"It has been another challenging quarter but the implementation of the improvement program including continuous focus on consumer value and the trends we see strengthen our assessment of a gradual improvement in earnings during 2022"

Otto Drakenberg, Interim managing director and CEO

Focus on price increases and improvement program

October – December 2021

Net sales amounted to MSEK 2,435 (2,393) in the fourth quarter 2021. At constant exchange rates net sales increased by 1 percent.
Operating income (EBIT) decreased by 47 percent to MSEK 30 (56), corresponding to a margin of 1.2 (2.3) percent. Adjusted operating income (adj. EBIT)1) decreased by 96 percent to MSEK 3 (83), corresponding to a margin of 0.1 (3.5) percent.
Income for the period amounted to MSEK 4 (21). Earnings per share amounted to SEK 0.08 (0.32).
Operating cash flow was MSEK 69 (-23).

January – December 2021

Net sales amounted to MSEK 10,101 (9,940) in the year of 2021. At constant exchange rates net sales increased by 3 percent.
Operating income (EBIT) decreased by 37 percent to MSEK 222 (351), corresponding to a margin of 2.2 (3.5) percent. Adjusted operating income (adj. EBIT)1) decreased by 48 percent to MSEK 213 (410), corresponding to a margin of 2.1 (4.1) percent.
Income for the period amounted to MSEK 103 (208). Earnings per share amounted to SEK 1.60 (3.16).
Operating cash flow was MSEK 347 (476).

Significant events after the close of the quarter

▪ Jonas Tunestål will join the company as managing director and CEO on 1 April 2022.

Key metrics

MSEK	Q4 2021	Q4 2020	Δ	2021	2020	Δ
Net sales	2,435	2,393	2%	10,101	9,940	2%
EBITDA	125	147	-15%	598	699	-14%
Operating income (EBIT)	30	56	-47%	222	351	-37%
EBITDA margin %	5.1%	6.1%	-1.0ppt	5.9%	7.0%	-1.1ppt
EBIT margin %	1.2%	2.3%	-1.1ppt	2.2%	3.5%	-1.3ppt
Non-comparable items1)	26	-28	-	9	-59	-
Adjusted EBITDA1)	98	173	-43%	589	756	-22%
Adjusted operating income (Adj. EBIT)1)	3	83	-96%	213	410	-48%
Adjusted EBITDA margin1) %	4.0%	7.2%	-3.2ppt	5.8%	7.6%	-1.8ppt
Adjusted EBIT margin1) %	0.1%	3.5%	-3.3ppt	2.1%	4.1%	-2.0ppt
Income after finance net	8	33	-76%	140	260	-46%
Income for the period	4	21	-80%	103	208	-50%
Earnings per share, SEK	0.08	0.32	-74%	1.60	3.16	-49%
Return on capital employed %	5.2%	8.4%	-3.1ppt	5.2%	8.4%	-3.1ppt
Return on equity %	5.5%	11.5%	-6.0ppt	5.5%	11.5%	-6.0ppt
Operating cash flow	69	-23	-	347	476	-27%
Net interest-bearing debt	1,980	1,933	2%	1,980	1,933	2%
NIBD/Adj. EBITDA	3.4	2.6	31%	3.4	2.6	31%
Lost time injuries (LTI) per million hours worked	38.0	28.7	32%	39.2	31.0	26%
Feed efficiency (kg feed/live weight)	1.52	1.51	0%	1.52	1.52	0%

1) Restated non-comparable items. see note 6 and 8.

CEO Comments

Scandi Standards net sales during the fourth quarter 2021 were MSEK 2,435 (2,393), in line with the previous year. Operating income was MSEK 30 (56). The operating income was positively affected by items affecting comparability of MSEK 26 (-28).

The ready-to-cook segment has during the quarter been affected by a number of external and internal challenges. Net sales amounted to MSEK 1,789 and the operating income for the segment declined substantially to MSEK -32 (56). The operating income was, also in this quarter, negatively affected by significant price increases on several input factors, a continued challenging price situation in export markets as well as consequences from the measures taken to address the production challenges in Sweden and Ireland, in particular significant production reductions. The ready-to-cook segment in Denmark continue to make major losses and reported a negative operating income of MSEK -59 for the quarter.

The ready-to-eat segment reported a continued improvement with net sales for the quarter increasing 14 percent to MSEK 543 (476) with a slightly improved operating income. The development was driven by increased sales in the Foodservice sales channel and we note an increasing demand within this profitable segment. Scandi Standard has good capacity to meet the increasing demand during 2022, and in order to take advantage of growth opportunities, investments are planned to increase capacity further in Farre – the largest production plant for readyto-eat products.

Improvement program

The work within the group-wide improvement program that was initiated in the third quarter 2021 continued in the fourth quarter. The aim initially is to swiftly return Scandi Standard to profitability in line with the years 2016 to 2020 as well as to lay the foundation for long-term sustainable and profitable growth and returns. Scandi Standard is following a detailed action plan to significantly improve both commercial and operational efficiency on all markets. The focus in the fourth quarter was mainly on continued price adjustments in all countries, measures to improve profitability within the Ready-to-cook in Denmark, address the production challenges in Sweden and Ireland as well as cost reductions in the entire group.

Price adjustments

Scandi Standard's operating income for the fourth quarter is significantly affected by considerable cost increases on feed and other input goods. Successfully negotiated price increases to customer which will gradually become effective in the first quarter 2022 will to a large extent compensate for the effects on operating income due to cost increases.

Additional cost increases have emerged during the beginning of 2022 and renewed negotiations are currently ongoing with customers to compensate also for these. Scandi Standard's business model allows for fluctuations in input prices to be transferred to the customer and provides good possibilities to manage price and cost increases over time.

Improve profitability within Ready-to-cook Denmark

Ready-to-cook Denmark reported an operating income of MSEK -59 during the quarter. The negative outcome is mainly related to the implementation of the strategy for slow growing birds, low export prices and cost increases. We are now implementing, in close cooperation with our customers, comprehensive changes in the strategy for slow growing birds to meet a demand that is expected to grow. Significant staff reductions are also being made and the company is increasing the flexibility in its supplier contracts. The positive effects of these measures are expected primarily during second half of 2022.

1) Pro forma including Manor Farm

2) Recalculated for IFRS16

Addressing production challenges in Sweden and Ireland

As a part of the improvement program, Scandi Standard reduced the intake of birds for production in Sweden and Ireland with approximately 8 percent during the fourth quarter. This was to address the production challenges and ensure a good operational capability. The company has also initiated a structured process for early discovery of potential future deviations in the production plants. The reduced volume has had a negative impact on the operational income, but improved control. The production reduction has moreover created conditions for long-term operational improvement through more efficient working methods. The company's assessment is that the attention in the Swedish market regarding the production challenges has had a negative effect on the demand in the chicken category, but that the structural improvements that are now being implemented will strengthen the competitiveness of the Group's consumer brands over time.

Organisational changes and investments

As part of the work with the improvement program, Scandi Standard has carried out a number of personnel changes at management level in the company. New country managers have been appointed in Denmark, Ireland and Finland and the manager for the successful Norwegian market is also acting country manager for Sweden in order to strengthen the Swedish Business. Furthermore, the organisation for Sales and Operations Planning (S&OP) has been further developed and a restructuring of the organisation for Group Supply Chain and Group Operations is ongoing.

The current investment plan for 2022 is about MSEK 330 and will be continuously evaluated during the year. Under this framework, we have decided to prioritise facilitation of profitable growth within the Ready-toeat and commencement of a three year roll out of a new ERP system, which has a framework of MSEK 100 in 2022. The new ERP system will in the longer term drive efficiencies throughout the value chain by, among other things, harmonized business processes and an increased degree of automation throughout the group. New accounting principles regarding investments in cloud-based solutions may lead to a portion of the ERP investments being expensed. The Board has resolved not to propose a dividend for the financial year 2021.

Outlook

The effect of the improvement program this far and the trends we see strengthen our assessment on a gradual improvement in earnings during 2022. When the price increases on input factors now also are having an effect in categories with a longer production cycle such as beef and pork, we can also expect increased tailwinds from the market due to more favourable competitive conditions. The effect of the challenges that Scandi Standard faced in 2021 is expected to gradually diminish from the second quarter of 2022.

I am convinced that the new management that is now being formed has the right competence and prerequisites to continue Scandi Standard's development journey and that the powerful measures we are implementing will result in the expected outcome. I am looking forward to on the first of April, welcoming our new CEO Jonas Tunestål to a company that is significantly better equipped than before to take advantage of the full potential in the market.

Stockholm, 11 February 2022

Otto Drakenberg, Interim managing director and CEO

Group results, financial position and cash flow October – December 2021

Net sales amounted to MSEK 2,435 (2,393). At constant exchange rates net sales increased by 1 percent. Net Sales to Retail sales channel decrease with 5 percent, net sales to Food service sales channel increased with 17 percent as previous year was negatively affected by the Covid-19 pandemic.

Operating income (EBIT) for the Group amounted to MSEK 30 (56), corresponding to an operating margin (EBIT margin) of 1.2 (2.3) percent. The operating income included MSEK 26 (-28) of non-comparable items consisting of MSEK 26 (-28) in a decrease of earn-out debt resulting from the final purchase price payment relating to the acquisition of Manor Farm of MSEK 26 (-21). Adjusted operating income (adj. EBIT) amounted hereby to MSEK 3 (83), corresponding to an adjusted operating margin (adj. EBIT margin) of 0.1 (3.5) percent.

The decrease in results was mainly driven by lower results in Ready-tocook, among other due to price increases on feed as well as other input factors, a continued challenging Ready-to-cook business in Danmark, production reductions in Sweden and Ireland, and a continued challenging price situation in export markets due to bird flu.

Finance net for the Group of MSEK -22 (-23) related to interest expenses for interest-bearing liabilities of MSEK -9 (-8), interest on leasing of MSEK -3 (-2) and currency effects/other items of MSEK -10 (-12).

Tax expenses for the Group amounted to MSEK -3 (-12) corresponding to an effective tax rate of approximately 44 (35) percent. The increased tax rate 2021 was mainly explained by the mix of tax rates between the different countries.

Income for the period for the Group decreased by 80 percent to MSEK 4 (21). Earnings per share was SEK 0.08 (0.32).

Net interest-bearing debt (NIBD) for the Group was MSEK 1,980, an increase by MSEK 89 from the 30th of September 2021. Operating cash flow increased in the quarter to MSEK 69 (-23) negatively affected by lower EBITDA and positively affected by a higher positive change of working capital compared with the same quarter last year and a lower capital expenditure compared with the same quarter last year as the investment rate in the fourth quarter has been reduced in order to create financial flexibility. The total increase in net interest-bearing debt during the quarter of MSEK 89 (5) was, in addition to the higher operating cash flow, negatively affected by higher purchase price payments compared with corresponding quarter last year.

Total equity attributable to the owners of the parent company as of December 31, 2021, amounted to MSEK 1,951 (1,876). The equity to assets ratio amounted to 30.0 (29.4) percent. Return on equity was 5.5 (11.5) percent.

The financial target for the Group's adjusted EBITDA margin is to exceed 10 percent in the medium term. The outcome for the full year 2021 was 5.8 (7.6) percent, which was below the target for the Group.

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 December 31, 2021, was 3.4 (2.6), which was above the target range for the Group.

The financial target for the Group's net sales is an annual average organic growth in line with or above market growth. The outcome for the average organic growth (5 y CAGR) for the full year 2021 was 6 (6) percent, but the growth in 2021 was only 2 percent.

The financial tar et for the Group's dividend ratio is approximately 60 percent of profit for the year adjusted for non-comparable items on average over time. The outcome for the full year 2021 is that the Board proposes that no dividend be paid for the financial year 2021 in order to ensure continued financial flexibility.

Net Sales and Operating Income (EBIT)2)

MSEK	Q4 2021	Q4 2020	2021	2020
Net sales	2,435	2,393	10,101	9,940
EBITDA	125	147	598	699
Depreciation	-84	-82	-328	-300
EBITA	40	65	270	398
Amortisation	-12	-12	-50	-50
EBIT2)	30	56	222	351
EBITDA margin, %	5.1%	6.1%	5.9%	7.0%
EBITA margin, %	1.7%	2.7%	2.7%	4.0%
EBIT margin, %	1.2%	2.3%	2.2%	3.5%
Non-comparable items1)	26	-28	9	-59
Adj. EBITDA1)	98	173	589	756
Adj. EBIT1)	3	83	213	410
Adj. EBITDA margin, %1)	4.0%	7.2%	5.8%	7.6%
Adj. EBIT margin, %1)	0.1%	3.5%	2.1%	4.1%
Chicken processed (tonne lw) 3)	94,288	96,788	393,369	382,257

EBIT/kg 0.3 0.6 0.6 0.9

1) Restated non-comparable items. see note 6 and 8

2) For specific explanatory items, see note 7. 3). Live Weight, tonnes

Note, non-comparable items of MSEK -28 MSEK in the fourth quarter 2020 and MSEK 26 MSEK in the fourth quarter 2021, see note 6t

Finance net and tax expenses

MSEK	Q4 2021	Q4 2020	2021	2020
Finance income	1	0	2	0
Finance expenses	-23	-23	-83	-91
Finance net	-22	-23	-82	-90
Income after finance net	8	33	140	260
Income tax expenses	-3	-12	-37	-52
Income tax expenses %	-44%	-35%	-26%	-20%
Income for the period	4	21	103	208
Earnings per share, SEK	0.08	0.32	1.60	3.16

Net-interest-bearing debt (NIBD)

MSEK	Q4 2021	Q4 2020	2021	2020
Opening balance NIBD	1,891	1,929	1,933	2,200
EBITDA	125	147	598	699
Change in working capital	59	-85	162	143
Net capital expenditure	-68	-94	-306	-355
Other operating items	-46	9	-108	-10
Operating cash flow	69	-23	347	476
Paid finance items, net	-17	-16	-69	-76
Paid tax	4	-1	-56	-41
Dividend	-	-	-81	-
Business combinations	-136	-	-171	-104
Other items1)	-9	35	-17	12
Decrease (+) / increase (-) NIBD	-89	-5	-47	267
Closing balance NIBD	1,980	1,933	1,980	1,933

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

Financial targets	Q4 2021	Q4 2020	2021	2020	Target
Adj. EBITDA margin, %	4.0%	7.2%	5.8%	7.6%	10%
NIBD/Adj. EBITDA	3.4x	2.6x	3.4x	2.6x	2.0-2.5x

Overview – segment consolidation and KPIs

	Ready-to-cook 1)		Ready-to-eat 2)		Other 3)		Total
MSEK unless stated otherwise	Q4 2021	Q4 2020	Q4 2021	Q4 2020	Q4 2021	Q4 2020	Q4 2021	Q4 2020
Net sales	1,789	1,825	543	476	103	91	2,435	2,393
EBITDA	47	132	44	39	33	-24	125	147
Depreciation	-68	-65	-12	-11	-4	-5	-84	-82
EBITA	-21	67	31	28	30	-29	40	65
Amortisation	-12	-12	-	-	-	-	-12	-12
EBIT	-32	56	32	29	30	-29	30	56
EBITDA margin, %	2.6%	7.2%	8.1%	8.2%	32.4%	-26.1%	5.1%	6.1%
EBITA margin, %	-1.1%	3.7%	5.8%	5.8%	28.8%	-32.0%	1.7%	2.7%
EBIT margin, %	-1.8%	3.0%	5.8%	6.1%	28.9%	-31.6%	1.2%	2.3%
Non-comparable items 4)	-	-7	-	-	26	-21	26	-28
Adj. EBITDA4)	47	139	44	39	7	-5	98	173
Adj. EBIT4)	-32	63	32	29	3	-8	3	83
Adj. EBITDA margin, %4)	2.6%	7.6%	8.1%	8.2%	6.7%	-5.5%	4.0%	7.2%
Adj. EBIT margin, %4)	-1.8%	3.4%	5.8%	6.1%	3.2%	-9.1%	0.1%	3.5%
Capital employed							4,253	4,204
Return on capital employed							5.2%	8.4%
Chicken processed (LW) 5)							94,288	96,788
Net sales/kg							25.8	24.7
EBIT/kg							0.3	0.6
Net sales split
Sweden	489	498	115	101	19	18	624	617
Denmark	368	364	338	306	60	45	765	716
Norway	366	337	83	66	5	3	454	406
Ireland	428	506	2	0	11	19	441	525
Finland	138	120	5	3	7	6	151	129
Total Net sales per country	1,789	1,825	543	476	103	91	2,435	2,393
Retail	1,394	1,479	123	109	4	5	1,521	1,594
Export	131	123	44	47	12	17	187	188
Foodservice	139	117	348	300	1	2	488	418
Industry / Other	125	106	28	20	86	67	239	193
Total Net sales sales channel	1,789	1,825	543	476	103	91	2,435	2,393
Chilled	1,427	1,443
Frozen	362	383
Total Net sales sub segment	1,789	1,825
LTI per million hours worked6)	42.1	31.4	15.4	11.1			38.0	28.7
Use of antibiotics (% of flocks treated)	6.4	4.4					6.4	4.4
Animal welfare indicator (foot score)7)	9.4	9.2					9.4	9.2
CO2 emissions (g CO2e/kg product)8)							86.8	71.9
Critical complaints9)	0	2	3	1	0	0	3	3
Feed efficiency (kg feed/live weight)10)	1.52	1.51					1.52	1.51

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. Group cost was MSEK 19 (-28) in the quarter. The cost for the quarter was affected by non-comparable items of MSEK 26 (-21).

4) Restated non-comparable items. see note 6 and 8

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 fi ures are based on farmer's reported fi ures 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 at Scandi Standard

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 – the ambition is to be a sustainability leader in the global poultry space.

Fourth quarter 2021

Lost time injuries (LTI) per million hours worked remain at a high level during the fourth quarter 2021 (38,0) which is 30 percent higher than the corresponding quarter 2020, even if the result is slightly better than the second and third quarters 2021. The high numbers are mainly, as previously, driven by a high injury rate at the Swedish, Finnish, and Irish sites. A group-wide project is ongoing to improve governance and processes as well as in a structured way evaluate the root-cause of 2021 accidents and identify relevant measures of improvement.
The use of antibiotics in Scandi Standard's Nordic business is traditionally low, and the practices has been successfully exported to the Irish operations. During the fourth quarter 2021, use of antibiotics in the Group was 6.4 percent of treated flocks, which is a good result in an international comparison, but an increase compared to the corresponding quarter in 2020 when the result was 4.4 percent. The full year result 5.2 percent for 2021 is however almost 30 percent better than the full year result for and the Group's tar et .7 percent was reached. The improved performance is driven by continued improvements in the Irish operations.
Foot pad condition or foot score is a leading industry indicator for animal welfare, a low score equates good foot health, values below − are ood in an international comparison. The result for the fourth quarter 2021 showed a continued good result; 9.4 points which is in line with 9.2 points in the corresponding quarter of 2020. This means a result of 9.3 points in 2021, a decrease of almost 10 percent compared to 2020 even if Scandi Standard did not reach the ambitious target of 8.0 points.
Decreasing the climate impact of its own operations as well as across the value chain is a key priority for Scandi Standard. The work to measure and manage impact from the business is continuously being developed. With a result of 86.8 g CO2e / kg product in the fourth quarter 2021, is the carbon intensity higher than last year which mainly is driven by a colder fourth quarter. For the full year 2021 has Scandi Standard decreased its carbon intensity with 1 percent, even if the ambitious target of 72.9 g CO2e / kg product is not reached.
Critical complaints remain on a low level, three new complaints have been reported within the Danish RTE business during the fourth quarter 2021. For the full year 2021, the number of critical complaints has decreased with 73 percent compared to 2020.

The foundation for an ambitious and structured climate strategy

During the fourth quarter 2021, Scandi Standard has continued to lay the foundation for managing its climate impact in an ambitious and structured way. Since the Science Based Target initiative was committed to in April 2021, there has been intensive efforts to map Scandi Standards climate impact across the value chain., from farm to fork. Since the key climate impact from chicken production does not occur during the slaughtering and processing stages, but upstream in the value chain, is this crucial to be able to develop a targeted and ambitious plan for decreased climate impact.

Many of our growers are already working actively with increased circular flows and towards decreased climate impact. In addition is the RISE climate database open list v. 1.7 showing that chicken has a climate impact ten times lower than beef and lower than farmed salmon. Scandi Standard's objective for 2022 is to conclude the work with the carbon footprint across all countries as well as getting our mid- and long-term climate targets approved by the Science Based Targets initiative.

Sustainability Overview	Q4 2021	Q4 2020	Δ	2021	2020	Δ	2021 Target
LTI per million hours worked1)	38.0	28.7	32%	39.2	31.0	26%	27.6
Use of antibiotics (% of flocks treated)	6.4	4.4	46%	5.2	7.2	-28%	5.7
Animal welfare indicator (foot score)2)	9.4	9.2	2%	9.3	10.2	-9%	8.0
CO2 emissions (g CO2e/kg product)3)	86.8	71.9	21%	79.9	81.0	-1%	72.9
Critical complaints4)	3	3	0%	7	26	-73%	0
Feed efficiency (kg feed/live weight)5)	1.52	1.51	0%	1.52	1.52	0%	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 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

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 wei ht . Includes only con entional chickens approximately of the Group's chicken . The fi ures are based on farmer's reported figures in all countries except in Sweden, where figures are country averages from Svensk Fågel

Segment: Ready-to-cook

MSEK	Q4 2021 Q4 2020		Δ	2021	2020
Net sales	1,789	1,825	-2%	7,611	7,622
EBITDA	47	132	-64%	424	615
Depreciation	-68	-65	5%	-266	-239
EBITA	-21		67 -131%	158	376
Amortisation	-12	-12	5%	-50	-50
EBIT	-32		56 -157%	110	326
EBITDA margin, %	2.6%		7.2% -4.6ppt	5.6%	8.1%
EBITA margin, %	-1.1%		3.7% -4.8ppt	2.1%	4.9%
EBIT margin, %	-1.8%		3.0% -4.8ppt	1.4%	4.3%
Non-comparable items1)	-	-7	-	-	-7
Adj. EBITDA1)	47	139	-66%	424	622
Adj. EBIT1)	-32		63 -151%	110	333
Adj. EBITDA margin, %1)	2.6%		7.6% -4.9ppt	5.6%	8.2%
Adj. EBIT margin, %1)	-1.8%		3.4% -5.2ppt	1.4%	4.4%

LTI per million hours worked2)	42.1	31.4	34%	43.2	34.9
Animal welfare indicator3)	9.4	9.2	2%	9.3	10.2
Critical complaints4)	0		2 -100%	1	9

1) Restated non-comparable items. see note 6 and 8

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) decreased by 2 percent from MSEK 1,825 to MSEK 1,789. In fixed currency the decrease in net sales was 2.5 percent. In Finland, Norway and Denmark net sales increased with 17, 2 and 2 percent in local currency. Net sales in Sweden decreased by 2 percent and Ireland with 14 in local currency, significantly impacted by reduction in production.

Net sales for chilled products decreased with 1 percent and constituted 80 percent of net sales for RTC. Net sales for frozen products decreased with 5 percent driven by product mix and large export volumes at low export prices. Frozen products constituted 20 percent of net sales for RTC.

Sales to Retail decreased with 6 percent and represents 78 percent of total net sales for RTC. The development deviates from the consumer trend that has been seen over the past years.

Contrary to Retail, the Foodservice sales channel is showing growth by 19 percent and constituted 8 percent of net sales for RTC. compared to the fourth quarter 2020 which was affected negatively by Covid-19 in all markets.

Net sales for the Export sales channel increased with 7 percent and represents 7 percent of total RTC net sales.

Prices in the global export markets have continued to be negatively affected by both the Covid-19 pandemic and bird flu. The bird flu that was detected in Denmark, Sweden and Ireland last winter has led to some of the most important export markets in Asia and Africa being closed to exports, which has also led to lower prices in Europe. New case was detected in Denmark in January 2022, which means that the export market is still affected.

Ready-to-cook: Change in EBIT Q4 2020 – Q4 2021 (MSEK)

Operating income (EBIT) for RTC decreased by MSEK 87 to MSEK - 32 (56) corresponding to an operating income margin (EBIT margin) of - 1.8 (3.0) percent.

The reduced volume is mainly driven by production reductions, ie reduced slaughter, which has been taken to address the production challenges in Sweden and Ireland.

The segment result was negatively affected by price effects predominantly driven by product mix and increased Export sales.

The negative price effect was amplified by the negative effect on the business due to bird flu. The negative effect is estimated at MSEK 28, driven by lower export prices and increased volume on export.

At the same time cost of goods sold (COGS) had a strong negative effect. This was driven by increased prices for direct materials which have not yet been fully transferred to customer. Increased production costs and increased insurance costs together with inventory write downs in Sweden and Denmark due to lower than expected sales also had a negative impact. This was countered by a one-time repayment of MSEK 12 from AFA insurance.

Denmark has continued to have high cost of production and costs for the purchase of birds that has not been optimized, increased prices for direct materials and other costs as well as sales at low export prices, which impacts cost of gods sold (COGS) negatively. In total, RTC Denmark reported a negative operating income of MSEK -59.

Depreciation increased by MSEK 3 due to higher investment level in previous year.

Adjusted operating income (adjusted EBIT) was in line with operating income (EBIT) as no non-comparable items were reported in the fourth quarter MSEK - (-7).

Lost time injuries (LTI) for the RTC business amounted to 42.1 per million hours worked during the fourth quarter, which was slightly higher than the corresponding quarter previous year, when the result was 31.4. This is an unacceptable development and measures are being implemented to address the issues.

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

Segment Ready-to-cook (RTC): is the Group's lar est product cate ory 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		Q4 2021 Q4 2020	Δ	2021	2020
Net sales	543	476	14%	2,112	1,911
EBITDA	44	39	12%	187	141
Depreciation	-12	-11	10%	-49	-47
EBITA	31	28	13%	138	94
Amortisation	-	-	-	-	-
EBIT	32	29	9%	138	95
EBITDA margin, %	8.1%		8.2% -0.1ppt	8.8%	7.4%
EBITA margin, %	5.8%	5.8%	0.0ppt	6.5%	4.9%
EBIT margin, %	5.8%		6.1% -0.3ppt	6.6%	5.0%
Non-comparable items1)	-	-	-	-	-
Adj. EBITDA1)	44	39	12%	187	141
Adj. EBIT1)	32	29	9%	138	95
Adj. EBITDA margin, %1)	8.1%		8.2% -0.1ppt	8.8%	7.4%
Adj. EBIT margin, %1)	5.8%		6.1% -0.3ppt	6.6%	5.0%

LTI per million hours
worked2)	15.4	11.1	39%	13.6	11.5
Critical complaints3)	3	1	200%	6	17

1) Restated non-comparable items. see note 6 and 8

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 14 percent from MSEK 476 to MSEK 543. In fixed currency the increase was 13 percent.

All the three major markets, Denmark, Sweden and Norway, showed strong growth. Denmark remains the largest market and represents 62 percent of the total net sales for RTE. A large part of the sales is to QSR (quick service restaurants) in Nordic and Europe.

The Foodservice sales channel increased with 16 percent and represents 64 percent of net sales for RTE. The increase is explained by the fourth quarter last year being negatively affected by Covid-19 pandemic.

Retail sales channel continued to grow and increased its net sales by 13 percent. The Retail sales channel represents 23 percent of total net sales for RTE.

Net sales for the Export sales channel decreased with 7 percent, and now represent 8 percent of net sales for RTE. The export business within RTE does not deal with surplus sales in the same way as RTC and has not been negatively impacted by the declining export prices as RTC has been.

Ready-to-eat: Change in EBIT Q4 20 – Q4 21 (MSEK)

Operating income (EBIT) for RTE increased by MSEK 3 to MSEK 32 (29) corresponding to an operating margin (EBIT margin) of 5.8 (6.1) percent.

The quarter showed a positive volume effect mainly driven by the volume growth in Foodservice.

The positive volume effect was offset by increasing production costs (COGS) for direct materials like frying oil and packaging material that are at historically high levels.

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

Lost time injuries (LTI) for the RTE business amounted to 15.4 per million hours worked during the fourth quarter, which was higher than the corresponding quarter previous year when the result was 11.1. Generally, the injury frequency is lower for RTE than for RTC, but measures are continuously being implemented to further improve performance.

3 critical complains was reported for RTE in the fourth quarter compared to 1 in the corresponding quarter previous year.

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 consists 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 103 (91) with an operating income (EBIT) of MSEK 12 (0). The increase in operating income (EBIT) was driven by increased prices in fur animal feed.

Group cost

Group costs of MSEK 19 (-28) were recognised in the Group operating income (EBIT). The group cost included non-comparable items of MSEK 26 (-21) related to an adjustment resulting from the final purchase price payment of the earn-out debt attributable to the acquisition of Manor Farm of MSEK 26 (-21).

Other

Personnel

The average number of fulltime employees in the fourth quarter 2021 was 3,108 (3,250) and 3,215 (3,220) for the year.

Government support

During the fourth quarter 2021 an amount of MSEK 1 of governmental support has been recognized in profit. The received government support refers to compensation for increased sick leave.

Average exchange rates

	2021–12	2020–12
DKK/SEK	1.36	1.41
NOK/SEK	1.00	0.98
EUR/SEK	10.14	10.49

Group results, financial position and cash flow January – December 2021

Net sales amounted to MSEK 10,101 (9,940). At constant exchange rates net sales increased by 3 percent. During the beginning of the year net sales to Retail sales channel increased while net sales to Foodservice decreased. From the middle of the year net sales to Retail remained flat versus the same period previous year while net sales to Foodservice began to grow again.

Operating income (EBIT) for the Group amounted to MSEK 222 (351), corresponding to an operating margin (EBIT margin) of 2.2 (3.5) percent. The operating income included MSEK 9 (-59) of non-comparable items partly related to an adjustment resulting from the final purchase price payment of the earn-out debt attributable to the acquisition of Manor Farm of MSEK 22 (-52) and to final purchase price payment relating to the acquisition the Finnish business of MSEK -13 (0). Adjusted operating income (adj. EBIT) for the Group amounted hereby to MSEK 213 (410), corresponding to an adjusted operating margin (adj. EBIT margin) of 2.1 (4.1) percent.

The lower operating income is mainly driven by lower results in Readyto-cook, while Ready-to-eat has improved its results.

Finance net for the Group amounted to MSEK -82 (-90), which is an improvement compared with previous year. The improvement refers to lower interest expenses for interest-bearing liabilities of MSEK -37 (-41), lower interest on leasing of MSEK -11 (-14) and currency/other items of MSEK -33 (-36).

Tax expenses for the Group amounted to MSEK -37 (-52) corresponding to an effective tax rate of approximately 26 (20) percent. The increased effective tax rate in 2021 was mainly explained by that fact that no deferred tax asset was booked for costs attributable to the final purchase price payment relating to the acquisition of the Finnish business of approximately MSEK 13 and of the mix of tax rates between the different countries.

Income for the period for the Group decreased by 50 percent to MSEK 103 (208). Earnings per share was SEK 1.60 (3.16).

Net interest-bearing debt (NIBD) for the Group was MSEK 1,980, an increase by MSEK 47 from the 31 of December 2020. The operating cash flow for the year decreased to MSEK 347 (476) negatively affected by lower EBITDA but positively affected by higher positive change of working capital compared with last year and by slightly lower capital expenditure compared with last year. The total increase in net interestbearing debt of MSEK 47 (-267) from the 31 of December 2020 was in addition to the lower operating cash flow, negatively affected by dividends paid compared with no dividends paid last year, higher additional purchase price payments and higher tax payments compared to last year when local authorities in some countries last year approved a deferral of certain tax payments due to the Covid-19 pandemic.

The financial tar et for the Group's net sales is an annual average organic growth in line with or above market growth. The outcome for the average organic growth (5 y CAGR) for the full year 2021 was 6 (6) percent, but the growth in 2021 was only 2 percent.

The financial tar et for the Group's di idend ratio is approximately 60 percent of profit for the year adjusted for non-comparable items on average over time. The outcome for the full year 2021 is that the Board proposes that no dividend be paid for the financial year 2021 in order to ensure continued financial flexibility.