Long Term Shift Toward Poultry Will Support Expanding Higher Value Product Volumes

Catalysts

About Scandi Standard

Scandi Standard produces and sells poultry based products across the Nordics, Ireland and parts of Continental Europe.

What are the underlying business or industry changes driving this perspective?

• Consumer preference is gradually shifting toward chicken as an affordable, responsible and versatile protein, and management links recent 9% net sales growth and a 46% EBIT increase in Q4 2025 to substitution away from other meats. This directly supports top line and EBIT progression.
• The company reports a long running rise in poultry demand in its core regions, with a 10 year period of 50% category growth and a 3% volume CAGR indicated for the Nordics and Ireland. This can underpin continued revenue growth and support scale driven improvements in net margins.
• Ready to cook is already the strongest segment, with Q4 2025 EBIT of SEK 120 million and a 4.6% margin. Structured improvement programs plus deboning and value ladder initiatives are intended to lift EBIT per kilo from SEK 2.03 toward the SEK 3 target, with a focus on expanding earnings and margin headroom.
• The Oosterwolde acquisition and ramp up of large, efficient breaded product lines in the Netherlands, together with the Farre plant and local Ready to eat sites, are expected to create a top tier European platform for higher value products. This is aimed at lifting Ready to eat profitability and supporting overall EBIT per kilo and earnings growth.
• Highly consolidated semi closed home markets with strong consumer preference for domestic poultry and meaningful influence from Scandi Standard’s own supply decisions provide pricing power and volume visibility. This can support revenue stability, ROCE and net margin resilience over time.

Assumptions

How have these above catalysts been quantified?

• This narrative explores a more optimistic perspective on Scandi Standard compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Scandi Standard's revenue will grow by 7.2% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 2.6% today to 3.9% in 3 years time.
• The bullish analysts expect earnings to reach SEK 671.1 million (and earnings per share of SEK 10.15) by about April 2029, up from SEK 367.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 18.3x on those 2029 earnings, down from 27.7x today. This future PE is lower than the current PE for the GB Food industry at 24.8x.
• The bullish analysts expect the number of shares outstanding to grow by 0.17% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.22%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The long term substitution toward chicken as an affordable protein has supported 9% net sales growth and a 46% EBIT increase in Q4 2025. If consumer preferences shift back toward other meats or plant based proteins, particularly as VAT cuts or broader food price relief make alternatives more attractive, that could slow poultry category growth in the Nordics and Ireland and weigh on revenue growth and EBIT progression.
• The business model relies heavily on passing through volatile feed and raw material costs, and management explicitly highlights feed cost at roughly one third of the cost base and ongoing volatility in grain and export prices linked to avian influenza and other supply issues. Any period where Scandi Standard cannot fully pass on these input swings, particularly into Ready to eat where there has already been a significant EBIT drop due to delayed pass through, could pressure net margins and overall earnings.
• The long term plan assumes sizable capacity increases and higher value added volumes, including doubling Lithuanian production from 11 million chickens and ramping large breaded product lines in Oosterwolde and Farre. If demand growth is weaker than expected or export conditions soften, this higher capital employed of SEK 5.0b and planned SEK 650m CapEx in 2026 could lead to underutilized assets, lower return on capital employed and weaker earnings than current ambitions imply.
• The Ready to eat segment has a history of pressure when QSR demand softens or large contracts are lost, as seen with the general QSR drop and loss of a major Continental European contract between 2023 and the first half of 2025. Any renewed weakness in QSR or Foodservice or delays in regaining pricing power for processed products could limit the contribution of this segment to EBIT per kilo and constrain earnings growth.
• Scandi Standard benefits today from highly consolidated, semi closed home markets and strong consumer preference for domestic poultry. Management also notes consumer segments that are sensitive to provenance and increasing government and consumer focus on issues like antibiotic use, animal welfare and CO2 emissions. Any shift in regulation, public opinion or ESG ratings that raises compliance costs or favors alternative proteins could increase operating costs, pressure net margins and slow earnings growth over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Scandi Standard is SEK160.0, which represents up to two standard deviations above the consensus price target of SEK127.33. This valuation is based on what can be assumed as the expectations of Scandi Standard's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK160.0, and the most bearish reporting a price target of just SEK102.0.
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2029, revenues will be SEK17.4 billion, earnings will come to SEK671.1 million, and it would be trading on a PE ratio of 18.3x, assuming you use a discount rate of 5.2%.
• Given the current share price of SEK156.0, the analyst price target of SEK160.0 is 2.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.