The company, whose operations span consumer foods, grains and oilseeds, has been able to capture new sales through its innovation efforts in the first half of this year. Its existing lines have also benefited from a halo effect, Vanhainen noted.
“Our investment in new product development and renewal is generating new sales, and the favourable development is also having a positive effect on products that have been on the market for a longer time. Grocery sales continued to pick up in the first half of the year. According to our estimate, our food solutions business outpaced the overall development of the grocery trade,” he said.
The company’s consumer foods unit, which includes fresh and frozen packaged foods, booked a 4% rise in sales for the first six months of the year, rising to €51.4m versus €49.3m last year.
Higher sales enabled the unit to reduce its operating losses in the period. Apetit said that its food solutions segment racked up an operating loss of €2.4m, down from €2.8m last year.
However, Vanhainen said that the company “cannot be pleased” with the current performance of the food solutions division. “We will continue our work to increase sales and improve efficiency,” he stressed.
On a group-wide basis, including Apetit’s grain trade and oilseed businesses, the company reported lower sales and profits overall. Net sales dropped 1% to €151.9m. Operating losses rose to €1.3m, compared to €0.9m last year, and the net loss stood at €1.7m compared to a loss of €1.6m.
The seasonal nature of Apetit’s business means profits are weighted to the back half. For the full-year of 2017 Apetit expects to deliver an improvement in operational EBIT, which stood at €0.9m in 2016.
Focus on vegetable-based innovation
Apetit plans to strengthen its performance by focusing its innovation efforts on the growth area of vegetable-based diets.
In March last year, in a strategy update, Apetit said its goal is to become the “leading brand in vegetable-based food solutions and services”. The group is focusing development on frozen vegetable products and frozen ready meals, ready-to-use fresh vegetables and service sales.
Renewal will be accelerated by increasing efforts in product development and investing in new food solutions and service development, and “especially by exploiting digitalisation”, the company revealed.
“The interest in vegetable-based and vegan foods among consumers and customers in the professional food service sector supports our strategic direction and guides our investments in product development,” Vanhainen revealed.
In order to place increased resource behind its vegetable-based brands, the company entered into an agreement to sell its seafood operations in Finland, Sweden and Norway to Norwegian fish and shellfish specialist Insula in June.
“The transaction will enable us to allocate more resources to the implementation of our strategy, which focuses on diets with a high vegetable content. The transaction also means that the seafood business will be run by a new owner committed to developing and strengthening the business,” Vanhainen noted.
The chief executive insisted that Apetit remains committed to investing in innovation while also driving efficiencies to improve profitability.
“We will continue to implement measures to improve growth and profitability by increasing sales and improving efficiency across our operations.”
In the food solutions segment, Apetit’s goal is to reach 20% organic net sales growth by the end of 2018, compared to a 2015 base of €96m. In terms of profitability, Apetit wants to hit a 7.5% EBITDA margin in 2018.