Raisio plc: Interim Report January-March 2020

Raisio plc’s Interim Report, 6 May 2020, at 8:30 a.m. Finnish time

Strategy advancement and food supply assurance under exceptional circumstances

FINANCIAL DEVELOPMENT IN BRIEF

January–March 2020

• The Group’s net sales totalled EUR 54.7 (49.9) million, which signified an increase of +9.7%.
• EBIT was EUR 6.6 (5.0) million, accounting for 12.0 (10.0)% of net sales. EBIT increased +32% in relation to the comparison period.
• The Healthy Food Segment’s net sales totalled EUR 37.3 (34.7) million. EBIT was EUR 5.3 (4.0) million, accounting for 14.2 (11.5)% of net sales.
• The Healthy Ingredients Segment’s net sales totalled EUR 25.6 (21.8) million. EBIT was EUR 2.2 (1.3) million, accounting for 8.6 (6.2)% of net sales.
• The return on investments (ROIC) was 4.4% (10%).
• The Group’s outlook for 2020 remains unchanged.

KEY FIGURES OF THE GROUP

PRESIDENT AND CEO PEKKA KUUSNIEMI:

Raisio’s first quarter of the year was a tour de force for our personnel. This year is the second year of our strategy period and its leading theme is the internationalisation of our oat-based added-value products. In January, we announced two strategic steps we have taken to this end; namely, the modernisation of the Nokia mill, particularly to enable the production of gluten-free oat products, and the update of our 95-year-old Elovena brand to make it more suitable for international markets and new product categories.

The nature of our operations changed during the quarter as a result of the pandemic and took on a very tactical approach aimed at maximising our supply capability. Demand shifted strongly to retail sales as demand in the Food Service-sector declined rapidly due to operational difficulties experienced by the sector’s customers. Grain-based products were of particular interest to consumers stocking up during March and, at the same time, the retail business focused on ordering large volume products as a means of surviving the logistical challenges presented by the period of increased demand. We also focused the volumes within our own supply chain and managed, I believe, to do an excellent job keeping up with the changes in demand brought on by the exceptional circumstances.

The new sales for the first quarter rose by nearly ten per cent in relation to the comparison period for a total of EUR 54.7 (49.9) million and EBIT increased to EUR 6.6 (5.0) million, which represented 12.0% (10.0%) of net sales. This strong development was the result of three factors: a smooth initial period that ran according to plan, the peak in demand during March and the advance deliveries, primarily to our Russian customers, as a result of the better management of the production capacity for the fish feed season. The key currencies for Raisio have been on a declining trend against the euro, but during the review period, they did not cause any negative changes in volume.

The investment in the development and production facility for our plant-based added-value products has proceeded completely according to plan and we have already recruited all of the key personnel needed to start up operations. For the time being, the exceptional situation has not caused delays for the project. Of the almost EUR 5.7 (2.4) million in investments during the review period, the new production facility is the most significant. Efforts to improve the productivity of the fish feed factory are also worthy of mention.

As the exceptional situation continues, we have prepared well in terms of the availability of our ingredients, and our supply capabilities are secured to this end up until the new harvest season. Travel restrictions will cause a labour shortage in agriculture during the upcoming harvest season, but the impact will be less for grain farming than for those farms that rely more on hand labour. Our personnel have shown tremendous flexibility amidst a rapidly changing environment. We have managed to scale our production quickly and do our part to safeguard the food supply. During the review period, we have also taken on a number of new recruits to fulfil the rapid needs created by growth in line with the company's strategy. I offer my warmest gratitude to our entire personnel for a job well done under the ongoing exceptional conditions.

OUTLOOK 2020

The Group’s outlook remains unchanged.

In 2020, Raisio expects its net sales for continuing operations to grow (2019: EUR 236.3 million) and comparable EBIT to be over 10 per cent of net sales.

Raisio will continue its investments in the brands, R&D and the company's own production in its most important product categories.

In Raisio, 06 May 2020

Raisio Plc

Board of Directors

Further information:

Pekka Kuusniemi, President and CEO, tel. +358 50 537 3883
Toni Rannikko, CFO, tel. +358 40 078 8812
Mika Saarinen, Director of Investor Relations, tel. +358 40 072 6808

The information in this Interim Report is unaudited.

Raisio’s Half-Year Report for 2020 will be published on 5 August 2020.

Raisio is an international company specialised in healthy, responsibly produced food, ingredients and fish feeds. Our well-known brands include, for example, Benecol, Elovena, Sunnuntai, Torino and Benella. In Raisio’s products, the focus is on well-being, health, good taste and sustainable development. Profitable growth is ensured through our strong expertise and passion for creating new. Raisio’s shares are listed on Nasdaq Helsinki Ltd. In 2019, the Group’s net sales totalled EUR 236 million and EBIT was EUR 27 million. Our food is good for Health, Heart and Earth. For more information on Raisio go to www.raisio.com.

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Nasdaq
www.raisio.com
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