Stock Analysis & Valuation Scandi Standard AB (publ) (0QVR.L)

• Previous Close: £108.40
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	2.80	-97
Intrinsic value (DCF)	32.60	-70
Graham-Dodd Method	0.90	-99
Graham Formula	2.70	-98

Strategic Investment Analysis

Company Overview

Scandi Standard AB (publ) is a leading European producer and distributor of chilled, frozen, and ready-made chicken products, operating primarily in Sweden, Norway, Ireland, Denmark, Finland, Germany, and the UK. The company operates through three segments: Ready-to-cook, Ready-to-eat, and Other, offering products under well-known brands such as Danpo, Naapurin Maalaiskana, Manor Farm, Den Stolte Hane, and Kronfågel. Founded in 2013 and headquartered in Stockholm, Sweden, Scandi Standard is also involved in poultry rearing, egg production, and feed provision, ensuring vertical integration in its supply chain. As a key player in the food distribution sector, the company serves both retail and foodservice markets, emphasizing sustainability and high-quality standards. With a market capitalization of approximately SEK 6.01 billion, Scandi Standard is positioned as a resilient consumer defensive stock, catering to stable demand for poultry products across Europe.

Investment Summary

Scandi Standard presents a stable investment opportunity within the consumer defensive sector, supported by consistent demand for poultry products and a vertically integrated business model. The company's revenue of SEK 13.02 billion and net income of SEK 275 million in the latest fiscal year reflect steady operational performance. With a low beta of 0.388, the stock exhibits lower volatility compared to the broader market, appealing to risk-averse investors. However, the company's high total debt of SEK 2.05 billion and modest cash reserves of SEK 109 million could pose liquidity risks in a rising interest rate environment. The dividend yield, supported by a SEK 2.4 per share payout, adds income appeal. Investors should weigh Scandi Standard's strong market position against potential margin pressures from feed costs and regulatory challenges in the poultry industry.

Competitive Analysis

Scandi Standard holds a competitive edge in the European poultry market through its strong brand portfolio and vertical integration, which includes control over rearing, production, and distribution. The company's focus on ready-to-cook and ready-to-eat segments aligns with growing consumer demand for convenience foods. Its multi-country presence diversifies revenue streams but also exposes it to varying regulatory and economic conditions across Europe. Competitively, Scandi Standard faces pressure from larger global players with greater economies of scale, as well as regional producers with strong local brand loyalty. The company's ability to maintain cost efficiency and sustainable practices will be critical in differentiating itself. While its market position in Scandinavia is robust, expansion into larger markets like Germany and the UK requires competing with entrenched players. The poultry industry's sensitivity to feed costs and disease outbreaks (e.g., avian flu) also presents ongoing operational risks that could affect Scandi Standard's competitive standing.

Major Competitors

• Poupart NV (POUL.BR): Poupart NV is a key competitor in the European poultry market, specializing in processed chicken products. The company benefits from strong distribution networks in Western Europe but lacks Scandi Standard's vertical integration. Its smaller scale limits cost advantages compared to Scandi Standard's broader operations.
• LDC S.A. (LDC.PA): LDC S.A. is a major French poultry producer with extensive operations across Europe. It outperforms Scandi Standard in terms of revenue and market reach but faces higher exposure to commodity price fluctuations. LDC's diversified product range includes premium offerings, posing a challenge to Scandi Standard's mid-tier positioning.
• Bakkafrost P/F (2B7.F): Bakkafrost focuses on salmon and poultry, with a strong presence in Northern Europe. Its aquaculture expertise gives it an edge in sustainability, but its poultry segment is smaller than Scandi Standard's. The company's niche focus limits direct competition but offers alternative investment exposure to protein markets.
• Mowi ASA (MOWI.OL): Mowi ASA, primarily a seafood company, competes indirectly in the protein market. Its larger scale and global footprint provide cost advantages, but its lack of focus on poultry reduces direct rivalry with Scandi Standard. Mowi's sustainability credentials set a high benchmark for environmental practices in the industry.