Apetit Plc’s Half-Year Report 1 January–30 June 2023: Apetit’s operating profit improved year-on-year – sales volumes increased in both businesses

Apetit Plc, Half-Year Report on 17 August 2023 at 08:30 a.m.

Apetit Plc’s Half-Year Report 1 January–30 June 2023: Apetit’s operating profit improved year-on-year – sales volumes increased in both businesses

April–June 2023, continuing operations*)

• In continuing operations, comparable net sales were EUR 45.0 (47.3) million. EBITDA was EUR 2.0 (0.4) million. Operating profit was EUR 0.7 (-1.0) million. Decrease in net sales was due to Oilseed Products, of which the market prices were exceptionally high in the comparison period.
• The net sales of Food Solutions were EUR 16.7 (14.7) million and operating profit EUR -0.1 (-0.4) million. Sales volumes increased in all channels. Price increases made as a response to the general increase in costs influenced net sales development.
• The net sales of Oilseed Products were EUR 28.5 (32.8) million and operating profit EUR 1.4 (-0.2) million. Positive profit performance was boosted by successful raw material sourcing and active pricing efforts.

January–June 2023, continuing operations*)

• In continuing operations, comparable net sales increased by 4 per cent to EUR 93.2 (89.9) million. EBITDA was EUR 5.5 (1.5) million. Operating profit was EUR 2.7 (-1.2) million.
• The net sales of Food Solutions were EUR 36.3 (31.9) million and operating profit EUR 1.5 (0.7) million.
• The net sales of Oilseed Products were EUR 57.2 (58.2) million and operating profit EUR 2.7 (-0.8) million.

April–June 2023, Group, incl. discontinued operations**)

• Net sales decreased by 31 per cent to EUR 45.0 (64.9) million. EBITDA was EUR 2.0 (2.8) million. Operating profit was EUR 0.6 (1.2) million.
• The net sales of Grain Trade were EUR 0.0 (21.9) million and operating profit EUR -0.1 (2.2) million.

January–June 2023, Group, incl. discontinued operations**)

• Net sales decreased by 33 per cent to EUR 93.2 (139.7) million. EBITDA was EUR 5.4 (4.6) million. Operating profit was EUR 2.6 (1.4) million.
• The net sales of Grain Trade were EUR 0.0 (64.0) million and operating profit EUR -0.1 (2.6) million.

*) Apetit’s continuing operations are Food Solutions and Oilseed Products. In addition, Apetit reports Group Functions, consisting of the expenses related to Group management, strategic projects and listing on the stock exchange, that are not allocated to the business segments.

**) Grain Trade is reported as a discontinued operation starting from the Q1/2022 Business Review. The divestment of the Grain Trade business was completed in stages during the first half of 2022.

The information in this report is unaudited. The figures in brackets refer to the corresponding period in 2022, and the comparison period means the corresponding period in the previous year, unless otherwise stated.

PROFIT GUIDANCE FOR 2023 UNCHANGED

(Published on 16 February 2023)

The full-year operating profit from continuing operations is expected to improve year-on-year (EUR 3.5 million in 2022).

KEY FIGURES

Esa Mäki, CEO:

“Apetit’s result continued to develop positively. In the second quarter, the Group’s operating profit improved year-on-year. Both businesses improved their results. In Oilseed Products, the result has been improved by successful raw material sourcing. In Food Solutions, the improvement in result was influenced by successful product launches and by the price increases, made as a response to the general increase in costs. Result for the first half of the year improved clearly year-on-year.

In the second quarter, Apetit Group’s net sales decreased slightly from the comparison period. The prices of oilseed products were exceptionally high in the comparison period, and the stabilisation of market prices could be seen as a decrease in net sales. However, sales volumes increased year-on-year. In Food Solutions, sales volumes and net sales have increased in all channels.

The effects of cost inflation can be seen in consumer purchasing behavior. When buying food, consumers prefer more affordable products. At the same time, traditional, easy-to-prepare dishes, such as casseroles, have again become more popular. This can also be seen as changes in the demand for Apetit’s products as demand varies between different product groups. Our product range meet the consumers’ needs well. Frozen vegetables are an easy way to eat healthy and at the same time reduce food waste.

The harvest season has proceeded fairly well. The hot and dry weather in the early summer reduced the first batch of the frozen pea harvest. The pea fields harvested later have yielded a harvest that is in line with expectations, in terms of both quality and quantity. For root vegetables, the growing season is still ongoing. The outlook is good, thanks to rains that came at a good time in July.

For domestic spring oilseed plants, the growing season has been hampered by the hot and dry early summer. The rapeseed cultivation area has decreased year-on-year, which is not in line with our targets. As Finland is not entirely self-sufficient in oilseed plants, there is a genuine need to increase the cultivation area.

In June, we announced a significant step in promoting the cultivation of domestic oilseed plants. Apetit was the driving force in the establishment of the new oilseed plant production development group, RypsiRapsi-foorumi. The forum brings together different stakeholders in the oilseed plant sector. It compiles the results of earlier research activities and produces new farming knowledge. Through this forum, we want to provide farmers with practical information and efficient methods for the cultivation of oilseed plants. The goal is to promote the cultivation of rapeseed and its profitability in Finland.

The work to commercialize the rapeseed ingredient BlackGrain continues. During the first half of the year, we have focused on developing the production process. Measures to start commercial scale production are underway. BlackGrain offers the food industry a new domestic plant protein alternative that supports the implementation of the circular economy and the development of sustainable and high-quality food solutions.

The use of steam produced with biogas was started in harvest-time production at the Säkylä frozen foods plant as part of the plant’s new energy solution. The new energy solution, based on renewable energy sources and heat recovery, will reduce the plant’s CO₂ emissions by approximately 80 per cent. From now on, steam used at the Säkylä frozen foods plant is mainly produced with bioenergy. At the same time, the amount of primary energy needed decreases by approximately one third. As a result of the deployment of the new energy solution, the Group now uses mainly renewable energy sources. Already in 2022, a total of 76 per cent of the energy used by Apetit came from renewable sources.

During the review period, we made a lot of progress towards our corporate responsibility programme’s goal of increasing the recyclability of packaging. Early this year, the use of recyclable plastic started in the Apetit Potato Onion product family, accounting for high sales volumes. The first frozen soups packaged in PECF-certified paperboard will be available in shops in the autumn. All frozen soups will be packaged in PEFC-certified paperboard by the end of 2024.”

WEBCAST

A news conference (in Finnish) will be held as a live webcast today on 17 August 2023 at 10:00 a.m. The news conference can be followed at apetit.fi/sijoittajille. The presentation material and a recording of the webcast will be available on the company’s website after the news conference.

Apetit Plc

Esa Mäki, CEO, Apetit Plc, tel. +358 10 402 2100

Apetit is a food industry company firmly rooted in Finnish primary production. Our operations are based on a unique and sustainable value chain: we create well-being with vegetables by offering tasty food solutions that make daily life easier and produce high-quality vegetable oils and rapeseed expellers for feeding stuff. Apetit Plc's shares are listed on Nasdaq Helsinki. In 2022, Apetit Group's net sales were EUR 182 million.