Svend erik sorensen en


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Svend erik sorensen en

  1. 1. Coop Summit Quebec 2012Round table on future COOP financing Svend Erik Sørensen, Danish Crown
  2. 2. Danish Crown is a primary cooperative• Each single farmer has direct membership• Supply directly from the single farm to the coop under full price transparency• Elected management in two levels only• A commercial supply chain – not a political body• All non-retained earnings are paid back to the members at year-end• A robust business model with a high implicit credit rating
  3. 3. Our development is based on the coop model• Our lean and direct coop model has served us for 125 years and put us on the global scene• Investments beyond the home base requires more equity• Sooner or later we will reach the limit of what equity can be sourced from members• The GFC has increased the need for equity• COOPs with an international growth strategy should start looking for other equity sources
  4. 4. Limitations in attracting more coop equity frommembers• European farmers under financial pressure with limited debt capacity• Many would prefer to invest in developing their own farming enterprise• Concentration among farmers increases the challenge• Collective investment decisions become difficult ~ individual investments may not be coop compatible• A potential barrier for attracting new members
  5. 5. Value creation and control – option 1Value creation Full coopby growth and control given development up but growth continued Maximum growth under full COOP regime Time
  6. 6. Value creation and control – option 2Value creationby growth and Control maintained development but growth and value lost Maximum growth under full COOP regime Time
  7. 7. We have prepared our group structure for new investors BEFORE AFTER New shareholders Danish Crown can be Danish Crown COOP added COOP Danish Crown Ltd.
  8. 8. ... and thereby increased our financial flexibility Member equity Financial Transfer to Ltd. investors structure Internat. mergers Listing / Here we are IPO
  9. 9. To be in place if and when the equity base isexpanded:• The company must be a good investment ! – earnings, technology, market position, growth potential• Governance model satisfying all stakeholders• Transparent and market based trading and reporting• The right time window
  10. 10. • We should open the door for new partners• We need to make it attractive for new partners to enter through the door• We need to ensure a fair ticket price