HKFoods Plc, Financial Statements Bulletin 14 February 2025, at 8.30 am. EET
HKFoods' Financial Statements Bulletin 1 January-31 December 2024
October-December 2024
- HKFoods' net sales from continuing operations increased by 6.9 per cent to EUR 266.9 (249.7) million. HKFoods increased its sales in all other sales channels except industrial sales, where sales declined as planned. Consumer demand in Finland remained at the comparison period's level but was particularly focused on lower-priced products. HKFoods was able to meet demand with its comprehensive product portfolio, which increased sales in the retail sector. Sales in the food service channel developed strongly, enabling HKFoods to strengthen its position in the market.
- The Group's EBIT from continuing operations totalled EUR 6.5 (3.1) million.
- The Group's comparable EBIT from continuing operations was EUR 10.3 (3.0) million. The improved performance was driven by a better sales mix, production efficiency measures and cost savings. Especially Christmas season sales were successful. Sales to the retail sector increased, especially to the food service channel. In addition, the structure of export sales was strengthened by growth focused on added-value products.
- Cost levels remained high in October-December. In addition to the cost increases in energy and external services, wage costs were pushed up by previously agreed general pay rises. HKFoods was able to cover the impact of the cost increase through production efficiency measures and cost savings. Particularly the investment in the Rauma poultry cutting department increased production efficiency.
- The comparable EBIT of the Business Unit Finland was EUR 14.5 (6.3) million.
- Cash flow from business operations including discontinued operations was EUR 38.4 (33.1) million.
- The company's extensive restructuring was completed on 31 October 2024 when HKFoods sold its Danish business to Plukon Food Group B.V. from the Netherlands.
January-December 2024
- HKFoods' net sales from continuing operations increased by 7.4 per cent to EUR 1,001.8 (933.0) million.
- Sales increased due to good consumer demand and successful commercial activities. Sales increased especially in the Finnish retail channel in the early part of the review period, with the food service channel showing more pronounced sales growth towards the end of the period. Exports from Finland remained at the previous year's level; exports of red meat fell while exports of poultry meat and meat products increased significantly.
- The Group's EBIT from continuing operations totalled EUR 22.4 (14.3) million.
- The Group's comparable EBIT from continuing operations was EUR 27.7 (11.6) million. An improved sales mix, increased production efficiency and cost savings improved EBIT during the review period.
- HKFoods strengthened its position in the Finnish consumer market, which reduced the need for less profitable meat exports. Growth in exports of meat products also strengthened the structure of export sales.
- Cost levels remained high, with the cost of external services in particular rising from the comparison period. Profitability of red meat, especially beef, continued to be challenging in Finland, but improved towards the end of the review period. Increased production volumes, investments in production and efficiency measures enhanced operational efficiency and improved the company's profitability.
- The comparable EBIT of the Business Unit Finland was EUR 37.7 (20.5) million.
- Cash flow from operating activities including discontinued operations was EUR 60.8 (50.6) million. Cash flow improved because of better working capital development performance and lower financing costs than in the comparison period.
- Interest-bearing net debt was EUR 149.8 (287.9) million and net gearing 69.5 (121.0) per cent.
- Interest-bearing net debt excluding IFRS 16 lease liabilities was EUR 62.2 (184.3) million.
- The sale of the Swedish business was completed on 27 March 2024.
- The Board of Directors proposes to the Annual General Meeting that no dividend is to be paid for the financial year 2024. The Board of Directors proposes that the Annual General Meeting resolve to distribute EUR 0.09 per share from the company's reserve for invested unrestricted equity for 2024. The Board of Directors further proposes the Annual General Meeting to authorise the Board of Directors to resolve on the distribution of the funds recorded in the reserve for invested unrestricted equity, at its discretion, up to a maximum of EUR 0.05 per share. Under the authorisation, the Board of Directors could decide to distribute funds in one or more instalments.
The figures in parentheses refer to the same period in the previous year, unless otherwise mentioned. The figures are unaudited.
Outlook for 2025
HKFoods expects that in 2025 the Group's comparable EBIT will grow compared to 2024.?? ?
KEY FIGURES, NET SALES, CONTINUING OPERATIONS
| (EUR million) | 10?12/2024 | 10?12/2023 | 1?12/2024 | 1?12/2023 |
| Net sales | 266.9 | 249.7 | 1 001.8 | 933.0 |
| Finland | 266.9 | 249.7 | 1 001.8 | 933.0 |
KEY FIGURES, EBIT, CONTINUING OPERATIONS
| (EUR million) | 10?12/2024 | 10?12/2023 | 1?12/2024 | 1?12/2023 |
| EBIT | 6.5 | 3.1 | 22.4 | 14.3 |
| - % of net sales | 2.4 | 1.3 | 2.2 | 1.5 |
| Comparable EBIT | 10.3 | 3.0 | 27.7 | 11.6 |
| - % of net sales | 3.9 | 1.2 | 2.8 | 1.2 |
| Comparable EBIT, Finland | 14.5 | 6.3 | 37.7 | 20.5 |
| - % of net sales | 5.4 | 2.5 | 3.8 | 2.2 |
KEY FIGURES, OTHER
| (EUR million) | 10?12/2024 | 10?12/2023 | 1?12/2024 | 1?12/2023 |
| EBITDA, continuing operations | 16.9 | 11.1 | 56.3 | 45.1 |
| Profit before taxes, continuing operations | 2.3 | -3.9 | 4.2 | -10.7 |
| - % of net sales | 0.9 | -1.6 | 0.4 | -1.2 |
| Profit for the period, continuing operations | -2.7 | -7.2 | -1.8 | -17.3 |
| - % of net sales | -1.0 | -2.9 | -0.2 | -1.9 |
| EPS, EUR, continuing operations | -0.06 | -0.10 | -0.09 | -0.24 |
| Comparable EPS, EUR, continuing operations | -0.02 | -0.10 | -0.04 | -0.27 |
| Cash flow from operating activities, incl. discontinued operations | 38.4 | 33.1 | 60.8 | 50.6 |
| Cash flow after investing activities, incl. discontinued operations | 64.3 | 40.2 | 141.7 | 73.3 |
| Return on capital employed (ROCE) before taxes, %, incl. discontinued operations | 0.9 | 3.0 | ||
| Interest-bearing net debt | 149.8 | 287.9 | ||
| Net gearing % | 69.5 | 121.0 |
HKFoods' CEO Juha Ruohola
HKFoods' continuing operations developed strongly in 2024, with both net sales and comparable EBIT growing significantly. The company's net sales from continuing operations in 2024 increased by 7.4 per cent to EUR 1,001.8 (933.0) million. In the fourth quarter the comparable EBIT was 3.9 (1.2) per cent of net sales. The comparable EBIT margin for the whole year was 2.8 (2.2) per cent. The company's EBIT target is 4 per cent.
HKFoods increased its profitability also in the fourth quarter through successful commercial measures, production efficiency measures and cost savings. Retail sales developed positively with a comprehensive product range and successful Christmas season, which improved the sales mix and profitability. Our food service sector has managed to grow its share in a declining market. The structure of export sales has improved due to increased sales of ready-to-use products.
The company's investment capacity has improved. We have focused our investments on strategic and efficiency investments. The investments in the Rauma and Forssa units have been completed, and our investment in the manufacture of ready-to-eat products in our Eura unit is progressing as well as the investment in the ready meal production of our Vantaa unit. With this investment, we will increase our meal preparation capacity and develop new high-quality meals for consumers' various food moments.
Over the past two and a half years, we have been assessing the position of our businesses within the Group in order to increase our financial flexibility. We have improved HKFoods' profitability and strengthened our balance sheet through the sale of the Baltic business, which was completed in August 2023. The sale of the Swedish business was closed at the end of March 2024. Our major restructuring was completed at the end of October 2024, when the sale of the Danish subsidiary ROSE Poultry A/S to the Dutch Plukon Food Group was closed.
The divestments have strengthened HKFoods' balance sheet as planned and the proceeds have been used to repay the company's loans. The company's net debt decreased by EUR 138.1 million to EUR 149.8 (287.9) million from a year ago. Our net gearing ratio has decreased to 69.5 per cent. As a result of this reduction, our net financing costs have fallen by EUR 7.5 million during 2024. In the financing negotiations in summer 2024, we secured financial continuity until early 2027.
According to HKFoods' vision, updated at the end of 2024, we want to be the most valued partner of food moments. This means working together with all our employees to meet the changing needs of consumers and customers by creating sustainable, tasty and nutritious solutions for all meaningful food moments. It is a collaborative effort with customers, consumers, contract farmers and other company partners.
The company's strategy affects all sustainability topics identified as material to HKFoods; the most important ones in the medium to long term are climate change, consumer health and safety and animal welfare. These will be pursued with even greater determination. During 2025, we will update our responsibility programme to better address the sustainability topics that we have identified as material to our stakeholders. The wellbeing and safety of our employees will remain at the heart of our responsibility programme. Our key target is to be a safe and healthy workplace for our own employees and the partners working in our units. Improving safety at work is something that will continue to require our continued commitment and action together with all our employees. We are running a quality culture project to improve the quality of our operations and products.
Following the completion of our major restructuring, we are now focusing on implementing our long-term strategy by improving the competitiveness of our core business and the profitability of our operations in Finland. Our efficiency programme, launched at the end of 2024, aims to significantly improve our performance. The programme involves improving production efficiency and strengthening commercial measures.
The measures taken in 2024 have taken the company to the right direction. The hard work has paid off and our future is now on firmer ground than it has been for many years. I would like to thank our own people, our customers, our contractors and our other partners. We are well-positioned to move forward inspired by our new vision.
Key events in 2024
Sale of the Swedish business completed
On 27 March 2024, HKFoods sold the shares in its Swedish subsidiary HKScan Sweden AB (now Scan Sverige AB) to Lantmännen ek för. The transaction was preceded by the approval of the Swedish authorities in February 2024 regarding foreign direct investment (FDI) control and the approval of the arrangement by HKFoods' Extraordinary General Meeting. On 7 March 2024, the EU Commission announced its approval of the arrangement, and the transaction was completed on 27 March 2024.
The purchase price for the shares in HKScan Sweden AB amounted to approximately EUR 60 million in cash as well as 6,869,750 A shares and 665,000 K shares in HKFoods held by Lantmännen. In addition, Lantmännen repaid an intragroup loan between HKFoods and HKScan Sweden AB to the amount of approximately EUR 50 million. HKFoods also reduced its off-balance sheet factoring financing by approximately EUR 55 million and IFRS 16 leasing liabilities by approximately EUR 13 million. A prepayment of EUR 25 million of the purchase price was made upon the signing of the agreement, with the remainder being paid after the completion of the transaction.
With the transaction, HKFoods' ownership of its Swedish business ended.
Details of the transaction have been disclosed in the following releases: 29 December 2023, 28 February 2024, 7 March 2024 and 27 March 2024.
The sale of the Danish business unit to Plukon Food Group B.V. was completed on 31 October 2024
On 15 October 2024 HKFoods was informed that the Danish Consumer and Competition Authority had approved the arrangement announced in May 2024 whereby HKFoods sells its operations in Denmark. The sale of the Danish business unit was completed on 31 October 2024. The company received cash of EUR 36.6 million. The amount was used to pay off the company's debts.
Details on the matter have been provided in the following releases: 7 March 2024, 2 May 2024, 15 October 2024 and 31 October 2024.
The company name changed to HKFoods
Due to the sale of the Swedish business, the Annual General Meeting approved the change of the company name from HKScan Oyj to HKFoods Oyj. The new name, logo, website and email address were introduced on 27 May 2024 after registration with the Trade Register. The parallel company names of the new name are HKFoods Plc (in English) and HKFoods Abp (in Swedish).
The new name of the Danish subsidiary changed to ROSE Poultry A/S on 27 May 2024. The name of the Polish subsidiary has been HKFoods Poland Sp. z o.o. from 23 August 2024 onwards. HKScan Finland Ltd has changed its name to HKFoods Finland Ltd on 2 September 2024.
Details on the matter were provided in the following releases: 15 March 202418 April 2024 and 24 May 2024.
HKFoods issued secured notes of EUR 90 million
On 17 June 2024, HKFoods issued secured senior notes of EUR 90 million. The three-year notes mature on 17 June 2027, carry a floating interest at the rate of EURIBOR 3 months plus a margin of 7.5 per cent and had an issue price of 100 per cent.
The proceeds from the issue of the notes will be used for refinancing certain existing indebtedness of HKFoods and general corporate purposes of HKFoods' Group.
Details on the matter have been provided in the following releases: 31 May 2024, 7 June 2024, 10 June 2024, 10 June 2024 and 13 June 2024.
HKFoods redeemed its outstanding notes due 24 March 2025
The Company gave a notice in December to the holders of Notes that it redeems all the outstanding Notes due 24 March 2025 in accordance with Condition 8.3 (Clean-up call option) of the terms and conditions of the Notes. The outstanding Notes redeemed on 20 December 2024 in accordance with the terms and conditions of the Notes. On the Redemption Date, the Company paid to the Noteholders a redemption price per Note equal to 100 per cent of their principal amount together with any accrued but unpaid interest. Interest on the Notes redeemed accrues until (but excluding) the Redemption Date.
Details on the matter have been provided in a release: 2 December 2024.
HKFoods invests in the growing meal category at its Vantaa unit - New technology line to prepare meals to make consumers' everyday lives easier?
HKFoods Plc decided on a significant strategic investment of approximately EUR 5 million in the meal production of its Vantaa unit. The investment is HKFoods' response to the growing demand for ready meals in both the retail and food service sectors. The investment supports HKFoods' strategy to increase added value and operational efficiency. The company aims to grow in product categories that make everyday life easier for consumers, such as meals, meal components and snacks.?
Details on the matter were provided in the following release: 19 September 2024.
Development investment in the Eura unit of ready-to-eat products improves profitability and competitiveness
In January 2024, HKFoods announced plans to improve the efficiency of its production operations by centralising the poultry packing activities in the Eura unit to the company's production units in Rauma and Forssa. The statutory negotiations concluded in February. After the statutory negotiations, HKFoods decided to invest approximately EUR 8 million in a production line for ready-to-eat products at its Eura unit. With this strategic investment, HKFoods will improve its profitability by increasing the added value of its products and operational efficiency and respond to the growing consumer demand for quick and easy cooking.
Details on the matter have been provided in a release: 11 January 2024, 5 March 2024 and 14 March 2024.
Changes in HKFoods Plc' s Executive Team
Mika Tilli started as the new CFO and member of the Group Executive Team as of 1 July 2024. Jyrki Paappa left the company in summer 2024.
Details on the matter have been provided in a release:26 March 2024.
Following the completion of the sale of the company's Swedish business, Lars Appelqvist, EVP of Business Unit Sweden and member of the Group Executive Team, left the company on 27 March 2024.
Details on the matter have been provided in a release: 27 March 2024
Michael Juhl Jørgensen started as Interim EVP, Business Unit Denmark and member of the Group Executive Team as of 1 July 2024. Jukka Nikkinen left the company on 30 June 2024.
Following the completion of the sale of HKFoods' Danish business, Michael Juhl Jørgensen left HKFoods on 31 October 2024.
Details on the matter have been provided in a release: 27 May 2024 and 31 October 2024.
Jari Leija, HKFoods Plc's EVP, Business Unit Finland and member of the Executive Team, left the company on 24 October 2024.
Details on the matter have been provided in a release: 24 October 2024
Petri Toivola, EVP, Poultry Business at HKFoods, Mikko Järvinen, EVP Meat Business at HKFoods, and Terhi Hakkarainen, EVP Processed Food Business, were appointed as members of HKFoods Plc's Executive Team as of 27 November 2024.
Details on the matter have been provided in a release: 27 November 2024.
HKFoods launched Finnish poultry exports to China in late 2024
HKFoods started exporting poultry meat from Finland to China in late 2024, following an export licence for HKFoods' Rauma unit. The export licence obtained by HKFoods for Finnish poultry meat is a significant addition to HKFoods' extensive export rights. HKFoods currently exports Finnish pork to China.
Details on the matter have been provided in a release: 30 October 2024.
HKFoods revised its climate emissions calculation and target
HKFoods has updated the climate emissions calculation, climate target and timeline of its responsibility programme to better align with international climate work guidelines, calculations guidance and reporting standards.
Details on the matter were provided in a release: 25 January 2024.
Board of Directors' proposal on the distribution of profit, the distribution of assets from the reserve of unrestricted equity and the authorisation of the Board of Directors to resolve on the distribution of funds recorded in the reserve for invested unrestricted equity
The parent company's distributable equity amounts to EUR 167.2 (195.6) million, including a free equity reserve of EUR 216.2 (216.2) million and results for the financial year 2024 of EUR -23.1 (-69.9) million. The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial year 2024 and that the loss for the financial year be recognised in the profit reserves of previous financial years.
The Board of Directors proposes that the Annual General Meeting resolve to distribute EUR 0.09 per share (corresponding to a total of approximately EUR 8.1 million for all 89,910,373 shares currently outstanding) from the company's reserve for invested unrestricted equity for 2024. The repayment of equity will be paid to shareholders who are registered in the shareholders' register of the company held by Euroclear Finland Ltd on the record date of the payment. The record date for the equity repayment will be 25 April 2025 and the payment date 5 May 2025.
The Board of Directors further proposes the Annual General Meeting to authorise the Board of Directors to resolve, at its discretion, on the distribution of the assets recorded in the reserve of unrestricted equity, up to a maximum of EUR 0.05 per share (corresponding to a total of approximately EUR 4.5 million for all 89,910,373 shares currently outstanding). Under the authorisation, it could be possible to resolve to distribute the funds in one or more instalments. The authorisation is valid until the beginning of the next Annual General Meeting. The company will announce any decision of the Board of Directors on the equity repayment and, at the same time, confirm the record and payment dates for the equity repayment. Equity repayments payable under the authorisation will be paid to shareholders entered in the shareholders' register held by Euroclear Finland Oy on the record date for the equity repayment in question.
Annual General Meeting 2025
HKFoods' Annual General Meeting will be held in Turku, Finland on Wednesday, 23 April 2025.
The invitation will be published later.
Turku, 14 February 2025
HKFoods Plc
Board of Directors
Webcast
HKFoods will hold a briefing on its 2024 financial statements for analysts, institutional investors and the media on 14 February 2025 at 10:00 am, Finnish time. The event will take place in the conference room "1940" of the Helsinki Olympic Stadium at Paavo Nurmen tie 1, 00250 Helsinki. Entrance is from the Visitor Centre in Tornipiha.
The event can also be followed as a webcast at https://hkfoods.events.inderes.com/q4-2024.
The event will be in Finnish, and the recording will be available later in the day at www.hkfoods.com.
The 2024 financial statements will be presented by CEO Juha Ruohola and CFO Mika Tilli.
To arrange investor calls, please contact executive assistant Suvi Oksava, tel. +358 44 554 4231 or
suvi.oksava@hkfoods.com.
Financial reports
HKFoods will publish the following financial reports in 2025:
• Interim Report for January-March 2025 on Wednesday 7 May 2025 at about 8:30 EEST
• Half-Year Financial Report 2025 on Wednesday 6 August 2025 at about 8:30 EEST
• Interim Report for January-September 2025 on Wednesday 5 November 2025 at about 8:30 EET
For further information
Juha Ruohola, CEO, tel. +358 400 647 160
Mika Tilli, CFO, tel. +358 50 538 5793
HKFoods Media Service Desk email communications@hkfoods.com or tel. +358 10 570 5700.
With 110 years of experience, we at HKFoods make life tastier - today and tomorrow. With 3,000 professionals, we make responsible and locally produced food for consumers' various food moments. Our well-known brands in Finland are HK®, Kariniemen® and Via®. We are developing a more climate-friendly way of producing food. HKFoods is a publicly listed company, and in 2024, our net sales totalled EUR 1 billion. www.hkfoods.com
DISTRIBUTION:
Nasdaq Helsinki
Key media
www.hkfoods.com
