Apetit Q2'26: Earnings challenged on several fronts
Summary
- Apetit's earnings are under pressure due to challenges in Sweden's turnaround and the Finnish Oilseed Products market, leading to a near-zero earnings forecast for this year, with profitability expected to improve in H2 and beyond.
- The Q2 report showed weaker-than-expected revenue and earnings, with a 3% revenue decline and EBIT impacted by losses in the Swedish pea business and costs from closing the Pudasjärvi pizza factory.
- Apetit has specified its 2026 EBIT guidance between -2 and +1 MEUR, with a favorable Finnish harvest outlook, but achieving this guidance remains uncertain due to potential operational inefficiencies and geopolitical volatility affecting oilseed prices.
- Valuation multiples remain high, and despite potential earnings recovery in Sweden by 2028, significant earnings growth is needed to make valuations attractive, with dividend payments likely maintained but not appealing if financed by debt.
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Translation: Original published in Finnish on 8/23/2026 at 8:52 pm EEST.
The delay in Sweden's turnaround, as well as the earnings challenges that Oilseed Products is facing in the Finnish market, are pushing this year's earnings close to zero. We expect earnings to become profitable again in H2 and continue improving in the coming years. Although the company is taking the right steps to strengthen its Swedish operations, the turnaround is not entirely within the company's control, as evidenced by this summer's poor pea harvest. Even with gradual earnings turnaround estimates, earnings-based valuation multiples are expensive, which is why we are lowering our recommendation to Sell (was Reduce) and our target price to EUR 11 (was EUR 12.50).
Underperformance not only in Sweden, but also in Oilseed Products
The Q2 report was weaker than expected in terms of both revenue and earnings. Revenue declined by 3% (organically -7%), driven by a decrease in pea exports in the Food Solutions segment due to last summer’s poor harvest whereas sales of food-grade vegetable oils were lower in the Oilseed Products segment. EBIT was pulled down by losses from the Swedish pea business (1.3 MEUR), costs related to the closure of the Pudasjärvi pizza factory (1.3 MEUR), and a weakened crushing margin in Oilseed Products. Reported EBIT fell short of our forecast by 1 MEUR. EBIT, adjusted for the costs of closing the pizza factory, was 2 MEUR below our estimate because we had budgeted for larger one-off items.
Good harvest expected, but guidance still comes with risk
On August 12, Apetit specified its guidance, which indicates that the reported EBIT for 2026 will be between -2 and +1 MEUR. While earnings will thus be weaker than last year's (5.9 MEUR, excl. the acquisition's impact), the company expects positive earnings in the seasonally stronger H2. If EBIT remains at -5.8 MEUR in H1, the company will need to achieve EBIT of 3.8-6.8 MEUR in H2 to meet the guidance. In our view, achieving the guidance is somewhat uncertain. It is crucial that the crop harvesting season for Food Solutions is more successful than in recent years and, conversely, that the result for Oilseed Products recovers after a difficult H1. The outlook for the Finnish harvest season is favorable for both peas and root vegetables, but weather conditions during the harvest will impact operational efficiency as well. Although the domestic rapeseed crop also looks good, geopolitical uncertainty has caused volatility and upward pressure on oilseed market prices.
Sweden's turnaround shifts further out in our forecasts
The pea harvest in Sweden is expected to be poor due to drought, which will likely hinder an increase in utilization rates at the Bjuv plant and make a turnaround in earnings difficult over the next 12 months. We adjusted our earnings turnaround assumptions so that the Swedish pea unit would break even at the EBITDA level in 2027 and turn a profit only in 2028 (around 1 MEUR). In our view, the company has implemented good measures in the pea business, both commercially and in terms of operational efficiency. However, current earnings turnaround estimates are still uncertain due to the history of heavy unprofitability.
Difficult to imagine a scenario in which valuation would be considered cheap
We do not expect any significantly positive news regarding a turnaround in Sweden’s results over the next 12 months and, in addition, Apetit has recently faced challenges with the profitability of its Finnish operations as well. Earnings-based valuation multiples are high (EBIT/ EBIT 2027e: 18x), and even the modest earnings recovery projected for Sweden in the 2028 figures will not lower valuation multiples sufficiently to make them attractive (EV/EBIT 2028e: 12x, fair value about 10x). A successful H2 crop harvesting season could alleviate the situation by reducing uncertainty around the 2027 forecasts, but finding the upside would require significant, broad-based earnings growth, also in the Swedish pea business. We estimate that the company will maintain dividend payments even though the result for the current year is likely to be negative. However, we do not consider dividend payments financed by debt to be significantly attractive to investors.