Apetit Group’s Strategy 2016-2018: Targeting profitability improvement and a leadership role in vegetable-based food solutions

Apetit Group’s Capital Market Day will be held today, 1 March 2016, in Helsinki. Juha Vanhainen, CEO, will present the company’s new strategy for the 2016–2018 period, the financial targets for the strategy period, the company’s new segment structure and its dividend policy.

“Our strategy is to improve Apetit’s profitability and make Apetit the leader in vegetable-based food solutions. Renewal will be accelerated by investing in new food solutions, product development in current product lines, in increasing added value and in service development, especially by exploiting digitalisation. In the grains, oilseeds and feed raw-material trade our goal is to achieve growth in the Baltic region. In Seafood our goal is to become the most efficient producer of volume and added value products as a retail trade partner,” says Juha Vanhainen, CEO.

“Apetit has a strong balance sheet and furthermore, we aim to use our capital more effectively. The company will increase its investments in growth and to enhance added value and operational efficiency. We will also focus a lot more on the digitalisation opportunities for improving our services at the customer and producer and farmer interface,” Vanhainen says.

New segment structure will support strategy implementation

In order to reinforce the implementation and follow-up of the new strategy, Apetit is renewing its segment structure. The new business segments are Food Solutions, Oilseed Products, Grain Trade and Seafood.

The Food Solutions business will include frozen foods group and fresh products group, and also service sales. The Oilseed Products business will include the processing and sales of vegetable oils and expeller meals.  The Grain Trade Business will comprise the Finnish and international trade in grains, oilseeds and feed raw-materials, and the Seafood segment will comprise the operations of the fish products group in Finland, Sweden and Norway.

The new segment structure will be adopted as of the first quarter 2016 reporting. Comparison figures in accordance with the new segment structure will be published today, 1 March 2016, in a separate release.  

Strategic focus and goals of business operations

Food Solutions

In Food Solutions Apetit’s goal is to become the leading brand in vegetable-based food solutions and services. The most important product groups are frozen vegetable products and frozen ready meals, ready-to-use fresh vegetables and service sales. Renewal will be accelerated by increasing efforts in product development and investing in new food solutions and service development, and especially by exploiting digitalisation.

In the Food Solutions segment the goal is to reach 20 per cent organic net sales growth by the end of 2018 (2015: EUR 96 million). In terms of profitability, the goal is to achieve 7.5 percent EBITDA margin (2015: 3.7%) in 2018.

Oilseed Products

In Oilseed Products our goal is to be the first choice of customers who prefer high-quality vegetable oils and feeds. We will increase the level of added value in production by investing in product development and in-depth R&D.

In the Oilseed Products the target is to increase the share of packaged and special products so that in 2018 they will account for 34.0 per cent of net sales (2015: 28.4%). In terms of profitability, the goal is to achieve 7.5 percent EBITDA margin (2015: 5.5%) in 2018.

Grain Trade

In the Grain Trade the goal is to increase our market share in the Finnish grain, oilseed and feed raw-material markets and to grow especially in the Baltic countries’ grain and oilseed sector. In capital intensive business we will pay particular attention to the effective use of capital. We will seek competitive advantage by offering the best service and tools for grain buyers and sellers alike.

The goal in the Grain Trade segment is to increase sales volume to over 1,000,000 tonnes per year in 2018 (2015: 830,000 tonnes) and to achieve and ROCE percentage of 14.0 (2015: 12.1%).

Seafood 

In Seafood the focus will be on improving the efficiency and competitiveness of operations in high volume and added value products in all operating countries: Finland, Norway and Sweden. Operations will be developed by becoming the most efficient in the sector. The sales focus will be on retailers’ private label products.

The Seafood segment does not have a defined strategic growth target. Instead, the goal is positive cash flow in the strategy period 2016-2018 (EBITDA minus investment).

Group’s Financial goals 2018 and dividend policy

At the group level Apetit Plc’s financial goals for 2018 are:

• Return on capital employed (ROCE-%) > 10 per cent
• EBITDA at least EUR 20 million per annum

The target for equity ratio remains unchanged being at least 40 per cent.

The aim of the Board of Directors of Apetit Plc is to ensure that the company’s shares provide shareholders with a good return on investment and retain their value. In line with its policy, the company will distribute in dividends at least 40 per cent of the profit for the financial year but not less than EUR 0.70 per share.

The Apetit Plc profit guidance issued on 17 February 2016 for the year 2016 remains unchanged.

Juha Vanhainen
CEO

Additional information:
Juha Vanhainen, CEO, tel. +358 10 402 00
Eero Kinnunen, CFO, tel.  +358 10 402 00

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