Apetit: Strategy event provided drivers for Foodhills' earnings turnaround

Translation: Original published in Finnish on 2/18/2026 at 7:10 am EET.

Apetit held a press conference on Tuesday regarding its new strategy. The strategy is a step towards a more growth-oriented direction and includes several growth projects, which involve significant financial investments and, in part, uncertainty about their success. We consider the acquisition of the Swedish pea producer Foodhills to be the biggest change in the strategy, and in our opinion, the press conference provided credible guidelines for strengthening the profitability of the acquired entity. In Oilseed Products, the company is planning investments aimed at increasing conventional production and accelerating the commercialization of the new rapeseed-based BlackGrain ingredient. From an investment story perspective, we expect growth projects to weigh on the share price until visibility on the success of these projects improves or earnings growth lowers the company's elevated earnings-based valuation multiples. The press conference and its presentations can be viewed via this link (in Finnish).

In this article, we will only go through a few of the main themes on which the briefing provided new information. An overview of the company's new strategy, which we published earlier, can be found via this link.

The drivers for Foodhills' targeted earnings turnaround were presented

The biggest change in Apetit's strategy concerns the Food Solutions unit, which expanded into Sweden through an acquisition completed at the end of 2025. Foodhills AB, acquired from Sweden, is a large and currently the only Swedish producer of frozen peas. Going forward, the company will be known as Apetit Sverige AB. The business has been significantly loss-making over the past 5 years, which allowed Apetit to acquire the company, which owns modern production facilities, at a very low price. Foodhills has numerous contract pea farmers in the vicinity of its plant, with a combined cultivation area of 4,000 hectares (Apetit has 2,000 hectares in Finland). Over half of Foodhills' production has been exported in recent years, although the share of domestic sales in Sweden has been growing, and the company sees additional growth potential in its home market. Together, production in Finland and Sweden accounts for over 10% of European frozen pea production.

The key question is whether Apetit will succeed in turning Foodhills' profitability positive. We interpret the following elements as supporting Foodhills' profitability in the coming years:

• Increasing production volume. In pea production, profitability is largely dependent on utilization rates. The factory's capacity is 15 million kilograms per year, but it has been operating at a lower utilization rate to date. Apetit aims to increase pea volumes and also use the factory for processing other local vegetables to utilize its capacity.
• Reduced competition supports pricing power. There used to be two pea producers in Sweden, but competitor Toppfrysfabrik ceased operations during 2025 due to poor profitability.
• Higher processing levels. A new packaging line for consumer products was completed at the plant during 2025. Having its own packaging line reduces the need for outsourced packaging and supports growth in the retail channel, which has a favorable margin level.
• Improving operational efficiency. Apetit has solid experience in cultivating and producing peas in Finland. We interpret that the company has thoroughly analyzed Foodhills' production cost structure and identified several ways to reduce costs in the production chain.

Foodhills has a history of rather weak profitability. In 2020–2024, the company's EBIT averaged -33 MSEK (ca. -3 MEUR) and EBITDA was estimated at -15 MSEK, meaning losses have been high relative to average revenue of around 120 MSEK. Because Apetit acquired the company below book value, it effectively received a significant portion of the company's assets tied to the factory "for free." From this perspective, achieving positive profitability, even at the EBITDA level, in the coming years would be a satisfactory outcome given the situation. In the long term, the operating profit should also turn positive so that the business does not destroy value. We have estimated Foodhills' earnings impact at the EBITDA level to be around -0.7 MEUR in 2026 (EBIT -2.4 MEUR). For 2026–2027, we have estimated Foodhills' EBITDA to turn positive at 0.9–1.4 MEUR (EBIT: -0.7 and -0.3 MEUR).  There is significant uncertainty associated with the earnings turnaround, but based on the strategy event, we better understand the underlying drivers of the targeted turnaround and consider them quite credible, even if the uncertainty does not completely disappear.

Planned capacity increases for Oilseed Products

As part of its growth strategy, Apetit plans to increase the production capacity of its Oilseed Products business. With its plant in Kantvik, the company is Finland's only industrially significant presser of turnip rape and rapeseed, which supports its market position. Growth investments are first planned for refining capacity, which would mean that all produced oil could be processed for food use in the future, thereby increasing the value-added of sales. The company is also exploring the possibility of increasing its total crushing capacity, which would offer significant additional potential for the overall growth of the business. Implementing these investments would be relatively straightforward, although we estimate that a strategy based on increasing capacity would be quite capital-intensive, making it difficult to achieve high returns on invested capital.

BlackGrain commercialization is progressing

Apetit has long been developing and commercially promoting the BlackGrain ingredient, which is produced from the press products of vegetable oils. BlackGrain is rich in protein, fiber, and healthy fats. The ingredient has novel food approval for numerous applications.

The company will invest 2 MEUR in 2025 to increase the production capacity of the ingredient's raw material and is working with its subcontractor to boost the capacity of the final product. This would allow BlackGrain sales to be scaled up to a more commercially significant level in the future. Products containing BlackGrain, such as plant-based patties, have already been sold to the foodservice channel, and BlackGrain-containing meatballs have also become available in retail stores early this year.

Investments in the operation will depress profitability in the short term, and the company estimates that BlackGrain will support the company's earnings no earlier than 2028. The demand for plant-based meat substitutes is growing in the long term, supported by megatrends, but in the short term, demand volumes are limited and competition is fierce.