Apetit’s comparable profitability was lower than last year – net sales grew, the sharp increase in costs posed challenges
Apetit Plc, Half-Year Report on 18 August 2022 at 08:30 a.m.
Apetit Plc’s Half-Year Report 1 January–30 June 2022
Apetit’s comparable profitability was lower than last year – net sales grew, the sharp increase in costs posed challenges
April–June 2022, continuing operations*)
- In continuing operations, comparable net sales increased by 40 per cent to EUR 47.3 (33.8) million. EBITDA was EUR 0.4 (1.7) million. Operating profit was EUR -1.0 (0.4) million. The sharp increase in the prices of production inputs could not be fully transferred to sales prices.
- The net sales of Food Solutions were EUR 14.7 (14.0) million and operating profit EUR -0.4 (-0.1) million. Net sales increased especially in the food service channel.
- The net sales of Oilseed Products were EUR 32.8 (19.9) million and operating profit EUR -0.2 (0.9) million. Net sales were boosted by the significantly increased sales prices due to the higher price of the oilseed raw material.
January–June 2022, continuing operations*)
- In continuing operations, comparable net sales increased by 27 per cent to EUR 89.9 (70.9) million. EBITDA was EUR 1.5 (5.4) million. Operating profit was EUR -1.2 (2.8) million.
- The net sales of Food Solutions were EUR 31.9 (30.7) million and operating profit EUR 0.7 (1.5) million.
- The net sales of Oilseed Products were EUR 58.2 (40.4) million and operating profit EUR -0.8 (2.2) million. Sales volumes remained on a par with the comparison period.
April–June 2022, Group, incl. discontinued operations**)
- Net sales decreased by -5 per cent to EUR 64.9 (68.7) million. EBITDA was EUR 2.8 (0.3) million. Operating profit was EUR 1.2 (-1.2) million.
- The net sales of Grain Trade were EUR 21.9 (40.3) million and operating profit EUR 2.2 (-1.6) million.
January–June 2022, Group, incl. discontinued operations**)
- Net sales increased by 2 per cent to EUR 139.7 (136.4) million. EBITDA was EUR 4.6 (2.8) million. Operating profit was EUR 1.4 (-0.3) million.
- The net sales of Grain Trade were EUR 64.0 (76.2) million and operating profit EUR 2.6 (-3.1) million.
*) Apetit’s continuing operations are Food Solutions and Oilseed Products. In addition, Apetit reports Group Functions, consisting of the expenses related to Group management, strategic projects and listing on the stock exchange, that are not allocated to the business segments.
**) Grain Trade is reported as a discontinued operation starting from the Q1/2022 Business Review. The divestment of the Estonian grain trade business to Scandagra was completed on 10 March 2022, and the divestment of the Lithuanian business was completed on 31 March 2022. The divestment of the Finnish operations of the Grain Trade business to Berner Ltd was completed on 31 May 2022.
The information in this report is unaudited. The figures in brackets refer to the corresponding period in 2021, and the comparison period means the corresponding period in the previous year, unless otherwise stated.
PROFIT GUIDANCE FOR 2022 UNCHANGED
The full-year operating profit from continuing operations is expected to decrease year-on-year (EUR 5.8 million in 2021).
KEY FIGURES
| EUR million | 4-6 | 4-6 | 1-6 | 1-6 | 1-12 | ||
| 2022 | 2021 | 2022 | 2021 | 2021 | |||
| Continuing operations | |||||||
| Net sales | 47.3 | 33.8 | 40 % | 89.9 | 70.9 | 27 % | 149.1 |
| EBITDA | 0.4 | 1.7 | 1.5 | 5.4 | 11.1 | ||
| Operating profit | -1.0 | 0.4 | -1.2 | 2.8 | 5.8 | ||
| Share of profit of associated company Sucros | -0.1 | -0.2 | -0.4 | -0.6 | 0.4 | ||
| Profit for the period | -0.9 | 0.2 | -1.4 | 1.8 | 5.3 | ||
| Earnings per share, EUR | -0.14 | 0.04 | -0.22 | 0.28 | 0.85 | ||
| Investments | 3.0 | 3.3 | 6.6 | ||||
| Group (incl. discontinued operations) | |||||||
| Net sales | 64.9 | 68.7 | -5 % | 139.7 | 136.4 | 2 % | 283.9 |
| EBITDA | 2.8 | 0.3 | 4.6 | 2.8 | 9.2 | ||
| Operating profit | 1.2 | -1.2 | 1.4 | -0.3 | 2.8 | ||
| Profit for the period | 0.9 | -1.2 | 0.6 | -1.1 | 2.4 | ||
| Earnings per share, EUR | 0.14 | -0.19 | 0.09 | -0.17 | 0.38 | ||
| Equity per share, EUR | 14.68 | 14.48 | 14.95 | ||||
| ROCE-% | 3.8 | 2.9 | 2.4 | ||||
| Working capital, end of period | 22.1 | 25.5 | 50.5 | ||||
| Net cash flow from operating activities | 17.8 | 24.4 | 5.0 | ||||
| Equity ratio, % | 82.7 | 76.3 | 59.4 | ||||
| Net gearing, % | -4.8 | 3.1 | 26.6 | ||||
Esa Mäki, CEO:
“The net sales of Apetit Group’s continuing operations increased significantly, but profitability was lower than in the comparison period. In Food Solutions, the main challenge from profitability’s perspective was inflation that affects production inputs. In Oilseed Products, significantly increased raw material and logistics costs reduced profitability. However, demand for products in both businesses remained high.
The increase in costs continued during the second quarter, and the sales price increases to be made are a response to cost inflation that has already been realised. In Food Solutions, customer price increases will enter into force gradually in late summer and in the autumn.
In Oilseed Products, the introduction of higher sales prices will be slower due to agreement structures and the more extensive customer base. There is very good demand for domestic rapeseed oil in all sales channels. The successfulness of the current cultivation when it comes to the availability and price of oilseed plant raw material is significant for our profitability.
According to recent surveys, an increasing number of consumers has changed their purchasing behaviour as the price of food has increased. Apetit’s products have a strong position in retail trade as the only Finnish option and market leader of frozen vegetable products, which contributes to safeguarding demand for our products also in the changed circumstances. Apetit’s products are of high quality and have competitive prices. They are also a good match with the prevailing food trends of easier daily life, domestic origin, well-being, plant-based food, and sustainability.
The construction of the pizza production line in Pudasjärvi started in May and proceeded as planned during the summer. The approximately EUR 2 million investment was completed in July, and commercial production on the new line started at the beginning of August. New pizzas will be available in shops’ frozen food sections in October. Our goal is to challenge our foreign competitors by baking pizzas with sourdough, using domestic raw materials as much as possible and ensuring the deliciousness with stonebaking.
In Säkylä, we have continued investments in production efficiency improvements. The reception of peas at the start of the production line started during the summer. For its part, this eliminates production bottlenecks and improves our opportunities to increase pea production capacity in the future.
The harvest expectations for field vegetables are hopeful. The hot weather in early summer did not continue too long for plants, and rainfall has been mainly even throughout the growing season in our cultivation areas. After a couple of weaker years, the pea harvest is also expected to be good. Cooler weather has also contributed to the more even development of peas, which is good for pea quality and the smoothness of production.
For oilseed plants, the conditions during the summer growing season have been generally favourable so far. In the Baltic countries, harvesting started on time, and in Finland, main harvesting will probably begin in September a little later than normally. The total cultivation area of rapeseed in Finland increased by approximately 12,000 hectares from the previous year, which contributes to improving the harvest volume forecast.
The divestment of Apetit’s Grain Trade business to Berner was completed at the end of May, and it allows us to focus on growing and developing our processing businesses, meaning the Food Solutions and Oilseed Products businesses. Apetit will continue to cooperate intensively with Berner in purchasing oilseed plant raw material and in increasing the oilseed plant cultivation area and harvest level together with farmers.
Apetit’s products promote sustainable eating in many ways. Baltic Sea Fish Patties, to be launched to professional kitchens in August, complement our local fish product selection. Like Baltic Sea Fish Fingers, the product is made of Finnish skinless Baltic herring fillet. The fishing of Baltic herring removes eutrophicating nutrients and algae from waterways. Sustainable food choices do matter!”
WEBCAST
A news conference (in Finnish) will be held as a live webcast today on 18 August 2022 at 10:00. The news conference can be followed at apetit.fi/for-investors. The presentation material and a recording of the webcast will be available on the company’s website after the news conference.
Apetit Plc
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 and sustainable value chain: we create well-being with vegetables by offering 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 2021, Apetit Group's net sales were EUR 284 million.
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