Func Food Group Interim Report Q3 2015

Transcription

1 Func Food Group Interim Report Q3 2015

2 Summary Func Food Group Oy ( FFG ) is a Nordic wellness company, which markets and distributes FAST, CocoVi, FitFarm, Celsius and Freddy brands in Finland and Sweden. FFG acquired ACMF Holding Ab ( ACMF ), the parent company of People s Choice Ab ( PC ) and Freddy Store Ab ( FS ) on 1 July Furthermore, FFG acquired 51 per cent of Suomen Lisäravinne Oy ( SLR ) on 20 May In the quarterly reporting, consolidated figures for the Group and the parent company are presented. Figures are not pro forma and include acquired companies figures from the date of their acquisition. The figures presented have not been subject to audit. Q3 FFG Group net sales amounted to EUR 10.7 m (EUR 5.0 m) FFG Group EBITDA amounted to EUR 1.4 m (EUR -0.1 m) and adjusted EBITDA totaled EUR 1.5 m (EUR -0.1 m) ACMF Group net sales amounted to SEK 56.4 m ACMF Group EBITDA amounted to SEK 18.2 m and adjusted EBITDA totaled SEK 18.2 m Year to date FFG Group net sales amounted to EUR 20.9 m (EUR 13.0 m) FFG Group EBITDA amounted to EUR 0.8 m (EUR -0.7 m) and adjusted EBITDA totaled EUR 1.2 m (EUR -0.5 m) ACMF Group net sales amounted to SEK m ACMF Group EBITDA amounted to SEK 38.0 m and adjusted EBITDA totaled SEK 43.4 m

3 Management comments There has not been remarkable changes in the market during Q Finnish economy continues to be in a long-term recession where continuous uncertainty and negativity reflect as weakened consumer demand. The cheapening campaigns seen in the daily retail store channel have continued in Q3. Hence, the market continues to be challenging for premium brands such as FAST, CocoVi and FitFarm. The strong growth of the Finnish sports nutrition market has cooled down during the past one and half years. Competition has increased as new players have entered the market. Cheap private label brands and online stores continue to win market share. FFG entered the Swedish market in Q3 by acquiring ACMF Holding Ab consisting of wholly-owned subsidiaries People s Choice Ab ( PC ), which distributes Celsius functional drink in Sweden and Freddy Store Ab ( FS ), which distributes Freddy active fashion brand in Sweden. The transaction was financed by a senior secured EUR 38 million bond due 2019 as well as equity injections from FFG s current owners and one major owner of ACMF Holding Ab. The general market environment in Sweden is clearly more positive than in Finland due to positive GDP growth in Sweden. However, Celsius faces tightened competition from new entrants such as Nocco and other BCAA drinks. FFG s net sales increased by 5.9 million (+116%) in Q3 and by 7.9 million (+61%) in Q1-Q3 compared to respective periods in The strong growth is explained by acquisitions of ACMF, SLR and CocoVi. Sales margin was 41% in Q3 (25%) and 31% in Q1-Q3 (22%). Sales margin improvement is explained by higher sales margins of Celsius and Freddy compared to Func. SLR s sales and profitability during Q3 have developed according to expectations. FFG has during Q3 continued actions to normalize its Finnish business and revert profitability to a healthy level. There has also been significant write-downs of inventory and packaging materials ( 0.4 million in Q1-Q3), which is seen as low sales margin level in Finland. Write-downs are expected to continue until the end of the year as the brand renewal process of FAST proceeds, and as the product offering is being condensed and rationalized. Starting from 2016 the Finnish business model will change in such a way that only finished products are purchased and raw material sourcing will be outsourced to partners. Furthermore, majority of customer contracts have been renegotiated for This combined with decreased number of product items is expected to improve the sales margin level and decrease the inventory level. ACMF Group net sales in Q3 decreased by SEK 6.8 million (11%) from Q2 due to tightened competition and summer months, which are typically more quiet. However, Freddy performed well and sales increased by 11% from Q2 due to seasonal orders to resellers. Q1-Q3 EBITDA has been adjusted with non-recurring items of SEK 5.3 million resulting mainly from changed accounting methods for coolers, transaction related costs, ERP consulting costs and personal expenses. Through the acquisition of ACMF, FFG has become a leading Nordic wellness company with market leading brands in sports nutrition, super foods, functional drinks and healthy snacks categories in Finland and Sweden. Due to write-downs, weakened sales of Celsius and the FAST brand renewal process, the Group s profitability for financial year 2015 is expected to be lower than originally estimated. Antti Pirinen, CEO Func Food Group Oy

4 Table 1: Consolidated statement of comprehensive income Table 2: Consolidated statement of financial position Net sales 10,687 4,955 20,920 13,013 Other revenues 0,002 0,003 0,003 0,012 Total revenues 10,689 4,958 20,923 13,024 COGS -6,264-3,703-14,351-10,200 Sales Margin 4,425 1,254 6,571 2,825 Personnel expenses -1,176-0,530-2,334-1,141 Marketing expenses -0,747-0,341-1,906-0,941 Other external expenses (opex) -1,060-0,453-1,558-1,452 Total expenses -2,983-1,324-5,799-3,534 EBITDA 1,443-0,069 0,772-0,709 EBITDA-margin (%) 13,5 % -1,4 % 3,7 % -5,4 % Non-recurring items 0,095 0,000 0,415 0,210 Adjusted EBITDA 1,538-0,069 1,187-0,499 Adjusted EBITDA margin (%) 14,4 % -1,4 % 5,7 % -3,8 % Depreciation -0,273-0,064-0,368-0,152 EBITA 1,170-0,133 0,404-0,861 EBITA-margin 10,9 % -2,7 % 1,9 % -6,6 % Goodwill amortizations -1,084-0,408-1,905-0,986 EBIT 0,086-0,541-1,501-1,847 EBIT margin 0,8 % -10,9 % -7,2 % -14,2 % Financial income 0,002 0,001 0,010 0,001 Financial expenses* -2,018-0,243-2,583-0,753 EBT -1,932-0,784-4,074-2,599 Income tax -0,021-0,036-0,026-0,162 Minority interest -0,051 0,000-0,051 0,000 Net income -2,004-0,820-4,151-2,761 EUR in millions 9/2015 9/2014 Intangible assets 40,919 16,058 Tangible assets 2,171 0,228 Investments 0,002 0,000 Non-current assets 43,092 16,286 Inventory 9,033 4,594 Accounts receivables 5,700 2,388 Other receivables 9,864 0,109 Cash (and equivalents) 1,909 0,119 Current assets 26,505 7,210 ASSETS 69,597 23,496 Equity 22,019 4,810 Long-term interest-bearing liabilities 37,177 9,850 Other long-term liabilities 1,577 5,111 Short-term interest-bearing liabilities 0,276 0,549 Accounts payables 5,031 1,927 Other short-term liabilities 3,517 1,249 Liabilities 47,578 18,686 EQUITY AND LIABILITIES 69,597 23,496 *Financial expenses in 7-9/2015 include 0.6 million of currency losses related to intra group loans and costs related to financial arrangements done in conjuction with the ACMF transaction Non-recurring items consist of inventory and packaging material write-downs.

5 Table 3: Consolidated cashflow statement Table 4: Parent company income statement Func Food Group Oy EBITDA 1,443-0,069 0,772-0,709 Change in NWC* -8,031-0,373-8,171-3,915 Maintenance Capex 0,000 0,000 0,000 0,000 Operating cash flow -6,589-0,442-7,399-4,624 Net finance charges** -1,420-0,242-1,978-0,751 Instalments*** 0,000-0,250-0,807-0,250 Debt service -1,420-0,492-2,784-1,001 Operating cash flow after debt service -8,009-0,935-10,183-5,625 *Change in NWC in 2015 figures includes ACMF s inventory of 5.1 million and sales receivables of 3.3 million. **Net finance charges in 7-9/2015 exclude 0.6 million of currency losses related to intra group loans ***Bank debt of 8.3 million was paid back on 1 July 2015 in conjuction with the ACMF transaction. This instalment is not shown in 7-9/2015 figures in order to provide a correct view of the cashflow. Net sales 0,000 0,000 0,000 0,000 Other revenues 0,000 0,000 0,000 0,000 Total revenues 0,000 0,000 0,000 0,000 COGS 0,000 0,000 0,000 0,000 Sales Margin 0,000 0,000 0,000 0,000 Personnel expenses -0,016-0,002-0,049-0,024 Marketing expenses 0,000 0,000 0,000 0,000 Other external expenses (opex) -0,034-0,003-0,063-0,008 Total expenses -0,050-0,005-0,112-0,033 EBITDA -0,050-0,005-0,113-0,033 EBITDA-margin (%) Non-recurring items 0,000 0,000 0,000 0,000 Adjusted EBITDA -0,050-0,005-0,113-0,033 Adjusted EBITDA margin (%) Depreciation 0,000 0,000 0,000 0,000 EBITA -0,050-0,005-0,113-0,033 EBITA-margin Goodwill amortizations 0,000 0,000 0,000 0,000 EBIT -0,050-0,005-0,113-0,033 EBIT margin Financial income 0,900 0,000 0,900 0,000 Financial expenses -1,333-0,179-1,814-0,552 EBT -0,483-0,184-1,027-0,585 Income tax 0,000 0,000 0,000 0,000 Minority interest 0,000 0,000 0,000 0,000 Net income -0,483-0,184-1,027-0,585

6 Table 5: Parent company statement of financial position Func Food Group Oy Table 6: Parent company cashflow statement Func Food Group Oy EUR in millions 9/2015 9/2014 Intangible assets 0,000 0,000 Tangible assets 0,000 0,000 Investments 56,006 18,933 Non-current assets 56,006 18,933 Inventory 0,000 0,000 Accounts receivables 0,000 0,000 Other receivables 11,184-0,130 Cash (and equivalents) 0,693 0,016 Current assets 11,877-0,114 ASSETS 67,883 18,819 Equity 27,939 6,132 EBITDA -0,050-0,005-0,113-0,033 Change in NWC -2,009 0,242-3,069 0,520 Maintenance Capex 0,000 0,000 0,000 0,000 Operating cash flow -2,059 0,237-3,181 0,487 Net finance charges -0,433-0,179-0,914-0,552 Instalments 0,000-0,250-0,875-0,250 Debt service -0,433-0,429-1,789-0,802 Operating cash flow after debt service -2,492-0,191-4,971-0,315 Long-term interest-bearing liabilities 39,577 6,513 Other long-term liabilities 0,000 5,111 Short-term interest-bearing liabilities 0,000 0,673 Accounts payables 0,303 0,077 Other short-term liabilities 0,063 0,313 Liabilities 39,944 12,687 EQUITY AND LIABILITIES 67,883 18,819

7 For further information please contact: Antti Pirinen CEO Func Food Group Oy Phone: Robert Savikko CEO Func Food Finland Oy Phone: Address: Func Food Group Oy Pyynikintie 25 Y 10, Tampere, Finland Corporate identity number: Phone: