Danish Crown Demonstrates Stable Competitiveness

DENMARK - The food company Danish Crown has spent the 2010/11 financial year strengthening its competitiveness.
calendar icon 24 November 2011
clock icon 3 minute read

With revenue of DKK 51.8 billion this year against DKK 45.2 billion last year, the group is posting earnings of DKK 1,762 million against DKK 1,648 million last year.

This is a testament to stability – and to the group having succeeded in creating organic growth in a challenged market.

The satisfactory results support higher consolidation than normal for the company, and the Board of Representatives has today approved the distribution of DKK 1,394 million as supplementary payments to the owners, while a total of DK 368 million will be spent consolidating the company.

"The strong results allow us to consolidate with the equivalent of DKK 0.16 extra – in addition to making cash supplementary payments of DKK 0.95. The Board of Representatives is acting responsibly in seizing this opportunity to strengthen the company’s capital base in light of Danish Crown’s plans for the future," said Chairman of the Board Niels Mikkelsen.

Supplementary payments thus amount to DKK 0.95 per kg for pork producers, DKK 0.80 for sow producers and DKK 1.30 for beef producers.

"In the past year, we have spent some time discussing the raising of capital, and the extraordinary consolidation which has been possible means that it is time to continue this discussion until the owners are ready to make a decision," said Mr Mikkelsen.

Today, most value is being created by the foreign companies and in the international markets, but the enduringly competitive prices offered to owners have led to an increase of more than 5pc in the number of animals supplied in Denmark.

"Danish Crown is becoming an ever more international business, and in the past year our access to, for example, the Chinese market has contributed substantially to ensuring competitive settlements – and China has been the fastest-growing market of all. This underlines the importance of maintaining absolutely world-class food standards as this is what gives us access to the markets. Together with our reliable supplies, our sought-after know-how and the quality of our products, this is what makes us such a popular partner," said CEO of Danish Crown Kjeld Johannesen.

Danish Crown’s processing sector is again contributing significantly to the results and is doing well internationally. The European processing industry is currently challenged by increasing commodity prices, especially due to increasing demand from the BRIC countries. A challenge which will not go away in the new year.

"Ours is a long value chain, and all the various parts influence each other. And while the processing sector will be working to absorb the higher commodity prices, we will continue to look at payroll costs in the Danish companies. This is the only way that we will remain competitive," said Mr Johannesen.

Financial highlights for Danish Crown 2010/11
DKKm 2009/10 2010/11
Revenue 45,211 51,754
Profit from primary activities 1,857 2,029
Net profit for the year 1,648 1,762
Balance sheet 22,615 23,935
Equity 5,101 5,391
Subordinated loans, total 6,098 6,444
Supplies from members, millions of kg 1,377 1,450
Total supplementary payments, DKKm 1,316 1,394
No. of members 9,847 9,577
No. of employees 23,085 23,576

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