HKScan will grow into a versatile food company in line with its strategy.
HKScan’s strategy focuses on the implementation of Turnaround programme to improve the company's profitability in 2019–2021. The successful implementation of the Turnaround programme creates a financially strong foundation for the company, enabling future growth and renewal. A fundamental change in the Group’s operating model from a matrix organisation to the country-specific profit centre based organisation plays a key role in the strategy implementation.
HKScan aims to grow into a versatile food company and strengthen its market position in changing markets together with its customers. HKScan invests in strengthening and growing its position in existing and new product categories and sales channels, with evolving retail and the growing food service channel as the key sales channels. The company also invests in exports.
Changes in consumer behaviour emphasise the need for renewal in line with the strategy on our journey to a versatile food company. Renewing ways and channels of food production and supply, combined with rapidly advancing digitalisation, strengthen the need to renew our operations. With changing consumer behaviour, commercial concepts serving customers and consumers and the digital solutions supporting these concepts play a key role in the implementation of HKScan’s strategy. New commercial concepts will utilise everything from the company’s traditional strengths to the latest digital solutions.
The Covid-19 pandemic has already changed consumer behaviour and thus, our operations. Some of the changes caused by the pandemic are expected to remain permanent, such as the much stronger anchoring of digitalisation
to the purchase of food. The pandemic has not caused the need to change the key targets of the Group strategy, but for example digitalisation will have a greater weight in the strategy implementation.
HKScan also continues its strategic assessment related to the company structure and reviews the positioning of different market areas as part of the Group’s operations.
Turnaround programme progressing
The Turnaround programme at the core of our strategy was launched at the beginning of 2019. The pandemic changed the sales mix and led to additional costs, which slowed down the progress of the programme. The cumulative improvement in the comparable EBIT, achieved through the Turnaround programme from the 2018 level, was already over EUR 63 million at the end of December 2020.
The company’s cash flow from operating activities improved cumulatively by EUR 78 million during the same period. Net gearing is at a level that allows a controlled implementation of the Turnaround programme.
Poultry products driving growth
Growth in poultry products is at the core of HKScan’s strategy. In 2020, the company grew strongly in the poultry category in all its home markets, driven by the Business Units Finland, the Baltics and Denmark. Poultry meat consumption has been growing strongly and is expected to continue strong in the future.
In beef, pork and meat products, HKScan’s sales strenghtened in 2020, particularly in branded retail products. The red meat market as a whole has been declining. The company aims to strengthen its position in beef, pork and meat products through its advanced responsibility work, strong brand portfolio and partner network.
In processed meat products and meal components, HKScan has been able to strengthen its position, which plays a key role in increasing the added value of meat raw material. For ready-to-eat meals, growth will focus on the coming years, but will already start during 2021.
New product categories through partnerships
Strong partnerships are a key element of the company’s strategy. Through partnerships, HKScan can expand into new product categories and sales channels. On the other hand, HKScan’s wide commercial network and customer contacts provide many smaller companies with an interesting platform to grow in the Baltic Sea region.
In 2019 and 2020, HKScan has extended into new product categories through partnerships. The company is looking into opportunities to expand sales of plant-based protein products to the home markets. Partnerships create the basis for the company’s growth in new product categories and for its expansion into new raw material bases. At the same time, they support HKScan’s strategic target to grow into a versatile food company.
Long-term financial targets: