Apetit Plc Interim Report, January-September 2016
This is a summary of the Interim Report January - September 2016. 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.
Operational EBIT was unsatisfactory – Seafood's performance continued to improve
Third quarter (July–September)
- Consolidated net sales amounted to EUR 91.9 (75.3) million
- Operational EBITDA was EUR 3.1 (2.9) million
- Operational EBIT*) was EUR 1.4 (1.8) million
- Profit for the period came to EUR 1.8 (-4.0) million, and earnings per share amounted to EUR 0.29 (-0.64)
January–September
- Consolidated net sales amounted to EUR 286.4 (267.0) million
- Operational EBITDA was EUR 4.1 (4.0) million
- Operational EBIT*) was EUR -0.7 (-0.1) million
- Profit for the period came to EUR -1.2 (-6.8) million, and earnings per share amounted to EUR -0.19 (-1.05)
The information 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 was changed on 19 October 2016. The Group’s operational EBIT* for the full year is estimated to be positive but to fall short of the comparison year’s level (2015: EUR 2.6 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.
*) Due to the new 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.
Juha Vanhainen, CEO:
“When examined on the basis of operations, there were ups and downs in the Apetit Group’s performance in July–September. From the perspective of the company’s strategic development, I can see that by focusing on renewal we are going in the right direction. Unfortunately, based on our clarified outlook for the rest of the year, we do not expect to achieve an actual turnaround in results this year.
I am pleased with the continued good performance of the Seafood segment. Improvements in operational efficiency have boosted the profitability of operations, even though the volume has been reduced by the higher raw material prices of Norwegian salmon. The efficiency boosting investments and improvements in processes carried out in Kuopio have achieved the expected results.
The vegetable oil packaging plant extension that was opened in June quickly enabled to increase the share of packaged vegetable oil products in net sales. As a result, we were able to increase delivery volumes of packaged products, particularly to the export markets, in this quarter.
During the year, we have faced difficulties on the international grain market. The grain prices and margins, which have remained low, weakened profit also in July–September despite increased sales volumes. The volume of grain crops in the latest crop year is lower than the previous year in our area of supply, while crops in the rest of the world have correspondingly grown. This will also affect the market dynamics during the remainder of the year.
The Food Solutions segment has not yet achieved a turnaround in profitability. Sales in frozen foods have improved. The Tuorekset product family that was launched in August is helping us to generate new growth in in retail stores’ fruit and vegetable sections. However, sales volumes of fresh products to professional food service sector customers have not performed as anticipated so our aim is to improve operating efficiency and our market share.
From the perspective of renewal and growth, our strategy implementation has proceeded as planned. We have increased resources in product development and boosted the organisation’s speed of renewal. I am expecting these efforts to produce results and to increase Apetit's market position in the future.”
GROUP-LEVEL KEY FIGURES
| EUR million | Q3 2016 | Q3 2015 | Change | Q1–Q3 2016 | Q1–Q3 2015 | Change | 2015 | Rolling 12 m |
| Net sales | 91.9 | 75.3 | +22 % | 286.4 | 267.0 | +7 % | 380.8 | 400.2 |
| Operational EBITDA | 3.1 | 2.9 | 4.1 | 4.0 | 8.5 | 8.6 | ||
| Operational EBIT | 1.4 | 1.8 | -0.7 | -0.1 | 2.6 | 2.0 | ||
| Operating profit | 1.4 | -2.5 | -0.7 | -3.7 | -1.0 | 2.0 | ||
| Share of profit of associated company Sucros | -0.1 | -0.3 | -0.7 | -1.4 | -1.0 | -0.3 | ||
| Profit for the period | 1.8 | -4.0 | -1.2 | -6.8 | -4.6 | 1.0 | ||
| Earnings per share, EUR | 0.29 | -0.64 | -0.19 | -1.05 | -0.69 | 0.17 | ||
| Equity per share, EUR | 18.70 | 19.07 | 19.53 | |||||
| Working capital | 56.3 | 57.1 | 69.6 | 58.3 | ||||
| Return on capital employed, (ROCE %) | 1.2 % | 1.2 % | ||||||
| Net cash flow from operating activities | 14.5 | -8.4 | -17.1 | |||||
| Equity ratio | 64.3 % | 60.2 % | 61.1 % | |||||
| Gearing | 17.3 % | 13.0 % | 19.0 % | |||||
| Investment | 7.9 | 7.1 | 9.1 |
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 and fresh products group, as well as service sales.
- The Oilseed Products business includes the processing and sale of vegetable oils and expeller meals.
- The Grain Trade business comprises 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.
The associated company Sucros (20% holding) has been reported after operating profit in the income statement as of the beginning of 2016 and Group Administration costs have been allocated equally between the segments.
| NET SALES | Q3 2016 | Q3 2015 | Change | Q1–Q3 2016 | Q1–Q3 2015 | Change | 2015 | Rolling 12 m |
| Food Solutions | 22.8 | 22.8 | 0 % | 72.1 | 70.5 | 2 % | 95.8 | 97.5 |
| Oilseed Products | 17.6 | 14.8 | 19 % | 52.3 | 46.3 | 13 % | 61.3 | 67.3 |
| Grain Trade | 38.9 | 28.3 | 37 % | 119.9 | 111.4 | 8 % | 170.5 | 178.9 |
| Seafood | 20.4 | 20.4 | 0 % | 63.7 | 61.7 | 3 % | 82.9 | 84.9 |
| Intra-segment net sales | -7.8 | -11.0 | -21.6 | -22.9 | -29.6 | -28.4 | ||
| Total | 91.9 | 75.3 | 22 % | 286.4 | 267.0 | 7 % | 380.8 | 400.2 |
| Operational EBIT | Q3 2016 | Q3 2015 | Q1–Q3 2016 | Q1–Q3 2015 | 2015 | Rolling 12 m |
| Food Solutions | 0.2 | 0.3 | -2.5 | -1.9 | -0.1 | -0.8 |
| Oilseed Products | 0.8 | 0.9 | 2.1 | 2.4 | 2.7 | 2.5 |
| Grain Trade | 0.6 | 0.7 | 1.1 | 2.6 | 3.8 | 2.3 |
| Seafood | -0.2 | -0.1 | -1.4 | -3.2 | -3.8 | -2.0 |
| Total | 1.4 | 1.8 | -0.7 | -0.1 | 2.6 | 2.0 |
PROFIT GUIDANCE FOR 2016
The profit guidance was amended with a stock exchange release published on 19 October 2016.
The Group’s operational EBIT* for the full year is estimated to be positive but to fall short of the comparison year’s level (2015: EUR 2.6 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.
The new harvest season has clarified the Grain Trade segment’s outlook for the remaining part of the year. Supply is plentiful, which is expected to keep the price level and margins in international grain markets at a low level.
The profitability of the Food Solutions segment has not improved as expected. The outlook for the remainder of the year is weakened by lower-than-expected volume of fresh product sales to the professional food service sector.
The improved operating efficiency of the Seafood segment is estimated to continue to support the improvement of the segment’s profitability in the remaining part of 2016.
The Oilseed Products segment’s outlook for the rest of 2016 is estimated to be stable.
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 - September 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.
Copies to:
Nasdaq Helsinki
Main media
www.apetitgroup.fi