Apetit Plc Interim Report, January-March 2017 (Q1)
This is a summary of the Interim Report January - March 2017. The complete 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.
New products introduced – work continues to improve profitability
First quarter (January-March)
- Consolidated net sales amounted to EUR 91.9 (87.5) million
- Operational EBITDA was EUR 0.5 (0.6) million
- Operational EBIT was EUR -1.2 (-1.0) million
- The profit for the period was EUR -1.8 (-2.2) million, and earnings per share were EUR -0.29 (-0.35).
The information has not been audited. The figures in parentheses are the equivalent figures for the same period in 2016, 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 0.9 million in 2016). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year.
Juha Vanhainen, CEO:
“Our first quarter was characterised by the introduction of many new products, which is in line with our strategy. Our product development activities now produce solid, new vegetable products with good commercial potential more efficiently than before. The most significant product launches in the first quarter include the Apetit Kasvisjauhis patties and balls, Apetit Vegepops ice lollies and Apetit Finnish rapeseed oil. In April, we launched Apetit Kasvisjauhis products in the retail stores’ ready meal section.
Consolidated net sales increased in all segments, with the exception of Seafood, where the high raw-material price of Norwegian salmon and rainbow trout has lowered sales volumes in Finland. In Food Solutions sales performance was good in both frozen and fresh products. In fresh products, we continued to develop the sales structure according to plan to focus on wholesale organisation and retail stores, and this produced new sales during the quarter. A welcome piece of good news was that the Tuorekset product family, which was launched last autumn, continued its good sales performance in January-March.
In Seafood, profitability improved thanks to better operational efficiency. In the Grain Trade sales grew year-on-year but the low prices and margins resulting from a high level of supply in the grain markets lowered our profitability. In Oilseed Products profitability was reduced by the temporarily lower margins of the oil agreements delivered in the quarter than in the comparison period.
In January-March we continued to establish our position as a leader in vegetable-based food solutions with the help of interesting new products for consumers. In addition, we are now accelerating the research and development of more highly processed oilseed products. We have launched a new R&D project on the use of rapeseed as an advanced vegetable protein and have received backing for the project from Tekes.
We aim for profitable growth in 2017. We will continue to work on improving profitability by increasing sales and improving operational efficiency throughout our operations.”
CONSOLIDATED KEY FIGURES
| EUR million | Q1 2017 | Q1 2016 | Change | 2016 | Rolling 12 m |
| Net sales | 91.9 | 87.5 | +5.0% | 386.5 | 390.9 |
| Operational EBITDA | 0.5 | 0.6 | 7.5 | 7.4 | |
| Operational EBIT | -1.2 | -1.0 | 0.9 | 0.6 | |
| Operating profit | -1.3 | -1.0 | 0.6 | 0.2 | |
| Share of profit of associated company Sucros | -0.6 | -1.0 | 0.7 | 1.1 | |
| Profit for the period | -1.8 | -2.2 | 1.2 | 1.5 | |
| Earnings per share, EUR | -0.29 | -0.35 | 0.19 | 0.25 | |
| Equity per share, EUR | 18.08 | 18.52 | 19.00 | ||
| Working capital | 50.1 | 62.2 | 52.9 | 53.5 | |
| Operational return on capital employed, (ROCE %) | 1.2% | 1.3% | |||
| Net cash flow from operating activities | -0.5 | 3.2 | 21.9 | ||
| Equity ratio, % | 62.2% | 62.3% | 64.1% | ||
| Gearing, % | 14.9% | 20.6% | 12.4% | ||
| Investment | 1.6 | 4.1 | 9.7 |
SEGMENT COMPARISON
The Apetit Group’s reporting business segments are Food Solutions, Oilseed Products, Grain Trade and Seafood.
- The Food Solutions business comprises the frozen foods group, the fresh products group and service sales.
- The Oilseed Products business comprises the processing and sale of vegetable oils and expeller meals.
- The Grain Trade business comprises the Finnish and international trade in grains, oilseeds, pulses and feed raw-materials.
- The Seafood business comprises the operations of the fish products group in Finland, Sweden and Norway.
The associated company Sucros (holding 20%) will be reported after operating profit in the income statement as of the beginning of 2016.
| NET SALES, EUR million | Q1 2017 | Q1 2016 | Change | 2016 | Rolling 12 m |
| Food Solutions | 25.8 | 25.0 | +3.0% | 97.8 | 98.5 |
| Oilseed Products | 16.8 | 16.5 | +1.9% | 68.2 | 68.5 |
| Grain Trade | 33.0 | 30.8 | +7.0% | 159.7 | 161.9 |
| Seafood | 20.3 | 20.5 | -1.1% | 87.8 | 87.6 |
| Intra-group net sales | -3.9 | -5.3 | -27.0 | -25.6 | |
| Total | 91.9 | 87.5 | +5.0% | 386.5 | 390.9 |
| OPERATIONAL EBIT, EUR million | Q1 2017 | Q1 2016 | 2016 | Rolling 12 m |
| Food Solutions | -1.1 | -1.2 | -2.6 | -2.6 |
| Oilseed Products | 0.3 | 0.7 | 2.7 | 2.3 |
| Grain Trade | 0.2 | 0.4 | 1.4 | 1.1 |
| Seafood | -0.5 | -0.9 | -0.6 | -0.2 |
| Total | -1.2 | -1.0 | 0.9 | 0.6 |
PROFIT GUIDANCE FOR 2017
Sales in the Finnish retail sector and professional food service sector are expected to pick up in comparison to the previous year, but the price competition is expected to remain intensive. Ample supply is expected to continue to prevail in the global grains market, keeping prices and margins at a low level. This situation is not expected to change significantly before a more specific outlook is available for the new harvest season.
The Group’s full-year operational EBIT is expected to improve year-on-year (EUR 0.9 million in 2016). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year.
With regard to profitability, favourable development will be supported by higher added value and positive sales development in Food Solutions, improved operational efficiency in Seafood and increased sales volumes in Grain Trade in comparison to the previous year.
Due to the substantial effect of international grain market price fluctuations on the Group’s net sales, Apetit will not issue any estimates of its expected full-year net sales.
Further information
Juha Vanhainen, CEO, tel. +358 (0)10 402 00
Sami Saarnio, CFO, tel. +358 (0)10 402 00
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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 Sami Saarnio 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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Main media
www.apetitgroup.fi