dividend is to be paid for the financial year 2024. The Board of Directors
proposes that the Annual General Meeting resolve to distribute EUR 0.09 per
share from the company's reserve for invested unrestricted equity for 2024. The
Board of Directors further proposes the Annual General Meeting to authorise the
Board of Directors to resolve on the distribution of the funds recorded in the
reserve for invested unrestricted equity, at its discretion, up to a maximum of
EUR 0.05 per share. Under the authorisation, the Board of Directors could decide
to distribute funds in one or more instalments.
The figures in parentheses refer to the same period in the previous year, unless
otherwise mentioned. The figures are unaudited.
Outlook for 2025
HKFoods expects that in 2025 the Group's comparable EBIT will grow compared to
2024.
KEY FIGURES, NET SALES, CONTINUING OPERATIONS
(EUR million) 10˗12/2024 10˗12/2023 1˗12/2024 1˗12/2023
Net sales 266.9 249.7 1 001.8 933.0
Finland 266.9 249.7 1 001.8 933.0
KEY FIGURES, EBIT, CONTINUING OPERATIONS
(EUR million) 10˗12/2024 10˗12/2023 1˗12/2024 1˗12/2023
EBIT 6.5 3.1 22.4 14.3
- % of net sales 2.4 1.3 2.2 1.5
Comparable EBIT 10.3 3.0 27.7 11.6
- % of net sales 3.9 1.2 2.8 1.2
Comparable EBIT, Finland 14.5 6.3 37.7 20.5
- % of net sales 5.4 2.5 3.8 2.2
KEY FIGURES, OTHER
(EUR million) 10˗12/ 10˗12/ 1˗12/2024 1˗12/2023
2024 2023
EBITDA, continuing operations 16.9 11.1 56.3 45.1
Profit before taxes, continuing 2.3 -3.9 4.2 -10.7
operations
- % of net sales 0.9 -1.6 0.4 -1.2
Profit for the period, continuing -2.7 -7.2 -1.8 -17.3
operations
- % of net sales -1.0 -2.9 -0.2 -1.9
EPS, EUR, continuing operations -0.06 -0.10 -0.09 -0.24
Comparable EPS, EUR, continuing -0.02 -0.10 -0.04 -0.27
operations
Cash flow from operating activities, 38.4 33.1 60.8 50.6
incl. discontinued operations
Cash flow after investing activities, 64.3 40.2 141.7 73.3
incl. discontinued operations
Return on capital employed (ROCE) before 0.9 3.0
taxes, %, incl. discontinued operations
Interest-bearing net debt 149.8 287.9
Net gearing % 69.5 121.0
HKFoods' CEO Juha Ruohola
HKFoods' continuing operations developed strongly in 2024, with both net sales
and comparable EBIT growing significantly. The company's net sales from
continuing operations in 2024 increased by 7.4 per cent to EUR 1,001.8 (933.0)
million. In the fourth quarter the comparable EBIT was 3.9 (1.2) per cent of net
sales. The comparable EBIT margin for the whole year was 2.8 (2.2) per cent. The
company's EBIT target is 4 per cent.
HKFoods increased its profitability also in the fourth quarter through
successful commercial measures, production efficiency measures and cost savings.
Retail sales developed positively with a comprehensive product range and
successful Christmas season, which improved the sales mix and profitability. Our
food service sector has managed to grow its share in a declining market. The
structure of export sales has improved due to increased sales of ready-to-use
products.
The company's investment capacity has improved. We have focused our investments
on strategic and efficiency investments. The investments in the Rauma and Forssa
units have been completed, and our investment in the manufacture of ready-to-eat
products in our Eura unit is progressing as well as the investment in the ready
meal production of our Vantaa unit. With this investment, we will increase our
meal preparation capacity and develop new high-quality meals for consumers'
various food moments.
Over the past two and a half years, we have been assessing the position of our
businesses within the Group in order to increase our financial flexibility. We
have improved HKFoods' profitability and strengthened our balance sheet through
the sale of the Baltic business, which was completed in August 2023. The sale of
the Swedish business was closed at the end of March 2024. Our major
restructuring was completed at the end of October 2024, when the sale of the
Danish subsidiary ROSE Poultry A/S to the Dutch Plukon Food Group was closed.
The divestments have strengthened HKFoods' balance sheet as planned and the
proceeds have been used to repay the company's loans. The company's net debt
decreased by EUR 138.1 million to EUR 149.8 (287.9) million from a year ago. Our
net gearing ratio has decreased to 69.5 per cent. As a result of this reduction,
our net financing costs have fallen by EUR 7.5 million during 2024. In the
financing negotiations in summer 2024, we secured financial continuity until
early 2027.
According to HKFoods' vision, updated at the end of 2024, we want to be the most
valued partner of food moments. This means working together with all our
employees to meet the changing needs of consumers and customers by creating
sustainable, tasty and nutritious solutions for all meaningful food moments. It
is a collaborative effort with customers, consumers, contract farmers and other
company partners.
The company's strategy affects all sustainability topics identified as material
to HKFoods; the most important ones in the medium to long term are climate
change, consumer health and safety and animal welfare. These will be pursued
with even greater determination. During 2025, we will update our responsibility
programme to better address the sustainability topics that we have identified as
material to our stakeholders. The wellbeing and safety of our employees will
remain at the heart of our responsibility programme. Our key target is to be a
safe and healthy workplace for our own employees and the partners working in our
units. Improving safety at work is something that will continue to require our
continued commitment and action together with all our employees. We are running
a quality culture project to improve the quality of our operations and products.
Following the completion of our major restructuring, we are now focusing on
implementing our long-term strategy by improving the competitiveness of our core
business and the profitability of our operations in Finland. Our efficiency
programme, launched at the end of 2024, aims to significantly improve our
performance. The programme involves improving production efficiency and
strengthening commercial measures.
The measures taken in 2024 have taken the company to the right direction. The
hard work has paid off and our future is now on firmer ground than it has been
for many years. I would like to thank our own people, our customers, our
contractors and our other partners. We are well-positioned to move forward
inspired by our new vision.
Key events in 2024
Sale of the Swedish business completed
On 27 March 2024, HKFoods sold the shares in its Swedish subsidiary HKScan
Sweden AB (now Scan Sverige AB) to Lantmännen ek för. The transaction was
preceded by the approval of the Swedish authorities in February 2024 regarding
foreign direct investment (FDI) control and the approval of the arrangement by
HKFoods' Extraordinary General Meeting. On 7 March 2024, the EU Commission
announced its approval of the arrangement, and the transaction was completed on
27 March 2024.
The purchase price for the shares in HKScan Sweden AB amounted to approximately
EUR 60 million in cash as well as 6,869,750 A shares and 665,000 K shares in
HKFoods held by Lantmännen. In addition, Lantmännen repaid an intragroup loan
between HKFoods and HKScan Sweden AB to the amount of approximately EUR 50
million. HKFoods also reduced its off-balance sheet factoring financing by
approximately EUR 55 million and IFRS 16 leasing liabilities by approximately
EUR 13 million. A prepayment of EUR 25 million of the purchase price was made
upon the signing of the agreement, with the remainder being paid after the
completion of the transaction.
With the transaction, HKFoods' ownership of its Swedish business ended.
Details of the transaction have been disclosed in the following releases: 29
December 2023 (https://www.hkscan.com/en/newsroom/stock-releases/2023/12/inside
-information-hkscan-to-sell-c4717004/), 28 February
2024 (https://www.hkscan.com/en/newsroom/stock-releases/2024/02/resolutions
-passed-by-the-extraordinary-c4761629/), 7 March
2024 (https://www.hkscan.com/en/newsroom/press-releases/2024/03/eu-commission
-approved-lantmannen-c4769138/) and 27 March
2024. (https://www.hkscan.com/en/newsroom/press-releases/2024/03/the-transaction
-of-hkscans-swedish-c4784270/)
The sale of the Danish business unit to Plukon Food Group B.V. was completed on
31 October 2024
On 15 October 2024 HKFoods was informed that the Danish Consumer and Competition
Authority had approved the arrangement announced in May 2024 whereby HKFoods
sells its operations in Denmark. The sale of the Danish business unit was
completed on 31 October 2024. The company received cash of EUR 36.6 million.
The amount was used to pay off the company's debts.
Details on the matter have been provided in the following releases: 7 March
2024 (https://www.hkscan.com/en/newsroom/stock-releases/2024/03/inside
-information-hkscan-is-in-c4769195/), 2 May
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/05/inside
-information-hkscan-to-sell-c4810692/), 15 October
2024 (https://www.hkfoods.com/en/newsroom/press-releases/2024/10/danish
-competition-authority-approves-c4918482/) and 31 October
2024 (https://www.hkfoods.com/en/newsroom/press-releases/2024/10/the-transaction
-of-hkfoods-danish-c4929706/).
The company name changed to HKFoods
Due to the sale of the Swedish business, the Annual General Meeting approved the
change of the company name from HKScan Oyj to HKFoods Oyj.The new name, logo,
website and email address were introduced on 27 May 2024 after registration with
the Trade Register. The parallel company names of the new name are HKFoods Plc
(in English) and HKFoods Abp (in Swedish).
The new name of the Danish subsidiary changed to ROSE Poultry A/S on 27 May
2024. The name of the Polish subsidiary has been HKFoods Poland Sp. z o.o. from
23 August 2024 onwards. HKScan Finland Ltd has changed its name to HKFoods
Finland Ltd on 2 September 2024.
Details on the matter were provided in the following releases: 15 March
2024 (https://www.hkscan.com/en/newsroom/stock-releases/2024/03/notice-of-the
-annual-general-meeting-c4775263/) 18 April
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/04/resolutions
-passed-by-the-annual-c4799159/)and 24 May
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/05/hkscan
-corporations-new-name-hkfoods-c4831409/).
HKFoods issued secured notes of EUR 90 million
On 17 June 2024, HKFoods issued secured senior notes of EUR 90 million. The
three-year notes mature on 17 June 2027, carry a floating interest at the rate
of EURIBOR 3 months plus a margin of 7.5 per cent and had an issue price of 100
per cent.
The proceeds from the issue of the notes will be used for refinancing certain
existing indebtedness of HKFoods and general corporate purposes of HKFoods'
Group.
Details on the matter have been provided in the following releases: 31 May
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/05/inside
-information-hkfoods-considers-c4837953/), 7 June
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/06/inside
-information-hkfoods-plc-c4843393/), 10 June
2024 (https://www.hkfoods.com/en/newsroom/press-releases/2024/06/hkfoods-plc
-issues-eur-90-million-c4844679/), 10 June
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/06/hkfoods-plc
-announces-the-final-c4844688/) and 13 June
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/06/hkfoods-plc
-files-listing-application-c4847498/).
HKFoods redeemed its outstanding notes due 24 March 2025
The Company gave a notice in December to the holders of Notes that it redeems
all the outstanding Notes due 24 March 2025 in accordance with Condition 8.3
(Clean-up call option) of the terms and conditions of the Notes. The outstanding
Notes redeemed on 20 December 2024 in accordance with the terms and conditions
of the Notes. On the Redemption Date, the Company paid to the Noteholders a
redemption price per Note equal to 100 per cent of their principal amount
together with any accrued but unpaid interest. Interest on the Notes redeemed
accrues until (but excluding) the Redemption Date.
Details on the matter have been provided in a release: 2 December
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/12/hkfoods-to
-redeem-its-outstanding-c4949254/).
HKFoods invests in the growing meal category at its Vantaa unit - New technology
line to prepare meals to make consumers' everyday lives easier
HKFoods Plc decided on a significant strategic investment of approximately EUR 5
million in the meal production of its Vantaa unit. The investment is HKFoods'
response to the growing demand for ready meals in both the retail and food
service sectors. The investment supports HKFoods' strategy to increase added
value and operational efficiency. The company aims to grow in product categories
that make everyday life easier for consumers, such as meals, meal components and
snacks.
Details on the matter were provided in the following release: 19 September
2024 (https://www.hkfoods.com/en/newsroom/news/2024/09/hkfoods-invests-in-the
-growing-c4902799/).
Development investment in the Eura unit of ready-to-eat products improves
profitability and competitiveness
In January 2024, HKFoods announced plans to improve the efficiency of its
production operations by centralising the poultry packing activities in the Eura
unit to the company's production units in Rauma and Forssa. The statutory
negotiations concluded in February. After the statutory negotiations, HKFoods
decided to invest approximately EUR 8 million in a production line for ready-to
-eat products at its Eura unit. With this strategic investment, HKFoods will
improve its profitability by increasing the added value of its products and
operational efficiency and respond to the growing consumer demand for quick and
easy cooking.
Details on the matter have been provided in a release: 11 January
2024 (https://www.hkscan.com/fi/uutishuone/press-releases/2024/01/hkscan
-suunnittelee-siipikarjanlihan-c4723453/), 5 March
2024 (https://www.hkscan.com/en/newsroom/news/2024/03/hkscan-to-centralise-its
-poultry-c4766516/) and 14 March 2024 (https://www.hkscan.com/en/newsroom/press
-releases/2024/03/hkscan-makes-a-major-production-c4773795/).
Changes in HKFoods Plc' s Executive Team
Mika Tilli started as the new CFO and member of the Group Executive Team as of 1
July 2024.Jyrki Paappa left the company in summer 2024.
Details on the matter have been provided in a release:26 March
2024 (https://www.hkscan.com/en/newsroom/stock-releases/2024/03/appointment-in
-hkscan-group-executive-c4783252/).
Following the completion of the sale of the company's Swedish business,Lars
Appelqvist, EVP of Business Unit Sweden and member of the Group Executive Team,
left the company on 27 March 2024.
Details on the matter have been provided in a release:27 March
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/03/change-in
-hkscans-executive-team-c4784294/)
Michael Juhl Jørgensen started as Interim EVP, Business Unit Denmark and member
of the Group Executive Team as of 1 July 2024. Jukka Nikkinen left the company
on 30 June 2024.
Following the completion of the sale of HKFoods' Danish business,Michael Juhl
Jørgensen left HKFoods on 31 October 2024.
Details on the matter have been provided in a release: 27 May
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/05/change-in
-hkfoods-plcs-executive-c4832466/) and 31 October
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/10/change-in
-hkfoods-plcs-executive-c4929720/).
Jari Leija, HKFoods Plc's EVP, Business Unit Finland and member of the Executive
Team, left the company on 24 October 2024.
Details on the matter have been provided in a release: 24 October
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/10/change-in
-hkfoods-plc-s-executive-c4924839/)
Petri Toivola, EVP, Poultry Business at HKFoods,Mikko Järvinen, EVP Meat
Business at HKFoods, andTerhi Hakkarainen,EVP Processed Food Business, were
appointed as members of HKFoods Plc's Executive Team as of 27 November 2024.
Details on the matter have been provided in a release: 27 November
2024 (https://www.hkfoods.com/en/newsroom/stock-releases/2024/11/appointments-in
-hkfoods-plcs-executive-c4946524/).
HKFoods launched Finnish poultry exports to China in late 2024
HKFoods started exporting poultry meat from Finland to China in late 2024,
following an export licence for HKFoods' Rauma unit. The export licence obtained
by HKFoods for Finnish poultry meat is a significant addition to HKFoods'
extensive export rights. HKFoods currently exports Finnish pork to China.
Details on the matter have been provided in a release: 30 October
2024 (https://www.hkfoods.com/en/newsroom/news/2024/10/hkfoods-to-launch-finnish
-poultry-exports-to-china-in-late-2024/).
HKFoods revised its climate emissions calculation and target
HKFoods has updated the climate emissions calculation, climate target and
timeline of its responsibility programme to better align with international
climate work guidelines, calculations guidance and reporting standards.
Details on the matter were provided in a release: 25 January
2024 (https://www.hkscan.com/en/newsroom/press-releases/2024/01/sbti-approval
-for-hkscans-near-c4732822/).
Board of Directors' proposal on the distribution of profit, the distribution of
assets from the reserve of unrestricted equity and the authorisation of the
Board of Directors to resolve on the distribution of funds recorded in the
reserve for invested unrestricted equity
The parent company's distributable equity amounts to EUR 167.2 (195.6) million,
including a free equity reserve of EUR 216.2 (216.2) million and results for the
financial year 2024 of EUR -23.1 (-69.9) million. The Board of Directors
proposes to the Annual General Meeting that no dividend be paid for the
financial year 2024 and that the loss for the financial year be recognised in
the profit reserves of previous financial years.
The Board of Directors proposes that the Annual General Meeting resolve to
distribute EUR 0.09 per share (corresponding to a total of approximately EUR 8.1
million for all 89,910,373 shares currently outstanding) from the company's
reserve for invested unrestricted equity for 2024. The repayment of equity will
be paid to shareholders who are registered in the shareholders' register of the
company held by Euroclear Finland Ltd on the record date of the payment. The
record date for the equity repayment will be 25 April 2025 and the payment date
5 May 2025.
The Board of Directors further proposes the Annual General Meeting to authorise
the Board of Directors to resolve, at its discretion, on the distribution of the
assets recorded in the reserve of unrestricted equity, up to a maximum of EUR
0.05 per share (corresponding to a total of approximately EUR 4.5 million for
all 89,910,373 shares currently outstanding). Under the authorisation, it could
be possible to resolve to distribute the funds in one or more instalments. The
authorisation is valid until the beginning of the next Annual General Meeting.
The company will announce any decision of the Board of Directors on the equity
repayment and, at the same time, confirm the record and payment dates for the
equity repayment. Equity repayments payable under the authorisation will be paid
to shareholders entered in the shareholders' register held by Euroclear Finland
Oy on the record date for the equity repayment in question.
Annual General Meeting 2025
HKFoods' Annual General Meeting will be held in Turku, Finland on Wednesday, 23
April 2025.
The invitation will be published later.
Turku, 14 February 2025
HKFoods Plc
Board of Directors
Webcast
HKFoods will hold a briefing on its 2024 financial statements for analysts,
institutional investors and the media on 14 February 2025 at 10:00 am, Finnish
time. The event will take place in the conference room "1940" of the Helsinki
Olympic Stadium at Paavo Nurmen tie 1, 00250 Helsinki. Entrance is from the
Visitor Centre in Tornipiha.
The event can also be followed as a webcast at
https://hkfoods.events.inderes.com/q4
-2024 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fhkfoods.
events.inderes.com%2Fq4
-2024&data=05%7C02%7CMarja.Siltala%40hkfoods.com%7C8d945ff1b24641033f0b08dd413eac
cc%7Cbede92472ee64171b66eada66bc7873b%7C0%7C0%7C638738459641870779%7CUnknown%7CTW
FpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWF
pbCIsIldUIjoyfQ%3D%3D%7C4000%7C%7C%7C&sdata=3yNgfJeb3SQVDl7chCx1W%2BcLLtciKLyx2xk
c9JBqKSo%3D&reserved=0).
The event will be in Finnish, and the recording will be available later in the
day at www.hkfoods.com. (https://www.hkfoods.com/en/)
The 2024 financial statements will be presented by CEO Juha Ruohola and CFO Mika
Tilli.
To arrange investor calls, please contact executive assistant Suvi Oksava, tel.
+358 44 554 4231 or
suvi.oksava@hkfoods.com.
Financial reports
HKFoods will publish the following financial reports in 2025:
• Interim Report for January-March 2025 on Wednesday 7 May 2025 at about 8:30
EEST
• Half-Year Financial Report 2025 on Wednesday 6 August 2025 at about 8:30 EEST
• Interim Report for January-September 2025 on Wednesday 5 November 2025 at
about 8:30 EET
For further information
Juha Ruohola, CEO, tel. +358 400 647 160
Mika Tilli, CFO, tel. +358 50 538 5793
HKFoods Media Service Desk email communications@hkfoods.com or tel. +358 10 570
5700.
With 110 years of experience, we at HKFoods make life tastier - today and
tomorrow. With 3,000 professionals, we make responsible and locally produced
food for consumers' various food moments. Our well-known brands in Finland are
HK®, Kariniemen®and Via®. We are developing a more climate-friendly way of
producing food. HKFoods is a publicly listed company, and in 2024, our net sales
totalled EUR 1 billion. www.hkfoods.com (https://www.hkfoods.com/en/)
DISTRIBUTION:
Nasdaq Helsinki
Key media
www.hkfoods.com (https://www.hkfoods.com/en/)