APETIT PLC’S INTERIM REPORT, JANUARY-SEPTEMBER 2014

6.11.2014 08:30:00 EET | Apetit Oyj | Interim report (Q1 and Q3)

Apetit Plc, Interim Report, 6 November 2014 at 08.30 am

This is a summary of the Interim Report January - September 2014. The complete Interim Report, including tables of financial information, is attached to this release and can be downloaded from the company’s website at www.apetitgroup.fi/en.

Third quarter (July-September)

• Consolidated net sales amounted to EUR 77.0 (91.6) million, down by 16 per cent.
• Operating profit excluding non-recurring items was EUR 1.6 (3.1) million. The reported operating profit was EUR -11.1 (1.0) million.
• The non-recurring items included in the reported operating profit were EUR -12.7 (-2.1) million. These consisted of EUR -10.2 million in impairments carried out in the Food Business on the basis of goodwill impairment testing and EUR -2.5 million in expenses related to the arbitration court process between Apetit and Nordic Sugar, which was concluded during the period.
• The profit for the period was EUR -11.1 (2.5) million, and earnings per share amounted to EUR -1.74 (0.48).
• The profit for the period excluding non-recurring items was EUR 1.0 (1.7) million, and earnings per share excluding non-recurring items was EUR 0.20 (0.35).
• The equity ratio remained strong and was 61.4 (67.4) per cent.

January - September

• Consolidated net sales amounted to EUR 264.0 (290.0) million, down by 9.0 per cent.
• Operating profit excluding non-recurring items came to EUR 2.0 (6.8) million. The reported operating profit was EUR -11.2 (4.3) million.
• The non-recurring items included in the reported operating profit were EUR -13.2 (‑2.5) million. These consisted of EUR -10.2 million in impairments carried out in the Food Business on the basis of goodwill impairment testing and EUR -3.0 million in expenses related to the arbitration court process between Apetit and Nordic Sugar.
• The profit for the period was EUR -12.1 (4.9) million, and earnings per share amounted to EUR -1.86 (0.91).
• The profit for the period excluding non-recurring items was EUR 0.3 (4.4) million, and earnings per share excluding non-recurring items was EUR 0.15 (0.84).

The assessment of profit performance for the full year has been updated on a stock exchange release issued on 2 October 2014.

The information in this Interim Report has not been audited. The figures in parentheses are the equivalent figures for the same period in 2013, and the comparison period means the corresponding period of the previous year, unless stated otherwise.

Veijo Meriläinen, CEO:

The Apetit Group’s third-quarter net sales were strongly affected by the low world market prices for grains and the smaller delivery volumes in the grain trade compared with the previous year. Sales performance in the Finnish retail trade and in staff restaurants has been lacklustre due to reduced household purchasing power, and in the Food Business we have been actively working to maintain our market position.

The third-quarter consolidated operating profit excluding non-recurring items was down from the previous year because of the impact of the unsatisfactory profitability of the Food Business’s fish products group and the decline in the share of profits of the associated company Sucros. In the Grains and Oilseeds Business, the operating profit excluding non-recurring items improved especially as a result of the good performance in the refining margin of oilseed products. Profit performance was also good in the Food Business’s frozen products group. During the period, impairments were carried out in the Food Business on the basis of goodwill impairment testing in the fish products group in Sweden and Norway and in the fresh products group.

Juha Vanhainen was appointed the new CEO of Apetit Plc, to take effect on 16 March 2015, and we are glad to have such an able and experienced expert from an international process industry company. Before he starts, we will continue our committed approach to the profitability and development programmes already under way in order to improve profitability and renew our business.

In Food Business, under fish and fresh products groups’ long term profitability programs the business practices and structures of purchasing, sales and the order-delivery chain are being revised in order to achieve better profitability and sustainable competitiveness in these product groups. Most of the programme measures are focused on the years 2014-2015, and we expect them to improve profitability gradually as of 2015. The aim of the programmes is to achieve a reduction of EUR 4.5 million in annual expenses.

The significance of domestic content in consumers’ purchasing decisions continues to increase, and this is also a cause that is supported in society at large. We believe that our long-term investment in the development of domestic contract growing, strong integration with primary production and the systematic building of the Apetit Kotimainen domestic food brand will continue to produce a competitive advantage that is difficult to imitate.

KEY FIGURES

OUTLOOK FOR 2014

The Apetit Group’s net sales will be affected particularly by the level of activity in the grain and oilseed markets and by changes in the price level of grains and oilseeds. As a result of the lower global market prices of grains, the Group’s net sales for this year are expected to decrease from the previous year’s level.

The Group’s full-year operating profit excluding non-recurring items is expected to be down significantly from the previous year. In the Food Business, the market conditions are expected to remain challenging and, furthermore, the profitability of fish products will remain poor this year. In comparison with the same period in 2013, the profitability of the Grains and Oilseeds Business has been positively influenced by the volume growth in the grain trade and in packaged vegetable oil products, and by the success in raw material procurement. Lower market prices for sugar are expected to weaken the result considerably for the associated company Sucros, which is in the Other Operations segment.

In addition, the 2014 reported operating profit will be affected by non-recurring expenses in the form of Apetit’s expert costs and the process costs ordered to be paid by Apetit in relation to the shareholder agreement dispute regarding Sucros, and by the impairments carried out in the Food Business in the third quarter on the basis of goodwill impairment testing.

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INVITATION TO A BRIEFING

A briefing (in Finnish) for analysts and media representatives will be held today at 10.00 a.m. in Hotel Scandic Simonkenttä (address: Simonkatu 9, Helsinki). In the briefing Apetit Plc’s CEO Veijo Meriläinen presents the January - September results of Apetit Plc and gives more information about current issues. Apetit Plc’s forthcoming CEO, Juha Vanhainen, will also be present.

The presentation material will be available on the company’s website at http://www.apetitgroup.fi/en/ after the event.

Copies to:

NASDAQ OMX Helsinki
Main media
www.apetitgroup.fi

Attachments

• eng_apetit_interim_report_q3_2014_final.pdf

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