Scandi Standard (SCST) Q3 2024 earnings summary

Executive summary

• Achieved 18% increase in adjusted EBIT year-over-year to SEK 153 million, with net sales up 1% to 3,343 MSEK in Q3 2024, driven by strong demand, improved product mix, and efficiency gains.

• EBIT margin improved to 4.6% from 4.2%, and EBIT per kilo rose to 2.15 SEK.

• Ready-to-Cook and Ready-to-Eat segments both contributed to earnings growth, with cost control and sales mix improvements.

• Completed acquisition of Lithuanian processing plant, enhancing low-cost capacity and market potential, with production to commence in Q4 2024.

• New five-year sustainability-linked financing package of SEK 3.2 billion increases flexibility for growth.

Financial highlights

• Q3 2024 net sales: 3,343 MSEK (up 1% year-over-year); EBIT: 153 MSEK (up 11%); EBIT margin: 4.6%.

• Adjusted EBIT up 18% year-over-year; net income: 94 MSEK (up 5%); EPS: 1.44 SEK (up 24%).

• Operating cash flow remained strong, enabling SEK 100 million net debt reduction despite dividend payments.

• CapEx for 2024 estimated at SEK 500 million, with lower spend in Q3 due to timing.

• ROCE at 11.7% and ROE at 12.1% for the last twelve months.

Outlook and guidance

• Targeting 5%-7% annual net sales growth and EBIT margin above 6% by 2027; EBIT per kilo target set at SEK 3 or higher by 2027.

• Management expects continued strong demand for chicken, supported by positive consumer trends and efficiency initiatives.

• Lithuanian plant ramp-up expected to reach break-even within six months and contribute above SEK 3 EBIT per kilo medium term.

• Ongoing SEK 2 billion investment program through 2027 to expand capacity and support growth.

• Q4 2024 paid financing cost estimated at ~8% p.a. of NIBD; blended effective tax rate ~19%.