"Scandi Standard has managed to offset the adverse trends through continued internal development work and price increases. There is great potential in increasing the value per bird processed and my first months as CEO have strengthened my belief in that we have a positive journey ahead of us".

Jonas Tunestål, managing director and CEO

Operational improvements and price increases

April – June 2022

Net sales amounted to MSEK 3,056 (2,564) in the second quarter of 2022. At constant exchange rates net sales increased by 19 percent.
Operating income (EBIT) decreased by 44 percent to MSEK 42 (75), corresponding to a margin of 1.4 (2.9) percent.
Income for the period amounted to MSEK 7 (41). Earnings per share amounted to SEK 0.07 (0.61).
Operating cash flow was MSEK 135 (57).

January – June 2022

Net sales amounted to MSEK 5,848 (5,033) in the first half of 2022. At constant exchange rates net sales increased by 16 percent.
Operating income (EBIT) decreased by 52 percent to MSEK 79 (163), corresponding to a margin of 1.3 (3.2) percent.
Income for the period amounted to MSEK 17 (95). Earnings per share amounted to SEK 0.18 (1.44)
Operating cash flow was MSEK 141 (166).

Significant events in the quarter

The result is negatively affected by write-downs of fixed assets in Ireland of MSEK 26, costs related to the fire incident in Farre of MSEK 10 and a provision for compensation linked to an old contract dispute in Finland of MSEK 19.
The war in Ukraine has continued to contribute to uncertainty regarding food supply in Europe, where Scandi Standard is primarily affected by increased prices for input goods as well as energy and transport. During the quarter, further price increases have been implemented and have now largely compensated for the cost inflation the company faced. In combination with previously initiated measures, this has resulted in a clear improvement in the operational result.
In May 2022, a binding loan agreement was signed regarding sustainability-linked credit facilities totaling MSEK 2,090 with a term of five years.

Significant events after the close of the quarter

At the extraordinary general meeting on August 22, Paulo Gaspar was elected as new board member. Paulo Gaspar represents Grupo Lusiaves, which is Scandi Standard's second largest shareholder.

Key metrics

MSEK	Q2 2022	Q2 2021	Δ	H1 2022	H1 2021	Δ	R12M	2021
Net sales	3,056	2,564	19%	5,848	5,033	16%	10,915	10,101
EBITDA	172	167	3%	308	348	-11%	559	598
Operating income (EBIT)	42	75	-44%	79	163	-52%	138	222
EBITDA margin %	5.6%	6.5%	-0.9ppt	5.3%	6.9%	-1.6ppt	5.1%	5.9%
EBIT margin %	1.4%	2.9%	-1.6ppt	1.3%	3.2%	-1.9ppt	1.3%	2.2%
Non-comparable items1)	0	-4	-100%	-	-4	-100%	13	9
Adjusted EBITDA1)	172	171	0%	308	352	-12%	545	589
Adjusted operating income (Adj. EBIT)1)	42	79	-47%	79	167	-53%	125	213
Adjusted EBITDA margin1) %	5.6%	6.7%	-1.1ppt	5.3%	7.0%	-1.7ppt	5.0%	5.8%
Adjusted EBIT margin1) %	1.4%	3.1%	-1.7ppt	1.3%	3.3%	-2.0ppt	1.1%	2.1%
Income after finance net	18	51	-65%	34	123	-72%	52	140
Income for the period	7	41	-82%	17	95	-82%	25	103
Earnings per share, SEK	0.07	0.61	-88%	0.18	1.44	-88%	0.34	1.60
Return on capital employed %	3.2%	7.9%	-4.6ppt	3.2%	7.9%	-2.0ppt	3.2%	5.2%
Return on equity %	1.1%	10.1%	-9.0ppt	1.1%	10.1%	-4.4ppt	1.1%	5.5%
Operating cash flow	135	57	136%	141	166	-15%	322	347
Net interest-bearing debt	1,949	1,967	-1%	1,949	1,967	-1%	1,963	1,980
NIBD/Adj. EBITDA	3.6	2.6	37%	3.6	2.6	37%	3.6	3.4
Lost time injuries (LTI) per million hours worked	28.4	39.5	-28%	28,2	36.3	-22%	35.1	39.2
Feed efficiency (kg feed/live weight)	1.50	1.52	-1%	1.50	1.52	-1%	1.52	1.52

1) Restated non-comparable items. see note 6.

CEO Comments

The second quarter of the year was also influenced by the instability in Europe and volatile prices on input goods, however, we can conclude that Scandi Standard has managed to handle the development well. During the recent quarters, price adjustments have been implemented in order to meet the strong cost inflation. Our earnings have previously been significantly affected by the lead times for these adjustments, however, during the end of the second quarter, the price increases have largely compensated for the cost inflation the company faced. In combination with previously initiated measures, this has resulted in a clear improvement in the operational result.

The war in Ukraine will continue to be the single largest uncertainty factor when it comes to cost inflation. Considering the volatility in the market, we have adjusted the periodicity of our negotiations, and discussions that previously took place once or twice a year now occur more frequently. This is positive for a well-functioning price development, which reduces the risk for us, our growers, customers as well as the end consumer. Monitoring the development and ensuring the right price levels on our products will continue to be of the highest priority going forward.

As expected, we see a positive trend during the quarter where several of the measures that were previously initiated are starting to yield results. Scandi Standard's net sales during the quarter were MSEK 3,056 (2,564). The 19 percent growth was primarily driven by the abovementioned price adjustments and by improved export prices. Slaughter volumes have been temporarily reduced as planned, and at the same time, inventory was reduced during the quarter. The operating income was MSEK 42 (75).

Net sales in the Ready-to-cook segment amounted to MSEK 2,199 (1,943) during the quarter, corresponding to a growth of 13 percent. Despite implemented price increases, operating income decreased by MSEK 81 to MSEK -16 (65), negatively affected by write-downs of fixed assets and a reservation for compensation linked to an old contract dispute, in total MSEK 45.

The improvement in the Ready-to-eat segment continued and net sales increased by 40 percent to MSEK 748 (536) and operating income increased by 46 percent to MSEK 51 (35) during the quarter, despite the fire incident in April in the segment's largest production facility. As previously, the development was driven by increased sales in the Foodservice sales channel following the removal of pandemic related restrictions as well as by successful product launches and a continued high demand in the Retail sales channel. Investments to further increase the production capacity at the company's largest production plant for Ready-to-eat products in Farre, Denmark is ongoing.

During the second quarter 2022, export prices continued to improve, driven by reduced chicken production in Europe and increased demand within the restaurant industry worldwide.

Ready-to-cook Denmark reported an operating income of MSEK -30 during the quarter, an improvement compared to previous quarters. Increased export prices are one driving factor. In parallel, the work on implementing a new strategy for slow growing birds with the goal of meeting existing demand with improved profitability is ongoing and includes among other things a revised mix of slow growing and conventional birds and an adjusted cost base. Given the current challenging market conditions, we might not see further material financial benefits until 2023. It is pleasing to see that the total operation in Denmark, including Ready-to-eat, is now delivering positive results for the first time in seven quarters.

1) Pro forma including Manor Farm

2) Recalculated for IFRS16

Despite the low result, operating cash flow during the quarter was MSEK 135 (57), including capital expenditure of MSEK 44. Net interest-bearing debt (NIBD) was MSEK 1,949 by the end of the quarter, a reduction of MSEK 84 from the first quarter.

Scandi Standard follows the lower investment plan for 2022 of approximately MSEK 330, as previously communicated. We prioritise investments for profitable growth within the Ready-to-eat segment as well as the first phase of a three-year rollout of a new ERP system. The new five-year credit facilities agreement entered into during the second quarter secures a stable financial foundation for the future.

The sustainability indicators antibiotics usage and foot pad score point in the wrong direction during the quarter, mainly linked to an external supplier in Ireland. A number of measures have been initiated to regain the previous improvement curve.

For Scandi Standard, sustainability is not a separate strategy, but part of our DNA. Therefore, it was particularly pleasing to receive the new research results from the research institute RISE and the Swedish industry organisation Svensk Fågel, which shows that the climate footprint from Swedish chicken has decreased by almost 20 percent over the past ten years. As part of Scandi Standard's systematic climate work, we also collaborate with the climate specialist the Carbon Trust in order to map the climate impact of our own products on all our markets in detail. As a market leader, it is important to lead the way for a development towards increased transparency that makes it easier for end consumers to make informed decisions. The mapping is now completed and certified and constitutes a solid knowledge base for our continued efforts within the climate area.

Over the past few months, I have had the privilege of getting to know our business in depth. I am convinced that, despite the prevailing macro situation, the company has good opportunities to deliver on a return to normalised profitability during the second half of 2022. There are several factors in the market working in favour of Scandi Standard and our healthy and climate-smart protein. Chicken has a shorter production cycle and cost increases have hence been realized at a faster pace than for example beef and pork. As the cost increases also affect other protein sources, we expect a market tailwind due to more favourable competitive conditions. At the same time, price awareness among end consumers is expected to increase as the effects of the ongoing price inflation impacts households even stronger.

In the longer term, there is a great potential in increasing the value per bird processed. It will be essential to establish a new stable level of earnings beyond the margins reported during 2015–2020. The transition requires additional focus on the right culture, governance and leadership, on efficiency throughout the entire value chain, on developing the product portfolio in order to improve the yield from our input materials as well as on our positioning, where sustainability is an important common denominator. The work within these four strategic focus areas has already been initiated, but change takes time. I chose Scandi Standard because I saw the company's inherent possibilities. These first months as CEO have strengthened my belief that we have a positive journey ahead of us.

Stockholm, 25 August 2022

Jonas Tunestål, Managing director and CEO

Group results, financial position and cash flow April – June 2022

Net sales amounted to MSEK 3,056 (2,564). At constant exchange rates, net sales increased by 19 percent. Net Sales to the Retail sales channel increased by 8 percent compared to the corresponding quarter previous year, while net sales to Foodservice sales channel increased by 48 percent affected by removed restrictions following the Covid-19 pandemic. Export sales also increased sharply in the quarter in line with rising prices in the international market.

Operating income (EBIT) for the Group amounted to MSEK 42 (75), corresponding to an operating margin (EBIT margin) of 1.4 (2.9) percent. Adjusted operating income (adj. EBIT) was in line with operating income (EBIT) as there were no non-comparable items reported in the quarter.

The decrease in results was mainly driven by lower results in Ready-tocook, partly driven by costs related to the write-downs of fixed assets in Ireland, costs related to the fire incident in Farre and a provision for compensation linked to an old contract dispute in Finland. Ready-to-cook business in Denmark continues to burden the result, even though the group-wide improvement program starts to gain effect with financials in a positive direction.

The Ready-to-eat business contributed positively to the results with a 40 percent net sales growth compared to same quarter previous year. Other segments also improved compared to the previous year, where ingredients have been positively affected by an improved price picture.

Finance net for the Group of MSEK -24 (-24) related to interest expenses for interest-bearing liabilities of MSEK -13 (-9), interest on leasing of MSEK -3 (-3), and currency effects/other items of MSEK -8 (-12).

Tax expenses for the Group amounted to MSEK -11 (-10) corresponding to an effective tax rate of approximately 59 (20) percent. The increased tax rate in 2022 was mainly explained by the mix of tax rates between the different countries and that no deferred tax asset was booked for Finland in the quarter.

Income for the period for the Group decreased by 82 percent to MSEK 7 (41). Earnings per share were SEK 0.07 (0.61).

Net interest-bearing debt (NIBD) for the Group was MSEK 1,949, a decrease by MSEK 84 from 31 March 2022. Operating cash flow in the quarter amounted to MSEK 135 (57) positively affected by higher EBITDA and by a low capital expenditure as the investment rate remains at a very low level in order to create financial flexibility. Working capital also developed positively in the quarter driven by lower inventory.

Total equity attributable to the owners of the parent company as of June 30, 2022, amounted to MSEK 2,069 (1,895). The equity to assets ratio amounted to 29.8 (29.2) percent. Return on equity was 1.1 (10.1) percent.

The financial target for the Group's adjusted EBITDA margin is to exceed 10 percent in the medium term During the last twelve-month period, the company's adjusted EBITDA margin amounted to 5.6 percent, which is below the year 2021 level, and below the company's target.

The financial target for the Group´s net interest-bearing debt in relation to adjusted EBITDA is 2.0-2.5x. The outcome as of June 30, 2022, was 3.6x (2.6x), which was above the target range for the Group.

Net Sales and Operating Income (EBIT)2)

MSEK	Q2 2022	Q2 2021	R12M	2021
Net sales	3,056	2,564	10,915	10,101
EBITDA	172	167	559	598
Depreciation	-117	-80	-176	-328
EBITA	55	88	383	270
Amortisation	-13	-12	-26	-50
EBIT2)	42	75	138	222
EBITDA margin, %	5.6%	6.5%	5.1%	5.9%
EBITA margin, %	1.8%	3.4%	3.5%	2.7%
EBIT margin, %	1.4%	2.9%	1.3%	2.2%
Non-comparable items1)	0	-4	13	9
Adj. EBITDA1)	172	171	545	589
Adj. EBIT1)	42	79	125	213
Adj. EBITDA margin, %1)	5.6%	6.7%	5.0%	5.8%
Adj. EBIT margin, %1)	1.4%	3.1%	1.1%	2.1%
Chicken processed (tonne lw) 3)	88,639	100,586	380,020	393,369
EBIT/kg	0.5,	0.7	0.3	0.6

1) Restated non-comparable items. see note 6

2) For specific explanatory items, see note 7.

3). Live Weight, tonnes

Finance net and tax expenses

MSEK	Q2 2022	Q2 2021	R12M	2021
Finance income	0	0	1	2
Finance expenses	-24	-24	-87	-83
Finance net	-24	-24	-87	-82
Income after finance net	18	51	52	140
Income tax expenses	-11	-10	-27	-37
Income tax expenses %	-59%	-20%	-52%	-26%
Income for the period	7	41	25	103
Earnings per share, SEK	0.07	0.61	0,34	1.60

Net-interest-bearing debt (NIBD)

MSEK	Q2 2022	Q2 2021	R12M	2021
Opening balance NIBD	2,034	1,941	1,967	1,933
EBITDA	172	167	558	598
Change in working capital	27	0	42	162
Net capital expenditure	-44	-89	-174	-306
Other operating items	-19	-22	-104	-108
Operating cash flow	135	57	322	347
Paid finance items, net	-19	-17	-70	-69
Paid tax	-23	-27	-52	-56
Dividend	0	-81	-0	-81
Business combinations	-	-	-159	-171
Other items1)	-9	43	-24	-17
Decrease (+) / increase (-) NIBD	84	-25	17	-47
Closing balance NIBD	1,949	1,967	1,949	1,980

1) Other items mainly consist of effects from changes in foreign exchange rates and net change of leasing assets

Financial targets	Q2 2022	Q2 2021	R12M	2021	Target
Adj. EBITDA margin, %	5.6%	6.7%	5.2%	5.8%	10%
NIBD/Adj. EBITDA	3.6x	2.6x	3.6x	3.4x	2.0-2.5x

1) Target for Net sales and dividend is measured and evaluated on annual basis

Overview – segment consolidation and KPIs

	Ready-to-cook 1)		Ready-to-eat 2)		Other 3)		Total
MSEK unless stated otherwise	Q2 2022	Q2 2021	Q2 2022	Q2 2021	Q2 2022	Q2 2021	Q2 2022	Q2 2021
Net sales	2,199	1,943	748	536	109	85	3,056	2,564
EBITDA	96	141	64	47	12	-21	172	167
Depreciation	-99	-64	-13	-12	-5	-4	-117	-80
EBITA	-3	77	51	35	7	-24	55	88
Amortisation	-13	-12	-	-	-	0	-13	-12
EBIT	-16	65	51	35	7	-24	42	75
EBITDA margin, %	4.3%	7.3%	8.5%	8.7%	11.6%	-24.3%	5.6%	6.5%
EBITA margin, %	-0.1%	4.0%	6.8%	6.5%	6.2%	-28.4%	1.8%	3.4%
EBIT margin, %	-0.7%	3.3%	6.8%	6.5%	6.3%	-28.4%	1.4%	2.9%
Non-comparable items 4)	-	-	-	-	-	-4	-	-4
Adj. EBITDA4)	96	141	64	47	12	-17	172	171
Adj. EBIT4)	-16	65	51	35	7	-20	42	79
Adj. EBITDA margin, %4)	4.3%	7.3%	8.5%	8.7%	11.6%	-19.6%	5.6%	6.7%
Adj. EBIT margin, %4)	-0.7%	3.3%	6.8%	6.5%	6.3%	-23.7%	1.4%	3.1%
Capital employed							4,463	4,230
Return on capital employed							3,2%	7,9%
Chicken processed (LW) 5)							88,639	100,586
Net sales/kg							34,5	25,5
EBIT/kg							0,5	0,7
Net sales split
Sweden	666	535	180	114	21	14	868	663
Denmark	423	382	462	344	54	42	938	767
Norway	398	371	94	73	5	3	497	448
Ireland	525	507	3	1	21	20	549	527
Finland	187	148	9	4	7	6	204	158
Total Net sales per country	2 199	1 943	748	536	108	85	3,056	2,564
Retail	1,668	1,560	146	123	6	4	1,820	1,687
Export	184	121	57	47	14	10	256	178
Foodservice	208	139	502	340	1	2	711	481
Industry / Other	140	123	42	26	87	69	268	218
Total Net sales sales channel	2,199	1,943	748	536	108	85	3,056	2,564
Chilled	1 735	1 606
Frozen	464	337
Total Net sales sub segment	2 199	1 943
LTI per million hours worked6)	31.0	44.1	15.1	5.8			28.4	39.5
Use of antibiotics (% of flocks treated)	11.3	3.9					11.3	3.9
Animal welfare indicator (foot score)7)	12.9	6.2					12.9	6.2
CO2 emissions (g CO2e/kg product)8)							63.3	71.9
Critical complaints9)	0	1	0	2	0	0	0	3
Feed efficiency (kg feed/live weight)10)	1.50	1.52					1.50	1.52

1) Includes feed in Ireland, hatching in Sweden, 100% consolidation of the 51% owned entity Rokkedahl in Denmark. Net sales for the segment Ready-to-cook includes the external net sales

2) Net sales for the segment Ready-to-eat includes the external net sales. Operative result for the segment includes the integrated result for the group without internal margins

3) Other consist of Ingredients, business and group cost, see note 2 for definition of Other.

4) Adjusted for non-comparable items. see note 6

5) Live Weight, tonnes

6) Injuries lead to absence at least the next day, per million hours worked

7) Foot score; leading industry indicator for animal welfare. The score is measured according to industry standard, meaning assessing 100 feet per flock independent of flock size

8) g CO2e/kg product. Location-based method used for calculations. Emission factors from DEFRA 2020 and IEA 2018–2020. Includes 90% of Scope 1 and Scope 2 emissions for Scandi Standard Group, with exception for owned and leased vehicles and energy and electricity consumed at our sites Harlösa, SweHatch, Rokkedahl och Ski

9) Includes recall from customers or consumers, presence of foreign objects in the product, allergens or incorrect content or sell by dates 10) Feed conversion rate (kg feed/kg live weight). Includes only conventional chickens (approximately 85% of the Group's chicken). The figures are based on grower's reported figures in all countries except in Sweden, where figures are country averages from Svensk Fågel

Note, adjusted operating income in line with operating income as no noncomparable items was reported in the periods

Sustainability performance

Focus areas and development

Scandi Standard's vision is Better Chicken for a Better Life. We contribute to sustainable food production by providing healthy and innovative chicken products produced in a responsible and resource-efficient way. Expectations and requirements on Scandi Standard's sustainability work from different stakeholders are increasing and are to a larger extent linked to operational and financial success for the Group – with the ambition to be a sustainability leader in the global poultry space.

Second quarter 2022

The lost time injury frequency rate (LTIFR) during the first quarter 2022 was 28.4 LTIs per million hours worked. This is 28 percent lower than the second quarter 2021 and considerably lower than the full year result for 2021. The work to further improve is ongoing, and the target is to reach an average level of 25.0 LTIs per million hours worked by the end of the fourth quarter 2022 at the latest.
During the first half of 2022, use of antibiotics in the Group has been higher than previous years, however still low in an international comparison. In the second quarter, 11.3 percent of flocks were treated, compared to 3.9 percent in the corresponding quarter in 2021. The increase was driven by the Irish antibiotics use, while still remaining to be close to zero in the other countries. The increase is cause by a decline in quality of day-old chicks and, due to strict Covid-restrictions in Ireland, the possibility for advisory visits has been very limited. Since the restrictions has been lifted, Scandi Standard has had its expert on site at the external hatchery, identifying root causes and working actively with corrective actions. The expectation is to see a gradual improvement during the second half of the year, towards the previous improvement trend.
Foot pad condition (foot score) is a leading industry indicator for animal welfare, a low score equates good foot health, where values below 15−20 are good in an international comparison. The result for the second quarter 2022 was 12,9 points which is a decline compared to the corresponding quarter 2021, when the result was 6,2. Also this is partly due to a decline in Ireland due to limitations in advisory visits during Covid-restrictions, as well as an increased share of soy in the feed due to impact of local supply and prices on primarily wheat and corn. We expect this situation to also improve during the second half of the year since the local supply of wheat looks promising.
Decreasing the climate impact of its own operations as well as across the value chain is a key priority at Scandi Standard. The result for the second quarter with regards to carbon intensity in own operations was 63,3 g CO2e / kg product which was 12 percent lower than in the corresponding quarter in 2021. The decrease is caused by lower consumption of natural gas as well as an update to emission factors where for example district heating has been updated to use the specific production prerequisites in Sweden and Denmark.
Critical complaints remain at a very low level, no new complaint was reported during the second quarter 2022.

Scandi Standard has calculated the carbon footprint of its products

During the last 18 months, as part of our long-term climate strategy, we have worked together with climate specialist Carbon Trust to map our climate impact on product level in all our markets. The result, together with the work to develop climate targets in line with the Science Based Targets initiative, will form the basis to lower our climate impact and meet our climate targets. In total across the Group, the carbon footprint has been calculated for 282 individual products, from farm to fork. There are several methods to set boundaries in carbon footprint calculations. We have actively chosen a comprehensive approach, so called cradle-to-grave, to capture the effects across the value chain and to develop a better and more holistic basis for decision-making related to where our efforts will be focused going forward. As a market leader, we also consider it our responsibility to lead the way towards increased transparency, making it easier for the end consumer to make informed decisions.

Sustainability Overview	Q2 2022	Q2 2021	Δ	H1 2022	H1 2021	Δ	2021	2022 Target
LTI per million hours worked1)	28.4	39.5	-28%	28.2	36.3	-22%	39.2	25.06)
Use of antibiotics (% of flocks treated)	11.3	3.9	188%	11.2	5.0	124%	5.2	4.7
Animal welfare indicator (foot score)2)	12.9	6.2	109%	13.5	10.4	30%	9.3	8.4
CO2 emissions (g CO2e/kg product)3)	63.3	71.9	-12%	67.7	76.8	-12%	79.9	75.9
Critical complaints4)	0	3	-100%	1	4	-75%	7	0
Feed efficiency (kg feed/live weight)5)	1.50	1.52	-1%	1.50	1.52	-1%	1.52	1.50

1) Injuries lead to absence at least the next day, per million hours worked

2) Foot score; leading industry indicator for animal welfare. The score is measured according to industry standard, meaning assessing 100 feet per flock independent of flock size

3) g CO2e/kg product. Location-based method used for calculations. Emission factors from Energiföretagen 2020, Energistyrelsen 2020 and AIB 2020. Includes 80% of Scope 1 and Scope 2 emissions for Scandi Standard Group, with exception for owned and leased vehicles, technical gases, and energy and electricity consumed at our sites Harlösa, SweHatch,

Rokkedahl och Ski

4) Includes recall from customers or consumers, presence of foreign objects in the product, allergens or incorrect content or sell by dates

5) Feed conversion rate (kg feed/kg live weight). Includes only conventional chickens (approximately 85% of the Group's chicken). The figures are based on grower's reported figures in all countries except in Sweden, where figures are country averages from Svensk Fågel

6) The target for LTIFR is set to be achieved in Q4 2022, and corresponds to 38% decrease in the LTIFR

Segment: Ready-to-cook

MSEK	Q2 2022 Q2 2021		Δ	R12M	2021
Net sales	2,199	1,943	13%	7 976	7,611
EBITDA	96	141	-32%	311	424
Depreciation	-99	-64	54%	-304	-266
EBITA	-3		77 -104%	7	158
Amortisation	-13	-12	4%	-50	-50
EBIT	-16		65 -125%	-42	110
EBITDA margin, %	4.3%		7.3% -2.9ppt	3.9%	5.6%
EBITA margin, %	-0.1%		4.0% -4.1ppt	0.1%	2.1%
EBIT margin, %	-0.7%		3.3% -4.1ppt	-0.5%	1.4%
Non-comparable items1)	-	-	-	-	-
Adj. EBITDA1)	96	141	-32%	311	424
Adj. EBIT1)	-16		65 -125%	-42	110
Adj. EBITDA margin, %1)	4.3%		7.3% -2.9ppt	3.9%	5.6%
Adj. EBIT margin, %1)	-0.7%		3.3% -4.1ppt	-0.5%	1.4%
LTI per million hours worked2)	31.0	44.1	-30%	38.4	43.2
Animal welfare indicator3)	12.9	6.2	109%	11.0.	9.3
Critical complaints4)	0		1 -100%	0	1

1) Restated non-comparable items, see note 6

2) Injuries lead to absence at least the next day, per million hours worked

3) Foot score; leading industry indicator for animal welfare

4) Includes recall from customers or consumers, presence of foreign objects in the product, allergen or incorrect content or sell-by dates

Net sales within the segment Ready-to-cook (RTC) increased by 13 percent from MSEK 1,943 to MSEK 2,199 MSEK. In fixed currency, the increase in net sales was 11 percent, driven by price increases and better Export market conditions. For Retail, growth amounted to 7 percent.

Sweden is the main contributor with an increased net sales of 25 percent versus the same period last year.

As planned slaughtered volumes were reduced by 9 percent versus 2021, mainly driven by Denmark and Ireland, while Sweden returns a volume growth.

Sales of frozen products are increasing by 38 percent, while the corresponding figure for chilled landed at 8 percent. This is partly explained by the strongest growth within the quarter in Foodservice and Export, where net sales are more based on frozen goods.

During the quarter, export to Asia has stepwise ramped up as restrictions related to bird flu have been removed.

Operating income (EBIT) for RTC decreased by MSEK 81 to MSEK -16 (65) corresponding to an operating income margin (EBIT margin) of -0.7 (3.3) percent.

Cost increases in supplies and energy are better compensated for by the price increases implemented during the second quarter of 2022 in comparison with the first quarter and it is costs related to write-downs of fixed assets in Ireland of MSEK 26 and a provision for compensation linked to an old contract dispute in Finland of MSEK 19 that are the biggest drivers to the weak quarterly result.

RTC Denmark delivered a negative result of -30 MSEK for the second quarter, which is an improvement of 21 MSEK versus the first quarter of 2022, as a result of the revised strategy and improved export prices.

Adjusted operating income (adjusted EBIT) was in line with operating income (EBIT) as no non-comparable items were reported in the second quarter.

Lost time injuries (LTI) for the RTC business amounted to 31.0 per million hours worked during the second quarter, which is an improvement of 30 percent compared to the corresponding quarter last year, this shows that implemented measures still deliver expected results.

No critical complaint was reported for RTC during the second quarter.

Net Sales per Country, product type and sales channel. Change versus corresponding quarter previous year in brackets ()

Segment Ready-to-cook (RTC): is the Group's largest product category and consists of products that are either chilled or frozen, that have not been cooked. These include whole birds, cuts of meat, deboned and seasoned, or marinated products. Products are made available mainly via Retail and Foodservice sale channels to both domestic and export markets. The segment comprises RTC processing plants in all five countries, the feed business in Ireland, egg production in Norway, and the hatching business in Sweden. Net sales for the segment consist of the external net sales.

Segment: Ready-to-eat

MSEK		Q2 2022 Q2 2021	Δ	R12M	2021
Net sales	748	536	39%	2 523	2 112
EBITDA	64	47	36%	214	187
Depreciation	(13)	(12)	5%	(50)	(49)
EBITA	51	35	47%	163	138
Amortisation	-	-	-	-	-
EBIT	51	35	47%	164	138
EBITDA margin, %	8.5%	8.7%	-0.2	8.5%	8.8%
EBITA margin, %	6.8%	6.5%	0.4	6.5%	6.5%
EBIT margin, %	6.8%	6.5%	0.4	6.5%	6.6%
Non-comparable items1)	-	-	-	-	-
Adj. EBITDA1)	64	47	36%	214	187
Adj. EBIT1)	51	35	47%	164	138
Adj. EBITDA margin, %1)	8.5%	8.7%	-0.2	8.5%	8.8%
Adj. EBIT margin, %1)	6.8%	6.5%	0.4	6.5%	6.6%

LTI per million hours
worked2)	15.1	5.8	160%	18.8	13.6
Critical complaints3)	0		2 -100%	4	6

1) Restated non-comparable items. see note 6

2) Injuries lead to absence at least the next day, per million hours worked

3) includes recall from customers or consumers, presence of foreign objects in the product, allergens or incorrect content or sell by dates

Net sales within the segment Ready-to-eat (RTE) increased by 39 percent from MSEK 536 to MSEK 748. In fixed currency, the increase was 36 percent.

Sweden showed strong growth during the second quarter with a net sales increase of 57 percent and is now representing 24 percent of the RTE business. On top of the price/mix improvements, Sweden is also growing 25 percent on volume, much driven by sales success within quick service restaurants (QSR)l.

Also, Denmark and Norway delivered significant growth in price and volume. Volumes in Norway are up 16 percent and Denmark 2 percent in comparison with the corresponding period last year.

The total RTE volumes demonstrate a bold recovery post-covid-19 and are now 18 percent higher than volumes for the second quarter of 2019.

Net sales within Foodservice grew by 49 percent and does now represent 67 percent of the RTE net sales. The growth derives from changes in consumer behaviour within quick service restaurants (QSR) in the Nordics and Northern Europe where consumers tend to opt more for chicken products versus other sources of protein.

Retail sales increased by 19 percent and represent 20 percent of total RTE sales, while Export grew by 21 percent and now stand for 8 percent of the RTE business.

(35) corresponding to an operating margin (EBIT margin) of 6.8 (6.5) percent. The growth in the quarter contributed positively to the operating income.

The quarterly result is burdened by MSEK -10 related to the fire in our main RTE production facility in Farre, Denmark at the beginning of April, mainly related to lost sales. Further improvements of Farre will be done.

The price increases during the second quarter of 2022 cover a bigger share of the cost increases of supplies and energy that have burdened the business over the last quarters. Also, a product mix transition to higher value products contributes to the positive result.

Other operating costs increased with MSEK 5, driven by higher sales and marketing spending to stimulate innovation and growth.

Also, the operating margin for the segment is clearly exceeding the corresponding period in 2019 (5,5 percent) and 1 percent higher than the first quarter of 2022.

Adjusted operating income (adjusted EBIT) was in line with operating income (EBIT) as no non-comparable items were reported in the second quarter 2022.

Lost time injuries (LTI) for the RTE business amounted to 15.1 per million hours worked during the second quarter, which was higher than the corresponding quarter the previous year, but an improvement compared to the first quarter of 2022. The number of hours worked within the RTE business is relatively low in comparison to RTC, hence also a smaller number of accidents influences the LTIFR. Looking at the whole Group, the LTIFR has improved by 22 percent in the second quarter compared to the corresponding quarter last year.

No critical complaints were reported during the second quarter.

Segment Ready-to-eat (RTE): consists of products that have been cooked during processing and are ready to be consumed, either directly or after being heated up. Products range from grilled and pre-sliced chicken fillets with different seasoning to chicken nuggets. Sales are mainly to Retail and Foodservice sales channels, and part of the production is exported. The segment comprises RTE processing plants in Sweden, Denmark and Norway, combined with third-party production. Net sales for the segment consist of the external net sales. The operational result includes the integrated result for the group without internal margins.

Segment: Other/ Ingredients and group cost

Ingredients

Net sales within Ingredients amounted to MSEK 108 (85) with an operating income (EBIT) of MSEK 19 (-1). The improvement in operating income (EBIT) was mainly driven by increased sales prices.

Group cost

Group costs of MSEK -12 (-24) were recognised in the Group operating income (EBIT).

Other

Personnel

The average number of fulltime employees in the second quarter 2022 was 3,173 (3,275) and 3,119 (3,223) in the first half of the year.

Government support

During the second quarter 2022 an amount of MSEK 1 (2) of governmental support has been recognized in profit. The received government support refers to compensation for increased sick leave.

Average exchange rates

	2022–06	2021–06
DKK/SEK	1.41	1.36
NOK/SEK	1.05	1.00
EUR/SEK	10.48	10.13

Group results, financial position and cash flow January – June 2022

Net sales amounted to MSEK 5,848 (5,033). At constant exchange rates net sales increased by 16 percent. The largest driver is price increases. Net sales to Retail sales channel decreased while net sales to Food service showed strong increase after restrictions related to Covid-19 pandemic were lifted. Sales to the Export channel also increased.

Operating income (EBIT) for the Group amounted to MSEK 79 (163), corresponding to an operating margin (EBIT margin) of 1.3 (3.2) percent. Adjusted operating income (adj. EBIT) was in line with operating income (EBIT) as there were no non-comparable items reported in the quarter.

The decrease in operating income is mainly driven by lower results in Ready-to-cook, while Ready-to-eat has improved its results. The operating income within Ready-to-cook was affected by costs related to the write-down of fixed assets in Ireland, costs related to the fire incident in Farre and a provision for compensation linked to an old contract dispute in Finland.

Finance net for the Group amounted to MSEK -45 (-40) related to interest expenses for interest-bearing liabilities of MSEK -22 (-19), interest on leasing of MSEK -6 (-6) and currency/other items of MSEK - 16 (-16).

Tax expenses for the Group amounted to MSEK 17 (27) corresponding to an effective tax rate of approximately 51 (22) percent. The increased tax rate in 2022 was mainly explained by the mix of tax rates between the different countries and that no deferred tax asset was booked for Finland in the first half year.

Income for the period for the Group decreased by 82 percent to MSEK 17 (95). Earnings per share was SEK 0.18 (1.44).

Net interest-bearing debt (NIBD) for the Group was MSEK 1,949, a decrease by MSEK 31 from the 31st of December 2021. The operating cash flow for the first half year decreased to MSEK 141 (166) negatively affected by lower EBITDA and increased working capital driven by higher trade receivables and positively affected by a low capital expenditure as the investment rate remains at a very low level in order to create financial flexibility.

The financial target for the Group's adjusted EBITDA margin is to exceed 10 percent in the medium term During the last twelve-month period, the company's adjusted EBITDA margin amounted to 5.3 percent, which is below the year 2021 level, and below the company's target.