Raisio Plc’s Half-Year Financial Report 2022

Raisio Plc’s Half-Year Financial Report, 3 August 2022, at 8.30 a.m. Finnish time

Strong growth and improving profitability during the second quarter

FINANCIAL DEVELOPMENT IN BRIEF

April–June 2022, continuing operations

• The Group’s net sales totalled EUR 55.5 (49.9) million, which signified a growth of 11.2%.
• Comparable EBIT was EUR 4.4* (4.1) million, accounting for 7.9 (8.3)% of net sales. Comparable EBIT increased by 6.6% in relation to the comparison period.
• EBIT was EUR 4.4 (3.4**) million, which accounted for 7.9 (6.9)% of net sales.
• The Healthy Food Segment’s net sales totalled EUR 35.1 (33.1) million. Comparable EBIT was EUR 4.1 (4.0) million, accounting for 11.7 (12.1)% of net sales. EBIT was EUR 4.1 (3.9) million, which accounted for 11.7 (11.7)% of net sales.
• The Healthy Ingredients Segment’s net sales totalled EUR 29.4 (24.0) million. Comparable EBIT was EUR 1.4 (1.2) million, accounting for 4.6 (5.0)% of net sales. EBIT was EUR 1.4 (0.6) million, which accounted for 4.6 (2.6)% of net sales.
• The Group’s cash flow from continuing operations after financial items and taxes totalled EUR -0.2 (9.8) million.
• The overall effect of currency conversions was EUR 0.3 (0.1) million on net sales, EUR 0.0 (0.1) million on comparable EBIT and EUR 0.0 (0.1) million on EBIT.

* The comparable EBIT includes a return of EUR 1.1 million in pension fund surplus from previous years.
**EBIT of the comparison period includes EUR 0.7 million in expenses related to the corporate acquisition.

January–June 2022, continuing operations

• The Group’s net sales totalled EUR 108.7 (95.5) million, which signified a growth of 13.9%.
• Comparable EBIT was EUR 5.9* (9.6) million, accounting for 5.4 (10.0)% of net sales. Comparable EBIT decreased by 38.9% in relation to the comparison period.
• EBIT was EUR 5.9 (8.9**) million, which accounted for 5.4 (9.3)% of net sales.
• The Healthy Food Segment’s net sales totalled EUR 70.7 (65.1) million. Comparable EBIT was EUR 6.8 (8.5) million, accounting for 9.6 (13.1)% of net sales. EBIT was EUR 6.8 (8.4) million, which accounted for 9.6 (12.9)% of net sales.
• The Healthy Ingredients Segment’s net sales totalled EUR 57.0 (44.7) million. Comparable EBIT was EUR 1.4 (3.0) million, accounting for 2.4 (6.7)% of net sales. EBIT was EUR 1.4 (2.4) million, which accounted for 2.4 (5.4)% of net sales.
• The Group’s cash flow from continuing operations after financial items and taxes totalled EUR -1.4 (12.6) million.
• The comparable return on investments (ROIC) was 2.5 (7.6)% and the return on investments (ROIC) was 2.5 (7.0)%.
• The overall effect of currency conversions was EUR 0.9 (-0,9) million on net sales, EUR 0.1 (0.0) million on the comparable EBIT and EUR 0.1 (0.0) million on EBIT.

* The comparable EBIT includes a return of EUR 1.1 million in pension fund surplus from previous years.
**EBIT of the comparison period includes EUR 0.7 million in expenses related to the corporate acquisition.

KEY FIGURES OF THE GROUP

CEO PEKKA KUUSNIEMI:

This half-year period has tested Raisio’s ability to react to unexpected situations. I am extremely satisfied with our capacity to operate within a completely exceptional market situation. The necessary decisions regarding the company structure in response to Russia’s war of aggression were made with prompt but careful consideration. The unprecedented rise in the price of key raw materials tried our profitability throughout the period, but price increases restored profitability towards the end of the period to a more acceptable level. 

During the second quarter, we completed the sale of our consumer business in Russia and decided to transfer Raisioaqua to discontinued operations and start seeking out a new owner for the business. The fish feed business has sparked interest and we believe that the business will be sold during the current financial year. Once this occurs, Raisio can again focus specifically on its role as a manufacturer and global marketer of healthy foods and ingredients. 

The net sales for the first half-year increased by 13.9% for a total of EUR 108.7 (95.5) million with a comparable EBIT of EUR 5.9 (9.6) million. During the second quarter, we managed to compensate for increased raw material, packaging and transport costs by raising our prices, thus giving us notably better profitability than the first quarter. Net sales for Q2 increased by 11.2% for a total of EUR 55.5 million and the comparable EBIT improved in relation to the comparison period for a total of EUR 4.4 (4.1) million and accounted for 7.9 (8.3)% of the net sales. It should be noted, in particular, that the most drastic price increases did not enter into effect until the beginning of June. 

The considerable growth in net sales for continuing operations was affected by the increased sales prices but also by the success of new products within the markets. The growth of the Elovena® brand was gratifying, at more than 31 per cent over the comparison period. The enormous increase in the price of raw materials had a tangible impact on cash flow for a result of EUR -1.4 (12.6) million. Assuring the supply of raw materials was high on our priority list throughout the review period, since sufficiency within the exceptional situation has been uncertain. Our strong balance sheet enabled us to support the work of farmers experiencing financial difficulties by offering them short terms of payment and payments in advance for their next harvest. The war continues to place a strain on the global food system and it is vital for Raisio to safeguard its own operational ability within this turbulence. The grain harvest of the current period always carries uncertainties, but the outlook for the crops at this moment appears to be better than the situation experienced in 2021. 

The changes initiated in the company’s structure will not alter our strategy to increase the healthy, plant-based foods produced by our company.  In my opinion, the big picture still appears to show a demand for these products both in the Finnish and European markets. It is understandable that consumption habits will fluctuate as a result of the pandemic and war in Europe and the trends may not necessarily continue in a straightforward manner. Raisio’s strategic position is extremely interesting and we continue to resolutely implement our plan.  

As one can see from the half-year figures, we were able to respond well to the unexpected turns of the spring season and for this, I extend my sincere gratitude to our entire personnel. 

OUTLOOK 2022

In its meeting on 15 June 2022, The Board of Raisio plc decided to issue new financial guidelines for 2022 once the outlook for the end of the year had been clarified.

New guidance for 2022:

Raisio anticipates that the net sales for its continuing operations in 2022 will be between EUR 220–230 million with a comparable EBIT of around EUR 17–20 million. The fluctuation margin reflects uncertainty regarding future demand and the price development of raw materials.

In Raisio, Finland  3 August 2022
Raisio plc
Board of Directors

Further information:
Pekka Kuusniemi, President and CEO, tel. +358 50 537 3883
Mika Saarinen, CFO, tel. +358 40 072 6808

The information in this Half-Year Financial Report is unaudited.

The Finnish-language webcast concerning the H1 result will take place at 12 noon on 3 August 2022. Raisio’s half-year report will be presented by CEO Pekka Kuusniemi. The webcast can be accessed from the link found on Raisio’s website. The direct link to the webcast is: https://raisio.videosync.fi/2022-1-6-osavuosikatsaus

Raisio’s Interim Report for the third quarter of 2022 will be published on 2 November 2022.

RAISIO PLC
Raisio’s purpose is to make food which is good for Health, Heart and Earth. Our growth drivers and focus areas are Benecol® and plant stanol ester solutions, plant based foods, branded oat products for consumers and oat as raw material for industry. Our strong brands include for example, Benecol®, Beanit®, Elovena®, Sunnuntai® and Torino®. In our products the focus is on well-being, health, good taste and responsibility. Raisio's values − courage, fairness and drive − guide us towards our targets. Raisio’s shares are listed on Nasdaq Helsinki Ltd. In 2021, the Group’s comparable net sales for continuing operations was EUR 200 million and comparable EBIT was EUR 21 million. Raisio employs about 380 people from which 350 work for continuing operations. www.raisio.com.