Leverandørselskabet DANISH CROWN AmbA

Transcription

1 Leverandørselskabet DANISH CROWN AmbA Central Business Register no HALF-YEAR REPORT 2014/15

2 MANAGEMENT S REVIEW Market development The Danish Crown Group is a global player within meat products - fresh meat product as well as processed products. Both globally and at the European market, an important market for the Danish Crown Group, the first half year has been influenced by an increasing supply and a flat development in demand. The continued closing of the Russian market for import of meat from the EU as well as an increasing production in the US has resulted in an oversupply resulting in lower prices. This has been further intensified by a continued fierce competition among the customers; especially in the retail and food service sector. The low consumer prices have affected the suppliers - the farmers - in all the countries where the group purchased live animal for slaughter. 24 February 2015, Danish Crown announced a merger with another large cooperative pig slaughterhouse in Denmark; Tican A.m.b.a. On 26 March 2015 the merger was approved by the owners of the companies and it awaits the competition-law approval by the relevant authorities. After closing of the first six months, Danish Crown has announced adjustment of the slaughtering capacity in Ringsted, Denmark. The closure does not affect the half-year report. Net profit for the first half year of 2014/15 In spite of the difficult market conditions, the group has emerged stronger from the first six months. In the first half year of 2014/15, Danish Crown has realised an organic growth of approx. 4%. In addition there is the growth resulting from the purchase of the remaining 50% of Sokołów carried out in June The foreign exchange rates have mainly developed positively - strongest in second quarter of the financial year. In total, the revenue improved to approx. DKK 29.2 billion - in spite of lower sales prices. At the same time, the group was able to maintain a strong focus on contribution margin and costs in a market under pressure and realised an improvement of DKK 174 million in operating profit before special items for the first half year of 2014/15, equivalent to DKK 1,118 million compared to DKK 944 million for the same period last year. A little less than half of the increase can be ascribed to the purchase of Sokołów. All the group s essential business units - DC Fresh Meat (DC Pork and DC Beef), DC Foods and DAT-Schaub (DC Ingredients) - have contributed to the positive result. Result for associated companies of DKK 46 million is on par with last year when adjusted for gain from sales of equity investments last year. Due to a generally low interest level, the group s net financing costs are on par with last year - in spite of an increased interestbearing debt, among other as a result of the purchase of Sokołów. Tax on net profit for the first half year is higher than for the previous year; also measured as per cent of profit before tax. The first half year in 2013/14 was impacted by tax-free income from sales of equity investments and earnings in loss-making companies where tax assets were not included. This is not applicable to the same extend for the first half-year of 2014/15. Net profit for the first half-year of 2014/15 amount to DKK 852 million against DKK 813 million last year, which is considered satisfactory. Balance sheet Total assets are increased by DKK 3.3 billion. Hereof just under 2/3 is ascribable to the purchase of Sokołów, while just under 1/3 is attributable to the increase in more of the group s primary foreign exchange rates (especially GBP and USD). At the end of the first half-year of 2014/15, the group s equity amounts to DKK 6.5 billion against DKK 5.6 billion at the end of the first half-year of 2013/14. The increase is partly attributable to the consolidation decided in connection with the distribution of profit for 2013/14 and partly to foreign currency translation adjustments. The group s net interest-bearing debt at the end of the first half-year of 2014/15 is increased by DKK 1.3 billion compared to the end of first half-year of 2013/14 to DKK 14 billion, what is primarily ascribable to the purchase of Sokołów. The debt is expected to be reduced in the second half year - by reduction of inventory levels, among other things. The group is still mainly financed by credits with a term to maturity of more than 1 year. 65 per cent of the interest-bearing debt is long-term debt. The per cent has decreased compared to the same time last year but is expected to increase concurrently with the refinancing of the debt within the coming year. 2

3 Statement by the Executive Board Today, the executive board has considered and adopted the half-year report of Leverandørselskabet Danish Crown AmbA for the financial year 29 September March The half-year report has not been audited or reviewed by the company s auditor. In our opinion, the half-year report gives a true and far view of the group s assets, liabilities and financial position as per 29 March 2015 and of the results of the group s activities and cash flows for the period 29 September March We believe that the management s review contains a fair review of the development in the group s activities and financial affairs, net profit for the first half year and the financial position as a whole for the companies included in the consolidated financial statements Randers, the 22 May 2015 Executive Board: Kjeld Johannesen Group CEO Preben Sunke Group CFO Flemming N. Enevoldsen Group Executive Vice President 3

4 The group s income state for the first half year of 2014/15 (29 September March 2015) 2014/ /14 mdkk mdkk Revenue 29,228 28,212 Production costs -25,161-24,597 Gross profit 4,067 3,616 Distribution costs -2,129-1,905 Administrative expenses Other operating income 25 7 Other operating expenses -8-7 Operating profit before special items (EBIT before special items) 1, Special items Operating profit (EBIT) 1, Income from equity investments in associates Financial income Financial expenses Profit before tax 1, Tax on profit of the year Net profit for the period The group s comprehensive statement for the first half year of 2014/15 Net profit for the period Other comprehensive income Comprehensive income for the period 1,

5 The group s balance sheet per 29 March mdkk mdkk Goodwill 2,361 1,526 Software Acquired trademark etc Intangible assets 2,898 1,611 Land and buildings 5,770 5,067 Plant and machinery 3,857 3,465 Other plant, fixtures, tools and equipment Property, plant and equipment under construction 927 1,222 Property, plant and equipment 10,823 10,007 Equity investments in associates Other securities and equity investments Other receivables 0 0 Financial assets Biological assets Deferred tax assets Non-current assets 14,783 12,737 Inventories 5,127 4,622 Biological assets Trade receivables 6,847 6,120 Receivables from and prepayments to cooperative members Receivables from associates 6 15 Other receivables Prepayments Receivables 7,759 7,025 Other securities and equity investments Cash Current assets 13,463 12,236 Assets 28,245 24,973 5

6 The group s balance sheet per 29 March mdkk mdkk Contributed capital 1,580 1,605 Other reserves and retained earnings 4,873 3,955 Equity (incl. minorities) 6,453 5,560 Pension obligations Deferred tax liabilities Other provisions Subordinate loans Mortgage debt 3,967 4,140 Other debt, issued bonds 1,575 2,113 Other credit institutions 1,877 2,256 Bank debt 1,933 1,796 Finance lease commitments Non-current liabilities 10,336 11,685 Other provisions Mortgage debt Other debt, issued bonds Other credit institutions 3,666 2,089 Bank debt Finance lease commitments Trade payables 3,600 2,828 Payables to associates Income tax payable Other payable 2,351 2,166 Deferred income Current liabilities 11,456 7,728 Liabilities 21,792 19,413 Equity and liabilities 28,245 24,973 6

7 The group s statement of changes in equity per 29 March 2015 Other reserves and Contributed capital retained earnings Total mdkk mdkk mdkk Equity as per ,605 3,955 5,560 Net profit for the first half year Total other comprehensive income after tax Payment of contributed capital (net) Purchase of/ dividend to minority interests Equity as per ,505 4,918 6,423 Net profit for the first half year Total other comprehensive income after tax Payment of contributed capital (net) Supplementary payments disbursed -1,218-1,218 Purchase of/ dividend to minority interests Equity as per ,580 4,874 6,454 7

8 The group s cash flow statement for the first half year of 2014/ / /14 mdkk mdkk Operating profit before special items (EBIT before special items) 1, Operating profit before special items (EBIT before special items) 1, Change in net working capital Other adjustments Cash flows from operating profit 1, Purchase/sale of companies Other investments Cash flows from investing activities Cash flows from financing activities Change in cash and cash equivalents Cash and cash equivalents as per Foreign currency translation adjustment on cash and cash equivalents 0 0 Cash and cash equivalents as per

9 Note 1 Significant accounting policies The half-year report for 2014/15 includes a summarised consolidated financial statement for Leverandørselskabet Danish Crown AmbA and its subsidiaries. The half-year report for 2014/15 is presented according to the same accounting principles and significant accounting estimates as the annual report for 2013/14 for Leverandørselskabet Danish Crown AmbA. Reference is made to mention of applied accounting policies and significant accounting estimates in note 1 and 29 in the annual report for 2013/14. However, jointly controlled companies are no longer recognised according to the pro rata method, but with an entry in income statement and balance sheet (equity method) in accordance with IFRS 11. The change has an insignificant impact on income statement and balance sheet and is without impact on for net profit and equity. There are no other changes to the accounting policies compared to last year due to new and changes standards. Leverandørselskabet Danish Crown AmbA is a limited liability cooperative with domicile in Denmark. The consolidated financial statements is accounted for in Danish kroner (DKK), which is the presentation currency for the group s activities. Note 2 Seasonal fluctuations Due to seasonal fluctuations in sale of the group s main products, the revenue is historically speaking lower in the first half year than in the second half year. Correspondingly, the group s inventory valuation is historically speaking higher by the end of the first half year than by the end of the second half year since inventory is built up for sale in the peak season. 9