Scandi Standard (SCST) Q2 2024 earnings summary

Executive summary

• Achieved strong volume and profit growth in Q2 2024, with EBIT up 5% to SEK 127 million and margin improved to 3.8% from 3.5%, driven by Ready-to-Cook segment performance and efficiency gains.

• Net sales declined 2% year-over-year to SEK 3,350 million, mainly due to Ready-to-Eat contract loss and normalization in Ingredients.

• Ready-to-Eat showed sequential EBIT recovery but remained below prior year levels due to contract loss and absence of insurance compensation.

• Maintained strong operating cash flow and balance sheet, though net cash flow and net debt were impacted by the Jaeren acquisition and dividend payout.

• Advanced sustainability initiatives, with improvements in antibiotics usage and animal welfare indicators.

Financial highlights

• Q2 2024 EBIT increased 5% to SEK 127 million; EBIT margin rose to 3.8% (up 0.2ppt year-over-year).

• Net income for Q2 was SEK 71 million, down 3% year-over-year; H1 net income up 20% to SEK 141 million.

• Ready-to-Cook EBIT more than doubled to SEK 98 million, with 2% net sales and 3% volume growth.

• Ready-to-Eat EBIT fell to SEK 38 million, impacted by contract loss and lower production; margin at 5.6%.

• Dividend of SEK 2.30 per share for 2024, split between May and September payments.

Outlook and guidance

• Targeting 5%-7% net sales growth and EBIT margin above 6% by 2027, with Q2 margin at 3.8% showing progress.

• Continued profitable growth expected in Ready-to-Cook and gradual EBIT improvement in Ready-to-Eat.

• Investment program of SEK 2 billion for 2024-2027 to support growth, efficiency, and sustainability, with SEK 500 million capex in 2024.

• Focus on efficiency, product mix, and sustainability to drive future profitability.