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Unsatisfactory Performance By HKScan Group

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Unsatisfactory Performance By HKScan Group

Unsatisfactory Performance By HKScan Group
February 10
12:44 2017

Nordic meat group HKScan has reported a fall in both net sales and profits for the year ended 31 December 2016 compared to 2015. Net sales declined from €1.917 billion to €1.873 billion during the period, with all the group’s market areas behind the previous year, and comparable EBIT fell from €21.5 million to €13.2 million. The biggest decline in EBIT was in market area Sweden, due to weak sales performance, especially in the processed category. Performance in Sweden was also impacted by the higher purchase prices and the scarcity of beef on the market. In Finland, full-year EBIT remained behind the previous year due to the weak first half of the year. The Baltics showed a slight improvement. Market area Denmark continued performing well on the domestic retail market, but challenges in exports continued.

Jari Latvanen, president and chief executive of HKScan Group.

Jari Latvanen, who took over as HKScan Group’s new president and chief executive on 31 October 2016, comments: “HKScan’s full-year performance in 2016 was weak. The group’s smallest market, the Baltics, was the only area that was ultimately able to improve its comparable operating profit from the previous year, despite the severe internal turbulence it faced at the end of the year. Sweden was a particular disappointment, having lost market share and falling clearly behind its previous year’s result. Finland recorded slight growth in net sales for the whole year, and its operating profit improved year-on-year both in the third and the fourth quarter.”

He continues: “Given the poor performance, we will undertake multiple simultaneous measures to correct the negative trend. While we continue to invest in strengthening our innovation capability and offering development to delight consumers and win the loyalty of our customers. We will also focus on improving our operational efficiency.”

HKScan has consequently renewed its group leadership team and is about to initiate a review of the group’s operating model. As part of this review, HKScan plans to embark on a partial re-organisation of its operations. The goal of the review is to renew HKScan’s offering with a sharper focus on consumers and customers, to improve the efficiency and transparency of the meat value chain, and to upgrade the productivity of its internal processes. The strategic aim of these changes is to improve the company’s profitability and competitiveness and to seek profitable growth on its home and export markets. Job losses from the planned changes are not expected to exceed 150.

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