Apetit Oyj - Interim report (Q1 and Q3)

Apetit Plc Interim Report, January-March 2016

Apetit Plc, Stock exchange release, 12 May 2016 at 08:30 a.m.

This is a summary of the Interim Report January - March 2016. The complete
Interim 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. 

January – March

  -- Consolidated net sales amounted to EUR 87.5 (91.5) million
  -- Operational EBITDA was EUR 0.6 (0.2) million
  -- Operational EBIT was EUR -1.0 (-1.6) million
  -- The profit for the period came to EUR -2.2 (-2.3) million, and earnings per
     share amounted to EUR -0.35 (-0.31).

The information in this Interim Report 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 remains unchanged The Group’s full-year operational EBIT is
expected to improve year-on-year (EUR 2.6 million in 2015). Due to the seasonal
nature of the Group’s operations, a high proportion of the annual profit is
accrued in the second half of the year. 

Juha Vanhainen, CEO:

“I am satisfied with the Group’s profitability trend compared with the previous
year. We will continue to work to improve operational profitability. I am
particularly pleased with the improvement in the profitability of the Seafood
segment, which has been experiencing difficulties for a long time, in all of
its countries of operation. The measures implemented within the profitability
programmes are producing results and I anticipate this development to continue.
Market prices in grain trading declined at the beginning of the year and this
lowered activity and increased uncertainty on the markets. 

On our Capital Market Day held on 1 March 2016 we presented our new strategy
for the 2016–2018 period. Our strategy is to improve Apetit’s profitability and
make Apetit the leader in vegetable-based food solutions. Renewal will be
accelerated by investing in new food solutions and in product development in
current product lines, in increasing added value and in service development,
especially by exploiting digitalisation. In Oilseed Products we will focus on
strengthening product leadership and increasing the level of added value. In
the Grain Trade our goal is to grow in the Baltic region. In Seafood our goal
is to become the most efficient producer of volume and added-value products as
a retail trade partner. 

The desire to grow and renew are significant drivers of our strategy. At the
beginning of March we announced that we would be launching a new food solution,
Apetit Tuorekset, on the market in the autumn. We have started piloting these
products in over 70 retail trade stores in April. Tuorekset are diverse,
consumer-packaged, ready-to-use vegetables. As they are pre-washed, peeled and
chopped they are always ready for use in various dishes and meal preparation
situations. In the development of the Tuorekset products we focused in
particular on retaining freshness and on developing a packaging solution to
support this. Based on consumer research and preliminary feedback from shops we
believe the new concept has strong sales potential. 

In line with our new vision we want to be a leader in creating completely new,
digital solutions for food and services for the food supply chain from primary
producers to consumers. Our innovation project “Digital services for food” that
was planned at the beginning of the year received a positive funding decision
from the Finnish Funding Agency for Innovation (Tekes) at the end of April and
we have launched work to develop a new type of digital consumer service
ecosystem to meet the changing needs of food consumption.” 



GROUP-LEVEL KEY FIGURES



EUR million                                  Q1     Q1    Change   2015  Rolling
                                             2016   2015                  12 m  
--------------------------------------------------------------------------------
Net sales                                    87.5   91.5   - 4%   380.8   376.9 
--------------------------------------------------------------------------------
Operational EBITDA                           0.6    0.2            8.5     8.9  
--------------------------------------------------------------------------------
Operational EBIT                             -1.0   -1.6           2.6     3.2  
--------------------------------------------------------------------------------
Operating profit                             -1.0   -1.6           -1.0   -0.4  
--------------------------------------------------------------------------------
Profit for the period                        -2.2   -2.3           -4.6   -4.5  
--------------------------------------------------------------------------------
Earnings per share, EUR                     -0.35  -0.31          -0.69   -0.73 
--------------------------------------------------------------------------------
Equity per share, EUR                       18.52  19.63          19.53         
--------------------------------------------------------------------------------
Working capital                              62.2   42.5           69.6   52.7  
--------------------------------------------------------------------------------
Operational return on capital employed,                           1.2 %   1.4 % 
 (ROCE %)                                                                       
--------------------------------------------------------------------------------
Net cash flow from operating activities      3.2    0.1           -17.1         
--------------------------------------------------------------------------------
Equity ratio                                62.3%  68.0%          61.1%         
--------------------------------------------------------------------------------
Gearing                                     20.6%  -0.3%          19.0%         
--------------------------------------------------------------------------------
Investment                                   4.1    1.9            9.1          
--------------------------------------------------------------------------------



On 1 March 2016 Apetit announced the changes made to its segment structure.
From the beginning of 2016, the new reporting business segments have been Food
Solutions, Oilseed Products, Grain Trade and Seafood. 

The Food Solutions business comprises the frozen foods group and fresh products
group, and also service sales. The Oilseed Products business includes the
processing and sales of vegetable oils and expeller meals.  The Grain Trade
business comprises the 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. 

As of the beginning of 2016 the associated company Sucros (holding 20%) will be
reported after operating profit in the income statement and group
administration expenses are allocated evenly to the operating segments. 



SEGMENT COMPARISON

                                Net sales          Operational EBIT
-------------------------------------------------------------------
                         Q1/2016  Q1/2015  Change  Q1/2016  Q1/2015
-------------------------------------------------------------------
Food Solutions            25.0     23.9     + 5%    -1.2     -0.9  
-------------------------------------------------------------------
Oilseed Products          16.5     16.0     + 3%     0.7      0.7  
-------------------------------------------------------------------
Grain Trade               30.8     37.9     - 19%    0.4      0.5  
-------------------------------------------------------------------
Seafood                   20.5     20.8     - 1%    -0.9     -1.8  
-------------------------------------------------------------------
Intra-segment net sales   -5.3     -7.2                            
-------------------------------------------------------------------
Total                     87.5     91.5     -4%     -1.0     -1.6  
-------------------------------------------------------------------



OUTLOOK FOR 2016

 In Finland, the market situation in the retail sector is expected to remain
challenging. The growth outlook of the Finnish economy is weak. The decline in
grain price levels in the early part of the year reduced activity on the
international grain market and the market situation is not expected to
materially change before better information becomes available on the new crop
year. 

The Group’s full-year operational EBIT *) is expected to improve year-on-year
(2015: EUR 2.6 million). Due to the seasonal nature of the Group’s operations,
a high proportion of the annual profit is accrued in the second half of the
year. 

Positive profit performance will be supported by improved cost-efficiency in
the Seafood and Food Solutions businesses compared to the previous year and by
the renewal of the product selection and increased processing value. The
situation in the international grain market is expected to cause uncertainty in
the Grain Trade’s segment profit performance in the second quarter. 

Due to the significant effect of international grain market price fluctuations
on the entire Group’s net sales, Apetit will not issue any estimates of the
expected full-year net sales. 

*) Due to the forthcoming 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. 



Further information

Juha Vanhainen, CEO, tel. +358 (0)10 402 00
Eero Kinnunen, CFO, tel. +358 (0)10 402 4025



***************

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 Eero Kinnunen 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

Liitteet:

Apetit Plc Interim Report Q1 2016.pdf