Avena Nordic Grain Oy is now Apetit Kasviöljy Oy
The sale of Apetit Group’s Grain Trade business to Berner Oy took place on May 31, 2022. Avena Nordic Grain was responsible for Apetit Group’s Grain Trade and Oilseed Products businesses. As part of the sale, the right to use the Avena name was also transferred to Berner. Avena Nordic Grain Oy new name is Apetit Kasviöljy Oy and its subsidiary Avena Kantvik Oy is now named Apetit Kantvik Oy. The companies form the Apetit Group's Oilseed Products business. The new names have been already registered in the trade register. Both companies’ business ID numbers, invoicing information and phone numbers will remain unchanged. The business has already introduced changes to the e-mail addresses of the personnel of the companies, which now have the format . We continue to purchase domestic oilseeds and develop cultivation together with our partners. We will also import certain amounts of rapeseeds in addition to domestic procurement. This way we can offer our customers decent quantity of high-quality oil products and feeds for their success.
CEO’s review Q1/2022
Esa Mäki, CEO: “The significant increase in the prices of production inputs had a negative effect on the profit performance of continuing operations in the first quarter. The profitability of Food Solutions was reduced in particular by higher energy costs. The profitability of Oilseed Products was weighed down by the high costs of raw materials and logistics. Both businesses will continue to transfer the higher costs to sales prices. At the end of December, we announced that Apetit had signed an agreement to sell the Baltic operations of the Grain Trade business to Scandagra Group. The sale concerned the business operations of Avena’s companies in Estonia and Lithuania. The transactions for both companies were completed as planned in March. In connection with these divestments, we decided to close our Latvian company. The Latvian company primarily provided logistics support for wheat and oilseed plants sourced in Lithuania. In March, we announced the sale of the Finnish operations of the Grain Trade business to Berner Ltd. The transaction will be carried out as a business transfer including Avena’s Finnish grain trade business, as well as its grain stocks and port operations in Finland. The transaction is expected to be completed in the second quarter. The completion of the sale is subject to approval by the competition authority. Once completed, the divestment of the Grain Trade business will improve Apetit’s profitability and allow Apetit to focus on the growth and development of its processing businesses, namely the Food Solutions and Oilseed Products businesses. The operating environment and competitive landscape in the Grain Trade business has changed drastically during the past few years. The operating conditions have continuously become increasingly challenging for a company that operates purely as a grain seller. In the upcoming cultivation season, our target for contract growing is the previously established level of just over 30 million kilograms of domestic vegetables. In addition to contract farming, we will continue to implement a number of projects at our experimental farm to seek ways to improve soil fertility and water economy, for example, and to develop the cultivation of various legumes, such as chickpeas, to correspond to the needs of the industry. This will present us with the opportunity to further increase our degree of domestic origin and our self-sufficiency with regard to specialty plants. We will continue our efforts to increase the cultivation area and harvest size of oilseed plants in Finland. Due to the significant increase in the prices of oilseed plants, the profitability of cultivation is at an attractive level from the farmer’s perspective, and there is certain demand for oilseed plant raw material in the Finnish food industry. Highquality rapeseed oil is valued and in high demand in all sales channels: industry, professional kitchens and retail. The BlackGrain rapeseed ingredient, which is currently in small-scale production, responds to the need to increase the availability of plant-based proteins. Our development efforts are focused on moving the production to an industrial scale. Apetit’s corporate responsibility programme sets a target of reducing the CO2 emissions from Apetit’s own operations by 75 per cent by 2025. The most significant emission reductions are achieved from the bioenergy plant completed at the Kantvik vegetable oil milling plant, which became operational last year, and the new energy solution to be deployed in Säkylä. The energy solution at the Säkylä frozen foods plant will use heat-capturing technology and renewable energy to reduce the plant’s CO2 emissions by as much as 80 per cent. The new energy solution is scheduled to be deployed in the second quarter of 2023. To date, we have reduced the Group’s emissions by over 50 per cent compared to the baseline year specified in our corporate responsibility programme. Phasing out the use of fossil fuels and having a fixed price for electricity will also significantly reduce the Group’s energy costs in the next few years. In general, Apetit has successfully achieved its goal of ensuring the health and safety of employees and undisrupted operations throughout the food supply chain during the COVID-19 pandemic. However, sicknessrelated absences caused by the pandemic have significantly increased during the early part of the year. Apetit will continue to promote sustainable food supply chains in a profitable manner.”
CEO’s review Q4/2021
Esa Mäki, CEO: “Apetit Group’s net sales in the fourth quarter were at the same level with the comparison period but profitability declined. Towards the end of the year, profitability was weakened especially by the rise in energy costs and the increase in the price of oilseed plant raw materials that had continued since the summer. At the annual level, our operating profit was lower than in the previous year due to the weak profitability of the Grain Trade business. The profitability of the Oilseed Products segment was burdened by the record-high raw material price and increased logistics costs. With regard to the refining margin, the situation will remain challenging early in the year. In Food Solutions, development has been, for the most part, very positive. The retail demand for food remained strong until the end of the year. Demand in the Food Service channel also continued to recover. In food exports, we strengthened our position especially in the Swedish retail sector with new customer relationships. Although the pea harvest fell significantly short of the target, which reduced export volumes towards the end of the year, the total annual value of exports increased by 5 per cent. Profitability improved in all sales channels. Our delivery reliability has also remained at an excellent level. In the Oilseed Products business, we continued our systematic work to commercialise the new rapeseed-based plant protein during the year. The small-scale production of the BlackGrain from Yellow Fields plant protein started in October 2021. The small-scale production enables customers to test BlackGrain in their own product development. At Apetit, BlackGrain was used for the first time in a commercial product in early 2022 as Apetit Vegetable Ball was launched for the HoReCa market. The Kantvik bioenergy plant was commissioned towards the end of the year. The plant significantly reduces the Group’s CO2 emissions and energy costs. In the bioenergy plant, we can also make full use of production side streams, such as the straw that comes with seeds. The side streams account for about 10 per cent of the total fuel amount. The total value of the investment was approximately EUR 7 million. We have succeeded in improving production efficiency throughout the Kantvik vegetable oil milling plant: records were achieved both in rapeseed milling and in oil refining. Increasing the cultivation of domestic oilseed plants in line with our goal supports our efforts to improve the profitability of the Oilseed Products segment in the new harvest season. In December, Apetit Group’s subsidiary Avena Nordic Grain agreed on selling the Baltic operations of the Grain Trade business to Scandagra Group, which is a leading agriculture company in the Baltic countries. This business transaction is in line with our strategy and will make the Grain Trade business significantly healthier. The transaction is expected to be completed during the first quarter of the year. The changing COVID-19 situation has required us to act flexibly and competently in implementing various exceptional arrangements. Regardless of this all, we have successfully achieved our goal of ensuring the health and safety of our employees and ensuring undisrupted operations throughout the food supply chain. For this, I would like to thank our personnel warmly. In the corporate responsibility programme published in spring 2021, Apetit set targets for every stage of the value chain. An important goal is to reduce the climate impacts of our own operations. In this area, we have identified the impacts of energy consumption as essential. Significant investments in both Kantvik and Säkylä in the use of renewable energy and the development of energy and material efficiency reduce our climate impacts considerably. Put together, they will propel us towards our goal of reducing our own direct CO2 emissions by 75 per cent by 2025.”
CEO’s review Q3/2021
CEO Esa Mäki, July–September 2021: “Apetit Group’s net sales in the third quarter declined while profitability improved slightly year-on-year. In Oilseed Products, the exceptional and rapid increase in raw material prices has reduced the refining margin since the summer. In the Grain Trade segment, net sales declined substantially due to lower volumes caused by the poor harvest, with profitability being slightly lower than in the comparison period. In Food Solutions, profit performance has remained strong. Retail demand in the Food Solutions segment was at a good level. The Food Service channel has also continued its recovery from the low level seen during the pandemic. The Baltic Sea fish stick, launched in Finnish schools and kindergartens on Baltic Sea Day, significantly increased the channel's sales as a single product. In addition, exports to Sweden, in particular, have continued to grow. Increased prices in logistics, energy and packaging materials are creating pressure for increases in sales prices. Preparatory work, such as planning and orders of equipment and components for the pizza production line in Pudasjärvi, has progressed on schedule. The investment covers the modernisation of the entire production equipment in the existing building. At the same time, we are moving forward with product development to renew our range of products: our aim is to provide consumers in Finland with even more delicious frozen pizza made using domestic ingredients to the greatest possible extent. The redesigned range of pizzas will be launched next year. Enhancing the efficiency of production is a key aspect of our operations and the improvement of profitability. In Säkylä, we have invested in the processing of raw materials by upgrading the equipment used to wash vegetables. The new brush scrubbers significantly reduce water consumption. The investment is also significant from the perspective of raw material efficiency: the improved washing means that more of the vegetables are left to be processed for production. We are upgrading how peas are received at the start of the production line by investing in cleaning and processing equipment to increase capacity. Peas need to go from field to freezer within two hours, which naturally limits the cultivation area to the surroundings of the production facility, but the process is also directly dependent on the capacity of the production function to process peas quickly. Peas are Apetit’s most significant export product, with Italy and Sweden being the key markets. The investment supports our potential to increase pea exports in the future. The retail sales of our food products in Sweden have developed in line with our expectations. This autumn, we are launching on the Swedish market wok vegetables and a new vegetable mix. In addition to ICA, we have gained a foothold in other retail chains in Sweden this year. The value of food exports grew, amounting to EUR 4.4 (3.9) million in January–September in spite of pea exports being significantly lower than last year. The indications are that the overall harvest of field vegetables will be moderate. The harvest of early vegetables, such as peas and spinach, suffered from the hot and dry summer. In Oilseed Products, raw material prices have increased with exceptional speed – approximately 70 per cent in one year. The rate of price increases has been the highest since the summer. The profitability of Oilseed Products is decreased not only by the high raw material costs but also increasing freight costs. Raw material and freight costs are not expected to decrease in the near future, which weakens the outlook of the Oilseed Products segment for the remainder of the year. The start-up of small-scale production of the rapeseed ingredient to test the equipment at a subcontractor’s premises began in September. The start of small-scale production makes higher volumes possible and also allows our customers to test the ingredient in their products. In addition to making deliveries to customers, we will continue our own testing of end uses for the ingredient and the potential expansion of the product family. The ingredient will also be used in Apetit’s vegetable balls to be launched for the professional kitchen segment at the beginning of 2022. At the same time, we are planning the start of production on the commercial scale. According to our most recent harvest estimates, the rapeseed harvest will grow by just over a third. For autumn rapeseed, the area under cultivation increased compared to the previous harvest season, which can be considered good news: autumn oilseed plants yield higher harvests than spring oilseed plants and they are more resilient to pests. We are also pleased to have achieved our goal of increasing the number of contract growers and the area under contract cultivation. For grains, the harvest in Finland will be weak and the harvest in the Baltic countries will also be substantially smaller than last year. There are even clear shortages of certain grains. Grain prices have increased sharply both in Finland and the global market, especially since the late summer. The exceptional arrangements related to the COVID-19 pandemic have been discontinued in Apetit Group in accordance with the national recommendations. 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.”
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.