Apetit Plc Interim Report, January-March 2016
This is a summary of the Interim Report January - March 2016. The complete Interim Report, including tables of financial information, is attached to this release and can be downloaded from the company’s website at www.apetitgroup.fi/en.
January – March
- Consolidated net sales amounted to EUR 87.5 (91.5) million
- Operational EBITDA was EUR 0.6 (0.2) million
- Operational EBIT was EUR -1.0 (-1.6) million
- The profit for the period came to EUR -2.2 (-2.3) million, and earnings per share amounted to EUR -0.35 (-0.31).
The information in this Interim Report has not been audited. The figures in parentheses are the equivalent figures for the same period in 2015, and the comparison period means the corresponding period of the previous year, unless stated otherwise.
The profit guidance remains unchanged The Group’s full-year operational EBIT is expected to improve year-on-year (EUR 2.6 million in 2015). Due to the seasonal nature of the Group’s operations, a high proportion of the annual profit is accrued in the second half of the year.
Juha Vanhainen, CEO:
“I am satisfied with the Group’s profitability trend compared with the previous year. We will continue to work to improve operational profitability. I am particularly pleased with the improvement in the profitability of the Seafood segment, which has been experiencing difficulties for a long time, in all of its countries of operation. The measures implemented within the profitability programmes are producing results and I anticipate this development to continue. Market prices in grain trading declined at the beginning of the year and this lowered activity and increased uncertainty on the markets.
On our Capital Market Day held on 1 March 2016 we presented our new strategy for the 2016–2018 period. 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 and in product development in current product lines, in increasing added value and in service development, especially by exploiting digitalisation. In Oilseed Products we will focus on strengthening product leadership and increasing the level of added value. In the Grain Trade our goal is to grow 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.
The desire to grow and renew are significant drivers of our strategy. At the beginning of March we announced that we would be launching a new food solution, Apetit Tuorekset, on the market in the autumn. We have started piloting these products in over 70 retail trade stores in April. Tuorekset are diverse, consumer-packaged, ready-to-use vegetables. As they are pre-washed, peeled and chopped they are always ready for use in various dishes and meal preparation situations. In the development of the Tuorekset products we focused in particular on retaining freshness and on developing a packaging solution to support this. Based on consumer research and preliminary feedback from shops we believe the new concept has strong sales potential.
In line with our new vision we want to be a leader in creating completely new, digital solutions for food and services for the food supply chain from primary producers to consumers. Our innovation project “Digital services for food” that was planned at the beginning of the year received a positive funding decision from the Finnish Funding Agency for Innovation (Tekes) at the end of April and we have launched work to develop a new type of digital consumer service ecosystem to meet the changing needs of food consumption.”
GROUP-LEVEL KEY FIGURES
| EUR million | Q1 2016 | Q1 2015 | Change | 2015 | Rolling 12 m |
| Net sales | 87.5 | 91.5 | - 4% | 380.8 | 376.9 |
| Operational EBITDA | 0.6 | 0.2 | 8.5 | 8.9 | |
| Operational EBIT | -1.0 | -1.6 | 2.6 | 3.2 | |
| Operating profit | -1.0 | -1.6 | -1.0 | -0.4 | |
| Profit for the period | -2.2 | -2.3 | -4.6 | -4.5 | |
| Earnings per share, EUR | -0.35 | -0.31 | -0.69 | -0.73 | |
| Equity per share, EUR | 18.52 | 19.63 | 19.53 | ||
| Working capital | 62.2 | 42.5 | 69.6 | 52.7 | |
| Operational return on capital employed, (ROCE %) | 1.2 % | 1.4 % | |||
| Net cash flow from operating activities | 3.2 | 0.1 | -17.1 | ||
| Equity ratio | 62.3% | 68.0% | 61.1% | ||
| Gearing | 20.6% | -0.3% | 19.0% | ||
| Investment | 4.1 | 1.9 | 9.1 |
On 1 March 2016 Apetit announced the changes made to its segment structure. From the beginning of 2016, the new reporting business segments have been Food Solutions, Oilseed Products, Grain Trade and Seafood.
The Food Solutions business comprises the frozen foods group and fresh products group, and also service sales. The Oilseed Products business includes the processing and sales of vegetable oils and expeller meals. The Grain Trade business comprises the Finnish and international trade in grains, oilseeds and feed raw-materials. The Seafood business comprises the operations of the fish products group in Finland, Sweden and Norway.
As of the beginning of 2016 the associated company Sucros (holding 20%) will be reported after operating profit in the income statement and group administration expenses are allocated evenly to the operating segments.
SEGMENT COMPARISON
| Net sales | Operational EBIT | ||||
| Q1/2016 | Q1/2015 | Change | Q1/2016 | Q1/2015 | |
| Food Solutions | 25.0 | 23.9 | + 5% | -1.2 | -0.9 |
| Oilseed Products | 16.5 | 16.0 | + 3% | 0.7 | 0.7 |
| Grain Trade | 30.8 | 37.9 | - 19% | 0.4 | 0.5 |
| Seafood | 20.5 | 20.8 | - 1% | -0.9 | -1.8 |
| Intra-segment net sales | -5.3 | -7.2 | |||
| Total | 87.5 | 91.5 | -4% | -1.0 | -1.6 |
OUTLOOK FOR 2016
In Finland, the market situation in the retail sector is expected to remain challenging. The growth outlook of the Finnish economy is weak. The decline in grain price levels in the early part of the year reduced activity on the international grain market and the market situation is not expected to materially change before better information becomes available on the new crop year.
The Group’s full-year operational EBIT *) is expected to improve year-on-year (2015: EUR 2.6 million). Due to the seasonal nature of the Group’s operations, a high proportion of the annual profit is accrued in the second half of the year.
Positive profit performance will be supported by improved cost-efficiency in the Seafood and Food Solutions businesses compared to the previous year and by the renewal of the product selection and increased processing value. The situation in the international grain market is expected to cause uncertainty in the Grain Trade’s segment profit performance in the second quarter.
Due to the significant effect of international grain market price fluctuations on the entire Group’s net sales, Apetit will not issue any estimates of the expected full-year net sales.
*) Due to the forthcoming amendments to the regulations of the European Securities and Markets Authority (ESMA), Apetit has replaced the key figure “operating profit excluding non-recurring items” with the key figure “operational EBIT” as of 2016. Operational EBIT does not include restructuring expenses, any significant impairment on goodwill or other balance-sheet items or reversal of impairment, the profit of the associated company Sucros or other extraordinary and material items.
Further information
Juha Vanhainen, CEO, tel. +358 (0)10 402 00
Eero Kinnunen, CFO, tel. +358 (0)10 402 4025
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Invitation to a briefing
A briefing (in Finnish) for analysts and media representatives will be held today at 10.00 a.m. in Hotel Scandic Simonkenttä (address: Simonkatu 9, Helsinki). In the briefing Apetit Plc’s CEO Juha Vanhainen presents the January - March results of Apetit Plc and gives information about other current issues. Apetit Plc’s CFO Eero Kinnunen will also be present in the briefing.
The presentation material will be available on the company’s website at http://www.apetitgroup.fi/en/ after the event.
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www.apetitgroup.fi