Analysis Feature
Danish Crown dissatisfied with results
Danish Crown once again reports positive figures, as shown in the annual report for the fiscal year 2023/24. However, the company is far from satisfied. The Danish corporation sees a significant decline in slaughter numbers as a threat. Additionally, the department that has been the profit leader in recent years, DAT-Schaub, is not performing as well as before.
In the explanation, chairman of the board of representatives Asger Korsgaard describes it as one of the most challenging years in the company's history. The company states that it is difficult in Denmark to obtain enough pigs. This is because Danish Crown is not able to pay out enough, as CEO Niels Duedahl writes in his explanation.
Slaughter numbers decrease
Traditionally, Danish Crown slaughters a large majority of Danish pigs, but the percentage has now dropped below half, as stated by the CEO in the annual report. This is reflected in the slaughter numbers. In 2024, Danish Crown slaughtered 15.1 million pigs. In the peak year of 2021, the slaughter number was 18.9 million pigs. That is a decrease of a significant 20%. Last year, the company slaughtered 15.6 million pigs. The company loses many of its pigs to exports to Germany, where considerably higher prices are paid.
Despite the lower supply of pigs, Danish Crown improved its EBIT by 27% compared to the previous year. The EBITDA amounted to 1.85 billion Danish kroner (approximately €250 million) at current exchange rates. The revenue also increased from 67.2 billion kroner (€9 billion) to 67.81 billion kroner (€9.1 billion). However, the company's profit took a hit. Net profit decreased from 1.47 billion kroner (€200 million) to 1.04 billion kroner (€140 million).
New strategy limits damage
The company's solvency improved from 26.7% to 27.6%. This is partly due to the sale of various slaughter locations. Danish Crown decided to close several slaughter locations in Denmark and Germany this year. This is also directly reflected in the workforce. In the fiscal year 2022/23, Danish Crown had 25,796 employees. In 2023/24, the number of employees decreased to 23,959. The location in Essen, Germany, is also likely to be sold.
Lastly, the success of Danish Crown's producer of casings and processor of by-products, DAT-Schaub, which has been the profit leader in recent years, seems to be declining. The department's revenue decreased by 11.6% from 5.3 billion kroner (€710 million) to 4.8 billion kroner (€640 million). Although the total revenue is relatively small, the margins of this division have been significant in recent years. For example, last year's EBITDA was 961 million kroner (€129 million). However, this year, the EBIT decreased to 588 million kroner (€79 million). The company states that the demand for various types of by-products was weak. Additionally, the supply decreased due to the lower number of slaughters. As a result, the company was forced to import more raw materials at higher costs.
