Scandi Standard's Strongest Quarter Ever Comes With a Feed-Price Bill

Q3 EBIT up 18% and ready-to-eat margins back above 6%, but the chicken ladder now runs through a grain market nobody can fully hedge

SCST.ST · Earnings Call · 2026-10-20

The quarter that was

Scandi Standard delivered what CFO Fredrik Sylwan unambiguously called “Q3 was actually our strongest quarter ever.” — Fredrik Sylwan, CFO · 2026-10-20 Net sales rose 8% to just north of SEK 4 billion, adjusted EBIT climbed 18% to SEK 220 million, and the adjusted EBIT margin added 40 basis points to 5.4%. Adjusted earnings per share rose 20% to SEK 2.19, and EBIT per kg — the measure management keeps dragging to the front of the deck — came in at SEK 2.72 against SEK 2.36 a year ago, a 15% improvement on the road to the SEK 3 target in 2027. The shape of that improvement is the point. Ready-to-cook grew net sales 5% on a 3% increase in grill weight, lifted EBIT to SEK 170 million from SEK 159 million, with a margin of 5.6% versus 5.5%. Respectable, but incremental. Ready-to-eat is where the quarter was made: net sales up 25%, and an EBIT margin of 6.2% against 2.4% a year earlier. That is a business that had been written off by parts of the market two years ago now printing close to its long-run average of roughly 6%, and back above the 2022 rolling-twelve-month peak management reminded listeners they had lost when continental contracts walked out the door in 2023. Jonas Tunestål attributed it to "successful price increases, new product launches with accretive margins, and improved capacity planning" — the mechanics of climbing the value ladder rather than a one-off seasonal gift.

Buying the ladder: Glenhaven and Factory C

The strategic news is the acquisition of Glenhaven Foods for SEK 1.4 billion, at roughly 8.2x EBIT, expected to add more than 10% to EPS on a 2025 basis including the capital increase and finance costs. It was partly funded by an oversubscribed rights issue of about SEK 400 million, and it does something specific rather than generic: it converts Scandi's Irish ready-to-cook leadership into ready-to-eat leadership in the same market, while providing a bridgehead into UK retail. The acquired sites carry nearly 50% capacity headroom, which matters more than the multiple in a business where utilisation drives margin. The second leg is Factory C in the Netherlands, and here the language changed from aspiration to logistics. “We are doing our first commercial production this week, on the first big line.” — Jonas Tunestål, CEO and Managing Director · 2026-10-20 Two of Europe's largest and most efficient breaded product lines, 50,000 annual tonnes of capacity, advanced form capability, and a site tailored to the largest European clients. Against 36,000 tonnes of product weight in 2024 and about 5% European market share, with close to 100kt of expected market growth to 2030, that is a credible second engine. The company now says it has the building blocks and capacity to double throughput — a claim that only becomes testable once Factory C is actually running, which is precisely what Q4 will show.

The feed-price staircase

Here is the tension. Feed is one-third of the cost base, and feed prices have been rising for several quarters. Management flagged further increases in feed raw material costs flowing through to farmers, driven by the Ukraine war, uncertainty over fertiliser components from the Middle East, and the ongoing effects of El Niño. That is not a Scandi-specific worry — the global keyword tape has carried El Niño as a top-tier market theme and fertiliser production as a persistent input-cost concern, so this is a protein-input wave rather than a company story. What is company-specific is the hedging architecture. “We will never speculate and have short hedgings. We never hedge shorter than we know that we can put the prices forward.” — Jonas Tunestål, CEO and Managing Director · 2026-10-20 In markets where Scandi owns the feed mill, it hedges raw material to the length of the retailer price-adjustment window; where it does not, it links farmer and retailer pricing quarterly and lets the farmer choose spot or hedge. It is a genuinely improved machine versus a few years ago, and it is why management can sound calm while ranking feed price as the single most prominent theme of the quarter.

High feed prices actually gives us more and more competitive advantage compared to other proteins. The risk is always that you can be squeezed in the meantime, and that is our focus to not being squeezed.
Jonas Tunestål, CEO and Managing Director · 2026-10-20

That is the honest version of the bull case. Poultry needs 1.5kg of feed per kg of chicken against 3.5kg for pork and 7kg for beef, and beef prices have, in Tunestål's words, gone through the roof, with pork falling back only lately. Affordability widens the substitution case. But the interim squeeze is real, and it is the reason the company's own momentum leaderboard reads as a wholesale narrative refresh: every name on its gainers list this quarter — Glenhaven, Factory C, feed price, farmers, hedging, breaded products, the rights issue — is stamped to the current period. Nothing older survived with momentum intact.

A new customer and an old trade barrier

Tucked into the Q&A was a genuinely new demand pocket: Scandi's rendering joint venture with BHJ is now supplying the Norwegian salmon feed industry. “In terms of the Norwegian salmon industry, that is a new customer for us.” — Jonas Tunestål, CEO and Managing Director · 2026-10-20 Management was careful to size it — material for Farmfood, not for Scandi Standard as such — but a new customer group for the offal stream is the kind of quiet optionality that never shows up in a margin bridge. On exports, the EU's closure of Brazilian chicken imports has so far had little effect because importers front-loaded stock that will last to year-end. A November EU meeting could reopen the door; if it stays shut past the new year, the impact arrives in the spring. That is a swing factor nobody can forecast, and management did not pretend otherwise.

Balance sheet and the bottom line

The financial plumbing is stronger than the headline distortion suggests. Leverage fell to 1.7x against a 2.5x target, the equity ratio rose to 37.3% from just shy of 34%, return on capital employed improved 130 basis points to 13.1%, and return on equity added 270 basis points to 14.7%. Working capital landed at 5.4% of rolling twelve-month sales, below the 6% target, and the five-year refinancing lifted committed facilities from roughly EUR 290 million to EUR 450 million with a further EUR 150 million option. Net interest-bearing debt fell almost SEK 460 million in the quarter. So the quarter is good, and the strategy is more concrete than it has been in years: two factories' worth of ready-to-eat capacity, a UK/Irish breaded platform, a value ladder with actual rungs on it. The question for the next two quarters is narrower and less comfortable. Can the feed-price pass-through outrun the grain curve, and does Factory C ramp cleanly enough to keep the 6% margin target for 2027 in sight? Scandi has more tools for that fight than it did three years ago. It still does not control the weather in Ukraine or the Pacific.