Raisio plc's Half-Year Financial Report 2018: Raisio's renewal continues strong

RAISIO’S RENEWAL CONTINUES STRONG

April-June 2018, continuing operations

• The Group’s net sales totalled EUR 59.7 (61.4) million. Comparable EBIT was EUR 6.5 (11.0) million, accounting for 11.0 (18.0)% of net sales. EBIT was EUR 6.5 (39.6) million, accounting for 10.9 (64.6)% of net sales. The comparison period EBIT includes sales profits of EUR 28.7 million for the Southall factory property.
• Healthy Food Division’s net sales totalled EUR 47.8 (51.6) million. EBIT was EUR 6.8 (10.7) million, accounting for 14.3 (20.8)% of net sales.
• Raisioaqua Division’s net sales totalled EUR 11.7 (9.4) million. EBIT was EUR 0.3 (1.1) million, accounting for 2.4 (11.6)% of net sales.
• Raisioagro’s cattle feed business to be sold to Lantmännen Agro is treated as a discontinued operation. Unlike in its initial estimate, Raisio expects the transfer of the cattle feed business to Lantmännen Agro to take place in October-November.
• Raisio revises its full-year 2018 outlook because the cattle feed business is treated as a discontinued operation. For this reason, the Group’s net sales for continuing operations are estimated to total some EUR 230 million and comparable EBIT some 12 per cent of net sales.
  

January-June 2018, continuing operations

• The Group’s net sales totalled EUR 109.5 (113.2) million. Comparable EBIT was EUR 12.8 (18.4) million, accounting for 11.7 (16.3)% of net sales. EBIT was EUR 10.9 (46.1) million, accounting for 9.9 (40.7)% of net sales. The comparison period EBIT includes sales profits of EUR 28.7 million for the Southall factory property.
• Healthy Food Division’s net sales totalled EUR 95.9 (101.9) million.Comparable EBIT was EUR 15.1 (20.5) million, accounting for 15.8 (20.1)% of net sales. EBIT was EUR 15.0 (20.5) million, accounting for 15.6 (20.1)% of net sales.
• Raisioaqua Division’s net sales totalled EUR 13.0 (10.7) million. EBIT was EUR -0.7 (0.3) million, accounting for -5.4 (3.2)% of net sales.

CEO’S REVIEW

“Raisio is at the beginning of the new, focusing on healthy and responsibly produced food. We continue our determined work to support profitable organic growth. The reorganisation completed this spring allowed us to steer all resources to promote growth.

We have identified problem areas regarding the businesses where net sales and profitability development do not meet expectations, and started corrective actions. We have set an ambitious but realistic recovery schedule for these businesses.

As planned, we have significantly increased marketing investments, particularly in Benecol, which has lowered the Healthy Food Division’s EBIT level. Benecol product sales were at the comparison period level in the UK whereas in Finland, strong growth continued. In line with its strategy, Raisio launched new Benecol products into new product categories in the UK, Finland and Poland in the first half of the year.

The divestment of the cattle feed business is an important step towards Raisio’s strategy focusing on healthy foods. Unlike in its initial estimate, Raisio expects the transfer of the cattle feed business to Lantmännen Agro to take place in October-November as the Finnish Competition and Consumer Authority decided, at the end of July, to begin further processing of the deal. Raisioaqua, the fish feed manufacturer, is a solid part of the Raisio Group and an innovative forerunner in its field.

Raisio’s new Purpose, combining mission and vision, sets us ambitious goals and strongly guides everything we do. Raisio’s Purpose in brief: Food for Health, Heart and Earth. This summer, we introduced a project to define new values for the company. Our goal is to have Raisio’s new values in use during the autumn 2018. Our Purpose and values gives a clear direction for all our activities."

OUTLOOK

On 4 May 2018, Raisio announced that it had signed an agreement to sell its cattle feed business to Lantmännen Agro. The business is expected to transfer to the new owner in October-November 2018. Due to the business divestment, Raisio treats the cattle feed business as a discontinued operation and has revised the Group’s net sales forecast for the continuing operations. As the cattle feed business is moved to discontinued operations, the relative profitability for continuing operations will slightly improve.

Raisio’s revised outlook for 2018

Raisio expects net sales of the Group’s continuing operations to total some EUR 230 million. The company estimates that the comparable EBIT for the Group’s continuing operations is some 12 per cent of net sales. Exchange rates will continue to significantly affect Raisio’s net sales and EBIT.

In addition to foods and fish feed sales, Raisio’s net sales for continuing operations consist of exports of raw materials, such as grains. Raisio has identified the problem areas and initiated corrective measures in the markets where the net sales development did not meet expectations in early 2018.

Raisio’s key strategic target is to grow its Healthy Food business both organically and through acquisitions. With its structural reforms completed, Raisio has targeted all the resources to support the medium-term organic growth of the new Healthy Food Division. Raisio also seeks growth through acquisitions. The company is net debt free and has a strong balance sheet, which allows acquisitions that suit the company’s core business.

Raisio’s previous outlook on 26 April 2018

Raisio expects the net sales of the Group’s continuing operations to be approximately at the 2017 level. The company estimates that the comparable EBIT for the Group’s continuing operations is over 10 per cent of net sales. Exchange rates will continue to significantly affect Raisio’s net sales and EBIT.

In addition to foods and feeds, Raisio’s net sales consist of exports of raw materials, such as grains. Raisio has identified the concerns and initiated corrective measures in the markets where the net sales development did not meet the expectations in early 2018.

Raisio’s key strategic target is to grow its Healthy Food business both organically and through acquisitions. With its structural reforms completed, Raisio has targeted all the resources to support the medium-term organic growth of the new Healthy Food Division. Raisio also seeks growth through acquisitions. The company is net debt free and has a strong balance sheet, which allows acquisitions that suit the company’s core business.

In Raisio, 8 August 2018

Raisio plc’s Board of Directors

Further information:
Pekka Kuusniemi, CEO, tel. +358 50 537 3883
Antti Elevuori, CFO, tel. +358 40 560 4148
Heidi Hirvonen, Communications and IR Manager, tel. +358 50 567 3060

Chief Executive’s video in English will be available on Raisio’s web site at www.raisio.com.

Raisio will publish the Interim Report for January-September on 7 November 2018.

The Half-Year Financial Report has not been audited.

Raisio plc

Raisio is an international company specialised in healthy, responsibly produced food. Our well-known brands include, for example, Benecol, Elovena, Nalle and Sunnuntai. 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 2017, the Group’s net sales for continuing operations totalled EUR 307 million and comparable EBIT was EUR 38 million. Our food is good for Health, Heart and Earth. For more information on Raisio go to www.raisio.com.

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