Danish Crown affected by problems in its UK business
The company said that the impact on its Danish employees will be "relatively limited" and that most of the job losses will be in the United Kingdom.
In November, Danish Crown had to let go to 150 employees from Tulip and announced also a 200 million kroner () saving program for its UK business in the 2018/19 financial year.
"A detailed review and analysis of Tulip Ltd has revealed that we have been unable to fully optimise our UK supply chain, while operating costs are far too high. We have therefore launched a comprehensive cost-cutting plan, and in the past two months we had to say goodbye to more than 150 salaried employees in the UK business. Altogether, we expect to reduce costs by more than 200 million DKK from the 2018/19 financial year," says Jais Valeur.
Danish Crown announced that its earnings have been impacted by the problems in the UK subsidiary and because of this it will take "an extra two years to realise its strategic target of raising the settlement price paid to cooperative members by 0.60 DKK per kg".
Due to declining pork and beef prices, Danish Crown’s revenue in the 2017/18 financial year has, in spite of acquisitions in the period, declined from 62 billion DKK to 61 billion DKK. On the other hand, the gross profit is up 146 million DKK at 8 billion DKK following the acquisition of DK-Foods in Denmark, Gzella in Poland and the Dutch company Baconspecialist Zandbergen. The new activities have also led to increased distribution and administration costs. The profit from primary operations is reduced by 181 million DKK to 1,742 million DKK.
The group announced that in other business units it experienced better results. "Sokolow's earnings are up 26% and Tulip Food Company in Denmark posted growth of 29% following a year of improved sales of bacon in Europe and growth in exports of canned meat."
Strong earnings were reported by DAT-Schaub which confirmed the company's potential.
"DAT-Schaub is developing strongly. The offensive strategy that we adopted after acquiring all the shares in the company almost three years ago is spot on. Today, we are a global market leader in natural casings, and our set-up is geared for further growth," says Jais Valeur.
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