Pauli has published a new company report on Fodelia after Q1.
Q1 was weaker than expected, partly due to Feeliaâs growth temporarily falling below its medium-term trend and fixed costs rising more than we anticipated. In our view, the growth guidance for the current year is high, and uncertainty regarding its achievement has increased, although the company still sounded confident about growth accelerating, supported by customer-specific sales estimates. The shareâs value creation potential remains strong, but considering the elevated valuation and guidance risk, we lower our recommendation to âaddâ (previously âbuyâ).
The CEO somehow very politically dodged Paulâs question about the rise in cost level and the related trend. He started explaining something about efficiency in different stages of the process and other mumbo jumbo.
Was it an accident, or can it still be interpreted from this that the cost level doesnât scale and Fodelia still incurs all sorts of unexpected cost items? Could someone from the company answer this more clearly now?
I donât understand how, in this business, they canât estimate the timing of costs better, or perhaps they can, but they donât want to say it out loud beforehand.
When a small company grows larger and finances allow, more investment is made in all kinds of administrative tasks than before. Previously, financial administration services were outsourced, but since the end of last year, they have started to be brought in-house to the group, and own personnel have been hired. Other areas include IT projects, sustainability work, and the Delimax certificate. In my opinion, these are at least mostly essential matters that should be in order for a large food industry company from both a risk management and credibility perspective. Additionally, related to the change in leadership, there were temporarily overlapping remunerations.
These development costs happened to hit Q1 more than the average trend, and were also elevated in Q4. The company stated quite clearly, in my opinion, that this Q1 level in group expenses was an exception and should not weigh on profitability as much for the rest of the year. I agree that more proactive communication about cost development would be needed so that earnings development would not come as a surprise to outsiders. It is probably realistic to assume that the groupâs costs will grow in the long term, though likely slightly slower than total revenue.
In my opinion, fluctuations in individual quarterly results are still not the right way to examine companiesâ profitability or outlook. Guidance is given for the entire year, and in Fodeliaâs case, there are a huge number of variables behind it, both on the top line and below it. Sometimes the recording of these expenses does not optimally align from a quarterly perspective, but they are not optimized from the perspective of quarterly results either. The fact that the cost level comes as a surprise to analysts or investors does not mean that they came as a surprise to the company. I understand the interest in quarterly figures per se (since they are reported quarterly), but I genuinely hope that the overall picture is considered, at least over an annual period â not to mention the big picture of what the companyâs true competitive factors are and their relevance to the current market. Regarding efficiency measures, one more observation is that even the Co-operation Act (yt-laki) defines in what order and with what precision matters should be communicated. When efficiency measures are taken, they usually affect the daily lives of the personnel, i.e., people (the companyâs most important stakeholder and resource) â which is why I think itâs wise to speak about them on a general level.
Fodelia Oyjâs subsidiary Feelia Oy has been selected as the food supplier for early childhood education and schools in the municipality of Veteli. The cooperation will begin on June 1, 2025, and continue until July 31, 2026, including an option for an extension for the period of August 1, 2026, to July 31, 2027. The annual value of the agreement is approximately 300,000 euros. Feeliaâs Kokkola factory is located only 60 kilometers from Veteli, which enables flexible and fast service.
I just read the press release that popped into my email as well. Big news. If I recall correctly, there are now a few municipalities in Finland that have made similar agreements. The track is open, the skis are waxed, nothing left but to go for it. Go go Fodeliađ„
TYKSâs tendering process was suspended at least temporarily:
The Wellbeing Services County of Southwest Finland suspends the procurement on the basis of a genuine and justified reason referred to in section 125 of the Procurement Act. The purpose of suspending the procurement procedure is to ensure equal treatment of tenderers and the contracting entityâs opportunity to obtain the most economically advantageous contract by re-launching the tender competition with a corrected tender request and appendices.
OP has added Fodelia to their âStock and ETF ideasâ with the comment:
Fodeliaâs stock is, in our view, reasonably priced:
our cash flow model, which does not expect the company to even come close to its 2028
targets (revenue of 82 million euros vs. 100 million and adj. EBIT-% of 8.5% vs.
10.0%), gives the stock our target price of 8 euros.
âJukka Ojala, a member of Fodelia Oyjâs Management Team and CEO of its subsidiary Feelia Oy, has resigned from his position.â
CEO Riikka Wulff comments:
âFeelia is a company in a very interesting phase, with a clear competitive advantage and a strong growth strategy. Together with Jukka and Feeliaâs management team, we will ensure a smooth transition of matters even in this changing situation, and Jukka will continue in an advisory role until the autumn. I thank Jukka for his excellent cooperation.â
âThe change will impact the groupâs management team work and leadership model. The company is preparing an updated leadership model and will communicate about it separately.â
I donât engage in speculation, but I will say that models are changed first, and then people are fitted into the new model.
I donât really believe he was âallowedâ to leave The gentleman in question owns almost 12% of the companyâs shares. So probably of his own volition, just like Tahkola. This means there seems to be confidence that other competent people will be found to manage the company.
Itâs a bit worrying that there havenât been announcements of new clients for a while, but I guess theyâll come again at some point.
Pauli has published a new company report on Fodelia.
A prolonged shortage of beef and a moderate number of announced new customers relative to the growth guidance, in our opinion, increase the risk regarding Fodeliaâs current year guidance. We have therefore slightly cut our growth and profitability forecasts. Fodelia is still a profitable growth company, but the somewhat tight short-term valuation and guidance risk weigh on the risk-reward ratio. We lower our recommendation to reduce (previously add) and the target price to EUR 7.0 (previously EUR 7.5).
Fodelia announced on Monday that it is making changes to the groupâs management model. Historically, the company aimed to be a holding company, where each of the groupâs subsidiaries was managed through separate CEOs. The strategy was reformed in spring 2024, as a result of which the company abandoned the holding structure and sought closer cooperation between the group companies.
Own share repurchases have also been initiated for the implementation of the employee share savings program and the remuneration paid as shares to the board of directors.
The Board of Directors of Fodelia Plc has decided to commence the acquisition of own shares based on the authorization granted by the Annual General Meeting on March 25, 2025. The shares will be acquired for the implementation of the employee share savings program and the remuneration paid as shares to the board of directors. A maximum of 20,000 shares will be acquired, which corresponds to a maximum of 0.2% of the total share capital.
The shares will be acquired in public trading organized by Nasdaq Helsinki at the market price at the time of acquisition. The acquisition of own shares will commence no earlier than June 18, 2025, and will end no later than October 31, 2025. The acquisition of own shares will be financed with the companyâs distributable unrestricted equity.
The Annual General Meeting on March 25, 2025, authorized the Board of Directors to decide on the acquisition of a maximum of 500,000 own shares, in one or more tranches, using funds belonging to the companyâs unrestricted equity. The authorization is valid until the end of the next Annual General Meeting, however, no later than May 31, 2026. The total number of Fodeliaâs shares and votes is 8,150,549 shares. The company holds 4,562 own shares, and the number of outstanding shares is 8,145,987.
Could it be Fodeliaâs food? If Iâm not mistaken, at least the ex-CEO, Tahkola, was in this group. Hopefully. People get affordable tasty food and investors like itđ«Ą
The procurement notice for TYKSâs catering services has been reopened. The estimated total value is still 22.4M and the comparison criterion remains price with a weighting of 100. The deadline is now August 11.
The previously opened tender was cancelled, and the cancellation notice stated:
The Southwest Finland Wellbeing Services County cancels the procurement on the basis of a genuine and justified reason referred to in Section 125 of the Procurement Act. The purpose of cancelling the procurement procedure is to ensure equal treatment of tenderers and the contracting entityâs opportunity to obtain the most economically advantageous contract by re-launching the tender with a revised request for tenders and appendices.
The cancellation notice also revealed that 3 electronic tenders had been submitted. I donât know if Fodelia had submitted a tender, but I believe this would be of interest. HUS is a good reference, and the recipes are ready through them.
I have not personally participated in the event, but having observed from the sidelines, I can confirm that a significant amount of Feeliaâs food has gone there this year as well.
Has Fodelia considered the Finnish Defence Forces as a customer? It would be a pretty good product, for example, for forest exercises and other long-range patrol tasks.
The gentleman in question owns almost 12% of the companyâs shares. So probably of his own volition, just like Tahkola. This means there seems to be confidence that other competent people will be found to manage the company.
