DENMARK, Randers. Danish Crown records a profit of more than DKK 2.2 billion for the first time ever. The strong performance was achieved in a year when the group retained its competitive strength despite COVID-19 and massive price drop on pork in the second half of the financial year.
The record-high profit in the 2020/21 financial year was achieved on the basis of a dedicated effort through several years. The company has been focusing on strengthening the group’s domestic market positions in Northern Europe. Worldwide, they have dedicated resources to the bacon, pizza toppings and canned product categories and have invested in DAT-Schaub, which now ranks among the market leaders in the sale of products from hog casings for the food and pharmaceutical industries.
For the seventh consecutive year, DAT-Schaub has expanded its business volumes. The company has increased its EBIT nearly fivefold during the strategy period, reaching EBIT of DKK 1 billion for the first time. The company also recorded strong progress in the processing activities in domestic markets in Northern Europe. In 2020/21, these activities contributed EBIT of close to one billion kroner, which is 41% more than at the beginning of the strategy period five years ago.
The strategic goal has been to lift earnings, allowing DC to increase the settlement for owners’ pork deliverables by at least DKK 0.60 per kilo compared with the European price index. This goal has now been achieved for two consecutive years.
Danish Crown’s net profit increased by 5.3% to DKK 2.255 billion. Due to significantly decreasing prices on the global pork market in the last third of the financial year, total revenue declined by 4.1% to DKK 58.287 billion.
The supplementary payment to the cooperative owners for the supply of pigs will be DKK 1.30 per kg and DKK 1.10 per kg for sows, while cattle suppliers receive a supplementary payment of DKK 1.30 per kg. In addition, DKK 242 million will be deposited in the cooperative owner’ accounts. For an owner supplying 10,000 pigs annually, this equates to about DKK 1.3 million.
While the settlement price for pork plunged over the course of the summer, prices of beef and veal rose considerably. Danish Crown Beef is beginning to realise its potential and is showing good strength. Sales have improved both in the retail segment and to restaurants and the foodservice market, and the slaughter activities in Germany and Scan-Hide, which processes cattle hides for the leather industry, are both contributing strong earnings.
In June, Danish Crown presented its strategy for the next five years. Named Feeding the Future, the strategy shifts the basic focus away from volume to value creation, with sustainability being pivotal in developing their business going forward.
Therefore, Danish Crown has, among other things, signed up to the Science Based Targets initiative and undertaken to define specific climate goals for the entire value chain from farm to fork. This supports the overall goal of reducing CO2 emissions by 50% by 2030.