Annual report 2009/10 | danish crown group
Business areas (DKKm) Beef 2,795 6%
Pork 21,229 47 %
Processing 18,100 40 % Other 3,087 7%
[Pages 4-6]
Group key figures Revenue DKK 45.2bn Operating profit DKK 1.9bn Net profit for the year DKK 1.6bn Equity DKK 4.6bn Balance sheet total DKK 22.2bn
Danish Crown posts best results ever Randers, 25 November 2010 - The results for the year presented by Danish Crown clearly demonstrate the strong position of the group. The net profit for the year is DKK 1.648 billion against DKK 1.164 billion last year, and the massive growth is primarily attributable to reduced costs in Denmark and markedly improved results in the foreign companies. - The excellent results have been achieved through dedi cated efforts, and it is thus a pleasure to present them. I’m not afraid to admit that without the very focused approach which has been taken with DC Future, our competi tive edge would have been nothing like what it is today, nor would our results, says Kjeld Johannesen, CEO of Danish Crown, who also emphasises that a large number of factors have impacted the results. - The record earnings posted by the foreign divisions,
in particular, are part of DC Future, and the plan has contributed very significantlyto the results. However, sales in the world market have also been very favour able in the course of the year, and our knowledge and access to markets such as Russia and Asia is very important. Moreover, our finan cing costs have been very low, which is also a contributory factor, says Kjeld Johannesen. All in all, a total of DKK 1.316 billion will be paid out to the company’s owners, the highest level of supplementary payments in Danish Crown’s 20-year history. The supplementary payments will translate into DKK 0.75 per kg for sow producers, DKK 0.95 for pork producers and DKK 1.25 for cattle producers. A balance has now been struck between payments into and out of DC members’ accounts. This means that the supplementary payments will be disbursed in full and in cash to all members who
have been members for more than eight years. - The financial crisis is by no means over on the farms, and the money is badly needed. There is therefore every reason to celebrate that we are now competitive in terms of the prices being paid out to members. This year, Danish Crown is offering the highest prices to farmers, and this makes a big difference, says Niels Mikkelsen, Chairman of Danish Crown’s Board of Directors. He points out that Danish farmers are still under immense pressure, and that competitiveness remains absolutely key. - Competitiveness is inextric ably linked to the framework conditions under which both primary productionand the meat sector operate, and this is where there is a lack of political will. When we launched DC Future, we were promised that politically imposed burdens to the tune of
DKK 300 million would be removed, and we are still waiting for this to materialise, says Niels Mikkelsen. In addition to the record supplementary payments, there will be a substantial increase in equity. Partly as a result of non-recurring income items and changed accounting policies. - Exciting developments are taking place in Danish Crown, but these developments require financial solidity and additional capital. It is a responsible decision which will make it possible to pursue the ambitious targets set out in DC2015, says Kjeld Johannesen. In recent years, Danish Crown has become ever more international. Today, approx. 35 % of employees work in Denmark, while the rest of the workplaces in the group are found abroad. - This is a natural development for a company which
exports approx. 90 % of its production. Moreover, a continuous reduction in production costs is needed if we are to remain competitive. Today, 84 % of our processing activities take place outside Denmark, and this is a precondition for being able to slaughter Danish pigs in Denmark, and thereby maintain a considerable number of workplaces in this country, says Kjeld Johannesen. He emphasises that the challenges have not gone away, even though there is every reason to celebrate this year’s results. - We still have some way to go when it comes to redu cing our payroll costs as part of DC Future, something we must do if we are to remain on a positive track. We cannot rely on low interest rates and favourable market conditions; the company’s production economy must be able to withstand fluctuations, also in the long term, says Kjeld Johannesen.
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GROUP Management’s review Page 2 Financial review Page 3 Business areas Pages 4-6 Corporate social responsibility Pages 7-9 Group key figures Page 10 Statement by the Board of Directors and the Executive Board on the annual report and independent auditor’s report Page 11 Accounting policies Page 12 Income statement Page 13 Statement of comprehensive income Page 13 Statement of Financial Position Pages 14-15 Statement of changes in equity Page 16 Cash flow statement Page 16 Notes Pages 17-40
PARENT Accounting policies Page 41 Income statement Page 41 Statement of Financial Position Pages 42-43 Statement of equity Page 44 Notes Pages 44-47 Group structure Page 48