Apetit Plc’s Financial Statements Release 1 January to 31 December 2018: The Group’s net sales and result decreased due to the weak grain crop – Positive development continued in Food Solutions
Apetit Plc, Financial Statements Release, 20 February 2019 at 8:30 a.m.
October–December 2018
- Net sales amounted to EUR 74.0 (86.6) million
- Operational EBITDA was EUR 2.0 (2.7) million
- Operational EBIT was EUR 0.6 (1.2) million
January–December 2018
- Net sales amounted to EUR 283.1 (311.8) million
- Operational EBITDA was EUR 5.3 (6.8) million
- Operational EBIT was EUR -0.5 (1.3) million
Key events during the period
- Apetit announced that it will divest its remaining service sales operations of the Food Solutions business gradually during early 2019. The divestment of the service sales operations is in line with Apetit’s strategy of focusing on its core businesses and a natural continuation of the seafood business divestment in 2017.
- As a result of impairment testing in the fresh cut products category, Apetit made an impairment of EUR 4.7 million. The impairment has no impact on cash flow.
The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.40 per share be paid.
The figures for 2018 and 2017 have been audited. The quarterly and six-month figures are unaudited. 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.
Juha Vanhainen, CEO:
“The year 2018 was one of large contrasts. Two consecutive exceptionally weak harvest seasons in Finland have reduced the volumes of Grain Trade significantly, making trading materially more challenging than in seasons with a normal harvest. The significant decrease of opportunities to export Finnish grain and the imbalance of supply and demand in the Baltic market have reduced profitability. On the other hand, profit improvement in Food Solutions and the related improvement measures create confidence in finding the right direction in the Food Business. The stable performance of the Oilseed Products business lays the foundation for long-term development.
During the fourth quarter of 2018, we continued the restructuring of the Food Business and announced that we would discontinue our service sales operations. This is in line with Apetit’s strategy of focusing on its core businesses and a natural continuation of the seafood business divestment in 2017.
After the divestment of the service sales operations, the Food Business will focus on the frozen food and fresh cut product categories. The frozen foods has continued to grow commendably, thanks to systematic investments in product development, among other factors. This growth will also be supported by our investment in the new patty and ball production line in Säkylä, which will double the plant’s production capacity in this product category.
The fresh cut products category has been developing in the right direction, but this development has been disappointingly slow. As a result we have no choice but to continue to implement ongoing and new, rapid measures to improve profitability by streamlining our operations. At the beginning of 2019 we agreed on efficiency improvement measures with the aim of improving profitability concerning the planning of working hours and on working methods that improve the efficiency of operations and reduce the need for temporary agency workers. With these measures we aim for an annual overall impact of around EUR 1 million.
We have done a great deal of good work within the Group – unfortunately, much of this work is overshadowed by Grain Trade’s considerably weaker performance. On average, our growth in frozen foods and fresh cut products outpaced market development last year, and production volumes at the Kantvik oil milling plant were higher than ever before. In Grain Trade, we launched a new cooperation model, Farmer’s Avena Berner, which is off to a promising start, and we have high expectations for the cooperation and its results for 2019. Our systematic investment in research and development again resulted in numerous new products. In recognition of its expertise in processing Finnish-grown vegetables, Apetit’s Vegepops was chosen as the Finnish Food of the Year 2018.
All in all, however, I am not pleased with the company’s performance. We must continue to improve the efficiency of all of our operations and take measures to significantly improve profitability, also over the short term. Based on this need, the roles and responsibilities of the members of Apetit Plc’s Management Team were further specified in early 2019. The purpose of this is to further strengthen the company’s growing business and rapidly improve underperforming operations.
In 2018, we worked on ensuring the company’s competitiveness. Apetit implemented its strategy systematically, leading the way in vegetable-based diets through renewal and by improving our operational efficiency and taking the first important steps in growing international food sales.”
KEY FIGURES
| EUR million | 10–12 2018 | 10–12 2017 | Change | 1–12 2018 | 1–12 2017 | Change |
| Continuing operations | ||||||
| Net sales | 74.0 | 86.6 | -15% | 283.1 | 311.8 | -9% |
| Operational EBITDA | 2.0 | 2.7 | 5.3 | 6.8 | ||
| Operational EBIT | 0.6 | 1.2 | -0.5 | 1.3 | ||
| Operating profit | -4.3 | 1.2 | -6.9 | 1.1 | ||
| Share of profit of associated company Sucros | 0.3 | 1.4 | -0.7 | 1.0 | ||
| Profit for the period | -3.2 | 2.3 | -6.6 | 2.9 | ||
| Earnings per share, EUR | -0.51 | 0.38 | -1.06 | 0.46 | ||
| Working capital at the end of the period | 57.2 | 30.0 | ||||
| Investment | 6.7 | 5.2 | ||||
| Group (incl. operations discontinued during the comparison period, Seafood) | ||||||
| Profit for the period | -4.1 | 2.4 | -7.5 | -0.6 | ||
| Earnings per share, EUR | -0.66 | 0.38 | -1.21 | -0.10 | ||
| Equity per share, EUR | 16.29 | 18.10 | ||||
| Return on capital employed (ROCE), % | -1.2% | 2.4% | ||||
| Net cash flow from operating activities | -23.5 | 20.0 | ||||
| Equity ratio | 61.4% | 72.6% | ||||
| Gearing | 21.5% | -9.6% |
PROFIT GUIDANCE 2019
The Group’s full-year operational EBIT is expected to improve year-on-year (EUR -0.5 million in 2018). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year. The profit outlook for early 2019 is burdened by the weak grain crop of 2018. Opportunities to export Finnish grain are limited, and an imbalance of supply and demand is posing challenges in the grain trade in the Baltic countries.
DIVIDEND PROPOSAL
On 31 December 2018, the parent company’s distributable funds totalled EUR 58,632,855.11, of which EUR 380,714.20 is profit for the financial year.
The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.40 per share be paid. The Board of Directors will propose that a total of EUR 2,486,648.40 be distributed in dividends and that EUR 56,146,206.71 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 Thursday 28 March 2019.
PUBLISHING OF THE ANNUAL REPORT
Apetit Plc’s Annual Report for 2018 – including the Board of Directors’ report, the financial statements for 2018, a sustainability report and a separate corporate governance statement – will be published in the week beginning 4 March 2019 on the company’s website at www.apetit.fi.
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 apetit.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
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 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 2018, the company’s net sales were EUR 283 million. Read more at www.apetit.fi.
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