Raisio plc’s Half-Year Financial Report January-June 2020

Raisio plc’s Half-Year Financial Report, August 5^th, 2020, at 8:30 a.m. Finnish time

An ambivalent half-year

FINANCIAL DEVELOPMENT IN BRIEF

April–June 2020

• The Group's net sales totalled EUR 59.9 (62.7) million, which signified a decrease of -4.5%.
• EBIT was EUR 7.0 (7.3) million, accounting for 11.6 (11.6)% of net sales. EBIT decreased -4.1% in relation to the comparison period.
• The Healthy Food Segment's net sales totalled EUR 31.6 (34.2) million. EBIT was EUR 4.0 (4.5) million, accounting for 12.7 (13.2)% of net sales.
• The Healthy Ingredients Segment's net sales totalled EUR 34.3 (34.7) million. EBIT was EUR 3.7 (3.9) million, accounting for 10.9 (11.3)% of net sales.
• The Group’s cash flow from business operations after financial items and taxes totalled EUR 6.0 (3.4) million.

January-June 2020

• The Group's net sales totalled EUR 114.6 (112.6) million, which signified a growth of +1.8%.
• EBIT was EUR 13.6 (12.2) million, accounting for 11.8 (10.9)% of net sales. EBIT increased +11.5% in relation to the comparison period.
• The Healthy Food Segment's net sales totalled EUR 68.9 (68.9) million. EBIT was EUR 9.3 (8.5) million, accounting for 13.5 (12.3)% of net sales.
• The Healthy Ingredients Segment's net sales totalled EUR 59.9 (56.6) million. EBIT was EUR 5.9 (5.3) million, accounting for 9.9 (9.3)% of net sales.
• The return on investments (ROIC) was 9.8 (14.8)%.
• The Group’s cash flow from business operations after financial items and taxes totalled EUR 9.9 (7.9) million.
• Raisio withdrew its guidance for 2020 on 29^th July 2020: Due to the potential second wave of the COVID-19 pandemic and the prolonged state of the pandemic in general, Raisio withdraws its outlook for 2020. Unexpected changes in consumer behaviour caused by the pandemic continue to inflict significant insecurity in our different markets during the second half of the year.

KEY FIGURES OF THE GROUP

PRESIDENT AND CEO PEKKA KUUSNIEMI:

The first half of the year was filled with rapid and partially unexpected changes for Raisio. The extreme panic buying in response to the pandemic that took hold in March caused a sudden peak in demand, which continued for a number of weeks. The demand focused particularly on foods that store well, of which Raisio’s portfolio includes quite a few. During the second quarter, the demand evened out quickly and there was a notable fluctuation between months, both in terms of volume and the different markets.

The key changes in demand within the Finnish market included the near-complete shutdown of the foodservice channel and significant decline in demand for so-called ‘on the go’ products, such as Elovena snack biscuits and drinks, for understandable reasons. In practice, there were no limitations to the opening hours or operations of grocery shops nor to the movement of consumers and, for this reason, the overall changes were relatively minimal during the spring.

The heavy restrictions in the UK, on the other hand, had a negative impact on the demand for Benecol products during the spring. Nearly half of all Benecol consumers fall into the age group of those over 65, and their self-isolation affected the sales of our products in two ways. Shopping frequency and consumption, in general, declined considerably. Furthermore, during the lockdown period, the demand shifted from the large markets to smaller local shops, where the distribution range of our products is not as extensive. Also, Polish shopping centres, where the large markets are located, were partially closed throughout the spring, thereby presenting a challenge for accessibility to Benecol products.

Raisioaqua’s advance sales in early spring were notably higher in relation to the comparison period and this took an expected toll on the net sales during the second quarter. This, in addition to the fact that the conditions for the farming season changed immediately from a cold spring to a sweltering hot June and the consumption of the fish feed delivered prior to the start of the season could not be commenced as anticipated.

As a result of the highly exceptional circumstances, Raisio’s net sales for the second quarter decreased in relation to the comparison period, for a total of EUR 59.9 (62.7) million. Despite this, EBIT of net sales retained the same level as that of the comparison period, thereby accounting for 11.6 (11.6)% of the net sales. The net sales for the first half of the year increased by 2 per cent and EBIT by nearly 12 per cent for a final total of EUR 13.6 (12.2.) million, which accounts for 11.8 (10.9)% of net sales. Cash flow before investments was a strong EUR 9.9 (7.9) million.

Raisio’s investments are growing dynamically as we implement projects designed to support our strategy. The most significant of these is the investment in the development and production facility for our plant-based added-value products, which has proceeded completely according to plan. For the time being, the exceptional situation has not delayed the project in any way. The investments of the first half-year totalled EUR 12.9 (6.7) million, thereby accounting for 11.3 (6.0)% of the net sales.

As the exceptional conditions have drawn on, we have managed to operate efficiently, through co-operation with the prominent trade groups and the active use of demand data. We have also worked with them to prepare for a possible second wave and its rapid impact on consumer demand. Any clear outlook concerning the demand for the autumn season remains, however, very limited and uncertain. Because of these circumstances, we withdrew our guidance for 2020.

Our personnel has worked throughout the entire first half-year under highly exceptional conditions. In spite of this, we have maintained our supply capability at a good level and distance working has been realised successfully. In terms of our internal activities, our operational work and planning for the future have not suffered in the least. I offer my sincerest gratitude to our entire personnel for a job well done during this ongoing exceptional period.

OUTLOOK 2020

On 29^th July, Raisio withdrew its guidance for 2020, gives a new guidance as visibility improves. Due to the potential second wave of the COVID-19 pandemic and the prolonged state of the pandemic in general, Raisio withdraws its outlook for 2020. Unexpected changes in consumer behaviour caused by the pandemic continue to inflict significant insecurity in our different markets during the second half of the year.

Raisio’s previous guidance 12^th February 2020:

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 issue a new outlook in case the situation stabilizes.

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

In Raisio, 05 August 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 Half-Year Financial Report is unaudited.

Raisio’s Interim Report for January-September 2020 will be published on 4 November 2020.

RAISIO PLC

Raisio is an international company specialized 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 totaled EUR 236 million and EBIT was EUR 27 million. Raisio employs about 350 people. Our food is good for Health, Heart and Earth. For more information on Raisio go to www.raisio.com.