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Scandi Standard reported a robust first quarter in 2025, marking its strongest Q1 performance to date. The company achieved 7% growth in net sales, with EBIT rising by 2%. With a market capitalization of $594 million and trading near its 52-week high, the stock price saw a 2.7% increase, closing at 85.2 SEK. According to InvestingPro analysis, the company’s stock appears slightly undervalued based on its Fair Value calculations, suggesting potential upside for investors. The company maintains a "GOOD" overall financial health score, supporting investor confidence in its trajectory and strategic expansions.
Key Takeaways
- Scandi Standard achieved its strongest first-quarter performance in 2025.
- Net sales grew by 7%, driven by both Ready to Cook and Ready to Eat segments.
- The company proposed a 9% increase in dividends to SEK 2.50 per share.
- Strategic expansions include acquiring new production facilities in Lithuania and the Netherlands.
- Stock price increased by 2.7% post-earnings announcement.
Company Performance
Scandi Standard’s performance in Q1 2025 was marked by significant growth in sales and strategic expansions. The company’s focus on Ready to Cook and Ready to Eat segments contributed to its top-line growth. The expansion into new markets with the acquisition of production facilities in Lithuania and the Netherlands positions the company well for future growth.
Financial Highlights
- Revenue: 7% growth year-over-year.
- EBIT: Increased by 2% compared to the previous year.
- Proposed dividend: SEK 2.50 per share, a 9% increase.
Outlook & Guidance
Looking forward, Scandi Standard aims for a 5-7% net sales growth and an EBIT margin exceeding 6% by 2027. Analysts on InvestingPro forecast EPS growth to $0.49 in 2025, though the current P/E ratio of 20.6x appears high relative to near-term earnings growth. The company is focusing on integrating its newly acquired entities and maintaining its sustainability efforts, having achieved a CDP A rating. With a strong Altman Z-Score of 5.47 indicating solid financial stability, the outlook is positive, with expected significant EBIT improvement in 2025.
Executive Commentary
CEO Jonas Sternestahl highlighted, "Chicken is convenient, versatile and tasteful, and it is affordable because it’s sustainable." He emphasized the company’s strong positioning in a "turbulent macro environment" and the focus on starting up acquired entities.
Risks and Challenges
- Integration of newly acquired facilities may present operational challenges.
- Continued capital investments could impact short-term financial performance.
- Market volatility and macroeconomic pressures could affect consumer demand.
Q&A
During the earnings call, analysts inquired about the startup costs for the Lithuanian facility, which are expected to break even within 6-12 months. Questions also focused on the positive outlook for the quick-service restaurant market recovery later in 2025 and the company’s continued emphasis on convenience and efficiency.
Full transcript - Scandi Standard publ AB (SCST) Q1 2025:
Geri, Call Coordinator: Ladies and gentlemen, welcome to the Scandi Standard Interim Report for Q1 twenty twenty five. My name is Geri, and I will be coordinating your call today. I will now hand over to Jonas Jonasdlo, CEO of Scandi Standard, to begin. Please go ahead.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Good morning, everyone, and welcome to this presentation of Scandi Standard’s results for Q1 twenty twenty five. My name is Jonas Sternestahl, and I’m the CEO and Managing Director of Scandi Standard. By my side, have Fredrik Silvan, our CFO, and I’m pleased to have him by my side today. I’m also glad to report a strong growth in the quarter. Next slide, please.
We have a solid growth and improved performance. We see a 7% growth in net sales and increase in volumes. And that is supported by strong consumer trend and driven by substitution from red meat. It is also supported by strength and convenience offering. We can see that the chicken is a convenient product where we are deboning more and more and get the products more convenient.
We also have the startup of Lithuanian low cost platform according to plan, and that has an EBIT impact of minus €7,000,000 the And we have also done the acquisition of Pharm and that will accelerate the backward integration. Without that, we see the strong improvement in underlying EBIT and making continual steps to our financial targets. But as communicated before, we’re also preparing our newly acquired Ready to Eat plant in Netherlands, in Ostendorf, for start up in quarter four twenty twenty five. We also see improved performance in our key sustainability KPIs, and the dividend proposal for us is SEK2.50 compared to SEK2.13 last year per share. Next slide, please.
And this slide shows why we have this growth and our value drivers for this, and that is because it’s responsible, safe and nutritious. Chicken is convenient, versatile and tasteful, and it is affordable because it’s sustainable. So next slide, please. And we see a strong consumer trend that is in favor of chicken products. So we have seen a strong poultry growth in The Nordics and Ireland, and it is a 44% poultry growth from 2010 to 2023, and we’re expecting a 30% poultry growth from 2023 to 02/1930, and that is 1.7% annual growth.
And chicken is benefiting from consumers switching over from other proteins, and that is mainly from red meat. And Scandi Standard has increased our harvest volume by 4% in 2024. ’1 of the major reasons why it’s benefiting from other proteins is because it’s sustainable and affordable. And price has always been important for our consumers and the focus has increased even more in the current environment of high food prices. So beef prices are increasing and they’re becoming more expensive, which chicken is benefiting from, but also from the long term trend of switching proteins from red meat to poultry.
So chicken is affordable in all segments and that gives us further opportunities to drive long term volume and value creation. And we see future opportunities to drive more value out of the chicken due to its affordability. Next slide, please. And on this slide, we want to present the EBIT per kilo measure, which is a good measurement of our value creation for our business. So Q1 twenty twenty five EBIT per kilo is 1.73 compared to 1.74 in q one twenty twenty four.
It’s slightly lower, but if we exclude the startup cost in Lithuania, EBIT per kilo is two point o five, and that’s an increase of 18% versus Q1 twenty twenty four. And Lithuania and Ostovaldi in Netherlands will be good contributors for us reaching our twenty twenty seven goals, and we’re expecting to make material EBIT per kilo steps in 2025. And in the different colors in the diagram, you can see development in the different segments, and the RTC color includes the ramp up cost in Lithuania. And in spite of the startup cost in Lithuania, it per kilo is higher than last year. Next slide, please.
And this slide is to remind you on our strong market position in all our five home markets, and the countries are highly consolidated. These markets have large hurdles for new entrants. They can individually be regarded as semi closed markets due to the strong consumer preference for domestic produce. Due to our strong market petitions, our own supply decisions have a meaningful impact on the market balance, which has helped us recover process from inflation. Note that each market, however, also includes consumer segment less sensitive for provenance.
So next slide, please. And here we’re talking about Lithuania. And to fully utilize the potential of our existing markets and clients, it’s important to integrate the low cost and high quality hub into Scandi Standard. And now we’re in the startup process and the ramp up process of our Lithuanian platform, and it will reach 20 to 25,000 ton drill weights, and it will be a state of the art processing plan and best in class cost position. Our intention is to build a fully integrated hub, and that allows us cost control, animal welfare and food safety.
And we have also done recent acquisitions of farm, and that will accelerate the process. And for the long term being, we’re planning to build additional farm capacity from 2026 and onwards. So with that, we’re well positioned to serve high quality products to segments of existing markets less sensitive for provenance and also into our ready to eat plants and export clients. And we are targeting medium term aid per kilo, well above SEK3 per kilo. Next slide, please.
And if we’re looking into our total picture of our ready to cook plants, so you can see them here, all our plants and note that down in the right corner, 11,000,000 chickens in Lithuania is just one shift. If market has a positive momentum, we have the possibility to scale up with another shift and double the production. Next slide, please. Now we’re moving into ready to eat, and chicken is becoming the preferred convenience choice. And this slide is a reminder of the strong historic growth in our ready to eat business, and I’m confident that it will continue the trend.
And there are two main type of businesses. The three third of breaded products, European market, that is 75%, and 25% of the market is integrated local business in Sweden, Norway and Finland. And we see a high return on capital employed and an average EBIT margin of 6% the last five years, and it’s also low capital employed compared to Ready to Cook. And as you can see in this graph, the last two years we have declined a little bit and the growth come in an even step, and that is the loss of a European breaded contract in the second half of twenty twenty three. But we have a positive momentum on replacing those orders and get growth again in our ready to eat, and it looks promising.
So next slide, please. And if we look at the market in total, we see healthy market growth expected in European bread market, and there are three different type of players. There are the European players, there are the regional players, and the local players. And Scandi Standard has been a regional large regional player with 36,000 ton product weight in 2024, and that is about 5% of European markets. The market has been stagnant after COVID-nineteen, and there are also some European overcapacity.
But we expect growth and that growth is about 60,000 ton until 2029. So next slide, please. And this is why we do the acquisition in Ostovalda, and that is to take Scandi standard breading activities to the top tier. And there are two of Europeans most efficient breaded products lines in the factory C that you can see in the top right corner of the picture. And it will give us 48,000 tons of annual capacity, and it is one of the few with advanced form production capability.
And as explained and talked about before, the total total investment is about €28,000,000, and that will replace a planned investment of €30,000,000 in Denmark. And it is tailored to meet the criterias of the large client. And the operation is planned to start in Q4 twenty twenty five. So next slide, please. So if we look at that the more holistic perspective, our Lithuanian business is a low cost, high quality end to end hub in combination with the state of the art breaded capability Netherlands of Fava.
That gives us feed efficiency, low labor cost, and efficient logistics with a scalable platform. With this together, with our strong position in our home market, it gives us a very competitive combined offer to our clients. And that gives us competitive strength to take market shares. But it has typically long lead time in suppliers switchovers, so we need to be patient to onboard a full value chain business with customers. Meanwhile, Lithuania has secured a strong customer’s orders for fresh meat.
So next slide, please. And now we’re moving over to our segment, and the table shows the reconciliation of our segments. Adjusted for start up custom lithane, we see a strong positive contribution in both ready to cook and ready to eat. And we also want to remind you of the category other includes our ingredients business and our corporate costs. Next slide, please.
And if we look into Ready to Cook specific, we see a strong growth and improved performance, 6% increase in net sales, 2% increase in processed grill weight and a positive mix effect. The adjusted EBIT is 93 compared to 96 last year, but that includes the Lithuanian startup cost of 70,000,000. We have lower LTIs injury frequency rate. It’s 13.3 compared to 23 last year, and that’s a reduction of 42%. And that has an effect of the focus efforts during the last quarters.
The animal welfare indicator is 8.5, which is well below target and in line with last in quarter one last year. Next slide, please. Then we move into the feed prices. So after a long period of increase in feed prices, we have now seen a normalized market for a while. There are still uncertainties and we need to be prepared for future volatility, but our model had most of the input costs linked to our top line.
And we have no or limited trade with US and China. We also want to highlight that feed cost is one third of our cost base. And the short production cycle compared to other proteins enable us to be more agile in our supply chain. So next slide, please. And now we’re moving into export prices.
And as you can see, they are down 3% compared to Q4 twenty twenty four, but increased prices are more than offset by FX and mix. So we see a strong development in export prices, and we are also seeing a strong increase in the coming quarter. But that is also due to our effort to improve our market performance. So we are looking into more strategic client relationships, improved sales and operation planning, increased flexibility between export and ready to eat, and we have also reduced exposure to spot markets. Next slide, please.
And on this slide you can see the shallow development more in detail. Through these details you can notice the increase in retail in the quarter. We see a slightly decrease in net sales in food service though. But in general, we have been seeing strong demand growth in several of our home markets in the quarter. So next slide, please.
And in Red Tweet, we had a strong growth and improved EBIT with the net sales with that is up 9%, and that is driven by, as you saw in the last slide, by strong retail demand. EBIT is SEK 31,000,000 compared to SEK 25,000,000 last year, and it has a slightly negative impact from our stock expansion start up. The QSR market is flat, but we’re expecting it to improve later in 2025. We see a really good progress in our preparation of our Ostovallo plant. We have a really positive market feedback, and we are preparing and investing for the Q4 startup.
And also in this segment, we see a reduced number of injuries. And if we’re looking into the segment in ready to eat, so we see a strong retail growth also in ready to eat, and the food service is still slow. But ready to eat will be an important long term tool on developing a bit per kilo, I. E. Increasing the value of our protein.
So with that, I will hand over to Fredrik for a more deep dive in the financials. Great.
Fredrik Silvan, CFO, Scandi Standard: Next slide, please. Thank you, Jonas, and good morning, everyone. Next slide, please. As Jonas mentioned, Q1 was strong. In fact, it was our strongest first quarter ever with a top line growth of 7% and a fixed FX 8% top line growth.
EBIT grew 2%, which includes the impact from the Lithuanian ramp up cost of SEK17 million that has been mentioned earlier. Very positive was to see that the top line was driven by both RTC and RTE. Our finance net is higher due to less favorable impact from interest rate swaps and higher net interest bearing debt due to the acquisitions during last year and beginning of this year. Tax is in line with previous year and feed efficiency remains at a stable and strong level. And we also see a significant reduction of
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: injuries. Next slide, please.
Fredrik Silvan, CFO, Scandi Standard: Our return on capital employed is continuous, its positive trajectory, showing improvement compared to the previous year. Meanwhile, return on equity is slightly below last year, primarily due to higher finance net and the ramp up cost for Lithuania. At the same time, our equity ratio remains relatively stable despite the acquisitions, which reflects a balanced capital structure and continued financial resilience. Next slide, please. We delivered strong operating cash in the quarter, supported by higher EBITDA, but also improved accounts receivables and inventory.
CapEx is up mainly driven by by the acquisition of the RT factory in Ostevald in Netherlands. Paid taxes is up primarily due to Sweden’s tax refund last year, which created a comparative impact. Paid tax is now on a more normal level. Other items are positively impacted by FX on interest bearing debt, And our net interest bearing debt increased by 13,000,000 in the quarter driven by the above. And as you can see, the reported leverage is well below our internal threshold of 2.5 times EBITDA.
Next slide please. Our working capital remains exceptionally low in the quarter. Inventory decreased 5% year over year, driven by lower level of finished goods, partly offset by live animals. Receivables were well below last year despite increased top line and accounts receivable are expected to come up to more historic levels during the second quarter. Payables and other liabilities increased marginally, primarily due to timing effects.
Our target for working capital as a percentage of rolling 12 sales, adjusted for financing remains at 6%. And in Q1, this metric stood at 4.7%, including the financing adjustments. Next slide, please. During 2025, we have large investments. So the acquisition of Ostevaalde was closed and paid during the first quarter.
The Lithuanian Farms is expected to be fully paid during the second quarter. And then we have capital investments amounting to SEK $515,000,000, which includes the preparation of Oostavaldo for the Q4 production start. And the efficiency and capacity investments in our existing factories, as well as the rollout of the BPE system. We are expecting an increase of working capital, due to the ramp up in Lithuania and Ostovaldo. We also expect the effective tax rate to be at roughly 20%.
And the proposed dividend of SEK2.5 per share amounts to SEK163 million will be paid in two installments during the second and third quarter. And the this is an increase of 9% versus the 2024 payout. Next slide, please. And back to you, Oss.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Thank you, Fredrik. Next, I would like to talk about one of our cornerstones and licenses for us to operate. And there are three key areas when it comes to creating trust in what we do, and that is responsible animal welfare, it’s safety for the consumers and employees, and it is nutritious products. And this is closely linked to our sustainability scorecard. So if we move to next slide, please.
Here you can see the really positive traction in our LTI performance on the top left corner. We have a really good Q1 and we have a focus to reduce our lost time injuries, and we can see that it started to perform well. When it comes to the antibiotic and footbed scores, we are at well below target at a good level. There are some seasonally increases in Q1 twenty twenty four, but we see a stable and good progress. And when we are entering new countries, we are putting in our standards and ways of working, and that is an important thing for us and one important cornerstone for Scandi Standard.
So if we move into next slide, please. And the ones of you that has followed us for a while have seen these pillars before. These are the four strategic pillars that will support us achieving our goals, and that is increase the value of our protein, ramp up our efficiency, integrate the sustainability and better together. And all of these emphasize the collective effort, shared goals and team cooperation, and that will lead to improved performance and outcomes. So if we move into next slide, please.
And with these four strategic pillars, have also, as you know, our twenty twenty seven targets. And this slide shows them, and on the right hand side, you can see the targets. And we are expecting strong growth over the coming years, so we have set the target for 2027 of five to 7% net sales growth. We target an EBIT margin in excess of 6% by 2027. We’re also measuring the progress in terms of EBIT per kilo and for which we have supporting targets of three SEK, and that has been presented in the former slides.
And that is an important target for us to 2027 and our aim to achieve the three sick per kilo. So if we move into next slide, I also want to show you this, our structured approach of receiving better ESG targets. And we can see, and I told you that last quarter as well, that we have achieved an A in the CDP rating, and there’s only a few companies that has achieved A rating. And that we’re really proud of. So we are working in a structural way to improve our ESG rating and our total work with ESG.
So if we move into next slide, please. And this, in order to reach our target for our EBIT margin, we need to increase our EBIT per kilo. And as you can see, target for 2027 is to reach above three sig. We are at 1.82 now in 2024, and our underlying AB per kilo, if we take away the Lithuanian startup cost, is 2.05 in quarter one, and we are seeing stronger quarter in the future. So next slide, please.
So to summarize all this, we see a strong quarterly growth and performance. We’re moving steadily towards our financial targets, and we are expecting another significant step in 2025 in terms of EBIT. And we are well positioned in a turbulent macro environment, and our focus now is to start above our acquired entities, and those acquired entities will perform later in 2025. And our dividend proposal is 2.5 compared to 2.3 per share. And we are really confident in the way that we are progressing this business.
And with that, I want to open up for Q and A. So next slide, please. Any Q and A? If there’s no question.
Geri, Call Coordinator: Please standby. Thank you, ladies and gentlemen. Thank you. We will now take our first question from Erik Stancic from Kepler. Please go ahead.
Erik Stancic, Analyst, Kepler Cheuvreux: Hi, thanks. Erik Stentik here with Kepler Cheuvreux. A couple of detailed financial questions to start off with, and I actually joined the call a bit late. So sorry if you have covered this already. But I’m wondering firstly, how we should think about start up costs for the Lithuanian operations in the coming quarters?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: We have stated out that we will ramp up Lithuania, and we have said that there will be ramp up costs within six to twelve months, and we see that progressing well. We’re not guiding for the future, but the progress in Lithuania start up is progressing well, we said six to twelve months. But we still expect that we will succeed to get breakeven in the early part of the six to twelve months.
Erik Stancic, Analyst, Kepler Cheuvreux: Okay. And then in terms of currency movements, we’ve seen some pretty volatile currency fluctuations here late, particularly the strengthening of the Swedish krona. What kind of impacts do you foresee on your business in the coming quarters?
Fredrik Silvan, CFO, Scandi Standard: We see fairly limited impact when it comes to the P and L effect since we have most of the cost in local currency as well as the income. So we are naturally hedged there.
Erik Stancic, Analyst, Kepler Cheuvreux: Okay. No sort of translational impacts when you convert your P and L back into SEK?
Fredrik Silvan, CFO, Scandi Standard: Yes. We do see that if the SEK remains at this level, then there is a negative effect since we have sales in other currencies, mainly in euros. But as said, the majority of the effect is naturally hedged.
Erik Stancic, Analyst, Kepler Cheuvreux: Perfect. Thanks. And then coming back to this EBIT per kilo target of three by 2027. I know you’ve elaborated on it already, but I’m wondering other than the Lithuanian operations, could you maybe just share some thoughts again on what will drive what will be the sort of the key drivers to that target? And is it fair to assume that it will be back end loaded, although we saw a pretty good underlying development here in Q1, but you’re still some way below the three?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Yes. As you say, we see a good underlying improvement in this quarter. What will drive the two main drivers of EBIT per kilo is, of course, leverage of our RT, because then we are not adding more kilos, we’re adding more value into the business. So that will be one key, and that is back again to the growth in our QSR market and RRT and the ramp up in Ostovolta, and that’s why we’re preparing for having good expansion capacity in that segment. And we also see a long term growth in that.
The other part will be the efficiency part in ready to cook, but also the convenience part in ready to cook that I talked about the first slide. The more we can debone, the easier we can do it for consumer, the more margin we can take out in the ready to cook segment. And on top of that, now when we’re investing and using our, for example, $550,000,000 this year and part of that is efficiency investment. So we are reducing costs and actually adding more value also in the ready to cook. So those would be the two main things.
Back again, utilize more of the protein, ramping up the value both in ready to cook, but also by growing ready to eat. And then never forget our ingredients part that is really important for us to utilize more of the whole bird. And that we’re also looking into strategies to take out more value in the ingredients business, but there’s an ongoing positive effect month by month on harvesting more and utilizing more ingredients. So two main ready to eat and ready to cook and then utilize our ingredients business even more. And we will see big step in this during this year.
And you’ve also seen it in quarter one underlying, but we’re investing in ramping up new businesses.
Erik Stancic, Analyst, Kepler Cheuvreux: Perfect. Thank you very much. That’s all I had for now.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Great. Thank you. Thank you.
Geri, Call Coordinator: Thank you. We will now next take Florent from TPICAP. Please go ahead.
Erik Stancic, Analyst, Kepler Cheuvreux: Hi, good morning. Just one question on my side regarding the price effect. The feed prices are quite stable. So can you elaborate more why the price effect We have plus 4%, five %.
And do we have to expect the same effect in the coming quarters?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Are you talking about the feed prices, why the feed prices are still high?
Erik Stancic, Analyst, Kepler Cheuvreux: No, no. I mean, the feed prices are quite stable, but it seems that the price effect on your revenues is quite high 4%, five %. So can you elaborate a little bit on that?
Fredrik Silvan, CFO, Scandi Standard: The main drivers of top line are actually both favorable mix as well as price and volumes were up in the quarter as well. So it’s a price mix effect, if that answers your question.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: And in general, we see a strong demand in poultry. That’s no doubt about it. And also we’re increasing our convenience part and that of course drives top line and takes out, as I said on the last question, take out more value on the protein. So convenience is not only in terms of increasing our ready to eat, it’s also about taking out more value and debone more and get it more convenient in the red cook and that is driving top line. But we also see a strong demand for poultry both in this quarter and when we’re looking in the coming quarters.
Erik Stancic, Analyst, Kepler Cheuvreux: Okay. And maybe just a follow-up regarding the start up cost in Lithuania. Do we have to expect the same amount, 17,000,000 in Q2?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: We have as we’ve said, we’re saying that we will have startup cost in when we acquired it six to twelve months, but we are expecting to get breakeven in the earlier part of this six to twelve months. We started up in the mid Q4. So we have a strong and good improvement in our startup in Lithuania. What has need to be mentioned is that we have a strong European market and has of course been linked to the live bird prices in the first quarter, but we will see improvement in Q2 and we’re aiming for getting the startup as planned. And we are pretty confident in that we are holding the plan that was set from the beginning.
Florent, Analyst, TPICAP: Okay, thank you.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Thank you.
Geri, Call Coordinator: Thank you. We will next have Simon Brunn from ABG. Please go ahead.
Florent, Analyst, TPICAP: Yes. Thank you, guys. Well done another quarter. Just starting with a question on Ready to Cook. Sweden continues to grow very well.
Any comments on this and the sustainability of this strong growth level just relative to other regions where we see maybe more stable or even negative growth? So any comments on the sort of like the different dynamics per market would be useful.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Yeah, I’m going to comment Sweden in specific, we have former quarters in our presentations, we have talked about that we took down the volumes in Sweden and securing the level, and when the growth comes back in the market, we are increasing the levels, now we’re actually seeing a good improvement in Sweden, and therefore we are having this positive progress, and of course we’re expecting further positive progress as a part of our reaching our 2027 goals. We see a strong demand in several of our markets and underlying demand, but of course we see a good performance in Sweden and a good demand in this quantum. So yes, we’re expecting a strong demand going forward. That’s a part of our 2027 goals.
Florent, Analyst, TPICAP: Yes. Thank you. And on Ready to Eat, can you say something about the magnitude of the financial impact from the sort of the ramp up, not issues, but sort of the ramp up in stock? And should we expect margins fairly quickly coming back to the levels we see sort of in the second half of twenty twenty four around 6%? And is that sort of the level we should expect until volumes pick up either from new contracts at Farra or the other ramp up in The Netherlands?
Thank you.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Yes. We will talking stock specific, we are now up and running in stock here, so of course we expect that to be normalized. We also said that we have an unstable QSR market that we expect to be stronger in the later part in 2025. And in Q4 we will start up Ostovolde that will of course have an impact. But in general, see ready to eat market where we actually are investing a lot and see really good progress.
Of course, it’s an expectation for us to have those kind of margins and that is what we see going forward, but that will of course be quarters when we are ramping up things or we see this uneven growth that we’ve talked about before. So it’s hard to say quarter by quarter, but we see a really strong long term, medium term trend and markets in ready to eat.
Florent, Analyst, TPICAP: Okay. Thank you, guys. Appreciate it.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Thank you.
Geri, Call Coordinator: Thank you. We will now next have Daniel Schmidt from Danske Bank. Please go ahead.
Simon Brunn, Analyst, ABG: Yes. Good morning, Jonas and Fredrik. Just maybe following up on your latest comment there Jonas, when you say that you will have sort of quarters with uneven growth and you write a little bit about some weakness in QSR in the report, but you do expect that demand to pick up later this year. What is the reason for that belief?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: That we see that a long term convenience trend and if you be specific at some of our customers in QSR, they have had some challenges and that of course short term effect. We’ve also seen in latest years an increased price from a lot of QSR customers that has had a little bit setback on the growth, but we see the long term trend of of the QSR, and we also see that the QSR customers are are are getting back both some segments. So that’s why we have the have the belief.
Simon Brunn, Analyst, ABG: And what do you refer those sort of difficulties to when it comes to QSR customers in Q1? What does that relate to?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Without talking about specific customers, there has been some media attention to different customers in different countries, and there has been also this, as I said, price, historical price increases that has impacted growth a little bit, and a perception that it has been a little bit expensive, but we see it’s getting back again. That’s why we do not see any break in the long term, and we also see some interesting signals going on forward.
Erik Stancic, Analyst, Kepler Cheuvreux: Okay.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: But it’s hard to say
Simon Brunn, Analyst, ABG: So you’re not seeing sort of the Yes. You’re not seeing sort of adverse behavior towards U. S. Food retail chains getting worse in Q2 than it was in Q1, basically?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: No. We do not see that.
Simon Brunn, Analyst, ABG: And then the second question, when it comes to FX, does that have any impact, the strength of the Swedish krona when it comes to export prices and the translation effect of what’s being exported?
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Yes, that is a little bit what you’re seeing in that graph, because we see strong demand for European pulp, but most of it is a little bit referred to what Fredrik is talking about, our export. Most of the export is out of Denmark and it’s out of Lithuania, and then of course we have to put out of the other countries of products that is not preferred by local customers, but most of the export are out of Denmark and Lithuania. So therefore, there’s no direct impact of the strength of corona, but of course when we translate that back to the net sales in Swedish crowns, it has an effect, and that is what we see in that graph. But you also see a little bit delay in from market in the in export. Actually, that is not shown in Q1.
So then it’s translation effect, not marked.
Simon Brunn, Analyst, ABG: Okay. Good. And speaking about delays, when you announced the acquisition in The Netherlands, you said that you aim to start operations in Q3. Now you’re saying Q4. Has that something changed dramatically?
Or is this just a couple of weeks of delay or
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Yes. Nothing has changed dramatically. It actually when we say Q3, it has been in the borderline between Q3 and Q4, and we’re saying Q4 now for being secure of our start up. So there’s no major change.
Erik Stancic, Analyst, Kepler Cheuvreux: Okay.
Simon Brunn, Analyst, ABG: Thank you, guys. That’s all for me.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Thank you. Many thanks. Thank you,
Geri, Call Coordinator: We currently have no further questions. I will now hand back to Jonas for any closing remarks. Thank you.
Jonas Sternestahl, CEO and Managing Director, Scandi Standard: Thank you very much. I really want to say thank you to everyone listening in to our presentation of Q1. With that, we close the meeting. Thank you. Thank you.
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