Danish Crown's profit drops in difficult year

The turnover of the Danish powerhouse in the meat sector increased from 64,21 billion kroner (€8,61 million based on the current daily rate) to €9,07 billion. According to Danish Crown, the increase is the direct result of higher meat prices. Volumes, on the other hand, declined. Pork production in particular has declined significantly.

The decline for Europe as a whole was 7% lower. The slaughter figure fell sharply, especially in Denmark. In its home country, the cooperative meat processor has cut pork production by as much as 17%. Due to lower slaughter weights, meat production fell even more, by 9%. Beef production went somewhat better. In Germany the slaughter rate fell by 2,4% and in Denmark the number of cattle slaughtered fell by 1%.

In addition to supply, demand also caused challenges, writes Danish Crown. Due to inflation, the demand for meat fell sharply this year. Although this is a temporary decrease, Danish Crown believes that the demand for meat will also be structurally lower due to the climate. The company anticipates this by shifting its focus from selling fresh and frozen meat to the food industry to selling ready-made products to the catering industry and retail. In addition, the company is reducing its pig slaughter capacity.

Cut back and invest
Due to the shrinking European pig herd, Danish Crown's production fell sharply. Due to the difficult times, Danish Crown was forced to make cuts of €190 million for the next two years and €130 million for 2026. For example, the company closed five facilities within and twelve facilities outside Europe. Particularly prominent were the closures of production locations in Shaeby, Denmark and Boizenbrug, Germany. This is reflected in the company's workforce. In total, the company said goodbye to 1.700 employees. Of these, 1.500 employees worked in production and 200 in the slaughterhouses.

However, investments were required to streamline the slaughter lines. The company invested €130 million in existing slaughterhouses. The focus was on automation. In addition, the company invested €48,28 million in a new bacon factory in Rochdalle (in the United Kingdom). Separately, Danish Crown decided to invest €260 million in its feeding technology.

Brands
The results of the large companies managed by Danish Crown paint a mixed picture. Just like last year, DAT-Schaub presented well. However, last year's record profit did not materialize this year. The company's Ebit fell from €150 million to €130 million, a decrease of 13,5%.

The Polish brand Sokolow and the Swedish KLS were having a hard time. Although the turnover of both branches increased, Danish Crown indicates that inflation was a major obstacle for both consumer brands. Due to the difficult market conditions, Danish Crown decided to thin out its workforce. For the Swedish brand, Danish Crown saw Ebit fall by almost 15%. It is striking in these times of high inflation that various meat concepts actually did well. The Burger Boost brand in particular grew by no less than 83%.