Danish Crown introduces delivery rights and new capital allocation key
The new ownership model is not just a technical change; it is a strategic move that strengthens Danish Crown's future. For Danish Crown, a modernized ownership model is important to ensure stable and predictable deliveries. It allows for better planning and long-term investments, while continuing to uphold the cooperative idea as the core.
"This is a historic change in the ownership structure. We have worked thoroughly and in ongoing dialogue with our owner representatives to find the right model that is both attractive to the owners and creates a strong foundation for the company's long-term development. We believe that we have found a model that allows us to realize the great potential that lies in Danish Crown", says Chairman of the Board of Directors of Danish Crown, Søren Skou.
"The company has significant potential when we look ahead. We believe that this can be achieved through the transformation we have initiated. And that transformation reaches all the way to our owners with the new model, which structures ownership in a better way for the benefit of both the owners and the company", says Søren Skou.
The foundation of the new ownership model is the introduction of delivery rights and an associated new distribution key, where the company's free equity, if distributed, is distributed according to the total, accumulated deliveries.
The delivery rights give the owner the right and obligation to deliver a specific number of animals to Danish Crown. The delivery rights accumulate the delivered kilos, which then form the basis for the distribution key that determines the owner's potential share of the company's undistributed equity and thus the percentage share of any distributions. The rights can be freely traded between farmers, which creates a new asset for the unit owner in addition to the farm and the land, and the more kilos that are accumulated on a right, the higher its potential value will be.
“The delivery rights are the key to creating more stable and predictable deliveries. When we know how many animals are coming, we can utilize the capacity and plan our investments much better. At the same time, the delivery rights will have value for the owners and can be traded or transferred. This does away with "naked in, naked out", because there is actually a value in being an owner. This, we believe, will make ownership more flexible and attractive and strengthen the entire foundation for the owners' joint business”, says Niels Ulrich Duedahl, Group CEO of Danish Crown.
The full delivery obligation is lifted.
The introduction of delivery rights also eliminates the full delivery obligation, which has previously meant that a shareholder in Danish Crown is basically obliged to deliver all of his production to the company.
"I strongly believe that we should be elected because we are the best and most relevant, not because it is stated in a paragraph in our articles of association. By abolishing the delivery obligation, we give the owners greater freedom, but it also provides some opportunities for the company to get animals from farmers who do not necessarily want to move their entire production to Danish Crown. It is a new reality between farm and company, and it also underlines that we really believe that we can get much more out of the company by working together in a new way", says Niels Ulrich Duedahl.
With the new distribution key, it will be the accumulated deliveries over time that determine how large a share of the capital you are entitled to, in contrast to the previous model, where the key to the capital distribution is calculated based on the delivery history of the past five years. The more you deliver over a longer period of time, the larger the share you get, and at the same time the delivery rights must be maintained with stable deliveries in order to preserve their value. It functions as a form of savings, where the owners get a share in the value creation when, for example, the company realizes profits or distributes capital in other ways. In this way, there is a direct link between the value the company creates and the effort the owners make.
In the coming period after adoption, the board of directors and the executive board will continue to work on the operational details and assumptions in the model, and then determine an entry into force date in the first half of 2026.
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