Apetit Plc Interim Report, January-September 2017 (Q3)

Apetit Plc, Interim Report, 2 November 2017 at 08:30 a.m.

This is a summary of the Interim Report January - September 2017. The complete report, including tables of financial information, is attached to this release and can be downloaded from the company’s website at apetitgroup.fi. 

Food Solutions improved its net sales and result, Grain Trade and Oilseed Products achieved a reasonable result despite challenging conditions

July-September, continuing operations

• The net sales of continuing operations were EUR 75.0 (77.8) million.
• Operational EBITDA was EUR 3.2 (2.8) million.
• Operational EBIT was EUR 1.8 (1.6) million.
• The profit for the period was EUR 2.7 (2.1) million, and earnings per share amounted to EUR 0.44 (0.34).

January-September, continuing operations

• The net sales of continuing operations were EUR 226.9 (231.6) million.
• Operational EBITDA was EUR 4.7 (4.2) million.
• Operational EBIT was EUR 0.7 (0.7) million.
• The profit for the period was EUR 1.0 (0.5) million, and earnings per share amounted to EUR 0.16 (0.08).

July-September, Group, including discontinued operations*

• Consolidated net sales amounted to EUR 89.9 (91.9) million.
• Operational EBIT was EUR 1.9 (1.4) million.
• The profit for the period was EUR 0.5 (1.8) million, and earnings per share amounted to EUR 0.09 (0.29).

January–September, Group, including discontinued operations*

• Consolidated net sales amounted to EUR 276.2 (286.4) million.
• Operational EBIT was EUR 0.4 (-0.7) million.
• The profit for the period was EUR -3.0 (-1.2) million, and earnings per share amounted to EUR -0.48 (-0.19).

* Discontinued operations: On 29 June 2017, Apetit Plc signed an agreement on selling its seafood business to the Norwegian company Insula AS. The transaction was completed as of 1 November 2017. The transferred business is reported as discontinued operations in this interim report. 

The information has not been audited. The figures in parentheses are the equivalent figures for the same period in 2016, and comparison period means the corresponding period of the previous year, unless otherwise stated. 

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:

“The Apetit Group continued to focus strongly on vegetable-based food solutions. The sales of frozen and fresh products increased and profitability improved. We have solidified our position in the minds of consumers and retailers as a forerunner in vegetable-based eating. We continued to invest in product development in order to delight consumers and retailers with new products more frequently.

Customers’ expectations evolve and we seek to respond to these expectations proactively. In the summer we launched an organic programme, the goal of which is to substantially increase the proportion of organic products in our range in the coming years. During this harvest season, we brought our first Finnish organic products to stores and professional kitchens. We will increase research and development into organic products at our experimental farm and offer our knowledge on new farming methods to our contract growers who are interested in this information. This way we can ensure that we also have organic alternatives of high-quality produce available for our products and at the same time we can support the competitiveness of Finnish primary production.

The July-September operational EBIT improved year-on-year, boosted by Food Solutions. We have succeeded in making the sales of frozen products grow, ensuring the product group’s profitability. In fresh products we continued to change our operating model from direct retailer to professional kitchens to partner serving the retail trade and professional kitchens and as a result we achieved new, profitable net sales. In Grain Trade and Oilseed Products the delay in the domestic harvest reduced volumes in Finland, but the results were at a satisfactory level considering the challenging harvest conditions. 

The sales of the fish processing business to Insula AS in Finland, Norway and Sweden, announced at the end of June, was completed at the end of October. Insula AS, the new owner of the seafood business, is a growing company with a strong position in its sector that offers new growth and development opportunities for both our transferring staff and for our customers.

According to a consumer survey that we commissioned in July, a third of Finns have increased their consumption of vegetables in the past year and more than half intend to continue increasing their consumption. This delights us at Apetit and inspires us to go forward. We actively renew our products and procedures to retain our position as number one in vegetables and to strengthen our position as our customers’ first choice.”

KEY FIGURES

SEGMENT COMPARISON

The Apetit Group’s reporting business segments are Food Solutions, Oilseed Products, Grain Trade and Seafood.

• Food Solutions comprises the frozen foods group, fresh products group and service sales.
• The Oilseed Products business includes 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 segment’s operations in Finland, Sweden and Norway were transferred to discontinued operations following a corporate transaction announced on 29 June 2017.

The associated company Sucros (holding 20%) has been reported after operating profit in the income statement since the beginning of 2016.

Development of net sales 

Continuing operations

Discontinued operations

Development of operational EBIT

Continuing operations

Discontinued operations

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 during the rest of the year.

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 and improved operational efficiency in Seafood segment.

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 - 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 apetitgroup.fi after the event. 

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