Annual Report • Mar 26, 2021
Annual Report
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Annual Report 2020
| Vision, mission and values | 1 |
|---|---|
| This is Scandi Standard | 2 |
| The year in brief | 4 |
| CEO statement | 6 |
| Trends and drivers | 8 |
| Strategy for profitable and sustainable growth | 12 |
| Financial and sustainability goals | 18 |
| Our markets, product segments and sales channels | 20 |
| Operations and value chain | 26 |
| Sustainability Report | 30 |
| Our management of the Covid-19 pandemic | 44 |
| The Scandi Standard share | 46 |
| CFO statement | 48 |
| Administration report | 49 |
| Consolidated financial statements | 60 |
| Parent Company financial statements | 64 |
| Notes | 66 |
| Proposed appropriation of earnings, and the Board | |
| of Directors' and the Managing Director's assurance | 96 |
| Auditor's report | 97 |
| Five-year summary | 101 |
| Segment information by quarter | 102 |
| Alternative KPIs | 103 |
| Definitions | 104 |
| About the Sustainability Report | 105 |
| GRI Index | 108 |
| Auditor's report on the statutory sustainability report | 111 |
| Corporate governance report | 113 |
| Auditor's report on the corporate governance | |
| statement | 121 |
| Board of Directors | 122 |
| Group Management | 124 |
| Annual General Meeting | 126 |
It is always possible to do things better. We believe that our vision, our mission and our values can enable Scandi Standard to produce better chicken and help people to lead a better and healthier life for themselves, their families and our planet.
Our mission is also our commitment to sustainability and how we work every day to make a difference and contribute to the health and well-being of people, chickens and our shared planet.
Openness means being transparent and honest, which enables us to help each other between countries and between functions so that we are constantly improving and developing.
Challenge means challenging ourselves and the industry every day. We do this by always asking questions to identify better solutions and constantly improve.
Acting now means there is no time to lose, as time waits for nobody. We act quickly and smartly, and assume responsibility for creating value throughout the value chain in order to make all consumers confident that they have made the right choice by choosing our products.
We contribute to the joy of food and sustainable food production, by providing healthy, innovative chicken products that are produced in a responsible and resource-efficient way.
3 1 2 1 1 We set the standard in chicken production. Scandi Standard is the leading producer of chilled, frozen and ready-made chicken products in the Nordic countries and Ireland. In Norway we also produce and sell eggs. Every day, in everything we do, we ensure that our products meet the highest levels for quality, innovation and sustainability. Our well-known brands include Danpo, Den Stolte Hane, Kronfågel, Manor Farm and Naapurin Maalaiskana. Our customers are found in the retail, food service and food industry sectors and we export to more than 40 countries. Scandi Standard's market position in each market Net sales per product category 711910y Ready-to-cook 71% Ready-to-eat 19% Other 10% Net sales per segment 273216205y Sweden 26% Denmark 30% Norway 17% Ireland 21% Finland 6% Net sales per sales channel 642095+2y Retail 67% Food Service 17% Export 8% Food industry 5% Other 3%
The climate footprint of chicken is about ten times lower than beef and is roughly at the same level as farmed fish and the fully vegetable-based product Quorn. Combined with the fact that chicken is one of the world's most versatile foods, this contributes to chicken consumption being forecast to grow over the coming ten years.**
* Greenhouse gases
** OECD-FAO report Source: Open list – an excerpt from the RISE climate database for food v 1.5
Scandi Standard Annual Report 2020 3
Net sales
9,940 SEK million
Adjusted operating income
500
SEK million
Employees
3,220
Organic growth amounted to 3 percent, which is lower than the long-term growth of 6–7 percent per year that we have shown historically.
The adjusted operating margin increased during the year. This was partly due to a favourable change in the product mix and strong volumes.
4 Scandi Standard Annual Report 2020
Profit per share fell by 12 percent during the year, which was impacted by a lower operating profit.
Use of antibiotics, measured as share of treated chicken flocks, was reduced from 11.4 till 6.8 (Group average).
Our Swedish brand Kronfågel has been a favourite in Swedish households for 50 years. In the 90's, chicken even had its own dinner day, which was primarily
due to the "chicken on Friday" campaign. From frozen, whole chicken to a large variety of products – Kronfågel continues to be loved by the Swedish people.
On 7 June, World Food Safety Day, established by the World Health Organisation, WHO, in collaboration with the UN and the 17 global goals for sustainable development, was celebrated. Scandi Standard took part with activities at all of its production plants by drawing attention to and
making visible the work that goes on every day. The Danish plant in Rokkedahl was also visited by a representative from the Danish food safety authority, the Danish Veterinary and Food Administration, who praised the level of commitment within the Group.
| MSEK | 2020 | 2019 |
|---|---|---|
| Net sales | 9,940 | 9,891 |
| Adjusted EBITDA* | 835 | 776 |
| Adjusted operating income (EBIT)* | 500 | 454 |
| Operating profit (EBIT) | 351 | 424 |
| Profit after net financial items | 260 | 312 |
| Profit for the Year | 208 | 237 |
| Interest-bearing net debt | 1,933 | 2,200 |
| Operating cash flow | 476 | 536 |
| Organic growth, % | 3 | 12 |
| % | 2020 | 2019 |
|---|---|---|
| Adjusted EBITDA margin* | 8.4 | 7.8 |
| Adjusted operating margin (EBIT)* | 5.0 | 4.6 |
| Operating margin (EBIT) | 3.5 | 4.3 |
| Adjusted return on capital employed* | 11.9 | 11.0 |
| Return on equity | 11.5 | 14.2 |
| Equity/assets ratio | 29.4 | 27.7 |
| Average number of employees | 3,220 | 3,266 |
| Employee engagement index | 72 | 69 |
| Feed efficiency, kg feed/kg live weight | 1.52 | 1.52 |
* Adjusted for non-comparable items, see page 50.
Scandi Standard initiated several projects in the year designed to investigate the potential for plantbased products to supplement the existing product portfolio. These included the start of a research project to develop products from the locally produced ingredients potatoes and rapeseed oil together with a partner founded following research at Lund University. The project is forecast to run over two years.
In February, Irish Manor Farm won the "Best Sustainable Food Product Award" given by the Irish Foodservice Supplier's Alliance for the product "Farmers to Market freerange chicken thigh burgers".
The Danish food service brand "The Happy Chicken Project" also received the "New Brand of the Year" award which is awarded by the Danish industry organisation MDLK for retailers for retail and food service.
2020 will forever be remembered as the year when the global pandemic of Covid-19 broke out. Despite massive changes to society, Scandi Standard's operations have largely been able to function unhindered by implementing extensive health and safety procedures at an early stage. Read more about our initiatives and the impact of the pandemic in the special section on page 44.
In 2020, we enhanced our ESG position further. Our ambition is to be an ESG leader in the European poultry space."
Since our listing in 2014, net revenues have increased from SEK 5bn to SEK 10bn averaging a growth of 11 percent per annum. From the initial base in Sweden and Denmark, we have expanded into Norway, Ireland and Finland and we are currently the market leader for poultry products in both the Nordic region and in Ireland.
The strong market position is built on trustful relationships with leading retail chains in the five individual national markets. Each of these markets can be regarded as separate due to the strong end customer preference for domestic produce. Two thirds of our revenues are currently generated from these clients.
The Retail business provides a stable platform for our business. As most of the risk factors causing margin fluctuations are country specific, a portfolio of five countries diversifies this risk. Our margins are further stabilised as the relationship-based trading with retail clients generally allow raw material pricing fluctuation to be passed on to end consumers.
In 2020 our sales channel Retail business has been resilient to effects caused by the Covid-19 pandemic. Revenues grew by 6 percent in line with previous years, and margins developed favourably. Consumers in our five domestic markets are more focused than ever on locally produced products adhering to the strictest animal welfare, food safety and ESG standards (Environmental Social and Governance).
Scandi Standard is also a strong player in the Foodservice sales channel in our home markets and a growing position in Western Europe. Sales through this channel represented 17 percent of our revenues in 2020 and has grown from about MSEK 500 in 2015 to about MSEK 1,700 equating to an annual growth of 22 percent. The preference for domestic produce is also getting more traction among consumers in this channel, and our Foodservice clients are adapting to this and have started to incorporate local origin in their marketing. We welcome this trend as it allows us to leverage off our high standards compared to the raw material from low cost producing countries, which has dominated this market in the past.
The Covid-19 pandemic has taken its toll on Foodservice demand in 2020. Consumers have been restricted from eating out and several of our Foodservice clients have been closed for periods. Overall, our Foodservice revenues dropped by 12 percent in 2020. The sudden shifts up and down in demand have been particularly hard to deal with due to inventory build up of products intended for this channel and requirements to rapidly ramp up production of such products.
Plants have operated at low utilisation; extra costs have been added in repacking and frozen inventory and inventory has been written down due to a low price environment in export markets. I am proud of how the organisation has dealt with the challenges to minimise negative consequences. Although we expect poor demand and high volatility to remain in the Foodservice and export segments in the coming periods, we are confident in observing a boost from these segments once consumers are freer to move around.
Historically our bird intake has been managed to meet local demand chicken fillets, leaving "spare parts" such as legs, wings and feet for export markets. In 2020, export outside our home markets represented 8 percent of our revenues. We have a strong focus on minimising this part of our business as it provides low and volatile prices. Investments in advanced leg deboning equipment has enabled us to provide chicken steaks which have become popular in our markets. An increased Ready-to-eat business has also allowed us to apply spare parts for higher margin products. These measures coupled with high general growth in domestic markets, has allowed us to successfully reduce the export share from 15 percent in 2016 to 8 percent in 2020. In 2020 our export business has suffered from historically low global commodity prices in 2020 due to the Covid-19 pandemic and prevalence of bird flu impacting demand from certain Asian markets.
As part of our ESG commitment we are dedicated to using the entire bird for commercial purposes. There is a lot of nutritional value left after fillets, legs, wings and feed are removed from the carcass. We have developed an ingredients business that converts these items into feed for pets and other animals.
Sustainability is at the core of what we are doing in Scandi Standard, closely linked to our vision Better Chicken for a Better Life. There is full alignment between meeting increasing ESG expectations and requirements, and operational and financial success for the Group. Poultry stand out as a climate smart alternative in the protein industry and Scandi Standard stand out in the poultry industry. Through the improvements in Manor Farm regarding antibiotics and animal welfare, we have demonstrated our ability to export our best practice from the Nordic region to geographic areas which historically have had larger challenges in this area.
In 2020, we enhanced our ESG position further. Our ambition is to be a clear ESG leader in the European poultry space, we focus on maintaining our streng hts and implement forceful measures in areas with development potential. This means to continue develop governance, initiatives and reporting for our key areas. This year we have for example decided to further develop our climate objectives using the Science Based Targets initiative, and adopted new Group policies for health and safety, animal welfare, antibiotics and healthy products. In 2020 we signed UN Global Compact, confirming that we support the ten principles with respect to human rights, labor, environment and anti-corruption, and are committed to integrate them in our operations.
Scandi Standard has a strong balance sheet, a solid financing, and a signifi cant available liquidity. Compared to the end of last year, net interest-bearing debt has been reduced by about MSEK 270 to MSEK 1,933. Following the capital measures implemented during the spring of last year, our capital investment amounted to MSEK 355 for 2020. We expect to spend MSEK 415 during 2021, with flexibility to adjust downward if required. The 2021 invest ments are a combination of efficiency, capacity and ESG investments.
Despite the turbulence around us, we continue to carefully monitor the struc tural changes and opportunities within our sector. We have a proven track record of adding significant value through acquisitions, most notably in product devel opment, processing efficiency, rearing, improved animal welfare and ESG performance.
I would like to thank our employees, customers and partners for a year filled with both challenges and positive changes. Together we are in a great position to see the Group develop in a positive direction. I would also like to further emphasize our vision: Better Chicken for a Better Life .
Leif Bergvall Hansen Managing Director and CEO
The demand for chicken has continued to rise steadily over recent decades, while major global issues such as climate change are affecting all food production. Chicken is a very good type of food from both a climate and health perspective and has a low environmental impact compared with farmed fish and plant-based Quorn. It is also rich in protein, but low in fat and easy to vary with different flavours.
The climate impact for chicken is comparable with farmed salmon and plant-based products such as Quorn according to a climate database produced by the Research Institutes of Sweden (RISE). Chicken is even more beneficial than other animal protein; the climate impact of chicken is a tenth of that of beef.
An increasing number of people are making conscious decisions and choosing foods both from a health point of view and with regard to the environment. This is driving the development from red meat and sugar to, in the first instance, chicken and fish, but also to plant-based foods. At the same time, growing consumer awareness is driving the need for more detailed lists of ingredients and the demand for products with fewer ingredients and additives as well as less processed foods, known as the Clean Label movement, which promotes chicken as the natural choice from all aspects.
Trends and drivers
The growing population will continue to drive growth globally and there are no major structural changes that are expected to affect demand. Chicken continues to be the fastest growing animal protein source and is forecast to account for about half of total growth by 2029. The OECD estimates that consumption will increase in Europe and Central Asia by almost 2 kg per capita to 28 kg per capita in 2029*.
* OECD/FAO (2020), OECD-FAO Agricultural Outlook 2020-2029, FAO, Rome/OECD Publishing, Paris, https://doi.org/10.1787/1112c23b-en.
Chicken is an extremely affordable source of protein for the individual, society and the environment. The relatively short growing period of chicken implies, for example, a lower feed and energy usage than for other types of animal protein, which results in lower production costs.
Growing public health issues such as obesity, diabetes and other diseases linked to poor diet have led several countries to introduce laws and taxes to promote the consumption of healthier foods, such as the sugar tax in Norway. Chicken is relatively low in calories and high in protein, it is therefore considered to be healthier for us humans than red meat. Food recommendations from around the world unanimously indicate that a healthier diet should contain more white meat and less red meat.
In a world where globalisation is constantly increasing, people from different cultures and religions are living side by side. Although various traditions, customs and food habits remain, some other habits change; for example, many people in the West who used to eat red meat and pork are turning away from them for both health and environmental reasons. It is challenging for schools, hospitals, staff canteens and other food service companies who want to be able to offer delicious and nutritious food that is suitable for everyone. Chicken offers a perfect solution as it is accepted by the majority of the major religions in the world.
The convenience wave and "Convenience Food" supersede all food trends, including "Hood Food" (locally produced) and "Clean Eating" (food without additives). The growth of food recipe delivery services, online shopping and products that are bought ready-to-eat are all examples of this. This trend can be seen in every category from cheap, simple food to gourmet food, and from the unhealthy to the healthy. Chicken has a natural place in all trend and food categories and is mostly both locally sourced and free of additives and antibiotics.
A survey also shows changes in attitudes to convenience food. Since 2015, the number of discussions in social and traditional media on this topic has gradually increased. Whereas before it was linked to the more negative aspects of fast food, such as diabetes and sugar intake, the discussions are now about the climate and the impact of food on the environment, both in terms of carbon dioxide emissions, and in the use of plastics and single-use packages.
Scandi Standard Annual Report 2020
Trends and drivers
Working to reduce waste is a natural part of all production activities and vital from both an environmental and value perspective. We initiated a project at Scandi Standard in January 2020 to systematically reduce what we call Floor Waste, which are ingredients that for various reasons drop out of the production chain and are therefore no longer suitable for human consumption. In doing so, we reduce our food waste while maintaining the value of our ingredients
Henrik Kjær, Chief Business Development Officer Operations, runs the project at a group level together with project manager Jenny Simony from Scandi Standard's Graduate programme along with key individuals at each production unit.
To systematically identify and correct minor and major deficiencies in our production chain to ensure that as few ingredients as possible are wasted. It may sound obvious, but this requires a focused working approach. It sometimes involves a very basic mechanical solution, for example setting up guide rails on conveyor belts, but sometimes you need to replace an entire process and work differently
to be able to address the problem. In this project, we have analysed large amounts of data in the areas that are causing the problems, and then initiated the process of correcting them.
A key element is, of course, that we reduce our food waste. If the ingredient leaves the production chain, we can no longer use it for products intended for human consumption. Instead, it can be turned into animal feed or bio-fuel which means it is never wasted, but it also causes the value of the ingredients to fall. Therefore it is key for us to reduce waste to ensure that we can get the best possible payment for our products.
Since the beginning of the project, we have reduced our Floor Waste by 38 percent, which is impressive, however the goal is to reach 50 percent compared to 2019, which we aim to achieve at the beginning of 2021. The project has yielded great dividends for us but also for the environment. We have also seen that we have succeeded in engaging our employees in the project and created a greater understanding for its importance, and we have been able to delegate more responsibility. I think it is important for your own motivation, to feel that you can influence while at the same time contribute to something bigger.
Scandi Standard Annual Report 2020
Food is heavily rooted in local traditions, cultures and tastes. Our overall strategy combines the strength of being a group and the ability to run efficient production processes on a large scale across several countries with the local context required to create strong brands that consumers appreciate. In addition to our strategy, we have specified the three key priorities that in combination ensure that we deliver on our strategy and ensure continued profitable growth.
Strategy
12
STRATEGY 1 Product innovation and business development
Scandi Standard Annual Report 2020
STRATEGY 2 Commercial optimizations
STRATEGY 3 Drive cost out of supply chain
FINANCIAL OBJECTIVES
BUSINESS PHILOSOPHY Being local and drive scale efficiencies
STRATEGY 4 Optimize the broiler value
STRATEGY 5 Agile organisation
13
CULTURE
We are Open, We Challenge and We have a Sense of Urgency
The Scandi Way – the way we work every day to become better and make a difference, promoting health and wellbeing for the people, the chickens and the planet.
Product and business development
Our goal is to grow at a similar or better rate than the market by continuously delivering product innovations and building strong local brands. We invest in product development that contributes to products with a higher degree of refinement and a more extensive product range featuring new categories which in turn will lead to growth.
Our aspiration is to constantly streamline our operations by integrating joint planning, systems and management to ensure the optimal balance between commercial excellence and production capacity. Investments in improved automation and the optimisation of cutting technology provide a rise in both efficiency and productivity per employee, a better return per bird and less waste in production.
We are constantly looking for new ways of capitalising on the strength of being a group, to work and act as a company and thereby improve efficiency across the entire value chain. Coordinating production and sales resources across the markets in order to ensure that the best technology and processes are being applied throughout the Group is a vital element to achieving profitability.
Our focus is on a measurably high level of animal welfare, sustainability and feed quality along with value-based replacement models to ensure that our chicken maintains a high and consistent quality thereby generating the conditions for a higher value for our finished products.
The needs of our customers and consumer trends in constant flux require a fastpaced organisation that lives our values and that creates a culture that inspires and attracts the very best talent.
Driving organic
growth 1 Improving efficiency throughout the supply chain 2 Strategic acquisitions
and partnerships 3
The most important trends that drive the development are the demand for tasty, easy-to-cook, healthy and environmentally sustainable products based on locally produced chicken. We are constantly developing our product range to feature everything from new cuts, flavours and readymade products. Product development is primarily conducted locally in each country as the taste and product preferences to some extent differ between the markets, but at the same time we have seen the potential for the coordination and exchange of ideas and concepts between the countries to grow over recent years.
The Group has a product development plan covering the next 18–36 months with major launches two to three times per year in each country. The development plan is based on market segmenting and consumer insight. Product innovation can also be driven by innovations in production, such as new equipment and new processes.
The Group's products are sold both under our own brands and our customers' brands, referred to as 'private labels'. Strong brands create the foundation for premium products that require a higher price, and it therefore remains a priority area to invest in, in order to strengthen our brands further across all markets. The sale of our customers' private labels results in economies of scale and contributes to creating customer relationships within retail.
Retail is Scandi Standard's largest sales channel representing more than half of the Group's total sales. For a long time the Group has been the main supplier of a number of large retailers in Denmark, Norway, Ireland and Sweden. The Group manages continuous projects together with important customers for changes in stores in order to stimulate the demand for chicken and drive the development of the chicken category.
The Foodservice sales channel includes fast-food chains, hotels, restaurants and catering within the public and private sector. Sales in this sales channel have grown in recent years* driven by people eating out more frequently and because consumers regard chicken healthier than
other types of meat. Chicken is also more affordable and is considered more convenient to prepare than other types of meat, and also adds to the customer base of fast food restaurants to include more health conscious consumers. Unlike the retail sector, the sales channel Foodservice has a larger proportion of imported chicken from countries that do not enforce the same legal requirements and high standards when it comes to animal welfare and the use of antibiotics. A priority area for the Group is therefore to develop the chicken category within this sales channel as well as convincing consumers and customers to introduce more stringent requirements on the products they consume.
For many years the Group has been one of five suppliers of McDonald's in Europe. Given the Group's size and long-standing experience as a leading supplier, there are good further growth opportunities within Foodservice in the whole of northern Europe.
"The Group has a product development plan covering the next 18–36 months with major launches two to three times per year in each country."
* The global outbreak of Covid-19 in the year impacted the Foodservice sales channel, but Scandi Standard did not implement any long-term changes or reprioritisations as a consequence. Read more in the section on Corona, p 44.
One prerequisite for growth is to constantly streamline your existing operations. It is expected that the efficiency can be further improved at the largest plants through investments in greater automation and optimisation of cutting technologies. With same number of birds, we can increase the amount of extracted meat. A stated ambition is to increase production yield per bird, by sharing knowledge between the countries and by identifying the potential for improvement in our processes.
Opportunities for acquisitions and partnerships are continuously evaluated in order to consolidate the Group's position in existing markets, expand the product offering into adjacent categories or enter new geographical markets. The potential for this exists in three main areas: acquisitions that supplement our product offering, acquisitions that bolster our position in our domestic markets or acquisitions that ensure a position for us in new markets.
We are working actively to make the most of the opportunities in the European market, which we believe is ripe for additional consolidation in the coming years. We are in a good position both in terms of our finances and our organisation to be able to act when the opportunities arise.
Since its inception in 2013 through the merger of Kronfågel and Danpo and the acquisition of, Den Stolte Hane, the majority of Scandi Standard's acquisitions have been made in all categories. The acquisition of the Finnish business in 2015 and the business in Ireland in 2017 are examples of acquisitions that are giving us a strong position in new markets. Examples of supplementary acquisitions in existing markets in the production of organic and free-range products are the acquisitions of Bosarpskyckling in 2014, Sødam in 2016 and Rokkedahl Food in 2018. No acquisitions were made in 2020.
| Medium-term goals | Results 2020 | Results 2015–2020 | Objective | |
|---|---|---|---|---|
| Net sales | Annual average organic growth in line with or above market growth. |
+6% (5Y CAGR) |
% Net sales, 5Y CAGR % EBITDA-margin 1) 8 10 8 6 6 |
Growth in line with or higher than growth in the market shows that operations are retaining or increas ing their market share, proving that we are competitive. |
| EBITDA margin |
Exceed 10 percent in the medium term. |
8.4%1) | 4 4 2 2 0 0 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 |
An EBITDA margin of more than 10 percent is important for us to be able to ensure good profitability and a strong cash flow. |
| Interest bearing net debt/EBITDA |
2.0—2.5 x EBITDA (LTM), but may temporarily exceed this level to allow for capturing opportuni ties for organic growth and acquisitions. |
2.41) | Interest-bearing net debt/EBITDA1) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2015 2016 2017 2018 2019 2020 |
The interest-bearing net debt in rela tion to EBITDA measurement shows how well our capital structure reflects our size and profitability. If the meas urement is within this target, we are well prepared for leaner times and we have the capacity to take advantage of future acquisitions. |
| Dividend ratio |
Approximately 60 percent of profit for the year adjusted for non-compa rable items on average over time. |
47/23%2) | % Dividend ratio 80 70 60 50 40 30 20 10 0 2) 2015 2016 2017 2018 2019 2020 |
This measurement shows how much of the profit is distributed among the shareholders. A high and stable dividend level is important for the share to be an attractive investment. |
1) EBITDA adjusted for non-comparable items. 2) The Boards proposed dividend to the Annual General Meeting 2021 and a second dividend planned to be proposed at a second general meeting during the second half of 2021.
| Goals | Results 2020 | Results 2016–2020 | Objective | |
|---|---|---|---|---|
| Employee engagement |
Motivation and satisfaction index: 71 |
72 | Index 80 75 70 65 No No measurement measurement 60 1) 2016 2017 2018 2019 2020 |
Motivated employees who feel good are essential for the Group's development and success. This is monitored at Group level through the employee survey Scandipuls, which is carried out every two years |
| Carbon dioxide emissions, g CO2e per kg product |
–50% 2016–2025 | -5%2) | g CO2 120 Excl. 100 transports Excl. transports 80 60 40 20 0 2016 2017 2018 2019 2020 |
Scandi Standard takes the climate issue seriously and strive to reduce our climate footprint through out the value chain. Reported data include the energy use of proprietary plants, and from 2018 distribution shipments (scope 3). |
| Use of antibiotics, share of flocks treated |
<1% flocks treated | 7/0.03) | % Flocks 13 11 1.2 < 1% 1.0 0.8 7 0.6 0.4 0.2 0.1 0.0 0.0 0.0 3) 3) 3) 2016 2017 2018 2019 2020 |
Antibiotic resistance is a serious global health challenge. We have an important role to play in minimising the use of antibiotics in food production by keeping our chickens healthy. |
| Feed efficiency, kg feed/kg live weight |
1.49 kg feed/kg live weight |
1.52 | Kg feed 1.7 1.6 1.5 < 1.49 1.4 2016 2017 2018 2019 2020 |
Feed efficiency is an important indicator in order to optimise the rearing process. Chickens are very good at converting feed into meat, the feed efficiency is a direct indicator of the quality of the feed, and how well the chickens are being taken care of. |
1) Incl./excl. Manor Farm which participated for the first time in 2018 (73), (Higher staple). 2) Reduction 2018–2020. Baseline data 2016 to be recalculated. 3) Reported incl (higher staple)./excl. Ireland (lower staple).
Scandi Standard has operations in all the Nordic countries and in Ireland. Furthermore, we export products to over 40 countries around the world and we deliver to retail outlets, restaurants, restaurant wholesalers and food service as well as to industry. The business is divided into our main product segments Ready-to-cook, Ready-to-eat and Other. The chicken market overall is characterised by high organic growth, particularly in the Nordic markets where the consumption of chicken is still relatively low and is therefore a potential source of continued high growth.
Scandi Standard's domestic markets consist of the Nordic countries and Ireland, where we have our producing plants. All markets are characterised by a high level of domestic pride in locally produced products and Scandi Standard's brands are well known and hold a strong position in each market. The consumption of chicken in Ireland is greater and more in line with other European countries in relation to the Nordic countries which means there is a greater potential for higher growth in the Nordic countries. Our export markets consist primarily of the rest of Europe and Asia, where we for the most part sell surplus products such as wings and feet.
Chicken consumption per capita and year
Source: Association of Poultry Processors and Poultry Trade within the EU, Swedish Board of Agriculture and others, and the company's best estimates.
| Sweden: | Guldfågeln Atria |
|---|---|
| Denmark: | HK Scan |
| Norway: | Nortura Norsk Kylling |
| Ireland: | Western Brand, Shannonvale |
| Finland: | HK Scan Atria |
Ready-to-cook (RTC) is our largest product category and comprises products for self-preparation by the customer or consumer. They can be whole birds, cuts of meat, deboned and seasoned, or marinated products. We sell to both Retail and Foodservice in our domestic markets in the Nordic countries and Ireland, and we also sell for export.
The products can be divided into the subcategories of chilled and frozen products. Chilled products are sold fresh to customers, so there are stricter requirements for production planning and logistics. The frozen products are quick-frozen after production. The products are frozen before they are packaged and most products are also frozen individually to make them easier to thaw. Although products are sometimes frozen at the production plant, they are generally frozen at the freezer warehouse.
We also sell chicken that is grilled in store in some markets. This means that chickens that have been prepared to be grilled for retail are sold to the stores and sold freshly grilled over the counter.
The biggest selling product in all of our markets is the natural chicken fillet. There is always a risk of overproducing wing and leg products, as the demand for these products does not keep up with the demand for fillets. There needs to be what is known as an 'anatomical balance' in the sales mix. This is why we are working intensely with the innovation of products that use other parts of the chicken, for example, by deboning them. Bone-free products are more attractive and command a higher price, for example, ChickenSteak which is a deboned chicken leg. We are also working on processing charcuterie products, such as bacon and sausages, where other types of cuts can be used.
New products: Crispy Fillet Slices is an example of a new product where the seasoning distinguishes the food from other brands.
Sales in Sweden have previously largely consisted of frozen products with a low degree of processing, but in recent years the trend has shifted towards a higher proportion of fresh and more processed products that offer more convenience to the consumer, which is a positive development as these products command a higher price. Other countries do not have the same tradition of frozen products, as chilled products are the primary product category. We also see a similar trend where consumers demand more refined products in all our domestic markets. We also deliver Ready-to-cook products to all markets under retail private labels.
MSEK 7,048 Net sales
6%
Organic growth
Ready-to-eat (RTE) are products that have been prepared in the processing process, which means that they can be consumed directly or after being lightly heated up. Production takes place mainly at our own plants, but in some markets we also produce through partnerships, which expands our product portfolio and brand exposure.
We produce Ready-to-eat products at three plants with slight variations. Farre in Denmark is our largest Ready-to-eat plant. In 2018 the plant was expanded by adding another production line, increasing the number from three to four. This plant produces frozen Ready-to-eat products, mostly coated products like nuggets and burgers, but also other fried products. One common factor in all of the production is that freezing is part of the production process. A high share of the production in Denmark goes to McDonald's and other fast-food customers. The plant in Farre produces products that are based on chickens that have been slaughtered and cut at our own plants, and using ingredients that have been purchased externally.
We also have a processing plant in Sweden connected to the slaughter house in Valla, which produces chilled processed products. This plant has been in operation for five years and production volumes are gradually increasing. Our plant in Stokke in Norway produces pre-grilled chilled products.
The convenience food trend is growing stronger in our domestic markets, particularly in Norway, where the proportion of cooked products is higher, and where we have enjoyed great success with the Fried & Sliced product series, pre-fried and sliced chicken fillets in a range of spices.
New products: Pre-fried and sliced chicken fillet is an example of insight-driven product innovation aimed at younger target groups.
Share of total sales
MSEK 1,857 Net sales
Organic growth
This category includes sales that are not directly linked to sales of chicken products, such as sales of day-old chickens to growers as well as purely surplus products such as blood, fat, intestines and other products that are not used for our private labels, but used in industrial food production, animal feed or other products. This category also includes the export of feet to Asian markets. The ability to sell these surplus products is valuable in terms of sustainability as it minimises production waste in production as a whole. It also includes the sale of surplus hatching eggs. In Norway we also sell consumer eggs, which are included in this category.
Net sales
Retail comprises approximately 67 percent of our sales and growth is highest in chilled and Ready-to-Eat products. Our markets are characterised by a high degree of consolidation among a few established companies with strong market positions in each market. In recent years, these established actors have been challenged first by low-price chains and now by online shopping, even though online shopping continues to represent a small share of retail. Strict regulations for animal welfare and laws for food safety are essential if consumers are to trust the products within retail. The level of trust is high, particularly for locally produced products. Our markets are also essentially free from salmonella.
The Foodservice sales channel refers to sales to restaurant wholesalers and catering kitchens such as schools, hospitals, nursing homes and similar operations, but also in some instances directly to restaurants and other companies who sell ready-made food, such as petrol stations. The restaurant channel has a higher underlying growth than the retail sector, and the number of restaurant visits is continuing to increase in all our markets*. Experience shows that chicken accounts for a higher proportion of consumption in restaurants than in meals at home.
Traditionally the proportion of imports has been higher in this sales channel than in retail as the origin is not clarified in the same way. We are seeing signs in some of our markets that awareness is increasing among restaurant visitors, so the origin of the food is becoming more important.
This sales channel accounts for 17 percent of Scandi Standard's sales. This is a priority area and has become more important in recent years. Investments in more Ready-to-Eat products that suit this sales channel and the coordination of market canvassing will contribute to increased sales. Scandi Standard is also a major supplier to many fast-food chains in several countries in Europe, including McDonald's. The Group's processing plant in Denmark is certified for deliveries to McDonald's.
Scandi Standard mostly exports to retail chains and restaurant wholesalers in Europe, outside our domestic markets. Surplus products such as wings and feet are also exported, primarily to Asia.
* The global outbreak of Covid-19 in 2020 impacted the Foodservice sales channel, but Scandi Standard did not implement any long-term changes or reprioritisations as a consequence. Read more in the section on Corona, p 44.
We have a lot of responsibility for the business that we run: responsibility to the animals we rear, the people who work with us and who buy our products, and society for the resources we use. Every stage of production is surrounded by thorough planning, checks and follow-ups to ensure that we can offer good food that has been produced under the best possible conditions.
Our business is based on a value chain where each stage is continually evaluated and developed and where the focus is always on care for people, chickens and the environment. Our ambition is to create and use synergies within the Group by using shared processes and exchanging knowledge and ideas between the operations. All production management and the operation of the production units is organised under a central Groupwide function to ensure that production is as efficient as possible.
The work to produce good food starts several generations before our chickens are hatched. The hens and roosters at our parent farms are supplied by highly specialised bird companies, whose
breeding is systematically based on the characteristics that the customers require in the rearing they are involved with. The health, growth and behavior of the parent bird and the slaughtered bird are checked and monitored continually during their lifecycle to ensure that the right qualities are promoted and that the entire rearing process is performed as effectively as possible with regard to the environment, care and feeding.
Our operations in Ireland also include production of our own feed for rearing chickens. When the feed is being produced, meticulous checks are carried out on its composition and nutritional content.
The parent birds live in pens where light, temperature and moisture are checked and adapted continually to ensure that the flocks are healthy and can live under conditions that are as natural as possible. Both here and at later stages in the production chain, it is important for the animals to be of the same age and size to ensure that flocks operate as efficiently as possible. The hens have access to enclosed nests where they go to lay their eggs. Most hens lay an average of one egg per day. From the conveyor belt the eggs are loaded onto crates and are taken to a temperature-controlled egg warehouse before being transported to the hatchery.
At the hatchery the eggs are first inspected to check that they have been fertilised and contain an embryo. The eggs are then placed on trays that are put on an incubator trolley, where the temperature, moisture and carbon dioxide content in the air are carefully regulated. When the hen herself sits on her eggs, she turns them several times a day to make sure the yoke (the embryo) is protected in the centre of the egg. In the hatchery, the egg is tilted forwards and backwards by machine in the trays to achieve the same effect. After 18 days on the incubator trolley, the eggs are placed in hatching trays to await hatching. Hatching starts on the egg's 20th day in the hatchery and the process is completed just past the 21st day. An average of 85 percent of eggs produces a live chicken. Once the newly hatched chickens are separated from the remnants of the shell, their quality is checked and it is then time to transport the day-old chickens to a rearing farm.
Scandi Standard does not operate any farms on their own. All growers are carefully selected suppliers who are monitored regularly to ensure quality and good animal welfare. The rearing farms maintain constant supervision of the chickens to make sure that they are in good condition and that the environment meets all the criteria to ensure the best well-being of the animals. The chickens Hatching begins during the twentieth day of the eggs in the hatchery.
live in flocks of the same age and are fed with carefully tested feed to ensure optimal growth. When the chickens come to the rearing farm, they weigh an average of 40 grammes. Before they are slaughtered 35 days after hatching, they weigh an average of 2.1 kg. During the five weeks at the rearing farm, they have eaten approximately 3.3 kg feed and drunk 5 litres of water. It is important for the feed to maintain an even quality over time, which is why the nutritional content of the feed is continually tested. In Ireland we produce feed ourselves, however this is outsourced in our other markets.
Transport to the slaughter house must be as calm as possible for the chickens. The chickens are normally collected in the early morning when they are calm after a night's rest. When they arrive at the slaughter house, they are placed in a peaceful and dark environment for a few hours in order to minimise their stress. Before they are killed, the chickens are stunned with carbon dioxide gas which renders them almost unconscious. Death is then caused by a machine severing their carotid artery. After this their insides and feet are removed. The plucked and drawn chickens then pass through a chilling tunnel to be cooled down before they go to be cut. The chickens that are going to be sold as whole chickens go directly to packaging. The other chickens move on to the main automated cutting process. Wings, legs and fillets are separated and either go in their natural state to packaging, or to be seasoned, where they are tumbled in a marinade before being packaged. The fillets are checked before packaging to make sure they are completely bone-free.
For Ready-to-eat products, the process continues at separate plants that produce both chilled and frozen processed products.
Scandi Standard endeavours to lead the way in product innovation in our domestic geographic markets for chicken-based food and to carry out product development in all production countries. Each market has its own preferences in terms of the type of products preferred (chilled, frozen, Ready-to-eat) as well as the flavours and cooking form. Our test kitchens test new and varied products using a defined product development process and we work to
broaden and share experiences and knowledge from this process across our various operations.
Production is guided by customer forecasts and actual orders. However, the production volumes are relatively predictable and production plans are adjusted continually.
Blood, fat, offal and other products are also used, primarily for animal feed, the industrial production of food and other applications. By using as much of the chicken as possible, we achieve the highest levels of resource efficiency and profitability.
Just as when the animals are being reared, the entire processing process undergoes meticulous checks in terms of hygiene and the controlled climate. Every sub-process is continually checked to be able to quickly identify and take action against any deviations that would otherwise risk the quality of the finished products and in the long term, the consumers' experience of the products.
Scandi Standard works constantly to develop and improve the processing process and to create the best possible environment for the chickens, the highest quality in our products, and the most resource-efficient operations possible.
Our products reach our consumers through stores, restaurants and other catering operations, such as schools and hospitals. The products are distributed via our customers' central warehouses and also direct to stores and restaurants. Deliveries are mainly carried out by subcontractors and sometimes by our customers' own distributors.
Our chilled products are on site in stores the day after they are packaged. Scandi Standard's sales teams help our retailers in the direct marketing of these products and also in the structuring of the display spaces in store. This ensures the highest sales and the best retention of product quality before the products are sold. New products are advertised in the media and on advertising boards and we also work with indirect marketing through social media. We are for example, working with bloggers and also invite the media in for "inspirational cooking" at our own display kitchens.
"Just as when the animals are being reared, the entire processing process undergoes meticulous checks in terms of hygiene and the controlled climate."
For Scandi Standard, sustainable development is about promoting responsible value creation over time for owners, customers, consumers and other stakeholders. Based on our vision, our aim is to assume an industry-leading role in animal welfare and healthy products, which also applies to environmental and social responsibility.
We work on managing risks and making continuous improvements throughout the value chain, and on realising the opportunities presented from a rise in expectations and new consumer trends. Work on sustainable and operational development focuses on the areas where Scandi Standard has the greatest impact, where we can make a difference, and that are the most important for our stakeholders. Examples of this are that we see an increased awareness concerning the issue of antibiotics and animal welfare, the climate and environmental impact of our products, and risk management in the supply chain.
Our strategic framework for sustainable development, "The Scandi Way", is based on defined and prioritised issues of responsibility and sustainability within the perspectives People, Chickens and the Planet. This framework sets the level for the Group's joint sustainability work and defines the approach, general goals and indicators for each focus area. Each company and plant within the Group is committed to comply with and contribute to meeting the shared goals, but is also free to choose a higher level of ambition where appropriate and feasible.
Work on sustainable development is integrated into the operations as a part of the standard processes and areas of responsibility. There is an overall Head of Sustainability for the Group whose job
it is to coordinate and support this sustainability work, as well as a steering group responsible for monitoring prioritised activities and reporting to Group management. In 2020, the steering group comprised the Head of Sustainability, Group Communications Director, Group Chief Operating Officer, Group Supply Chain Director and Group Live Operations Director, of which the latter three are part of the Group management team, as well as a management representative from our Irish operations.
A strategic project manager has been appointed for each focus area who works with representatives in the various countries to advance the work towards achieving the goals that have been set. Each country has appointed a sustainability coordinator who is tasked with executing the local work with regard to national conditions.
Since 2020, sustainability goals and KPIs have been included in the ordinary business planning and also form part of the bonusbased goals. Monitoring takes place quarterly by Group management.
Scandi Standard established a clear level of ambition in 2020: Achieving an industry-leading position in sustainability by 2025. This puts requirements on the continued development and acceleration of goals, governance and activities. Work has been conducted in the autumn to define the goal scenario, as well as the decisions, activities and investments that need to be prioritised going forward.
Scandi Standard supports Agenda 2030 in its entirety, including the global goals for sustainable development. We have the responsibility and the opportunity to contribute to several of these goals through our operations and interim goals. Some of them are
Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture.
Goal 3: Ensure healthy lives and promote well-being for everybody at all ages.
Goal 12: Ensure sustainable consumption and production patterns.
We also have a great responsibility to contribute to:
Goal 8: Promote sustained, inclusive and sustainable
Goal 13: Take urgent action to combat climate
Scandi Standard has signed the Global Compact, which is the UN's initiative for responsible business. ment the ten principles of Global Compact relating to human rights,
labour rights, the environment and anti-corruption.
The way we work every day to make a difference and contribute to the health and well-being of people, chickens and our shared planet.
Safe, healthy products that help and inspire people to lead a sustainable lifestyle.
Attractive and healthy workplace.
Responsible supplier relationships and business ethics.
Chickens
High-quality farmers.
Chickens in good health.
Feed quality and feed efficiency.
Climate-smart and resource-efficient production.
Sustainable packages.
Reduced food waste.
Our most important undertaking to consumers is that our food products are safe and healthy to eat, and that they are produced from chickens that feel good and are treated well. We want to inspire people to eat healthier and more climate-smart meals.
Product quality and food safety are top of the list of priorities for Scandi Standard. We work continually to improve processes and governance, based on certified management systems. Our production plants are third-party certified in line with the BRC Food Safety System, which includes requirements for quality-assured working methods, buildings and equipment, HCCAP, product traceability, staff competence and hygiene procedures as well as verification of products and processes. Moreover, we comply with the specific requirements that different customers place on us.
The challenges that we need to address include the risks of unwanted bacteria and quality deficiencies or food fraud when purchasing ingredients. In recent years work on food safety has intensified under the leadership of our Head of Quality and Product Safety for the Group. Measurable indicators are continually
| Goals | Results 2020 (2019) | |
|---|---|---|
| Critical complaints, number |
Minimum possible number. Long-term goal: 0 |
25 (54) |
| Product recalls, number |
Long-term goal: 0 | 3 (13) |
The number of what we refer to as critical complaints1) in 2020 was 25, a significant reduction compared to 2019. Three recalls were made from customers and the wholesale chain with the reason for this being the presence of foreign objects (plastic and metal) in the product packaging. No injuries or illness to the consumer was reported as a result.
1) Critical complaints include those that result in a recall from customers or consumers, the presence of foreign objects in the product (such as hard plastic or metal), allergens or other risks related to substandard food safety practices such as incorrect content or sell by dates. The assessment is made locally in each country.
monitored to check product quality and identify any deviations. These include temperature and cleanliness at the plants, the incidence of bacteria, checking the finished products and complaints.
We are placing particular focus on checking for the presence of any pathogenic bacteria. Our chickens must be completely free from salmonella, and there must be the absolute minimum levels of campylobacter possible. Regular inspection of both of these is conducted on the chickens on arrival at the slaughterhouse.
In November 2020, Danish and Swedish authorities reported the presence of bird flu in chicken flocks. Bird flu has recently spread across parts of Europe but is not considered to affect humans, which means there is no need to worry about consumers, as chicken products are safe to eat. As we enforce strict biosafety measures, Scandi Standard has assessed the risk of outbreaks as low, and no occurrence of bird flu has been detected in the regions in Sweden and Denmark where Scandi Standard and its contracted breeders conduct their main activities. However, exports of chicken products to Asia ceased for a period during the year, which affected operations.
We are working continually on developing our products and ranges, focusing more on nutrition and issues surrounding additives, sugar content, salt content, etc. Our premiss is that pure chicken is a naturally healthy raw material, rich in protein and low in saturated fat. When processing and flavouring, our aim is to keep recipes and ingredients as pure and simple as possible. The Board adopted a Group-wide Clean Label Policy in the year, which is based on current legislation and describes our shared stance on healthy products and establishes a clear framework that applies to all of our product development and new recipes. The policy applies to all new products carrying our private labels.
We want to inspire people to eat good chicken because of its taste, health and the climate. Through innovative, attractive prod ucts, we want to promote a transition from red to white meat, which is in line with the recommendations for a healthy diet from the World Health Organization (WHO) and the Nordic Nutrition Recommendations (NNR). Chicken is also significantly more climate-effective than beef and pork which is an important advan tage as the demand for animal protein increases and poses a major environmental challenge from a global perspective.
In order to meet the increased interest and demand for plantbased products, Scandi Standard has initiated work to produce a future supplement to chicken during the year. This has involved us initiating a research collaboration with the Swedish food develop ment company Veg of Lund. The project is set to run over two years and aims to develop a plant-based "chicken product" using potatoes and rapeseed oil.
Marketing and product information to consumers is performed locally by each of the Group's companies and brands. Our Code of Conduct states that Scandi Standard must provide accurate and non-misleading information in its labelling and marketing of products. All marketing must comply with the relevant legislation and ethical practice. Claims and information on the content and properties of our products must be transparent and fact-based. Scandi Standard did not suffer any consequences from any non-compliances during the year
Scandi Standard's operations are completely dependent on its employees. Attracting, developing and retaining motivated and skilled individuals is crucial for the development and success of the Group. We are working on ensuring a safe, inclusive and stimulating work environment, and are continually following up on commitment and motivation among our employees.
The pandemic and the new Corona virus have dominated the year for all of us. For Scandi Standard this has primarily been from the employer perspective, with a strong focus on ensuring the health of our employees. Read more about how we have managed the pandemic on page 44 .
Most of our around 3,000 employees work in a production environment where there are physical risks associated with health and the work environment. Scandi Standard has a zero vision in terms of occupational accidents and works preventively and systematically on physical work environment risks as well as the psychosocial work climate and corporate culture. Sick leave and work-related injuries are followed up at each plant and at a Group level. Local interim goals are also set in each country.
We rarely see serious accidents, but we have a challenge in reducing the total number of accidents that do occur. This is a prioritised area going forward and the focus is on addressing the identified risks in the plants, creating a more robust safety culture and advancing the development of common working methods and reporting systems.
Group management approved an overall group policy for health and safety at the workplace in the year. This policy clarifies Scandi Standard's commitment to ensuring a good working environment from all dimensions, to promote health and to ensure compliance with legislation and standards in the area. The policy also states that we must work actively to ensure an inclusive culture and diversity.
We want to promote health and well-being among our employees by inspiring them to lead a sustainable lifestyle, and to work on local goals and activities based on the circumstances in different countries and plants. This includes organising a joint "Sustainability Week" beginning in 2019, which focuses on health and the environment. Due to the pandemic, the 2020 version of the theme week had to be limited to local initiatives in the form of communication and digital activities.
Our values, Openness, Challenge and Sense of Urgency, describe our corporate culture and work alongside Scandi Standard's Code of Conduct to guide us in our daily work towards achieving our vision "Better Chicken for a Better Life". The Code of Conduct applies to all employees and sets the frameworks to act responsibly in terms of ethics, the environment, social issues and human rights. All employees receive a review of the code upon employment, "We are working to ensure a safe, inclusive and stimulating work environment."
and sign to confirm they understand what it means. All office employees also receive mandatory e-training in the code as additional support. By 2020, 88 (92) percent had completed the training (including new employees).
The way we live up to our values is monitored through annual performance appraisals and employee surveys. A whistle-blowing function has been set up to enable the anonymous reporting of possible infringements in relation to the Code of Conduct.
A major employee survey, ScandiPuls, is conducted every two years for all employees, the latest being in October 2020. Smallscale surveys are conducted in between. The results of this year's survey reveal a high level of engagement and that the vast majority of our employees enjoy their work. Despite a challenging year with the Covid-19 pandemic, both the engagement index and the loyalty index rose compared to the previous survey. The ambassadorship, measured by the number NPS (Net Promoter Score), is also a good tool for industry comparison, and amounted to 18 for 2020.
The survey reveals that a clear, visible and involving leadership is one of the most important factors in promoting employee engagement. Programmes and activities for leadership development based on a shared platform are carried out continually in the Group's companies.
Scandi Standard's aim is to be an inclusive organisation promoting diversity. The goal is to benefit from the potential of all our employees, promote a creative work culture, reflect our customer groups and secure the supply of skills going forward. At Scandi Standard, we respect human rights and show zero tolerance towards discrimination. This has also been specified in our Code of Conduct.
For the first time, this year's ScandiPuls measured whether our employees experience the workplace as inclusive, offering equal opportunities to everybody, regardless of gender, age and background. Although the index number 75 can be seen as a positive result, Scandi's vision is to achieve 100. The result reveals a few differences between the different staff groups, with higher results among office employees (83) compared with production staff (71). There are no significant differences between age groups or different genders.
We also strive for equal groups at all levels. Of all employees, 43 (42) percent were women and 57 (58) percent men. The proportion of women in executive positions was 27 (26) percent.
| Results of the employee survey ScandiPuls (index where max = 100): | Goals | 2020 | 2018 | 2016 | 2015 |
|---|---|---|---|---|---|
| Satisfaction and motivation | 71 | 72 | 69 (731)) | 72 | 70 |
| Inclusive culture | 100 (long-term) | 75 |
The employee survey measures a number of different parameters, including engagement and leadership. An index score of 66–72 is average, while 75 is a good result. In the 2020 survey, 92% of those who have been employed at Scandi Standard for at least 6 months took part. The index for inclusive culture was measured for the first time in 2020. 1) Our Irish company Manor Farm participated for the first time in 2018, so the results are exclusive of Ireland (73).
| Attendance rates and work-related injuries in 2020 | Group | Sweden | Denmark | Finland | Norway | Ireland |
|---|---|---|---|---|---|---|
| Attendance rates (percentage of standard working hours, %) | – | 93 (94) | 95 (95) | 96 (94) | 97 (97) | 97 (96) |
| Accidents at work (LTA, number of accidents at work with sick leave/number of hours worked x 1,000,000) |
31 (–) | 48 (56) | 13 (10) | 56 (64) | 2 (16) | 38 (49) |
Sick leave and work-related injuries are followed up at each plant. No serious injuries or accidents that caused permanent incapacity occurred during the year. A total of 170 injuries resulting in sick leave occurred during the year. Scandi Standard has an overall zero vision for accidents, with local measurable interim goals in the work on ensuring a safe working environment.
Scandi Standard's operations are highly dependent on good and effective supplier partnerships. As well as chicken, we buy other ingredients, equipment and services from a high number of suppliers. Purchases are coordinated at a Group level for categories related to production, which includes ingredients, packaging materials and transport.
Scandi Standard strives for mutual, responsible business relationships. Our Supplier Code of Conduct provides the foundation for this, setting requirements for environmental responsibility, anti-corruption and ethics, human rights as well as social responsibility that equate to the Group's own Code of Conduct. Our suppliers must also ensure that these requirements are passed on down the chain, i.e. to their subcontractors. The Group's purchasing function is ultimately responsible for the contents and implementation of the Supplier Code of Conduct.
The Supplier Code of Conduct was updated in 2020 to better reflect Scandi Standard's essential sustainability issues and identified risks in the supply chain. This included clarifying the requirements relating to animal care, the climate and biological diversity.
The Supplier Code of Conduct has been communicated to all suppliers with the requirement of confirming compliance in priority purchasing categories: chickens, transport services, technical equipment and packaging materials, as well as spices and other ingredients. Our aim is for all suppliers with a purchasing value of more than SEK 500,000 per year to sign the code. The outcome 2020 for the prioritised categories was over 90 percent.
Our systematic work is based on risk assessments. This includes a risk screening at supplier level based on risk parameters, such as production country as well as category/industryspecific risks linked to the environment, human rights and ethical issues. In order to identify risks and potential deviations, we are
continually striving to ensure greater transparency in our supplier relationships, beyond the first link in the supply chain.
We also ask our suppliers to complete a self-assessment form in order to assess risks and performance at supplier level. These responses provide supplementary data to help us prioritise where we need to focus our work on additional monitoring and audits, as well as other initiatives. In 2019–2020 around 120 of our suppliers had been evaluated against the Supplier Code of Conduct. On the whole these results show that the majority of our suppliers have well-developed systems in place for managing risks linked to the areas in the Supplier Code of Conduct. We aim to reach 98 percent of the evaluated suppliers in our priority categories, and set up action plans for the suppliers that are assessed as not being up to standard.
We strive for an ethical and respectful approach in all our business relationships. The Code of Conduct clarifies that zero tolerance applies to all forms of bribery and corruption. We must also act in an exemplary and responsible fashion to ensure the correct processing of information and to ensure the avoidance of any conflicts of interest. All employees are trained in our Code of Conduct, and are encouraged to report any suspected violations.
A whistle-blowing function is set up in collaboration with an external company to enable the anonymous reporting of potential violations of the Code of Conduct. Reported cases are received by the external partner and further distributed to an internal committee consisting of Group HR Director, Group CFO, Head of Group Finance and Group Quality Director. In 2020 four cases were reported through the service. They were related to employment law, internal leadership and employee issues and policy compliance. All cases were investigated and answered, although none of the cases proved to be an actual violation.
"We are continuously striving to improve transparency in our supplier relationships."
Studies show that deficiencies in food safety are rarely traced to poor procedures or system failures, as it is the culture and attitudes to food safety that determine success.
At Scandi Standard, food safety has always been a very high priority issue, and quality work has long been certified in line with European industry standards. The importance of the food safety culture has also recently started to receive attention, and since 2018 several certifications now include requirements for actively working to improve the corporate culture. The World Health Organisation, WHO, and the UN have also highlighted the importance of cultural work through the establishment of a special day; World Food Safety Day.
The quality and food safety work at Scandi Standard is headed by Heidi Bretthauer, Group Quality Director, who together with quality managers across all countries work to strengthen the internal culture and attitudes to food safety.
The old saying "Culture eats strategy for breakfast" sums it up pretty well. We have procedures and processes in place that are carefully thought out and implemented, although it is what our employees do that makes a difference. If we can get our employees to understand the issue in depth and get involved, we will succeed a lot better in this process than if we simply introduce new procedures.
We conduct attitude surveys at our production plants on a regular basis in order to map how the quality work is experienced by our employees. Through the results, we can then identify our weaknesses and work specifically on them through local working groups. We have also appointed Food Safety Culture Ambassadors at a couple of plants. They are tasked with keeping the issue alive and to inspire their colleagues. Another important element of
the work is to hold training courses on a regular basis to ensure that the level of knowledge is always high. It is not enough to simply hold one course when an employee is new, constant refreshers are needed.
We will continue to work on our food safety culture, which includes carrying on working with our working groups and working more with the sharing of knowledge between our plants. It is also vital to continue to build on the engagement in terms of activities such as the World Food Safety Day. Additionally, we will certify our quality work in line with a higher standard, BRC, with regard to those operations that are currently certified in line with a lower standard. This work will be performed in 2021, the purpose of which is to ensure that we maintain the same high level of work across all our countries.
Chickens are the heart of Scandi Standard's business. Our premiss is that all of our chickens must feel good and be reared in a good environment, from hatching to slaughter. Good animal welfare is an intrinsic part of our operations for ethical reasons, and because it is directly linked to quality, resource efficiency and profitability. The right quality of the day-old chicken, the right stable environment and the right feed all provide the chicken with the conditions to remain healthy and receive nutrition. Only chickens that feel good can grow in a healthy way.
Our ambition is to assume a dynamic and industry-leading role to promote good animal welfare. The foundation of the work is focused on continuous improvements and the Nordic approach to animal care, with animal welfare legislation that is some of the strictest in the world. Our Group-wide policy for animal welfare applies to all elements of our business and to all suppliers. As Scandi Standard's operations continue to grow beyond the Nordic countries, it will be even more important to clarify our position and ensure implementation of the requirements.
Scandi Standard's Group Live Operations Director has the overall responsibility for the Group's policy and improvement work. In each market, local management together with the local Live Operations Manager is responsible for implementation and monitoring. An animal welfare coordinator is appointed at each plant. All employees handling chickens undergo training in this as part of their introduction.
We have long-term collaborations with selected farmers in each country. Quality and animal welfare parameters are measured for each delivery, and our guidelines apply to all farmers regardless of country. The contracted farmers which total about 350 receive support, training and regular follow-up visits from our advisers. In the event of non-conformance in terms of the requirements, a deduction is applied to the farmer's payment, whereas if the quality is good a supplement is paid. In the event of more serious or recurring deficiencies, a more thorough examination is made of the root causes and the conditions for future collaboration.
Different chicken breeds and breeding lines are used in different production systems. Their care needs and conditions may vary, but our premise is that all chickens should be in good health and treated properly.
Our animal welfare policy is based on the internationally recognised five freedoms for animal welfare, and states, among other factors;
We focus on the areas that are most important in terms of animal health. This includes the health of newly hatched chickens, the composition of the feed and how the pen environment is designed.
A good pen environment is crucial for the chickens. Examples of requirements include that the animals must be able to move freely and have sufficient space. Limits to flock density vary between the different production systems and differences in national legislation, with an average for Scandi Standard of around 37 kg live weight per square metre. There are also clear requirements in place for heating, lighting, ventilation, bedding and equipment for feed and water. The health of the chicken flocks is monitored on a daily basis and the pen environment is measured using a number of key indicators. No growth hormones may be used and antibiotics or other medicines may only be administered to sick animals. No beak trimming is allowed.
The straw bed where chickens spend their time has a major impact on their health. Keeping the straw bed dry makes life comfortable for the chickens, maintains their immune system and reduces the risk of spreading diseases. The quality of the straw bed is checked by looking at the condition of the foot pads. This is monitored and registered for each pen when the chickens arrive at the slaughterhouse. Good foot health increases the proportion of high-quality chicken feet that can be exported as food, which increases revenue as this is more profitable than when they are used for animal feed.
We enforce a very strict policy regarding the use of antibiotics and other types of medicines. In accordance with current legislation in the Nordic countries, antibiotics are not used as a preventive measure in the rearing process, unlike many other countries. Only sick animals may be treated, following veterinary approval. The use of antibiotics among Nordic breeders is also very low, a sign of good animal husbandry.
Our stance towards antibiotics, as well as our working methods and results in the Nordic Group companies, lie at the forefront from a global perspective, as well as in comparison with the stricter EU rules for antibiotic use in animal production that were set in 2018.
When Irish Manor Farm was included in Scandi Standard in 2017, antibiotic use was around 70 percent. Through a purposeful process, this usage has more than halved by 2020. This trend is continuing in the right direction and levels should be on a par with Nordic levels within the next few years.
* Including/excluding Ireland.
Scandi Standard's target is for the share of flocks treated to be lower than 1 percent in all countries. This goal has been achieved by a good margin for the Nordic countries over recent years. The work on reducing antibiotic use in our Irish operations has been successful over the period 2018–2020, with the numbers being more than halved. The difference with other countries in the Group is still substantial, but the assessment is to achieve the goal within a few more years.
Our Group target is for the percentage of flocks treated with antibiotics to be lower than 1 percent.
The increase in antibiotic resistance is a global health challenge and we believe that Scandi Standard has an important role to play in minimising the use of antibiotics in food production, particularly in terms of our acquisitions and the integration of operations in the Group that are outside the Nordic countries.
One important part of the collaboration with the breeders is the composition of feed to achieve the best possible health for the chickens and the most effective use of feed. All feed is made from vegetables and careful planning goes into several ingredients in the composition of the feed, with wheat and soya being major components. The use of GMO (genetically modified organisms, in this case soya and corn) in feed is widely discussed. Scandi Standard has chosen to adhere to local conditions and customer requirements and requires GMO-free feed in Sweden, Norway and Finland.
Chicken rearing is very resource-efficient compared with other kinds of animals. The amount of feed and the level of climate impact per kilogram of meat are much higher in the production of pork and beef, for example. Feed efficiency is one of the most important indicators in order to optimise the rearing process. Chickens are very good at converting feed into meat, the feed efficiency is a direct indicator of the quality of the feed, and how well the chickens are being taken care of.
At present some 20 percent or just over 100,000 tonnes of the feed that our chickens receive currently consists of imported soya. Requirements for good quality, traceability and responsible production are set through various third-party certifications such as RTRS and ProTerra.
Our long-term goal is to replace imported soya that is traditionally used as a feed protein with other, local protein sources. This is because there are better options from an environmental and animal welfare perspective, which at the same time also promote local agricultural production. A strategic development project has been operating since 2019 together with feed specialists to develop and test new feed mixes, where a significant part of the soya is replaced by locally sourced beans.
Animal ethics are a high priority in the transport and slaughter of the chickens. Transport from the breeders to our plants in cold climate conditions (Sweden, Finland, Norway) is carried out in specially adapted lorries that have temperature-controlled ventilation. We select breeders who are close to our plants and the average transport time is 1–2 hours which is far below the statutory maximum time of eight hours. Transport distances and arrival times are planned and registered to ensure that all chickens are handled within set time frames, and that they are always slaughtered on the day of transportation. The chickens are checked on arrival and stunned (anaesthetised) before slaughter. The chickens are checked on site by independent vets.
| Goals | 2020 | 2019 | 2018 2017 2016 | |||
|---|---|---|---|---|---|---|
| Antibiotics, proportion of treated flocks,% |
<1 | 7 0.0 excl. Ireland |
11 0.1 excl. Ireland |
13 0.0 excl. Ireland |
0.2 | 0.3 |
| Foot health, foot points | <5 | 10 4 excl. Ireland |
20 4 excl. Ireland |
14 6 excl. Ireland |
9 | 14 |
| Feed efficiency, kg feed/ kg live weight |
1.49 | 1.52 | 1.52 | 1.54 | 1.56 | 1.59 |
The chickens' health is monitored using a number of parameters. Low use of antibiotics and good foot health are key indicators of good animal health and pen environment. Reported use of antibiotics can be compared with an estimated 40−80 percent treated flocks in many European countries. Foot health is measured with foot points, where samples of 100 per flock are checked before slaughter. A low score equates to good foot health, values below 15−20 are good in an international comparison. Irish Manor Farm is included in reported figures as of 2018. In order to compare with 2017, figures are also reported excluding Ireland. Goals are long-term, aiming at 2025.
Feed efficiency for different kinds of animals, kg feed per kg live weight
This diagram shows feed efficiency when rearing different kinds of animals measured as the amount of feed in relation to growth (the weight is the live weight). The figures given should be seen as the mean value of the FCR values (feed conversion rate) from several published sources. An increase in feed efficiency saves natural resources and costs at several stages: less cultivated land is needed, fewer shipments, lower energy consumption for producing feed and less water consumption throughout the value chain.
Good animal welfare is, and has been for decades, an essential part of the Nordic way of raising animals. Good animal welfare is also a key area for Scandi Standard, where we, together with our contracted breeders, share an ambition to be the industry leader.
An important element of achieving the goal is to create consensus on what contributes to good animal welfare. It is an extensive and complex field with multiple parameters that in combination and individually impact the health and well-being of the chickens.
Tommi Saksala, Group Live Operations Director, is responsible for the Group's work on systematically improving animal welfare.
It is easy to think that individual external factors have a major impact, such as the breed of the chicken or how many windows there are in a pen, but the most important element is actually the human factor. Our knowledge and how we choose to apply it in partnership with our breeders is by far the biggest component.
If you want to simplify it, you can divide the parameters into three different areas that have a major impact. The first is how the chicken feels as soon
as it hatches, that is what we call the quality of the day-old chicken. We are able to influence the conditions considerably at the embryonic level and during the incubation process and ensure that the chickens that hatch are strong and healthy.
The second area is the quality of the feed the chickens are given. The same applies to us humans, when we eat well we also feel good and stay healthy. Many negative behaviours, such as the chickens pecking each other, can be counteracted by being given the correct feed.
The final area is, of course, about the environment the chickens live in and that the breeder taking care of them possesses the right knowledge and ensures the right conditions. We work hard to improve knowledge and augment attitudes towards animal welfare. Possessing the right knowledge can often compensate for, for example, an older chicken pen or other factors.
We currently operate in five different markets that all have their own legislation, traditions and market conditions. We have to take this into account to
some extent, and this may mean that we focus or act in one way in one market, and in another way in the other countries. Regardless of the conditions, we measure animal welfare in the same way and we always have the same ultimate goal: to treat the chickens with respect, and that the chickens must feel as good as possible during their lifetime.
The work on climate- and resource-efficient chicken production covers the entire value chain: both Scandi Standard's in-house processing operations and the supplier stage with feed production and breeding, transport, and the customer and consumer stages The focus at the company's own plants is on the efficient use of electricity, heating and water, as well as the minimising and management of waste and by-products.
We take the climate issue seriously and realise that we need to do our part to reduce emissions, and also identify and manage the risks resulting from climate change. In line with the Paris Agreement and the 1.5 degree goal, our vision is to be completely fossil-free. Our overall-goal is to halve our climate-impacting emissions every 10 years. Our measurable climate goals and reported climate data have the base year 2016 and currently include the energy consumption at our plants (scope 1 and 2) as well as distribution shipments. This goal is measured in relation to the size of operations (tonne CO2e per kg product). However, we are also monitoring our climate footprint in absolute figures as well.
Work and actions to reduce our climate impact cover every stage in our value chain. Looking at the entire lifecycle, the cultivation and production of feed along with the breeding of chickens account for the vast majority of our climate footprint.
As a next step, Scandi Standard will develop and verify our measurable climate goals in 2021, as specified in the Science Based Target initiatives model.
As a food producer, we depend on a well-functioning agriculture sector primarily for the production of feed for our chickens. Climate change and more extreme weather conditions can affect quality, cost and delivery reliability. Other identified climate-related risks to address include flood risks and the climate protection of plants, legislation and financial instruments in the energy and transport sector, as well as brand risks linked to the increased environmental awareness of customers and consumers. For more information, see the section on risks on page 55 and Scandi Standard's reporting to the Carbon Disclosure Project (CDP).
At each plant, ongoing work is performed to ensure the efficient use of energy and water, in line with the Group's Energy and Water Policy. Local goals are set annually and monitored on a monthly basis. The systematic work on mapping this and the actions taken, such as recirculating heat and changing over to energy-efficient LED lighting, has yielded significant energy savings. We have also been working on the gradual phasing out of fossil energy sources for several years. In 2020, electricity was purchased from originmarked renewable electricity for our plant in Sweden.
None of our own plants or breeders are located in areas with direct water shortages, but fresh water is a limited resource that must always be used responsibly. We work for the optimal use of the water within the framework of strict rules set for food safety and hygiene. Reduced water consumption locally primarily focuses on indirectly reducing the use of energy, and reducing the amount of wastewater that needs to be treated. Local authorities are setting extensive requirements on the quality of wastewater, which is checked by monitoring the content of nitrogen and the Biological Oxygen Demand (BOD) content. Five of the Group's plants currently have their own treatment plants that treat wastewater from the slaughtering and processing of chicken.
Sustainable transport is about the safety and security of our drivers and passengers, and also the chickens we transport, and of course about the delivery quality for our customers. We also want to enforce transport solutions that are as efficient and climate-smart as possible. We require our transport suppliers not only to observe our Supplier Code of Conduct, but also to provide Energy consumption, 2020, distribution energy sources (kWh)
Target:
less carbon dioxide emissions 2016–2025
us with environmental data and use EURO 6 environmentally classified vehicles.
In collaboration with our hauliers, we have installed filling stations for HVO biodiesel at our plants and at our hauliers' stations in Sweden. All shipments of Kronfågel's products within Sweden take place using 100 percent renewable HVO biodiesel. A pilot project was conducted in Denmark in 2020 featuring carbon-neutral cooling trailers which cool our products using a combination of electricity and energy generated from the drive shaft. The vehicle fleet also includes refrigerated trailers with solar panels on the roof.
Two new projects will be initiated in 2021 that will have a major impact on our climate footprint: a new agreement on fossil-free chiller and freezer storage in Denmark, and cooperation with a new logistics partner in Sweden that will shorten transport distances through better geographical placement.
The entire chicken is used in the processing process, with nothing being wasted. An average of 70 percent of each chicken becomes food, while 30 percent is used as by-products in feed or biooil. In terms of the value chain as a whole, the customer and consumer chain is the most important for reducing the amount of food waste. Our contribution is to provide innovative packaging solutions, guidance for consumers, and to optimise the product flow to and in food stores.
Waste at our plants comprises primarily packaging and other flammable materials. All of our large plants sort their waste and monitor the volumes for each waste fraction. Our long-term goal is zero residual waste in production, with a sub-goal of reducing the amount of waste by 2 percent per year. However, we still need to work with our waste contractors on defining base data and uniform measurements.
A special effort was made in 2020 to reduce food waste (known as floor waste) at our plants. In total the result was a reduction with 38 percent. Read more on page 11.
Stricter legislation and trends for a circular economy for packages affect Scandi Standard. All plastic packaging in the EU must be able to be reused or recycled by 2030. Scandi Standard's packaging strategy focuses on prioritising clean, non-composite materials, and to choose recycled and thinner materials where possible. This while keeping focus on product quality and packaging functionality. For example, in Denmark, Sweden and Norway we now use rPET trays and have also implemented a new technology for wrapping pallets that reduces the amount of plastic film by 30 percent. We have set targets for all our product packaging to be made from renewable or recycled materials and to continue reduce the amount of plastic used in our own production. In 2020, we used approx. 18 g plastic per kg sold food product (Group average excluding Ireland where aligned data is not yet available). The main plastic categories are trays and plastic film.
| Reported emissions distribution per scope according to the GHG protocol |
Share of emissions |
Tonne CO2e |
|---|---|---|
| Scope 1 Energy consumption |
||
| Fuel oil | 5% | 1,734 |
| Natural gas | 21% | 6,595 |
| Scope 2 Energy consumption |
||
| District heating | 11% | 3,373 |
| Electricity | 43% | 13,587 |
| Scope 3 Distribution transports |
21% | 6,398 |
The diagrams to the right show energy consumption (electricity and heat) and water consumption in our plants, and carbon dioxide emissions from energy consumption and distribution transports (from 2018) per kg of chicken product. Reported data include the plants at AArs, Farre, Valla, Lieto, Stokke, Jaeren and Manor Farm, which in 2020 accounted for around 95 percent of Scandi Standard's overall production.
Compared to published data in previous report for 2019, data for carbon dioxide emissions 2018–2020 have been recalculated with updated and standardized emission factors for energy consumption. Emission factors used are from IEA, national and supplier-specific values where available.
Total energy consumption in 2020 was 147 279 260 kWh, 0.46 kWh per kg product.
Emissions of carbon dioxide from energy consumption production and distribution transports in 2020 totalled in 32 182 tonnes, which equates to 102 grams per kg of product.
6 8 10 Litre per kg product
2 190 169 m3, 6.91 litre per kg product.
The outbreak of the pandemic and the new corona virus has had a major impact on the year, especially from the employer perspective. Scandi Standard's operations generally have been able to be performed relatively unchanged, but with a high priority on employee safety and health, safeguarding the value chain and focusing on fulfilling the important societal function of maintaining the supply of food to the general population. In this section, we describe how we have managed the pandemic in different ways over the course of the year.
Scandi Standard introduced protection measures and extra hygiene protocols at an early stage to reduce the spread of infections. Following recommendations and in consultation with local authorities, travel bans were introduced for non-business-critical business trips, both between markets and plants in the same country, visiting bans were put in place for external visits, extra personal protective equipment was sourced for production staff and working from home was encouraged for workers who did not need to be at the office. In Ireland, temperature checks were also introduced for all production staff before entering the plant.
Both Denmark and Ireland also tested all employees during the year. In Denmark, this was introduced as an extra precaution following the detection of a few cases of Covid-19, while in Ireland it was part of a national testing program where production workers were tested a total of five times. All tests came back negative in Denmark, while in Ireland only a handful of positive cases were detected despite the extensive spread of infection throughout the local community, which shows that our measures and procedures have had an impact on restricting infection.
Detailed risk analyses and continuity planning were also conducted early on in the pandemic based on a number of possible scenarios in order to safeguard operations. These included making local plans for cooperation between different companies in order to ensure both animal welfare and production, as well as outcomes where a simplified product range could be produced with a greatly reduced workforce.
The OECD-FAO report Agricultural Outlook states that the longterm impacts on consumption, production and trade are difficult to assess. To manage any changes to demand or difficulties in supplying the value chain with raw materials, Scandi Standard has created a special, countrywide and cross-functional unit tasked with monitoring, analysing and interpreting the existing signals. The goal is to detect structural changes at an early stage that could have an impact on the business.
Despite the fact that the pandemic has had a major impact on our Food Services sales channel, we have not made any structural or overall changes to our strategy for the channel. Measures were introduced in the short term that safeguarded outstanding accounts receivable and minimised the write down of credit losses. In general we believe there will be a return to relatively normal movement patterns over the coming year and have planned accordingly.
"Detailed risk analyses and continuity planning were conducted at an early stage to safeguard operations."
As the Corona virus spread during the spring, travel restrictions were also introduced, especially to and from Sweden and Ireland. But machines and equipment still needed to be maintained. Technicians from our suppliers usually travel around from plant to plant to tackle these maintenance tasks, but shut-downs and quarantine made this impossible. The solution was smart glasses that combine video and Augmented Reality where our own employees perform the tasks themselves with the supplier's technicians using video links who direct the work from a remote location. The glasses, intended as a temporary solution, have proven to be a very efficient and time-saving way of performing maintenance and will continue to be used even when the pandemic is over.
* Augmented Reality (AR) is an enhanced version of the real physical world that is achieved through the use of digital visual elements, sounds or other sensory stimuli delivered through technology such as glasses or a mobile phone.
The Scandi Standard share was listed on Nasdaq Stockholm on 27 June 2014 under the symbol SCST.
In 2020, a total of 30.0 (20.9) million shares were traded. The average daily volume was 119,145 (84,020) shares.
The final price paid on the last day of trading in 2020 was SEK 68.8 (SEK 74.4), which entails a drop of approximately 8 percent compared with the same period in the previous year. The share price has therefore increased by approximately 46 percent since the listing in 2014. The share is a part of the Nasdaq Mid Cap index, which increased by 25 percent in 2020.
On 31 December 2020 the market value totalled approximately MSEK 4,545 (4,915).
On 31 December 2020 the number of shareholders totalled 6,114 (5,854). The holding of the ten largest share owners corresponded to 54 (54) percent of the share capital. Swedish institutions, unit trusts and private individuals had a holding in the compant corresponding 57 (54) percent av of the share capital as of 31 December 2020.
The Board intends to propose a total dividend for the financial year 2020 of SEK 2.50 (0.00) per share which corresponds to MSEK
164 (0) based on the number of outstanding shares as of December 31, 2020. The Board proposes a dividend of SEK 1.25 (0.00) per share which corresponds to MSEK 82 (0), to the Annual General Meeting 2021 based on the number of outstanding shares on December 31, 2020. The Board intends to convene an Extraordinary General Meeting in the second half of 2021 to propose an second dividend of SEK 1.25 per share. The total dividend for the financial year 2020 that the Board intends to propose corresponds to approximately 47 (0) percent of the earnings for the year, adjusted for non-comparable items. The Company's dividend policy is to distribute approximately 60 percent of earnings, adjusted for non-comparable items, for the year on average over time. The dividend should be determined in a way that ensures that the proposed dividend is justifiable; which is based on the requirements that the type, scope and risks of the company's and Group's operations place on the level of the company's and Group's equity, as well as the company's and Group's consolidation needs, liquidity and status in general.
Scandi Standard has three share-based long-term incentive programmes for key individuals, LTIP 2018, LTIP 2019 and LTIP 2020. See Notes 1 and 5 for information about these programmes.
Increase in the share price since the listing in 2014 (as of 31 December 2020)
The percentage of the share capital that is controlled by the ten largest owners
| No. of shareholders | No. of shares | Voting rights and share capital, % |
|---|---|---|
| 4,304 | 603,400 | 0.9 |
| 707 | 576,219 | 0.9 |
| 879 | 2,701,995 | 4.1 |
| 68 | 974,986 | 1.5 |
| 156 | 61,204,290 | 92.6 |
| 6,114 | 66,060,890 | 100.0 |
| 10,001 – 20,000 |
| 2020 | 2019 | |
|---|---|---|
| Adjusted earnings per share 1) | 5.45 | 4.06 |
| Earnings per share | 3.16 | 3.60 |
| Dividend per share | 1.25 2) | – |
| Operating cash flow, per share 3) | 7.26 | 8.20 |
| Equity per share | 28.58 | 26.58 |
| Average no of shares 4) | 65,501,968 | 65,358,603 |
| Number of shares at the end of period | 66,060,890 | 66,060,890 |
1) Adjusted for non-comparable items, see page 50.
2) Board's proposal to the Annual General meeting 2021.
3) Reclassification of cash flow effect for leasing assets has been made for the year and for comparative figures.
4) In 2020, 0 (0) shares were repurchased.
| Name | No. of shares | Capital, % |
|---|---|---|
| Investment AB Öresund | 10,100,000 | 15.3 |
| Carton Group ULC | 6,000,000 | 9.1 |
| Länsförsäkringar Fondförvaltning AB | 4,655,873 | 7.0 |
| Lantmännen Animalieinvest AB | 3,303,461 | 5.0 |
| Carnegie Fonder | 2,862,591 | 4.3 |
| JP Morgan Bank Luxembourg S.A. | 2,448,472 | 3.7 |
| Cliens Fonder | 2,160,000 | 3.3 |
| State Street Bank and Trust Co | 1,602,371 | 2.4 |
| Brown Brothers Harriman/Lux | 1,559,416 | 2.4 |
| Brown Brothers Harriman & Co. | 1,231,537 | 1.9 |
| Other | 30,137,169 | 45.6 |
| Total | 66,060,890 | 100.0 |
Scandi Standard has navigated the
challenges of 2020 in a balanced way."
Adjusted operating income in 2020 was MSEK 500, which is a rise of MSEK 46 (10 percent) compared to 2019, with an adjusted operating margin of 5.0 (4.6) percent. It is pleasing to see that our operations in Finland were profitable for the first time since the acquisition, and that our operations in Ireland had their strongest year since the acquisition. In contrast, operations in Denmark have experienced a particularly tough year as this segment within the Group was most negatively affected by the Covid-19 pandemic due to the fact that it has a major share of its sales within the Foodservice and Export sales channels. The segment also faced challenges in production. Suffice to say we have potential for improvement here. However, it is a positive sign that the strong results delivered by the other segments demonstrate that the Group as a whole is still able to deliver solid results.
Our net financial items in 2020 were positively affected by exchange rate effects, compared with negative exchange rate effects last year, but we also had lower interest expenses as we had a consistently lower debt-to-equity ratio throughout the year. We have also had lower tax costs in 2020, primarily the result of a positive mix between our legal entities.
In the first half of 2020, we had a strong focus on the effect the Covid-19 pandemic would have on our financial position and we therefore took some precautionary measures such as the Board's decision to propose to the Annual General Meeting that dividends not be paid for 2019, reducing investments and raising additional credit facilities. Fortunately, these measures and operational measures implemented to manage the risk of the Covid-19 pandemic have made us stronger from a financial perspective over the course of the year with reduced net debt and debt-to-equity ratio at 2.4 which is in line with our long-term target. Our financial position, including available funds at the end of the year, is good and we are well equipped to deliver on our strategy . This while continuing to focus on maintaining several of the measures to address the risks of the Covid-
19 pandemic. Acquisitions are an important part of Scandi Standard's strategy and potential acquisition targets are therefore analyzed on an ongoing basis.
To sum up, 2020 was a year like no other for Scandi Standard, but our business has handled the Covid-19 pandemic in an exemplary manner and we see potential to further strengthen our margins.
We look forward to 2021 with confidence, as does the rest of the world.
Julia Lagerqvist CFO
The Board of Directors and President of Scandi Standard AB (publ), identity number 556921-0627, with registered office in Stockholm, Sweden, herewith submit the annual report and consolidated accounts for the 2020 financial year.
Net sales for the Group for 2020 increased to MSEK 9,940 compared to MSEK 9,891 last year.
Net sales increased by 1 percent in Sweden, 2 percent in Norway, 7 percent in Ireland and 13 percent in Finland and decreased with 5 percent in Denmark.
Net sales by product category increased by 6 percent for Ready-to- cook Chilled, which is the largest product category, decreased by 5 percent for Ready-to-cook Frozen and decreased by 8 percent for Ready-to-eat. The decrease in Ready- to-eat is driven by the decrease in sales within the Foodservice sales channel.
Operating income for the Group, adjusted for non-comparable items1), increased to MSEK 500 in 2020 from MSEK 454 in 2019, corresponding to a margin of 5.0 (4.6) percent. Adjusted operating income1) improved in all segments except Denmark. The improved adjusted operating income was mainly driven by higher sales volumes and an improved sales mix.
Operating income, including non-comparable items, decreased to MSEK 351 from MSEK 424 in 2019, corresponding to a margin of 3.5 (4.3) percent.
Negatively non-comparable items in operating income amounted to MSEK 150 (30), see table on page 50.
The finance net for the Group 2020 amounted to MSEK –90 (–113). The decrease is mainly driven by lower interest expenses and positive currency fluctuations due to a stronger Swedish krona.
Tax expenses for the Group amounted to MSEK 52 (75) corresponding to an effective tax rate of approximately 20 (24) percent. The tax rate was positively affected mainly by a changed country mix.
Income for the Group in 2020 decreased to MSEK 208 from MSEK 237 in 2019, corresponding to earnings per share of SEK 3.16 (3.60).
| MSEK | 2020 | 2019 |
|---|---|---|
| Net sales | 9,940 | 9,891 |
| Adjusted EBITDA1) | 835 | 776 |
| Adjusted operating income (EBIT)1) | 500 | 454 |
| Operating income (EBIT) | 351 | 424 |
| Income after finance net | 260 | 312 |
| Income for the year | 208 | 237 |
| Earnings per share, SEK | 3.16 | 3.60 |
| Dividend, SEK | 1,252) | – |
| Net interest-bearing debt | 1,933 | 2,200 |
| Operating cash flow | 476 | 536 |
| % | 2020 | 2019 |
|---|---|---|
| Adjusted EBITDA-margin1) | 8.4 | 7.8 |
| Adjusted operating margin (EBIT)1) | 5.0 | 4.6 |
| Operating margin (EBIT) | 3.5 | 4.3 |
| Adjusted return on capital employed (ROCE)1) |
11.9 | 11.0 |
| Return on equity | 11.5 | 14.2 |
| Equity ratio | 29.4 | 27.7 |
| Average number of employees | 3,220 | 3,266 |
1) For the non-comparable items, see page 50.
2) Proposed by the Board to the Annual General Meeting 2021.
Operating cash flow for the Group in 2020 last year amounted to MSEK 476 compared to MSEK 536 last year. Cash flow was negatively impacted by a lower income before depreciation and amortization (EBITDA) and lower improved working capital and positively affected by lower investments.
Working capital as of 31 December 2020 amounted to MSEK 64 (211), corresponding to 0.6 (2.1) percent of net sales. The improvement compared with previous year is mainly driven by decreased receivables.
| MSEK | 2020 | 2019 |
|---|---|---|
| Bird flu1) | –15 | – |
| Earn-out Debt adjustment2) | –52 | – |
| Covid-19 pandemic3) | –60 | – |
| Strategy project4) | –16 | – |
| Restructuring5) | –7 | –12 |
| Restructuring of production6) | – | –7 |
| Transaction costs7) | – | –1 |
| Costs for incorrect inserts goods8) | – | –6 |
| Other | – | –4 |
| Total | –150 | –30 |
1) Cost related to bird flu – mainly inventory write-down.
Net capital expenditure for the Group in 2020 amounted to MSEK 355 compared to MSEK 419 last year. A significant part is mainly related to investments in Finland with the purpose to increase efficacy, productivity and capacity. Investments with the same purpose have also been made in several sites in the other countries.
Approximately 71 (72) percent of the capital expenditure in 2020 referred to productivity and capacity improvement measures and approximately 29 (28) percent to maintenance.
| MSEK | 2020 | 2019 |
|---|---|---|
| Opening balance net interest-bearing | ||
| debt | –2,200 | –2,370 |
| EBITDA | 699 | 748 |
| Adjustments for non-cash items | 74 | 29 |
| Change in working capital | 143 | 264 |
| Net capital expenditure | –355 | –419 |
| Net increase in leasing assets1) | –84 | –87 |
| Operating cash flow | 476 | 536 |
| Paid finance items, net | –76 | –72 |
| Paid income tax | –41 | –49 |
| Dividend | – | –131 |
| Acquisition | –104 | –133 |
| Other2) | 11 | 18 |
| Total change in net interest-bearing | ||
| debt | 267 | 170 |
| Closing balance net interest-bearing | ||
| debt | –1,933 | –2,200 |
1) Reclassification of cash flow effect for leasing assets has been made for the year and for comparative figures.
Equity as of 31 December 2020 amounted to MSEK 1,875 (1,738). The equity to assets ratio improved to 29.4 (27,7) percent. Return on Equity was 11.5 (14.2) percent.
Net interest-bearing debt for the Group as of 31 December 2020 amounted to MSEK 1,933 (2,200). Despite lower income before depreciation and amortizations (EBITDA) and lower improved operating cash flow, the net interest-bearing debt was improved due to lower capital expenditure and the fact that no dividend was paid for the financial year 2019, a decision taken as a precautionary measure to secure the company's and the group's liquidity if the development as an effect of the Covid-19 pandemic were to deteriorate. Net interest-bearing debt/adjusted EBITDA as of 31 December 2020, was 2.4 (2.8) percent. Cash and cash equivalents for the Group amounted to MSEK 413 (194) as of 31 December 2020 and committed but not utilized credit facilities amounted to MSEK 723 (461).
2) Other items mainly consist of effects from changes in foreign exchange rates and net change of leasing assets.
| Sweden | |||
|---|---|---|---|
| MSEK | 2020 | 2019 | Change |
| Net sales | 2,884 | 2,864 | 1% |
| Adjusted EBITDA1) | 298 | 257 | 16% |
| Adjusted operating income (EBIT)1) |
216 | 182 | 19% |
| Non-comparable items1) | –13 | – | – |
| Operating income (EBIT) | 203 | 182 | 12% |
| Adjusted EBITDA-margin1) | 10.3% | 9.0% | – |
| Adjusted operating margin1) | 7.5% | 6.3% | – |
1) For the non-comparable items, see page 50.
Net sales for the Swedish operations in 2020 increased by 1 percent to MSEK 2,884 (2,864).
Net sales was unchanged for product category Ready-to-cook and increased by 1 percent for Ready-to-eat product category compared with previous year. Net sales increased in sales channel Retail market while it decreased in Foodservice.
Adjusted operating income increased by 19 percent to MSEK 216 (182), corresponding to a margin of 7.5 (6.3) percent.
The increase in adjusted operating income and margin was positively impacted by improved product mix and imroved production efficiency.
Non-comparable of MSEK 13 was recognised during 2020, which was related to the Covid-19 pandemic of MSEK 4 in the form of provision for bad debt and inventory write-down, partly to restructuring of a Swedish subsidiary with termination of a longterm contract and write-downs of assets of MSEK 7, partly due to bird flu in the form of inventory write-down of MSEK 2.
The Retail market* for chicken products in Sweden increased by 16 percent in value compared to 2019 while volume increased with13 percent.
| Denmark | |||
|---|---|---|---|
| MSEK | 2020 | 2019 | Change |
| Net sales | 3,251 | 3,426 | –5% |
| Adjusted EBITDA1) | 141 | 186 | –24% |
| Adjusted operating income (EBIT)1) |
57 | 101 | –43% |
| Non-comparable items1) | –66 | –20 | 224% |
| Operating income (EBIT) | –8 | 80 | –111% |
| Adjusted EBITDA-margin1) | 4.3% | 5.4% | – |
| Adjusted operating margin1) | 1.8% | 2.9% | – |
1) For the non-comparable items, see page 50.
Net sales for the Danish operations in 2020 decreased by 5 percent to MSEK 3,251 (3,426) and by 5 percent in local currency.
Net sales decreased by 5 percent for product category Readyto-cook and by 9 percent for Ready-to-eat product category compared with previous year. Net sales increased in sales channel Retail market while it decreased in Foodservice.
Adjusted operating income decreased by 43 percent to MSEK 57 (101), corresponding to a margin of 1.8 (2.9) percent.
Adjusted operating income and adjusted operating margin decreased mainly due to lower export prices and worsening mix with less sales to the sales channel Foodservice, impacted by the Covid-19 pandemic and bird flu.
About MSEK 66 was reported as non-comparable items during the year. These items related partly to the Covid-19 pandemic of MSEK 53, due to costs for temporary closure of production lines focused on Foodservice, provision for bad debt and inventory write-down and the rest was related to the bird flu due to inventory write-down of MSEK 13.
The Retail market* for chicken products in Denmark increased with 9 percent in value compared to 2019 while the volume increased with 8 percent.
| Norway | |||
|---|---|---|---|
| MSEK | 2020 | 2019 | Change |
| Net sales | 1,648 | 1,619 | 2% |
| Adjusted EBITDA1) | 228 | 223 | 2% |
| Adjusted operating income (EBIT)1) |
162 | 150 | 8% |
| Non-comparable items1) | – | – | – |
| Operating income (EBIT) | 162 | 150 | 8% |
| Adjusted EBITDA-margin1) | 13.8% | 13.8% | – |
| Adjusted operating margin1) | 9.8% | 9.2% | – |
1) For the non-comparable items, see page 50.
Net sales for the Norwegian operations in 2020 increased by 2 percent to MSEK 1,648 (1,619) and by 12 percent in local currency.
The net sales in the product categories Ready-to-cook increased by 4 percent, while the net sales in the product category Ready-to- eat decreased by 8 percent compared to previous year. Net sales increased in sales channel Retail market while it decreased in Foodservice.
Adjusted operating income increased by 8 percent to MSEK 162 (150), corresponding to a margin of 9.8 (9.2) percent. Adjusted operating income and adjusted operating margin were positively affected by increased net sales coupled with good operational performance, but negatively affected by a weaker local currency rate in relation to the Swedish krona.
The Retail market* for chicken products in Norway in 2020 grew by 23 percent in value compared to 2019 while the volume increased with 20 percent.
* Source: Nielsen, Kantar WorldPanel and others, and the company's best estimates.
| Ireland | |||
|---|---|---|---|
| MSEK | 2020 | 2019 | Change |
| Net sales | 2,104 | 1,972 | 7% |
| Adjusted EBITDA1) | 237 | 169 | 40% |
| Adjusted operating income (EBIT)1) |
166 | 107 | 55% |
| Non-comparable items1) | –4 | – | – |
| Operating income (EBIT) | 162 | 107 | 51% |
| Adjusted EBITDA-margin1) | 11.3% | 8.6% | – |
| Adjusted operating margin1) | 7.9% | 5.4% | – |
1) For the non-comparable items, see page 50.
Net sales for the Irish operations increased with 7 percent in 2020 and amounted to MSEK 2,104 (1,972) and by 8 percent in local currency. Net sales increased in sales channel Retail market while it decreased in Foodservice.
Adjusted operating margin improved by 55 percent to MSEK 166 (107), corresponding to a margin of 7.9 (5.4) percent. The improvement in adjusted operating income and adjusted operating margin was mainly driven by increase in sales and improved efficiency in the production.
Non-comparable of MSEK 4 was recognised during 2020, which was related to the Covid-19 pandemic in the form of provision for bad debt and inventory write-down.
The Retail market* for chicken products in Ireland, which is predominantly chilled, increase by 13 in value compared to 2019.
| 2020 | 2019 | Change |
|---|---|---|
| 555 | 491 | 13% |
| 29 | 20 | 41% |
| 6 | –2 | 480% |
| – | –9 | – |
| 6 | –10 | 159% |
| 5.2% | 4.1% | – |
| 1.1% | –0.3% | – |
1) For the non-comparable items, see page 50.
Net sales for the Finnish operations in 2020 increased by 13 percent to MSEK 555 (491) and by 14 percent in local currency. Net sales increased in sales channel Retail market while it decreased in Foodservice.
Adjusted operating income was improved to MSEK 6 (–2), corresponding to a margin of 1.1 (–0.3) percent. The improvement was manly driven by increased net sales, improved product mix and improved efficiency in the production.
The Retail market* for chicken products in Finland, which is predominantly chilled, increased by 4 percent in value compared to 2019.
No acquisitions were made during 2020.
In conjunction with the acquisition of the Irish operation, Manor Farm, in 2017, an agreement of contingent consideration was made, to be paid in four separate payments 2018–2021. The amount is depending on the income development. The first instalment of the contingent consideration amounting to MSEK 4, was paid in 2018. The second instalment of the contingent consideration, amounting to MSEK 133, was paid in the third quarter of 2019. The third part, of SEK 117 million, was paid out in the third quarter of 2020 and the first quarter of 2021. During 2020 an increase of earn-out debt of MSEK 52 related to the acquisition of Manor Farm has been recognised, mainly due to a strong development of earnings in Manor Farm in 2020 compared to the assumptions at the time of the transaction. The amount was included in profit as a non-comparable item.
As of 31 December 2020, the share capital in Scandi Standard AB (publ) amounted to SEK 659,663 (659,663), comprising 66,060,890 (66,060,890) shares with a quota value of 0.009986 per share. Each share carries one vote. All shares have equal rights to the company's assets and profits.
There are no restrictions on the transfer of shares, voting rights or the right to participate in the Annual General Meeting, nor is the company party to any significant agreements which might be affected, changed or terminated if control of the company were to change as a result of a public bid for acquisition of shares in the company, with the exception of the Group's financing agreement. The company is not aware of any agreements between shareholders which might limit the right to transfer shares. In addition, there are no stipulations in the Articles of Association regarding appointment or dismissal of Board members or agreements between the company and Board members or employees which require remuneration if such persons leave their posts, or if employment is terminated as a result of a public bid to acquire shares in the company.
As of 31 December 2020, the three largest shareholders were Investment AB Öresund, Carton Group ULC and Länsförsäkringar Fondförvaltning AB with a holding in the company corresponding to 15.3, 9.1 and 7.0 percent of the share capital respectively. For * Source: Nielsen, Kantar WorldPanel and others, and the company's best estimates. information on major shareholders, see page 47.
Scandi Standard operates 12 larger production facilities, of which four in Sweden, two in Denmark, three in Norway, two in the Republic of Ireland and one in Finland. Permits and notification requirements are in accordance with local legislation for all units. The main direct environmental impacts are noise, emissions into the air and water, and temporary storage of hazardous waste. There was no non-compliance to the legislations reported in 2020. More information can be found in the sustainability section stated on page 30.
In accordance with the Annual Accounts Act, Chapter 6, 11§, Scandi Standard has chosen to prepare the statutory Corporate Governance Report and Sustainability Report that is separated from the statutory Annual Report. The Corporate Governance Report is stated on page 113 and the Sustainability report is stated on page 30.
The average number of employees (FTE) in 2020 was 3,220 (3,266), of which 979 (843) in Sweden, 941 (920) in Denmark, 314 (312) in Norway, 832 (1,008) in Ireland and 184 (183) in Finland. For more information, see Note 5.
The Annual General Meeting (AGM) 2021 will be held on 7 May. In order to prevent the spread of the infection of the Covid-19, the Board of directors has decided that the Annual General Meeting shall be held without physical presence of shareholders, proxies or external parties and that the shareholders shall extercise their voting rights by post in accordance with sections 20 and 22 of the Swedish Act on Temporary Exemptions to Facilitate the Execution of General Meetings in Companies and Associations. Notice of the Annual General Meeting, including information on how shareholders can vote by mail and exercise other rights is available on: www. investors.scandistandard.com/en/agm.
Background
The Board anticipates to propose a total dividend for the financial year 2020 of SEK 2,50 per share corresponding to MSEK 164 (0) based on the number of outstanding shares as of 31 December 2020. The Board proposes a dividend of SEK 1,25 (0,00) per share, corresponding to MSEK 82 (0) to the Annual General Meeting 2021 based on the number of outstanding shares as of 31 December 2020, except for shares that are expected to be held by the Company itself on the record date for the dividend, and is therefore subject to change if the Company acquires or disposes own shares before the record date. Accordingly, the Company has taken into account the expected allotment under LTIP 2018. The Board intends to summon an Extraordinary General Meeting during the second half of 2021 to propose a second dividend of 1.25 SEK per share.
The total dividend for the financial year 2020 that the Board intends to propose corresponds to approximately 47 (0) percent of income for the period adjusted for non-comparable items.
The company's dividend policy is to distribute a dividend of approximately 60 percent of income for the year, adjusted for non-comparable items, on average over time. The dividend shall be determined taking into account the requirements that the company's and the Group's operations type, scope and risks impose on the size of the company's and the Group's equity and the investment requirements of the company and the Group.
The Board proposes a dividend of SEK 1,25 (0,00) per share, corresponding to MSEK 82 (0) to the Annual General Meeting 2021 based on the number of outstanding shares as of 31 December 2020, except for shares that are expected to be held by the Company itself on the record date for the dividend, and is therefore subject to change if the Company acquires or disposes own shares before the record date. Accordingly, the Company has taken into account the expected allotment under LTIP 2018. The Board proposes that the remaining funds will be carried forward.
| SEK | 2020 | 2019 |
|---|---|---|
| Share premium reserve | 726,508,284 | 726,508,284 |
| Accumulated deficit | −19,969,532 | −39,963,216 |
| Income for the year | 24,553.713 | 16,993,683 |
| Total | 731,092,465 | 706,538,751 |
| Dividend to shareholders of SEK 1.25 (–) per share |
82,308,955 | – |
| To be carried forward | 748,783,510 | 706,583,751 |
| Total | 731,092,465 | 706,538,751 |
During the spring of 2020, the Corona virus, first discovered in China, has spread over the world. On 11 March 2020, WHO declared the outbreak of Covid-19 as a pandemic. The outbreak affected the society in all countries where we have operations. The hospitality industry was affected the most and thereby sales to the Foodservice channel negatively. This was offset by a positive increase in sales in the Retail channel, which comprises the majority of our sales.
In all the Group's operations, crisis plans was adapted and activated to ensure that the effects on our operations would be as limited as possible and proactive actions were taken to protect employees and other stakeholders and to safeguard the financial position. During 2020, an amount of MSEK 20 of governmental support has been recognized in profit. The received government support refers to compensation for short-term layoffs, increased sickness-related absences through sick pay compensation, reduced social security contributions and lower pension fees, but in total substantially lower than the overall increased costs related to the Covid-19 pandemic.
Further cases of avian influenza have been detected in Sweden and Denmark. The impact its currently expected to be managed within the range of previously communicated press release which is available on: investors.scandistandard.com/en/press.
The 2020 Annual General Meeting, held on 15 May, 2020, resolved to establish the following guidelines for remuneration to senior management. Guidelines for remuneration to senior management shall be resolved by the Annual General Meeting at least every four years. The Board of Directors has not proposed any changes to these guidelines prior to the 2021 Annual General Meeting, which means that the following guidelines for senior management will continue to apply. These guidelines apply to agreements reached after the guidelines were resolved by the 2020 Annual General Meeting and to amendments to existing agreements after the guidelines were decided by the 2020 Annual General Meeting.
In these guidelines, senior management means the Managing Director of the company, the senior managers in the company and other group companies who, from time to time, report to the Managing Director or the CFO and who are also members of senior management, as well as board members of the company that have entered into an employment or consulting agreement with a group company.
The company's remuneration principles and policies shall be designed to ensure responsible and sustainable remuneration decisions that support the company and the Group's strategy, long-term interests and sustainable business practices. Salaries and other terms and conditions of employment shall be adequate to enable the company and the group to retain and recruit skilled senior managers at a reasonable cost. The remuneration to the senior managers shall consist of fixed salary, variable salary, pension and other benefits, and it shall be based on the principles of performance, competitiveness and fairness.
Each senior manager shall be offered a fixed salary in line with market conditions and based on the manager's responsibility, expertise and performance. To the extent a board member performs work for the company, in addition to ordinary board work, a market-based consulting fee may be paid.
All senior managers may, from time to time, be offered a variable salary (i.e., cash bonuses). The variable salary shall be based on a set of financial and personal objectives determined in advance. The extent to which the objectives for awarding variable salary have been satisfied shall be determined when the relevant measurement period of the performance criteria has ended. The remuneration committee of the Board of Directors is responsible for the evaluation of the variable cash salary to the Managing Director. The Managing Director is responsible for the evaluation of the variable cash salary to other members of senior management.
The variable salary may not amount to more than 75 percent of the fixed salary (in this context, fixed salary means cash salary earned during the year, excluding pension, benefits and similar).
Remuneration resolved upon by the Annual General Meeting is not covered by these guidelines. Accordingly, these guidelines do not apply to the share-related long-term incentive program 2021 (LTIP 2021) which the Board of Directors intends to propose to the 2021 Annual General Meeting or the outstanding share-related longterm incentive programs of the same kind resolved upon by the Annual General Meetings 2020 and 2019, or the outstanding share-related long-term incentive programs resolved by the 2018 and 2017 Annual General Meetings, which are partly in line with LTIP 2021, 2020 and 2019. These share-related long-term incentive programs are directed at certain key employees of the company and the Group and are designed to promote the long-term value growth and sustainability of the company and the Group and improve alignment between the interests of the participating employees and the company's shareholders. Under the long-term incentive programs, the participating employees may be allotted shares in the company free of charge, subject to a three-year vesting period and provided that certain performance criteria are fulfilled. In order to further improve alignment between the long- term interests of the participants and the company's shareholders, a requirement for participation is that the participant undertakes to retain all allotted shares (except for such shares that are sold to cover for tax due to the allotment of shares) for a period of two years from the date of the allotment of the shares. More information on the company's share-related long-term incentive programs, including the performance criteria which the outcome depends on, is available on the company's website www.scandistandard.com.
Agreements regarding pensions shall, where applicable, be premium based and be designed in accordance with the level and practice applicable in the country in which the member of senior management is employed. Pension premiums for premium defined pension may not amount to more than 25 percent of the annual fixed salary.
Other benefits may include, for example, life insurance, medical insurance and company cars. Premiums and other costs related to such benefits may not amount to more than 10 percent of the annual fixed salary.
Fixed salary during notice periods and severance payment, including payments for any restrictions on competition, shall in aggregate not exceed an amount equivalent to the fixed salary for two years. The total severance payment for all members of senior management shall be limited to the current monthly salary for the remaining months up to the relevant retirement age.
These guidelines have been prepared by the remuneration committee of the Board of Directors. When evaluating whether the guidelines and the limitations set out herein are reasonable, the remuneration committee has considered the total income of all employees of the company, including the various components of their remuneration as well as the increase and growth rate over time.
The remuneration committee shall during the year monitor and evaluate both ongoing and completed programs for variable remuneration for senior management, and monitor and evaluate the application of the guidelines for remuneration to senior management resolved by the Annual General Meeting as well as the current remuneration structures and compensation levels in the company and the Group.
The members of the remuneration committee are independent in relation to the company and senior management. The Managing Director and the other members of senior management do not participate in the Board of Directors' handling and resolutions of remuneration-related matters if they have no effect.
The Board of Directors may resolve to deviate from the guidelines, in whole or in part, if the Board of Directors, in an individual case, is of the opinion that there are special circumstances justifying a deviation and a deviation is necessary to serve the company's long-term interests, including its sustainability, or to ensure the company's financial viability.
The Board of Directors has resolved to propose to the AGM 2021 a share-related long-term incentive program 2021 (LTIP 2021) for key employees which is designed to promote the long-term value growth and sustainability of the company and the Group and improve alignment between the interests of the participating individuals in the program and the company's shareholders. The program is of the same type as LTIP 2020 and LTIP 2019 and complies partly with the program LTIP 2018 and LTIP 2017 as resolved by the AGMs for each year. The program comprises a maximum of 33 participants.
Performance share rights shall be allotted free of charge to the participants in the program in relation to a fixed percentage of their base salary (fixed salary). After a three-year vesting period commencing in connection with the implementation of LTIP 2021 and provided that certain conditions are fulfilled, the participants in the program may exercise their performance share rights through which they will be allotted ordinary shares in the company free of charge. Each performance share entitles the holder up to one ordinary share. New from LTIP 2019 is that the participants in the LTIP program undertake to retain all allotted ordinary shares, except for such shares that are sold to cover for employment income tax due to the allotment of shares, for a period of two years from the date of the allotment of the ordinary shares.
In order for performance share rights to entitle the allotment of ordinary shares, it shall be required that the participants in the program remain employed and have not given or been given notice of termination of employment within the Group during the vesting period and that certain performance criteria are fulfilled.
In order to ensure the delivery of ordinary shares under LTIP 2021 and for the purpose of hedging social security charges under LTIP 2021, the Board of Directors proposes that (a) a new share class named "shares of series C", which may be converted into ordinary shares, is introduced and (b) the board of directors is authorised to issue a maximum of 509,000 new shares of series C to a third party and to immediately repurchase such shares of series C, which subsequently shall be held in treasury during the vesting period of LTIP 2021 and be converted into ordinary shares in connection with the execution of the performance share rights (if any). In addition, in order to enable the company to deliver ordinary shares to the participants, the Board of Directors proposes that the Annual General Meeting resolves to transfer a maximum of 509,000 own ordinary shares to the participants of LTIP 2021 in accordance with the terms of LTIP 2021.
The LTIP 2017 program was completed during 2020 with an allotment of 218.334 shares to the participants in the program.
Apart from LTIP 2018, LTIP 2019 and LTIP 2020, Scandi Standard has no other share- or share price related incentive programs. The intention is that a program similar to LTIP 2020 will be proposed annually to the AGM in the coming years.
Full details of LTIP 2021 are included in the notice to the AGM 2021. For information about the terms and the costs for LTIP 2020, LTIP 2019 and LTIP 2018, see Note 5.
Scandi Standard's ability to reach its financial and other targets is dependent on the Group being able to maintain its strong market shares and brand positions, to continuously launch new, innovative and safe products, and to have cost efficient, flexible production and effective internal processes and controls.
As all business activities involve risks, an effective risk management process is required to protect current assets and realise the Group's potential. Risks that are managed effectively can be reduced and result in opportunities and value creation, while risks that are not managed correctly can result in damage and value destruction.
The Group has a formalised and proactive risk management process, with clearly established roles and areas of responsibility. The process for risk managment involves risks being identified, evaluated, managed and followed up as a natural part of its corporate governance.
The risks are described below in no particular order of priority and without claiming to be exhaustive. Other risks and uncertainties presently unknown to the Group, or which the Group at present deems to be insignificant, could have a significant adverse impact in the future on the Group's opportunities to achieve its financial and other goals.
Risks connected with Scandi Standard's operations can generally be divided into strategic risks, operational risks, risks related to compliance with external laws and regulations and internal steering documents, reporting risks and financial risks. Sustainability risks are integrated in these risk if applicable.
All risks can have a negative impact on Scandi Standard's net sales, financial results and financial position, and affect the Group's ability to achieve the strategic, operational, financial and other targets that have been set.
Internal steering documents such as Codes, policies, guidelines and instructions have been established to ensure that all the risks are taken into account when making important business decisions and to govern and control operations.
Strategic risks are linked to business development and long-term planning, as well as brand value. These risks are largely dealt with by the Board of Directors as part of the annual strategy process, and in the work to establish the Group's annual business plan and targets.
Operational risks arise in the course of the day-to-day running of the businesses and are mainly managed by Group Management and other managers with operational responsibility.
These risks are related to inadequate compliance with applicable external laws and regulations as well as internal steering documents. For more information about important external laws and regulations and internal steering documents, see page 113 of the Corporate governance report. These include the Swedish Corporate Governance Code and the Scandi Standard Code of Conduct, for example. In the case of external financial reporting, this is to be prepared in accordance with external laws, accounting standards and other requirements applicable to listed companies.
Reporting risks are related to the internal and external reporting in general and to financial reporting in particular.
A description of internal control and risk management in the Group related to financial reporting can be found in the Corporate governance report on page 113.
Through its international operations, the Group is exposed to various types of financial risks. These include fluctuations in the Group's financial results, financial position and cash flow due to currency risks, interest rate risks, refinancing and liquidity risks as well as credit and counterparty risks. See also note 22.
A sensitivity analysis of important factors affecting the Group's financial results is shown below. The analysis is based on values as of 31 December 2020 and assumes that all other influencing factors remain unchanged.
| Sensitivity analysis as of 31 December 2020 | Average | Cost of | Change in exchange rates in relation to SEK | |||
|---|---|---|---|---|---|---|
| sale price | goods sold | DKK | NOK | EUR | ||
| Change on an annual basis | +/− 1% | +/− 1% | +/− 5% | +/− 5% | +/− 5% | |
| Estimated impact on operating income, MSEK | +/− 99 | +/− 83 | +/− 3 | +/− 8 | +/− 9 |
| Risks | Description | Management | Risks | Description | Management | |
|---|---|---|---|---|---|---|
| Dependency on a few major customers |
The Group's five largest customers represented approximately 44 percent of net sales in 2020, and the ten largest approximately 60 percent. This is partly due to the fact that for the Group's markets the food retail market is con solidated with only a few major chains in each country. Loss of customers or volumes with customers can have a substantial negative impact on the Group's net sales and financial results. |
• Annual strategy process. • Proactive management of yearly customer negotiations. • Reporting of sales and results to Group Management and other members of operational manage ment on a weekly basis. • Group Management holds meet ings every two weeks to review the results and position, to update forecasts and plans, and to discuss critical business issues. |
Political risks | Markets in which the Group operates are governed by extremely strict and extensive regulations on hygiene, food safety and animal welfare. New or changed conditions for running the business, for example, regulations on climate mitigation and adaptation, biodiversity and other sustainability areas, can result in unforeseen costs and require extensive investments. Inability to adapt the business could damage the reputation of the Group |
• Continuous improvement of work processes and quality manage ment systems to ensure high food safety and quality throughout the value chain. • Major focus on sustainability work throughout the organisation and the value chain. • Develop stakeholder dialogue and improving sustainability govern ance and reporting. • Certification of the production |
|
| Access to birds to main tain current operations |
It is almost exclusively external con tract breeders in their local markets that breed chickens. The Group is dependent on buying significant vol |
• The Group works closely with its contracted breeders on the effi ciency and quality of the breeding and to promote good animal |
among customers and shareholders. Any issues with the quality of products, production processes, animal hus bandry or in other parts of the value chain can lower trust in the Group's brands and result in lower sales volumes. |
facilities in accordance with global and leading standards. • Continuous tests in production for salmonella and campylobacter. |
||
| and achieve growth |
umes in order to maintain its current operations and achieve growth. |
husbandry. • Continue to strengthen coopera |
Brand damage | • Internal steering documents such as codes, policies, guidelines and instructions. • A process has been established to capture learnings and benefit from the experience from events that have occurred. |
||
| Introduction of new breeds complicates the planning of volumes. |
tion with the contracted breeders overall and in terms of the legal agreements, and to formalize the follow-up. • Improved internal planning process throughout the value chain. |
|||||
| New trends that could lead to lower demand for chicken |
Demand for the Group's products can be affected by trends in health, diets, animal welfare, slow-growing breeds, ethical values relating to animal hus bandry, the environment and climate, which can also affect the Group's net sales and production costs. |
• Greater focus on sustainability work throughout the organisation and the value chain, including stakeholder dialogues. • Improved communication on our product benefit related to health and climate efficiency. • The Group has group-wide func tions for sustainability, quality and animal welfare. • Long-term marketing studies. |
Company culture and the ability to attract competent employees |
Motivated employees with the right competence are crucial to drive the Group's development and achieve the objectives that have been set. |
• Internal steering documents includ ing Code of Conduct • Leadership development. • More work on Employer branding e.g Graduate program. • Succession planning. • Major focus on sustainability work. • Annual employee survey with follow-up and targeted measures. |
|
| Changes in retail marketing |
The retail sector is Scandi Standard's largest sales channel, representing more than half of Group Net sales. Retail has a major impact on the buying behaviour of consumers, for example, in terms of where the goods are located in the store, shelf space and sales promotion and therefore the Group's net sales. An increase in online sales can lead to changes in volumes and market shares for the Group's most important customers. |
• The Group works actively with trade organisations and retail to promote the chicken category and to ensure that the demand is stimu lated, for example, through store design, allocation of shelf space and sales promotion measures. |
| Risks | Description | Management | Risks | Description | Management |
|---|---|---|---|---|---|
| Fluctuations in demand Price |
In the event of a sudden increase or decline in demand, the Group may not be able to make an immediate adjust ment to production, which, among other things, may result in the build-up of inventory. Production costs have a substantial impact on the Group's financial results. The main cost items are personnel, distribution, energy and property costs. The domestic production of chicken |
• To some extent, the negative effect can be limited for example by freez ing products and selling them later as frozen products with a longer shelf life. • Continuous focus on streamlining the production processes and flows in production. • Minimising waste, downtime and overtime are other important factors that affect production costs and the profitability of a facility. • Continuous focus on planning, processes and systems. • The Group is the largest producer in |
Disease out breaks among the animals |
Outbreaks of diseases among the animals within the Group, in the markets where Scandi Standard operates, other geographical markets or at competitors' facilities can have a negative impact on demand for chicken products. The greatest risk is an outbreak of bird flu or similar viruses, which can result in trade bans that restrict the Group's export sales, even if the disease has not been detected in the Group's value chain. Salmonella infection is a constant chal lenge for the entire poultry industry. |
• Nordic chicken is considered to be of the highest quality as a result of the strict rules regarding animal health and welfare. • The Group has extensive experience and well-developed processes throughout the value chain to prevent disease outbreaks. • Group-wide program regarding the quality requirements for animal welfare applies to all contracted breeders, irrespective of their country. • The costs of any damage are mini mised through insurance solutions, when available. |
| competition | based food products in the Nordic coun tries and Ireland is consolidated to a few main producers in each country. There is strong competition to maintain and strengthen positions in the sales chan nels Retail markets and Foodservice. |
the Nordic region and Ireland and has significant economies of scale and competitive advantages as a result of its high volumes, broad product range and strong brands. • Greater investments in product development and in processed product categories. • Transfer of best practice between the countries to gain economies of scale. |
Product quality and product safety |
Supplying food which is safe to eat is decisive for the Group's success and survival. If internal production pro cesses or processes in the rest of the value chain do not work as intended, it can have a negative impact on product quality and product safety, which can lead to lower sales volumes and less trust in the Group and its brands. |
• Continuous focus on improving work processes and quality man agement systems to ensure high food quality throughout the value chain. • Business ethics risks, risks in the value chain and raw material risks are mostly managed by implement ing the Group's Supplier Code of |
| Export prices | Fluctuations in export prices and for certain chicken parts that are sold on the export markets can in particular affect the profitability of the Danish business, which has a high proportion of exports. |
• Established a global export depart ment to maximize sales value for the entire Group's export sales. • Continuous focus on driving export sales of further processed prod ucts and reduce export sales of standard products. |
Disruptions in production or in the supply chain |
Typically, an order from a customer must be processed within one to three days. Even minor disturbances to pro duction may make it difficult to fulfil obligations to customers, which can increase the risk of customers chang in production. ing supplier. Customers may some times also be entitled to compensation. |
Conduct, which is included in every supplier agreement, and by regu larly monitoring compliance with this Code of Conduct. • Tests for salmonella and campylo bacter are performed continuously • The costs of any damage are mini |
| Changes in purchasing costs |
Total external purchasing costs of raw materials and supplies in 2020 amounted to approx MSEK 5,898 of which the major part refers to the pur chase of live chickens. The chickens are largely sourced from third-party growing farms in each local market. The Group is exposed to changes in the price of feed indirectly as it is the larg est cost item for the Group contracted breeders as well directly through the feed mill that is part of the Irish busi ness and that produces feed for the |
• The Group's purchasing depart ment works closely with suppliers to manage materials supply and risk in this and monitor the financial stability, quality assurance systems including animal welfare and deliv ery capacity of suppliers. • Good relations with customers enable us in certain cases to com pensate for higher prices in raw material with price increases. |
A large proportion of the Group's prod ucts are sold as fresh food, which due to expiration dates must be distributed and sold to customers short time after pro duction. There may also be disruptions to the production as a result of illness of the staff, fire, emissions or other damage to material resources. |
mised through insurance solutions, when available. • Crisis management procedures and contingency plans. • Fire alarm on all sites. • Cooperation with suppliers. |
Irish contracted breeders.
| Risks | Description | Management | Risks | Description | Management |
|---|---|---|---|---|---|
| Business Ethics risks and risks relat ing to health, safety, human rights, the environment and animal husbandry |
Weakened trust in the Group and its brands resulting from unethical behav iour, fraud, corruption or bribes. Risks relating to health, safety, human rights, the environment and animal husbandry can occur throughout the value chain, including at the Group's facilities. This can put the Group's repu tation at risk, which can damage trust in the Group and its brands among cus tomers and consumers, and also make it more difficult to recruit and retain employees. |
• Internal systematic work and com munication to maintain a sound company culture. • Continuous measures to create a good work environment with a mini mised risk of injuries. • Implementation of the Group's Code of Conduct and the Supplier Code of Conduct. • Whistle-blowing function to enable the reporting of illegal or unethical behaviour that violates the Group's Code of Conduct. |
Insurance risks |
The Group is through its operations and assets exposed to losses and damages. The costs for any losses and damages are minimized through insurance solu tions in line with industry practice. Insurance is only possible if the insur ance solutions Scandi Standard wants or has committed to have, are available, and there is no guarantee that available insurance solutions are provided with coverage and/or premiums at the desired level. |
• Internal steering documents such as codes, policies, guidelines and instructions. • Systematic work to limit the risk of losses and damages and routines for crisis management and contin gency plans to limit the effect of losses and damages. • Procurement process for insur ance, structured by and imple mented with assistance from lead ing insurance broker with access to and experience from relevant inter national insurance markets. |
| Risks related to climate change |
A growing awareness of climate change can lead to restrictions in emissions that affect the environment, changed or new taxes on energy and transport, as well as |
• The Group is actively working to secure resource efficiency in all parts of the value chain in terms of the use of energy and water, and managing waste and by-products. Lack of inter The target is to reduce carbon dioxide emissions from the compa and informa ny's own production by 50 percent tion- and IT per kg product during the period security 2016–2025. For more information, see the section on Sustainability Work on page 30–43. |
• Programs to make the business more insurable and thus in the long run reduce the cost of insurance premiums. |
||
| changes in consumers' preferences and buying behaviour. Climate change leading to more extreme weather conditions and weather events can have negative impact on our value chain e.g. production of feed and the Group's operations in case of heavy rains affecting our facilities. |
nal processes | If roles and divisions of responsibility are unclear within the organisation and its processes and IT systems, crucial actions including decisions, controls and changes can be delayed or not taken at all until the Group has suffered negative effects or damage, or are taken by the wrong person. Inefficient pro |
• Internal steering documents such as codes, policies, guidelines and instructions. • Clearly defined areas of responsi bility and mandatory reporting for managers and all others in supervisory positions. • Efficient processes, controls and |
||
| Virus pandemic |
The ongoing outbreak of the new Corona virus during the spring of 2020 affects |
• The Group has crisis plans that are updated and activated according |
cesses, controls and IT systems can lead to a lack of internal control. |
IT systems. | |
| Scandi Standard operations in several to circumstances. ways. The Group's sales in Foodservice is • Production capacity is adapted to negatively affected since the hospitality demand. industry is suffering the consequences • A detailed analysis of the expected of the virus outbreak. liquidity and financial position is made and updated continuously. Ability to produce may also be affected • Crisis packages from governments by high levels of sick leave and by employ may be applicable in some cases. ees that cannot be at work due to other |
Integration of acquisitions |
Integration of acquisitions always involves risks. The integration costs can be higher than anticipated, and the synergies may be lower than expected. It can take longer than expected to achieve the objectives that were set up for the operations at the time of the acquisition. |
• Acquisitions are preceded by thorough due diligence processes. • In the event of an acquisition, an Integration Board was set up to provide advice on and follow up the integration work. |
||
| reasons. If the outbreak has a major impact on the Groups earnings, it could have a signifi cant impact on the Groups liquidity and financial position. |
| Risks | Description | Management | Risks | Description | Management |
|---|---|---|---|---|---|
| Compliance with external laws and regulations as well as internal steering doc uments |
The Group operates in several countries, which means that there are many external laws and regulations governing all aspects of the business. If these are not observed, there could be both legal and financial consequences that can also damage the Group's reputation. As a Swedish public limited liability company listed on Nasdaq Stockholm, Scandi Standard has to follow the |
• The Group's management struc ture with strong local management in each country allows for relevant information to be disseminated quickly within the organisation. • Internal steering documents such as Procedure for the Board, Instruc tion for CEO, Instruction regarding financial reporting to the Board, Code of Conduct and Supplier Code of Conduct, Whistle-blowing policy, Information policy, Insider policy, IT-security policy, Finance policy and other internal steering docu ments are updated on a regular basis and approved by the Board. • Finance and Accounting policy and the Group's Framework for internal control of financial reporting and establishing a formal program for development of the framework. • Whistle-blowing function |
Currency risks, trans action and translation exposure |
Transaction exposure relates mainly to export sales. Translation exposure is the effect of changes in exchange rates when foreign subsidiaries' income state ments and statements of financial posi tion in DKK, NOK and EUR are translated into SEK. See also note 22. |
• The financial risks are managed by the Group's central finance func tion, based on the finance policy that has been established by the Board, and risk policies for each country. • The Group's currency rate risk is hedged to some extent by denominating some loans in the subsidiaries' relevant reporting currency. |
| Swedish Companies Act, the Swedish Annual Accounts Act, Main Market Rule book for Issuers of Shares, the Swedish Corporate Governance Code, and other Swedish and foreign external laws and regulations but also internal steering documents. |
Interest, refinancing, liquidity, credit- and counterparty risks |
Interest-bearing liabilities expose the Group to interest rate risks, i.e. changes in market interest rates can negatively affect financial results and cash flow. Risks related to refinancing and liquidity include the risk that refinancing oppor tunities are limited when loans and credit facilities are to be renewed, or due to non-compliance with loan terms and credit terms, risk of higher costs, as well as the risk of the inability to meet pay ment obligations as a result of insuffi cient liquidity. Credit and counterparty risks include the risks that a counterparty in a trans |
• The interest rate risk is managed by limiting the fixed-rate period and is to a certain extent also secured by using rate swaps. • The Group's outstanding liabilities to credit institutions, including out standing rate swaps, had a weighted average term of 12 (16) months, as of 31 December 2020. • The refinancing risk is limited by having a well-diversified group of counterparties. • The weighted average maturity of liabilities to credit institutions as of 31 December 2020 were 3 (4) years. |
Financial risks
action will be unable to discharge its obligations. For more information,
see Note 22.
| Risks | Description | Management |
|---|---|---|
| Inaccuracies in reporting |
Inaccuracies can affect both internal and external reporting generally but also specifically financial reporting. For information about internal control over financial reporting, see the Corporate governance report on page 113. |
• Financial and Accounting Manual. • Internal control framework for financial reporting. • Risk management process • Internal Audit Function. |
| IT-related risks |
Lack of information security and IT security, including cyber security, dis ruptions or faults in critical IT systems can affect both internal and external reporting in general, but also specifically the financial reporting. |
• IT security policy. • Implemented strengthened govern ance processes for and procedures for changes in IT systems. |
| MSEK | Note | 2020 | 2019 |
|---|---|---|---|
| 1, 2, 3, 26, 30 | |||
| Net sales | 9,940 | 9,891 | |
| Other operating revenues | 4 | 21 | 24 |
| Changes in inventories of finished goods and work in progress |
30 | 69 | |
| Raw materials and consumables | –5,898 | –6,049 | |
| Cost of personnel | 5 | –2,067 | –1,972 |
| Depreciation, amortisation and impairment | 6 | –350 | –325 |
| Other operating expenses | 7, 9 | –1,327 | –1,215 |
| Share of income of associates | 14 | 2 | 1 |
| Operating income | 351 | 424 | |
| Finance income | 8, 9 | 0 | 1 |
| Finance expenses | 8, 9 | –91 | –113 |
| Income after finance net | 260 | 312 | |
| Tax on income for the year | 10 | –52 | –75 |
| Income for the year | 208 | 237 | |
| Whereof attributable to: Shareholders of the parent company |
207 | 235 | |
| Non-controlling interests | 1 | 1 | |
| Average number of shares | 65,501,968 | 65,358,083 | |
| Earnings per share before dilution, SEK | 3.16 | 3.60 | |
| Earnings per share after dilution, SEK | 3.16 | 3.60 | |
| Number of shares at the end of the period | 66,060,890 | 66,060,890 |
| MSEK | Note | 2020 | 2019 |
|---|---|---|---|
| Income for the year | 208 | 237 | |
| Other comprehensive income | |||
| Items that will not be reclassified to the income statement |
|||
| Actuarial gains and losses in defined benefit pension plans |
23 | 12 | –11 |
| Tax on actuarial gains and losses | 23 | –3 | 2 |
| Total | 10 | –9 | |
| Items that will or may be reclassified to the income statement |
|||
| Cash flow hedges | 6 | –4 | |
| Currency effects from conversion of foreign operations | –116 | 40 | |
| Income from currency hedging of foreign operations | 16 | 3 | |
| Tax attributable to items that will be reclassified to the income statement |
–1 | 1 | |
| Total | –95 | 40 | |
| Other comprehensive income for the year, net of tax | –85 | 31 | |
| Total comprehensive income for the year | 123 | 267 | |
| Whereof attributable to: Shareholders of the Parent Company |
122 | 266 | |
| Non-controlling interests | 1 | 1 |
| MSEK | Note | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|---|
| 1, 2, 3, 26, 27, 28, 30 | |||
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 11 | 888 | 940 |
| Other intangible assets | 11 | 878 | 957 |
| Property plant and equipment | 12 | 1,817 | 1,748 |
| Right-of-use assets | 13 | 455 | 427 |
| Non-current leasing receivables | 15 | 0 | 9 |
| Participations in associated companies | 14 | 43 | 43 |
| Financial assets | 15 | 1 | 4 |
| Deferred tax assets | 10 | 41 | 40 |
| Total non-current assets | 4,123 | 4,167 | |
| Current assets | |||
| Biological assets | 16 | 103 | 99 |
| Inventory | 17 | 713 | 727 |
| Trade receivables and other receivables | 18 | 818 | 901 |
| Other short-term receivables | 18 | 78 | 93 |
| Prepaid expenses and accrued income | 18 | 131 | 89 |
| Current leasing receivables | 19 | 0 | 2 |
| Derivative instruments | 22 | 5 | – |
| Cash and cash equivalents | 19 | 413 | 194 |
| Total current assets | 2,262 | 2,105 | |
| TOTAL ASSETS | 6,385 | 6,272 |
| MSEK | Note | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|---|
| 1, 2, 3, 26, 27, 28, 30 | |||
| EQUITY AND LIABILITIES | |||
| Shareholder's equity | |||
| Share capital | 1 | 1 | |
| Other contributed equity | 727 | 727 | |
| Reserves | 70 | 166 | |
| Retained earnings | 1,077 | 845 | |
| Capital and reserves attributable to owners | 1,875 | 1,738 | |
| Non-controlling interests | 1 | 3 | |
| Total equity | 20 | 1,876 | 1,741 |
| Liabilities | |||
| Non-current liabilities | |||
| Non-current interest-bearing liabilities | 21, 22 | 1,863 | 1,925 |
| Non-current leasing liabilities | 21, 22 | 401 | 381 |
| Derivative instruments | 21, 22 | 15 | 11 |
| Provisions for pensions | 23 | 8 | 26 |
| Other non-current provisions | 24 | 7 | 5 |
| Deferred tax liabilities | 10 | 166 | 174 |
| Other non-current liabilities | 22 | 64 | 137 |
| Total non-current liabilities | 2,524 | 2,659 | |
| Current liabilities | |||
| Current leasing liabilities | 21, 22, 25 | 73 | 73 |
| Derivative instruments | 21, 22 | – | 4 |
| Trade payables | 25 | 1,163 | 1,117 |
| Tax payables | 10 | 29 | 12 |
| Other current liabilities | 22, 25 | 342 | 254 |
| Accrued expenses and prepaid income | 22, 25 | 378 | 412 |
| Total current liabilities | 1,985 | 1,872 | |
| TOTAL EQUITY AND LIABILITIES | 6,385 | 6,272 |
| Consolidated statement of changes in equity | Equity attributable to the owners of the Parent Company | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| MSEK | Note | Share capital |
Other contributed equity |
Hedge reserve |
Translation reserve |
Retained earnings |
Equity attributable to the owners of the Parent Company |
Non controlling interests |
Total equity |
| 20 | |||||||||
| Closing balance Dec 31, 2018 | 1 | 857 | –36 | 171 | 594 | 1,586 | 1 | 1,587 | |
| Opening balance Jan 1, 2019 | 1 | 857 | –36 | 171 | 594 | 1,586 | 1 | 1,587 | |
| Income for the year | 235 | 235 | 1 | 237 | |||||
| Actuarial gains and losses on pension plans | –11 | –11 | –11 | ||||||
| Cash flow hedges | –4 | –4 | –4 | ||||||
| Exchange differences on translation of foreign operations | 40 | 40 | 40 | ||||||
| Net gain on hedge of net investments in foreign operations | 3 | 3 | 3 | ||||||
| Tax relating to components of other comprehensive income | 1 | 2 | 3 | 3 | |||||
| Other comprehensive income for the year, net of tax | –3 | 43 | 226 | 266 | 1 | 267 | |||
| Dividend | –131 | –131 | –131 | ||||||
| Long term incentive programs | 17 | 17 | 17 | ||||||
| Transactions with owners | –131 | –114 | –114 | ||||||
| Other changes | 24 | –32 | 8 | – | – | ||||
| Closing balance Dec 31, 2019 | 1 | 727 | –15 | 181 | 845 | 1,738 | 3 | 1,741 | |
| Opening balance Jan 1, 2020 | 1 | 727 | –15 | 181 | 845 | 1,738 | 3 | 1,741 | |
| Income for the year | 207 | 207 | 1 | 208 | |||||
| Actuarial gains and losses on pension plans | 12 | 12 | 12 | ||||||
| Cash flow hedges | 6 | 6 | 6 | ||||||
| Exchange differences on translation of foreign operations | –116 | –116 | –116 | ||||||
| Net gain on hedge of net investments in foreign operations | 16 | 16 | 16 | ||||||
| Tax relating to components of other comprehensive income | –1 | –3 | –4 | –4 | |||||
| Other comprehensive income for the year, net of tax | 5 | –100 | 217 | 121 | 1 | 122 | |||
| Dividend | – | –2 | –2 | ||||||
| Long term incentive programs | 15 | 15 | 15 | ||||||
| Transactions with owners | – | 15 | 15 | –2 | 13 | ||||
| Closing balance Dec 31, 2020 | 1 | 727 | –10 | 81 | 1,077 | 1,875 | 1 | 1,876 |
| MSEK | Note | 2020 | 2019 |
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Operating income | 351 | 424 | |
| Adjustment for non-cash items | 424 | 353 | |
| Paid finance items, net | 28:1 | –76 | –72 |
| Paid current income tax | –41 | –49 | |
| Cash flows from operating activities before changes in operating capital |
658 | 656 | |
| Changes in inventories and biological assets | –16 | –69 | |
| Changes in operating receivables | 13 | 37 | |
| Changes in operating payables | 146 | 296 | |
| Changes in working capital | 143 | 264 | |
| Cash flows from operating activities | 801 | 920 | |
| INVESTING ACTIVITIES | |||
| Business combinations | 28:2 | –104 | –133 |
| Investment in right-of-use assets | –2 | –1 | |
| Investment in property, plant and equipment | –355 | –432 | |
| Sale of property, plant and equipment | – | 12 | |
| Cash flows used in investing activities | –461 | –553 | |
| FINANCING ACTIVITIES | |||
| New loans | 28:4 | 60 | – |
| Repayment of loans | 28:4 | –55 | –12 |
| Change in credit facility | 28:4 | – | –41 |
| Payments for amortisation of leasing liabilities | 28:4 | –82 | –84 |
| Paid dividend | – | –131 | |
| Other | –25 | 5 | |
| Cash flow in financing activities | –102 | –262 | |
| Cash flows for the year | 237 | 105 | |
| Cash and cash equivalents at beginning of the period | 194 | 89 | |
| Currency effect in cash and cash equivalents | –19 | – | |
| Cash flows for the period | 238 | 105 | |
| Cash and cash equivalents at end of the year | 28:3 | 413 | 194 |
The Parent Company Scandi Standard AB (Publ) owns shares in the subsidiaries in which operations are conducted. These operations are shown in the section that describes the Group. No operations are conducted in the Parent Company and there are no employees.
| MSEK | Note | 2020 | 2019 |
|---|---|---|---|
| Net sales | – | – | |
| Operating expenses | 29 | 0 | 0 |
| Operating income | 0 | 0 | |
| Finance net | 29 | 31 | |
| Income after finance net | 29 | 31 | |
| Group contribution | –4 | –14 | |
| Tax on income for the year | – | – | |
| Income for the year | 25 | 17 |
| MSEK | Note | 2020 | 2019 |
|---|---|---|---|
| Income for the year | 25 | 17 | |
| Other comprehensive income for the year, net of tax | – | – | |
| Total comprehensive income for the year | 25 | 17 |
| MSEK | Note | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|---|
| 29, 32 | |||
| ASSETS | |||
| Non-current assets | |||
| Investments in subsidiaries | 31 | 533 | 533 |
| Receivables from Group entities | 32 | 405 | 405 |
| Total non-current assets | 938 | 938 | |
| Current assets | |||
| Receivables from Group entities | 27 | 24 | |
| Cash and cash equivalents | 0 | 0 | |
| Total current assets | 27 | 24 | |
| TOTAL ASSETS | 965 | 962 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital | 1 | 1 | |
| Non-restricted equity | |||
| Share premium | 727 | 727 | |
| Retained earnings | –20 | –37 | |
| Income for the year | 25 | 17 | |
| Total equity | 732 | 707 | |
| Current liabilities | |||
| Liabilities to Group entities | 32 | 233 | 255 |
| Accrued expenses and prepaid income | 0 | 0 | |
| Total current liabilities | 233 | 255 | |
| TOTAL EQUITY AND LIABILITIES | 965 | 962 |
| MSEK | Note | Share capital |
Share premium account |
Retained earnings |
Total equity |
|---|---|---|---|---|---|
| 20 | |||||
| Equity, Jan 1, 2019 | 1 | 857 | –37 | 821 | |
| Income for the year | 17 | 17 | |||
| Dividend | –131 | –131 | |||
| Equity, Dec 31, 2019 | 1 | 727 | –20 | 707 | |
| Equity, Jan 1, 2020 | 1 | 727 | –20 | 707 | |
| Income for the year | 25 | 25 | |||
| Dividend | – | – | |||
| Equity, Dec 31, 2020 | 1 | 727 | 5 | 732 |
| MSEK | 2020 | 2019 |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Operating income | 0 | 0 |
| Paid finance items net | 26 | 23 |
| Paid current income tax | – | – |
| Cash flows from operating activities before changes in operating capital |
26 | 23 |
| Changes in operating payables | –12 | 122 |
| Cash flows from operating activities | 13 | 145 |
| FINANCING ACTIVITIES | ||
| Lending to subsidiaries | – | – |
| Paid dividend | – | –131 |
| Repurchase own shares | – | – |
| Paid group contribution | –14 | –15 |
| Cash flows from financing activities | –14 | –145 |
| Cash flows for the year | 0 | 0 |
| Note 1 | Accounting policies | 67 | Note 19 Current interest-bearing assets and cash |
|
|---|---|---|---|---|
| Note 2 | Significant judgements, accounting | and cash equivalents | 85 | |
| estimates and assumptions | 73 | Note 20 Equity |
86 | |
| Note 3 | Segment reporting | 74 | Note 21 Interest-bearing liabilities |
87 |
| Note 4 | Breakdown of revenue | 75 | Note 22 Financial instruments and financial risk |
|
| Note 5 | Employees and employee benefits expenses | 76 | management | 87 |
| Note 6 | Depreciation, amortisation and impairment | Note 23 Pensions |
91 | |
| of intangible assets and property, plant | Note 24 Other provisions |
93 | ||
| and equipment and of right of use assets | 79 | Note 25 Trade payables and other current liabilities |
93 | |
| Note 7 | Fees and reimbursement to auditors | 79 | Note 26 Related party transactions |
93 |
| Note 8 | Finance income and finance expenses | 80 | Note 27 Pledged assets and contingent liabilities |
93 |
| Note 9 | Exchange differences affecting income | 80 | Note 28 Notes to the statement of cash flows |
94 |
| Note 10 | Taxes | 80 | ||
| Note 11 | Intangible assets | 82 | Notes to the Parent Company financial statements | |
| Note 12 | Property, plant and equipment | 83 | Note 29 Fees and reimbursement to auditors |
95 |
| Note 13 | Right of use assets | 83 | Note 30 Pledged assets and contingent liabilities |
95 |
| Note 14 | Participations in associated companies | 84 | Note 31 Investments in subsidiaries |
95 |
| Note 15 | Non-current financial assets | 84 | Note 32 Financial instruments |
95 |
| Note 16 | Biological assets | 84 | Note 33 Proposed appropriation of earnings |
95 |
| Note 17 | Inventory | 84 | ||
| Note 18 | Trade receivables and other receivables | 85 | ||
| Note 21 | Interest-bearing liabilities | 87 |
|---|---|---|
| Note 22 | Financial instruments and financial risk | |
| management | 87 | |
| Note 23 | Pensions | 91 |
| Note 24 | Other provisions | 93 |
| Note 25 | Trade payables and other current liabilities | 93 |
| Note 26 | Related party transactions | 93 |
| Note 27 | Pledged assets and contingent liabilities | 93 |
| Note 28 | Notes to the statement of cash flows | 94 |
| Notes to the Parent Company financial statements | ||
| Note 29 | Fees and reimbursement to auditors | 95 |
| Note 30 | Pledged assets and contingent liabilities | 95 |
| Note 31 | Investments in subsidiaries | 95 |
| Note 32 | Financial instruments | 95 |
Amounts in MSEK unless otherwise stated.
The Board of Directors of Scandi Standard AB (publ) is domiciled in Stockholm, Sweden. The address of the main office is Strandbergsgatan 55. The corporate identity number is 556921-0627. The Group's operations are described in the Board of Directors' report and in Note 3, Segment reporting. The Group's and Parent Company's financial statements for 2020 will be presented for adoption by the AGM, on May 7, 2021.
The principal accounting policies applied in preparing this annual report are summarized in this note. The same policies are normally applied for both the Parent Company and the Group. Parent Company policies that differ from those of the Group are described under separate headings.
Scandi Standard's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. IFRS includes International Accounting Standards (IAS) and interpretations of standards from IFRS Interpretations Committee (IFRS IC). In addition to the Annual Accounts Act and IFRS, the Swedish Financial Reporting Board's recommendation RFR 1, Supplementary Accounting Rules for Groups, has also been applied.
The Parent Company's annual financial statements have been prepared in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for legal entities.
Scandi Standard applies the cost method for measuring assets and liabilities, except for derivative instruments and the category 'financial assets and liabilities measured at fair value through the income statement' and biological assets that are measured at fair value less cost of sales according to IAS 41. These financial assets and liabilities are not measured at fair value in the Parent Company. Non-current assets and non-current liabilities essentially consist only of amounts expected to be recovered or paid after more than twelve months reckoned from the closing date. Current assets and current liabilities essentially consist only of amounts that are expected to be recovered or paid within twelve months reckoned from the closing date.
Sometimes, the total amount in tables and statements do not add up due to rounding differences. The purpose is that each sub-line equals its source of origin and therefore rounding differences can occur.
No standards, amendments and interpretations effective from January 2020, have been implemented that have had any material impact on the Groups or the Parent Company's financial statements.
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2020 reporting periods and have not been early adopted by the Group or the parent company. These standards are not expected to have a material impact on the Group's or the Parent Company's financial statements in the current or future reporting periods.
To ensure preparation of the financial statements in accordance with IFRS, assumptions and estimates must be made which affect recognised assets and liabilities and income and expenses, as well as other information disclosed. The actual outcome may differ from these estimates and assumptions. The areas in which assumptions and accounting estimates have the greatest impact on carrying amounts are described in more detail in Note 2.
The Group's financial statements comprise the financial statements for the Parent Company and all Group entities in accordance with the definitions below.
The Parent Company recognises all investments in Group entities at cost, adjusted where applicable by accumulated impairment losses.
Subsidiaries are all entities over which the company has control. The Group controls an entity when the Group is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The consolidated financial statements are prepared according to the purchase method. The cost of an investment in a subsidiary is the cash amount and the fair value of any non-cash consideration paid for the investment. The value of the acquired net asset, the equity in the company, is determined by measuring acquired assets and liabilities and contingent liabilities at their fair value on the date of acquisition. Those fair values constitute the Group's cost. If the cost of an investment in a subsidiary exceeds the fair value of the acquired company's identifiable net assets, the difference is recognised as consolidated Goodwill.
Whether a minority's share of Goodwill should be measured and included as an asset is determined for each acquisition. If the cost is less than the final fair value of the net assets the difference is recognised directly in the income statement. Acquisition-related costs are recognised in the income statement as they arise.
All intra-Group transactions, including receivables and liabilities, income and expenses as well as unrealized earnings, are eliminated in their entirety.
Associates are companies over which Scandi Standard has a significant, but not controlling, influence. This is normally the case when the Group holds between 20 and 50 percent of the voting rights.
Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. Acquired assets and liabilities are measured in the same way as for subsidiaries and the carrying amount includes any Goodwill and other Group adjustments. The Group's share of the associate's income after tax arising after the acquisition, adjusted for any depreciation/reversals of the consolidated value, is recognised on a separate line in the income statement and is included in operating income. The share of income is calculated on the basis of Scandi Standard's share of equity in the associate. The equity method means that the consolidated carrying amount of investments in associates correspond to the Group's share of the equity of associates plus the residual value of fair value adjustments.
Unrealized gains and losses that do not involve an impairment loss are eliminated in proportion to the Group's investment in the associate.
Statements of financial position and income statements for all Group entities whose functional currency is not the presentation currency are translated into the Group's presentation currency using the following procedures:
In cases where net investments in foreign operations are hedged with financial instruments the foreign exchange differences arising on translation of these instruments are also recognised in the statement of comprehensive income. When a foreign operation is disposed of, the cumulative translation differences and exchange differences for any financial instruments held for hedging the net investment in the company are recognised as part of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated according to the same principles as the entity.
The various entities within the Group present their reports in the currency of the primary economic environment in which they operate (the functional currency).
The consolidated financial statements are prepared in Swedish kronor (SEK), which is the Parent Company's functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the transaction date. Foreign currency receivables and liabilities are remeasured at closing date rates at the end of each reporting period. Exchange differences arising on such remeasurement, and upon payment of the transaction, are recognised in the income statement. However, exchange differences arising on remeasurement of items that are hedging transactions, and that qualify for hedge accounting, are recognised in other comprehensive income. Gains and losses on operating receivables and liabilities are netted and reported within operating income. Gains and losses on borrowings and financial investments are recognised as financial items.
Exchange differences on receivables which represent an extended investment in subsidiaries are recognised in other comprehensive income in the same way as translation differences relating to investments in foreign subsidiaries.
| SEK | Average rate | Closing rate |
|---|---|---|
| DKK | 1.4068 | 1.3492 |
| NOK | 0.9786 | 0.9546 |
| EUR | 10.4867 | 10.0375 |
Recognised operating segments are consistent with the internal reporting submitted to the chief operating decision maker, who is the person that allocates resources and evaluates the results of the operating segments. At Scandi Standard, this role is assumed by the Managing Director & CEO, who, on behalf of the Board, takes charge of day-to-day management and governance.
The business segments are consistent with the Group's operational structure in which activities are divided into Regions. The Regions, which are based on geographical areas, are Sweden, Denmark, Norway, Ireland and Finland. Operations not included in a Region and corporate functions are recognised as Group-wide. A further description of the operating segments is provided in Note 3.
The Regions are responsible for their operating income and the assets and liabilities used in their own operations, the operating capital. Financial items and taxes do not fall within the Regions' responsibility; these are recognised centrally for the Group. The same accounting policies are used for the Regions as for the Group, apart from financial instruments (IFRS 9 only at Group level).
Transactions between segments and other operations are carried out on commercial terms.
Revenue from the sale of goods for the main businesses that comprise the sale of products is recognised when the buyer receives control over a product. Control is obtained when the buyer can control the use of the asset and receive all future benefit from it.
Every promise to transfer an asset to a customer distinct from other commitments in a contract constitutes a performance commitment. Each distinct performance commitment is recognised separately. A commitment is fulfilled when the customer receives control of the asset. The Group assess that this point in time mainly occurs upon delivery to the customer in accordance with current delivery terms in contracts entered into.
Revenue is recognised at transaction price, which is the compensation the Group expects to receive in exchange for the transfer of goods and services. When determining the transaction price, any discounts, but also any commitments regarding goods that the customer fails to sell further, are given primary consideration. The transaction price is not adjusted for the customer's credit risk, but a possible impairment of a remuneration is made according to IFRS 9 and the credit loss is recognized as an impairment loss in the income statement. Payment is made on the basis of agreed payment terms in contracts entered into, which normally takes place at a time that occurs after delivery has taken place. There are no financing solutions within the Group.
Net sales include invoiced sales for main activities. Most of the Group's revenue comes from the sale of manufactured goods. Revenue is recognised excluding VAT because the Group does not collect the tax on its own account but acts as an agent for the state.
As other operating revenue, income from activities outside the company's main business is reported. This mainly consist of rental income, insurance payments and profit on sales of tangible fixed assets. Other operating revenue includes foreign exchange gains on operating receivables and liabilities, which arise on translation at the closing day rate and profit on derivatives that are not hedged. In addition, other income and profits are reported from activities outside the company's main business.
Borrowing costs attributable to investments in assets that take at least 12 months to complete, and for which the investment amount is at least MSEK 100, are capitalized as part of the investment amount. Other borrowing costs are expensed in the period in which they are incurred.
The Group's tax expense consists of current tax and deferred tax. Taxes are recognised in the income statement, except when the underlying transaction is recognised in other comprehensive income (OCI), in which case the related tax effect is also recognised in OCI. Current tax is the tax payable or receivable for the current year. Current tax also includes adjustments to current tax attributable to prior periods.
Deferred tax is recognised using the balance sheet liability method on all temporary differences arising between the tax base of assets and liabilities and their carrying amount. Deferred tax is measured at the nominal amount and is calculated by applying the tax rates and regulations that have been enacted or substantively enacted by the reporting date. Deferred taxes relating to temporary differences attributable to investments in subsidiaries and associates are not recognised, as, in each case, Scandi Standard is able to control the date for their reversal and it is not considered probable that any such reversal will occur in the near future.
Deferred tax assets relating to deductible temporary differences and loss carryforwards are recognised only to the extent that it is considered probable that these will result in lower tax payments in the future.
Deferred tax assets and deferred tax liabilities are offset when they are attributable to the same tax authority and the companies in question have a legally enforceable right to offset current tax assets against current taxation liabilities.
An intangible asset is recognised when the asset is identifiable, the Group controls the asset, and it is expected to yield future economic benefits. Intangible assets such as Goodwill, trademarks and customer and supplier relationships are identified and measured normally in connection with business combinations. Expenditures on internally generated trademarks, customer relationships and internally generated Goodwill are recognised in the income statement as an expense when they are incurred.
Goodwill is the amount by which the cost of acquisition exceeds the fair value of the net assets acquired by the Group in a business combination. The value of the Goodwill is allocated to the operating segment's cash generating units which are expected to benefit from the acquisition that gave rise to the goodwill item. Goodwill is recognised at cost less accumulated impairment losses and is tested annually for impairment. Goodwill impairment is not reversed.
Goodwill arising on acquisition of associates is included in the carrying amount of the associate and is tested for impairment as part of the value of the total investment in the associate.
Net gains or losses on the disposal of Group entities include the remaining carrying amount of the Goodwill attributable to the divested entity.
The value of trademarks is recognised at cost less any accumulated amortisation and impairment losses. Trademarks with an indefinite useful life are not amortised but are tested annually for impairment in the same way as Goodwill. Consumer trademarks that Scandi Standard intends to continue using for the foreseeable future and that have a cost of at least MSEK 10 are classified as trademarks with an indefinite useful life.
The relief from royalty method is used to measure trademarks identified in a business combination.
As trademarks in segments Sweden, Denmark and Norway have indefinite useful life, no estimated useful life has been defined. Trademarks in segment Ireland has an estimated useful life of 20 years.
Intangible assets in the form of customer and supplier relationships are identified in connection with business combinations. The value of customer relationships is calculated using the multi-period excess earning method, together with any other relevant information, and is recognised at cost less accumulated amortisation and impairment losses.
At present, existing customer relationships are considered to have a total useful life of 8, 10 or 20 years and existing supplier relationships a useful life of 5 or 10 years.
No research is conducted within the Group. Expenditure on development is recognised as an intangible asset only if it is technically and financially feasible to complete the asset, it is expected to provide future economic benefits, the cost of the asset can be measured reliably, and the development is substantial. Currently, this means that all expenditure on the development of commercial products and similar products is expensed as incurred. Expenditure on development of business-related IS/IT-systems is capitalized if the general preconditions according to the above are met and the total expenditure is estimated to exceed MSEK 3.
Capitalized expenditure is amortised on a straight-line basis over the estimated useful life of 5 to 10 years.
Intangible assets with an indefinite useful life are not amortised but are tested for impairment annually or more frequently if there is an indication of impairment. The carrying amounts of assets that are amortised are regularly tested. At the end of each reporting period, an assessment is made as to whether there is any indication that the assets are impaired and need to be written down. The recoverable amount is estimated for these assets and for assets with indefinite useful life. The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. An impairment loss is recognised if the recoverable amount is less than the carrying amount. A previously recognised impairment loss is reversed if the reasons for the earlier impairment no longer exist. However, an impairment loss is reversed only to the extent that it does not increase the carrying amount of an asset above the amount that would have been determined had no impairment loss been recognised in prior years. Impairment of Goodwill is never reversed.
For an asset that depends on other assets generating cash flows, the value in use of the smallest cash-generating unit to which the asset belongs is estimated. Goodwill is always allocated to the cash-generating units that benefit from the acquisition that generated the Goodwill.
An asset's value in use is the present value of the estimated future cash flows that are expected from using the asset and its estimated residual value at the end of its useful life. When calculating the value in use, future cash flows are discounted at an interest rate before tax that takes into account a market assessment of risk-free interest rates and risk involved with the specific asset.
Items of property, plant and equipment are recognised at cost less accumulated depreciation and any accumulated impairment. Cost includes expenditure that can be directly attributed to the acquisition of the asset, including the effect of cash flow hedges relating to investment purchases in foreign currencies. Start-up and pre-production costs that are necessary for bringing the asset to its predetermined condition are included in the cost. For major investments, where the total investment value is at least MSEK 100 and the investment period lasts at least 12 months, interest during construction is included in the cost of the asset.
Subsequent expenditure on property, plant and equipment increases the cost only if it is probable that the Group will have future economic benefit from the subsequent expenditure. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.
Land is assumed to have an indefinite useful life and is therefore not depreciated. Depreciation of other property, plant and equipment is based on cost less estimated residual value. Depreciation is straight-line over the asset's estimated useful life. Each component of a larger item of property, plant and equipment with a cost that is significant in relation to the asset's total cost and with a useful life significantly different from the rest of the asset, is depreciated separately. The assets' residual values and useful life are tested at least annually and adjusted as necessary.
The following depreciation schedules are applied:
| 25–30 years |
|---|
| 10–25 years |
| 5–20 years |
| 5–15 years |
| 5–10 years |
| 5–10 years |
All leases are recognised in the financial position statement and are, classified as right-of-use assets and leasing liabilities. At the start of the lease, a right-of-use asset (the right to use a lease object) and a financial liability to pay rents are recognized.
Exceptions according to the standard's simplification rules, which the Group has selected, are short-term leases (shorter than one year) and low value leases (below KSEK 50). These must be disclosed separately. The Group does not report right-of-use assets and lease liabilities for short term agreements and leased assets with a low underlying value. Expenses for these leases are recognised over the lease period and the amounts are disclosed separately in the financial statements, for more information see Note 13.
When a contract is found to contain a lease, the right-of-use asset is initially measured at the value of the leasing liability adjusted for any lease payments made before or on the initial date of the lease with the addition of any direct costs and the estimated cost of restoring the underlying asset.
The lease liability is initially estimated to the present value of future lease payments, discounted by the implicit interest rate of the agreement, or if difficult to identify, the marginal loan rate of the Group. In general, the marginal loan rate is used. Interest costs are disclosed separately. The leasing liability includes the present value of the following lease payments:
When the lease period is determined, the company uses available information impacting the incentive to utilize an extension option, or to not use the option to cancel the lease. Extension options are only included in the lease period if the lessee is reasonably certain that the option will be exercised, and periods included in an option to cancel are only included in the lease period if the lessee is reasonably certain to not use the option.
Revaluation of leasing liabilities is done when changes in future lease payments are caused by changes in an index or price or if the Group changes its estimate regarding buy-out, extension or cancellation of the lease agreement. The value of the right-of-use asset is also changed with the same amount.
The right-of-use asset is depreciated on a straight-line basis over the shortest of the useful life of the assets and the term of the lease. The right-of-use asset is adjusted for revaluation of the lease liability and any write downs. Depreciation and impairments are disclosed separately.
Revenues from any sub-lease of assets are disclosed separately, see Note 13.
Scandi Standard only reclassifies assets as held for sale if their value is substantial. The current threshold is MSEK 5.
Biological assets are measured and recognised at fair value less cost of sales in accordance with IAS 41. Scandi Standard has biological assets in the form of broiler parent stock within the operations of rearing day-old chicks in Sweden. The lifespan of the parent stock is approximately one year, and the lifespan of the broilers is about 30 days. The assets of broiler parent stock are measured at fair value less cost of sales.
The stock has been measured using cash flow projections from expected sales of day-old chicks and the direct and indirect costs of animal husbandry. For costs, estimates have been made based on past experience. There is an observable market price for the day-old chicks and for number of chicks produced, the breeder norms for the variety kept have been used.
Inventories are measured, according to IAS 2, at the lower of cost and net realizable value at the reporting date. The cost is estimated by applying the FIFO (first in/ first out) method or weighted average prices. The cost of self-produced goods includes raw materials, direct salaries, other direct costs and production-related overhead costs, based on normal production capacity. Borrowing costs are not included in the measurement of inventories. Net realizable value is the estimated selling price in operating activities less deductions for the estimated costs to complete and sell the product.
Financial assets and liabilities recognised in the statement of financial position include cash and cash equivalents, trade receivables, shares, loan receivables, other interest-bearing instruments, trade payables, borrowings and derivative instruments. Derivative instruments are recognised in the statement of financial position when the agreements are made. Other financial assets and financial liabilities are recognised in the statement of financial position on the settlement date. A financial asset is derecognised on the settlement date or when it expires. A financial liability or part of a financial liability is derecognised on the settlement date or when it is extinguished in another manner.
The Group classifies its financial assets in the following categories; fair value through the income statement, fair value through comprehensive income or amortized costs. Assets held for the purpose of collecting contractual cash flows and where these cash flows constitute principal amounts and interests, and have not been identified as measured at fair value, are measured at amortized cost. The booked value of these assets is adjusted with expected credit losses. Interest income from these financial assets is recognised using the effective interest method and is included in financial income. Financial assets held both for the purpose of collecting contractual cash flows and for sale, and where the assets' cash flows constitute only capital amounts and interest, and have not been identified as measured at fair value, are measured at fair value through other comprehensive income.
Interest income, write-downs and exchange rate differences are recognised at fair value in the income statement, while the other fair value changes are recognized in other comprehensive income. Assets that do not meet the requirements for amortized cost or fair value through other comprehensive income are measured at fair value through the income statement. Financial liabilities are normally recognised as amortised cost. Additional purchase price in connection with the acquisition of business and to be settled in cash is reported at fair value through the income statement.
The Group assesses the future expected credit losses related to assets recognised at amortized cost and assets recognised at fair value through other comprehensive income. The Group reports a credit reserve for such expected losses at each reporting date. For accounts receivable, the Group applies the simplified approach for credit reserve i.e. the reserve will correspond to the expected loss over the entire life of the receivable. To estimate the expected credit losses, accounts receivable has been grouped based on credit properties and the number of days in relation to maturity. The Group also uses forward-looking variables to assess the expected credit losses. Claims that are not accounts receivable are divided into three groups. For the first group, expected credit risk is assessed based on the risk of default within the next 12 months. If an assessment is made that the credit risk for a receivable has increased significantly since the first accounting date, the receivable is transferred to group two, where the assessment of the expected credit risk is based on the risk of default during the entire remaining term of the receivable. If a claim is deemed to have failed, it is moved to group three, where an assessment is made of the expected recoverable amount.
Scandi Standard has updated the hedge documentation according to IFRS 9. Hedges that qualify for hedge accounting shall be deemed to be effective during the remaining term of the hedge. Sources of inefficiency must be identified. The hedged item and hedging instrument must have an economic relationship, the hedging ratio must be in accordance with the company's hedging strategy and credit risk must not be the dominant cause of the hedging instrument's change in value.
Scandi Standards' holdings of financial derivative instruments comprise interest rate swaps and currency forward contracts. Currency forward contracts are agreed in order to limit the effect on Scandi Standards' profit and loss and financial position, due to short-term changes in the foreign exchange rates. Interest rate swaps are agreed in order to prolong the interest period for the underlying liabilities and decrease the uncertainty of future interest expenses.
Derivative instruments are recognised at fair value and the result of the remeasurement affects the income statement. In case where the derivative does not qualify for hedge accounting and the insurance model is a cash flow hedge or hedge of net investments, the effective portion of the remeasurement effect is recognised in other comprehensive income. Hedge accounting may be applied if certain criteria are met with regard to documentation of the hedge relationship and the hedge effectiveness.
Financial instruments that are hedging instruments hedge either an asset or a liability, a net investment in foreign operations or are a hedge of a forecast transaction.
There are three different hedging relationships: cash flow hedges, hedging of net investments and fair value hedges. Scandi Standard currently only applies cash flow hedging and hedging of net investments.
Cash flow hedging is a hedge held to reduce the risk for an impact to the income statement from changes in future cash flows. The future cash flows that are hedged must be deemed to have a high probability to occur. The portion of the hedging instrument's change in value which is deemed to be effective is recognised via other comprehensive income as equity and any ineffective portion is recognised in the income statement. When the result of the hedged item affects the income statement the result from the hedging instrument is transferred from other comprehensive income to the income statement.
Scandi Standard applies cash flow hedging for currency risks in commercial purchases and sales as well as for interest rate risks in the debt portfolio.
Hedging of net investments refers to hedges held to reduce the effect of changes in the value of a net investment in a foreign operation owing to a change in foreign exchange rates. Scandi Standard hedges net investments in a foreign operation by borrowing in the subsidiaries currency. Foreign currency gains or losses arising from remeasurement of the fair value of the instruments used for these hedges are recognised in other comprehensive income and accumulated in equity. The result is reclassified from equity to the income statement upon disposal of the foreign operation.
In the Parent Company, financial instruments are recognised using the cost method. The Parent Company applies the rules in RFR2 and thus not IFRS 9. As the interest-bearing assets and liabilities
of the Parent Company are consistent in all material respects with those of the Group, no special disclosures are provided for the Parent Company.
The fair value of forward exchange contracts is estimated based on current forward rates at the reporting date, while interest rate swaps are recognised using estimates of future discounted cash flows.
For financial liabilities, the fair value is estimated through discounting future cash flow of relevant market interest rate taking into account Scandi Standard's credit risk.
For financial assets and liabilities with short maturities, below three months, the fair value is estimated at cost adjusted for any impairment.
Provisions are recognised, according to IAS 37, when Scandi Standard has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation. The amount of the provision recognised is the best estimate of the expenditure required to settle the obligation at the reporting date. For longterm material amounts, provisions are measured at the present value of the expenditure required to settle the obligation, taking into account the time value of money. Provisions for restructuring measures are made when a detailed, formal plan for measures is in place and well-founded expectations have been created for those who will be affected by the measures. No provisions are made for future operating losses.
Employee benefits are recognised according to IAS 19. Scandi Standard has both defined contribution and defined benefit pension plans, most of which are funded.
With defined contribution plans, the company pays fixed contributions to a separate legal entity and has no obligation to pay further contributions thereafter. The costs for these plans are charged to consolidated profit as the benefits are earned.
Defined benefit pension plans define an amount of pension benefit that an employee will receive on retirement, based on factors such as salary, years of service and age. The Group's companies bear the risk associated with paying out promised benefits. Plan assets in funded plans can only be used to pay benefits under the pension agreement.
The liability recognised in the statement of financial position consists of the net of the estimated present value of the defined benefit obligation and the fair value of the plan assets associated with the obligation at the reporting date, either in a pension fund or in some other arrangement.
Pension costs and pension obligations for defined benefit pension plans are calculated according to the projected unit credit method (PUC). This method allocates the costs for pensions as the employees carry out services for the company that increase their entitlement to future benefits. The company's obligation is calculated annually by independent actuaries. The obligation comprises the present value of the expected future payments. The discount rate that is used corresponds to the interest rate for high-quality corporate bonds with a maturity that corresponds to the average term for the obligations and the currency. If no such bonds exist in the market a government bond rate is used. An interest rate equivalent to the interest rates of high-quality mortgage bonds is used for Swedish plans, which represent the vast majority of the defined benefit plans. These bonds are considered equivalent to corporate bonds as they have a sufficiently deep market to be used as the basis for the discount rate.
Actuarial gains and losses may arise in determining the present value of the defined benefit obligation and fair value of plan assets. These arise either when the actual outcome diverges from the previously calculated assumption or the actuarial assumption changes. These actuarial gains and losses are recognised in Other comprehensive income.
A special payroll tax is calculated on the difference between the pension obligation determined according to IAS 19 and the pension obligation determined according to the rules applied in the legal entity. The calculated future payroll tax is included in the recognised pension liability. The present value of the provision is not calculated. The change in the provision is recognised in other comprehensive income to the extent that it relates to actuarial gains or losses.
A provision for costs in connection with termination of personnel is recognised only if the company is obligated to end employment before the normal retirement date or when benefits are provided as an incentive to encourage voluntary termination. Estimated termination benefits are recognised as a provision when a detailed plan for the measures is presented.
Scandi Standard have annual recurring long-term incentive programs ("LTIPs") for key employees, which are intended to contribute to the company and the Group's long-term value growth and
increase shared interest in value growth between the employee and the company's shareholders.
The programs are equity-settled, share based and imply that performance rights shall be allotted free of charge to the participants in relation to a fixed percentage of their fixed salary. The compensation plans are accounted for in accordance with IFRS 2, Share base payments. The accounting costs that will arise in accordance with IFRS 2 are determined in connection with the allotment date and are allocated over the vesting period (3 years).
At the end of each reporting period, the company considers changes in anticipated number of vested shares. Social charges related to the program are recognised as a cash-settled instrument.
No new shares will be issued due to LTIPs and in order to ensure the delivery of shares and for the purpose of hedging social security charges under LTIPs, the company acquires own shares.
The repurchased shares reduce the Group's equity and are considered in the calculations of earnings per share ("EPS").
Provisions for variable salary are expensed on an ongoing basis in accordance with the economic substance of current agreements.
Government grants are recognised in the statement of financial position and the income statement when there is reasonable assurance that any conditions attached to the grant will be complied with and the grant will be received. Grants are recognised in the income statement on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate If the government grant or assistance is neither related to the acquisition of assets nor to compensation of costs, it is recognised as other income.
The Swedish Financial Reporting Board has introduced rules for reporting Group contributions in its recommendation RFR 2, Accounting for legal Entities. Scandi Standard applies the alternative rule, which means that both Group contributions received, and Group contributions made are recognised as an appropriation.
The issuer capitalizes the shareholder contribution in shares and interests to the extent that impairment is not required. The recipient recognises the shareholder contribution directly in equity.
By virtue of its control, the Parent Company has a related party relationship with its subsidiaries and sub-subsidiaries. By virtue of their significant influence, the Group and Parent Company have a related party relationship with their associates, which include directly and indirectly owned companies.
Intra-Group purchases and sales of goods and services are conducted at market prices.
By virtue of their right to participate in the decisions concerning the Group's strategies, members of the Group's Operational Board have significant influence over the Parent Company and Group and are therefore considered to be related parties.
Preparation of annual financial statements in accordance with IFRS in many cases requires management to make judgments and use of accounting estimates and assumptions in determining the carrying amounts of assets and liabilities. These estimates are based on historical experience and assumptions that are consid ered reasonable and realistic in the current circumstances. The actual outcome may differ from the accounting estimates and assumptions.
The estimates and underlying assumptions are regularly reviewed. The effect of a change in an accounting estimate is recognised in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.
A general description of the accounting policies where man agement's accounting estimates and assumptions are expected to have a material effect on Scandi Standard Group's financial position and financial statements are provided below. The carrying amounts at the reporting date can be found in the statement of financial position and associated notes.
Goodwill and other intangible assets with indefinite useful life are tested for impairment annually or whenever there are indications of possible impairment – in situations such as a changed busi ness environment, a divestment decision or closure of operations. The Group's Goodwill and other intangible assets amounted to MSEK 1,766 (1,897) at the end of the year, which corresponds to 28 (30) percent of the Group's total assets. Other assets are tested for impairment as soon as there is an indication that an asset's recoverable amount is lower than its carrying amount.
In most cases, an asset's value in use is estimated by reference to the present value of the future cash flows the Group expects to derive from the asset. The cash flow projection is based on assumptions that represent management's best estimate of the economic conditions that will exist over the remaining useful life of the asset and are based on the latest financial plan. An impairment loss is recognised if the estimated value in use is lower than the carrying amount.
The discount rates used to calculate the present value of the expected future cash flows are estimated from the current weighted average cost of capital (WACC) established within the Group for the markets in which the cash-generating units are active at the time.
Other estimates regarding expected future results and the discount rates used can give different values of assets from those applied. Impairment is described in more detail in Note 6. Contingent consideration agreed in connection with the
acquisition of Carton Bros ULC in Ireland is recognized as a liabil ity. The liability is determined based on the most probable out come of the consideration and is assessed at the end of each reporting period. Changes in the reported value is recognised in the income statement.
Assessments are made to determine deferred tax assets and tax liabilities. Deferred tax assets are recognised as an asset when it is considered likely that they can be utilized and offset against future taxable profits. Other assumptions regarding the outcome of these future taxable profits, as well as changes in tax rates and rules can result in significant differences in the measurement of deferred taxes.
More detailed information about the amounts can be found in Note 10.
The value of pension obligations for defined benefit pension plans is determined by using actuarial calculations based on assump tions about discount rates, future salary increases, inflation and demographics. The discount rate, which is the most critical assumption, is based on the market return on high-quality corpo rate bonds, namely mortgage bonds with long maturities. The rate is extrapolated to correspond to the pension plan's obligations. A lower discount rate increases the present value of the pension obligation and pension cost, while a higher discount rate has the reverse effect. A reduction of the discount rate by 0.25 percentage points would increase the pension obligation by MSEK 7 (7) while an increase would reduce the obligation by MSEK 7 (7).
More detailed information about the amounts can be found in Note 23.
The Group has biological assets in the form of broiler parent stock, in the rearing of day-old chicks. These assets are measured at fair value less cost of sales according to IAS 41. The value of those assets is dependent on assumptions. For broiler parent stock, the market price for day-old chicks as well as operational expenses for keeping the stock impacts the value of the assets. A 1 percent change in the price of day-old chicks impacts the value of the assets by about MSEK 1 (1).
Detailed information about the amounts and changes can be found in Note 16.
| Financial year, Jan 1−Dec 31 | Region Sweden |
Region Denmark |
Region Norway |
Region Ireland |
Region Finland |
Group wide1) |
Eliminations | Total Group |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Net sales | ||||||||||||||||
| External sales | 2,621 | 2,615 | 3,021 | 3,202 | 1,644 | 1,617 | 2,103 | 1,972 | 550 | 485 | 1 | – | – | – | 9,940 | 9,891 |
| Internal sales | 262 | 248 | 230 | 225 | 3 | 2 | 1 | – | 6 | 6 | 4 | 2 | –505 | –482 | – | – |
| Total net sales | 2,884 | 2,864 | 3,251 | 3,426 | 1,648 | 1,619 | 2,104 | 1,972 | 555 | 491 | 5 | 2 | –505 | –482 | 9,940 | 9,891 |
| Adjusted operating income | 216 | 182 | 57 | 101 | 162 | 150 | 166 | 107 | 6 | –2 | –106 | –83 | – | – | 500 | 454 |
| Non-comparable items2) | –13 | − | –66 | –20 | – | – | –4 | – | – | –9 | –67 | –1 | – | – | –150 | –30 |
| Operating income | 203 | 182 | –8 | 80 | 162 | 150 | 162 | 107 | 6 | –10 | –173 | –84 | – | – | 351 | 424 |
| Of which share of income in associates | – | – | 2 | 2 | 1 | 0 | – | – | – | – | – | – | – | – | 2 | 1 |
| Finance income | 0 | 1 | ||||||||||||||
| Finance expenses | –91 | –113 | ||||||||||||||
| Tax on income for the year | –52 | –75 | ||||||||||||||
| Income for the year | 208 | 237 | ||||||||||||||
| Other disclosures | ||||||||||||||||
| Assets | 1,069 | 1,151 | 1,867 | 2,039 | 981 | 1,016 | 798 | 767 | 122 | 51 | 3,724 | 3,823 | –2,218 | –2,618 | 6,342 | 6,229 |
| Holdings in associates | – | – | 29 | 28 | 14 | 15 | – | – | – | – | – | – | – | – | 43 | 43 |
| TOTAL ASSETS | 1,069 | 1,151 | 1,895 | 2,067 | 995 | 1,031 | 798 | 767 | 122 | 51 | 3,724 | 3,823 | –2,218 | –2,618 | 6,385 | 6,272 |
| Liabilities | 971 | 1,077 | 1,283 | 1,289 | 837 | 926 | 438 | 485 | 302 | 220 | 1,031 | 1,228 | –2,218 | –2,618 | 2,646 | 2,607 |
| Unallocated liabilities | 1,863 | 1,925 | ||||||||||||||
| Equity | 1,876 | 1,741 | ||||||||||||||
| TOTAL EQUITY AND LIABILITIES | 971 | 1,077 | 1,283 | 1,289 | 837 | 926 | 438 | 485 | 302 | 220 | 1,031 | 1,228 | –2,218 | –2,618 | 6,385 | 6,272 |
| Net investments | 64 | 67 | 90 | 160 | 45 | 18 | 69 | 140 | 103 | 15 | –16 | 20 | – | – | 355 | 419 |
| Payments for amortisation of leasing liabilities 3) |
–23 | –25 | –26 | –27 | –24 | –26 | –5 | –5 | –4 | –4 | –3 | 0 | – | – | –84 | –87 |
| Depreciation, amortisation and impairment |
–84 | –75 | –97 | –87 | –67 | –73 | –72 | –62 | -23 | –24 | –9 | –3 | – | – | –350 | –325 |
1) EBIT recognised under Group-wide includes central corporate costs of MSEK –106 (–83). Group-wide assets includes assets and liabilities relating to central functions.
2) For information about non-comparable items, see page 50.
3) Reclassification of cash flow effect for leasing assets has been made for the year and for comparative figures.
Internal reporting to Group Management and the Board corresponds with the Group's operational structure. The division is based on the Group's operations from a geographic perspective. The countries where business is operated equals the Group's segments. The segments are managed on the basis of the operating result (EBIT) and operating capital.
The responsibility for the Group's financial assets and liabilities, provisions for taxes, gains and losses on the remeasurement of financial instruments (IFRS 9) are dealt with by the corporate functions and are not allocated to each segment. All capital expenditure on property, plant and equipment and intangible assets, are included in the segments' investments.
Segment Sweden comprises the companies Kronfågel AB, Swe-Hatch AB, AB Skånefågel and Bosarpskyckling AB, Kronfågel AB is the segment's largest business engaged in slaughtering, production, development, processing and sale of fresh and frozen chicken products mainly for the Swedish market. SweHatch AB engages in the rearing, production and hatching of day-old chickens for Kronfågel AB's breeders and other players in the Swedish market.
Segment Denmark comprises Danpo A/S, Rokkedahl Food ApS and the associate Farmfood A/S, Danpo A/S and Rokkedahl Food ApS slaughter, produce, develop, process and sale of fresh and frozen chicken products for both the Danish market and exports within Europe and to Asia. Farmfood A/S processes slaughterhouse by-products from the Group's different segments, mainly for use in pet food sold in the international markets.
Segment Norway comprises Den Stolte Hane AS and Scandi Standard Norway AS. In addition, there is an associate, Naerbo Kyllingslakt AS. The segment consists of two parts – the production, development, processing and sale of fresh and frozen chicken products and the packing of eggs in the segment's own egg packing facility. Both types of products are sold in the Norwegian market.
Segment Ireland comprises Carton Bros ULC. which includes the operations of Manor Farm Ireland. Operations include slaughtering, production, development and sale of chilled chicken products for the Irish market. The segment also produces feed for its contracted farmers.
Segment Finland comprises Naapurin Maalaiskana Oy. Operations include slaughtering, production, development and sale of chilled and frozen chicken products for the Finnish market.
| Group− | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sweden | Denmark | Norway | Ireland | Finland | wide | Total | ||||||||
| MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Ready-to-cook Chilled | 1,220 | 1,174 | 1,113 1,051 | 842 | 786 | 1,870 1,780 | 475 | 387 | – | – | 5,521 | 5,178 | ||
| Ready-to-cook Frozen | 727 | 743 | 469 | 583 | 146 | 138 | 150 | 120 | 35 | 30 | – | – | 1,527 | 1,614 |
| Ready-to-eat | 367 | 360 | 1,216 1,354 | 264 | 285 | – | – | 11 | 12 | – | – | 1,857 2,011 | ||
| Other | 307 | 338 | 224 | 214 | 392 | 408 | 83 | 72 | 28 | 56 | 1 | – | 1,036 1,088 | |
| Total | 2,621 | 2,615 | 3,021 | 3,202 | 1,644 | 1,617 | 2,103 | 1,972 | 550 | 485 | 1 | – | 9,940 | 9,891 |
| MSEK | External sales 2020 |
External sales 2019 |
|---|---|---|
| Sweden | 2,908 | 2,595 |
| Ireland | 1,862 | 1,753 |
| Norway | 1,671 | 1,647 |
| Denmark | 1,563 | 1,853 |
| Finland | 594 | 549 |
| Germany | 447 | 618 |
| United Kingdom | 228 | 334 |
| Rest of Europe | 503 | 378 |
| Rest of the world | 165 | 163 |
| Total | 9,940 | 9,891 |
During 2020 one of Scandi Standard's customers accounted for more than 10 percent of the Group's total net sales. The net sales of the customer accounted for MSEK 1,227 (1,074) and the customer is a part of segment Sweden.
| MSEK | 2020 | 2019 |
|---|---|---|
| Net sales | ||
| Sales of goods | 9,940 | 9,891 |
| Total | 9,940 | 9,891 |
| Other operating income | ||
| Capital gains | 0 | 1 |
| Rental income | 0 | 0 |
| Government grants | 0 | 1 |
| Canteen sales | 7 | 8 |
| Insurance compensation | 7 | 6 |
| Other | 7 | 8 |
| Total | 21 | 24 |
Government grants were received of MESEK 20 (3) and of these MSEK 0 (1) has been recognised as revenue and MSEK 20 (2) as a reduction of cost. The government grant is related to the Covid-19 pandemic and refers to compensation for increased sickness-related absences through sick pay compensation and lower pension fees.
| Average number of employees | 2020 | of which women |
2019 | of which women |
|---|---|---|---|---|
| Group | ||||
| Sweden | 922 | 37% | 843 | 41% |
| Denmark | 856 | 39% | 920 | 41% |
| Norway | 322 | 54% | 312 | 53% |
| Ireland | 937 | 47% | 1,008 | 43% |
| Finland | 183 | 46% | 183 | 46% |
| 1) Total, Group |
3,220 | 43% | 3,266 | 43% |
1) No employees in the Parent company.
| Cost of personnel, MSEK | 2020 | 2019 |
|---|---|---|
| Salaries and benefits, Board of Directors and MDs | 39 | 28 |
| – of which variable salary | 21 | 13 |
| Salaries and benefits, other employees | 1,662 | 1,612 |
| Social security expenses | 226 | 214 |
| Pension expenses1) | 94 | 99 |
| Other staff costs | 62 | 64 |
| Capitalised personnel expenses2) | –15 | –45 |
| Total | 2,067 | 1,972 |
1) MSEK 4 (2) of the Group's pension costs relate to boards and Managing Directors. There are no outstanding pension obligations for these individuals. 2) Capitalised personnel expenses of ongoing investment project.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| Female representation, % | 2020 | 2019 | 2020 | 2019 | |
| Board of Directors | 14 | 15 | 14 | 29 | |
| Other senior executives | 27 | 27 | – | – |
The AGM has passed a resolution on the guidelines for remuneration to senior management. In these guidelines, the senior management means the managing director of the company, the senior managers in the company and other group companies who, from time to time, report to the managing director or the CFO and who are also members of the senior management, as well as board members of the company that have entered into an employment or consulting agreement with a group company.
Salaries and other terms and conditions of employment shall be adequate to enable the company and the group to retain and recruit skilled senior managers at a reasonable cost. The remuneration to the senior managers shall consist of fixed salary, variable salary, pension and other benefits, and it shall be based on the principles of performance, competitiveness and fairness.
Each senior manager shall be offered a fixed salary in line with market conditions and based on the manager's responsibility, expertise and performance.
To the extent a board member performs work for the company, in addition to ordinary board work, a market-based consulting fee may be paid.
All senior managers may, from time to time, be offered a variable salary (i.e., cash bonuses). The variable salary shall be based on a set of financial and personal objectives determined in advance. The variable salary may not amount to more than 75 percent of the fixed salary (in this context, fixed salary means cash salary earned during the year, excluding pension benefits and similar).
The general meeting may resolve on long-term incentive programs such as share and share price-related incentive programs for certain key persons. Such incentive programs shall be designed to promote the long-term value growth of the company and the group, sustainability and alignment between the interests of the participating individual and the company's shareholders.
Agreements regarding pensions shall, where applicable, be premium based and designed in accordance with the level and practice applicable in the country in which the member of senior management is employed. Fixed salary during notice periods and severance payment, including payments for any restrictions on competition, shall in aggregate not exceed an amount equivalent to the fixed salary for two years. The total severance payment for all members of the senior management shall be limited to the current monthly salary for the remaining months up to the age of 65.
The board of directors may resolve to deviate from the guidelines if the board of directors, in an individual case, is of the opinion that there are special circumstances justifying a deviation. Guidelines for remuneration to senior managers, remuneration to senior managers, see Note 5.
Scandi Standard has a general program for variable salary that applies to senior management, local management teams and certain key persons. Targets may be qualitative as well as quantitative. Decisions about participants and targets are made annually by Scandi Standard's board of directors. Variable salary is accrued for in line with expected pay-out.
Scandi Standard offers its employees occupational pensions unless otherwise regulated in local agreements or other regulations. The Managing Director and CEO is entitled to a defined contribution pension scheme, with a premium of 15 percent of the pensionable salary, and has a retirement age of 65 years.
In Sweden, most employees are covered by defined benefit pension plans (ITP) through PRI Pensionstjänst AB. There are currently two different pension guidelines for Scandi Standard's senior management: occupational pension accrual in accordance with the ITP agreement, with a pensionable salary ceiling of 30 income base amounts and payment of sickness benefits as laid down in the ITP agreement, and a defined contribution pension scheme, with a premium equal to 25–30 percent of the pensionable salary where the individual employee decides on the split between old-age, survivor and sickness benefits.
In Denmark, the pension contribution corresponds to 10 or 15 percent of the pensionable salary.
In Norway, the pension contributions are based on individual defined contribution pension agreements with contributions of between 5 and 15 percent of the pensionable salary.
In Ireland, the pension contribution corresponds to between 9 and 20 percent of the pensionable salary.
In Finland, the pension contribution corresponds to between 5 and 25 percent of the pensionable salary.
The Managing Director and CEO has a notice period of six months for termination of employment at the company's request and six months for termination at his own request. If employment is terminated at the company's request, termination benefits corresponding to 12 months' salary (including fixed and variable salary, pension and other benefits) is payable after the notice period with a full deduction of any salary from a new employer.
Other senior managers have notice periods of between six and 12 months for termination of employment at the company's request and between three and six months for termination at their own request. Certain senior managers have non-competition clauses with financial compensation to be paid to the company if breached, corresponding to between 3 and 12 months remuneration.
In addition to fixed and variable salaries and pensions, Scandi Standard offers occupational injury insurance and occupational group life insurance in accordance with local agreements and regulations. In addition, senior managers are entitled to private health insurance, telephone and car benefits.
LTIP 2017 was terminated during 2020 and led to that 218,334 shares with a combined market value of MSEK 13 were allotted to the participants in the program. Participants in the programs are senior managers and key employees.
At the end of 2020 the following incentive programs are ongoing, that have been accepted by the AGM the year they were started:
LTIP 2018 for 26 participants, and originally a maximum of 289,975 shares could be allotted.
LTIP 2019 for 29 participants, and originally a maximum of 334,596 shares could be allotted.
LTIP 2020 for 33 participants, and originally a maximum of 460,361 shares could be allotted.
The Board of Directors have decided to propose to the AGM 2021 a long-term incentive program for 2021 (LTIP 2021), of the same type as the earlier programs.
All programs are mainly based on the same terms. They imply that performance share rights shall be allotted free of charge to the participants in relation to a fixed percentage of their fixed salary. The vesting period is three years and provided that certain conditions are fulfilled, the participants may exercise their performance share rights through which they will be allotted shares in the company free of charge. Each performance share right is entitled to allotment of up to one share. For performance share rights to entitle to allotment of shares, it is required that the participant remains employed and has not given or been given notice of termination of employment during the vesting period.
From LTIP 2019 the participants undertake to retain all the allotted shares (except to cover payment of tax that arises in connection with the allotment of the shares) for a period of two years from the date of the allotment.
In order for full allotment of shares during the programs, the average annual growth rate of earnings per share ("EPS CAGR") must, during a period of three years as from January 1, the year when the individual program was decided, be at least 12.5 percent. If the average EPS CAGR during the period is 5 percent, the participants shall be allotted shares for 25 percent of their performance share rights. If the average EPS CAGR during the period is more than 5 percent but less than 12.5 percent, the participants shall receive linear allotment. If the average EPS CAGR during the period is less than 5 percent, no shares shall be allotted.
The long term incentive programs are accounted for in accordance with IFRS 2, Share based payments. The total cost for the programs is initially estimated as; number of shares to be allotted multiplied with the share price at program start and social charges. The programs are expensed linearly over the vesting time (three years).
The vesting period for LTIP 2017 expired May 9, 2020. EPS CAGR for the period January 1, 2017 – December 31, 2019 was 18.7 percent, leading to allotments according to the terms for the program, corresponding to 100 percent of the performance share rights and of 218,334 shares.
The vesting period for LTIP 2018 expires May 15, 2021. EPS CAGR for the period January 1, 2018 – December 31, 2020 was 18.2 percent, leading to allotments according to the terms for the program, corresponding to 100 percent of the performance share rights and of 245 227 shares.
Assuming 100 percent vesting and full fulfilment of the EPS requirement, LTIP 2019 and LTIP 2020 will result in allotments of 295,294 and 449,832 shares respectively in the company. The value of the performance share rights amount to MSEK 18 for LTIP 2019 and MSEK 24,2 for LTIP 2020, based on share prices of SEK 61.00 and SEK 53.80. As per December 2020, total accumulated accrued costs for LTIP 2018 – LTIP 2020 amounted to MSEK 25 (29).
Social security charges are expected to amount in average to approximately 21.7 (18.4) percent of the market value of the shares allocated upon exercise of the performance share rights. The average percentage of social charges is dependent on the mix of nationalities participating in the programs. In order to ensure the delivery of shares and for purpose of hedging social charges because of the incentive programs, Scandi Standard AB (publ) repurchased 677,287 own shares, whereof 218,334 shares were allotted to the participants of LTIP 2017. At year-end, Scandi Standard AB (publ) had 458,953 (677,287) shares in own custody.
| Board of Directors' Fees, SEK | 2020 | 2019 |
|---|---|---|
| Per Harkjaer, chairman of the Board | 760,000 | 750,000 |
| Gunilla Aschan1) | − | 302,000 |
| Vincent Carton | 360,000 | − |
| Øystein Engebretsen | 465,000 | 450,000 |
| Michael Parker | 360,000 | 345,000 |
| Karsten Slotte | 390,000 | 375,000 |
| Heléne Vibbleus | 510,000 | 495,000 |
| Henrik Hjalmarsson2) | 360,000 | − |
| Total | 3,205,000 | 2,717,000 |
1) Board member until 2019-11-18
2) Board member from 2020-05-15
| Salaries and remuneration of senior management 2020, TSEK |
Directors' fees |
Fixed salary1) |
Variable salary2) |
LTIP3) | Pension1) | Other benefits5) |
Total 2020 |
|---|---|---|---|---|---|---|---|
| Board members, specified above | 3,205 | − | − | − | − | − | 3,205 |
| Managing Director and CEO Leif Bergvall Hansen |
− | 5,435 | 3,522 | 4,702 | 812 | 133 | 14,604 |
| Group Management, other6) | − | 20,451 | 9,015 | 8,098 | 3,098 | 1,438 | 42,099 |
| Total | 3,205 | 25,886 | 12,537 | 12,537 | 3,909 | 1,571 | 59,907 |
| Salaries and remuneration of senior management 2019, TSEK |
Directors' fees |
Fixed salary1) |
Variable salary2) |
LTIP4) | Pension1) | Other benefits5) |
Total 2019 |
| Board members, specified above | 2,717 | − | − | − | − | − | 2,717 |
| Managing Director and CEO Leif Bergvall Hansen |
− | 5,012 | 2,745 | 3,981 | 727 | 133 | 12,597 |
| Group Management, other6) | − | 21,499 | 4,671 | 5,940 | 1,797 | 1,644 | 35,551 |
1) Certain members of Group Management are entitled to exchange fixed salary for pension contribution within the framework of current tax legislation.
2) The variable salary is based on the Group's financial performance and financial targets.
3) The Group's expense, referring to LTIP 2017–LTIP 2020.
4) The Group's expense per 2019, referring to LTIP 2016–LTIP 2019.
5) Mainly car, phone and health insurance benefits.
6) Group Management consists of 10 (9) individuals that are members of the Group Management of the Scandi Standard Group.
| MSEK | 2020 | 2019 |
|---|---|---|
| Depreciation and amortisation | ||
| Intangible assets | 53 | 58 |
| Land and buildings | 35 | 31 |
| Plant and machinery | 140 | 125 |
| Equipment, tools, fixtures and fittings | 36 | 24 |
| Rights-of-use assets, buildings and land |
49 | 49 |
| Rights-of-use assets, plant, machinery and other technical assets1) |
38 | 38 |
| Total | 350 | 325 |
1) Rights-of-use assets, plant, machinery and other technical assets includes equipment, tools, fixtures and fittings.
The Group tests intangible assets with indefinite useful life for impairment annually. These assets include Goodwill and Brands with indefinite useful lives. The intangible assets are allocated to the cash generating units in which they generated cash flow.
The cash generating units are the Groups operating segments. Cash flow expectations for the segments are based on business plans agreed by Group management for the next five years and on 2 percent organic growth thereafter. The cash flows are discounted by a calculated WACC before tax at 6.9–8.6 (9.1–10.9) percent based on the estimated return requirement for the segments. The calculated WACC before tax was 6.9 (9.1) percent in Sweden, 8.5 (9.1) percent in Denmark, 6.9 (9.1) percent in Norway, 6.9 (8.8) percent in Ireland and 8.6 (10.9) percent in Finland.
For the impairment testing at the end of 2020 all cash generating units are expected to perform in line with the market. EBITDA is expected to improve slightly over the forecasting period towards the Group's medium-term target of 10 percent.
The impairment test as of the end of the year shows that there is no need for impairment of the intangible assets in any of the cash generating units.
The assumptions included in the calculations are forward looking and as such are inherently uncertain and based on management assumptions. To evaluate the risk that a change in any of the assumptions would have decreased the outcome of the impairment test, sensitivity analyses have been performed.
The WACC used is based on long term variables and as such should be stable over time. Nevertheless, return requirements can change and testing for this variable shows no impairment when increasing the WACC three percentage points.
Cash flow expectations in the cash generating units are an important variable in the impairment test. The cash flows used are based on management's best estimate of the future cash flow in each cash generating unit. There is a risk that these cash flows will be lower than expected over time, especially in the long term. Long term assumptions are based on a growth rate below the expected market growth to be prudent. The cash flows for the coming five years have greater impact on the value of the assets and are more important to test.
Market growth is strong in Sweden with improved margins driven by a positive sales mix and operational efficiency. Operations efficiency is expected to continue to improve with planned capacity investments. The impairment test shows no impairment need even if the EBITDA margin were to drop by more than three percentage points.
Denmark is assumed to show modest growth in line with the market. Denmark has shown a weaker performance during 2020 with lower sales in the product category Ready-to-eat due to consumer behavioural changes related to the Covid-19 pandemic . Sales in the product category Ready-to-cook Export decreased due to change in demand and prices driven by bird flu and the Covid-19 pandemic. The expectation is that the margins will recover over the coming years when business returns to more normal after Covid-19, but the operation is exposed to fluctuating prices in the export markets since a large share of the sales is sold on export. The impairment test for this factor shows that there is no need for impairment even if prices on export markets would cause the EBITDA margin to be reduced by more than three percentage points.
Norway has shown a strong performance during 2020, however the operation in Norway is vulnerable due to its concentrated customer structure, but sensitivity analysis shows cash flows are expected to be sufficient even if the positive development of market share would ground to a halt. The impairment test shows no impairment need even if the EBITDA margin were to drop by more than three percentage points.
The operation in Ireland was acquired in 2017 and the business is developing better than expected, 2020 has come in above previous expectations, and no impairment is required. The impairment test shows no impairment need even if the EBITDA margin were to drop by more than three percentage points.
When the operation in Finland was acquired in 2015 it showed a low level of capacity utilization and generated a negative income. The valuation of Goodwill is based on a business plan where the operation is generating profit and a higher capacity utilization. The
actions, such as changes in management and reduction of labour force, that have been initiated over the past year have produced results. In 2020 the production volumes and sales were up and the underlying operating profit has continued to improve.The business position in the market continues to be strong and it is the estimate of management that the future profitability development mainly is dependent on a continued increase in sales in connection with capacity strengthening investments. The impairment test shows no impairment need even if the EBITDA margin were to drop by more than three percentage points.
Further information about Goodwill and intangible assets please see Note 11.
| Note 7 | Fees and reimbursement to auditors | ||
|---|---|---|---|
| MSEK | 2020 | 2019 | |
| PricewaterhouseCoopers (PwC) | |||
| Audit services | 6 | 6 | |
| Audit related services | 1 | 0 | |
| Tax services | 1 | 1 | |
| Other services | 0 | 0 | |
| Total | 8 | 7 |
Annual audit includes the audit of the financial statements of the Parent Company and the Group, the accounting records and the administration of the Board of Directors and the Managing Director. It also includes other duties incumbent on the auditor of the company as well as advice arising from observations made while performing the audit or carrying out such other duties.
The share of the total fees to PwC that refers to non-audit services, defined by the EU audit legislation, amounts to MSEK 2 (1) whereof MSEK 1 (0) regarding audit services and MSEK 1 (1) regarding tax services. The services include advice from an accounting perspective for preparation of the financial reports, as well as other guidance regarding accounting and tax.
| Income | Expenses | Total | ||||
|---|---|---|---|---|---|---|
| MSEK | 2020 | 2019 | 2020 | 2019 | 2019 | |
| Loans and other receivables | ||||||
| Other interest income | 0 | 1 | – | – | 0 | 1 |
| 0 | 1 | – | – | 0 | 1 | |
| Derivatives used in hedging | ||||||
| Interest and currency swaps | – | – | –5 | –6 | –5 | –6 |
| – | – | –5 | –6 | –5 | –6 | |
| Other financial liabilities | ||||||
| Interest expenses, pension plans | – | – | –3 | –4 | –3 | –4 |
| Interest expenses, borrowing | – | – | –36 | –44 | –36 | –44 |
| Interest expenses, earn-out | – | – | –4 | –13 | –4 | –13 |
| Other borrowing expenses | – | – | –7 | –9 | –7 | –9 |
| Other interest expenses | – | – | –12 | –7 | –12 | –7 |
| Financial cost, leasing | – | – | –14 | –12 | –14 | –12 |
| Currency effects | – | – | –10 | –18 | –10 | –18 |
| – | – | –86 | –107 | –86 | –107 | |
| Total | 0 | 1 | –91 | –113 | –91 | –113 |
| Tax on income for the year, MSEK | 2020 | 2019 | ||
|---|---|---|---|---|
| Current tax expense (−) / tax income (+) | ||||
| Tax expense / income for the year | –56 | –52 | ||
| Adjustment of tax attributable to prior years | –5 | –1 | ||
| Total current tax | –61 | –53 | ||
| Deferred tax expense (−) / tax income (+) | ||||
| Deferred tax from changes in temporary differences | –2 | –21 | ||
| Deferred tax from changes in changed tax rates | 0 | 1 | ||
| Deferred tax income in capitalized losses carry forward | 15 | 8 | ||
| Deferred tax expense use of capitalized losses carry forward | – | – | ||
| Reassessment attributable to losses carry forward | –4 | –11 | ||
| Total deferred tax | 9 | –22 | ||
| Total recognised tax expense | –52 | –75 | ||
| 2020 | 2019 | |||
| Reconciliation of effective tax | % | MSEK | % | MSEK |
| Income after finance net | 260 | 312 | ||
| Anticipated tax according to enacted Swedish tax rate | –21.4 | –56 | –21.4 | –67 |
| Effect of other tax rates for foreign subsidiaries | 4.1 | 13 | 3.0 | 9 |
| Unrecognised tax loss, incurred during the year | –2.2 | –7 | –1.5 | –5 |
| Non-deductible expenses | –0.6 | –2 | –0.9 | –3 |
| Non-taxable income | 0 | 0 | 0 | 0 |
| Effect of tax related to previous year | 1 | 3 | –0.2 | –1 |
| Reversal of income of associates | –0.2 | –1 | 0.1 | 0 |
| Change in deferred tax due to changes in tax rates in Sweden and Norway |
0 | 0 | 0.4 | 1 |
| Reassessment of deferred tax on carry forward losses | –1.4 | –4 | –3.5 | –11 |
| Other | – | – | –0.1 | 0 |
| Recognised effective tax | –20.5 | –52 | –24.1 | –75 |
| Tax items recognised in equity through other | ||||
| comprehensive income, MSEK | 2020 | 2019 | ||
| Actuarial gains and losses on defined | ||||
| benefit pension plans | 3 | 2 | ||
| Cash flow hedges | –1 | 1 | ||
| Total tax effects in other comprehensive income | 2 | 3 |
| MSEK | 2020 | 2019 |
|---|---|---|
| Exchange differences affecting operating income | –7 | –1 |
| Exchange differences, financial items | –10 | –18 |
| Total | –17 | –19 |
| Exchange differences in operating income are included in: | ||
| Other operating income/expense | –7 | –1 |
| Total | –7 | –1 |
During 2019 the tax rates in Sweden and Norway have been changed, from 22 percent and 23 percent, to 21.4 percent and 22 percent respectively. As from 2021 the tax rate in Sweden will decrease further to 20.6 percent. The Group has recalculated deferred tax during 2018 for these jurisdictions based on their new tax rates, valid as from 2019. For Sweden the deferred tax has been measured at 20.6 percent for tax bases that are not expected to change before 2021. The effects amounted to MSEK 3 for Sweden and MSEK 6 for Norway during 2019. During 2020 further adaptations to the new tax rate have been made in Sweden.
| Deferred tax assets/tax liabilities | Deferred tax assets |
Deferred tax liabilities |
Net | |||
|---|---|---|---|---|---|---|
| MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Intangible assets | – | – | 146 | 160 | –146 | –160 |
| Buildings | 18 | 24 | 2 | 2 | 16 | 21 |
| Machinery and equipment | – | – | 55 | 50 | –55 | –50 |
| Right-of-use assets | – | 6 | 2 | – | –2 | 6 |
| Other assets | 2 | 0 | 7 | 12 | –5 | –12 |
| Pension provisions | 2 | 5 | – | – | 2 | 5 |
| Other liabilities | 16 | 18 | – | – | 16 | 18 |
| Losses carryforward | 63 | 52 | – | – | 63 | 52 |
| Other | – | 3 | 15 | 16 | –15 | –13 |
| Total | 102 | 106 | 226 | 240 | –125 | –134 |
| Netting of offsettable assets/liabilities by jurisdiction | –61 | –66 | –61 | –66 | – | – |
| Total net deferred tax asset/ tax liability | 41 | 40 | 166 | 174 | –125 | –134 |
Deferred tax assets and liabilities nettable within the same jurisdiction were netted in 2019 and 2018.
| Change in deferred tax in temporary differences | Amount at beginning of period |
Recognised in income statement |
Recognised in OCI |
Changes in acquisition/ divestment of companies |
Translation differences |
Amount at end of period |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| and loss carryforwards, MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| Intangible assets | –160 | –167 | 8 | 10 | – | – | – | – | 6 | –4 | –146 | –160 | |
| Buildings | 21 | 28 | –5 | –7 | – | – | – | – | –1 | 1 | 16 | 21 | |
| Machinery and equipment | –50 | –35 | –6 | –15 | – | – | – | – | 1 | 0 | –55 | –50 | |
| Right-of-use assets | 6 | 6 | –8 | 0 | – | – | – | – | 0 | 0 | –2 | 6 | |
| Other assets | –12 | –12 | 7 | 0 | – | – | – | – | 0 | 0 | –5 | –12 | |
| Pension provisions | 5 | 3 | 0 | 0 | –3 | 2 | – | – | – | – | 2 | 5 | |
| Other liabilities | 18 | 17 | 0 | 0 | –1 | 1 | – | – | 0 | 0 | 16 | 18 | |
| Losses carryforward | 52 | 54 | 14 | –3 | – | – | – | – | –2 | 1 | 63 | 52 | |
| Other | –13 | –8 | –1 | –7 | – | – | – | – | 0 | 1 | –15 | –13 | |
| Total | –134 | –114 | –9 | –22 | –4 | 3 | – | – | 4 | –1 | –125 | –134 |
At the end of the year, the Group had losses carry forward of MSEK 407 (308), of which MSEK 299 (249) were recognised as base for the deferred tax asset MSEK 63 (52). MSEK 24 (30) of the deferred tax assets relates to losses carry forward in Finland, which have been partly capitalized. The maturity for losses in Finland is 10 years and nothing expires before five years. The remaining part of the deferred tax asset for 2020, MSEK 39 (22) is related to Denmark, where the lifetime is unrestricted.
When the operation in Finland was acquired in 2015 it showed a low level of capacity utilization and generated a negative income. During 2020 the production volumes and sales continued to increase and the actions taken in the recent years have given positive effects and contributed to a positive operating income for 2020. The business position in the market continues to be strong and it is the estimate of management that the future profitability development mainly is dependent on a continued increase in sales in connection with capacity strengthening investments made during the latter part of 2020.
The operations in Denmark have shown a weaker performance during 2020 with lower sales in the product category Ready-to-eat and Ready-to-cook Export due to consumer behavioural changes related to Covid-19 pandemic and bird flu. The expectation is that the margins will recover over the coming years when business returns to more normal after Covid-19 pandemic, but the operation is exposed to fluctuating prices in the export markets since a large share of the sales is sold on export.
Hence the management has come to the conclusion that the tax asset reported concerning the losses in Finland should be further reported in the statement of financial position.
| Goodwill | Other intangible assets | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Brands | Customer and supplier relationships |
Capitalized expenditure on internal development work |
Total other intangible assets |
||||||||
| MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| Accumulated cost | 888 | 940 | 445 | 461 | 706 | 742 | 48 | 37 | 1,199 | 1,240 | |
| Accumulated amortisation | – | – | –61 | –58 | –227 | –195 | –33 | –30 | –321 | –283 | |
| Carrying amount | 888 | 940 | 384 | 403 | 479 | 546 | 15 | 7 | 878 | 957 | |
| Balance at beginning of year | 940 | 922 | 403 | 401 | 546 | 584 | 7 | 10 | 957 | 995 | |
| Investments | – | – | – | – | – | – | – | 3 | – | 3 | |
| Additions | – | – | – | – | – | – | – | – | – | – | |
| Sale and disposals | – | – | – | – | – | – | – | – | – | – | |
| Amortisation for the year | – | – | –4 | –4 | –46 | –48 | –3 | –6 | –53 | –58 | |
| Reclassifications | – | – | – | – | – | – | 11 | – | 11 | – | |
| Translation differences | –52 | 18 | –15 | 6 | –22 | 11 | 0 | 0 | –37 | 16 | |
| Book value | 888 | 940 | 384 | 403 | 479 | 546 | 15 | 7 | 878 | 957 | |
| Allocation of Goodwill, brands and customer/supplier relationships |
|||||||||||
| Sweden | 121 | 121 | 1441) | 1441) | 17 | 19 | |||||
| Denmark | 200 | 207 | 872) | 902) | 21 | 25 | |||||
| Norway | 331 | 366 | 883) | 973) | 35 | 54 | |||||
| Ireland | 208 | 216 | 654) | 724) | 407 | 448 | |||||
| Finland | 29 | 30 | – | – | – | – |
1) Brands with indefinite useful life (Kronfågel, Ivars, Vitafågeln, Bosarp).
2) Brands with indefinite useful life (Danpo, BornholmerHanen).
3) Brand with indefinite useful life (Den Stolte Hane).
4) Brand with a limited useful life (Manor Farm).
Further information about depreciation, amortisation, impairment and impairment testing, please see Note 6.
Total 888 940 384 403 479 546
| Land and land improvements |
and land | Buildings | other technical assets | Plant and machinery and | Equipment, tools, fixtures and fittings |
in progress | Construction | Total property, plant and equipment |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Accumulated cost | 41 | 25 | 984 | 988 | 2,907 | 2,811 | 425 | 362 | 212 | 188 | 4,570 | 4,374 |
| Accumulated depreciation | –13 | –9 | –477 | –462 | –2,023 | –1,947 | –236 | –205 | – | – | –2,749 | –2,623 |
| Accumulated impairment | – | – | – | – | – | – | – | – | –3 | –3 | –3 | –3 |
| Book value | 28 | 16 | 507 | 526 | 884 | 864 | 189 | 157 | 209 | 185 | 1,817 | 1,748 |
| Balance at beginning of the period | 16 | 17 | 526 | 455 | 864 | 711 | 157 | 88 | 185 | 210 | 1,748 | 1,481 |
| Investments1) | – | – | 11 | 52 | 92 | 114 | 21 | 14 | 232 | 248 | 356 | 428 |
| Acquisitions | – | – | – | – | – | – | – | – | – | – | – | – |
| Sales and disposals | – | 0 | – | –1 | – | –11 | – | –1 | – | – | – | –13 |
| Depreciation for the period | –2 | –1 | –34 | –30 | –140 | –125 | –36 | –24 | – | – | –210 | –180 |
| Reclassifications | 14 | – | 24 | 43 | 101 | 165 | 53 | 78 | –202 | –272 | –11 | 15 |
| Translation differences | –1 | 0 | –20 | 6 | –34 | 11 | –4 | 1 | –6 | –1 | –65 | 17 |
| Book value | 28 | 16 | 507 | 526 | 884 | 864 | 189 | 157 | 209 | 185 | 1,817 | 1,748 |
1) Does not include capitalised interest.
No government grants affecting investment values were received in 2020 or 2019. For further information about depreciation, amortisation and impairment, see Note 6.
Information about the maturity structure for the leasing liabilities, see Note 22.
| Buildings Plant and machinery and and land other technical assets1) |
Total rights-of-use assets | |||||
|---|---|---|---|---|---|---|
| MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Accumulated cost | 598 | 560 | 182 | 175 | 781 | 735 |
| Accumulated depreciation | –245 | –236 | –78 | –71 | –324 | –307 |
| Accumulated impairment | –2 | –2 | 0 | – | –2 | –2 |
| Carrying amount | 351 | 322 | 104 | 104 | 455 | 427 |
| Balance at beginning of the period | 322 | 370 | 104 | 116 | 427 | 486 |
| Expenditure/Increase of right-of-use assets |
94 | 9 | 43 | 29 | 137 | 37 |
| Acquisitions | – | – | – | – | – | – |
| Sales and disposals/Decrease of right-of-use assets |
4 | 0 | –1 | –4 | 3 | –4 |
| Depreciation for the period | –46 | –47 | –38 | –38 | –85 | –85 |
| Impairment for the period | –2 | –2 | – | – | –2 | –2 |
| Reclassifications | – | –15 | – | – | – | –15 |
| Translation differences | –21 | 8 | –4 | 2 | –26 | 9 |
| Book value | 351 | 322 | 104 | 104 | 455 | 427 |
1) Plant and machinery and other technical assets include equipment, tools, fixtures and fittings.
Non-current leasing receivables and current leasing receivables MSEK 0 (9) and MSEK 0 (2) is a sublease of right-of-use asset.
| MSEK | 2020 | 2019 |
|---|---|---|
| Net interest expenses | –14 | –12 |
| Leasing fees for | ||
| short term leases | –7 | –7 |
| assets with a low underlying value, not included in the fees for short term leases |
–3 | –8 |
| variable leasing fees not included in leasing liabilities |
–13 | –7 |
| Reported in the statement of cash flows | ||
| investments in right-of-use assets | –2 | –1 |
| payments for amortization of leasing liabilities | –82 | –84 |
| Total cash flow for leasing contracts | –122 | –118 |
| Of which revenues for sub-lease of assets | ||
| interest income (included in the net interest expenses) |
0 | 0 |
| rental income (included in amortization of leasing liabilities) |
1 | 2 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Balance at the beginning of the year | 43 | 41 |
| Share of income in associates | 2 | 1 |
| Other adjustment | – | – |
| Translation difference | –3 | 1 |
| Carrying amount | 43 | 43 |
Any impairment and reversal of impairment is recognised in the income statement classified as Share of income in associates.
| MSEK | Assets | Liabilities | Net sales | Income for the period |
|---|---|---|---|---|
| Farmfood A/S | 162 | 86 | 295 | 5 |
| Nærbø Kyllingslakt AS | 29 | 19 | 78 | 1 |
| MSEK | Assets | Liabilities | Net sales | Income for the period |
|---|---|---|---|---|
| Farmfood A/S | 174 | 90 | 316 | 5 |
| Nærbø Kyllingslakt AS | 32 | 22 | 85 | –1 |
| Corporate name | Corp.identity no. | Domicile | Number of shares |
Share of capital, % |
Carrying amount in Group 2020, MSEK |
Carrying amount in Group 2019, MSEK |
|
|---|---|---|---|---|---|---|---|
| Associates in the Group: | |||||||
| Denmark | Farmfood A/S | 27 121 977 | Loegstoer | 10,000 | 33.3 | 29 | 28 |
| Norway | Nærbø Kyllingslakt AS | 985 228 175 | Nærbø, Hå | 3,875 | 50.0 | 14 | 15 |
| Total | 43 | 43 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Other long-term financial fixed assets |
– | 3 |
| Other shares and interests | 1 | 1 |
| Total | 1 | 4 |
| Non-current leasing receivables | 0 | 9 |
| Total | 1 | 13 |
Non-current leasing receivables is a sublease of right-of-use asset.
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Balance at beginning of the period |
99 | 94 |
| Change in number of hens | –4 | –6 |
| Change in revenue per hen | 3 | 17 |
| Change in production cost | 0 | 0 |
| Other | 5 | –6 |
| Balance at end of the period | 103 | 99 |
The biological assets consist primarily of parent broiler stock that produces day-old chicks sold to contract broiler producers. The lifespan of the parent broilers is about 60 weeks and the main source of revenue is sales of the day-old chicks that they produce. Each hen produces about 160 chicks between week 25 and week 60. Production costs include direct and indirect costs such as feed, rent and energy used. At the end of the year there were about 488,000 (514,000) hens in stock with a total fair value less cost of sales of MSEK 73 (72).
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Raw materials and consumables | 199 | 175 |
| Goods in progress | 13 | 12 |
| Finished goods and merchandise | 501 | 540 |
| Total | 713 | 727 |
MSEK 358 (158) of inventories this year were measured at net realizable value. Impairment losses of MSEK 39 (4) were recognised during the year. Previous impairments of MSEK 4 (2) have been reversed during the year since the impairment is no longer remains. The inventory is not subject for pledge assets or contingent liabilities.
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Trade receivables | 818 | 901 |
| Other current receivables | 78 | 93 |
| Prepaid expenses and accrued income |
131 | 89 |
| Total | 1,028 | 1,083 |
| The closing loss allowances for | Trade receivables | |
|---|---|---|
| trade receivables as follows: | 2020 | 2019 |
| Opening loss allowance as at 1 January 2019 – calculated in accordance with IFRS 9 |
31 | 28 |
| Increase in loss allowance, acquired companies |
– | – |
| Increase in loss allowance recognised in the income state ment during the year |
5 | 8 |
| Receivables written off during the year as uncollectible |
0 | 0 |
| Unused amount reversed | –1 | –6 |
| Closing balance 31 December | 35 | 31 |
| Age analysis of trade receivables, MSEK |
Dec 31, 2020 |
Expected loss rate in % |
Loss allowance |
Dec 31, 2019 |
Expected loss rate in % |
Loss allowance |
|---|---|---|---|---|---|---|
| Receivables, not yet due | 595 | – | – | 632 | – | – |
| Receivables, past due | ||||||
| < 31 days | 142 | – | – | 196 | – | – |
| 31–60 days | 37 | – | – | 43 | – | – |
| 61–90 days | 23 | – | – | 10 | – | – |
| > 90 days | 57 | 61% | 35 | 52 | 60% | 31 |
| Total | 853 | 35 | 932 | 31 | ||
| Provision for doubtful debts | –35 | –31 | ||||
| Total | 818 | 901 |
For information of assessment of trade receivables, see Note 22.
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Cash and bank balances | 413 | 194 |
| Current leasing receivables | 0 | 2 |
| Total | 413 | 196 |
Prepaid expenses and
| accrued income, MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Prepaid rent | 1 | 1 |
| Prepaid insurance | 0 | 0 |
| Prepayments to contract broiler producers |
25 | 20 |
| Prepaid interest | 0 | 0 |
| Other prepaid expenses | 104 | 66 |
| Other accrued income | 1 | 1 |
| Total | 131 | 89 |
Receivables with a maturity of up to one year are recognised. Current leasing receivables is a sublease of right-of-use asset. as current interest-bearing assets.
The share capital amounted to SEK 659,663 (659,663) and represented 66,060,890 (66,060,890) shares of which the number of shares outstanding was 65,601,937 (65,383,603). There is only one class of shares with equal voting rights and rights in the company's profits and capital. The quota value of the share is SEK 0.009986 (0.009986). Each share carries one vote.
Shareholder's equity paid up by shareholders and dividend to shareholders. No dividend has been paid out during 2020. The dividend in 2019 amounted to MSEK 131. No repurchase of own shares has been made during the year.
For cash flow hedges where the hedged transaction has not yet occurred, the hedge reserve comprises the cumulative effective portion of gains or losses arising from remeasuring the hedging instruments at fair value. The cumulative gain or loss recognised in the hedge reserve will be recycled to income statement when the hedged transaction affects the income statement.
The translation reserve includes all exchange rate differences that arise upon translation of financial statements of foreign operations that have prepared their financial statements in another currency than the presentation currency for the Group's financial statements. The Parent Company and Group present their financial statements in Swedish kronor (SEK). Gains and losses on hedging instruments that qualify as hedges of a net investment in a foreign operation are also included in the translation reserve.
This item includes mainly accrued earnings in the Group, actuarial gains and losses in pension plans, treasury shares and performance-based incentive programs.
51 percent of the shares in Rokkedahl Food Aps, which was acquired 1 September 2018.
| Income for the period attributable to owner of the Parent company, MSEK | ||
|---|---|---|
| 207 | 325 | |
| Average number of shares | 65,501,968 | 65,358,083 |
| Earnings per share, SEK | 3.16 | 3.60 |
| Equity per share | 2020 | 2019 |
|---|---|---|
| Equity attributable to owners of the Parent company, MSEK | 1.875 | 1.738 |
| Number of outstanding shares | 65,601,937 | 65,358,603 |
| Equity per share, SEK | 28.58 | 26.58 |
| No. of shares | Share capital | ||||||
|---|---|---|---|---|---|---|---|
| Registered | Transaction | Change | After transaction |
Quota value SEK |
Change | After transaction |
|
| Feb 1, 2013 | Incorporation | 50,000 | 50,000 | 1,000,000 | 50,000 | 50,000 | |
| Jun 26, 2013 | New share issue | 500,716,726 | 500,766,726 | 0.000500 | 200,287 | 250,287 | |
| Jun 26, 2013 | Reduction of share capital | – | 500,766,726 | 0.000200 | –150,215 | 100,072 | |
| Jun 26, 2013 | Reduction of share capital | –50,000 | 500,766,726 | 0.000100 | –50,000 | 50,072 | |
| May 19, 2014 | Bonus issue | – | 500,766,726 | 0.000999 | 449,928 | 500,000 | |
| May 19, 2014 | Reclassification of shares | – | 500,766,726 | 0.000999 | – | 500,000 | |
| May 20, 2014 | New share issue | 4,569,376 | 505,286,102 | 0.000999 | 4,563 | 504,563 | |
| Jun 27, 2014 | Reclassification of shares | – | 505,286,102 | 0.000999 | – | 504,563 | |
| Jun 27, 2014 | Reversed split 1:10 | –454,757,492 | 50,528,610 | 0.009986 | – | 504,563 | |
| Jun 27, 2014 | New share issue | 95,186 | 50,623,796 | 0.011847 | 95,186 | 599,749 | |
| Jun 27, 2014 | Set-off of shareholder loans |
9,437,094 | 60,060,890 | 0.009986 | – | 599,749 | |
| Aug 28, 2017 | New share issue | 6,000,000 | 66,060,890 | 0.009986 | 59,914 | 659,663 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Non-current liabilities to credit institutions |
1,863 | 1,925 |
| Derivative instruments | 15 | 11 |
| Financial liabilities, leases | 401 | 381 |
| Total | 2,279 | 2,317 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Derivative instruments | – | 4 |
| Other short-term interest-bearing debt |
73 | 73 |
| Total | 73 | 77 |
Financing of the Scandi Standard Group is mainly carried out through the group company Scandinavian Standard Nordic AB. External financing in the subsidiaries is only conducted if this is optimal for the Group.
In 2016, a syndicated loan agreement was signed, replacing previous outstanding debt. The financing is a five-year facility of MSEK 1,450 and a revolving facility of MSEK 750. Both facilities were extended in 2018 by two more years and are to be repaid in December 2023. The loan agreement also gives Scandi Standard the opportunity to extend the loan facility if needed, from MSEK 1,250 to MSEK 2,000. The facilities are available to Scandinavian Standard Nordic AB and selected subsidiaries. Furthermore, the ability for the Group to take on new debt is regulated by the loan agreement. The change has been presented as a loan extension of existing loan agreement, as the loan conditions reconcile with previous conditions.
As a precautionary measure to secure the Group´s liquidity need during Covid-19 pandemic, the existing credit facility was extended by MSEK 200 and an additional facility of MSEK 200 was agreed with our financiers. These credit facilities have not been utilised during the year.
The syndicated loan agreement sets forth a covenant on leverage (quota ratio of net interest-bearing debt in relation to EBITDA on a rolling twelve-month basis) and a covenant on interest cover (ratio of finance charges in relation to EBITDA on a rolling twelve-month basis). The definition of leverage in the loan agreement is different from the definition used when calculating the Group's financial targets. Scandi Standard complied with its covenants at the end of 2020.
Scandi Standard is exposed to different types of financial risk in the course of its international operations. Financial risk is the risk of fluctuations in the Group's financial results, position and cash flow as a result of currency risk, interest rates risk, and refinancingand liquidity risk and credit- and counterparty risks.
In the course of its operations, Scandi Standard is exposed to currency risk, in the form of exchange rate fluctuations affecting the Group's financial results and position.
The Group's currency exposure includes both transaction exposure and translation exposure. The Group's currency risk management is aimed at minimizing the short-term effect of exchange rate fluctuations and their adverse impact on the Group's financial results and position.
Cash flows from purchase and sale of goods in currencies other than the respective currency of each Group company leads to transaction exposure. Each business unit shall identify their exposure to foreign exchange risk on a regular basis and report forecasted cash flows in foreign currencies to Group Finance. Transaction exposure should be reduced actively by netting the cash flow (matching in- and outflows per currency). Scandi Standards' financial policy stipulates that these currency flows must be hedged. At least 50 percent and no more than 100 percent of transaction exposure for the following 12 months should be hedged. A default hedge would cover 100 percent for 3 months, 75 percent for 3–6 months, 50 percent for 6–9 months and 25 percent for 9–12 months.
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| SEK | 74 | 128 |
| DKK | 123 | 145 |
| NOK | 124 | 100 |
| EUR | 492 | 509 |
| Other currencies | 40 | 49 |
| Total | 853 | 932 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| SEK | 310 | 588 |
| DKK | 389 | 302 |
| NOK | 180 | 178 |
| EUR | 278 | 45 |
| Other currencies | 5 | 4 |
| Total | 1,163 | 1,117 |
Translation exposure is the effect of changes in exchange rates when foreign subsidiaries' income statements and statements of financial position are translated into the Group's presentation currency (SEK). Currency hedging of investments in foreign subsidiaries (net assets including Goodwill on acquired surplus values) is managed by means of loans in the subsidiaries' currencies and is referred to as the equity hedge. These loans are recognised at the closing rate on the reporting date. In the company, exchange differences attributable to these loans (net of tax) and translation differences from the net assets of subsidiaries are recognised in other comprehensive income and accumulated in consolidated equity. At present, net investments in DKK, NOK and EUR are hedged.
If the Swedish krona would change against other currencies by 5 percent, equity would be impacted by MSEK +/− 148 (150), not taking into account the equity hedge. If the equity hedge is taken into account, equity would be impacted by MSEK +/− 91 (93), all other things being equal.
Exchange rate fluctuations also affect the translation of foreign subsidiaries' income statements to SEK. As this translation is not hedged, the translation difference is exposed to currency risk and as such is included in the sensitivity analysis below.
Scandi Standard is primarily exposed to DKK, NOK and EUR. The different currencies represent both inflows and outflows against the functional currency.
If, on translation of operating income, the Swedish krona would change against subsidiaries' currencies by 5 percent, this would have an impact of MSEK +/−20 (18) on operating income, all other things being equal. The impact is broken down as follows: DKK/ SEK +/− 3 (5) MSEK and NOK/SEK +/−8 (8) MSEK and EUR/SEK +/−9 (5) MSEK. The calculation does not take into account any changes in prices and customer behaviour caused by the exchange rate movements.
Interest-bearing borrowing means that the Group is exposed to interest rate risk. Interest rate risk is the risk that changes in market interest rates will have an adverse effect on the Group's financial results and cash flows. Interest rate risk can be managed through fixed loans, derivatives or a combination of both. Derivatives approved by the Board for managing interest rate risk are interest rate swaps (IRS), interest floors, interest caps and currency interest swaps. The Group shall have 25–75 percent of its external interest-bearing loans to a fixed rate with an average fixed interest rate period of 24 (+/– 12) months.
At December 31, 2020, the Group's outstanding liabilities to credit institutions, including outstanding interest rate swaps, had a weighted average fixed-rate period of 12 (16) months. As per the end of the reporting period, a 1 percentage point change in interest rates would not entail any significant change in the fair value of financial assets. During the coming 12-month period, a 1 percentage point increase/decrease in interest rate on interest-bearing liabilities would be impact by MSEK +/– 23 (24).
Refinancing risk is the risk that costs will be higher and opportunities for financing limited when loans and other credit arrangements are renewed. Liquidity risk is the risk in discharging payment obligations. Scandi Standard limits its refinancing risk by having a well-diversified group of counterparties for its loan facilities. The average time to maturity for the Group's interest-bearing liabilities, excluding leasing obligations per December 31, 2020 was 3 (4) years.
By constantly maintaining cash assets or unused credit facilities, the Group ensures it has sound payment capacity, thereby reducing the liquidity risk. Payment capacity, i.e. cash and cash equivalents and unused credit facilities, on December 31, 2020 was MSEK 1,136 (655).
The tables 'Maturity structure' show undiscounted contractual cash flows so these amounts are therefore not found in the balance sheet.
| MSEK | 2021 | 2022 | 2023 | 2024 | 2025− | Total |
|---|---|---|---|---|---|---|
| SEK | 11 | 11 | 749 | – | – | 771 |
| NOK | 9 | 9 | 498 | – | – | 516 |
| DKK | 5 | 5 | 390 | – | – | 401 |
| EUR | 9 | 4 | 256 | – | – | 269 |
| Total | 34 | 29 | 1,893 | – | – | 1,956 |
| Of which interest |
29 | 29 | 29 | – | – | 87 |
| MSEK | 2020 | 2021 | 2022 | 2023 | 2024− | Total |
|---|---|---|---|---|---|---|
| SEK | 14 | 14 | 14 | 802 | – | 843 |
| NOK | 17 | 17 | 17 | 493 | – | 544 |
| DKK | 7 | 7 | 7 | 405 | – | 425 |
| EUR | 7 | 7 | 7 | 269 | – | 290 |
| Total | 44 | 44 | 44 | 1,969 | – | 2,102 |
| Of which interest |
42 | 42 | 42 | 42 | – | 168 |
| MSEK | 2021 | 2022 | 2023 | 2024− | Fair value |
|---|---|---|---|---|---|
| Currency derivatives |
321 | – | – | – | 5 |
| Interest rate derivatives |
– | 305 | – | 300 | –15 |
| Total | 321 | 305 | – | 300 | –10 |
| MSEK | 2020 | 2021 | 2022 | 2023− | Fair value |
|---|---|---|---|---|---|
| Currency derivatives |
259 | – | – | – | –4 |
| Interest rate derivatives |
894 | – | 367 | 359 | –11 |
| Total | 1,154 | – | 367 | 359 | –16 |
| Maturity structure of liabilities regarding leasing by currency 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | 2021 | 2022 | 2023 | 2024 | 2025− | Total | ||
| SEK | 26 | 20 | 17 | 17 | 39 | 119 | ||
| NOK | 30 | 29 | 29 | 27 | 87 | 203 | ||
| DKK | 28 | 24 | 17 | 13 | 111 | 193 | ||
| EUR | 5 | 4 | 3 | 2 | 7 | 21 | ||
| Total | 89 | 77 | 67 | 60 | 244 | 536 | ||
| Of which interest |
11 | 9 | 7 | 6 | 30 | 63 |
| MSEK | 2020 | 2021 | 2022 | 2023 | 2024− | Total |
|---|---|---|---|---|---|---|
| SEK | 24 | 21 | 16 | 14 | 44 | 119 |
| NOK | 32 | 31 | 30 | 30 | 123 | 246 |
| DKK | 22 | 26 | 19 | 13 | 45 | 125 |
| EUR | 6 | 3 | 3 | 2 | 6 | 20 |
| Total | 84 | 82 | 67 | 59 | 218 | 510 |
| Of which interest |
11 | 9 | 8 | 6 | 22 | 56 |
Maturity of short-term debt is up to one year. Maturity of trade payables is normally within approximately 60 days.
Credit and counterparty risk is the risk that the counterparty in a transaction will be unable to discharge its obligations, thereby causing a financial loss for Scandi Standard. Counterparty risk is limited by only accepting counterparties with high creditworthiness.
The credit risk associated with trade receivables is managed through special credit rating reviews. Scandi Standard has credit control procedures in place and obtains information about the financial position of customers from various credit-rating agencies.
An agreement of additional payments was made when acquiring Carton Bros ULC, by the time of closing of the books calculated to MSEK 180 (234), final payment to be paid during 2021. The amount is dependent on the progress of operating income before depreciation and amortization (EBITDA) of the acquired operation.During the year an increase earn-out debt of MSEK 52 was recognised, mainly due to a strong development of earnings in Carton Bros ULC compared to the assumptions at the time of the transaction. The amount is the most likely outcome and recognized as liability. The amount is remeasured at the end of each reporting period with the consideration of the expected payment and the change is booked in the income statement.
| Assets | Liabilities | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Average hedg | Nominal amount | Annual | Accumulated | ||||||||
| MSEK | ing price/-rate | Remaining term < 1 year |
> 1 year | Dec 31, 2020 | Nominal amount Dec 31, 2019 |
Booked value Dec 31, 2020 |
Dec 31, 2019 | Dec 31, 2020 | Booked value Dec 31, 2019 |
change in value 2020 |
change in value Dec 31, 2020 |
| Cash flow hedges | |||||||||||
| Interest related contract | |||||||||||
| Interest swap | 1.02% | – | 605 | 605 | 936 | – | – | –15 | –12 | –3 | –15 |
| Interest floor | – | – | – | – | 676 | – | 1 | – | – | –1 | –1 |
| Currency related contract | |||||||||||
| FX hedges | |||||||||||
| GBP/SEK | 11.60 | 64 | – | 64 | – | 3 | – | – | – | 3 | 3 |
| USD/SEK | 9.02 | 99 | – | 99 | – | 10 | – | – | – | 10 | 10 |
| DKK/SEK | 1.40 | 217 | – | 217 | – | –8 | – | – | – | –8 | –8 |
| NOK/SEK | 0.95 | –59 | – | –59 | – | 0 | – | – | – | 0 | 0 |
| EURGBPUSD/DKK | – | – | – | – | 259 | – | – | – | –5 | 5 | – |
| Total hedging | 321 | 605 | 926 | 1,872 | 5 | 1 | –15 | –16 | 6 | –10 | |
| Currency hedging of foreign operations |
|||||||||||
| Currency related contract | |||||||||||
| Derivatives instruments – Loan | – | 1,914 | 1,914 | 1,139 | – | – | 1,914 | 1,139 | –16 | – | |
| Hedged item – currency hedging of foreign operations |
– | 1,914 | 1,914 | 1,139 | 1,914 | 1,139 | – | – | 16 | – | |
| Total derivative instrument | – | – | 1,914 | 1,139 | – | – |
| Type of exposure | Type of hedged items | Hedged risk | Hedging instruments | Hedging model1) | |||
|---|---|---|---|---|---|---|---|
| Interest exposure | Loans with variable interest rates | Interest rate risk | Interest rate swaps | Cash flow hedges | |||
| Forecasted purchase and sales in foreign | |||||||
| Currency exposure | currency | Currency risk | Currency derivatives | Cash flow hedges | |||
| Currency exposure | Investments in foreign operations | Currency risk | Loan in foreign currency | Currency hedging of foreign operations |
1) Deviations in critical conditions between hedging instruments and hedged items represent the main source of inefficiency for all types of hedging.
| December 31, 2020, MSEK | Measured at amortised cost |
Measured at fair value through income statement1) |
Derivatives used in hedge accounting1) |
|---|---|---|---|
| ASSETS | |||
| Financial assets | 1 | – | – |
| Trade receivables and other receivables | 818 | – | – |
| Derivative instruments (Level 2) | – | 5 | |
| Cash and cash equivalents | 413 | – | – |
| Total financial assets | 1,232 | – | 5 |
| LIABILITIES | |||
| Non-current interest-bearing liabilities | 1,863 | – | – |
| Other non-current liabilities | – | – | – |
| Derivative instruments (Level 2) | – | – | 15 |
| Current interest-bearing liabilities | – | – | – |
| Other short-term payables (Level 3) | – | 180 | – |
| Trade payables | 1,163 | – | – |
| Total financial liabilities | 3,027 | 180 | 15 |
Financial assets and liabilities by measurement category December 31, 2019
| December 31, 2019, MSEK | Measured at amortised cost |
Measured at fair value through income statement2) |
Derivatives used in hedge accounting2) |
|
|---|---|---|---|---|
| ASSETS | ||||
| Financial assets | 4 | – | – | |
| Trade receivables and other receivables | 901 | – | – | |
| Derivative instruments | – | – | – | |
| Cash and cash equivalents | 194 | – | – | |
| Total financial assets | 1,100 | – | – | |
| LIABILITIES | ||||
| Non-current interest-bearing liabilities | 1,925 | – | – | |
| Other non-current liabilities (Level 3) | – | 116 | – | |
| Derivative instruments | – | – | 16 | |
| Current interest-bearing liabilities | 0 | – | – | |
| Other short-term payables (Level 3) | – | 118 | – | |
| Trade payables | 1,117 | – | – | |
| Total financial liabilities | 3,042 | 234 | 16 |
1) The Group's financial assets and liabilities are measured in accordance with the following fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Inputs other than the quoted prices included in level 1 that are observe able for the asset or liability, i.e. quoted prices or data derived therefrom.
Level 3: Unobservable inputs for measurement of the asset or liability.
Derivatives in Level 2 are foreign currency forwards and interest rate swaps.
Fair value measurement for foreign currency forwards is the present value of future cash flows based on the forward exchange rates at the balance sheet date.
Fair value measurement for interest rate swaps is the present value of the estimated future cash flows based on observable yield curves. Other short-term payables in Level 3 include Earn-out, reported fair value is based on an assessment of future sales and earnings performance for Carton Bros.
Reported value for Non-current interest-bearing liabilities is a good approximation of fair value as credit risk is not significantly changed.
For other financial instruments with no specific market value, the fair value is deemed to correspond to the carrying amount.
Scandi Standard has both defined contribution and defined benefit pension plans. The defined benefit plans, as recognised in the consolidated statement of financial position, are mainly funded and relate to PRI pensions in Sweden. These plans are funded in Lantmännen's 'Gemensamma Pensionsstiftelse Grodden' pension fund, which enables a number of companies that are part of, or have been part of, Lantmännen Group to safeguard their pension obligations. Each company has its own part of the fund's assets. There is no obligation for the companies in the fund to make additional contributions to the fund. The obligations are also credit insured via PRI Pensionsgaranti. PRI Pensionsgaranti is a mutual insurance company that guarantees employees' future pensions. Now that the assets are in a separate fund, the obligations can be reduced by the market value of the fund's assets when recognised in the statement of financial position. Kronfågel AB and SweHatch AB are connected to the fund with regard to obligations accrued up to the end of May 2013. After this date, all new pension earnings within the Group are financed by direct charges.
The obligations in Ireland concern closed pension plans.
Pension plans with surpluses are recognised as an asset in the statement of financial position under "Surplus in funded pension plans". Other pension plans that are unfunded or partially funded are recognised under "Provisions for pensions".
| Defined benefit plans, MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Funded plans | ||
| Defined benefit obligations under Swedish PRI Pensionsgaranti, plans |
190 | 199 |
| Fair value of plan assets | –181 | –176 |
| Total net value of funded plans | 9 | 23 |
| Surplus in funded pension plan recognised as asset | – | – |
| Partially funded pension plan recognised as liability | 9 | 23 |
| Unfunded plans | ||
| Other unfunded obligations | –1 | 3 |
| Total unfunded plans | –1 | 3 |
| Provision for pensions, net value | 8 | 26 |
Defined benefit pension plans are in Sweden and Ireland.
| Pension cost in the income statement, MSEK | 2020 | 2019 |
|---|---|---|
| Defined benefit plans | ||
| Incurred pension expense during the year | ||
| Interest income / expenses | –3 | –4 |
| Cost of defined benefit plans | –3 | –4 |
| Cost of defined contribution plans | –94 | –99 |
| Total pension cost | –97 | –104 |
| The cost is recognised in the following lines in the income statement |
||
| Employee benefits expenses, Note 5 | –94 | –99 |
| Finance expenses, Note 8 | –3 | –4 |
| Total pension cost | –97 | –104 |
| Pension-related charges in other comprehensive income, MSEK |
2020 | 2019 |
| Defined benefit plans | ||
| Return on plan assets in excess of what is recognised as interest income in the income statement |
10 | 13 |
| Remeasurement of pension obligations: | ||
| − Experience based adjustment of obligation | 4 | –1 |
| − Effect of changes in demographic assumptions | 1 | –4 |
| − Effects of changes in financial assumptions | –3 | –20 |
| Total remeasurement of pension obligations | 2 | –25 |
| Total actuarial gains (+) and losses (−) | 12 | –11 |
| Tax in gain / loss | –3 | 2 |
| Total recognised in other comprehensive income | 10 | –9 |
| Defined benefit obligations |
Plan assets |
Net | ||||
|---|---|---|---|---|---|---|
| 31 December, MSEK | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Opening balance, funded plans | 199 | 180 | –176 | –167 | 23 | 13 |
| Service cost | –2 | –2 | – | – | –2 | –2 |
| Interest recognised in income statement |
3 | 4 | –3 | –4 | – | 0 |
| Payment of pension benefits | –8 | –8 | – | – | –8 | –8 |
| Compensation received | – | – | 8 | 8 | 8 | 8 |
| Return in plan assets in excess of recognised interest |
– | – | –10 | –13 | –10 | –13 |
| Remeasurement of pension obligations recognised in other comprehensive income |
–2 | 25 | – | – | –2 | 25 |
| Closing balance, funded plans | 190 | 199 | –181 | –176 | 9 | 23 |
| Unfunded plans | –1 | 3 | – | – | –1 | 3 |
| Closing balance, pension liability | 190 | 202 | –181 | –176 | 8 | 26 |
| 2020 | 2019 | |||
|---|---|---|---|---|
| MSEK | % | MSEK | % | |
| Property | 79 | 45.1 | 71 | 40.3 |
| Fixed-interest investments | 30 | 17.3 | 46 | 26.1 |
| Equity investments | 53 | 29.8 | 39 | 22.2 |
| Alternative investments | 17 | 9.7 | 10 | 5.7 |
| Cash and cash equivalents | 2 | 1.1 | 10 | 5.7 |
| Total | 181 | 100 | 176 | 100 |
Equity investments are all listed equity.
| Actuarial assumptions | 2020 | 2019 |
|---|---|---|
| Discount rate | 0.90% | 1.50% |
| Future pension increase | 2.00% | 2.00% |
| Inflation | 1.50% | 2.00% |
| Mortality table | DUS14 | DUS14 |
A reduction of the discount rate by 0.25 percentage points would increase the pension obligation by MSEK 7 (7) while an increase of the discount rate by 0.25 percentage points would reduce the obligation by MSEK 7 (7). A change in the expected life span of one year would change the obligation by MSEK 9 (9). A change of the inflation rate of 0.25 percentage points would change the obligation by about MSEK 7 (7). The pension fund's return was 7 (10) percent and a change of 1 percentage point would change the value of plan assets by about MSEK 2 (2).
Funded plans cover to 47.2 (49.6) percent paid-up policy holders and to 52.8 (50.4) percent retired persons. Duration is 15 (15) years.
Expected payments under defined benefit pension plans in 2021 are MSEK 8.
For certain employees in Sweden insurance premiums are paid to Alecta under the ITP plan (individual supplementary pension). The plan is a multi-employer defined benefit plan. Alecta is currently unable to disclose the information required to recognise the plans as a defined benefit pension plan. Consequently, pension plans under Alecta are recognised as defined contribution plans. MSEK 4 (4) of total pension cost of MSEK 97 (99) for defined contribution plans are related to Alecta premiums for ITP plans. Alecta may distribute its surplus to policy holders and/or the insured. At the end of the year, Alecta's surplus defined as collective funding ratio was 148 (148) percent. The collective funding ratio reflects the market value of the assets of Alecta as a percentage of its pension obligations, calculated with Alecta's Actuarial assumptions, which do not follow IAS 19.
In corporate groups the size of Scandi Standard, there are normally a number of ongoing disputes. Scandi Standard assesses the most likely outcome of the disputes currently at issue, and where an outflow of financial resources is probable, a corresponding amount is recognised as a provision.
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Restructuring | – | 2 |
| Other provisions | 7 | 3 |
| Total | 7 | 5 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Trade payables | 1,163 | 1,117 |
| Other current liabilities | 342 | 254 |
| Current leasing liabilities | 73 | 73 |
| Accrued expenses and prepaid income |
378 | 412 |
| Total | 1,955 | 1,855 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Accrued personnel-related expenses |
253 | 239 |
| Bonuses and discounts | 23 | 37 |
| Other accrued expenses | 102 | 136 |
| Prepaid income | – | 0 |
| Total | 378 | 412 |
Salaries and benefits received by senior management are reported in Note 5. No dividends from subsidiaries or associates have been received in the Parent Company during the year. There is no outstanding receivables or liabilities related to associated companies as of December 31, 2020. Further information about associated companies can be found in Note 14. Other transactions with key persons are membership fee for Swedish poultry for a board member.
| MSEK | 2020 | 2019 |
|---|---|---|
| Intra-group purchases, share of total purchases, % |
7.9 | 7.4 |
| Intra-group sales, share of total sales, % |
6.9 | 6.6 |
| Purchases of goods and services from associates, MSEK |
68 | 90 |
| Sales of goods and services to associates, MSEK |
53 | 74 |
| Other transactions with associates, MSEK |
1 | 4 |
| Other transactions with key persons, MSEK |
5 | – |
| Pledged assets MSEK |
For own liabilities | ||
|---|---|---|---|
| Dec 31, 2020 | Dec 31, 2019 | ||
| Real estate mortgages | 271 | 242 | |
| Total | 271 | 242 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Guarantee multicurrency credit facility |
2,200 | 2,200 |
| Rent guarantee | 156 | 250 |
| Other contingent liabilities | 102 | 105 |
| Total | 2,458 | 2,555 |
Other contingent liabilities consist for the most part of guarantees for subsidiaries and suppliers.
| 1) Paid finance items net, MSEK |
2020 | 2019 |
|---|---|---|
| Interest received | 0 | 0 |
| Interest paid | –69 | –64 |
| Other paid financial items | –7 | –9 |
| Total | –76 | –72 |
| 2) Business combinations, MSEK |
2020 | 2019 |
| Acquired assets and liabilities | ||
| Property, plant and equipment | – | – |
| Intangible assets | – | – |
| Inventories | – | – |
| Trade and other receivables | – | – |
| Liabilities | – | – |
| Cash and cash equivalents | – | – |
| Total | – | – |
| Additional consideration, recognized liability |
104 | 133 |
| Provision for acquisition of minority |
– | – |
| Loans in acquired business combination |
– | – |
| Paid consideration | 104 | 133 |
| Cash and cash equivalents in acquired business combination |
– | – |
| Cash flow effect | 104 | 133 |
| 3) Cash and cash equivalents, MSEK |
2020 | 2019 |
| Cash and bank deposits | 413 | 194 |
| Total | 413 | 194 |
The Group's total liquidity, defined as cash, bank deposits and credit available under the provisions of applicable loan agreements, amounted to MSEK 1,136 (655) at the end of the year.
The net interest-bearing debt and the movement of it is analysed below, for the presented periods.
| Net interest-bearing debt 1), MSEK | 2020 | 2019 |
|---|---|---|
| Cash and cash equivalents | 413 | 194 |
| Interest-bearing liabilities – repayable within one year |
–67 | –77 |
| Interest-bearing liabilities – repayable after one year |
–2,279 | –2,317 |
| Net interest-bearing debt | –1,933 | –2,200 |
| Cash and bank deposits | 413 | 194 |
| Gross debt – variable interest rates | –2,346 | –2,394 |
| Net interest-bearing debt | –1,933 | –2,200 |
1) The Group utilises the same definition of Net interest-bearing debt as the current Credit agreement.
| Liabilities from financing activities | ||||
|---|---|---|---|---|
| Changes in gross debt, MSEK | Interest-bearing liabilities |
Leasing liability | Total | |
| Gross debt December 31, 2019 (Note 21) | –1,940 | –545 | –2,394 | |
| Cash flows | ||||
| new loans | –60 | – | –60 | |
| repayments | 55 | 82 | 137 | |
| changes in credit facility | – | – | – | |
| Total | –5 | 82 | 77 | |
| Foreign exchange adjustments | 71 | 27 | 98 | |
| Acquisitions | – | – | – | |
| Other non-cash movements | 2 | –128 | –126 | |
| Total | 73 | –101 | –28 | |
| Gross debt December 31, 2020 (Note 21) | –1,873 | –473 | –2,346 |
| Note 29 | Fees and reimbursements to auditors |
|---|---|
| MSEK | 2020 | 2019 |
|---|---|---|
| Öhrlings Pricewaterhouse Coopers AB |
||
| Annual audit | 0 | 0 |
| Total | 0 | 0 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Contingent liabilities | 4 | 4 |
| Guarantee for subsidiaries | 11 | 10 |
| Guarantor long-term multi currency credit facilities |
2,200 | 2,200 |
| Total | 2,215 | 2,214 |
The table includes directly-owned subsidiaries and indirectly-owned companies.
| Company name | Corporate identity no. |
Domicile | Share, % | Carrying amount, MSEK |
|---|---|---|---|---|
| Scandinavian Standard Nordic AB | 556921-0619 | Stockholm, Sweden | 100 | 533 |
| Scandi Standard ApS | 25 710 029 | Farre, Denmark | 100 | |
| Naapurin Maalaiskana OY | 2644740-9 | Helsinki, Finland | 100 | |
| Kronfågel Holding AB | 556529-6372 | Stockholm, Sweden | 100 | |
| Kronfågel AB | 556145-4223 | Stockholm, Sweden | 100 | |
| SweHatch AB | 556033-3386 | Stockholm, Sweden | 100 | |
| AB Skånefågel | 556056-1457 | Örkelljunga, Sweden | 100 | |
| Bosarpskyckling AB | 556673-6608 | Stockholm, Sweden | 100 | |
| Danpo A/S | 31 241 316 | Farre, Denmark | 100 | |
| Rokkedahl Foods ApS | 33 576 382 | Nibe, Denmark | 51 | |
| Scandi Standard Norway AS | 911 561 077 | Oslo, Norway | 100 | |
| Den Stolte Hane AS | 980 403 715 | Jæren, Norway | 100 | |
| Scandi Standard Ireland Holding AB | 559119-0789 | Stockholm, Sweden | 100 | |
| Carton Bros ULC | 7313 | Dublin, Ireland | 100 | |
| Total, Parent Company | 533 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Accumulated cost of acquisition | 533 | 533 |
| Carrying amount | 533 | 533 |
| MSEK | 2020 | 2019 |
| Balance at the beginning of the period |
533 | 533 |
| MSEK | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Loans and receivables | ||
| Non-current interest-bearing receivables from subsidiaries |
405 | 405 |
| Total | 405 | 405 |
| Financial liabilities measured at amortised cost |
||
| Liabilities to subsidiaries | 233 | 255 |
| Total | 233 | 255 |
There are no derivative instruments in the Parent Company. See Note 22 for information on interest-bearing liabilities.
The Board of Directors and the Managing Director proposes a dividend for 2020 of SEK 1.25 (–) per share to the Annual General Meeting 2021.
The following earnings are at the disposal of the Annual General Meeting:
| Total | 731,092,465 |
|---|---|
| To be carried forward | 648,783,510 |
| Dividend to shareholders | 82,308,955 |
| Total | 731,092,465 |
| Income for the year | 24,553,713 |
| Accumulated deficit | –19,969,532 |
| Share premium reserve | 726,508,284 |
| SEK |
|---|
| 726,508,284 |
| –19,969,532 |
| 24,553,713 |
| 731,092,465 |
| SEK |
| 82,308,955 |
| 648,783,510 |
The Board of Directors and the Managing Director and CEO hereby certify that the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and give a true and fair view of the Group's financial position and performance. The Parent Company's financial statements have been prepared in accordance with generally accepted accounting principles and give a true and fair view of the Parent Company's financial position and performance.
The Board of Directors' Report for the Group and Parent Company provides a true and fair overview of the development, financial position and performance of the Group and Parent Company, and describes significant risks and uncertainties faced by the Parent Company and Group companies.
Stockholm, 25 March 2021
Henrik Hjalmarsson Board member
Heléne Vibbleus Board member
Per Harkjær Chairman of the Board
Vincent Carton Board member
Øystein Engebretsen Board member
Michael Parker Board member
Karsten Slotte Board member
Leif Bergvall Hansen Managing Director and CEO
The Group's and Parent Company's annual financial statements will be presented for adoption by the Annual General Meeting on 7 May 2021. Our audit report was submitted on 25 March 2021.
Öhrlings PricewaterhouseCoopers AB
Ann-Christine Hägglund Authorized Public Accountant
To the Annual General Meeting of Scandi Standard AB (publ), Corporate Identity Number 556921−0627
We have audited the annual accounts and consolidated accounts of Scandi Standard AB (publ) for the year 2020. The annual accounts and consolidated accounts of the company are included on pages 49–96 in this document.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company and the group as of 31 December 2020 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2020 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the general meeting of shareholders adopts the income statement and statement of financial position for the parent company and the group.
Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.
We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the group operates.
Our group audit includes 15 reporting units operating in four countries in the Nordic region and the Republic of Ireland. The operations are managed and monitored country by country in Sweden, Denmark, Norway, Finland and the Republic of Ireland. We have therefore scoped our audit procedures for the reporting units within each country, taking into account the current control environment and business processes at the individual reporting unit level and also by assessing business performance reviews and Group management's oversight and follow-up activities on each unit.
In establishing the overall group audit strategy and plan, we determined the type of work that needed to be performed at the reporting unit respectively by the component auditor. For the most significant entities we required a full scope audit of their complete financial information.
The group consolidation, financial statement disclosures, a number of complex transactions and Swedish entities were audited by the Group engagement team. These procedures include among others impairment test of goodwill and other intangible assets with
indefinite life, long-term incentive program for management, business combinations and pension obligations.
The entities in scope for the Group audit procedures represent approximately 90 percentage of Group net sales.
Our audit is carried out continuously throughout the year. For the interim report covering the period January 1 to September 30, 2020, we issue a public limited review report. In connection with the issuance of the Group's interim reports for the third quarter and year-end, we report our observations to Group management and the Audit Committee. We also report our main observations to the entire Board of Directors when the annual financial statements have been prepared.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.
Refer to Annual report note 17 Inventory and note 1 Accounting policies.
Inventory of frozen chicken and processed products is held at a few locations in the Group and amounts to SEK 501 million as of December 31, 2020. Inventory of finished goods is a significant asset in the consolidated balance sheet.
It is arduous to perform accurate accounting and recognition of the acquisition cost for the reason that the manufacturing process includes a large variety of products. Product calculations require a number of judgments necessary by management that have consequences to the inventory values recognised and is therefore an important area in our audit.
The inventory valuation, including making write-down whenever necessary, is therefore of significant importance in our audit.
Our audit included an assessment of the Group's accounting policy of provision for obsolescence, analytical procedures and inquiries with controllers and detailed tests of inventory accounts.
We have tested controls regarding the methods applied in determining product calculations for finished goods, inward and outward deliveries from inventory, and the monitoring undertaken to ensure that stock-taking takes place at all inventory sites and that count differences are investigated.
We have performed price tests on the inventory stock of frozen chicken products. We have walked through management's monitoring controls for slow moving items and management's assessment of obsolescence.
We have participated in stock-takings to verify existence and the Group's assessment of obsolescence.
Our audit procedures at year-end focused on assessing the remaining risk of write-downs and evaluating management's assessment for write-downs made.
Refer to the Annual Report Note 6 – Amortization and Impairment of Intangible Assets, Note 11 – Intangible Assets and not 1 Accounting policies.
The majority of Scandi Standard intangible assets have been acquired externally, mostly through acquiring businesses. Assets with indefinite useful life such as goodwill are not subject to yearly depreciation. Instead, an annual test will show whether the carrying amount for the cash generating unit can still be supported.
The carrying value of goodwill amounts to SEK 888 million as of December 31, 2020. Intangible assets with an indefinite life comprise various brand names acquired in Sweden, Denmark and Norway. The carrying value of such brands amounts to SEK 319 million as of December 31, 2020. Goodwill and brands are significant assets in the consolidated balance sheet. No impairment charge has been recognised against goodwill or brand names with indefinite life in 2020.
Management's estimates of the intangible assets' potential to generate future cash flows and other assumptions are decisive when preparing the annual impairment tests. Given the elements of assumptions and estimates makes this a key audit matter.
Our audit included procedures to verify that business combinations have been recognised according to applicable accounting policies and that the impairment tests of goodwill and other intangible assets with indefinite life have been performed by the use of generally accepted valuation methods, are mathematically correct, and by the use of reasonable assumptions of, among others, future cash-flow estimates and discount rates.
In our audit we have performed, among others, the following procedures:
This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-42 and 101-104 and 126. Other information also contains the renumeration report 2020 which we have received before the date of our auditor's report .
The Board of Directors and Managing Directors are responsible for this other information.
Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Board of Directors and Managing Directors is responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and Managing Directors are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, the Board of Directors and Managing Directors is responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and Managing Directors intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Directors' responsibilities and tasks in general, among other things oversee the company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.
A further description of our responsibility for the audit of the annual accounts and consolidated accounts is available on Revisorspektionen's website: www.revisorsinspektionen.se/ revisornsansvar. This description is part of the auditor´s report.
In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and Managing Directors of Scandi Standard AB (publ) for the year 2020 and the proposed appropriations of the company's profit or loss.
We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and Managing Directors be discharged from liability for the financial year.
We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
The Board of Directors and Managing Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group' equity, consolidation requirements, liquidity and position in general.
The Board of Directors and Managing Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company´s organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner.
Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors and Managing Directors in any material respect:
Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.
A further description of our responsibility for the audit of the administration is available on Revisorspektionen´s website: www. revisorninspektionen.se/revisornsansvar. This description is part of the auditor´s report.
Öhrlings PricewaterhouseCoopers AB, Torsgatan 21 SE-113 97 Stockholm, was appointed auditor of Scandi Standard AB (publ) by the general meeting of the shareholders on the 15 May 2020 and has been the company's auditor since the 09 September 2013.
Stockholm, 25 March 2021 Öhrlings PricewaterhouseCoopers AB
Ann-Christine Hägglund Authorized Public Accountant
| MSEK, unless otherwise stated | 2020 | 2019 | 20184) | 20175) | 20165) |
|---|---|---|---|---|---|
| Net sales | 9,940 | 9,891 | 8,797 | 7,101 | 5,967 |
| EBITDA | 699 | 748 | 662 | 525 | 438 |
| Operating income | 351 | 424 | 333 | 295 | 238 |
| Income for the year | 208 | 237 | 200 | 168 | 131 |
| EPS, SEK | 3.16 | 3.60 | 3.05 | 2.73 | 2.21 |
| Adjusted EBITDA1) | 835 | 776 | 714 | 559 | 452 |
| Adjusted EBITDA-margin1), % | 8.4 | 7.8 | 8.1 | 7.9 | 7.6 |
| Adjusted operating income1) | 500 | 454 | 381 | 329 | 252 |
| Adjusted operating margin1), % | 5.0 | 4.6 | 4.3 | 4.6 | 4.2 |
| Dividend, SEK | 1.25 2) | – | 2.00 | 1.80 | 1.35 |
| Operating cash flow | 476 3) | 536 3) | 354 | 213 | 126 |
| Capital expenditure, net | 355 | 419 | 371 | 199 | 265 |
| Adjusted return on capital employed (ROCE)1), % |
11.9 | 11.0 | 9.7 | 11.1 | 10.3 |
| Equity to assets ratio, % | 29.4 | 27.7 | 26.5 | 28.2 | 27.8 |
| Average number of employees | 3,220 | 3,266 | 3,005 | 2,264 | 1,680 |
1) Adjusted for non-comparable items, see table to the right.
2) Proposed by the Board.
3) Reclassification of cash flow effect for leasing assets has been made for 2020 and 2019.
4) When applicable, the comparative figures for 2018 have been restated for changed accounting principles according to IFRS 16 Leases.
5) Not recalculated for effects in accordance with IFRS 16.
| and operating income | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Bird flua) | –15 | – | – | – | – |
| Earn out Debt adjustmentb) | –52 | – | – | 30 | – |
| Covid-19 pandemicc) | –60 | – | – | – | – |
| Strategy projectd) | –16 | – | – | – | – |
| Restructuringe) | –7 | –12 | –1 | –2 | –4 |
| Restructuring of productionf) | – | –7 | –42 | –19 | – |
| Transaction costsg) | – | –1 | –11 | –25 | –2 |
| Costs for faulty raw materialsh) | – | –6 | – | – | – |
| Write down of inventoryi) | – | – | – | – | –7 |
| Costs related to firej) | – | – | – | –4 | – |
| Costs for cancellation of leasing contractk) |
– | – | – | –15 | – |
| Other | – | –4 | –3 | – | – |
| Total non-comparable items in EBITDA |
–150 | –30 | –57 | –34 | –13 |
| Effect of changes in est. life expectancy of fixed assetsl) |
– | – | 8 | – | – |
| Total non-comparable items in operating income |
–150 | –30 | –49 | –34 | –13 |
a) Cost related to bird flu – mainly inventory write-down.
i) Write down of inventory in Denmark.
| MSEK | Q1 2020 | Q1 2019 | Q2 2020 | Q2 2019 | Q3 2020 | Q3 2019 | Q4 2020 | Q4 2019 | Full year 2020 | Full year 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Group | Net sales | 2,479 | 2,458 | 2,448 | 2,472 | 2,621 | 2,541 | 2,393 | 2,420 | 9,940 | 9,891 |
| Adjusted operating income 1) | 117 | 110 | 122 | 115 | 147 | 125 | 115 | 104 | 500 | 454 | |
| Adjusted operating margin, % | 4.7 | 4.5 | 5.0 | 4.6 | 5.6 | 4.9 | 4.8 | 4.3 | 5.0 | 4.6 | |
| Non-comparable items 1) | –42 | – | –17 | –13 | –31 | – | –59 | –16 | –150 | –30 | |
| Operating income | 75 | 110 | 105 | 101 | 116 | 125 | 56 | 87 | 351 | 424 | |
| Sweden | Net sales | 732 | 695 | 687 | 711 | 786 | 765 | 679 | 692 | 2,884 | 2,864 |
| Adjusted operating income 1) | 49 | 42 | 46 | 43 | 65 | 48 | 56 | 49 | 216 | 182 | |
| Adjusted operating margin, % | 4.7 | 6.0 | 6.8 | 6.1 | 8.3 | 6.2 | 8.2 | 7.1 | 7.5 | 6.3 | |
| Non-comparable items 1) | –4 | – | – | – | – | – | –9 | – | –13 | – | |
| Operating income | 45 | 42 | 46 | 43 | 65 | 48 | 47 | 49 | 203 | 182 | |
| Denmark | Net sales | 784 | 860 | 797 | 826 | 893 | 873 | 777 | 868 | 3,251 | 3,426 |
| Adjusted operating income 1) | 20 | 32 | 18 | 25 | 21 | 28 | –1 | 16 | 57 | 101 | |
| Adjusted operating margin, % | 2.5 | 3.7 | 2.2 | 3.0 | 2.4 | 3.2 | –0.2 | 1.8 | 1.8 | 2.9 | |
| Non-comparable items 1) | –11 | – | –25 | –6 | – | – | –29 | –14 | –66 | –20 | |
| Operating income | 8 | 32 | 8 | 19 | 21 | 28 | –31 | 2 | –8 | 80 | |
| Norway | Net sales | 419 | 400 | 395 | 419 | 428 | 415 | 406 | 385 | 1,648 | 1,619 |
| Adjusted operating income 1) | 34 | 37 | 42 | 41 | 45 | 40 | 40 | 32 | 162 | 150 | |
| Adjusted operating margin, % | 8.1 | 9.2 | 10.7 | 9.8 | 10.6 | 9.7 | 9.9 | 8.2 | 9.8 | 9.2 | |
| Non-comparable items 1) | –3 | – | 3 | – | – | – | – | – | – | – | |
| Operating income | 31 | 37 | 45 | 41 | 45 | 40 | 40 | 32 | 162 | 150 | |
| Ireland | Net sales | 538 | 496 | 532 | 501 | 509 | 496 | 526 | 479 | 2,104 | 1,972 |
| Adjusted operating income 1) | 36 | 17 | 46 | 32 | 38 | 30 | 50 | 28 | 166 | 107 | |
| Adjusted operating margin, % | 6.8 | 3.5 | 7.7 | 6.3 | 7.6 | 6.1 | 9.4 | 5.9 | 7.9 | 5.4 | |
| Non-comparable items 1) | –9 | – | 5 | – | – | – | – | – | –4 | – | |
| Operating income | 27 | 17 | 46 | 32 | 38 | 30 | 50 | 28 | 162 | 107 | |
| Finland | Net sales | 134 | 112 | 145 | 129 | 146 | 132 | 131 | 118 | 555 | 491 |
| Adjusted operating income 1) | 1 | 1 | 2 | 1 | 2 | 2 | 1 | –4 | 6 | –2 | |
| Adjusted operating margin, % | 0.7 | 0.5 | 1.4 | 0.4 | 1.7 | 1.3 | 0.4 | –3.7 | 1.1 | –0.3 | |
| Non-comparable items 1) | – | – | 0 | –7 | – | – | – | –2 | – | –9 | |
| Operating income | 1 | 1 | 2 | –7 | 2 | 2 | 1 | –6 | 6 | –10 |
1) Adjusted for non-comparable items. For a description of non-comparable items, see page 50.
The Scandi Standard Group uses the below alternative KPIs. The Group believes that the presented alternative KPIs are useful when reading the financial statements in order to understand the Group's ability to generate results before investments, assess the Group's opportunities to dividends and strategic investments and to assess the Group's ability to fulfil its financial obligations.
| From income statement, MSEK | 2020 | 2019 | |
|---|---|---|---|
| Net sales | A | 9,940 | 9,891 |
| Income for the year | B | 208 | 237 |
| + Reversal of tax on income for the year | 52 | 75 | |
| Income after finance net | C | 260 | 312 |
| + Reversal of financial income and expenses, net | 91 | 113 | |
| Operating income | D | 351 | 424 |
| + Reversal of depreciation, amortization and impairment |
350 | 325 | |
| + Reversal of share of income of associates | –2 | –1 | |
| EBITDA | E | 699 | 748 |
| Non-comparable items in income for the period | F | 150 | 30 |
| Adjusted operating income for the period | D+F | 500 | 454 |
| Adjusted operating margin, % | (D+F)/A | 5.0 | 4.6 |
| Non-comparable items in EBITDA | F | 137 | 27 |
| Adjusted EBITDA | E+F | 835 | 776 |
| Adjusted EBITDA-margin, % | (E+F)/A | 8.4 | 7.8 |
| From statement of cash flows, MSEK | 2020 | 2019 | |
|---|---|---|---|
| Operating activities | |||
| Operating income | 351 | 424 | |
| Adjustment for non-cash items | |||
| Depreciation, amortization and impairment | 350 | 325 | |
| Share of income of associates | –2 | –1 | |
| EBITDA | 699 | 748 | |
| Non-comparable items in EBITDA | G | 137 | 27 |
| Adjusted EBITDA | 835 | 776 |
| From statement of financial position, MSEK | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|
| Total assets | 6,385 | 6,272 | ||
| Non-current non-interest-bearing liabilities | ||||
| − Deferred tax liabilities | –166 | –174 | ||
| − Other non-current liabilities | –64 | –137 | ||
| Total non-current interest-bearing liabilities | –230 | –311 | ||
| Current non-interest-bearing liabilities | ||||
| Trade payables | –1,163 | –1,117 | ||
| Tax payables | –29 | –12 | ||
| Other current liabilities | –342 | –254 | ||
| Accrued expenses and prepaid income | –378 | –412 | ||
| Total current non-interest-bearing liabilities | –1,912 | –1,795 | ||
| Capital employed | 4,243 | 4,166 | ||
| Cash and cash equivalents | –413 | –194 | ||
| Operating capital | 3,830 | 3,972 | ||
| Average capital employed | H | 4,204 | 4,118 | |
| Average operating capital | I | 3,901 | 3,977 | |
| Operating income, LTM | 351 | 424 | ||
| Adjusted operating income, LTM | J | 500 | 454 | |
| Finance income | K | 1 | 1 | |
| Adjusted return on capital employed, % (ROCE) | (J+K)/H | 11.9 | 11.0 | |
| Adjusted return on operating capital, % (ROC) | J/I | 12.8 | 11.4 | |
| Interest-bearing liabilities | ||||
| Non-current interest-bearing liabilities | 1,863 | 1,925 | ||
| Non-current leasing liabilities | 401 | 381 | ||
| Derivatives instruments | 10 | 16 | ||
| Current interest-bearing liabilities | 73 | 73 | ||
| Total interest-bearing liabilities | 2,346 | 2,394 | ||
| Cash and cash equivalents | –413 | –194 | ||
| Net interest-bearing debt | 1,933 | 2,200 |
EBIT
Operating income.
Adjusted operating income Operating income adjusted for non-comparable items.
Operating margin Operating income as percent of net sales.
Adjusted operating margin Adjusted operating income (adjusted EBIT) as percent of net sales.
Operating income before depreciation, amortization and impairment and share of income of associates.
Adjusted operating income before depreciation, amortization and impairment and share of income of associates.
EBITDA-margin EBITDA as percent of net sales.
Adjusted EBITDA-margin Adjusted EBITDA as a percentage of net sales.
Income for the period last twelve months (LTM) divided by average total equity.
Adjusted operating income last twelve months (LTM) divided by average operating capital.
Adjusted operating income last twelve months (LTM) plus interest income divided by average capital employed.
Cash flow from operating activities excluding paid finance items net and paid current income tax. with the addition of net capital expenditure and net increase in leasing assets.
Adjusted operating cash flow Cash flow adjusted for non-comparable items.
Adjusted income for the period Income for the period adjusted for non-comparable items.
Income for the period, attributable to the shareholders, divided by the average number of shares.
Adjusted income for the period divided by average number of shares.
Equity attributable to the shareholders, divided by the outstanding number of shares at the end of the period.
Net sales is gross sales less sales discounts and joint marketing allowances.
Other operating revenue is revenue not related to sales of chicken, instead such as rent of excess land/ buildings to other users and payment by non-employees for use of the company's canteens.
Cost of goods sold.
Production costs include direct and indirect personnel costs related to production and other production-related costs.
Costs of raw materials and other consumables include the purchase costs of live chicken and other raw materials such as packaging etc.
Other operating expenses include marketing, group personnel and other administrative costs.
Events or transactions with significant effects, which are relevant for understanding the financial performance when comparing income for the current period with previous periods, including restructuring programs, expenses relating to major legal disputes, impairments and gains and losses from acquisitions or disposals of subsidiaries, joint ventures or associated companies. It can also be related to one-off large-scale events outside the control of the company such as natural disasters, or virus outbreaks affecting animals or humans.
Interest-bearing debt excluding arrangement fees less cash and cash equivalents.
Total inventory and operating receivables less non-interestbearing current liabilities.
Total assets less cash and cash equivalents and non-interestbearing liabilities, including deferred tax liabilities.
Average operating capital as of the last two years.
Total assets less non-interest-bearing liabilities, including deferred tax liabilities.
Average capital employed as of the two last years.
Ready-to-cook. Products that require cooking.
Ready-to-eat. Products that are cooked and may be consumed directly or after heating-up.
Last twelve months.
Our goal and ambition is to continuously develop our work and the reporting of our responsibility and contribution to ensure sustainable development. We formulate our sustainability report based on statutory requirements and accepted frameworks, in order to provide credible, relevant and comprehensive information to our stakeholders.
Scandi Standard is subject to the requirement for sustainability reporting in compliance with the Swedish Annual Accounts Act. As well as this section, our statutory Sustainability Report includes the sections, Operations and value chain on pages 26–29, Our responsibility on pages 30–45 and Risks and risk management on pages 55–59. The Sustainability report includes all of Scandi Standard's subsidiary companies. The Sustainability Report addresses Scandi Standard's material sustainability issues and risks, describing our work on them and the related internal steering documents.
In this year's reporting process, we have also taken into account the more stringent requirements for climate reporting that will apply in the future, and taken note of the guidelines from TCFD and the EU for non-financial reporting pertaining to climate-related information. In 2020, we will also report to the CDP for the first time for the entire Group in terms of climate and biodiversity. Our goal is to develop the climate accounts in line with these during the year, and also take into account the EU's new taxonomy.
Scandi Standard's sustainability report for 2020 has been prepared in compliance with the Global Reporting Initiative's standards, Core option. Read more about GRI at www.globalreporting.org. A table of contents appears in the following pages in the form of a GRI index, which indicates mandatory and selected GRI information that is included in the report, as well as reading references to where to find the information. For certain indicators, reporting and/or comments are provided directly in the index table. The index also contains references to the principles in the Global Compact initiative, which Scandi Standard signed on to during the year. This report therefore represents our Communication on Progress to Global Compact.
Reported information and data refer to Scandi Standard's operations in their entirety, where nothing else is stated.
For Scandi Standard, sustainable development is about promoting responsible value creation over time for owners, customers, consumers and other stakeholders. Our corporate vision, "Better Chicken for a Better Life" is to contribute to the joy of food and a sustainable food supply, by providing healthy, innovative chicken products that are produced in a responsible and resource-efficient way. For a more detailed description of our vision, mission, values, operations and value chain, see pages 1–3 and 26–29.
In 2017 Scandi Standard identified material sustainability aspects and risks by compiling an initial materiality analysis which was summarised under the following headings: Health, Food safety and hygiene, Animal welfare, Climate and resource efficiency, Good workplace and Good business ethics. This materiality analysis was performed internally and featured a broad representation from every part of the business. It was based on the impact of operations through the value chain, stakeholder expectations, our mission and our strategic goals. The input vales for this work included the accumulated knowledge and existing documentation from stakeholder dialogues and risk analyses, along with market analyses and external frameworks such as the Global Compact initiative and Agenda 2030.
The materiality analysis is a dynamic process, which is being continuously checked, revised and nuanced in relation to the company's ordinary market and risk analyses and in dialogue with investors, customers and other stakeholders We think that it is positive that demands from shareholders and investors are increasing in terms of measurable goals and KPIs, as well as for clear reporting of risk management, for example, concerning the climate, supplier relationships and animal health. The table on the next page provides an overview of Scandi Standard's sustainability impact, based on the sustainability areas in the Swedish Annual Accounts Act as well as the results of the materiality analysis and risk mapping for the Group.
Scandi Standard's priority stakeholder groups include owners and investors, employees, customers and consumers, along with suppliers and partners. The dialogue takes place with these groups on an ongoing basis through regular activities and interfaces, and through special forums and initiatives covering a range of issues. We see a growing demand and need for a detailed discussion with owners and investors concerning the ESG perspective, and we had a direct dialogue with several financial companies during the year, both existing and potential owners, about our work, our goals and risk management. We have also developed our method of working to stay better updated in terms of the information that is required by the various ESG indices, and ensure we provide a description of governance and performance based on this in a more expeditious way. A dialogue was also held with several supplier groups in the year not only because our Supplier Code of Conduct was updated, but also to jointly develop our work regarding, among other things, sustainable shipments and packaging. An employee survey has been conducted that covered the entire group, with follow-up of, among other factors, the work environment, engagement and company values.
As far as customers and consumers are concerned, the dialogue with them is held primarily on a local basis and is based on the relevant companies and markets.
Scandi Standard's Code of Conduct constitutes the Group's general sustainability policy and applies to every manager and employee and all parts of our company, as well as to members of the Board. The Code of Conduct states that environmental, economic and social responsibility is an integral part of the business strategy and describes the approaches and guidelines that apply to material sustainability aspects in the areas of environment, social conditions, human resources, respect for human rights and anti-corruption. Scandi Standard's Supplier Code of Conduct imposes corresponding requirements on the Group's suppliers and has been updated in the year. Additionally, Scandi Standard has a number of Group policies that clarify and specify stances and frameworks across a range of important areas: Work environment, Health and Safety, Clean Label for products, Antibiotics and Animal Welfare, as well as guidance policies for production activities in terms of Energy, Water, Packaging and Waste.
A whistle-blowing function has been set up, in collaboration with an external company, to enable the anonymous reporting of possible violations in relation to the Code of Conduct. A few cases were reported and investigated by the special committee over the course of the year, related to employee and employment law related issues, and policy compliance. However, none of these cases proved to be an actual violation.
| Sustainability aspect | Scandi Standard's impact | Comment/reference regarding governance, risk management and KPIs | |
|---|---|---|---|
| Social conditions | Health (for employees and consumers) Food safety and hygiene, Animal welfare (product responsibility) Responsibility in the supply chain |
Description: Risks and risk management: Pages 55–59. Policy: KPIs: |
Page 32–33 Safe and healthy products, Page 34–35 Scandi Standard as a workplace, and 38–41 Chickens in good health. Code of Conduct, section Social conditions, Environment/Animal welfare, and Products. Supplier Code of Conduct. Policies for Health and Safety, Clean Label, Antibiotics, Animal Welfare. Pages 32, 34, 40–41. |
| Environment | Climate and resource efficiency (energy, transport, water and waste management in production, feed efficiency, etc.) |
Description: Risks and risk management: Pages 55–59. Policy: KPIs: |
Page 42–43 Climate and resource-efficiency at all stages. Code of Conduct, section Environment. Permits and notification obligation in compliance with national and local environmental legislation for each plant. Pages 42–43. |
| Human resources | Good workplace (work environment, health, safety, gender equality and diversity) |
Description: Risks and risk management: Pages 55–59. Policy: KPIs: |
Page 34–35 An attractive and healthy workplace Code of Conduct, Social conditions section (including human rights, working conditions and work environment). New health and safety policy Diversity and equality policy. Page 35 |
| Respect for human rights | Good workplace Responsibility in the supply chain |
Description: Risks and risk management: Pages 55–59. Policy: KPIs: |
Page 36 Responsible supplier relations, Page 34–35 An attractive and healthy workplace. Code of Conduct, Social conditions section (including human rights, working conditions and work environment). Diversity and equality policy Supplier Code of Conduct. Pages 35–36. Follow-up is carried out through the employee survey as well as through follow-up and deviation reporting concerning the Code of Conduct and Supplier Code of Conduct. |
| Anti-corruption | Good business ethics | Description: Risks and risk management: Pages 55–59. Policy: KPIs: |
Ethical business risks occur in relationships with customers, suppliers and partners, as well as in the subcontractor chain. Code of Conduct, Business Ethics section, Supplier Code of Conduct. Page 36 Follow-up and deviation reporting regarding the Code of Conduct and the Supplier Code of Conduct, supported by internal governance and the whistle-blowing function. |
GRI Standards Content Index, Core Option
| Disclosure | Description | Page | Comments | UN Global Compact principle |
|---|---|---|---|---|
| Organizational profile | ||||
| 102-1 | Name of the organization | Scandi Standard AB | ||
| 102-2 | Business model, brands, products and services | 2, 20–25 | ||
| 102-3 | Location of headquarters | Stockholm | ||
| 102-4 | Location of operations | 2, 21 | ||
| 102-5 | Ownership and legal form | 46–47, 113 | ||
| 102-6 | Markets served | 2, 21 | ||
| 102-7 | Scale of the organization | 2, 5, 49 | ||
| 102-8 | Information on employees and other workers | 53 | Numbers of employees by type of contract and type of employment not reported. Mostly employ ees have permanent and full-time contracts. |
3 |
| 102-9 | Supply chain | 26–29, 36 | ||
| 102-10 | Significant changesto the organization and its supply chain during the reporting period |
17 | No significant changes | |
| 102-11 | Precationary principle approach | Applied in internal | environmental, health and safety work | 7 |
| 102-12 | External initiatives, which the organizations subscribes | 7, 31, 42, 105–106 | 1 | |
| 102-13 | Membership of associations | No specific memberships | ||
| Strategy | ||||
| 102-14 | Statement from CEO | 6–7 | ||
| Ethics och integrity | ||||
| 102-16 | Values, principles, norms of behavior | 1, 34 | ||
| Governance | ||||
| 102-18 | Governance structure | 30, 113–120 | ||
| Stakeholder engagement | ||||
| 102-40 | List of stakeholder groups | 30, 105–106 | ||
| 102-41 | Collective bargaining agreements | Differs between countries. Most employees working in production are covered. In our Swedish company all employees are covered. |
3, 6 | |
| 102-42 | Identifying and selecting stakeholders | 105–106 | ||
| 102-43 | Approach to stakeholder engagement | 105–106 | ||
| 102-44 | Key topics and concerns raised | 30, 105–106 |
| Disclosure | Description | Page | Comments | UN Global Compact principle |
|---|---|---|---|---|
| Reporting practice | ||||
| 102-45 | Entities included in the consolidated financial report | 67 | ||
| 102-46 | Defining report content and topic boundaries | 105, 109–110 | ||
| 102-47 | Material topics | 31 | ||
| 102-48 | Restatement of information | Any changes disclosed at respective key figure | ||
| 102-49 | Changes in reporting | No changes | ||
| 102-50 | Reporting period | Full year 2020 | ||
| 102-51 | Date of most recent report | April 2020 | ||
| 102-52 | Reporting cycle | Annual | ||
| 102-53 | Contact point for questions regarding the report | scandistandard.com/contact | ||
| 102-54 | Claims if reporting in accordance with the GRI | 105 | ||
| 102-55 | GRI-index | See this content index | ||
| 102-56 | External assurance | The sustainability report is not externally assured. | ||
For page references for topic-specific Management approach (103-1 – 103-3), see row for each topic.
| Disclosure | Description | Page | Comments | UN Global Compact principle |
|---|---|---|---|---|
| 201 (2016) | Economic performance – Covers Scandi Standard's own operation | |||
| 201-1 | Direct economic value created and disributed | 5, 61 | ||
| 201-2 | Financial risks and opportunities due to climate change | 42, 55–58 | ||
| 205 (2016) | Anti-corruption – Covers the entire value chain | 36 | 10 | |
| 205-2 | Communication and training on anti-corruption policies and procedures | 25–36 | 10 | |
| 205-3 | Confirmed incidents of corruption and actions taken | 36 | None | 10 |
| 302 (2016) | Energy – Covers Scandi Standard's own operations | 42 | ||
| 302-1 | Energy consumption within the organisation | 42 | 8, 9 | |
| 302-3 | Energy intensity | 43 | 8, 9 | |
| 305 (2016) | Emissions – Covers Scandi Standards's own operations and supply chain | 42–43 | ||
| 305-1 | Direct (scope 1) ghg emissions | 43 | Reporting limited to CO2 emissions from | 8, 9 |
| 305-2 | Indirect (scope 2) ghg emissions | 43 | energy use and distribution transports. | 8, 9 |
| 305-3 | Other indirect (scope 3) ghg emissions | 43 | Further data not available. | 8, 9 |
| 305-4 | Greenhouse gas emissions intensity | 43 |
| Disclosure | Description | Page | Comments | UN Global Compact principle |
|---|---|---|---|---|
| 403 (2018) | Work environment, health and safety – Covers Scandi Standard's own operations | 34–35 | 2 | |
| 403-1 – 403-7 | Management approach | 34–35 | Reporting limited to group common policies and approach. Management systems in each country are based on national legislation and not yet aligned on Group level. |
2 |
| 403-8 | Workers covered by an occupational health and safety management system |
All workers covered by local management systems. |
2 | |
| 403-9 | Work related injuries | 34–35 | 2 | |
| 405 (2016) | Diversity and equal opportunities – Covers Scandi Standard's own operation | 35 | 2, 6 | |
| 405-1 | Composition of governance bodies and employees according to gender, age and other indicators of diversity |
35 | Reporting limited to gender and age, data for other diversity not avalible. |
2, 6 |
| Own disclosure | Inclusive culture | 35 | 2, 6 | |
| 406 (2016) | Non-discrimination – Covers Scandi Standard's own operation |
34–35 | 2, 6 | |
| 406-1 | Incidents of discrimination and actions taken. | No confirmed incidents. | 2, 6 | |
| 414 (2016) | Supplier social assessment – Covers Scandi Standard's supply chain | 36 | No performance inidicator, full data not avalible. | 1, 3–6, 10 |
| 416 (2016) | Customer Health and Safety – Covers Scandi Standard's own operations, supply chain, customers and consumers |
32, 37 | ||
| 416-1 | Assessment of the health and safety impacts of product and service categories | 32, 37 | ||
| 416-2 | Incidents of non-compliance concerning the health and safety impacts of products and services |
32 | ||
| 417 (2016) | Marketing and labelling – Covers Scandi Standard's own operations, customers and consumers |
33 | ||
| 417-2 | Incidents of non-compliance concerning product and service | 33 | ||
| Own material topic | Animal health and welfare – Covers Scandi Standard's own operation and supply chain |
38–40 | ||
| Own disclosure | Use of antibiotics | 38–40 | ||
| Own disclosure | Feet health | 38–40 | ||
| Own disclosure | Feed efficiency | 38–40 |
To the Annual General Meeting of the shareholders in Scandi Standard AB (publ), corporate identity number 556921−0627
A sustainability report has been prepared.
Stockholm, 25 March 2021 Öhrlings PricewaterhouseCoopers AB
Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor's opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.
It is the Board of Directors who is responsible for the statutory sustainability report as described and referred to on pages 30–43 in the annual accounts and consolidated accounts and that it has been prepared in accordance with the Annual Accounts Act.
Ann-Christine Hägglund Authorised Public Accountant
| Corporate governance report | 113 |
|---|---|
| Auditor's report on the corporate governance report | 121 |
| Board of Directors | 122 |
| Group Management | 124 |
| Annual General Meeting | 126 |
Corporate governance within Scandi Standard aims to promote sustainable value creation for shareholders and a sound corporate culture where business opportunities are utilized within the framework of good risk control. This corporate governance report, which is a part of the Annual Report for 2020, has been prepared by the Board of Directors and has been examined by Scandi Standard's external auditor. No deviations from the Swedish Corporate Governance Code are reported. No breaches of Nasdaq Stockholm's applicable regulations and no breaches of good practice in the stock market was reported by Nasdaq Stockholm's surveillance or the Swedish Securities Council.
Scandi Standard AB (publ), corporate identity number 556921-0627 (the company) or the company with subsidiaries (the Group or Scandi Standard) is a Swedish Public Limited Liability Company with its registered office in Stockholm. The company's shares have been listed on Nasdaq Stockholm Mid Cap since June 2014.
Responsibility of corporate governance in the form of management and control of Scandi Standard is distributed between the shareholders at the general meetings, the Board of Directors with appointed committees, and the Managing Director, pursuant to applicable external laws and regulations and internal steering documents in the form of Scandi Standard's Articles of Association, as well as internal codes, policies, guidelines and instructions.
As of 31 December 2020, the share capital amounted to SEK 659,663, represented by 66,060,890 shares with a quota value of SEK 0.009986 per share. Each share carries one vote. All shares have equal rights to Scandi Standard's assets and profits.
The number of shareholders as of 31 December 2020 was 6,114. The holding of the ten largest owners corresponded to 54 percent of the share capital and one shareholder Investment AB Öresund had a holding in the company in excess of ten percent, amounted to 15.3 percent of the share capital as of 31 December 2020. Approximately 43 percent of the share capital was owned by foreigners as of 31 December 2020. More information of the share and shareholders, see pages 46–47.
The General Meeting of shareholders is Scandi Standard's highest decision-making body through which shareholders exercise their rights to make decisions on Scandi Standard's affairs. There are no restrictions on the shareholders' rights in the Articles of Association or, as far as the company is aware of, in any shareholders' agreements.
The Annual General Meeting (AGM) in the company shall be held in Stockholm, Sweden, within six months from the end of the financial year. Besides the AGM, extraordinary General Meetings may be convened.
To participate in the decision-making at the Annual General Meeting requires that the shareholders exercise their voting rights by post. In addition, the shareholders must be registered directly in the share register kept by Euroclear five business days prior to the General Meeting, and to announce participation no later than the date specified in the notice convening the meeting.
The AGM 2020 was held in Stockholm, Sweden, on May 15. Resolutions by the AGM included, among others:
The Annual General Meeting (AGM) 2021 will be held on 7 May 2021. In order to prevent the spread of the Covid-19, the Board of directors has decided that the Annual General Meeting shall be held without physical presence of shareholders, proxies or external parties and that the shareholders shall exercise their voting rights by post in accordance with sections 20 and 22 of the Swedish Act on Temporary Exemptions to Facilitate the Execution of General Meetings in Companies and Associations. Notice of the
Annual General Meeting (including information on how shareholders can vote by mail and exercise other rights) is available on the company's web site: www.investors.scandistandard.com/en/agm before the Annual General Meeting.
The Nomination Committee represents the shareholders of the company and shall, in accordance with the Nomination Committee instruction, which is available on the company web site, www.investors.scandistandard.com/en/agm submit proposals to the AGM regarding:
In accordance with the Instruction for the Nomination Committee, the committee shall consist of no less than four members. One of these members shall be the Chairman of the Board or a Board member nominated by the Chairman of the Board. Based on the shareholding statistics as per the last bank day of August following the AGM, the Nomination Committee shall identify the four largest shareholders in the company and urge them to elect the person which each shareholder wishes to appoint as member of the Nomination Committee.
The proposals of the Nomination Committee to the AGM are publicly announced no later than on the date of notification of the AGM.
The nomination committee for the AGM 2020 consisted of Andreas Hofmann (chairman, appointed by Investment AB Öresund), Justin Carton (appointed by Carton Group), Viktor Henriksson (appointed by Carnegie Fonder), Per Olof Nyman (appointed by Lantmännen Animalieinvest AB) and Per Harkjaer (Chairman of the Board of Scandi Standard).
The proposals of the Nomination Committee to the 2020 AGM and an account of the Nomination Committee's work were included in the notice convening the Annual General Meeting, which was published in a press release on 14 April 2020 and on the company's website www.investors.scandistandard.com/eng/agm. The 2020 Annual General Meeting resolved in accordance with all the Nomination Committee's proposals.
The nomination committee for the AGM 2021 consists of Andreas Hofmann (chairman, appointed by Investment AB Öresund), Johannes Wingborg (appointed by Länsförsäkringar Fondförvaltning AB), Per Olof Nyman (appointed by Lantmännen Animalieinvest AB) and Per Harkjaer (Chairman of the Board of Scandi Standard). Justin Carton resigned from the committee on 18 February 2021 following the sale by Themvar Eight of all its shares in Scandi Standard.
The Nomination Committee started its work by reviewing the tasks incumbent on it under the Swedish Corporate Governance Code and the Instruction for the Nomination Committee adopted at the AGM 2020 and a time plan was set for the Nomination Committee's work. The Nomination Committee took note of Chairman of the Board of Director's views on the company's and Group's operations, targets, strategy, financial results and position and other important conditions.
The Nomination Committee reviewed the results of the external evaluation from end of 2020 of the Board work and procedures, including the performance of the Chairman of the Board and its members individually. On this basis, the Nomination Committee has assessed the competence, experience and background that the company's Board members elected by the AGM should possess and considered the requirement for diversity and breadth in the Board in terms of gender, age, cultural/geographic background, professional background and ownership representation. An important starting point for the Nomination Committee's proposal to the Annual General Meeting is that each board assignment in the company shall be based on merit and the main assignment shall be to maintain and improve the Board's efficiency. The Nomination Committee also had contacts with the Chairman of the Audit Committee to obtain information on the Audit Committee's assessments of the quality and efficiency of external auditor work. In connection with this, the Chairman of the Audit Committee also provided the Nomination Committee the Audit Committee's recommendations on the election of external auditor and auditor fees. Prior to submitting their proposal to the AGM 2021, the Nomination Committee had held three meetings.
The proposals of the Nomination Committee to the 2021 AGM and a statement for the Nomination Committee work will be announced in a press release in April 2021, which will be available on the company website www.investors.scandistandard.com/eng/.
The names of the members of the Nomination Committee as set out below were announced in a press release on 27 October 2020.
| Member | Appointed by | Percent of share capital 2020-12-31 |
Percent of share capital 2020-08-31 |
Independent1) |
|---|---|---|---|---|
| Andreas Hofmann | Investment AB Öresund, Chairman | 15.3% | 15.3% | Yes/No |
| Justin Carton | Carton Group ULC | 9.1% | 9.1% | No/Yes |
| Johannes Wingborg | Länsförsäkringar Fondförvaltning AB | 7.0% | 5.6% | Yes/Yes |
| Per Olof Nyman | Lantmännen Animalieinvest AB | 5.0% | 5.0% | Yes/Yes |
| Per Harkjaer | Chairman of the Board of Scandi Standard AB (publ) | Yes/Yes |
1) Refers to independence of the company and its senior management and the independence of the company's largest shareholder in terms of votes or any group of shareholders who act in concert in the governance of the company.
The proposals and the statement will be included in the notice convening the AGM, which is available on the company website www.investors.scandistandard.com/en/agm.
The nomination committee applies Rule 4.1 of the Swedish Corporate Governance Code as diversity policy regarding the company's Board of Directors, which aims for the Board to have a size and composition that ensures the ability to manage the company's affairs with integrity and efficiency. This means that when preparing its proposals to the AGM, the Nomination Committee considers that the Board of Directors shall have a, with regard to the company and Scandi Standard's operations, phase of development and other relevant circumstances, appropriate composition characterized by diversity and breadth regarding the AGM members' competence, experience and background. The Nomination Committee is to strive for gender balance on the Board of Directors of the company but also for diversity and breadth including age, cultural/geographical and professional background. In particular, the Nomination Committee notes the necessity to increase the gender balance of the Board of Directors over time.
According to the Company's Articles of Association, the Board of Directors shall consist of no less than three and not more than nine members, without deputy members. The AGM elects the Board members and the Chairman of the Board.
Until the AGM 2020, the Board comprised six ordinary members, elected by the AGM 2019, after that Gunilla Aschan resigned from the Board of personal reasons, and after the AGM 2020, seven ordinary members, elected by the AGM 2020, for both years with no deputies and no employee representatives. For more information on the Board of Directors, see pages 122–123.
The Board is considered to be in compliance with the independence requirements of the Swedish Corporate Governance Code in that the majority of the Board members are independent of the company and its management and at least two of these Board members are also independent of Scandi Standard's major shareholders. See the table on page 117.
The Board of Directors is responsible for the organisation and management of the company's affairs in the interest of all shareholders and safeguard and promote a good company culture. The Board's responsibility and work are governed by laws and
regulations as well as internal steering documents, including the articles of association and the Procedure for the Board of Directors. In addition, the General Meeting can provide instructions.
The Procedure for the Board of Directors describes the Board's tasks and responsibilities, the work of the Board including responsibility for the Chairman as well as responsibilities delegated to Committees appointed by the Board, Board meetings and information and reporting to the Board, management of insider information, relations with Nasdaq Stockholm, information and reporting to the Board, and information about corporate governance. The Procedure is reviewed annually and adjusted as needed.
In addition to the inaugural Board meeting held in conjunction with the AGM, the Board shall meet at least six times a year.
The Board has established an Instruction for the Managing Director, including among other things specifications of issues requiring the Board's approval and an instruction regarding financial reporting to the Board.
In 2020, the Board held 14 meetings, of which one regular physical, eight regular per video, four per capsulam including the statutory Board meeting and one by email.
The standing items on the agenda for the ordinary Board meetings include an operational and financial review of the operations against set goals and an outlook for the coming quarter, a review of investments, and reports from the committee of the Board of Directors.
In addition, the Board continuously addresses strategic issues concerning the market, product development, purchasing, production, personnel, investments, acquisitions and financing.
Important issues for the Company and the Group that were addressed during the year included:
The Chairman of the Board is responsible for evaluating the Board's work on an annual basis with the aim of developing the Board's forms of working and efficiency.
The results of the evaluation are communicated to the Board and reported to the Nomination Committee. In 2020, the Chairman procured an external evaluation of the Board's work, which was communicated to the Board and reported to the Nomination Committee.
The Board has established an Audit Committee, a Remuneration Committee and in the end of 2020 an ad hoc Investment Committee. The work of the committees is mainly of a preparatory and consultative nature, but the Board may delegate decision-making authority to the committees on specific matters. The committees are subordinated to the Board and do not discharge the Board members from their general responsibility and commitment as Board members. The issues considered at the committee meetings shall be recorded in minutes and the minutes shall normally be presented to the Board as information at the Board meeting
following the committee meeting along with an oral presentation by the relevant committee chairman.
The main tasks of the Audit Committee are to monitor Scandi Standard's financial reporting and to make recommendations and suggestions in order to secure the reliability of the reporting. The tasks also include to monitor the effectiveness of the Group's internal control, internal audit and risk management in general for the business activities, and specifically in relation to the financial reporting. In addition, the task includes keeping itself informed regarding the external audit of the annual report for the company and the Group, as well as of the results of the Swedish Inspectorate of Auditors' quality control. As part of this, the Audit Committee shall inform the Board of the results of the external audit and in what way the external audit has contributed to the reliability of financial reporting as well as of the role of the Audit Committee.
The Audit Committee's tasks also involve to review and monitor the impartiality and independence of the external auditor and in particular pay attention to whether the external auditor has provided other services than auditing, and to assist in preparation of the proposal to the General Meeting regarding election of the external auditor.
The Audit Committee of Scandi Standard shall comprise no fewer than two Board members. The members of the Audit Committee must not be employed by the company or its subsidiary. At least one of the members must have accounting or auditing proficiency. The members of the Audit Committee must be independent in relation to the company and the management and at least one of the members must be independent in relation to the company's major shareholders.
The Audit Committee 2020, after the AGM, comprised the two Board members, Heléne Vibbleus (Chairman) and Øystein Engebretsen. The Audit Committee had a total of seven meetings during the year. The company's CFO, Head of Finance and other employees such as CEO and Head of Investor Relation attend meetings when necessary and in accordance with the agenda. The external auditor and the internal auditor attends the meeting when necessary and in accordance with the agenda.
The work was primarily focused on:
• Year-end report and Annual Report 2019.
• Interim reports 2020.
| Attendance 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Name | Nationality | Indepen dence1) |
Board Meetings |
Audit Committee Meetings |
Remuneration Committee Meetings |
Authorized fees, SEK2) |
Shareholdings no of shares3) |
|
| Per Harkjaer | Chairman/ Committee Chairman |
Danish | Yes/Yes | 14 | 3 | 760,000 | 110,000 | |
| Vincent Carton | Irish | No/Yes | 14 | 360,000 | 6,000,000 | |||
| Øystein Engebretsen Committee | member | Norwegian | Yes/No | 14 | 7 | 3 | 465,000 | 311,040 |
| Henrik Hjalmarsson | Swedish | Yes/Yes | 6 | 360,000 | 1,000 | |||
| Michael Parker | British | Yes/Yes | 13 | 360,000 | 16,000 | |||
| Karsten Slotte | Committee member |
Finnish | Yes/Yes | 14 | 3 | 390,000 | 13,698 | |
| Committee | ||||||||
| Heléne Vibbleus | Chairman | Swedish | Yes/Yes | 14 | 7 | 510,000 | 6,250 | |
| Total | 14 | 7 | 3 | 3,205,000 | 6,457,988 |
1) Refers to independence in relation to the company and its management, and to the company's major shareholders controlling, directly or indirectly, ten percent or more of the shares or votes in the company.
2) Fees exclude travel allowances.
3) As of December 31, 2020. Holdings include, when applicable, also holdings by related parties.
The main tasks of the Remuneration Committee include to prepare the Board's decisions on issues concerning guidelines for remuneration, remuneration and other terms of employment for senior management. The main tasks also include to monitor and evaluate both ongoing and completed programs during the year for variable remuneration for senior management and to monitor and evaluate the application of the guidelines for remuneration that the AGM has established as well as the current remuneration structures and levels in Scandi Standard. The Remuneration Committee's main task also includes to prepare and submit to the Board no later than the Board meeting in February each year, a remuneration report in accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance and a report on its monitoring and evaluation of the application of ongoing and completed programs for remuneration to senior executives decided by the AGM and current remuneration structures and remuneration levels in Scandi Standard .
The Remuneration Committee of Scandi Standard shall comprise three Board members. The Chairman of the Board may chair the Committee. The other members are to be independent of Scandi Standard and its senior management.
The Remuneration Committee 2020, after the AGM, comprised the three Board members Per Harkjaer (Chairman), Øystein Engebretsen and Karsten Slotte. The Remuneration Committee held a total of three meetings during the year. The Group's HR director attends the meetings when needed and in accodrance with the meeting agenda.
The work mainly focused on reviewing salary processes for remuneration to senior management, including bonus schemes, as well as preparation of proposal for a long-term incentive programme to be proposed to the AGM 2021.
Salaries and other terms and conditions of employment in the company and the Group shall be adequate to enable the company and the Group to retain and recruit skilled senior managers at a reasonable cost. The remuner- ation to the senior managers shall consist of fixed salary, variable salary, pension and other benefits, and it shall be based on princi- ples of performance, competitiveness and fairness.
The General Meeting may resolve on long-term incentive programs such as share and share price-related long-term incentive programs for certain key persons in the company and in the Group and designed to promote the long-term value growth of the company and the Group and improve alignment between the interests of the participating individuals and the company's shareholders. The 2020 AGM resolved on a share-related long-term incentive programme 2020 (LTIP 2020) of the same type as outstanding LTIP 2019 which is partly similar to the previous programmes LTIP 2018 and LTIP 2017 as decided by the Annual General Meetings for each year.
For information about the guidelines for remuneration to senior management and long-term incentive programmes, see the Report by the Board of Directors on pages 54–55 and Note 5.
Scandi Standard has a whistle-blowing procedure that makes it possible for employees and other stakeholders to anonymously report illegal or unethical behaviour that violates the Group's Code of Conduct. A whistle-blowing policy has been established for the functions operations.
Scandi Standard's external auditor is Öhrlings Pricewaterhouse-Coopers AB (PwC), elected at the AGM 2020 until the end of the AGM 2021, with Ann-Christine Hägglund as the Auditor in charge.
Ann-Christine Hägglund was born in 1966 and has been an authorised public accountant since 1997. She has no involvement in companies related to the principal owners of Scandi Standard or with the management at Scandi Standard. For remuneration to the external auditor, see Note 7.
The Board is responsible for internal control and risk management in accordance with the Swedish Companies Act and the Swedish Corporate Governance Code. Below is the Board's report on internal control and risk management over financial reporting.
The description of the Group's system of internal control and risk management with regards to financial reporting is based on the framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This framework comprises five integrated components; the control environment, risk assessment, control activities, information and communication, and monitoring, as well as 17 fundamental principles related to the five components. The description below is limited to internal control and risk management over financial reporting.
Internal control over financial reporting aims to provide reasonable assurance of the reliability of external financial reporting in interim reports, full year reports and annual reports, and to ensure that external financial reporting is prepared in accordance with external laws, accounting standards and other requirements applicable to listed companies.
Internal control over financial reporting is based on the overall control environment. The control environment is the set of standards, processes, and structures that provide the basis for carrying out internal control across the Group. The Board and Group Management establish the tone at the top regarding the importance of internal control including expected standards of conduct of the employees. This involves integrity and ethical values, the parameters enabling the Board to carry out its oversight responsibilities, the organizational structure and assignment of responsibility and authority, the process for attracting, developing, and retaining competent employees, and the rigor around performance measures, as well as incentives and rewards to drive accountability for performance. The resulting control environment has a pervasive impact on the overall system of internal control and risk management for the financial reporting. This is communicated in the form of internal steering documents such as:
The control environment is also based on applicable external laws and regulations.
The Board has established a procedure for its work and the Audit Committee and the Remuneration Committee. The main task of the Audit Committee includes to monitor Scandi Standard's financial reporting and to make recommendations and suggestions in order to secure the reliability of the reporting. The task also includes to monitor the effectiveness of the Group's internal control, internal audit and risk management, and more specifically regarding financial reporting in general for the business activities. In addition, the task includes keeping itself informed regarding the external audit of the annual report for the company and the Group, as well as of the results of the Swedish Inspectorate of Auditors' quality control. As part of this, the Audit Committee's work also includes to inform the Board of the results of the external audit and in what way the external audit has contributed to the reliability of financial reporting and the role of the Audit Committee.
Responsibility for implementing the Board's internal steering documents regarding internal control and risk management over financial reporting, maintaining an effective control environment as well as the day-to-day work on internal control and risk management over financial reporting is delegated to the Managing Director. This responsibility is in turn delegated to managers within their specific areas of responsibility at various levels in the Group.
Responsibility and authority are defined by the Board in, among others, internal steering documents such as Instruction for the Managing Director stipulating resolutions that are subject to decision by the Board or the General Meeting of shareholders, Authority to sign for the company and Delegated Authorities. The Board also approves, among others, the following internal steering documents: Instruction regarding financial reporting to the Board of directors, Code of Conduct, Whistle-blowing Policy, Information Policy, Insider Policy, IT Security Policy and Finance Policy. The Managing Director approves the Group's Finance and Accounting Manual, which is available to all personnel in finance and accounting. Based on the Board's internal steering documents, the Managing Director, the CFO and other managers establish guidelines and instructions to be implemented within their specific areas of responsibility. One example is a new established guideline for internal control for the financial reporting.
These internal steering documents are reviewed and updated regularly with reference to for example changes in legislation, accounting standards, listing requirements and internal risk assessment. Controls are performed at a general level by analysing results and key figures as well as at a detailed level by including control activities in processes.
The Group has a formalised and proactive process for risk management with clearly established roles and areas of responsibility. The process for risk management implies that risks and risks related to financial reporting should be identified, evaluated, managed and followed-up as an integral part of corporate governance. This is done in order to secure that the Group lives up to the aim of internal control related to financial reporting in an efficient way.
In accordance with the risk management process, a risk analysis was carried out during the year regarding financial reporting, which among other things comprises items in the income statement and the statement of financial position, and the processes and control activities that are linked to the financial reporting, the financial statements and the IT- environment are analysed on the basis of materiality and the risk for errors.
Risks over financial reporting are mitigated through control activities to ensure that the aims for internal control over financial reporting are met.
Control activities are performed at different levels of the Group and its processes including processes for financial reporting, closing and over the IT environment. They may be preventive or detective in nature and may encompass a range of manual and automated activities, such as approvals, verifications, reconciliations, and monitoring of the business performance. A distinction between controlling and executing functions known as the segregation of duties is typically built into the selection and development of the control activities. A continuous work has been carried out during the year to evaluate and improve the control activities within the framwork for internal control for financial reporting.
The Group maintains information and communication processes to ensure adequate internal financial reporting, for monitoring of business performance and for decision support, as well as for providing accurate, reliable and relevant external financial reporting to the financial markets.
The internal steering documents relevant to internal control over
financial reporting are for instance Instructions regarding financial reporting to the Board of Directors, Whistle-blowing policy, Information Policy, IT Security Policy, Finance Policy, Finance and Accounting Manual and framework for internal control for financial reporting. The documents can be accessed on the Group's intranet by all relevant personnel.
The Group CFO reports to the Audit Committee on the results, critical accounting issues and other issues that could affect the quality of the Group's financial reporting at the Audit Committee meetings where the interim reports, Year-end report and annual report are dealt with. When reporting on the quality of the financial reporting, there is particular focus on any critical accounting issues, any uncertainties in valuations, any changes in assumptions and estimates, any unadjusted faults in the annual accounts, any events after the end of the accounting period as well as the quality of the financial reporting process, the closing process and IT environment.
The Chairman of the Audit Committee reports on the Committee's work to the Board in the form of observations, recommendations and proposed decisions at the Board meeting following the Committee meetings and in the form of minutes from the Audit Committee meetings that are submitted to the Board.
Internal financial reporting for monitoring of performance and for decision support is submitted to Group Management and the Board on a regular basis.
The Group's process for external information and communication aim at providing the financial markets with accurate, reliable and relevant information which is characterised by openness regarding the development of the Group and its financial results and financial position in a timely manner.
The Group has an Information policy meeting the requirements of a listed company.
Financial information is issued regularly in the form of:
Interim reports, year-end reports and annual reports are to be found on Scandi Standard's website at www.scandistandard.com, as well as press releases, presentations and relevant internal steering documents.
Ongoing evaluations, separate evaluations, or some combination of the two are used to ascertain whether each of the five components of internal control is present and functioning. Ongoing evaluations are performed by the Board and management at different levels of the Group, and separate evaluations are conducted as deemed necessary for instance by the Group's internal audit function.
Financial data is reported every month by the reporting units, being a business unit operating within a subsidiary of the Parent Company, in accordance with the procedure stipulated in the Finance and Accounting Manual and Framework for internal control over financial reporting. All consolidation of the Group's financial reports is centralised to the Group Finance function. All financial reports are stored in a central database from which data is retrieved for analysis and monitoring.
All reporting units that conduct business within one of the company's subsidiaries have a controller whose responsibilities include to ensure adequate internal control concerning financial reporting and to comply with the Group's internal steering documents such as the Finance and Accounting Manual and Framework for internal control over financial reporting. The responsibility also includes reporting complete, accurate and timely financial information to the Parent Company.
A Country Manager is appointed in each country where the Group operates subsidiaries of the Parent Company. The Country Manager's duties include to ensure adequate internal control over financial reporting and to comply with the Group's internal steering documents as well as to identify and report risks that can have an impact on the quality on financial reporting and review the financial information for reasonableness.
The central Group Finance function is responsible for the consolidation of the Group's financial reports and to ensure adequate internal control over financial reporting, and that the reporting by each reporting unit that is conducting business within any of the company's subsidiaries and the Group are made in accordance with the Finance and Accounting Manual and Framework for internal control over financial reporting.
Group management comprises the Managing Director and the CFO, the COO, the Group Business Development Director, the Director of Group Live Operations, the Group Supply chain Director and the five country managers. Group Management normally review sales and results on a weekly basis. They hold meetings every second week to review the monthly results and position, to update forecasts and plans and to discuss critical business issues. Group Management is responsible for implementing the annual business plan, targets for the Group and for good internal control and accurate relevant och reliable financial reporting within their respective areas of responsibility.
An internal audit function was established in 2015, which is insourced from Deloitte. The work in 2020 focused to a large extent on evaluating the efficiency in internal control over financial reporting and the business in general in accordance with an annual internal audit plan. The work also included support to the organisation in the establishment of the Framework for internal control over financial reporting including formalising and documenting internal processes and control activities as well as improving the IT environment.
The Board is responsible for internal control and risk management including internal control and risk management related to the financial reporting. This responsibility includes establishing internal steering documents and monitoring compliance with these as well as with applicable external laws and regulations.
The Board's follow-up of compliance is based on different sources such as:
Stockholm, 25 March 2021
Scandi Standard AB (publ) The Board of Directors
To the Annual General Meeting of the shareholders in Scandi Standard AB (publ), corporate identity number 556921−0627
It is the Board of directors who is responsible for the corporate governance statement for the year 2020 on pages 113–120 and that it has been prepared in accordance with the Annual Accounts Act.
Our examination has been conducted in accordance with FAR's auditing standard RevU 16 The auditor's examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.
A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the annual accounts and the consolidated accounts and are in accordance with the Annual Accounts Act.
Stockholm, 25 March 2021 Öhrlings PricewaterhouseCoopers AB
Ann-Christine Hägglund Authorised Public Accountant
Holdings in Scandi Standard includes, when applicable, also holdings by related parties.
Born 1957. Bachelor's degree in International Marketing, Copenhagen Business School, Denmark. Elected 2014. Chairman of the Remuneration Committee.
Other assignments: Chairman of Løgismose Meyers in Denmark and Meadow Foods in the United Kingdom.
Previous assignments: Group CEO, United Coffee, Findus Group and Toms Confectionery Group.
Holdings in Scandi Standard: 110,000 shares.
Board member Born 1958. Bachelor of Commerce, University College Dublin, Ireland. CIMA Chartered institute of Management Accountants. Elected 2018.
Other assignments: Member of Foodwise 2025 (a strategic advisory Board for the Irish agriculture and food industry). Board member of MII (Meat Industry Ireland). Member of the boards of Consumer Foods and Meat and Livestock in Bord Bia (an Irish organisation for marketing of food).
Holdings in Scandi Standard: 6,000,000 shares.
Born 1980. BI Norwegian School of Management, Sandvika/Oslo, Master of Science in Business, Major in Finance. Elected 2017.
Other assignments: Investment manager, Investment AB Öresund. Board member of Catena Media P.L.C, Insr Insurance Group AS. Previous assignments: Board member of Investment AB Öresund, Project manager, Viking Sverige AB. Corporate Finance, HQ Bank. Holdings in Scandi Standard: 311,040 shares.
Born 1976. Master of Science in Mechanical Engineering and Technology Management, University of Lund, Sweden. Elected 2020.
Other assignments: President & CEO of Inwido AB (publ). Chairman of the board of directors of Repasco AB.
Previous assignments: CEO and other leading positions at Findus and Nomad Foods. Holdings in Scandi Standard: 1,000 shares.
Born 1953.
Bachelor of Science hons in Business Administration, University of Bath, UK, and a Booker Senior Management Certificate from INSEAD. Elected 2014.
Other assignments: Board member of Brookes Parker Ltd and Prospect Publishing Ltd.
Previous assignments: Deputy CEO of Young's Bluecrest Seafood (now Young's Seafood). Board member of Marine Harvest ASA and Karro Food Group.
Holdings in Scandi Standard: 16,000 shares.
Board member
Born 1953. Bachelor of Science (econ), Hanken School of Economics, Finland.
Elected 2014.
Other assignments: Board member of Conficap Oy, Ratos AB (publ), Antti Ahlström perilliset Oy and Finnish-Swedish Chamber of Commerce.
Previous assignments: President and CEO, Fazer Group, various leading positions at Cloetta/Fazer.
Holdings in Scandi Standard: 13,698 shares.
Born 1958.
Bachelor of Science in Business Administration and Economics, University of Linköping, Sweden. Elected 2014. Chairman of the Audit Committee. Other assignments: Vice President Internal Audit, Chief Audit Executive (CAE), Autoliv Inc. Board member of Dometic Group AB.
Previous assignments: Board member of Marine Harvest ASA, Orio AB, Renewable Energy Corporation ASA, Swedbank Sjuhärad AB, Tradedoubler AB,Trelleborg AB and Tyréns AB. Board member and Vice Chairman of Sida. Board member and Chairman of Nordic Growth Market NGM AB and Invisio Communications AB. Group Vice President, Chief Audit Executive (CAE), Elekta AB. Senior Vice President, Group Controller, AB Electrolux. Partner (Authorized public accountant) and Board member of PwC Sweden. Holdings in Scandi Standard: 6,250 shares.
Öhrlings PricewaterhouseCoopers AB. Ann-Christine Hägglund, Authorised Public Accountant, born 1966, chief auditor. Other assignments: Principal auditor, among ohters, for NCC, JM and Business Sweden.
Henrik Hjalmarsson is a part of the Board of Directors since May 2020.
All shareholdings reported as per 31 December 2020.
When applicable, holdings in Scandi Standard includes also holdings by related parties.
Managing Director and Chief Executive Officer Born 1966. Master of Science, Copenhagen Business School, Denmark, including a period at Stanford Business School, USA. In Group Management since 2013. Previous assignments: Head of division, Nestle, CEO of Bisca A/S. Holdings in Scandi Standard: 732,775 shares.
Chief Financial Officer, CFO Born 1979. Master of Science, Stockholm school of Economic, Sweden. In Group Management since 2019. Previous assignments: CFO Kronfågel AB, CFO of SverigesEnergi, Nordic Finance Manager, Barilla and several different positions in Procter & Gamble. Holdings in Scandi Standard: 1,000 shares.
Chief Operating Officer, COO Born 1962. Bachelor of Science in Technology, University of Odense, Denmark. In Group Management since 2013. Other major assignments: Board member Farm Food A/S. Previous assignments: Factory manager Rose Poultry A/S. Holdings in Scandi Standard: 489,324 shares.
Group Business Development Director Born 1960.
Master of Science in Economics and Technology, University of Agriculture, Sweden. In Group Management since 2014.
Other major assignments: Chairman Svenska Retursystem AB and board member Dagligvaruleverantörernas Förbund (DLF).
Previous assignments: Chairman and Managing Director, Dalsjöfors Holding AB. Managing Director, Swedish Meats cooperative/Scan AB/ HKScan. Management positions within Swedish Meats and Scan AB.
Cand. Negot University of Southern Denmark, Executive Management Program, INSEAD. In Group Management since 2016. Previous assignments: Chief Commercial Officer, Rynkeby Foods A/S. Leading positions in sales and marketing, Merrild Kaffe A/S. Product Manager, Bähncke A/S. Holdings in Scandi Standard: 28,376 shares.
Master of Science in Agricultural Economics & Management, University of Helsinki, Finland. In Group Management since 2014. Previous assignments: International broiler industry supply chain management consultant, Pomicon Oy Ltd. Director, poultry meat supply chain live operations, A-Tuottajat Oy (Atria Group Abs). Holdings in Scandi Standard: 70,460 shares.
Born 1971.
Master of Science, Norwegian School of Economics, Norway.
In Group Management since 2015. Other major assignments: Board member in Opplysningskontoret for egg og kjøtt and DLF Norway. Vice-chairman of the Board in Animalia and KLF.
Previous assignments: CEO, Orkla Commercial Excellence ASA. CEO and Country manager, Sætre AS. Management positions within Sætre AS and KiMs AS.
Holdings in Scandi Standard: 50,180 shares.
Group Supply Chain Director Born 1968. BSc. Technology Management & Marine
Engineering.
In Group Management since 2020.
Previous assignments: CEO of Vega Salmon. CEO and COO at Bisca. COO at Skandza. Factory Manager Carlsberg & Danionics. Manager at Maersk.
Holdings in Scandi Standard: 0 shares.
Country Manager, Ireland
Born 1968. Bachelor of Commerce, University College Dublin and Dip. Business Strategy, Irish Management Institute.
In Group Management since 2019. Previous assignments: Managing Director, Kerry Foods and other leadership roles within Kerry Group plc.
Holdings in Scandi Standard: 0 shares.
Products Division L'Oréal Sweden.
Holdings in i Scandi Standard: 5,000 shares.
7 MATS HEDLUND Country Manager, Sweden
Market Economist DIHM. In Group Management since 2019. Previous assignments: Vice President Fresh Dairy Products Arla Sweden, Managing Director Barilla Sweden, Commercial Director Consumer
Born 1974.
Born 1966.
Master of Science at Swedish School of Economics and Business Administration, Vaasa, Finland.
In Group Management since January 2019. Previous assignments: CEO of Polarica Group, EVP Consumer Business HKScan Oyj Finland and Baltics, 15 years of other executive positions in HKScan Group, HKScan Finland, Apetit Plc and Atria Abp.
Holdings in Scandi Standard: 0 shares.
Michael Budtz Berthelsen is a part of Group Management since September 2020.
All shareholdings reported as per 31 December 2020.
When applicable, holdings in Scandi Standard includes also holdings by related parties.
The Annual General Meeting (AGM) 2021 will be held on 7 May. In order to prevent the spread of Covid-19, the Board of directors has decided that Annual General Meeting shall be held without physical presence of shareholders, proxies or external parties. To participate in the decision-making at the general meeting requires that the shareholders exercise their voting rights by post. Notice of the Annual General Meeting (including information on how shareholders can vote by mail and exercise other rights) is available on: investors.scandistandard.com/en/agm before the Annual General Meeting.
Shareholders who wish to exercise their voting rights at the Annual General Meeting must:
In order to vote at the Annual General Meeting, the shareholders shall use the voting form and follow the company's instructions that are available on the company's website, www.scandistandard.com. The voting form should be sent either:
If a shareholder's voting rights are exercised by proxy, a power of attorney and other authorisation documents must be enclosed with the voting form. A proxy form is available at the company's website, www.scandistandard.com.
This report contains forward-looking statements and the actual outcome could be materially different. Factors that could have a material effect on the actual outcome include, but are not limited to, general business conditions, fluctuations in exchange rates and interest rates, political developments, the impact of competing products and their pricing, product development, commercialization and technological difficulties, product quality and safety, interruptions in supply, increased raw material cost, disease outbreaks, loss of major customer contracts, major customer credit losses and effects of Covid-19 pandemic. For further information see the sections on Risks and risk management on page 55–59 and Note 22.
Information about markets, market shares, market growth etc. are based on established independent external sources, internal sources and the company estimates. The forward-looking statements reflect the Board of Directors' and Group Management's current views with respect to certain future events and potential financial performance. Although the Board of Directors and the Group Management believe that the expectations reflected in such forwardlooking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. This report does not imply that the company has undertaken to revise these forward-looking statements, beyond what is required under the company's registration contract with Nasdaq Stockholm, if and when circumstances arise that will lead to changes compared to the date when these statements were provided.
Production: Scandi Standard in cooperation with Hallvarsson & Halvarsson. Script: Scandi Standard. Photo: Niklas Agaton, Bengt Alm, Edgar Castrejon, Juliana Fälldin, Eirik Halvorsen, Peter Hoelstad, iStock, Maiju Katila, Kronfågels bildbank and Anders Wasser.
Strandbergsgatan 55 Box 30174 SE-112 51 Stockholm Sverige
scandistandard.com kronfagel.se danpo.dk denstoltehane.no naapurinmaalaiskana.fi chicken.ie
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