HKScan Oyj

Annual / Quarterly Financial Statement • May 3, 2019

Disclosure 371509

HKScan Oyj - Other information disclosed according to the rules of the Exchange

Implementation of IFRS 16 Leases, HKScan Corporations’s restatement for 2018

HKScan Corporation Stock Exchange Release 3 May 2019 11:30 (EEST) Implementation of IFRS 16 Leases, HKScan Corporations’s restatement for 2018 As of 1 January 2019, HKScan has adopted the new IFRS 16 Leases standard using the full retrospective method. According to IFRS 16 lessee is required to recognise assets and liabilities for all leases and depreciation of lease assets separately from interest on lease liabilities in the income statement. The Group elected to use the recognition exemptions for short-term leases and low-value assets. Quarterly and full-year Group and Market Area financial information for 2018 has been restated accordingly. IFRS 16 impact to opening balance on 1 January 2018 amounted to EUR 44.0 million in tangible assets, EUR 0.4 million in deferred tax asset, EUR 45.9 million in interest-bearing liabilities and EUR -1.5 million in retained earnings. In the balance sheet of 31 December 2018 tangible assets increased by EUR 44.2 million and interest-bearing liabilities increased by EUR 46.2 million. Full year 2018 operating profit improved by EUR 1.2 million. Financial expenses increased by EUR 1.4 million. Profit for the period impact was EUR -0.2 million. HKScan Corporation Tero Hemmilä CEO of HKScan For more information please contact: HKScan Media Service Desk +358 10 570 5700 or by email to: communications@hkscan.com HKScan is a Nordic meat and meals company. We employ nearly 7 200 professionals in striving to serve the world´s most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service,industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2018, HKScan had net sales of EUR 1.7 billion. ATTACHMENTS Consolidated income statement, 1-12/2018, published and restated Consolidated statement of comprehensive income, 1-12/2018, published and restated Consolidated balance sheet, 1-12/2018, published and restated Cash flow statement,1-12/2018, published and restated Financial indicators, 1-12/2018, published and restated Analysis by segment, 10-12/2018, published and restated DISTRIBUTION: Nasdaq Helsinki Key media www.hkscan.com CONSOLIDATED INCOME STATEMENTPUBLISHED (EUR million) 1-3/20 4-6/2018 7-9/20 10-12/2018 2018 18 18 Net sales 411.0 433.5 416.2 454.7 1 715.4 Cost of goods sold -402.2 -424.1 -401.3 -432.9 -1 660.5 Gross profit 8.7 9.5 14.9 21.7 54.8 Other operating items 1.7 1.8 1.5 1.9 6.9 total Sales and marketing costs -10.6 -11.7 -10.6 -10.7 -43.6 General administration -18.3 -16.6 -16.0 -16.8 -67.6 costs Operating profit -18.6 -17.0 -10.1 -3.8 -49.5 Financial income 0.5 0.7 0.4 0.4 2.0 Financial expenses -3.0 -3.2 -2.4 -3.4 -11.9 Share of profit/loss in 0.4 0.0 0.4 0.2 1.1 associates and joint ventures Profit/loss before taxes -20.6 -19.4 -11.7 -6.6 -58.3 Income tax 4.0 3.0 2.8 -2.6 7.1 Profit/loss for the -16.7 -16.4 -8.9 -9.2 -51.2 period Non-controlling interests -0.1 -0.3 -0.3 -0.9 -1.7 Profit/loss for the -16.8 -16.7 -9.2 -10.2 -52.9 period Earnings per share calculated on profit attributable to equity holders of the parent: EPS, undiluted, -0.31 -0.31 -0.18 -0.20 -1.00 continuing operations, EUR/share EPS, diluted, continuing -0.31 -0.31 -0.18 -0.20 -1.00 operations, EUR/share RESTATEMENT (EUR million) 1-3/20 4-6/2018 7-9/20 10-12/2018 2018 18 18 Net sales 411.0 433.5 416.2 454.7 1 715.4 Cost of goods sold -402.0 -423.8 -401.0 -432.7 -1 659.5 Gross profit 9.0 9.7 15.2 22.0 55.9 Other operating items 1.7 1.8 1.5 1.9 6.9 total Sales and marketing costs -10.6 -11.7 -10.6 -10.7 -43.6 General administration -18.3 -16.5 -15.9 -16.7 -67.5 costs Operating profit -18.3 -16.7 -9.8 -3.5 -48.3 Financial income 0.5 0.7 0.4 0.4 2.0 Financial expenses -3.3 -3.5 -2.8 -3.7 -13.3 Share of profit/loss in 0.4 0.0 0.4 0.2 1.1 associates and joint ventures Profit/loss before taxes -20.7 -19.4 -11.7 -6.7 -58.5 Income tax 4.0 3.0 2.8 -2.6 7.2 Profit/loss for the -16.7 -16.4 -8.9 -9.3 -51.3 period Non-controlling interests -0.1 -0.4 -0.3 -0.9 -1.7 Profit/loss for the -16.9 -16.8 -9.2 -10.2 -53.0 period Earnings per share calculated on profit attributable to equity holders of the parent: EPS, undiluted, -0.31 -0.31 -0.18 -0.20 -1.00 continuing operations, EUR/share EPS, diluted, continuing -0.31 -0.31 -0.18 -0.20 -1.00 operations, EUR/share CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME PUBLISHED (EUR million) 1-3/2 4-6/2018 7-9/2018 10-12/2018 2018 018 Profit/loss for the period -16.7 -16.4 -8.9 -9.2 -51.2 OTHER COMPREHENSIVE INCOME (after taxes): Exchange differences on -4.2 -1.8 1.5 0.4 -4.0 translating foreign operations Cash flow hedging 1.1 2.4 -0.8 1.6 4.2 Actuarial gains or losses 0.0 0.0 0.0 -6.9 -6.9 TOTAL OTHER COMPREHENSIVE -3.1 0.7 0.6 -4.9 -6.7 INCOME TOTAL COMPREHENSIVE INCOME -19.8 -15.7 -8.3 -14.1 -57.9 FOR THE PERIOD TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: Equity holders of the parent -19.9 -16.1 -8.6 -15.0 -59.6 Non-controlling interests 0.1 0.3 0.3 0.9 1.7 Total -19.8 -15.7 -8.3 -14.1 -57.9 RESTATEMENT (EUR million) 1-3/2 4-6/2018 7-9/2018 10-12/2018 2018 018 Profit/loss for the period -16.7 -16.4 -8.9 -9.3 -51.3 OTHER COMPREHENSIVE INCOME (after taxes): Exchange differences on -4.1 -1.7 1.5 0.4 -4.0 translating foreign operations Cash flow hedging 1.0 2.4 -0.8 1.6 4.2 Actuarial gains or losses 0.0 0.0 0.0 -6.9 -6.9 TOTAL OTHER COMPREHENSIVE -3.1 0.7 0.6 -4.9 -6.7 INCOME TOTAL COMPREHENSIVE INCOME -19.8 -15.7 -8.3 -14.2 -58.0 FOR THE PERIOD TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: Equity holders of the parent -19.9 -16.1 -8.6 -15.1 -59.7 Non-controlling interests 0.1 0.4 0.3 0.9 1.7 Total -19.8 -15.7 -8.3 -14.2 -58.0 CONSOLIDATED BALANCE SHEET PUBLISHED (EUR million) 31.3.2018 30.6.2018 30.9.2018 31.12.2018 ASSETS Intangible assets 133.9 134.1 134.8 137.5 Tangible assets 451.2 442.1 439.1 434.2 Holdings 34.7 32.0 32.4 33.0 Deferred tax asset 36.9 39.6 42.1 42.9 Other non-current 2.7 2.7 2.6 2.5 assets TOTAL NON-CURRENT 659.4 650.6 651.1 650.2 ASSETS Inventories 123.0 113.1 121.8 121.4 Current receivables 130.1 142.1 137.2 130.9 Cash and cash 7.2 13.1 13.0 29.4 equivalents TOTAL CURRENT ASSETS 260.3 268.3 272.1 281.7 TOTAL ASSETS 919.6 918.9 923.2 931.9 EQUITY AND LIABILITIES EQUITY 329.6 309.1 340.6 326.6 Non-current loans, 284.4 279.3 276.3 242.0 interest-bearing Non-current 54.7 51.7 48.9 63.3 liabilities, non interest-bearing TOTAL NON-CURRENT 339.1 331.0 325.2 305.4 LIABILITIES Current loans, 36.4 51.1 42.5 77.0 interest-bearing Current liabilities, 214.5 227.7 214.7 223.0 non interest-bearing TOTAL CURRENT 250.9 278.8 257.3 300.0 LIABILITIES TOTAL EQUITY AND 919.6 918.9 923.2 931.9 LIABILITIES RESTATEMENT (EUR million) 31.3.2018 30.6.2018 30.9.2018 31.12.2018 ASSETS Intangible assets 133.9 134.1 134.8 137.5 Tangible assets 493.9 483.9 483.6 478.5 Holdings 34.7 32.0 32.4 33.0 Deferred tax asset 37.2 40.0 42.5 43.3 Other non-current 2.7 2.7 2.6 2.5 assets TOTAL NON-CURRENT 702.4 692.7 695.9 694.8 ASSETS Inventories 123.0 113.1 121.8 121.4 Current receivables 130.1 142.1 137.2 130.9 Cash and cash 7.2 13.1 13.0 29.4 equivalents TOTAL CURRENT ASSETS 260.3 268.3 272.1 281.7 TOTAL ASSETS 962.7 961.1 968.0 976.5 EQUITY AND LIABILITIES EQUITY 328.1 307.6 339.1 325.0 Non-current loans. 319.8 313.9 313.3 278.3 interest-bearing Non-current 54.7 51.7 48.9 63.3 liabilities. non interest-bearing TOTAL NON-CURRENT 374.5 365.6 362.3 341.7 LIABILITIES Current loans. 45.6 60.2 51.9 86.9 interest-bearing Current liabilities. 214.5 227.7 214.7 223.0 non interest-bearing TOTAL CURRENT 260.1 287.9 266.6 309.9 LIABILITIES TOTAL EQUITY AND 962.7 961.1 968.0 976.5 LIABILITIES CASH FLOW STATEMENT PUBLISHED (EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018 Cash flow before change -4.6 -2.8 3.5 11.4 7.6 in net working capital Change in net working -38.2 10.9 -15.9 20.4 -22.7 capital Financial items and -2.3 1.1 -5.7 -2.6 -9.5 taxes CASH FLOW FROM OPERATING -45.2 9.3 -18.1 29.3 -24.6 ACTIVITIES Cash flow from investing -58.8 -8.3 -10.0 -12.6 -89.8 activities CASH FLOW AFTER INVESTING -104.0 1.0 -28.1 16.6 -114.4 ACTIVITIES Hybrid loan - - 39.8 - 39.8 Change in loans 61.1 9.8 -11.8 -0.4 58.6 Dividends paid -0.6 -4.9 - - -5.5 CASH FLOW FROM FINANCING 60.4 4.9 28.0 -0.4 92.9 ACTIVITIES NET CASH FLOW -43.5 5.9 -0.2 16.3 -21.5 Cash and cash equivalents 50.9 7.2 13.1 13.0 50.9 at beginning of period Translation differences -0.2 0.1 0.1 0.1 0.1 Cash and cash equivalents 7.2 13.1 13.0 29.4 29.4 at end of period RESTATEMENT (EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018 Cash flow before change -1.7 0.1 6.5 14.4 19.3 in net working capital Change in net working -38.2 10.9 -15.9 20.4 -22.7 capital Financial items and -2.7 0.8 -6.1 -2.9 -10.9 taxes CASH FLOW FROM OPERATING -42.6 11.9 -15.4 31.9 -14.3 ACTIVITIES Cash flow from investing -58.8 -8.3 -10.0 -12.6 -89.8 activities CASH FLOW AFTER INVESTING -101.4 3.5 -25.5 19.3 -104.1 ACTIVITIES Hybrid loan - - 39.8 - 39.8 Change in loans 58.5 7.2 -14.5 -3.0 48.3 Dividends paid -0.6 -4.9 - - -5.5 CASH FLOW FROM FINANCING 57.9 2.3 25.3 -3.0 82.6 ACTIVITIES NET CASH FLOW -43.5 5.9 -0.2 16.3 -21.5 Cash and cash equivalents 50.9 7.2 13.1 13.0 50.9 at beginning of period Translation differences -0.2 0.1 0.1 0.1 0.1 Cash and cash equivalents 7.2 13.1 13.0 29.4 29.4 at end of period FINANCIAL INDICATORS, PUBLISHED 31.3.2018 30.6.2018 30.9.2018 31.12.2018 Earnings per share (EPS), -0.31 -0.62 -0.80 -1.00 undiluted, EUR Earnings per share (EPS), -0.31 -0.62 -0.80 -1.00 diluted, EUR Equity per share, EUR 5.85 5.46 6.04 5.76 Equity ratio, % 35.8 33.6 36.9 35.1 Gross capital expenditure 10.6 18.8 28.7 41.0 on PPE, EUR mill. Cash flow before -42.8 -34.6 -47.0 -15.1 investments (mEUR) Cash flow before debt -102.7 -103.3 -126.1 -107.2 service (mEUR) Cash flow before -104.0 -103.0 -131.1 -114.4 financing activities (mEUR) Return on capital -7.8 -9.1 -10.1 -7.4 employed (ROCE) before taxes, % Net debt (mEUR) 313.5 317.1 305.6 289.4 Net Gearing % 95.1 102.6 89.7 88.6 FINANCIAL INDICATORS, RESTATEMENT 31.3.2018 30.6.2018 30.9.2018 31.12.2018 Earnings per share (EPS), -0.31 -0.62 -0.80 -1.00 undiluted, EUR Earnings per share (EPS), -0.31 -0.62 -0.80 -1.00 diluted, EUR Equity per share, EUR 5.82 5.43 6.01 5.73 Equity ratio, % 34.1 32.0 35.0 33.3 Gross capital expenditure 12.3 22.4 37.5 52.2 on PPE, EUR mill. Cash flow before -39.9 -28.9 -38.2 -3.4 investments (mEUR) Cash flow before debt -99.8 -97.5 -117.3 -95.4 service (mEUR) Cash flow before -101.4 -97.9 -123.4 -104.1 financing activities (mEUR) Return on capital -7.5 -8.7 -9.6 -6.7 employed (ROCE) before taxes, % Net debt (mEUR) 358.0 360.8 352.0 335.6 Net Gearing % 109.1 117.3 103.8 103.3 ANALYSIS BY SEGMENT, PUBLISHED (EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018 EBIT - Sweden -1.6 1.7 3.0 5.5 8.6 - Finland -10.4 -14.1 -9.5 -2.6 -36.6 - Denmark -0.8 -1.1 -1.5 -2.5 -5.9 - Baltics -1.0 0.2 0.9 -0.9 -0.7 Segments total -13.8 -13.3 -7.2 -0.4 -34.6 Group administration costs -4.8 -3.7 -3.0 -3.4 -14.9 Group total -18.6 -17.0 -10.1 -3.8 -49.5 INVESTMENTS - Sweden 1.3 2.5 1.1 1.5 6.4 - Finland 7.2 3.3 4.8 6.6 21.9 - Denmark 0.0 0.3 0.6 1.4 2.3 - Baltics 2.0 2.3 3.3 2.8 10.4 Total 10.6 8.3 9.8 12.3 41.0 ANALYSIS BY SEGMENT, RESTATEMENT (EUR million) 1-3/2018 4-6/2018 7-9/2018 10-12/2018 2018 EBIT - Sweden -1.5 1.8 3.0 5.6 8.9 - Finland -10.3 -14.0 -9.4 -2.4 -36.1 - Denmark -0.8 -1.1 -1.5 -2.4 -5.8 - Baltics -1.0 0.2 0.9 -0.9 -0.7 Segments total -13.5 -13.0 -6.9 -0.2 -33.6 Group administration costs -4.8 -3.7 -2.9 -3.4 -14.7 Group total -18.3 -16.7 -9.8 -3.5 -48.3 INVESTMENTS - Sweden 1.8 3.0 1.5 1.9 8.1 - Finland 7.9 4.3 9.1 8.4 29.7 - Denmark 0.1 0.3 1.0 1.5 3.0 - Baltics 2.4 2.5 3.4 3.0 11.3 Total 12.3 10.1 15.0 14.7 52.2