Stock Exchange Release – Func Food Group Q1 2017 Financial Report
Func Food Group has today published its Q1 2017 financial report. The report is available in English at http://www.funcfood.com/investors/?lang=en.
SUMMARY
First quarter and year-to-date 2017
• Consolidated Group revenues amounted to MEUR 10,5 (MEUR 10,8 in consolidated 2016).
• Revenues decreased by MEUR 0,3 or 2,6% in comparison to 2016.
• Consolidated Group EBITDA amounted to MEUR 0,6 (MEUR 0,7 in consolidated 2016).
• EBITDA decreased by MEUR 0,2 or 21,5% in comparison to 2016.
• EBITDA adjusted for items affecting comparability was MEUR 0,7 in 2017 and MEUR 0,8 in 2016 (reduction of MEUR 0,1 or 17,6%).
In Q1 2017 the Group had a positive EBITDA and adjusted EBITDA in both of its key markets Finland and Sweden. Revenue performance of the Group’s two largest brands Celsius and FAST was strong while the sales of other brands and private labels declined. Total net revenue was MEUR 10,5 (-2,6% vs. previous year) and total EBITDA was MEUR 0,6 (-21,5% vs. PY). Adjusted EBITDA was MEUR 0,7 (-17,6% vs. PY). Total sales margin-% improved by 0,9%-points compared to Q1 2016 and was 38,3%.
The Group delivered solid results with its two biggest brands during Q1. Celsius is continuing its strong growth in Sweden and building the business in Finland. FAST is growing in Finland lead by new launches and getting established in Sweden. However, some of the traditional core products within the FAST range and CocoVi in total continue to decline and perform below the Group’s prior expectations. In Sweden, Freddy business is facing a number of challenges related to the pre-sales of the spring-summer 2017 collection, in turn resulting in lower comparable sales for the brand.
The Group had material financial arrangements during the quarter. A written procedure to amend the terms and conditions of the Group’s bonds was initiated by the company and approved by the bondholders. As a result, a maximum of MEUR 10,0 of the Group’s MEUR 33,1 secured intercompany loan made available by Func Food Group Oyj to Func Food Sweden Ab can be converted into own equity at Func Food Sweden Ab. Also, a waiver for the MEUR 2,5 amortization scheduled for September 2017 was granted. Further, an early disbursement of the Pre-Funded Earn-Out Amount of MSEK 70, as defined in the bond terms, towards a mandatory amortization of the bonds was executed. As a condition for the amendments the Group arranged for an equity contribution in an amount of MEUR 2,0 during December 2016 - February 2017.
Consolidated cash and cash equivalents on 31 March 2017 amounted to MEUR 1,4 (MEUR 0,7 in the beginning of the quarter). The Group generated a positive net cash flow from operating activities totaling MEUR 6,7 in the quarter, mainly due to decreased receivables relating to blocked bank account funds. These funds were used for amortizing the Group’s bonds. The shareholders of the Group granted it a subordinated convertible loan worth MEUR 1,5. Net cash flow from financing activities was MEUR –5,9. The Group’s inventory levels were MEUR 0,4 lower than in the beginning of the quarter. Total receivables (excl. changes in blocked bank accounts) and payables both increased vs. the beginning of the year. The net effect of receivables and payables development was a MEUR 0,2 decrease in the working capital tied in the business.
The wellness-nutrition market continues to attract more players, resulting in high competitive pressure while the growth in our core markets has stabilized. The Group is expecting to continue investing behind marketing and sales in order to maintain a leading position across our territories and increase the cross-sales of our brands.
We expect to see an overall revenue increase for the company in 2017, however uncertainty regarding cash flow and revenue delivery from quarter to quarter remains high and the slower sales development of our Finnish business will have an overall effect on the full year results.
For further information please contact:
Robin Lybeck, CEO, Func Food Group Oyj
email robin.lybeck@funcfoodgroup.com
mobile +358 40 735 2464
Tommi Virtanen, CFO, Func Food Group Oyj
email tommi.virtanen@funcfoodgroup.com
mobile +358 40 590 4040.
The information contained in this press release is such information that Func Food Group Oyj is required to publish in accordance with the Swedish Securities Market Act (2007:528) and/or the Swedish Financial Instruments Trading Act (1991:980). The information was submitted for publication on 31 May 2017, at 19.00 CET.
Func Food Group Oyj, Pyynikintie 25 Y 10, 33230 Tampere, Finland. The board is resident in Tampere. For further information about the company please visit http://www.funcfood.com/?lang=en.
Func Food Group Oyj