HKScan Oyj — M&A Activity 2021

Feb 19, 2021

HKScan sold the land and buildings of its Vantaa property to Sagax Finland Asset Management

HKScan sold the land and buildings of its Vantaa property to Sagax Finland Asset Management

HKScan Corporation, Inside Information, 19 February 2021 at 1.00 p.m. Finnish
time

HKScan sold the land and buildings of its Vantaa property to Sagax Finland Asset
Management

By decision of the Board of Directors, HKScan Group has sold the land and
buildings of its Vantaa property to a real estate investor, Sagax Finland Asset
Management Oy, a subsidiary of AB Sagax listed on Nasdaq Stockholm. The
transaction price is almost EUR 77 million. The transaction has no significant
impact on HKScan’s result for the current year. The lease agreed in connection
of the transaction allows HKScan to continue and develop its business in Vantaa
for the following 20 years. The agreement also includes an option for additional
years.

“We purchased the Vantaa plot of land in the spring 2020 to secure the
continuity of our operations since the unit’s techno-economic life will continue
well into the 2030s. We have been looking for expansion to the ownership base of
the property and have reached the solution now announced, as it enables us long
-term business development in Vantaa. The property sale also enables a
significant reduction in the amount of HKScan's interest-bearing loans, which
expands the financing base for the company's strategy implementation," says
HKScan's CEO Tero Hemmilä.

With the transaction, the structure of HKScan’s financing will diversify.
However, lease liabilities of the long-term lease now agreed are recognised in
the company’s balance sheet as a lease liability debt in accordance with IFRS.
As a result, the agreement will reduce the company’s net debt by some EUR 10
million and net debt per share by 10 eurocents. The lease HKScan will pay for
Vantaa will be some EUR 5 million a year; correspondingly, the company will not
be subject to depreciations related to the Vantaa property and financial
expenses will decline.

“The long-term lease allows long-term business development in terms of both new
forms of food production and customer deliveries close to the growing consumer
concentration in Finland’s capital region. Shorter delivery distances will be
increasingly important, considering environmental aspects. In addition, Vantaa’s
location and logistic ability provide an interesting platform for partnerships
with other food companies,” says CEO Tero Hemmilä.

HKScan’s Vantaa unit makes some 50 million kilos of meals and processed meat
products annually. Nearly 120 million kilos of products are delivered annually
to customers through the logistics centre located in the area. Nearly 700 food
industry professionals work in the Vantaa unit.

HKScan acquired the Vantaa plot of land in April 2020 from LSO Osuuskunta using
the right of first refusal included in the land lease agreement. The purchase
price was approximately EUR 36 million and corresponded to the offer LSO
Osuuskunta had received from a third party. In addition to the land, the
transaction now made includes the buildings on the property.

HKScan Corporation

Tero Hemmilä
CEO

More information:
Tero Hemmilä, CEO, tel. +358 10 570 2012
Heidi Hirvonen, SVP, Communications, tel. +358 10 570 6072

At HKScan, we make life tastier – today and tomorrow. Our strategic target is to
grow into a versatile food company. Our responsibly produced, delicious products
are part of consumers’ varied food moments – both every day and on special
occasions. We have some 7,000 HKScan professionals applying more than 100 years
of experience to make locally produced food. For us at HKScan, responsibility
means continuous improvements and concrete actions throughout the food chain. As
part of our Zero Carbon programme, we are targeting a carbon-neutral food chain
from farms to consumers by the end of 2040. Our home markets cover Finland,
Sweden, the Baltics and Denmark. Our strong product brands include HK®,
Kariniemen®, Via®, Scan®, Pärsons®, Rakvere®, Tallegg® and Rose™. Through our
strategic partnerships, we are also known for Kivikylän®, Tamminen® and Boltsi
brands. HKScan is a publicly listed company, and in 2020, our net sales totalled
nearly EUR 1.8 billion.

DISTRIBUTION:

Nasdaq Helsinki
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www.hkscan.com