Greetings to the viewers of InderesTV. Fodelia reports its Q3 results today, and I have the company's CEO, Riikka Wulff, here for an interview. Welcome to the interview, Riikka.

Thank you, Pauli!

Indeed, Fodelia returned to strong growth now in the third quarter, even if this didn't quite show on the bottom line as expected. How do you see the development of this quarter yourself?

Well, quite positively. Revenue grew favorably, of course, particularly at Feelia and in the right direction. It was nice to see the revenue distribution shift more strongly towards our own brand. Of course, I understand well that both we and many others expect strong, strengthening relative margin, but knowing what is currently happening in the background for us, a lot of things have moved forward at our factory. We have done really good work in sales, so I look to the future with great confidence.

Yeah, indeed, this Feelia margin perhaps in the big picture, if we look from the beginning of 2023 onwards, it has actually ticked pretty steadily downwards over the past few years. Do you recognize that competition here in the food service market or in public catering has tightened?

Well, perhaps it's tightening rather. Moving forward from here, we have worked quite a lot over the past couple of years to get our own processes and operational efficiency to grow, and we've made investments in this and also made investments in personnel over the past year. We have invested in ensuring that we can also achieve that strong future growth. Over the past few years, that has now shown up for us in strengthening our own operations, our own processes, our own personnel. Perhaps above all, these are the explaining factors.

You mentioned here in the Q3 report that the new Procurement Act will be applied in phases within the next 9 months and you expect this to show as significant growth in the number of requests for proposals, so can you explain how or why this act affects the number of requests for proposals and how you are reacting to the situation?

Well, currently quite many municipalities buy products and services from in-house companies, and currently there has been no restriction on how much you need to own of an in-house company to be able to buy products and services without a competitive bidding process. Now going forward, municipalities or any entity must own at least 10 percent of in-house companies in order to bypass bidding. This will mean that particularly in smaller municipalities, there will be many tenders that have perhaps now gone into the market without competitive bidding. So it will certainly show here in the future at the latest from the summer of next year onwards, when this will apply to all operators.

And indeed, how is Feelia reacting to this?

Well, we are currently already recruiting a new salesperson for our public sector team. That is, as we see strong growth there, we naturally want to serve customers extremely well in the future as well, just as we have served them until now.

Yeah, well here at Feelia you have also heavily invested in improving the efficiency of the factory operations and you shifted, among other things, to using an external maintenance partner. How does this change help make the factory more efficient, and what other measures have you taken?

Maintenance is indeed a really important part of this kind of industrial activity. We keep our lines running, machines running. We do things in advance, get new systems into use there with the new partner that support everyday work and anticipating things. Instead of repairing what is broken, we make sure that nothing would break. And when something occasionally does, whenever operating industrially, surprises sometimes happen, we are as quick as possible in how fast we get the equipment back into working order.

We have developed our own work a lot here. Our crew has done extremely good work, both our existing people and newly hired people in cooperation. In a way, that strong historical expertise and familiarity with our products combined with lessons from elsewhere too. How such a growing industrial production facility is run? Through this cooperation we have achieved really good results. When I look at the past month, our production volumes in kilos have grown by nearly 20 percent on a daily and weekly basis. Through numerous small changes that we have made there in production, we are seeing quite good results already at this point.

Sounds good. You were able to strengthen earnings on the right side even though total revenue remained unchanged. There indeed those brand products have grown strongly and private label has decreased a bit. What does the future of this private label look like?

Now I see that too as quite positive. We are having very good discussions here, some new customer accounts won in the background, products already. Naturally, all that with which we can increase our own efficiency makes it easier for us to win future deals as well. But we see that we have growth potential in both, in our own brand and also in getting private label production to grow. So one could state this is positive as well.

A turnaround perhaps a bit to this recent development on the revenue side.

We are working towards that too, and that is the goal, and right now it looks good. But of course before contracts are closed, nothing can be said for certain.

Right, right. Then the company's net gearing increased compared to a year ago. Even though you have had a profitable year as such, can you elaborate a bit on where capital has been tied up?

Yes, of course our net gearing is still very low. It's good to keep that in mind, but three main factors. We have capitalized Foodbar, meaning our associated company. We have had a share buyback program and some investments have certainly been made too.

Good. Well then to conclude, you lowered the upper end of the revenue guidance a bit for the end of the year, which wasn't really surprising news to the market as such, but if we look at Feelia's growth outlook from here onwards, perhaps beyond the end of the year a bit into next year as well. What does it look like in your opinion, and is there? Is there a risk like, for instance, that a slower growth phase would occur before the effects of the Procurement Act begin to show?

Well, I do not really believe that, because this revision to the Public Procurement Act has been known for quite some time now. So it is. Perhaps. I believe it has had more of an impact on this year than on next year. I do not see it as the reason for slowing growth, and I am very positive about next year as well. Of course, percentage growth becomes harder the higher the base figures rise, but we certainly have many promising discussions ongoing all the time, and our strengthened sales team is doing an excellent job there every day and every week, so I do not see any particular reason to worry about why our revenue would not grow.

Right, to wrap this up, you are expanding to Sweden and have now secured your first order there, so would you perhaps briefly tell us what investors should expect from that front?

We have not drawn up any particularly strong growth figures for this ourselves yet, not especially for this year, and not really for next year yet either. I firmly believe that opening up a new market like this is, however, slow and patient work. We have had excellent discussions there and very satisfied customers when we have let them taste the products, told them about this concept, and now indeed the first order has already been received. And since we have satisfied customers in Finland who have a sister company in Sweden, this is always a much easier way to enter a new market than charging into battle blindly without someone opening doors a bit through recommendations. So I am very optimistic that Sweden could well be a strong growth market for us in the future, but we have not drawn up very strong growth figures there for next year yet.

All right, let us stay tuned for that. Thanks for the interview. Thank you.