HKScan’s Interim Report 1 January – 31 March 2022 

HKScan’s EBIT down on the comparison period as expected, with the outlook for 2022 unchanged

January-March 2022

  • HKScan’s net sales totalled EUR 437.2 (427.5) million. In comparable figures, net sales increased by almost four per cent. Net sales increased in all the company’s home markets. Clear increase in food service sales and retail sales of meals and meal components. 
  • The Group’s EBIT totalled EUR -8.9 (-1.1) million. 
  • The Group’s comparable EBIT weakened as expected from the comparison period, totalling EUR -8.5 (-1.1) million. Negative performance in the Baltics caused the biggest deviation in the Group's EBIT.
  • High cost inflation in all HKScan's home markets, starting in late 2021, and the war in Ukraine further accelerating it, have pushed energy, grain and other production input prices to record high levels. To secure the sufficiency of meat raw material essential for its business, HKScan has raised producer prices for meat raw material faster than expected. 
  • HKScan’s costs rose significantly and exceptionally fast. Due to the structural delay in pricing, increased sales prices and production efficiency measures did not fully compensate for strongly increased costs. 
  • The South Korean market with its strong purchasing power opened up for Finnish poultry products in January.
  • Cash flow from operating activities was EUR -34.4 (3.3) million. In addition to a weaker EBIT than in the comparison period, cash flow was lowered by changes in working capital, the largest of which was the usual seasonal fluctuation in trade payables. 
  • Interest-bearing net debt was EUR 355.0 (308.0) million and net gearing 110.6 (95.6) per cent.
  • With the war in Ukraine, the Group’s operational focus has been shifted to short-term measures to minimise the negative impacts on performance and to ensure profit development in a rapidly changing operating environment.
  • HKScan’s outlook for 2022 remains unchanged and the company is confident in its ability to strengthen its performance over the rest of the year. 

The figures in parentheses refer to the same period in the previous year, unless otherwise mentioned. The figures are unaudited. 

Outlook for 2022

HKScan estimates that the Group’s comparable EBIT in 2022 will improve compared to 2021. Early 2022 comparable EBIT is expected to be weaker than the comparison period due to inflation, which strongly affects the company's profit development, and significant imbalances in the international meat and grain market. The full-year profit development will be significantly affected by the development of the international meat and grain market.


(EUR million) 1-3/2022 1-3/2021 2021
Net sales 437,2 427,5 1 815,3
    Finland 182,6 179,8 772,3
    Sweden 163,9 161,8 700,4
    Denmark 49,4 45,4 172,7
    Baltics 41,2 40,5 170,0


(EUR million) 1-3/2022 1-3/2021 2021
EBIT -8,9 -1,1 17,9
 - % of net sales -2,0 -0,3 1,0
Comparable EBIT -8,5 -1,1 14,5
 - % of net sales -1,9 -0,3 0,8
    Comparable EBIT, Finland -1,2 -0,5 8,5
    - % of net sales -0,7 -0,3 1,1
    Comparable EBIT, Sweden 0,2 2,4 22,9
    - % of net sales 0,1 1,5 3,3
    Comparable EBIT, Denmark 0,5 0,0 0,0
    - % of net sales 1,0 -0,1 0,0
    Comparable EBIT, Baltics -4,9 0,7 -5,1
    - % of net sales -11,8 1,7 -3,0


(EUR million) 1-3/2022 1-3/2021 2021
EBITDA 5,9 14,7 78,1
Profit/loss before taxes -10,7 -5,7 6,6
 - % of net sales -2,4 -1,3 0,4
Profit/loss for the period -10,9 -6,2 -1,2
 - % of net sales -2,5 -1,5 -0,1
EPS, EUR -0,12 -0,07 -0,06
Comparable EPS, EUR -0,11 -0,07 -0,10
Cash flow from operating activities -34,4 3,3 54,6
Cash flow after investing activities -38,5 69,6* 81,2*
Return on capital employed (ROCE) before taxes, % 2,5 4,3 3,6
Net debt 355,0 308,0 314,5
Net Gearing  % 110,6 95,6 95,2

* Includes the sale of Vantaa property (land and buildings) with EUR 76.1 million.

HKScan’s CEO Tero Hemmilä 

HKScan’s net sales increased during the first quarter of 2022. The performance weakened as expected from the comparison period. Comparable EBIT was EUR -8.5 million, while in the comparison period it was EUR -1.1 million. The reasons for this are clear. The strong cost inflation in all our market areas, already starting towards the end of last year, accelerated by the war in Ukraine, pushed production input prices to record high levels. HKScan’s costs rose significantly and exceptionally fast. The company was not able to fully compensate the sharp rise in costs by increasing sales prices and by production efficiency measures, despite the fact that the increase in sales prices and the measures to improve production efficiency were higher than in the comparison period.

Net sales increased in all the company’s home markets 

The Group’s January-March net sales increased by almost four per cent in comparable figures from the comparison period. With the gradual removal of pandemic restrictions, sales growth was particularly strong in the food service channel, with an increase of some 22 per cent. Food service sales growth is expected to strengthen further towards the end of the year, supporting the Group’s positive profit development. Also, rise in sales prices partly increased net sales. 

The meat and grain market situation completely exceptional 

The comparable EBIT was lower than in the comparison period in all our Business Units except Denmark. In Denmark, we have managed to implement our strategy in a challenging operating environment and we improved our comparable EBIT. I am really pleased with our development in Denmark. Through our product portfolio development, sales channel choices and production efficiency measures, we have been able to build a more stable and profitable foundation for the business, for now and for the future. In Finland and Sweden, we were not able to increase sales prices at the same pace with cost increases and the comparable EBIT declined from the comparison period in both markets. The clearest decline in performance was seen in the Baltics. The completely exceptional price situation in the meat and grain markets challenged our long local value chain and business model in the Baltics. Pork prices increased significantly in Europe towards the end of the review period and are expected to rise further, which will significantly strengthen the competitive position of our own operations in the Baltics. At the same time, rising grain and energy prices continue to put pressure on our performance. 

With the war in Ukraine, the Group’s operational focus has been shifted to short-term measures to minimise the negative impacts on performance and to ensure profit development in a rapidly changing operating environment. This involves determined efforts to pass costs up the chain to sales prices, while emphasising systematic cost management. 

Expansion into vegetables supports strategic journey to become a versatile food company

As a key part of our Food Company strategy, we announced after the review period a partnership with Vihannes-Laitila Oy, Finland's leading vegetable trading company. We founded a joint venture, Kasviskonttori Oy, to develop and launch fresh added-value vegetables. New products will be introduced to the consumer market within a year. The vegetable use is expected to continue to grow and in particular the consumption of fresh vegetables with higher added value is expected to increase with new products to be introduced to the consumer market. High-quality vegetable products will complement HKScan's existing product range to respond to consumer needs, creating width and diversity of offering, also strengthening our commercial operations and our role as a versatile food company for consumers.

During the review period, we conducted statutory negotiations in accordance with the Act on Co-operation to develop the Group's operating model. The change will further clarify the responsibilities between the Group functions and Business Units. The change emphasises the Business Units' profit responsibility and the Group's role in the overall management of strategy and of good corporate governance of a listed company. The new responsibilities between the Group and Business Units also allowed us to rationalise and improve the Group's cost efficiency.

Unstable geopolitical situation bringing changes to food supply chains 

The unstable geopolitical situation is increasing business challenges and changing the market in a way that is strengthening the role of domestic raw materials and already familiar and safe products in consumer demand. Consumer food prices will rise significantly, affecting both retail selections and consumer demand. In this respect too, HKScan has a good market position and the situation is creating new opportunities for the company. At the same time, we will see developments where major food players will seek greater reliability and supply security in their international supply chains. This is an opportunity also for HKScan to strengthen existing customer relationships and find new ones.

With the war in Ukraine, we are facing new types of business risks related to the availability and price of Russian energy and increased cyber risk. As a company, we are well prepared for energy risks and we have prepared plans that are well underway to eliminate these risks. Cyber risk preparedness has been high on our agenda for quite some time. 

Securing the availability of domestic meat raw material is also in the interest of the consumer

The most significant near-term risk in our home markets is related to the availability of meat raw material, especially at the end of this year and next year, as the value chain for primary production is long also in terms of time. Food chain companies, especially industry and trade, will be required to react much more quickly to cost changes, as their speed and magnitude could threaten the operation of the whole food chain and domestic food production through their negative impact. It is expected that the volatility of commodity prices on world markets will continue to be higher also in the coming years. The need for the change now underway is well understood and the scale of the financial changes required is exceptional. Passing on cost increases up the chain is the basis of a meat producer's economy. This inevitably means a clear rise also in consumer prices. 

So far, the most critical issue has been to try to secure liquidity of farms. There is still a long way to go to reach a producer price level that will bring farm profitability up to the required level. For this reason, active discussion with customers to pass on costs up the chain will continue to play an important role also over the rest of the year. This is the only way to create continuity for the production of domestic meat raw material and food, because the current producer price level does not allow for this at current production input prices. I believe that all food chain companies understand the seriousness of the situation and are ready to take decisions that will not break the basis for domestic food production but strengthen it. I believe that this is also in the interests of consumers in the unstable geopolitical situation.

In the current situation, it is difficult to anticipate changes in the operating environment. Nevertheless, we are confident in our ability to strengthen our profit development over the rest of the year. Food always matters, especially in unstable times. Our strategic target is to grow into a versatile food company that creates strong shareholder value.

Key events in January–March 2022 

HKScan expanding into the growing market of value-added vegetable products together with Vihannes-Laitila 

HKScan and Vihannes-Laitila founded a joint venture in April after the review period. Kasviskonttori Oy will respond to growing consumer demand and renew the supply of fresh vegetable products. Within a year, the joint venture will launch ready-to-use and ready-to-cook fresh vegetable products with higher added value. The collaboration will promote HKScan’s strategic target to grow into a versatile food company.

For HKScan, partnership with Finland's leading vegetable trading company is a natural part of the company’s strategy to expand into new raw materials and product categories. The use of vegetables has been strongly growing and the added value of products has been on average very low. The new partnership will provide an excellent platform to create added value for vegetable products, develop the selection and drive growth. Fresh vegetable products made from trusted raw materials will complement HKScan’s product portfolio consisting of a wide variety of meat products, snacks and meals. 

HKScan holds 80 per cent and Vihannes-Laitila 20 per cent of the joint venture Kasviskonttori Oy. New vegetable products will be manufactured at HKScan’s production unit in Eura. 

Impacts of the war in Ukraine on HKScan

HKScan condemns Russia’s attack towards the people of Ukraine and the independent Ukrainian state. HKScan has no business operations in Russia or Belarus. Since the sanctions imposed by Russia in 2014, HKScan has had no food exports to Russia. In addition, the company has suspended its minor exports to Belarus as a result of the war in Ukraine. HKScan has terminated cooperation agreements with companies with significant Russian ownership. So far, the war in Ukraine has had no impact on HKScan’s service level. 

The most significant effects of the war in Ukraine on HKScan are related to cost inflation and rising meat raw material prices. The availability of energy has also become a risk, especially for the company's Baltic business. HKScan has critically reviewed its energy sources and identified alternatives to Russian energy, which accounts for a relatively small proportion of the energy used by the Group. The company is building back-up systems to replace natural gas and is developing energy solutions for its production units so that it will switch away from Russian energy in about six months at an exceptionally fast pace for a large company. At the same time, HKScan will ensure the energy supply of its production units also in case of possible exceptional situations and will increase the flexibility of energy solutions. During the spring, the company has already moved away from a significant part of its Russian energy by investing in new energy solutions and through supplier selection.

The war in Ukraine has increased uncertainty in the international grain market, leading to sharply higher prices and uncertainty about the availability of grain. In addition, the situation has affected the availability and price of other inputs used by farms, in particular fertilisers. These effects have already materialised and are expected to continue in 2023.

HKScan’s product range in Sweden more diverse than before 

In March 2022, HKScan’s strong and valued Scan brand was expanded to include plant-based products with five new plant-based alternatives for the popular Scan classics, made from Swedish raw materials. Easy-to-use, high-quality and tasty products respond to the growing consumer demand for local plant-based food and contribute to HKScan’s strategy to grow into a versatile food company. The first reactions to the products from retailers and consumers have been positive. 

HKScan’s collaboration with Scandinavian Aquasystems on Gårdsfisk fish products deepened. Sales of Gårdsfisk products were transferred to HKScan in March, benefiting from HKScan’s strong commercial platform. Consumer-packaged fresh fish products and frozen fish balls sold under the Gårdsfisk brand are now available in Swedish retail stores. The products have been well received by customers.

Finnish poultry products approved for export to South Korea

In January, the South Korean market opened up to Finnish poultry products. HKScan’s export of poultry products to the South Korean market with strong purchasing power has started.

Events after the reporting period

Media release on 9 May 2022: HKScan planning to improve the competitiveness and cost efficiency of its poultry business in Finland

HKScan aims to improve the competitiveness and cost efficiency of its poultry business in Finland. The company plans to increase production efficiency, reorganise operations and renew working methods in the poultry units of Rauma and Eura to meet the market and competitive situation and to continue to secure its strong position in the strategically important and growing category of poultry products. 

Related to the plan, HKScan will start statutory negotiations at the Rauma and Eura units of its poultry business. The negotiations concern a total of approximately 600 persons. The planned measures may affect up to 210 employment contracts in the Rauma unit, either through termination of employment or through substantial changes in the terms of employment. With the planned measures, HKScan aims to achieve annual savings of more than EUR 3 million. The savings are expected to be realised during 2023.

Turku, 10 May 2022

HKScan Corporation
Board of Directors

Information meeting for analysts and the media

HKScan will organise an information meeting related to the January-March Interim Report for analysts, institutional investors and the media in the auditorium of the Hotel Haven (address: Eteläranta 16, Helsinki, Finland) on 10 May 2022 at 10 am. Breakfast serving will start at 9:30 am. The event will be held in Finnish. The Interim Report will be presented by Tero Hemmilä, CEO, and Jyrki Paappa, CFO.

To arrange an investor call in English, please contact Heidi Hirvonen, SVP Communications, tel. +358 10 570 6072 or by email 

For further information

Tero Hemmilä, CEO, tel. +358 10 570 2012
Jyrki Paappa, CFO, tel. +358 10 570 2512
Heidi Hirvonen, SVP Communications, tel. +358 10 570 6072

Financial reports

  • Half-Year Financial Report 2022 will be published on Wednesday 20 July 2022.
  • Interim Report for January-September 2022 will be published on Thursday 3 November 2022.