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Edited Transcript of SCST.ST earnings conference call or presentation 21-Aug-19 6:30am GMT

Q2 2019 Scandi Standard AB (publ) Earnings Call

Stockholm Aug 26, 2019 (Thomson StreetEvents) -- Edited Transcript of Scandi Standard AB (publ) earnings conference call or presentation Wednesday, August 21, 2019 at 6:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Julia Lagerqvist

Scandi Standard AB (publ) - CFO

* Leif Bergvall Hansen

Scandi Standard AB (publ) - CEO, President & MD

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Conference Call Participants

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* Alexandra Barganowski

Nordea Markets, Research Division - Analyst

* Daniel Schmidt

Danske Bank Markets Equity Research - Research Analyst

* Mikael Löfdahl

Carnegie Investment Bank AB, Research Division - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to the Scandi Standard interim report for the second quarter 2019. My name is Charlotte, and I'll be coordinating your call today. (Operator Instructions)

I will now hand over to your host, Leif Bergvall Hansen, to begin. Leif, please go ahead.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [2]

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Thank you. Good morning, everybody, and welcome to our second quarter interim report. It's a quarter where we delivered strong growth, strong growth in both sales, earnings and in cash flow.

We came out with a revenue growth of 10%, driven by price and also increased sales of value-added items.

We increased EBIT with 24%. The biggest contributor there were our product mix improvement.

57% increase in earnings per share.

We delivered a strong operating cash flow, and 16% return on equity.

If you are flipping page, we have a breakdown of the 10% top line growth, 6% being underlying revenue growth, driven by a strong performance, both within the Chilled Ready-to-cook and also the Ready-to-eat categories.

There is 2 percentage point (sic) [2%] coming from the consolidation of the Rokkedahl Food, this premium chicken company that we acquired in the second half of last year. And then there is a currency effect of 2%.

Going on to Page 5, the quarter where we came through with a strong product mix. There was some volume growth in the quarter, but the main contributor came from improved mix, driven by increased branded sales and all in all the recent cost inflation has been compensated.

We do also want to make you aware that there is reduced raw material prices anticipated by the end of the year.

We had some OpEx increases, driven by additional marketing spend and also on some central projects and some general price inflation across the base.

We had an impact from reduced depreciation, both coming from the alignment of the economic life of assets that we carried through towards the end of last year and that is partly offset by investments that are over and above depreciation.

Going on to Page 6. We had a good development in our most profitable product categories, mainly being 10% growth in the Chilled Ready-to-cook area. Mainly contributors there being improved product mix, more deboned products, we had a good and solid barbecue season. We have seen some price impact from the raw material compensation impacting the growth in this category.

Going to the Ready-to-eat category, we delivered a 26% growth in this quarter. There is some volume increases, both within the breaded category, but also in the unbreaded categories of Ready-to-eat products.

We have seen a number of very successful introduction of new products, particularly in Scandinavia in this period. And all in all, we see very strong demand from this Farre plant that we expanded during the second half of last year. And we see a continuing decline in the relative share for less profitable segments like frozen and exports.

Going on to Page 7. We provide here a breakdown of the Ready-to-eat category, which is increasingly positioning itself as a very important category for us. This chart, to the left, shows the -- that we in 2015, this category represented 9% of the company and now in the first half of the year, we -- it represents 20%, and it's all organic growth.

It's a rapid growing market for convenience products, particularly convenience products and high quality and it is got a very good fit with the more modern lifestyles. And this is an area where we develop platforms for the future, as we see this category will grow and become relatively more important over time. Part of that will be at the expense of some short-term margins.

Going on to Page 8. The sales channel breakdown shows a strong growth in Retail and also in Food Service. The Retail client category grew with 9% in the quarter, basically contribution from all geographical segments. And there's a solid mix between growth, both in the high end, but also in discount retailers.

Food Service delivered a strong growth of 20% in the quarter, mainly coming from growth within the quick service restaurants category, but also through the strong innovation and the strengthened sales organization across the group.

The less profitable segments, we always -- we see them diminishing in relative importance from early [export sales].

Going on to Page 9. We see earnings improvement in all countries. Just to give you an overview. Sweden, significant improvements across the board. Denmark, earnings driven by strong top line. In Norway, we saw a quarter with best-in-class margins again. Ireland being a combination of mix and operating improvement as the reasons behind improvement in earnings there. And Finland, another quarter with improvements and EBITDA margin is at 4.4%.

Going into the countries, the first one, on Page 10, Sweden, with another quarter of significant improvement. An 8% increase in net sales coming from favorable sales mix development and also some price increases that are compensating for the raw material increases.

Adjusted EBIT increased with 50%, representing SEK 14 million, particularly coming from favorable development in product sales mix. And we do see incremental improvements during the second half of this year.

Going on to Denmark. Another quarter with exceptional growth, but also growth that are coming with some growth pain. 20% revenue growth and an adjusted EBIT improvement of SEK 3 million. As mentioned, we are undergoing some growth pain in terms of cost, and we saw a depreciation increase of SEK 4 million.

Continued positive development for the new brand, Danish Family Farms, now growing with 57% versus the same quarter last year. We anticipate a lower quarter-on-quarter growth in the coming quarters.

Going on to Norway. Another quarter of strong growth -- very strong performance. 7% revenue increase, particularly driven by increased sales within Retail. Very strong margins and improved -- coming from improved product mix, but also with higher efficiency delivered primarily within operations.

This is our most profitable geographical segment and really coming through some very successful investments that we made in Norway over a number of years, and we see some of the effects from that coming through and also a significant component of best practice transfer, and we have really strengthened our product offering also.

Going on to Ireland. A quarter with some margin improvements. Relatively stable revenues and the margin improvement mainly coming from improved sales mix and also some efficiencies within operations.

The very significant investments that we are conducting in 2019 is well underway to deliver better cost efficiencies, some animal welfare and food safety improvements and also some debottlenecking.

Going on to Page 14, on Finland. It's another quarter with further improvements. 13% revenue growth and an EBITDA margin coming in, as mentioned, at 4.4%. That was delivered primarily through an improved product mix, both within branded products but also other kind of value-added products have been the main contributors for that development.

We have seen strong focus on further improvements in Finland, primarily within product mix, but also through the effect of quite a strong innovation pipeline, some further opportunities within improving manufacturing yields and also increasing our relative cost efficiency.

With that, I would like to hand over to Julia Lagerqvist, our new CFO. This is her first full quarter.

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Julia Lagerqvist, Scandi Standard AB (publ) - CFO [3]

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Thank you, Leif. Very happy to be here.

So coming back to the group income statement. As Leif said, we report some strong revenue growth of 10% and there is a 7% growth in EBITDA, giving us a margin of 7.8%.

We have seen reduced depreciation related to the alignment across segments that we did for the economic life of assets. This led us to a growth in adjusted EBIT of 24%, a margin of 4.6%.

We've had some nonrecurring items as Leif mentioned, mainly layoffs in Denmark related to reorganization, SEK 6 million; and also closure of our hatchery in Finland. This we had outsourced, and we have then taken the future rent cost -- sales as a nonrecurring item amounting to SEK 7 million. The effective tax rate has been 22%, in line with our guidance, and as mentioned, the EPS has increased to 57%.

Moving on to Page 16, regarding our financial position. We have seen improved returns in this quarter, so the return on capital employed is now at 10.4% and the return on equity is 15.6%. This also gives us equity ratio of 26.7%, this is an increase from last time of 25.4%.

Just as I mentioned, our net interest-bearing debt has increased by SEK 455 million due to the adjustments from leasing related to IFRS 16 as it is in the [August] from 2018 and onwards.

Going on to the next page to working capital. We have seen again this quarter very low level of working capital. This is mainly driven by payables being increased in our sales, while we kept the receivables at the same level. This is also related to favorable timing of the ending of the quarter 2 ending on a Sunday for us. This giving us a working capital to sales ratio of 5.3%. It is the lowest one we've had in the last 2 years.

Moving on to the cash flow amount on Page 18. As mentioned before, we had a strong operational cash flow this quarter, mainly driven by the improvement in EBITDA, but also a reduced capital expenditure versus last year. And the net cash flow per share is now SEK 1.39, coming from a much lower level last year of only SEK 0.23. And as I mentioned, the dividend payments that we did in quarter 2 was SEK 2 per share, amounting to a total payment of SEK 131 million.

As a last slide from me, just a reminder of our cash flow guidance, there are no changes. The dividend policy is to be 60% of net income over time. As just mentioned, it was SEK 2 this last year, and last year, we paid SEK 1.80. The paid interest estimate is to be 3% to 3.5% of average NIBD, and the blended effective tax rate to be around 20% to 21%.

As I mentioned, the capital expenditure in this year is estimated to SEK 380 million, mainly focusing on projects in Ireland. We also do have some contingent liabilities related to the acquisition of Manor Farm. As Leif mentioned, this is the 3 earn-out tranches in 2019, '20 and '21. This has been successful so far. We actually paid out in quarter 3 now the first tranche of SEK 133 million. You can see the appendix for more detail.

And that's it from me. I'll hand back to Leif.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [4]

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All right. Thank you. Just to give you a little heads-up on a very important component in the way we operate the business, our sustainability work under the heading The Scandi Way. And one of the things I want to draw your attention to this quarter is what we do within plastic packaging, where we have a target of that all plastic packaging we used by 2023 to be based on renewables or recycled materials. And already now from Q3, we are starting a transformation that all our plastic trays will be based on 100% recycled materials and that will be implemented over the coming quarters.

Going to the summary page of Q2. We saw a quarter with strong growth in revenues, strong growth in earnings and with a good cash flow. We saw another quarter where it's clear that our markets are driven by secular trends really supporting poultry products. Tasty convenience products is one of the main drivers, very attractive nutritional and health profile compared to alternatives. This sustainability becomes increasingly important for consumers' choice where chicken products comes up very high on that score. We see an attractive price to consumers compared to peers as another important component for the consumers increasingly choosing chicken.

We have, in this quarter, continued to strengthen our market positions, thanks to a number of things not least a very solid innovation portfolio and also further strengthening on our brands in different markets.

So we do continue to have a positive market outlook, and also want to remind you that we do follow structural opportunities very closely.

So with that heads-up on Q2, we are happy to take any kind of questions. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have our first question from Daniel Schmidt from Danske Bank.

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Daniel Schmidt, Danske Bank Markets Equity Research - Research Analyst [2]

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I just wanted to start asking about price realization and raw material. You said in the presentation that you anticipated reduced raw material prices by year-end and you also talked about price hikes there, I think you mentioned Sweden as a function of sort of neutralizing higher raw material prices. How should we view sort of -- how should we model this going forward? Are you going to be able to sustain your prices, while at the same time we see raw material coming down and that should be sort of beneficial for you in the second half of this year? And have you seen any benefits coming through in terms of price in Ireland? I think I'll stop there.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [3]

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Yes. First of all, the cost inflation that we have seen coming through in the second half of last year as you refer to, we see that we have managed to all in all compensate for that, which is really thanks to this model about raw material-based cost inflation. We have a model and relationship with our clients, that means that we will pass those components through, which is a good contributor in terms of keeping a stable margin development in spite of raw material fluctuations that we will see from time to time. That's also why we don't anticipate that this effect on feed prices will have an impact on our earnings going forward, but more we want to draw your attention to the fact that there are changes anticipated within this deal.

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Daniel Schmidt, Danske Bank Markets Equity Research - Research Analyst [4]

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But is there any sort of lagging effects where you could see benefits over a short time period or vice versa?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [5]

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Could be.

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Daniel Schmidt, Danske Bank Markets Equity Research - Research Analyst [6]

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Yes. Okay. And on Ireland, where you've said that you were sort of lagging in terms of realizing prices and you guided for price realization for the second half of '18 in connection with the Q1 report. Is that not -- maybe not necessary now to push through prices given what you're seeing in raw materials for the second half?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [7]

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No. We have been -- all in all, achieved compensation for this well-justified raw material inflation that we have experienced. So -- and as you are saying, that's correct, that was longer in Ireland, as this way of working is relatively new in an Irish context. But we are -- we have landed this in a constructive manner, and we are, let's say, focusing on a lot of other opportunities that we have.

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Daniel Schmidt, Danske Bank Markets Equity Research - Research Analyst [8]

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Okay. And then just looking at profitability overall, 4 out of 5 markets are improving their profitability and Denmark is only the -- is basically the odd one out. And you are referring to growing pains there. What should -- and you also said that growth will decelerate in the coming quarters in the presentation. Will that sort of help you improve your profitability going forward and also the layoffs that you're conducting or how should be view Denmark in the coming quarters profitability-wise?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [9]

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No, you are right that in Denmark, we are -- we have seen a very exceptional growth. We have been very successful in signing up new contracts. In Q1, we grew more than 30% and this quarter 20%, which is really exceptional. But there is also -- it also does come with some pain in terms of getting so much more production through our operation and that has come with some pain in terms of bottom line profitability. We are confident that, that will be beneficial to us over time, but we also see that, that growth pain will impact us during this year. So we anticipate a relative stable development from this level in the remainder part of this year.

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Daniel Schmidt, Danske Bank Markets Equity Research - Research Analyst [10]

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All right. And then a last question from me. You and your wording states that you continue to gain market share, and I can understand that given the growth that you have. One of your competitors were out a month ago saying that they are also gaining market shares, and I think they refer especially to the Swedish market. Is it true that you're gaining in all markets? Or are you losing in -- if you look at the Nordics?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [11]

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No. All in all, you are right in referring to the 7%, 8% annual growth that we have now achieved over 5 years. That is clearly ahead of the market growth in our geography. And that is thanks to a very solid innovation platform, quite a successful category project. We're also entering into new categories that are today a bit more niche within the Ready-to-eat area. But obviously with the way people want to eat going forward, we see those categories becoming increasingly important over time.

So all in all, we are taking share in all geographies, but frankly, it is more important to us to grow the market in attractive areas. Whether we achieve a better market share or not is kind of less important to us. But overall, we do anticipate a strong growth also to continue going forward.

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Operator [12]

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Our next question comes from Mikael Löfdahl from Carnegie.

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [13]

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I have a few questions. Firstly, a follow-up on Denmark. Maybe I missed something, but did you say anything about the, first of all, the impact from the staff reduction that you have carried out in the quarter, if they will come through already in Q3 and the magnitude of those savings.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [14]

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No. In Denmark, we do anticipate a relatively flat or stable development from where we are now. As I said, we are taking in really a lot of new business, new clients, new products over the last 5, 6 months, and that has come through as some additional costs and some lack of efficiency, and that we are working hard of getting the impact of this exceptional top line development to get that to channel all the way through to the bottom line and the staff reduction is just one of those elements.

So the way we see the remainder of the year is gradually a slower top line development than the 20% to 30% that we have seen in Q1 and Q2. But we also anticipate that it will take the rest of the year to ease these growth pains in a way where it will show up in improved margins. So it is one component, the staff reductions, but there are more to be achieved to get the full impact.

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [15]

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Okay. And also just to clarify, when you speak about lower quarter-on-quarter growth, specifically if you go back a few years and look at the seasonal patterns, you said that's higher sales in Denmark in Q3 over Q2. But is this statement that you will have lower sales quarter-on-quarter in Q3 and Q4? Or is it that you expected the growth rate to decelerate year-on-year on a quarter-on-quarter basis?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [16]

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It's -- overall, for the group, there are very little seasonality and that goes also for Denmark. So everything equal, the quarterly growth is very similar across the business. That includes Denmark as well. So these, let's say, spikes that we have seen with 35% growth in Q1, 20% in this quarter, is really down to exceptionally strong income of new business. That is not down to seasonality, but more due to successful commercial initiatives. And there, we have got some work to be done to ensure we get the margins [out of it]. So what we are saying -- what this mean is that we do anticipate less than 20% growth in the second half of the year.

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [17]

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Yes. I understand that because you -- organically, you haven't grown that much. Obviously, you have this [reported growth] from acquisitions in the first half which will diminish during the second half. But okay, never mind. Another thing, on the group common costs, they increased by SEK 12 million year-on-year. Is this something that you expect to be sustainable? Or is there any exceptional thing in that number? SEK 27 million cost in this quarter, that's higher than you've ever had, I think. Yes.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [18]

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The group cost in this quarter were -- there was a -- some of these new categories that we are entering into, we do sort of skew those -- the development of those categories with some marketing investments and that is part of the reason for increased group cost in this quarter. Some of those -- some of these projects we take for the group and this is something that will benefit the entire group. And the only addition to that are some central projects, a number of those within IT and some general [accounting fees].

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [19]

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Okay. But how should we look at that going forward? I mean it's a quite big piece of cost here, SEK 27 million, out of total for the group. So is this the new normal around these levels growing by some normal growth rates going forward? Or was it any exceptionals in this quarter? I mean it was far, far less than SEK 27 million in Q1, for instance.

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Julia Lagerqvist, Scandi Standard AB (publ) - CFO [20]

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No, there is some exceptional cost in this quarter. So we are expecting to be more in the level of quarter 1, I would say going forward. Does that answer the question?

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [21]

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Yes. That's perfect. Another thing that stood out -- sorry, for focusing on the negatives, but I just want to put them aside. The net financials in the quarter, obviously, spiked quite a lot. Is it possible to strip out what we have here? I know the IFRS 16 impact obviously, but anything else? You're guiding on your paid interest, but there is not a dump in here, I assume, in the quarter.

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Julia Lagerqvist, Scandi Standard AB (publ) - CFO [22]

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There is some currency effects as well, that's the one thing that might be interesting to look at.

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [23]

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Is it possible to quantify that?

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Julia Lagerqvist, Scandi Standard AB (publ) - CFO [24]

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I would like to come back to you on this one maybe later in the call today. Is that okay?

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [25]

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Yes. Sure. Okay. And -- let me see, a final -- I don't know if you have anything to say about that, but when you look at the -- during the summer, we all saw this deal between the EU and Latin America -- or South America regarding a growth of (inaudible) on the imports of meat and poultry products and other agricultural products from South America to the EU. Obviously this is not a done deal yet, they have to go through the relevant countries and the EU parliament. But is this something that you think could impact your current geographies? Or are they sort of closed and consolidated and not that impacted even if the import should increase to the EU?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [26]

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Are you thinking whether this will impact our market positions? Or are you thinking about the label, I mean that there could be acquisition candidates that might be affected by this development?

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [27]

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I'm thinking more in terms of prices and obviously, mainly perhaps on frozen products and so on, not perhaps that much on more higher margin products. But I guess, the supply-demand situation could change with increased import to the EU from South America. That's one thing. And if so I guess, maybe you are quite protected in your current geographies, but you are looking at acquisitions elsewhere, and particularly in Europe, is this something that impacts your view on -- or have you become more cautious on perhaps acquiring something in other EU countries, which may be more affected by this if this deal comes through, I would say?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [28]

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I mean first of all, export is a relative small part of the business. It's now only 8% of the business, and we see the relative share of our export business to go down. And it is really coming back to the fact that the chicken market is very local, Swedish wants -- Irish people want Irish and so forth. There are some imports from outside the EU but it's mainly in the more commodity low-priced segments. And the -- and if there is -- this deal with -- that you referred to, we don't anticipate that really to have any impact.

[Let's say], the import from South America into EU have gone down for a few years for a number of quality issues that has been down there. Whether it will increase a bit going forward, we don't see that will impact our development either growth-wise or margin-wise. We don't really anticipate it will have any impact on relevant acquisition candidates either. It is a relatively smaller impact and it is very -- not very attractive segment, so let us put it that way.

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Mikael Löfdahl, Carnegie Investment Bank AB, Research Division - Research Analyst [29]

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Okay. Good. Final question from me. Sorry, for taking so much time. Just on Norway, I mean, it's impressive that your margin development in Norway and the margin has been growing now for many quarters now in a row. And you have always, my interpretation anyway, been quite cautious on you shouldn't extrapolate these kind of margins maybe, and so on, and you said so also after the very strong Q1 where the margin grew a lot. Now it grew even more in Q2. So how should we look at the margin development in Norway? Are the current levels sustainable? Or should one be a bit cautious on extrapolating these numbers going forward?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [30]

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No. I think that we see many opportunities to improve our performance across the group. Norway is one area, and you are right in saying that we've been relatively cautious in, let's say, guaranteeing these kind of margin levels going on forever. But it is -- we are seeing really the effect of a lot of best practice being implemented in Norway. A lot of best practice coming from other markets that are much more exposed to international competition. And we do see the leverage of those initiatives coming through in Norway.

What is particularly positive, I would say, in Norway over the last number of quarters is that we see quite a nice revenue growth. If you remember, you go back a year or 2, when top line were a bit more flat. So it is positive that we both see solid margins and also now top line coming through.

So we are happy with the developments in Norway. We believe there is sort of more things we can do. No revolutions for smaller initiatives. But for the main -- we're also trying to guide here, we are -- we see -- we're already doing very well in Norway. We still believe that there are areas we can improve. We'll be more seeing opportunities in Sweden, where we see -- where we anticipate some incremental improvements in profitability in the sort of shorter term. So there is a bit of catch-up to take place.

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Operator [31]

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Our next question comes from Alexandra Barganowski from Nordea.

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Alexandra Barganowski, Nordea Markets, Research Division - Analyst [32]

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I had a question regarding your Irish segment, and you've had a great significant improvement in your margin in this region. I'm just wondering if this is a level that we can expect also going forward? And yes, so that's my first question, basically.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [33]

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Sorry, Alexandra. What was the segment you referred to?

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Alexandra Barganowski, Nordea Markets, Research Division - Analyst [34]

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The Irish.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [35]

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The Irish segment, yes. Okay, sorry. We -- this was a relatively good, good quarter margin-wise in Ireland. There are a number of investment projects that we carried through in Ireland to improve our position, [this is] capacity-wise, but it's also within -- there was some debottlenecking to take place. So we do anticipate that there are some more to be achieved over there. But we kind of see in the sort of long term a relatively stable development in the performance in Ireland.

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Alexandra Barganowski, Nordea Markets, Research Division - Analyst [36]

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And my second question relates to your CapEx levels, which you have now reduced. Again, is this also a level that we can expect going forward for the next half of the year? Or do you expect to get back on your more historical level in the next 2 quarters?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [37]

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Sorry, could you maybe repeat the question? Sorry, there is a bit of an echo on the line, sorry about that. So could you repeat the question to make sure I give you the right answer.

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Alexandra Barganowski, Nordea Markets, Research Division - Analyst [38]

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Yes. I just had a question regarding your CapEx guidance and whether you expect it to stay on the level that you have indicated as of now? Or if you expect it to increase to more historical levels in the remaining part of the year?

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [39]

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This guidance that we have given for CapEx for this year, we anticipate that we will stick to it, and yes, so we -- that is still relevant.

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Operator [40]

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(Operator Instructions) We have no further questions. Leif, I will hand back to you.

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Leif Bergvall Hansen, Scandi Standard AB (publ) - CEO, President & MD [41]

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All right. Thank you, everybody. Thank you for good questions and for your time this morning, and have a great day. Bye-bye.

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Operator [42]

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Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your line. Have a lovely day.