CEO’s review H1/2021
Esa Mäki, CEO: “Apetit Group’s net sales declined and profitability decreased year-on-year due to the continued weakening of the Grain Trade segment’s result. Oilseed Products continued its strong profit performance in the second quarter. The result of Food Solutions improved year-on-year but was slightly in the negative due to the seasonality of operations. On a positive note, the profit performance of Apetit’s processing businesses was good for the entire first half of the year. In Food Solutions, retail demand remained strong in the second quarter, with sales being boosted particularly by the mixed vegetable products launched in the spring and targeted at the barbecue season. A clear recovery from the effects of the corona pandemic has also been seen in the Food service channel. It is particularly pleasing that profitability improved substantially in all sales channels. In May, we announced we will invest approximately EUR 2 million in a new frozen pizza production line at our Pudasjärvi plant. The investment covers the modernisation of the entire production equipment in the existing building. The investment will bring about significant improvements to Apetit’s range of frozen pizzas, particularly with regard to taste and texture: we want to offer Finnish consumers even more delicious pizza made from ingredients with as high a degree of domestic sourcing as possible. The redesigned range of pizzas will be launched next year. Retail sales in Sweden continued to grow in line with our targets throughout the first half of the year, and we have recently also seen a slight recovery in the Swedish professional food service segment. The value of food exports grew by a third and amounted to approximately EUR 2.5 million in January–June. The demand for oilseed products remained strong in all product groups in the second quarter, with end product prices increasing substantially due to higher raw material costs. Towards the end of the review period, demand in the food service channel also returned to the pre-pandemic level. The excellent result was attributable to demand as well as the strong refining margin. Our focus in the development of our rapeseed ingredient has been on the commercialisation of the product development project. We will begin test production of the ingredient at a subcontractor’s premises in August–September. The produced rapeseed ingredient will be delivered later in the year for production testing by customers as well as to be sold. In the initial stage, the end product use of the ingredient will be focused on plant protein products and gluten-free baked goods. Our aim is to start commercial scale production in 2022. The Kantvik bioenergy plant was commissioned at the beginning of August. It significantly reduces the Group’s CO2 emissions and energy costs. Milling rapeseed to produce vegetable oil is the Group’s most energy-intensive production process. The result of Grain Trade was negatively affected by the difficult market conditions in the international wheat trade and the unsuccessful response to unpredictable market changes. After a peak in supply caused by the export tariffs imposed by Russia, the international demand for wheat was very weak in March–April. Consequently, the large wheat reserves in the Baltic countries were delivered in their entirety to customers in May–June at a significant loss. In addition, Finnish grain exports in the first half of the year were lower than usual due to the previous year’s small harvest. Exceptional arrangements related to the COVID-19 pandemic continue in Apetit Group. We are actively monitoring the situation and will react to any changes. Throughout the pandemic, we have successfully achieved our goal of ensuring the health and safety of our employees and ensuring undisrupted operations throughout the food supply chain. The current cultivation season has been primarily characterised by hot and dry weather conditions. Autumn oilseed plants have nevertheless thrived. The total area under cultivation for domestic oilseed plants this year grew by nearly a third compared to last year and the harvest outlook is positive. Apetit’s systematic efforts to increase the cultivation area of oilseed plants and interest in oilseed plant cultivation are continuing: the contract farming of oilseed plants has nearly doubled from last year. The domestic grain harvest is expected to be weaker than average. In the Baltic countries, the harvest is expected to be fair, but substantially lower than the record harvest last year. The harvest of outdoor-grown vegetables, excluding peas, is expected to be moderate. Corporate responsibility is an integral aspect of Apetit’s business throughout the value chain, from field to fork. As an example of this, we continuously develop our existing products as well as new products that respond to growing consumer demand for sustainable food choices. This autumn, we will strengthen our local fish strategy by expanding our product range with Baltic Sea fish fingers made from delicious herring caught in the Baltic Sea. Increasing the consumption of domestic fish has a significant impact on the health of Finland’s inland waters and the Baltic Sea: for example, the roach we used in 2020 saw us remove phosphorus from lakes in an amount that would otherwise have led to the growth of 60,000 bucketfuls of blue-green algae. Our sustainable food choices are meaningful.”
CEO’s review Q1/2021
Esa Mäki, CEO: “Apetit Group’s first quarter was one of contrasts: the record-breaking profit performance of Food Solutions and Oilseed Products was very pleasing, but the result of the Grain Trade business was a big disappointment. Throughout the first quarter, the sales growth of Food Solutions was the highest in the retail and export segments. The strong retail sales were supported by the increase in eating at home due to the COVID-19 pandemic as well as attractive new products and commercial successes. Our strategically important exports to Sweden have also seen strong growth in line with our targets: the year-on-year increase was 31 per cent. The Food Service channel continues to suffer from the restrictions related to COVID-19, such as the reduced scale of operations in school meal services and lunch restaurants. Our delivery reliability has been very high. Our employees have also largely remained healthy in spite of the prevailing COVID-19 situation. The market situation in the Grain Trade business remained very challenging throughout the first quarter. The profitability of Grain Trade was reduced by unforeseen market changes in the international wheat trade. The export duties introduced by Russia, which gradually entered into force in February–March, increased the supply of wheat in particular in February, leading to a rapid decrease in prices. After the sharp increase in supply in the spring, international demand has declined and a substantial write-down was recognised on the value of Apetit’s wheat inventories in the first quarter. Finnish grain exports have also been lower than usual due to the small harvest. The situation in the Grain Trade is not expected to improve before the next harvest. The total sales of rapeseed oil increased significantly. The strong growth of retail sales supports our strategy of increasing value added. The demand for rapeseed expeller has also been at a good level. The rising market prices of the products improved the refining margin in the first quarter. We are continuing our efforts related to the commercialisation of the rapeseed ingredient. The first customer deliveries for product application testing and test sales will begin in the late summer. Apetit has continued the construction of the Kantvik bioenergy plant with a new contractor starting from the beginning of March. The updated estimate is that the bioenergy plant will be fully operational in summer 2021. The change in supplier and the delay to the original schedule will not have a material impact on the project’s total cost. When completed, the bioenergy plant will reduce the Group’s energy costs and significantly decrease carbon dioxide emissions. Apetit has continued its purposeful efforts to increase the cultivation area and harvest size of oilseed plants in Finland. We have been active in signing cultivation agreements for the next autumn’s harvest and we are making good progress towards achieving the 50 per cent growth target set for increasing the domestic contract cultivation area for the upcoming cultivation season as a whole. The prices of oilseed plants are high, which has increased interest among farmers in the cultivation of oilseed plants. In the field vegetables category, our target for contract growing is the previously established level of just over 30 million kilograms of domestic vegetables. In addition to the cultivation of the familiar varieties we are accustomed to, we are involved in a project to study the development of the cultivation of cauliflower and various legumes, such as chickpeas, to satisfy the needs of the food industry. Our utilisation rate of domestic ingredients is already very high. Developing the production of cauliflower and legumes will give us access to even more domestic plants. As nitrogen-fixing plants, legumes also have considerable potential in crop rotation. Apetit published its updated corporate responsibility programme and related targets in March. One of our most significant and impactful targets is to achieve a 75 per cent reduction in carbon dioxide emissions by 2025. This will be accomplished by transitioning to renewable energy and improving our energy efficiency. Food-related consumption habits and choices play a significant role in promoting sustainable development and thereby reducing environmental impacts. As a food industry company, we have an excellent opportunity – and an obligation – to have an impact on the world. Our sustainability targets are comprehensively linked to the various stages of our value chain, from field to fork. Apetit will continue the systematic execution of its strategy with the primary goal being the improvement of profitability.”
CEO’s review Q4/2020
Esa Mäki, CEO: “We determinedly continued to improve our profitability in the last quarter of the year. Annual profitability improved by nearly EUR 9 million. Profitability improvement is mainly attributable to strong demand for the Apetit brand products in retail trade, improved efficiency in our own operations and commercial successes both in Finland and in export trade. In the grain trade, we have focused on developing our trading ability, in line with our strategy: we have largely succeeded with this goal, although towards the end of the year, the outlook of grain price development had a negative impact on profitability. In the fourth quarter, the impacts of the COVID-19 pandemic could still be seen most strongly in the Food Service channel of the Food Solutions business, where net sales decreased year-on-year in spite of a partial recovery of sales during the second half of the year. The sales of frozen products grew year-on-year in other channels, especially in retail trade and exports. In Oilseed Products and Grain Trade, the impacts of the COVID-19 pandemic still remained minor. One of Apetit’s strategic focus areas is to strengthen the Swedish market as the primary focus area of food exports. We have made progress towards our goal in the Swedish retail trade and in November, we signed an agreement on the Food Service product sales with a local partner in Sweden. The cooperation started at the beginning of February. We will systematically continue to increase exports in selected markets. In 2020, the value of food exports was EUR 5.3 million. In December, the European Commission granted a novel food authorisation for Apetit’s rapeseed ingredient, the BlackGrain from Yellow Fields rapeseed powder. The novel food authorisation is the culmination of the BlackGrain product development work we have been doing for years. It also enables us to continue the development of new rapeseed-based ingredients. In addition, we promote to assess options related to the commercialisation of the ingredient. The commissioning of the bioenergy plant under construction in conjunction with the Kantvik vegetable oil milling plant will be further delayed due to reasons related to an equipment supplier. We are currently assessing different options for completing the construction work. The bioenergy plant is already at an advanced stage of construction and we are aiming to commission it during summer 2021. In order to ensure the availability of domestic rapeseed raw materials, we are continuing our determined work to increase oilseed plant cultivation area and harvest levels. In December 2020, the Finnish Safety and Chemicals Agency (Tukes) granted a special permission for the spring 2021 regarding a preparation used in treating oilseeds. The possibility of treating oilseeds will support the cultivation of domestic rapeseed, thereby increasing harvest levels from their current low point. In addition to being in good and stable demand, oilseed plants offer a profitable opportunity to increase versatility of crop rotation. The renewed oilseed plant campaign for 2021 started at the beginning of February: we offer contract growers new benefits and tools for oilseed plant cultivation. The planning for the coming cultivation season is in full swing also for field vegetables. In the coming growing season, we will seek a record harvest in peas as its demand in the export markets continues to be strong. We are also constantly conducting research on new crops at our Räpi experimental farm and promoting the development of domestic vegetable-based proteins: an example of this is the broad bean, which we will again be growing at the experimental farm after an interim year. The harvest will be processed into products later in the autumn. Apetit published its updated strategy in May. We have proceeded effectively in all strategic focus areas: Optimising core business functions, Strong foothold in Sweden, Growth from plant-based added value products, Developing farming partnerships and Sustainable actions. In light of the 2020 results, we are well on track to reach our financial objectives by the end of the strategy period.”
CEO’s statement Q3/2020
Esa Mäki, CEO: “Apetit Group’s positive profit performance continued in the third quarter: all of our businesses improved their profitability year-on-year. We can be satisfied with our profit performance to date. The remainder of the year involves uncertainties related to the COVID-19 pandemic, for example. We keep our profit guidance for 2020 unchanged: the full-year operating profit is expected to improve year-on-year and to show a profit. The impacts of the COVID-19 pandemic in the third quarter were mainly seen in the Food Service channel of the Food Solutions business, where net sales decreased year-on-year in spite of a partial recovery of sales. Sales grew year-on-year in the other channels of the Food Solutions business. In Oilseed Products and Grain Trade, the impacts of the COVID-19 pandemic were minor. In the challenging operating environment, it has been essential that our employees have stayed healthy and we have been able to maintain normal operations. I want to take this opportunity to express my warmest thanks to all of Apetit’s personnel. The harvest of outdoor-grown vegetables for this harvest season will be normal. The varying weather conditions in the early summer were challenging, with the cool spring, dry early summer and hot June having a negative impact on the growing season of peas in particular. The difficult growing season meant that we fell short of our target for peas by 1.3 million kilograms. Peas represent a significant share of Apetit’s food exports and, unlike in the previous year, pea exports fell entirely in the third quarter. One of Apetit’s strategic objectives is to strengthen food exports, particularly to Sweden. Our total food exports doubled year-on-year by the end of September. In the spring, eight products sold under the Apetit brand were added to the product selection of ICA, the largest retail chain in Sweden. Six new Apetit products were subsequently added to ICA’s selection this autumn. Continuing to strengthen our position in Sweden is a clear goal for us. In addition to retail, we are also seeking growth through the Food Service channel through local cooperation. Natural Resources Institute Finland estimates that the Finnish grain crop this year will be 3.4 million tonnes, which is about 15 per cent lower than last year. The relatively small grain crop will reduce Finland’s export surplus compared to the previous year. The oilseed harvest will be exceptionally low due to the declining area under cultivation and the low expectations of yield per hectare. However, the grain crop and oilseed harvest in the Baltic countries is excellent, which particularly compensates for the exceptionally weak oilseed harvest in Finland. At Apetit, we are continuing our systematic efforts to increase the willingness to cultivate oilseed plants in Finland to increase the area under cultivation and crop yields. The commissioning of the bioenergy plant under construction next to the Kantvik oil milling plant will be delayed to January–February 2021 due to reasons related to an equipment supplier. The bioenergy plant was originally scheduled to be commissioned at the end of 2020. When completed, the bioenergy plant will significantly reduce the energy costs of the Kantvik oil milling plant and the Group’s carbon dioxide emissions as a whole. Based on current information, the decision on the novel food marketing authorisation for Apetit’s rapeseed ingredient is expected before the end of the year. This autumn, we decided to invest in small-scale production equipment located on a subcontractor’s premises. Starting small-scale production will enable us to test the rapeseed ingredient more extensively with potential customers. Our work on developing new ingredients has progressed as planned. We are also continuing to assess alternatives related to the commercialisation of the rapeseed ingredient. We are systematically executing our strategy with the aim of making Apetit a successful Finnish company focusing on plant-based food products.”
CEO’s statement H1/2020
Esa Mäki, CEO: “We achieved a positive turnaround in profits as all of the Group’s businesses improved their profitability in the second quarter: the operating profit of continuing operations improved by EUR 4 million year-on-year. In the Grain Trade business, the previous profitable quarter was in 2017. The positive profit performance of the Group was driven primarily by commercial successes in the domestic market as well as exports, the flexible adjustment of production in exceptional circumstances, the recovery of trading ability in the grain trade and improvements in efficiency in everything we do. The impacts of the COVID-19 pandemic vary between the Group’s businesses. In Food Solutions, sales in the retail segment remained at a high level in the second quarter, even if the uptick in demand levelled off compared to the early days of the exceptional circumstances. Food service sales saw a partial recovery in the early summer but were significantly below the reference period. The sudden change in the sales mix caused additional costs in production. In the Oilseed Products business, the demand for vegetable oils grew particularly in the retail segment. In the Grain Trade business, the impacts of the pandemic have been minor, aside from market fluctuations being slightly larger than usual. The COVID-19 pandemic has required extra effort in every stage of the food supply chain, but Finnish food production has proved its resilience and functionality even under exceptional circumstances. This has led to a marked increase in the visibility and appreciation of domestic food. I want to take this opportunity to thank our stakeholders and Apetit’s personnel for their flexibility and ability to work under challenging circumstances. The cultivation season got off to a slow start as the cold springtime weather delayed sowing and the start of the growing season. In June, the hot and dry conditions posed challenges, particularly for pea cultivation. The earliest pea varieties suffered from the hot and dry weather and the size of the total pea harvest will fall short of the targets. In general, the harvest of outdoor-grown vegetables is expected to be moderate. The area under cultivation of oilseed plants was at a record low and the domestic oilseed harvest is expected to be the worst in decades. The total harvest of domestic grains is likely to be substantially weaker than in the previous year. In the Baltic countries, the harvest outlook is good for grains as well as oilseed plants. The European Food Safety Authority (EFSA) issued a verdict in late July in favour of granting a novel food authorisation for Apetit’s rapeseed ingredient. This is an important step in the long process that developing an entirely new food product entails. The final decision on the novel food authorisation is expected at the beginning of 2021 at the latest. In May, Apetit published its new strategy for 2020–2022. The five strategic focus areas are Optimising core business functions, Strong foothold in Sweden, Growth from plant-based added value products, Developing farming partnerships and Sustainable actions. In accordance with the strategic focus areas, Apetit focuses on improving its performance in all of its operations, strengthening its market position in Sweden particularly in the food segment, pursuing growth from new plant-based added value products, developing and expanding farmer partnerships in all of the company’s businesses and continuously improving the sustainability of operations through practical actions. The turnaround in profitability that we have achieved puts us in a good position to implement our new strategy and accomplish the targets set in it. In line with our vision, we aim to make Apetit a successful Finnish company focusing on plant-based food products.”
Apetit Plc’s Business Review 1 January – 30 September 2018: Favourable deve...
Since 1 January 2018, Apetit has reported its first (Q1) and third (Q3) quarter results as Business Reviews. The Half-year Financial Report (Q2) and Financial Statements Bulletin (Q4) provide more extensive reporting and contain segment information. July–September 2018 Net sales amounted to EUR 76.6 (74.4) million Operational EBITDA was EUR 3.1 (3.0) million Operational EBIT was EUR 1.7 (1.6) million January–September 2018 Net sales amounted to EUR 209.1 (225.3) million Operational EBITDA was EUR 3.2 (4.2) million Operational EBIT was EUR -1.1 (0.1) million The information is unaudited. The figures in parentheses are the equivalent figures for continuing operations for the same period in 2017, and the comparison period means the corresponding period in the previous year, unless otherwise stated. Juha Vanhainen, CEO: “Apetit seeks to lead the way in vegetable-based diets. Renewal, one of our strategic focuses, means a continuous stream of new products that interest consumers. This autumn, Apetit again introduced several new, tasty products that enable consumers to increase their consumption of vegetables and make responsible choices. We brought Finnish fish cakes made from fish caught from a lake as part of fish-stock management to the frozen food sections of retail shops. A vegan version was added to our family of spinach soup products, and a new vegetable mince product was added to our pizza selection. We also included new products in our selection for kids and new vegetable mixes in our Tuorekset product family. The Group’s net sales increased slightly due to a significant increase in the world market prices of grains. The two most recent harvest seasons have been very exceptional, and the Finnish grain crop in 2018 will be the weakest since 2000. The hot and dry summer also had a negative effect on the Finnish vegetable harvest. Food Solutions’ result continued to develop favourably due to the increased sales of not only frozen foods, but also fresh products, as well as adjustment and efficiency measures. Oilseed Products’ result remained at the comparison period’s level. Grain Trade’s profitability decreased significantly from the comparison period, due to the second consecutive weak grain crop and its effects on trading opportunities. I’m very pleased with the fact that Food Solutions’ improved performance during this quarter offset the decrease in Grain Trade’s result. The Group’s strategic focus areas are renewal, efficiency improvement and international operations. Our work to improve profitability and create future growth, even outside Finland, continues within the Group.” KEY FIGURES EUR million 7-9 2018 7-9 2017 Change 1-9 2018 1-9 2017 Change 2017 CONTINUING OPERATIONS, KEY FIGURES Net sales 76.6 74.4 3% 209.1 225.3 -7% 311.8 Operational EBITDA 3.1 3.0 3.2 4.2 6.8 Operational EBIT 1.7 1.6 -1.1 0.1 1.3 Operating profit 1.5 1.6 -2.6 -0.1 1.1 Share of profit of associated company Sucros -0.1 0.1 -1.0 -0.4 1.0 Profit for the period 1.1 2.6 -3.4 0.5 2.9 Earnings per share, EUR 0.17 0.42 -0.55 0.09 0.46 Working capital, at end of period 49.1 39.5 30.0 Investment 2.6 3.7 5.2 GROUP, KEY FIGURES incl. discontinued operations during comparison period, Seafood Equity per share, EUR 16.73 17.75 18.10 Return on capital employed R12 (ROCE), % 0.5% 2.5% 2.4% Net cash flow from operating activities -18.7 12.2 20.0 Equity ratio 63.6% 62,6% 72.6% Gearing 12.3% 8.8% -9.6% FINANCIAL PERFORMANCE IN JULY–SEPTEMBER Comparable net sales increased by 3 per cent to EUR 76.6 (74.4) million. Food Solutions’ net sales increased in frozen foods and slightly in fresh products. Grain Trade’s net sales improved due to a significant increase in the world market prices of grains. Oilseed Products’ net sales remained at the comparison period’s level. Operational EBIT was EUR 1.7 (1.6) million. Food Solutions’ result improved as a result of good sales in frozen foods and fresh products, as well as adjustment and efficiency measures. Grain Trade’s profitability has decreased as a result of the weak crops of 2017 and 2018. Oilseed Products’ profitability remained at the comparison period’s level. In the comparison period, an item of EUR 1.3 million related to taxes recognised as a result of the divestment of the seafood business had a positive effect on the result. FINANCIAL PERFORMANCE IN JANUARY–SEPTEMBER Comparable net sales declined by 7 per cent to EUR 209.1 (225.3) million. Food Solutions’ net sales remained at the comparison period’s level. Sales increased in frozen foods and fresh products in all sales channels. Net sales from service sales decreased due to the reduction of the sales network. Grain Trade’s net sales decreased year-on-year. Oilseed Products’ net sales remained at the comparison period’s level. Operational EBIT was EUR -1.1 (0.1) million. Food Solutions and Oilseed Products improved their results slightly from the comparison period. In Grain Trade, profitability decreased significantly, mainly due to weak harvest seasons. The Group’s liquidity was good, and its financial position is strong. The equity ratio was 63.6 (62.6) per cent, and gearing was 12.3 (8.8) per cent. Consolidated cash flow from operating activities after interest and taxes amounted to EUR -18.7 (12.2) million in January–September, due to an increase in grain stocks and a significant increase in the world market prices of grains. SEASONALITY OF OPERATIONS In accordance with the IAS 2 standard, the historical cost of inventories includes a systematically allocated portion of the fixed production overheads. With production focusing on harvest time, raw materials are mainly processed into finished products during the third and fourth quarters of the year. This means that more fixed production overheads are recognised on the balance sheet in the third and fourth quarters than during the other quarters of the year. Due to this accounting practice, most of the Group’s annual profit is accrued in the third and fourth quarters. The seasonal nature of profit accumulation is most marked in the frozen foods group of the Food Solutions segment and in the associated company Sucros, where crop-season production focuses on the fourth quarter. PROFIT GUIDANCE FOR 2018 UNCHANGED The Group’s full-year operational EBIT from continuing operations is expected to decrease from the comparison period (2017: EUR 1.3 million). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year. Sales volumes and the profit outlook for 2018 are burdened by the weak harvest of 2017 and the poor harvest outlook for 2018. Apetit Plc For further information, please contact: Juha Vanhainen, CEO, tel. +358 10 402 00 Attachment: Apetit Plc business review 1 january-30 september 2018 Apetit is number one in vegetables. It is a food industry company firmly rooted in Finnish primary production. We create well-being with vegetables by offering healthy and tasty food solutions that make daily life easier. We also produce high-quality vegetable oils and rapeseed expellers for feeding stuff, and trade grain on the international markets. Apetit seeks to lead the way in vegetable-based food solutions. Apetit Plc’s shares are listed on Nasdaq Helsinki. In 2017, the company’s net sales were EUR 312 million and it had an average 557 employees. Read more at www.apetitgroup.fi.
Apetit Plc’s Financial Statements and Corporate Governance Statement ...
The published reports contain the Board of Directors’ report, the consolidated and parent company financial statements, the auditor’s report, the statement by the Supervisory Board, Apetit Plc’s Corporate Governance Statement as well as Annual and Corporate Responsibility Report. Download here: Apetit 2017 For further information, please contact: Sanna Väisänen, Director, Communications and IR, tel. +358 10 402 4041
Apetit Half-Year Financial Report 1 January–30 June 2018: A weak harvest lo...
This release is a summary of Apetit’s Half-Year Financial Report for the January-June period of 2018. The complete report is attached to this release as a pdf file and it is also available on the company’s website at apetitgroup.fi/for-investors. April–June, continuing operations* Net sales from continuing operations were EUR 72.8 (76.8) million Operational EBITDA was EUR 0.1 (0.8) million Operational EBIT was EUR -1.4 (-0.5) million January–June, continuing operations* Net sales from continuing operations were EUR 132.5 (150.8) million Operational EBITDA was EUR 0.1 (1.2) million Operational EBIT was EUR -2.8 (-1.5) million Key events during the period Apetit invests EUR 9.7 million in a new patty and ball production line in Säkylä. Apetit invests EUR 3.7 million in the construction of a bioenergy plant in conjunction with the Avena Kantvik Oy rapeseed oil milling plant in Kirkkonummi. Avena Nordic Grain Oy and Viljelijän Berner joined their purchasing and sales organisations in production input and grain trade under a new operating model based on partnership. Apetit Vegepops Porkkana-mango was chosen as the Finnish Food of the Year 2018 *Continuing operations include Food Solutions, Oilseed Products and the Grain Trade. The information has not been audited. The figures in parentheses are the equivalent figures for the same period in 2017, and the comparison period means the corresponding period in the previous year, unless otherwise stated. REVISED (3 August 2018) PROFIT GUIDANCE FOR 2018 The Group’s full-year operational EBIT from continuing operations is expected to fall short of the 2017 level (2017: EUR 1.3 million). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year. Sales volumes and the profit outlook for 2018 are burdened by the weak harvest of 2017 and the poor harvest outlook of the current year. Juha Vanhainen, CEO: “Apetit has continued with the measures of the strategy announced in March 2018 in its focus areas, which are internationalisation, renewal and efficiency improvement. These measures reinforce Apetit’s position as number one in vegetables and help in building a foundation for the further development of the business. In June, we announced that we invest nearly EUR 10 million in a new patty and ball production line at our Säkylä plant. The new line will double our production capacity, meet current demand and enable us to produce new products for the Finnish and international markets. As a part of the project to improve efficiency, Apetit is building a bioenergy plant in conjunction with the Avena Kantvik Oy rapeseed oil milling plant in Kirkkonummi. The bioenergy plant will replace the current energy solution that uses non-renewable fuels and will significantly reduce the carbon dioxide emissions of the entire Group. Apetit participated in the share issue of the food business development company Foodwest which took place in May-June. Apetit’s holding in the company will promote our strategic goals to focus on product development and to renew and lead the way in vegetable-based diets. One result of the work we have done to date is the nomination of Apetit Vegepops Porkkana-mango as the Finnish Food of the Year 2018 in May. We also continued work on a project to develop a rapeseed ingredient in order to develop a new ingredient with high nutritional content for the international food market. The goals of renewal and continuous development of operations took concrete form when Apetit’s subsidiary Avena Nordic Grain Oy and Viljelijän Berner joined their purchasing and sales organisations in production input and grain trade under a new operating model based on partnership. Business will be conducted under the name Viljelijän Avena Berner and it will offer Finnish farmers a one-stop-shop for production input and grain trade services. Increasing the share of food sales abroad has proceeded according to plan. At the end of August Apetit will launch a new selection for the Swedish market called Free From which includes five patty and ball products. In Russia we are continuing work on reinforcing our position through local food product chains. As expected, the aftermath of the weak harvest of 2017 continued in the first half of 2018 and substantially lowered grain trade volumes and consolidated net sales on the comparison period. The shrinking of the Sales Services network had a negative impact on the net sales of Food Solutions. Oilseed Products’ performance remained stable as volumes slightly grew on the comparison period. The low price of sugar on the global market led to a weaker result for the associated company Sucros. During the spring Apetit has carried out adjustment measures to improve profitability, including personnel reductions and other cost saving measures. Their combined impact in 2018 will be EUR 1.0 million and the annual total impact will be EUR 1.8 million. It is likely that the 2018 harvest season will also be significantly worse than average, as was the 2017 season, which will have a negative impact on the Group’s profit-earning capacity in the second half of the year. The Finnish grain harvest is estimated to be the weakest of the 21st century, which will limit trade opportunities especially in exports. The harvest of field vegetables is also likely to be lower than usual.” KEY FIGURES EUR million 4-6 2018 4-6 2017 Change 1-6 2018 1-6 2017 Change 2017 Continuing operations Net sales 72.8 76.8 -5% 132.5 150.8 -12% 311.8 Operational EBITDA 0.1 0.8 0.1 1.2 6.8 Operational EBIT -1.4 -0.5 -2.8 -1.5 1.3 Operating profit -2.7 -0.7 -4.1 -1.7 1.1 Share of profit of associated company Sucros -0.4 0.2 -0.9 -0.5 1.0 Profit for the period -2.8 -0.5 -4.5 -2.0 2.9 Earnings per share, EUR -0.45 -0.08 -0.72 -0.32 0.46 Working capital, at end of period 28.5 25.3 30.0 Investment 1.8 2.5 5.2 Group (incl. discontinued operations during comparison period) Earnings per share, EUR -0.45 -0.27 -0.72 -0.56 -0.10 Equity per share, EUR 16.75 17.58 18.10 Return on capital employed (ROCE), % 0.9% 1.9% 2.4% Net cash flow from operating activities -0.1 23.1 20.0 Equity ratio 76.1% 71.1% 72.6% Gearing -4.7% -1.5% -9.6% NEWS CONFERENCE AND WEBCAST A news conference (in Finnish) will be held today at 10:00 a.m. at Apetit’s office, Sörnäistenkatu 1 A, Helsinki. A live webcast of the news conference can be followed via apetitgroup.fi/for-investors. The presentation material and a recording of the webcast will be available after the news conference on the company’s website. Apetit Plc Half-Year Financial Report 1 January - 30 June 2018 Apetit Plc For further information, please contact: Juha Vanhainen, CEO, Apetit Plc, tel. +358 10 402 2100 Apetit is number one in vegetables. It is a food industry company firmly rooted in Finnish primary production. We create well-being with vegetables by offering healthy and tasty food solutions that make daily life easier. We also produce high-quality vegetable oils and rapeseed expellers for feeding stuff, and trade grain on the international markets. Apetit seeks to lead the way in vegetable-based food solutions. Apetit Plc’s shares are listed on Nasdaq Helsinki. In 2017, the company’s net sales were EUR 312 million and it had approximately 640 employees. Read more at apetitgroup.fi.
Apetit further specifies its strategic goals – its focus areas are renewal,...
Its focus areas are renewal, internationalisation and efficiency improvement. Apetit seeks to lead the way in vegetable-based food solutions and be the best-known brand specialising in vegetable-based diets in Finland. According to studies, consumers want to increase their use of vegetables, and the demand for vegetable-based proteins continues to grow strongly. Healthiness, sustainability, organic foods and well-being are also continuing to grow as trends. In addition, consumers appreciate ease of use in their hectic lives. “The trends in eating firmly support Apetit and our chosen strategy. We are continuing the work that we started in the previous strategy period to strengthen our position as the leader in vegetable-based food solutions. Thanks to our hard work, bold strategic choices and continuous renewal, Apetit is now number one in its field,” says Juha Vanhainen, CEO of Apetit. “With the vegetable trend continuing to grow, we have systematically increased our investment in research and development, which is reflected in the significant increase in the number of new products, as well as our determined expansion into new product groups. International food trade has also increased. In the strategy work that we have now completed, we have shifted our focus towards younger target groups, and we will launch new products that meet their needs and wishes.” To increase the use of vegetables among consumers, Apetit has launched the Kasvimaani.fi online service and the Njam mobile app for recipe recommendations. The company has also renewed its Avenakauppa.fi online service for growers. “We have now taken the first steps in digital services and the international food trade. Our goal is for these measures to significantly support the development of Apetit’s business operations over the long term,” says Vanhainen. Apetit’s strategic focus areas for 2018–2020 Apetit is focusing on continuous renewal by increasing product and service development and on stronger internationalisation by increasing international food trade and mapping potential areas of supply in grain trade while strengthening its presence in the Baltics as well as on efficiency improvement in all of its business operations. Apetit’s financial targets for 2020: At least to double operational EBITDA (2017: EUR 6.8 million in continuing operations) Operational return on capital employed (ROCE%) > 8% (2017: 2.4%) The achievement of these strategic targets is based on customary crop development, systematic operational efficiency improvement, innovative and timely product launches and the development of international food trade. The company is open to corporate transactions that are in line with its strategy. Updated dividend policy The aim of the Board of Directors of Apetit Plc is that the company’s shares should provide shareholders with a good return on investment and retain their value. The company will distribute at least 50% of the profit for the financial year in dividends. Strategic focuses of the business areas for 2018–2020: The Food Solutions business seeks to grow profitably and more rapidly than the market in Finland. Its strategic focus areas are: The strong renewal of frozen foods and fresh products and the development of spearhead products for the international markets Supporting and increasing the consumption of vegetables among children and young people A clear improvement in profitability A sustainable value chain as a stronger competitive factor The Oilseed Products business seeks to improve profitability and create higher added value. Its strategic focus areas are: Improving the efficiency of oil milling operations Further developing the cultivation of rapeseed in Finland New innovations and their rapid commercialisation Developing self-sufficiency in vegetable-based proteins in Finland The Grain Trade business seeks to increase its trading volumes in its main areas of supply and to efficiently manage its working capital. Its strategic focus areas are: Increasing its market share in the area of supply consisting of the Baltic countries Creating strong value chain partnerships in Finland Developing the most highly advanced digital services that support logistics and the grain trade Studying potential areas of supply Apetit Plc Juha Vanhainen Apetit is number one in vegetables. It is a food industry company firmly rooted in Finnish primary production. We create well-being with vegetables by offering healthy and tasty food solutions that make daily life easier. We also produce high-quality vegetable oils and expeller meal from rapeseed, and trade grain on the international markets. Apetit seeks to lead the way in vegetable-based food solutions. Apetit Plc’s shares are listed on Nasdaq Helsinki. In 2017, the company’s net sales were EUR 314 million and it had 557 employees. Read more at apetitgroup.fi.
Apetit Plc’s Financial Statements Bulletin 1 January – 31 December 2017
October–December, continuing operations • Net sales from continuing operations were EUR 87.1 (80.4) million • Operational EBITDA was EUR 2.7 (2.0) million • Operational EBIT was EUR 1.2 (0.6) million • The profit for the period was EUR 2.3 (1.9) million, and earnings per share amounted to EUR 0.38 (0.31) January–December, continuing operations • Net sales from continuing operations were EUR 314.0 (312.0) million • Operational EBITDA was EUR 6.8 (5.8) million • Operational EBIT was EUR 1.3 (0.8) million • Profit for the period came to EUR 2.9 (2.0) million, and earnings per share amounted to EUR 0.46 (0.33) October–December, the Group, including discontinued operations* • Consolidated net sales amounted to EUR 91.6 (100.1) million • Operational EBIT was EUR 1.3 (1.6) million • Profit for the period came to EUR 2.4 (2.4) million, and earnings per share amounted to EUR 0.38 (0.38). January–December, the Group, including discontinued operations* • Consolidated net sales amounted to EUR 368.1 (386.5) million • Operational EBIT was EUR 1.7 (0.9) million • Profit for the period came to EUR -0.6 (1.2) million, and earnings per share amounted to EUR -0.10 (0.19) The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.70 per share be paid. * Discontinued operations: On 29 June 2017, Apetit Plc signed an agreement on selling its seafood business to the Norwegian Insula AS. The transaction was completed on 31 October 2017. In this financial statements bulletin, the transferred business is reported as a discontinued operation. Consolidated net sales and profit for 2017 include the seafood business from January to October. The figures for 2017 and 2016 are audited. The quarterly figures are unaudited. The figures in parentheses are the equivalent figures for the same period in 2016, and the comparison period means the corresponding period in the previous year, unless otherwise stated. Juha Vanhainen, CEO: “In 2017, Apetit established its position as the leading Finnish brand in vegetable-based food solutions. Its improved awareness is supported by the fact that the company introduced new products at a record pace and expanded into new product groups. Sales of existing products also increased. In 2017, the weather remained cool throughout the growing season. The end of the growing season was marked by exceptionally heavy rain, which delayed and hindered the harvesting of grains, oilseeds and root vegetables. The oilseed harvest in Finland was markedly smaller than in the previous year. The challenges of the harvest season also reduced grain trade export volumes significantly. The availability of Finnish field vegetables has been limited to some extent. As a result of this, it has been necessary to replace Finnish field vegetables with more expensive imported vegetables or limit the production of certain products, particularly products containing Finnish carrots. Despite the difficult harvest season, Apetit was able to improve its operational EBIT and net sales in continuing operations. The turnaround in the Food Solutions business was particularly pleasing. It was supported mainly by the increased sales of frozen and fresh products. Exports also increased in comparison with the previous year, with growth in the total exports of Food Solutions. In December, Apetit announced that it would start exporting to Russia and deliver various frozen products to the St Petersburg region. The successful work to improve the efficiency of working capital management continued in 2017. The Group’s working capital tied up in operations decreased by EUR 22.5 million during the financial year. As a result of the more efficient management of working capital and the divestment of the seafood business, the Group was debt-free at the end of the year. Its balance sheet structure creates favourable conditions for investments and potential business arrangements that are in line with its strategy. Apetit’s strategy to specialise and lead the way in vegetable-based food solutions is also supported by the divestment of its fish processing business. The business was sold to Insula AS in Finland, Norway and Sweden. The transaction was completed at the end of October. In 2018, we will continue to invest in sales and product development in line with our strategy. The prevailing food trends support our goals: consumers are increasingly appreciating well-being, good taste and ease of use. High vegetable content, organic products and Finnish origin are also primary considerations when consumers are making purchasing decisions.” KEY FIGURES EUR million 10-12 2017 10-12 2016 Change 1-12 2017 1-12 2016 Change Continuing operations Net sales 87.1 80.4 8 % 314.0 312.0 1 % Operational EBITDA 2.7 2,0 6.8 5,8 Operational EBIT 1.2 0.6 1.3 0.8 Operating profit 1.2 0.6 1.1 0.8 Share of profit of associated company Sucros 1.4 1.5 1.0 0.7 Profit for the period 2.3 1.9 2.9 2.0 Earnings per share, EUR 0.38 0.31 0.46 0.33 Working capital, at the end of the year 30.0 52,9 Group (including discontinued operations) Net sales 91.6 100.1 -8 % 368.1 386.5 -5 % Operational EBIT 1.3 1.6 1.7 0.9 Operating profit 1.2 1.2 -2.5 0.6 Profit for the period 2.4 2.4 -0.6 1.2 Earnings per share, EUR 0.38 0.38 -0.10 0.19 Equity per share, EUR 18.10 19.00 Operational return on capital employed (ROCE), % 2.4 % 1.2 % Net cash flow from operating activities 20.0 21.9 Equity ratio 72.6 % 64.1 % Gearing -9.6 % 12.4 % Investments 5.9 9.7 PROFIT GUIDANCE FOR 2018 The Group’s full-year operational EBIT from continuing operations is expected to improve year-on-year (EUR 1.3 million in 2017). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year. Sales volumes and the profit outlook for early 2018 are burdened by the weak harvest of 2017. BOARD OF DIRECTORS’ DIVIDEND PROPOSAL On 31 December 2017, the parent company’s distributable funds totalled EUR 62,596,445.91, of which EUR 838,688.75 is profit for the financial year. The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.70 per share be paid. The Board of Directors will propose that a total of EUR 4,344,305.00 be distributed in dividends and that EUR 58,252,140.91 be left in equity. No significant changes have taken place in the financial standing of the company since the end of the financial year. The company’s liquidity is good, and the Board deems that the company’s solvency will not be jeopardised by the proposed distribution of dividends. No dividend will be paid on shares held by the company. ANNUAL GENERAL MEETING The Annual General Meeting will be held in Säkylä on Tuesday 27 March 2018. PUBLISHING OF THE ANNUAL REPORT Apetit Plc’s Annual Report for 2017 – including the Board of Directors’ report, the financial statements for 2017, a corporate responsibility report and a separate statement on Apetit Plc’s corporate governance – will be published in the week beginning 5 March 2018 on the company’s website at www.apetitgroup.fi. INVITATION TO A BRIEFING A briefing (in Finnish) for analysts and media will be held today at 10:00 a.m. in Hotel Scandic Simonkenttä, meeting room Espa (address: Simonkatu 9, Helsinki). In the briefing CEO Juha Vanhainen presents Financial Statements Bulletin. The presentation material will be also published on company web pages after the event. Apetit Plc Juha Vanhainen For further information, please contact: Juha Vanhainen, CEO, tel. +358 10 402 00 Apetit is number one in vegetables. It is a food industry company firmly rooted in Finnish primary production. We create well-being with vegetables by offering healthy and tasty food solutions that make daily life easier. We also produce high-quality vegetable oils and expeller meal from rapeseed, and trade grain on the international markets. Apetit seeks to lead the way in vegetable-based food solutions. Apetit Plc’s shares are listed on Nasdaq Helsinki. In 2017, the company’s net sales were EUR 314 million and it had 557 employees. Read more at apetitgroup.fi. Apetit Plc Financial Statements Bulletin 1 January - 31 December 2017 Presentation