Raisio plc Financial Statements review

Raisio plc, Financial Statements review, 10 February 2011, at 10.00 a.m. Finnish time

Raisio plc, Financial Statements 2010

RAISIO’S GROWTH CONTINUES

January-December 2010

- Raisio’s net sales grew by 17.9% to EUR 443.0 million (EUR 375.9 million 2009).

- EBIT was EUR 19.4 million (EUR 20.5 million excluding one-off items), which accounts for 4.4% (5.5%) of net sales and is accordant with the Group’s all-year guidance. 

- Discontinuation characterised the year and the entire growth phase as the company’s priorities changed considerably.

- EUR 3.5 million costs of growth projects were recognised through profit and loss.

- Cash flow from operations before change in working capital was EUR 35.5 million (EUR 34.1 million)

- Earnings per share were EUR 0.08 (EUR 0.09 excluding one-off items).

- The Board of Directors proposes a dividend of EUR 0.10 (EUR 0.09) per share.

October-December 2010

- Raisio’s net sales grew 28.8% and were EUR 117.8 million (EUR 91.5 million Q4/2009).

- EBIT was EUR 3.0 million (EUR 4.2 million) accounting for 2.6% (4.6 %) of net sales. Without the costs of growth projects, EBIT for the previous year would have been exceeded.

Outlook 2011

Raisio continues the implementation of the growth phase according to plan. We expect net sales increase for 2011, especially for the Brands Division. In terms of net sales, it is still essential to pay attention to the impact of raw material price volatility. Activity in growth projects brings extensive costs compared to the company size and thus, undermines profitability in the short term. Group’s target is to maintain the earlier 4-5% profitability level also during the growth phase.

Key figures

* Excluding one-off items
** Board of Directors’ proposal to the Annual General Meeting
*** Including the acquisition of Glisten shares
**** Excluding the company shares held by the Group

Figures for the comparison period are given in brackets.

Chief Executive’s review

“Raisio is in the middle of the growth phase which we expect to last two years. During the growth phase, we aim to increase net sales and our international activities. In the first half of 2010, we carried out the acquisition of British Glisten. The acquisition gave us a foothold in the snack and confectionery market in Great Britain.

The acquisition of Big Bear Group in February 2011 was a natural extension of our growth strategy. With the acquisition, Raisio will gain a stronger branded foothold in the snack and breakfast markets in Great-Britain and Western Europe. The transaction will also strengthen the company’s position in the confectionery market. Big Bear complements extremely well the earlier acquisition of Glisten and brings the necessary critical mass for the future.

We will continue to be active in the acquisitions front. The Group’s strong balance sheet and cash flow provide a good foundation for acquisition activities as far as there are suitable companies available fitting our strategy and meeting our preset criteria. During the growth phase, Raisio aims to maintain the earlier 4-5% level of profitability.

In 2010, a total of EUR 3.5 million direct costs resulting from the growth projects were recognised in the Group’s EBIT following the IFRS standards. As the margarine business model was changed and Raisio became a distributor instead of a producer, the EBIT in the Nordic Countries was EUR 4 million lower than in 2009. In the fast changing markets and tough competition situation, Business to Business Division reached a profitable EBIT for each quarter of the year, which can be considered as a good achievement. In the Brands Division’s operations, good sales development in Raisio’s main brands continued, and we were able to increase our market shares in several product categories. Sales in the Benecol products increased, particularly in the new market areas in Asia and South-America.

Raisio was among the first to anticipate, already in 2007, high price volatility and a permanent upturn after the long-term fall of grain real price. Our vision is still topical since grain raw material prices have been and will continue to be volatile. As the company’s priority changed, our raw material procurement with new raw materials such as nuts, cacao and sugar will be more diverse. In terms of the Group profitability, risk management of raw material prices will be essential also in the future, regarding both value and volume.

Raisio is growing by combining ecology, health and snacks suitable for mobile lifestyle into a whole that meets the needs of consumers and customers in all our market areas.”

Events after the review period

On 4 February 2011, Raisio acquired the entire issued share capital of British Big Bear Group plc. The enterprise value was EUR 95.3 million. Raisio financed the all cash transaction with its cash reserves and a loan of EUR 52 million raised for the acquisition. The acquisition supports Raisio’s growth strategy to become the leading provider of healthy snacks in Europe.

With the acquisition, Raisio will gain a stronger branded foothold in the snack and breakfast markets in Great-Britain and Western Europe. The acquisition will also strengthen the company’s position in the confectionery market. Great-Britain also becomes the largest market area for Raisio’s food business with EUR 140-150 million annual net sales. Raisio is already present in the British snack market with Glisten acquired in 2010.

Big Bear Group was made a part of Western European brand operations from the 4 February 2011 and its operations are reported with Raisio Brands Division’s figures from the first quarter of 2011. The acquisition will improve Raisio’s earnings per share this year, also after the expenses and taxes related to the transaction.

New disclosure procedure

Raisio follows the new disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority and hereby publishes its financial statement bulletin enclosed to this stock exchange release. Raisio's Financial Statements review is available in its entirety on the company's web site at www.raisio.com. Raisio will follow this procedure in disclosing Interim Reports and Financial Statements in future.

RAISIO PLC

Heidi Hirvonen
Communications Manager
Tel. +358 50 567 3060

Further information:
Matti Rihko, CEO, tel. +358 400 830 727
Jyrki Paappa, CFO, tel. +358 50 5566 512 

Events related to the financial statements publication

A press and analyst event will be arranged in Helsinki on 10 February 2011 at 2.00 p.m. Finnish time. It will be held at Hotel Scandic Simonkenttä, in the Pavilion meeting room. The address is Simonkatu 9, Helsinki.

A teleconference in English will start at 3.30 p.m. Finnish time on 10 February 2011. The participants are requested to call 5-10 minutes before the start of the conference as it takes a moment to log in. The number is +358 9 8248 8669 and the PIN code 27929.

Release dates of financial reviews in 2011

- Raisio’s Annual Report will be published in week 10 on the Internet. Raisio Corporate Responsibility Report will be published as part of the Annual Report.
- The Annual General Meeting will be held on 24 March 2011.
- Interim report for January-March will be published on 10 May 2011.
- Interim report for January-June will be published on 16 August 2011.
- Interim report for January-September will be published on 8 November 2011. 

The financial statements review has not been audited.