HKScan aims to reduce debt quickly

It was nice to notice, that HKScan’s Q3 EPS was decent, although the earnings in Finland were lower than one ever could have expected and in addition, only in The Baltics the result was truly good. The decent EPS was of course due to decreased financial costs.  Consequently, if the Group just could keep financial costs this low, there is no need to achieve top result in every marketing area, and still achieve a proper result.

In the Q3 Interim Report, there is this extremely interesting statement [emphasis added]:

“At the end of September, a new development programme was launched. The new programme will run until the end of 2014 and it targets an annual cost reduction exceeding EUR 20 million and a reduction of over EUR 50 million in net debt.”

If I get it right, which is not often the case, HKScan intends to reduce its debt considerably during 2014. Moreover, the Q3 Interim Report tells that “Negotiations concerning the refinancing of loans maturing in June 2014 are currently being conducted.” Could it be possible, that HKScan is going to sell its stake in Sokołów?  In a recent interview Bogusław Miszczuk, CEO Sokołów, says that they do not plan to invest markedly in 2014 and then he continues by saying that during the next few years after 2014 they plan to make significant investments.  If HKScan ever will step aside and sell its stake, one may guess, that it happens in 2014. 

One cannot know HKScan’s plans with Sokołów, but in Sweden it very much looks like as if Scan’s performance has begun to improve.  At least Göran Holm, EVP HKScan Sweden from December 2012, is sure of that.  Recently, after the positive Q2, he said in an interview that this is just the beginning. Holm should know. He wasn’t born yesterday. In the past he has been in senior executive positions in Sweden at Coca Cola and Johnson & Johnson, about 20 years in total.

HKScan Baltics is again, after three bad quarters, in marvelous shape and somewhat underperforming HKScan Denmark alone cannot destroy the whole Group’s result.  This means that the only real headache is HKScan Finland. 

We will discuss HKScan later but on Friday, November 22^nd, we are going to look at Atria’s businesses.  Writing poems? Minimalism is the key!

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