Apetit Plc’s Half-Year Report 1 January–30 June 2020: A positive turnaround for Apetit as all of the Group’s businesses improve their profitability
Apetit Plc, Half-Year Report 21.8.2020 at 8.30 a.m.
April–June 2020, continuing operations*
- Net sales amounted to EUR 73.7 (64.5) million
- EBITDA was EUR 1.6 (-2.5) million
- Operating profit was EUR 0.1 (-3.9) million
January–June 2020, continuing operations*
- Net sales amounted to EUR 138.8 (135.5) million
- EBITDA was EUR 3.3 (-1.3) million
- Operating profit was EUR 0.3 (-3.9) million
*) Apetit’s continuing operations are Food Solutions, including the frozen foods category, Oilseed Products and Grain Trade. In addition to the three reporting segments (Food Solutions, Oilseed Products, Grain Trade), Apetit will report Group Functions, consisting of the expenses related to Group management, strategic projects and listing on the stock exchange that are not allocated to the three business segments.
The reporting principles mentioned above are in effect starting from the company’s reporting for the first half of 2020. The comparison figures for 2019 and the first quarter of 2020 in accordance with the new reporting model were published on 12 June 2020. Apetit also discontinued the use of alternative profitability-based performance measures.
The information in this report is unaudited. The figures in brackets refer to the corresponding period in 2019, and the comparison period means the corresponding period in the previous year, unless otherwise stated. The comparison figures have been adjusted to correspond to the continuing operations in 2020, except the service business, which is included in the comparison figures for the first half of 2019. The service business was gradually divested by the end of April 2019.
KEY EVENTS DURING THE PERIOD
- Apetit published its strategy and financial objectives for 2020–2022 in May: Further strengthening of the unique value chain is at the core of the renewed strategy.
PROFIT GUIDANCE FOR 2020 UNCHANGED
The full-year operating profit is expected to improve year-on-year (EUR -4.8 million in 2019) and to show a profit.
With Apetit Plc discontinuing the use of alternative profitability-based performance measures, the profit guidance has been changed to correspond to the current reporting principles.
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.”
KEY FIGURES
| EUR million | 4–6 2020 | 4–6 2019 | Change | 1–6 2020 | 1–6 2019 | Change | 2019 |
| Continuing operations | |||||||
| Net sales | 73.7 | 64.5 | 14% | 138.8 | 135.5 | 2% | 296.9 |
| EBITDA | 1.6 | -2.5 | 3.3 | -1.3 | 0.8 | ||
| Operating profit | 0.1 | -3.9 | 0.3 | -3.9 | -4.8 | ||
| Share of profit of associated company Sucros | -0.3 | 0.1 | -0.7 | -0.3 | -0.9 | ||
| Profit for the period | -0.3 | -3.3 | -0.8 | -3.9 | -5.4 | ||
| Earnings per share, EUR | -0.05 | -0.54 | -0.13 | -0.63 | -0.87 | ||
| Working capital at the end of the period | 22.1 | 27.2 | 64.0 | ||||
| Investment | 3.3 | 7.3 | 11.5 | ||||
| Group (incl. operations discontinued during the comparison period) | |||||||
| Net sales | 73.7 | 69.6 | 138.9 | 146.0 | 312.6 | ||
| EBITDA | 1.7 | -2.6 | 3.4 | -1.6 | 2.9 | ||
| Operating profit | 0.2 | -4.4 | 0.4 | -4.9 | -3.4 | ||
| Profit for the period | -0.2 | -3.7 | -0.7 | -4.8 | -4.4 | ||
| Earnings per share, EUR | -0.04 | -0.60 | -0.12 | -0.77 | -0.71 | ||
| Equity per share, EUR | 14.65 | 15.25 | 15.09 | ||||
| ROCE % | 1.5% | -6.6% | -4.0% | ||||
| Net cash flow from operating activities | 45.9 | 29.8 | -5.9 | ||||
| Equity ratio | 68.8% | 71.6% | 55.0% | ||||
| Gearing | -4.7% | 8.9% | 35.9% |
NEWS CONFERENCE AND WEBCAST
A news conference (in Finnish) will be held today on 21 August 2020 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:
Esa Mäki, CEO, Apetit Plc, tel. +358 10 402 2100
Apetit is a food industry company firmly rooted in Finnish primary production. Our operations are based on a unique value chain: 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 Plc's shares are listed on Nasdaq Helsinki. In 2019, Apetit Group’s net sales were EUR 313 million. Read more at apetit.fi.
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