HKScan issues profit warning

HKScan issues profit warning

HKScan has lowered its operating profit outlook for 2013 due to "longer-than-foreseen" export challenges and downward pressure on pricing at home and overseas.

In a statement this morning (25 September), HKScan said 2013 EBIT, excluding one offs, is now expected to come in below last year's levels. Previously, the Finnish meat company had guided to a year-on-year improvement in EBIT.

The company said sales were being hit by a shift in consumer buying patterns. Consumption of lower-priced mean products has "increased significantly" in all markets, especially Finland, HKScan said.

However, HKScan revealed it will exceed its target of annual performance improvements of EUR20m (US$26.1m). The group also said it would achieve a "significant reduction in capital employed" by the end of the year. HKScan has moved to restructure its manufacturing footprint in markets including Sweden, Finland and Denmark.

HKScan is launching a group-wide "development programme" that will run until the end of 2014, targeting an annual profit improvement exceeding EUR20m and a reduction of over EUR50m in net debt.

The company will publish its interim report on 6 November.

Show the press release

HKScan lowers its 2013 outlook - new development programme launched

HKScan lowers its outlook for 2013. According to the new guidance, the comparable EBIT for 2013, excluding non-recurring items, will fall short of last year. In the previous outlook, EBIT was estimated to improve from 2012. The outlook has deteriorated mainly due to longer-than-foreseen export challenges and continuing low price levels in export sales. In addition, consumption of lower-priced meat products has increased significantly relative to products made of higher-grade meat on all home markets, especially in Finland. HKScan will publish its interim report for January-September 2013 on 6 November 2013.

A new development programme launched

In April 2012, HKScan launched a development programme to run until the end of 2013 covering all its operations in Finland, Sweden, Denmark and the Baltics. The programme aimed to achieve an annual profit improvement exceeding EUR 20 million as well as a significant reduction in capital employed. Both targets will be exceeded by the end of the year.

HKScan has launched a new Group-wide development programme that will run until the end of 2014, targeting an annual profit improvement exceeding EUR 20 million and a reduction of over EUR 50 million in net debt. The main objectives of the launched development programme are to continue building a unified Group, efficient utilisation of Group synergies, and a demand-driven management of operations. In addition, the programme involves structural changes in business to improve profitability.

Brand work to be started
As part of its brand strategy, HKScan is launching a Group-wide project to utilise its top-performing local product- and packaging innovations as well as recipes in a more efficient way. The Group will also increase cross-border utilisation of production capacity. Sales will additionally be sought through innovative branded products and concepts. HKScan's new Group-level marketing organisation, founded in August 2013, will be responsible for the project.

Original source: HKScan