Apetit Half-Year Financial Report 1 January–30 June 2018: A weak harvest lowered Grain Trade volumes and Group result – strategic measures lay foundations for future
This release is a summary of Apetit’s Half-Year Financial Report for the January-June period of 2018. The complete report is attached to this release as a pdf file and it is also available on the company’s website at apetitgroup.fi/for-investors.
April–June, continuing operations*
- Net sales from continuing operations were EUR 72.8 (76.8) million
- Operational EBITDA was EUR 0.1 (0.8) million
- Operational EBIT was EUR -1.4 (-0.5) million
January–June, continuing operations*
- Net sales from continuing operations were EUR 132.5 (150.8) million
- Operational EBITDA was EUR 0.1 (1.2) million
- Operational EBIT was EUR -2.8 (-1.5) million
Key events during the period
- Apetit invests EUR 9.7 million in a new patty and ball production line in Säkylä.
- Apetit invests EUR 3.7 million in the construction of a bioenergy plant in conjunction with the Avena Kantvik Oy rapeseed oil milling plant in Kirkkonummi.
- Avena Nordic Grain Oy and Viljelijän Berner joined their purchasing and sales organisations in production input and grain trade under a new operating model based on partnership.
- Apetit Vegepops Porkkana-mango was chosen as the Finnish Food of the Year 2018
*Continuing operations include Food Solutions, Oilseed Products and the Grain Trade.
The information has not been audited. 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.
REVISED (3 August 2018) PROFIT GUIDANCE FOR 2018
The Group’s full-year operational EBIT from continuing operations is expected to fall short of the 2017 level (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 of the current year.
Juha Vanhainen, CEO:
“Apetit has continued with the measures of the strategy announced in March 2018 in its focus areas, which are internationalisation, renewal and efficiency improvement. These measures reinforce Apetit’s position as number one in vegetables and help in building a foundation for the further development of the business.
In June, we announced that we invest nearly EUR 10 million in a new patty and ball production line at our Säkylä plant. The new line will double our production capacity, meet current demand and enable us to produce new products for the Finnish and international markets.
As a part of the project to improve efficiency, Apetit is building a bioenergy plant in conjunction with the Avena Kantvik Oy rapeseed oil milling plant in Kirkkonummi. The bioenergy plant will replace the current energy solution that uses non-renewable fuels and will significantly reduce the carbon dioxide emissions of the entire Group.
Apetit participated in the share issue of the food business development company Foodwest which took place in May-June. Apetit’s holding in the company will promote our strategic goals to focus on product development and to renew and lead the way in vegetable-based diets. One result of the work we have done to date is the nomination of Apetit Vegepops Porkkana-mango as the Finnish Food of the Year 2018 in May. We also continued work on a project to develop a rapeseed ingredient in order to develop a new ingredient with high nutritional content for the international food market.
The goals of renewal and continuous development of operations took concrete form when Apetit’s subsidiary Avena Nordic Grain Oy and Viljelijän Berner joined their purchasing and sales organisations in production input and grain trade under a new operating model based on partnership. Business will be conducted under the name Viljelijän Avena Berner and it will offer Finnish farmers a one-stop-shop for production input and grain trade services.
Increasing the share of food sales abroad has proceeded according to plan. At the end of August Apetit will launch a new selection for the Swedish market called Free From which includes five patty and ball products. In Russia we are continuing work on reinforcing our position through local food product chains.
As expected, the aftermath of the weak harvest of 2017 continued in the first half of 2018 and substantially lowered grain trade volumes and consolidated net sales on the comparison period. The shrinking of the Sales Services network had a negative impact on the net sales of Food Solutions. Oilseed Products’ performance remained stable as volumes slightly grew on the comparison period. The low price of sugar on the global market led to a weaker result for the associated company Sucros.
During the spring Apetit has carried out adjustment measures to improve profitability, including personnel reductions and other cost saving measures. Their combined impact in 2018 will be EUR 1.0 million and the annual total impact will be EUR 1.8 million.
It is likely that the 2018 harvest season will also be significantly worse than average, as was the 2017 season, which will have a negative impact on the Group’s profit-earning capacity in the second half of the year. The Finnish grain harvest is estimated to be the weakest of the 21st century, which will limit trade opportunities especially in exports. The harvest of field vegetables is also likely to be lower than usual.”
KEY FIGURES
|
EUR million |
4-6 |
4-6 |
Change |
1-6 |
1-6 |
Change |
2017 |
|
Continuing operations |
|
|
|
|
|
|
|
|
Net sales |
72.8 |
76.8 |
-5% |
132.5 |
150.8 |
-12% |
311.8 |
|
Operational EBITDA |
0.1 |
0.8 |
|
0.1 |
1.2 |
|
6.8 |
|
Operational EBIT |
-1.4 |
-0.5 |
|
-2.8 |
-1.5 |
|
1.3 |
|
Operating profit |
-2.7 |
-0.7 |
|
-4.1 |
-1.7 |
|
1.1 |
|
Share of profit of associated company Sucros |
-0.4 |
0.2 |
|
-0.9 |
-0.5 |
|
1.0 |
|
Profit for the period |
-2.8 |
-0.5 |
|
-4.5 |
-2.0 |
|
2.9 |
|
Earnings per share, EUR |
-0.45 |
-0.08 |
|
-0.72 |
-0.32 |
|
0.46 |
|
Working capital, at end of period |
|
|
|
28.5 |
25.3 |
|
30.0 |
|
Investment |
|
|
|
1.8 |
2.5 |
|
5.2 |
|
Group |
|
|
|
|
|
|
|
|
Earnings per share, EUR |
-0.45 |
-0.27 |
|
-0.72 |
-0.56 |
|
-0.10 |
|
Equity per share, EUR |
|
|
|
16.75 |
17.58 |
|
18.10 |
|
Return on capital employed (ROCE), % |
|
|
|
0.9% |
1.9% |
|
2.4% |
|
Net cash flow from operating activities |
|
|
|
-0.1 |
23.1 |
|
20.0 |
|
Equity ratio |
|
|
|
76.1% |
71.1% |
|
72.6% |
|
Gearing |
|
|
|
-4.7% |
-1.5% |
|
-9.6% |
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 apetitgroup.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 Half-Year Financial Report 1 January – 30 June 2018
Apetit Plc
For further information, please contact:
Juha Vanhainen, CEO, Apetit Plc, tel. +358 10 402 2100
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 approximately 640 employees. Read more at apetitgroup.fi.
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CEO’s review Q3/2025
Esa Mäki, CEO: "Apetit Group’s operating result for the third quarter fell short of the comparison period. Oilseed Products improved its result slightly, but Food Solutions’ operating result declined from the strong comparison period. In Food Solutions, the deterioration of the result was influenced by the challenging harvest season for frozen peas. Some of the pea fields had to be skipped during the harvesting phase. In accordance with the cultivation agreements, Apetit has compensated the farmers for the pea fields that were not harvested. The operating result of Food Solutions includes EUR -0.4 million of expert expenses related to the acquisition of Foodhills. The delivery reliability situation, which weakened Apetit’s result for the first half of the year, normalised in both businesses in June, after which delivery reliability has remained at a good level. The Group’s net sales increased slightly from the comparison period. On 9 October 2025, Apetit announced that it had signed an agreement to acquire 100 per cent of the share capital of Foodhills. Foodhills is Sweden’s largest contract grower and producer of frozen peas. The completion of the sale is subject to approval by the Swedish ISP authority. The acquisition of Foodhills is a growth project in line with our strategy. We will have a strong foundation in the Swedish market and significantly increase the volume of frozen peas. Apetit has strengthened its position in Sweden in recent years, and now it is time to take a significant step in the company’s internationalisation. The critical phases of the Group’s ERP project with regard to deployment have been completed as planned. In Oilseed Products, the implementation phase took place in early October. The strategically significant project was completed on schedule and within budget. I am proud of the achievements of our committed personnel in the project, which has lasted approximately three years in total. We have launched a strategic investment in Kantvik’s vegetable oil milling plant to improve the raw material production process for BlackGrain from Yellow Fields® rapeseed powder and to multiply its production capacity. The investment has largely progressed as planned and is expected to be completed during the first quarter of 2026. The yield levels of Finnish rapeseed sown in autumn have been excellent in some places. According to the harvest estimate published by Natural Resources Institute Finland on 22 September, the rapeseed harvest would increase by more than 60 per cent from last year and be the highest in eight years. The successful growing season of oilseed plants was also reflected in the variety tests of the RypsiRapsi forum, which saw exceptionally high yield levels for several varieties. The results of the variety tests provide a good basis for further tests and give confidence to Finnish oilseed plant growers, even though the exceptionally good growth conditions of the harvest season should be taken into account in assessing the results. The current year’s harvest outlook for field vegetables is moderate. Of Apetit’s contract farming crops, frozen peas had a challenging harvest season. The hottest period in measurement history and the subsequent regional heavy rainfall taxed crops. The number of field sections skipped in harvesting was higher than usual, which had a negative impact on the result. For root vegetables, the situation looks good halfway into the harvest season. We launched several new products during the autumn. In retail, we introduced a new flavour option to the Apetit Superior frozen pizza product family and expanded the offering to the popular wok product family. We also introduced a Finnish leek slice product, which was very well received in store ranges. We see a growing demand for products that make using vegetables easier and more diverse. Launched in the Food service channel, Apetit Kasvisjauhis Burgerpihvi vegan patty is an interesting new product, as it contains Apetit BlackGrain from Yellow Fields® rapeseed powder. Kasvisjauhis Burgerpihvi is also exceptional in its texture and taste, which is why we look forward to its market reception. The product is an excellent demonstration of BlackGrain’s potential and the innovation and product development expertise of both of Apetit’s businesses."
CEO's review H1/2025
“Apetit Group’s operating result for the first half of the year declined year-on-year due to a weaker result in Oilseed Products. The prolonged collective bargaining negotiations between the Finnish Food and Drink Industries' Federation and the Finnish Food Workers’ Union caused challenges to both of Apetit's businesses during the first two quarters of the year. The overtime and shift change bans during the negotiations affected delivery reliability in both businesses. The strike days related to the negotiations also affected operations in Food Solutions. Food Solutions improved its result in the first half of the year. Both sales volumes and net sales have increased slightly year-on-year. In Oilseed Products, the decline in result was attributable not only to the price of the raw material used, but also to the decrease in sales of refined oil and challenges in delivery reliability. Apetit’s operating result in the second quarter declined from the comparison period. The delivery reliability situation normalised in both businesses in June. Net sales increased in both businesses in the second quarter year-on-year. In Food Solutions, also sales volumes increased. Retail sales developed positively due to the cool early summer being favourable to the sale of frozen products. In July, we announced an investment of approximately EUR 2 million in the Kantvik vegetable oil milling plant. The strategic investment improves the production process of the raw material for the BlackGrain from Yellow Fields® rapeseed powder. The investment in late 2025 will strongly support the commercialisation of BlackGrain. The investment will multiply BlackGrain’s raw material production capacity and significantly improve the quality and efficiency of the process. The total investment includes replacement investments in the milling plant’s current processes. The availability of raw materials has been one of the bottlenecks for increasing actual production. We will continue the practical development of BlackGrain’s various product applications. Thanks to its versatility, BlackGrain is suitable for a wide range of products in the food industry. Customer-oriented product application work is carried out for both BlackGrain rapeseed powder and TVP plant protein made from BlackGrain, which contains pea protein in addition to BlackGrain. At the same time, we are investigating alternatives for producing the BlackGrain rapeseed powder. Apetit is assessing potential partnerships and starting production by making an investment in the Kantvik vegetable oil milling plant or with purchased services. The strategically important ERP project has progressed according to schedule. The new ERP system is scheduled to be implemented in Oilseed Products by the end of the year, after which all Group operations will be covered by the new system. The outlook for the harvest season is currently moderate. In early summer, even the cool weather offered a promising start to the growing season, which benefitted spinach and pea in particular. However, the hottest period in the history of measurements in July weakened the harvest for frozen peas due to the rapid ripening of the harvest. Regional heavy rains taxed frozen pea crops in some places. Frozen peas are harvested on a record-large area of 2,000 hectares. The success of the harvest season is ultimately determined by the weather in the autumn and the harvesting conditions. The growing season of onion, which is Apetit’s contract farming crop for the first time, has largely gone according to expectations. Onion is a significant crop in Apetit’s product range and a strategic addition to the list of contract farming crops. The cultivation areas for Finnish oilseed plants grew strongly from the previous year. 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Development projects in Finnish cultivation lay down the conditions for the continuum of cultivation of plants significant to Apetit, especially in adapting to the changes brought about by climate change. The new national nutrition recommendations published in late 2024 and the importance of well-being and sustainability in food trends are reflected in the increased consumption of frozen vegetables in Finland. This phenomenon can be seen in frozen peas, for example. The increased popularity of legumes and the ease of using frozen vegetables combined with the uniqueness of Finnish frozen peas have increased the sales of Finnish frozen peas by more than one-third over five years. This the right direction, because adding more vegetables onto the plate is a good choice in every way." Esa Mäki, CEO
CEO's Review Q1/2025
"Apetit Group’s operating result for the first quarter declined from the comparison period. The result of Food Solutions improved, but the operating result of Oilseed Products decreased from the strong result of the comparison period. In Food Solutions, both net sales and sales volumes were on a par with the comparison period. Retail sales increased slightly year-on-year. The result of Food Solutions was boosted by the harvest season production that continued until 2025 and was record-long. The weak performance of Oilseed Products was particularly attributable to anticipated expensive raw material items timed during the reporting period. The prolonged collective bargaining negotiations between the Finnish Food and Drink Industries' Federation and the Finnish Food Workers’ Union had a negative impact on Apetit’s operations during the first quarter. The ban on overtime and shift changes weakened Apetit’s delivery reliability in both businesses. The volatile global political and economic situation causes uncertainty for Apetit’s operations and reduces predictability. The effects may be reflected in the market prices of oilseed plants in particular. No short-term impact is expected due to frontloaded raw material purchases. Work on strategically important projects has continued as planned. The ERP system upgrade is progressing according to schedule. The new ERP system for Oilseed Products is scheduled to be deployed towards the end of the year. Work with rapeseed powder BlackGrain From Yellow Fields and Finnish pea protein also continues. In the autumn, we will launch a product based on textured plant protein (TVP) processed from BlackGrain in the Food service channel. The patty with BlackGrain TVP and pea protein has an excellent taste and texture – and it is a great example of the synergies between Apetit’s two businesses. The sowing season for field vegetables is expected to begin earlier than usual as fields are quickly becoming ready for sowing. During the coming harvest season, we will further increase the area used for contract farming of frozen peas. Harvesting and the from field to freezer chain ran smoothly in last year's record-large area. As a new crop, we will contract grow Finnish onions for the first time. There has been commendable willingness to grow onions. Onion is an important crop in our products: both Finnish onion cubes and the potato-onion mix are important products in the frozen vegetable and frozen potato product categories. The domestic spring rapeseed cultivation area is expected to increase by 37 per cent in the Finnish Cereal Committee VYR’s* planting intention survey. The milder and less snowy winter than usual was favourable for autumn oilseed crops in large parts of the country. There may be regional differences in the success of the wintering of autumn rapeseed, but little winter damage has been reported and autumn rapeseed in particular looks good. We will continue to invest in promoting Finnish agricultural research in both of our businesses. Diverse experimental activities of the RypsiRapsi forum and the VARPS project aimed at increasing the cultivation reliability and volume of rapeseed continued. Variety tests of autumn and spring oilseed plants will be further established in different parts of Finland, and cultivation method experiments will be continued, for example, with plant protection alternatives and new establishment methods. Among other things, the Räpi experimental farm is participating in a project to investigate the use of side streams from the food industry as soil improvement products or recycled fertilisers. Early this year, we launched new products that fit perfectly with the food trends. A new flavour was made available for the Crispy Chick patty, which has become a favourite in Apetit’s Kasvisjauhis vegan mince product range. The sales of Apetit’s plant-based patties and balls as well as the Kasvisjauhis Crispy Chick patty have developed steadily. Crispy Chick in particular has established a solid position in shop freezers: the sales of the Crispy Chick patty have been increasing for five years and more than doubled over that time. Other new products early in the year included a new flavour in the Uuni- ja grillikasvikset frozen vegetable mix and Finnish potato slices to complement Apetit’s product range of frozen potatoes. Apetit celebrated its 75th anniversary in March. Operations began as Länsi-Suomen Sokeritehdas in 1950. Today, Apetit is at the heart of food trends and nutrition recommendations: its range of plant based frozen vegetables and foods and vegetable oils is aligned with prevailing food trends, responsible eating and nutrition recommendations.” Esa Mäki, CEO
