Apetit Oyj — Interim / Quarterly Report 2021

Aug 20, 2021

Apetit’s profitability was lower than last year – Grain Trade still unprofitable, Food Solutions and Oilseed Products improved their operating profit

Apetit’s profitability was lower than last year – Grain Trade still unprofitable, Food Solutions and Oilseed Products improved their operating profit

Apetit Plc, Half-Year Report on 20 August 2021 at 8:30 a.m.

Apetit Plc's Half-Year Report 1 January - 30 June 2021
Apetit’s profitability was lower than last year – Grain Trade still
unprofitable, Food Solutions and Oilseed Products improved their operating
profit
April–June 2021, continuing operations*

· Net sales amounted to EUR 68.7 (73.7) million
· EBITDA was EUR 0.3 (1.6) million
· Operating profit was EUR -1.2 (0.1) million

January–June 2021, continuing operations*

· Net sales amounted to EUR 136.4 (138.8) million
· EBITDA was EUR 2.8 (3.3) million
· Operating profit was EUR -0.3 (0.3) million

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

The information in this report is unaudited. The figures in brackets refer to
the corresponding period in 2020, and the comparison period means the
corresponding period in the previous year, unless otherwise stated.

PROFIT GUIDANCE FOR 2021 UNCHANGED

The full-year operating profit from continuing operations is expected to improve
year-on-year (EUR 3.9 million in 2020).

Esa Mäki, CEO:

“Apetit Group’s net sales declined and profitability decreased year-on-year due
to the continued weakening of the Grain Trade segment’s result. Oilseed Products
continued its strong profit performance in the second quarter. The result of
Food Solutions improved year-on-year but was slightly in the negative due to the
seasonality of operations. On a positive note, the profit performance of
Apetit’s processing businesses was good for the entire first half of the year.

In Food Solutions, retail demand remained strong in the second quarter, with
sales being boosted particularly by the mixed vegetable products launched in the
spring and targeted at the barbecue season. A clear recovery from the effects of
the corona pandemic has also been seen in the Food service channel. It is
particularly pleasing that profitability improved substantially in all sales
channels.

In May, we announced we will invest approximately EUR 2 million in a new frozen
pizza production line at our Pudasjärvi plant. The investment covers the
modernisation of the entire production equipment in the existing building. The
investment will bring about significant improvements to Apetit’s range of frozen
pizzas, particularly with regard to taste and texture: we want to offer Finnish
consumers even more delicious pizza made from ingredients with as high a degree
of domestic sourcing as possible. The redesigned range of pizzas will be
launched next year.

Retail sales in Sweden continued to grow in line with our targets throughout the
first half of the year, and we have recently also seen a slight recovery in the
Swedish professional food service segment. The value of food exports grew by a
third and amounted to approximately EUR 2.5 million in January–June.

The demand for oilseed products remained strong in all product groups in the
second quarter, with end product prices increasing substantially due to higher
raw material costs. Towards the end of the review period, demand in the food
service channel also returned to the pre-pandemic level. The excellent result
was attributable to demand as well as the strong refining margin.

Our focus in the development of our rapeseed ingredient has been on the
commercialisation of the product development project. We will begin test
production of the ingredient at a subcontractor’s premises in August–September.
The produced rapeseed ingredient will be delivered later in the year for
production testing by customers as well as to be sold. In the initial stage, the
end product use of the ingredient will be focused on plant protein products and
gluten-free baked goods. Our aim is to start commercial scale production in
2022.

The Kantvik bioenergy plant was commissioned at the beginning of August. It
significantly reduces the Group’s CO\2\ emissions and energy costs. Milling
rapeseed to produce vegetable oil is the Group’s most energy-intensive
production process.

The result of Grain Trade was negatively affected by the difficult market
conditions in the international wheat trade and the unsuccessful response to
unpredictable market changes. After a peak in supply caused by the export
tariffs imposed by Russia, the international demand for wheat was very weak in
March–April. Consequently, the large wheat reserves in the Baltic countries were
delivered in their entirety to customers in May–June at a significant loss. In
addition, Finnish grain exports in the first half of the year were lower than
usual due to the previous year’s small harvest.

Exceptional arrangements related to the COVID-19 pandemic continue in Apetit
Group. We are actively monitoring the situation and will react to any changes.
Throughout the pandemic, we have successfully achieved our goal of ensuring the
health and safety of our employees and ensuring undisrupted operations
throughout the food supply chain.

The current cultivation season has been primarily characterised by hot and dry
weather conditions. Autumn oilseed plants have nevertheless thrived. The total
area under cultivation for domestic oilseed plants this year grew by nearly a
third compared to last year and the harvest outlook is positive. Apetit’s
systematic efforts to increase the cultivation area of oilseed plants and
interest in oilseed plant cultivation are continuing: the contract farming of
oilseed plants has nearly doubled from last year. The domestic grain harvest is
expected to be weaker than average. In the Baltic countries, the harvest is
expected to be fair, but substantially lower than the record harvest last year.
The harvest of outdoor-grown vegetables, excluding peas, is expected to be
moderate.

Corporate responsibility is an integral aspect of Apetit’s business throughout
the value chain, from field to fork. As an example of this, we continuously
develop our existing products as well as new products that respond to growing
consumer demand for sustainable food choices. This autumn, we will strengthen
our local fish strategy by expanding our product range with Baltic Sea fish
fingers made from delicious herring caught in the Baltic Sea. Increasing the
consumption of domestic fish has a significant impact on the health of Finland’s
inland waters and the Baltic Sea: for example, the roach we used in 2020 saw us
remove phosphorus from lakes in an amount that would otherwise have led to the
growth of 60,000 bucketfuls of blue-green algae. Our sustainable food choices
are meaningful.”

KEY FIGURES

EUR million 4–6 4–6 Change 1–6 1–6 2020 Change 1–12 2020
2021 2020 2021
Continuing operations
Net sales 68.7 73.7 -7% 136.4 138.8 -2% 292.9
EBITDA 0.3 1.6 2.8 3.3 10.1
Operating profit -1.2 0.1 -0.3 0.3 3.9
Share of profit of -0.2 -0.3 -0.6 -0.7 0.3
associated company
Sucros
Profit for the period -1.2 -0.3 -1.1 -0.8 3.1
Earnings per share, -0.19 -0.05 -0.17 -0.13 0.49
EUR
Working capital at the 25.5 22.1 48.4
end of the period
Investment 3.4 3.3 7.8
Group (incl.
discontinued
operations)
Net sales 68.7 73.7 -7% 136.4 138.9 -2% 293.0
EBITDA 0.3 1.7 2.8 3.4 10.2
Operating profit -1.2 0.2 -0.3 0.4 4.1
Profit for the period -1.2 -0.2 -1.1 -0.7 3.2
Earnings per share, -0.19 -0.04 -0.17 -0.12 0.52
EUR
Equity per share, EUR 14.48 14.65 15.26
ROCE % 2.9 1.6 3.3
Net cash flow from 24.4 45.9 26.8
operating activities
Equity ratio, % 76.3 68.8 66.5
Gearing, % 3.1 -4.7 21.7

WEBCAST

A news conference (in Finnish) will be held as a live webcast today on 20 August
2021 at 10:00. The news conference can be followed at apetit.fi/for-investors.
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. We also produce high-quality vegetable oils and rapeseed expellers for
feeding stuff, and trade grain on the international markets. Apetit Plc's shares
are listed on Nasdaq Helsinki. In 2020, Apetit Group's net sales were EUR 293
million.

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