Raisio Group Financial Review 2004
Raisio Group plc Stock Exchange Release 10 Feb 2005, 12.30 Finnish time
Raisio Group Financial Review 2004
A YEAR OF RESTRUCTURING ENDED ON A POSITIVE NOTE
Operating result from ongoing business improved by some EUR 16
million in 2004
· The divestment of Raisio Chemicals to the Swiss company Ciba
Specialty Chemicals was concluded in early June. The financial
statements include Raisio Chemicals figures for the January to May
period in 2004.
· The Group posted a turnover of EUR 626.9 million (EUR 860.5
million), the drop over the previous year mainly resulting from
restructuring operations.
· The operating result was EUR 202.8 million (EUR -14.3 million),
and EUR 10.4 million (EUR 1.2 million) excluding one-off items.
· The earnings per share amounted to EUR 1.19 (EUR -0.16) and EUR
0.05 (EUR -0.09) excluding one-off items. The Board of Directors
proposes a dividend of EUR 0.21 per share of which EUR 0.18 is extra
dividend due to Raisio Chemicals sales profit.
· The operating result for 2005 is expected to end higher than the
comparable operating result in 2004.
Key Figures
1-3/ 4-6/ 7-9/ 10-12/ 2004 2003
2004 2004 2004 2004
Turnover, EUR million 205.6 196.2 113.0 112.2 626.9 860.5
Operating result, EUR 0.7 195.4 3.0 3.7 202.8 -14.3
million
Operating result, 0.7 4.4 3.0 2.2 10.4 1.2
excluding one-off items,
EUR million
Result before taxes, EUR -2.3 192.4 3.4 4.5 198.0 -27.2
million
Result before taxes, -2.3 3.4 3.4 3.0 7.6 -11.7
excl. one-off items, EUR
million
Earnings per share -0.03 1.15 0.05 0.02 1.19 -0.16
(EPS), EUR
EPS before one-off -0.03 0.02 0.05 0.01 0.05 -0.09
items, EUR
Equity ratio, % 31.3 65.8 70.6 76.8 76.8 32.2
Gearing, % 135.6 -41.1 -48.1 -42.9 -42.9 127.9
Cash flow from business 2.3 13.4 23.0 4.8 43.5 77.0
operations, EUR million
FOURTH QUARTER
Raisios turnover in the last quarter totalled EUR 112.2 million (EUR
216.1 million), while its operating result amounted to EUR 3.7
million (EUR -7.1 million). The result before taxes was EUR 4.5
million (EUR -10.8 million), and cash flow from operations EUR 4.8
million (EUR 41.5 million). The operating result was improved due to
i.e. an adjustment to an earlier made provision. The operating
result, excluding one-off items, was EUR 2.2 million (EUR 4.4
million).
Raisio Nutritions turnover decreased to EUR 97.6 million (EUR 104.4
million), mainly due to the discontinuation of grain starch
operations, weaker demand for malt and a decrease in the margarine
business in Sweden. The operating result, at EUR 2.5 million (EUR -
9.2 million) and EUR 2.6 million (EUR -1.1 million) excluding one-off
items, improved over the previous year, largely thanks to the
continued enhancement of operations and pruning of loss-making
business.
Heavy growth in ingredients sales pushed the turnover of Raisio Life
Sciences to EUR 16.1 million (EUR 11.0 million) and improved its
operating result, which amounted to EUR 1.2 million (EUR -0.2
million).
CEO Rabbe Klemets:
The strategy update in 2004 put the focus of Raisios business
operations on the development and production of plant-based foods, as
well as the promotion of the consumers well-being. Raisios previous
investments in paper chemistry enabled the chemicals business to be
divested on terms that were favourable both for Raisio Chemicals and
the Raisio Group and its shareholders. The acquisition agreement
signed with Ciba Specialty Chemicals made the Raisio Group net debt-
free and clearly increased its market value.
The performance of ongoing operations improved significantly in 2004.
Excluding one-off items, Raisios operating result without the
divested chemicals business increased to EUR 6.8 million (EUR -9.3
million). However, we still have a way to go to reach our target of
12 per cent for return on investment. Ensuring growth and increasing
the added value of our product range, as well as continuing to
enhance operations, are the keys to reaching this target. The assets
obtained from Raisio Chemicals will be used for business development,
selected acquisitions and alliances in line with the Groups
strategy, as well as for increasing shareholder return.
In addition to the extra dividend of 12 cents paid in October,
Raisios Board of Directors plans to propose an extra dividend of 18
cents at the Annual General Meeting this spring. This means that
altogether EUR 50 million of the sales profit from Raisio Chemicals
will be distributed to shareholders. In accordance with our dividend
policy, a EUR 0.03 per-share dividend based on the operating result
of ongoing business will also be proposed at the Annual General
Meeting. The Board of Directors will also seek authorization to share
buy-back.
RAISIO GROUP PLC
Taru Narvanmaa
Executive Vice President, Communications and Investor Relations
Further information:
Rabbe Klemets, CEO, tel. +358 2 443 2220 or +358 400 821 614
Jyrki Paappa, CFO, tel. +358 2 443 2279 or +358 50 556 6512
Taru Narvanmaa, Executive Vice President, Communications and Investor
Relations, tel. +358 2 443 2240 or +358 50 590 9398
A press conference will be held on 10 February 2005 at 2:00 p.m.
Finnish time at Sokos Hotel Vaakuna, address Asema-aukio 2, Helsinki,
and a telephone conference in English on 10 February 2004 at 3:30
p.m. (tel. +358 (0) 800 148766).
Raisio Groups annual report will be published week 11, and the
Annual General Meeting will be held on Thursday 31 March 2005. The
interim report for JanuaryMarch 2005 will be published on 3 May
2005, for JanuaryJune on 2 August 2005 and for JanuarySeptember on
1 November 2005.
No auditors report has been issued concerning the financial review.
REPORT OF THE BOARD OF DIRECTORS
Last year was a year of big changes in Raisio Group. Slow organic
growth made it difficult to implement the strategy drawn up in 2001,
resulting in a strategic reassessment by the Board of Directors.
Analysing restructuring alternatives resulted in the decision to
divest Raisio Chemicals, which was then sold to the Swiss company
Ciba Specialty Chemicals. Previous investments had increased the
value of Raisio Chemicals, and the deal was concluded quickly and on
favourable terms. Raisio Group with its strong financial standing is
now in a good position to proceed as an expert in plant-based foods
and ensuring food safety.
Competition remained intense in most of Raisios product areas,
partly due to the pressure on prices created by new market
participants. Although the food and feed markets showed weak growth,
Raisio clearly improved its profitability thanks to several
programmes aimed at enhancing operations. Increased consumer
awareness of health-related issues boosted the demand for functional
foods all around Europe. Raisio succeeded in considerably increasing
both the sales and market share of the cholesterol-lowering Benecol
ingredient.
DIVESTMENT OF RAISIO CHEMICALS
The divestment of Raisio Chemicals to the Swiss company Ciba
Specialty Chemicals was concluded on 2 June 2004. The enterprise
value amounted to EUR 475 million. It consisted of a cash payment and
the transfer of debts. Sales profit totalled EUR 223.1 million.
The financial statements include Raisio Chemicals figures for the
January to May period in 2004. The turnover of Raisio Chemicals in
JanuaryMay was EUR 183.7 million, and the operating profit EUR 3.6
million.
STRATEGIC REALIGNMENT
After the conclusion of the Raisio Chemicals divestment, the Board
of Directors and the Supervisory Board approved a new vision and
strategy for Raisio Group in June. Raisios vision is to be the
leading specialist in plant-based products and in ensuring food
safety.
Raisio Nutrition and Raisio Life Sciences represent the Groups
business areas. Raisio Nutrition comprises two businesses Food and
Feed&Malt and, similarly, Raisio Life Sciences two Ingredients
and Food Diagnostics. The two business areas share research and
development activities, which also include a unit focused on the
development of new business operations. Service functions are now
provided at the Group level.
Raisio Nutritions strategic growth areas are Russia and Poland. The
business area is expected to reach an annual organic growth of 2 per
cent in Finland and approximately 5 per cent in Russia and Poland.
Although the functional food ingredients and food diagnostics
businesses seek growth especially in the European markets, their
operations are global. Raisio Life Sciences is expected to grow
organically by 15 to 20 per cent a year. Raisio Groups strong
balance sheet also enables business development through acquisitions.
To improve profitability, Raisio Group aims to increase the degree of
product upgrading and continue to enhance its operations. The
objective is to raise the return on investment to 12 per cent.
TURNOVER
Turnover in 2004 amounted to EUR 626.9 million (EUR 860.5 million).
The divested Raisio Chemicals accounted for EUR 183.7 million (EUR
422.3 million) of this amount. The turnover of Raisio Nutrition
decreased, while that of Raisio Life Sciences increased.
Turnover from outside Finland represented 44.6 per cent (52.1%) of
the total, or EUR 279.4 million (EUR 448.6 million). When calculating
the figures for the new structure after the divestment of Raisio
Chemicals, foreign turnover drops to some 35.9 per cent.
RESULT
Operating result was EUR 202.8 million (EUR -14.3 million), and EUR
10.4 million (EUR 1.2 million) excluding one-off items. The most
notable one-off income was the sales profit of EUR 223.1 million from
the divestment of Raisio Chemicals. Other sales profits amounted to
EUR 4.4 million. During the work on its strategy, Raisio also updated
its business plans and made a critical assessment of the valuation of
balance sheet items in light of the new strategy and return
expectations. Goodwill and other balance sheet items were written
down by a total of EUR 33.7 million. The rationalisation provision
was adjusted to EUR 1.4 million, and one-off financial expenses were
EUR 2.0 million. The previous years operating result was also
weakened by one-off items of EUR 15.5 million.
One-off items
2004 2003
Raisio Nutrition -20.7 -6.9
Raisio Life Sciences -8.6 -
Raisio Chemicals - -8.6
Group +221.7 -
Total impact on +192.4 -15.5
operating result
Impact of financial -2.0 -
expenses
The operating result from the ongoing business operations, excluding
one-off items, saw significant improvement, amounting to EUR 6.8
million (EUR -9.3 million).
The result before taxes was EUR 198.0 million (EUR -27.2 million),
and net financial expenses totalled EUR 4.9 million (EUR 12.9
million). The profits from the divestment of Raisio Chemicals were
used to repay loans, which has decreased interest rate expenses.
Additionally, investing the profits has increased interest income.
Raisio Group considers the sales profit of EUR 223.1 million from the
divestment of Raisio Chemicals to be tax-free concerning the shares
in accordance with the new corporate and capital tax legislation.
Consequently, no tax on the sales profit of the Raisio Chemicals
shares was recorded in the financial statements. As for other assets,
a total of EUR 2.7 million was recorded as taxes on sales profit.
According to old legislation, sales profit tax would have amounted to
EUR 70 million.
A total of EUR 10 million of previously unrecorded deferred tax
assets were recorded under taxes as their recovery was confirmed.
The net result after taxes was EUR 195.8 million (EUR -26.7 million).
The earnings per share was EUR 1.19 (EUR -0.16) and EUR 0.05 (EUR -
0.09) excluding one-off items.
Cash flow from business operations totalled EUR 43.5 million (EUR
77.0 million).
BUSINESS AREAS
Raisio Nutrition
Central European manufacturers increased their supply in the Finnish
food market and the share of private label products grew. However,
Raisios market share in foods stayed more or less the same in
Finland and Poland but saw a slight increase in Russia. The Group
invested in the development and market launch of new healthy and easy-
to-use plant-based products.
Competition in the feed markets remained unchanged. Raisios market
position stayed the same in farm feeds, strengthening slightly in
fish feeds. Owing to the exceptional weather conditions last summer,
basic feeds show variable quality, which is why the feed business is
investing in the high quality of supplement feeds on domestic markets
and seeking growth from exports.
The oversupply of malt in the EU region and increased malting
capacity in Russia intensified competition in the malt markets.
However, Raisio maintained its market position both in Finland and
its export markets. Stiff competition and a low price level are
expected to characterise 2005 as well. The malting barley crop in
2004 was good in terms of volumes and quality. For the first time in
years, malting barley imports will account for a very small share of
overall raw material volumes.
Raisio Nutritions turnover dropped by 4.4 per cent, amounting to EUR
399.6 million (EUR 417.9 million). This resulted from weak margarine
sales in Sweden, the discontinuation of the grain starch business and
steep drop in malt prices. Growth, however, was seen in the Polish
margarine market and feed business.
Raisio Nutritions turnover, EUR million
2004 2003
Food 218.4 232.2
Margarine 120.6 130.8
Milling 72.2 75.3
Food Potato 21.0 21.2
Others 12.3 14.4
Internal sales -7.7 -9.5
Animal Feeds 165.2 163.8
Malt 24.7 26.4
Grain Starch 12.5 15.0
Internal Sales -21.2 -19.5
Total 399.6 417.9
Raisio Nutritions operating result was EUR -15.1 million (EUR -11.7
million). The operating result includes a total of EUR 25.1 million
in write-downs, targeting, for example, the goodwill of margarine
business in Sweden. It also includes one-off income of EUR 4.4
million from the sale of the Risella rice brand and grain starch
machinery.
The operating profit excluding one-off items was EUR 5.6 million (EUR
-4.8 million). Profitability improved thanks to enhancement
programmes, withdrawal from loss-making operations and good
development in Polish business operations. It was challenged by the
unexpected and hefty changes in soybean prices, in particular, and by
the low price of soy oil in Europe. Lower malt prices also weakened
profitability.
Margarine production was centralised in the Finnish, Polish and
Russian production facilities. A margarine plant in Istra, near
Moscow, began operations in the early part of the year. Margarine
production was discontinued in Sweden, and the facilities were sold
in December. The loss-making grain starch business was discontinued
at the end of August.
The catering organisations of Raisio and Lännen Tehtaat joined forces
to form Ateriamestarit Oy, a 50/50 owned sales company that began
operations in May.
Adding to its 20 per cent interest in Camelina Ltd, Raisio acquired
the companys remaining share capital in October to further develop
the productisation and marketing of omega-3 fatty acids extracted
from the Camelina plant.
Raisio Life Sciences
The market for functional foods grew especially in Europe, where
Raisio further strengthened its market position. The market growth in
functional foods is expected to continue due to the consumers
increasing awareness of health-related issues and an increase in
lifestyle diseases. Raisio will focus on creating and identifying new
product applications and market areas.
The fragmented food diagnostics markets have been characterised by
strong centralisation in the past few years, which may lead to small
companies quickly turning into significant players in the field. The
fastest growing field in food diagnostics is that of rapid testing
methods, which Raisio also focuses on.
The turnover for Raisio Life Sciences grew by 56.6 per cent and
amounted to EUR 53.3 million (EUR 34.0 million) thanks to strong
development in ingredients sales. The turnover of the food
diagnostics business also increased, but it should be noted that
Diffchamb, the food diagnostics company acquired in early 2003, is
only included in the AprilDecember figures for the comparison year.
Ingredients sales grew by 66.0 per cent, and new markets were won
especially in Central and Southern Europe. Partners introduced 14 new
products to the markets. Especially the Benecol yoghurt drink sold in
mini-bottles enjoyed good success.
Raisio Life Sciences Turnover, EUR million
2004 2003
Ingredients 44.7 27.0
Diagnostics 8.6 7.0
Total 53.3 34.0
Raisio Life Sciences recorded an operating result of EUR -5.3 million
(EUR -5.4 million). The operating result includes a EUR 4.1 million
write-down on the Diffchamb goodwill and EUR 4.5 million write-downs
on other balance sheet items.
Operating result one-off items excluded improved to EUR 3.3 million
(EUR -5.4 million) boosted by strong growth and a rigorous cost
regime. Enhancement measures were adopted to improve the
profitability of the diagnostics business. Inputs were also made in
product development.
Owing to the increase in ingredients deliveries, an expansion to the
capacity of the stanol ester plant in Raisio was initiated at the end
of the year.
The legal hearings for the sitostanolester patent continued in Munich
in late September. The European Patent Office returned the case to
the first instance, and Raisio estimates the final decision on patent
coverage to be made within 35 years.
Several medical studies carried out last year, such as a doctoral
thesis at the University of Helsinki in October, prove the
effectiveness and safety of the Benecol ingredient in lowering
cholesterol and sterol levels.
RESEARCH AND DEVELOPMENT
Raisio Groups research and development expenses in 2004 amounted to
EUR 14.2 million (EUR 21.1 million), or 2.3 per cent (2.5%) of
turnover. This figure includes a total of EUR 6.3 million (EUR 14.6
million) of Raisio Chemicals research and development costs.
Raisio Nutritions research and development expenses totalled EUR 4.8
million (EUR 4.4 million), or 1.2 per cent (1.1%) of the business
areas turnover. Raisio Life Sciences spent EUR 3.1 million (EUR 2.1
million), or 5.8 per cent (6.2%) of the business areas turnover, on
research and development.
Research and development is one of Raisios strategic priorities. It
enables Raisio to renew itself and upgrade the product portfolio. The
first steps in this respect were taken in 2004 with the inauguration
of a food diagnostics research centre in Turku and a research centre
for food and ingredients in Helsinki. Investments in research and
development will increase in 2005 by some EUR 3 million.
INVESTMENTS
The gross investments in 2004 amounted to EUR 33.1 million (EUR 63.7
million), or 5.3 per cent (7.4%) of turnover. The gross investments
of Raisio Nutrition totalled EUR 15.3 million (EUR 12.3 million), and
those of Raisio Life Sciences EUR 2.8 million (EUR 19.9 million). The
main investments in ongoing business included a new production line
in the food potato factory and the margarine plant in Russia.
BALANCE SHEET AND FINANCIAL POSITION
Raisios balance sheet decreased significantly as a result of the
divestment of Raisio Chemicals, repayment of debt, write-downs and an
extra dividend payment. The balance sheet total was EUR 510.4 million
(EUR 675.0 million), while shareholders equity amounted to EUR 376.8
million (EUR 194.0 million).
The change in Raisios financial position had a significant impact on
the key financial figures and financial risk position. The syndicated
loan agreement signed in 1998 was terminated, and the credit
withdrawn was fully repaid in June.
The net interest-bearing debt was EUR -168.1 million (EUR 277.8
million) at the end of the period. The equity ratio was 76.8 per
cent (32.2%), and the gearing ratio was -42.9 per cent (127.9%).
Working capital decreased to EUR 57.5 million (EUR 110.4 million), as
a result of the divestment of Raisio Chemicals and the measures taken
to enhance capital employment. Terminating the programme for true
sales of receivables brought a EUR 14 million increase to working
capital.
GOVERNANCE, MANAGEMENT AND PERSONNEL
Raisio Groups Supervisory Board elected Juha Saura to act as
Chairman for the period 23 November 200431 December 2005. Ola
Rosendahl, who assumed the duties after Vesa Lammela resigned from
the post in spring 2004, will continue as Vice Chairman.
In 2004 the Board of Directors of the Raisio Group consisted of
Jörgen Grandell, Erkki Haavisto, Jaakko Ihamuotila, Rabbe Klemets,
Matti Linnainmaa, Kaarlo Pettilä, Christoffer Taxell and Arimo
Uusitalo. In November the Supervisory Board elected Michael Ramm-
Schmidt to the Board of Directors for the period 20052006. Of the
members whose terms came to an end, Jörgen Grandell, Christoffer
Taxell and Arimo Uusitalo were re-elected. All of the members now
elected are independent of the company.
Olavi Kuusela and Jukka Lavi were re-elected as deputy members, while
Taru Narvanmaa and Jyrki Paappa, appointed Chief Financial Officer of
the Group and a member of the Executive Committee as of 1 September
2004, were elected as new deputy members. All deputy members
represent current management. Following the divestment of Raisio
Chemicals, Jari Lehmusvaara, COO of Raisio Chemicals, resigned from
his position as a deputy Board member in June 2004.
The Raisio Group is in the process of reforming its corporate
governance. The proposed amendments to the Articles of Association,
approved at the extraordinary general meeting held on 30 September
2004, will not take effect until approved without changes to their
content at a second general meeting. If the amendments are approved
in the second proceeding, e.g. the term of Board members will be
reduced to one year, and the duties of deputy members will be
terminated.
Raisio Group employed 1,412 (2,735) people on 31 December 2004.
Employees working abroad accounted for 32 per cent (45%) of the
personnel at the end of the year. The reduction in personnel was a
result of the divestment of Raisio Chemicals and streamlining
programmes. The roll-out of the Russian margarine plant and
recruiting in research and development increased the number of
personnel. At the end of the year Raisio Nutrition employed 1,190 and
Raisio Life Sciences 177 people.
ADOPTION OF THE IFRS ACCOUNTING STANDARDS
The financial statements of the Raisio Group have been prepared in
accordance with Finnish Accounting Standards (FAS). The interim
report for the first quarter of 2005 will be prepared in compliance
with the IFRS standards and published on 3 May 2005. In April at the
latest, the figures for 2004 will be published in compliance with
IFRS. This release will include, for example, the income statement
and balance sheet, quarterly figures and a bridging statement on the
transfer from Finnish accounting standards to IFRS-compliant
accounting.
Based on the preparations carried out, the adoption of IFRS standards
will not have a significant impact on Raisios operating result or
balance sheet. Raisio Chemicals will be treated as a discontinued
operation as of the first quarter of 2004.
The opening balance sheet total for 2004 will increase by EUR 7.1
million, while shareholders equity will decrease by EUR 4.5 million.
The most significant changes in the balance sheet include leasing
contracts of EUR 7.9 million and pension liabilities of EUR 4.3
million. However, the provision for defined benefit liabilities was
nearly fully terminated in 2004.
Goodwill testing was carried out, and no need for further write-
downs, in addition to those made according to the Finnish accounting
standards in 2004, was detected.
SHARES AND SHAREHOLDERS
A total of 110.1 million (45.7 million) of Raisios free shares were
traded on the Helsinki Stock Exchange in 2004. The value of share
trading was EUR 180.1 million and the average share price was EUR
1.64. The closing price in 2004 was EUR 1.90. The price of series V
shares rose by 53.2 per cent from the beginning of the year.
The 2004 trading volume of restricted shares on the Helsinki Stock
Exchange amounted to 1.5 million (633,302 million). The value of
share trading was EUR 2.5 million and the average share price was EUR
1.69. The closing price in 2004 was EUR 1.85. The price of series K
shares rose by 46.8 per cent from the beginning of the year.
On 31 December 2004, Raisio Group had 44,102 registered shareholders.
Of all shares, 11.7 per cent (5.8%) were in foreign holding with the
corresponding value for free shares being 14.8 per cent (7.4%).
The Board of Directors did not exercise the authorization to increase
share capital issued by the Annual General Meeting on 26 March 2004.
The option programme 19982003 for the Board of Directors, management
and key employees of the Group ended on 30 January 2004. No shares
were subscribed with the option rights. Raisio has no share-based
incentive systems at the moment.
DIVIDEND PROPOSAL AND SHARE BUY-BACK
It is Raisios objective to generate added value for all of its
shareholders by developing its business operations and improving
business profitability, and by following a long-range dividend
policy. The objective is to annually distribute half of the per-share
earnings generated by the continuing business operations, provided
the dividend payment does not compromise the companys ability to
meet its strategic objectives.
The Board of Directors proposes a dividend of EUR 0.03 (EUR 0.01) per
share for 2004, which represents 50 per cent of the operating result
from ongoing business. The Board also proposes an extra dividend of
EUR 0.18 (EUR 0.12) per share.
Raisios Board of Directors has decided to request authorization to
buy back company shares at the Annual General Meeting.
EVENTS AFTER THE REVIEW PERIOD
Raisio will begin to produce oat and soy-based fresh products in
Turku. The investment will pave the way for a product range upgrade
in line with the Groups strategy. Investments in the production and
packaging machinery needed for oat and soy-based fresh products
amount to some EUR 5 million. The production facilities will employ
1520 people. New products will be launched in early 2006.
To secure competitiveness, Raisio will continue to streamline its
margarine production, which may lead to a staff reduction of 20
employees at the margarine plant in Raisio. The invitation to
codetermination talks was issued at the end of January 2005.
Furthermore, the margarine plants maintenance operations and the
slightly under 20 employees involved in them were outsourced to ABB
Oy, Service.
OUTLOOK FOR 2005
Strong growth is predicted to continue in ingredients sales, and some
new food products will be launched. Also businesses in Poland and in
Russia are expected to grow. In addition, growth will be boosted by
enhanced networking in the food, feed and diagnostics businesses.
However, the input in research and development in order to speed up
organic growth is expected to increase the turnover only in 12 to 18
months. The business operations that were discontinued or divested in
2004 will decrease Raisios turnover. Hence, the Groups turnover is
not expected to show an upward trend in 2005.
The operating result for 2005 is expected to end higher than the
comparable operating result in 2004.
Raisios financial position will remain strong, and net financial
expenses are expected to be clearly positive. Growth and production
technology projects in line with Raisios strategy will raise the
level of investments substantially.
Helsinki 10 February 2005
Raisio Group plc
Board of Directors
CONSOLIDATED INCOME STATEMENT
(EURm) % of % of
turn- turn-
2004 over 2003 over
Turnover 626.9 860.5
Other income from business operations 231.3 8.0
Expenses from business operations -588.7 -822.6
Depreciation of goodwill
and write-downs -29.2 -5.1
Other depreciation and write-downs -36.9 -54.8
Share of associated companies results -0.6 -0.3
Operating result 202.8 32.4 -14.3 -1.7
Financial income 6.4 4.1
Financial expenses -11.3 -17.0
Result before extraordinary
items and taxes 198.0 31.6 -27.2 -3.2
Extraordinary items 0.0 0.0
Result before taxes 198.0 31.6 -27.2 -3.2
Income taxes -0.8 1.4
Minority interest -1.4 -0.9
Consolidated result for the period 195.8 31.2 -26.7 -3.1
CONSOLIDATED BALANCE SHEET
(EURm) 31.12.2004 31.12.2003
Non-current assets
Intangible assets 10.0 23.4
Goodwill 16.1 65.3
Tangible assets 124.3 277.2
Investments 9.8 12.6
Current assets
Inventories 56.5 117.7
Deferred tax assets 9.1 20.3
Accounts receivable 42.8 86.8
Other receivables 27.7 37.1
Securities under financial assets 210.4 14.1
Cash in hand and at banks 3.8 20.5
Assets 510.4 675.0
Share capital 27.8 27.8
Other shareholders equity 349.0 166.2
Minority interest 14.8 23.2
Deferred tax liability 10.0 22.0
Non-current liabilities 24.3 235.0
Accounts payable 30.9 75.2
Other current liabilities 53.6 125.5
Liabilities 510.4 675.0
CONSOLIDATED SOURCE AND APPLICATION OF FUNDS
(EURm)
1-12/2004 1-12/2003
Cash flow before change in working capital 41.7 44.4
Change in working capital 13.1 50.7
Financial items and taxes -11.4 -18.2
Cash flow from business operations 43.5 77.0
Investments -32.5 -65.8
Proceeds from sales of fixed assets 406.3* 3.6
Cash flow from investments 373.8 -62.2
Change in non-current loans -216.8 -18.1
Change in current liabilities 0.3 -1.0
Change in loan receivables -1.0 0.1
Dividend paid -21.7 -3.5
Cash flow from financial operations -239.2 -22.6
Unallocated items 1.4 0.3
Change in liquid funds 179.5 -7.5
Liquid funds at beginning of period 34.6 42.2
Liquid funds at end of period 214.1 34.6
* Includes a payment of intra-Group interest-bearing net liabilities
received in connection with the divestment of Raisio Chemicals.
FINANCIAL INDICATORS
31.12.2004 31.12.2003
Return on equity, ROE, % 64.8 -10.9
Return on investment, ROI, % 43.3 -1.8
Interest-bearing liabilities
at end of period, EURm 46.0 312.5
Gross investments, EURm 33.1 63.7
% of turnover 5.3 7.4
R & D expenditure, EURm 14.2 21.1
% of turnover 2.3 2.5
Personnel average 2,005 2,822
Equity ratio, % 76.8 32.2
Gearing, % -42.9 127.9
Earnings/share, EUR 1.19 -0.16
Earnings/share excl. one-off items,EUR 0.05 -0,09
Cash flow from operations/share, EUR 0.26 0.47
Equity/share, EUR 2.28 1.17
Average number of shares
during the period, in 1000s
Free shares 130,455 129,768
Restricted shares 34,694 35,381
Total 165,149 165,149
Market capitalization of shares
at end of period, EURm
Free shares 248.1 160.9
Restricted shares 63.9 44.6
Total 312.0 205.5
CONTINGENT LIABILITIES
(EURm) 31.12.2004 31.12.2003
Assets given as security
For the company
Mortgages on real estate 52.7 72.4
Securities pledged 0.5 4.0
Corporate mortgages 34.4 53.1
Contingent off-balance-sheet liabilities
Leasing liabilities
Amounts outstanding on leasing contracts
Falling due during 2005 3.5 4.7
Falling due later 2.1 4.9
Contingent liabilities for the Group companies
Guarantees 0.0 1.0
Contingent liabilities for the Company 2.1 7.0
Contingent liabilities for others
Guarantees 0.1 0.4
Other liabilities 0.0 5.0
Liabilities arising from derivative contracts
Raw material futures: market value 0.0 -0.5
Raw material futures:
value of underlying instruments 0.8 11.3
Forward electricity contracts: market value -0.6 0.0
Forward electricity contracts:
value of underlying instruments 5.6 2.6
Currency forward contracts: market value 0.3 2.1
Currency forward contracts:
value of underlying instruments 35.9 53.0
Interest-rate swaps: market value 0.0 -1.5
Interest-rate swaps:
value of underlying instruments 0.0 80.0
CONSOLIDATED TURNOVER BY BUSINESS AREA
(EURm) 2004 2003
Raisio Nutrition 399.6 417.9
Raisio Life Sciences 53.3 34.0
Raisio Chemicals 183.7 422.3
Interdivisional -9.6 -13.8
Turnover, total 626.9 860.5
CONSOLIDATED TURNOVER BY MARKET AREA
(EURm) % of % of
turn- turn-
2004 over 2003 over
Finland 347.6 55.4 412.0 47.9
Scandinavia 37.1 5.9 66.5 7.7
Europe (excl. Finland
and Scandinavia) 194.4 31.0 278.2 32.3
The Americas 22.7 3.6 47.4 5.5
Asia 24.0 3.8 54.6 6.3
Other 1.1 0.2 1.9 0.2
Total 626.9 100.0 860.5 100.0
CONSOLIDATED OPERATING RESULT BY BUSINESS AREA
(EURm) 2004 2003
Raisio Nutrition -15.1 -11.7
Raisio Life Sciences -5.3 -5.4
Raisio Chemicals 3.6 1.9
Others 219.6 1.0
Operating result, total 202.8 -14.3
QUARTERLY PERFORMANCE
(EURm)
1-3/ 4-6/ 7-9/10-12/ 1-3/ 4-6/ 7-9/10-12/
2003 2003 2003 2003 2004 2004 2004 2004
Consolidated turnover
Raisio Nutrition 94.6 110.4 108.5 104.4 91.1 108.5 102.4 97.6
Raisio Life Sciences6.3 8.3 8.5 11.0 11.8 13.7 11.7 16.1
Raisio Chemicals 103.2 109.4 105.4 104.3 106.5 77.1 0.0 0.0
Interdivisional -3.0 -3.3 -3.8 -3.6 -3.9 -3.1 -1.1 -1.5
Turnover, total 201.0 224.8 218.7 216.1 205.6 196.2 113.0 112.2
Consolidated operating result
Raisio Nutrition -1.4 -2.4 1.3 -9.2 -1.5 -18.8 2.8 2.5
Raisio Life Sciences-1.6 -1.7 -2.0 -0.2 0.6 -7.8 0.7 1.2
Raisio Chemicals -3.2 -0.1 2.9 2.2 1.9 1.7 0.0 0.0
Others -0.6 0.5 1.0 0.1 -0.3 220.3 -0.4 0.1
Operating result, total
-6.7 -3.7 3.2 -7.1 0.7 195.4 3.0 3.7
Financial items -2.5 -2.5 -4.2 -3.7 -3.0 -3.0 0.4 0.8
Result before extraordinary
items and taxes -9.2 -6.3 -1.0 -10.8 -2.3 192.4 3.4 4.5
Extraordinary items0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Result before taxes-9.2 -6.3 -1.0 -10.8 -2.3 192.4 3.4 4.5
Income taxes 0.0 0.2 -1.0 2.2 -2.0 -2.4 5.9 -2.3
Minority interest -0.1 -0.2 -0.4 -0.2 0.0 -1.0 -0.3 -0.1
Consolidated result for the period
-9.3 -6.2 -2.4 -8.8 -4.3 189.0 9.0 2.2
