Raisio Plc’s Interim Report January−September 2022

Raisio Plc’s Interim Report, November 2, 2022 at 8.30 a.m. Finnish time

Growth in sales already for six consecutive quarters, strong profitability under difficult conditions

FINANCIAL DEVELOPMENT IN BRIEF

July–September 2022, continuing operations

• The Group’s net sales totalled EUR 56.5 (50.8) million, which signified a growth of 11.2%.
• Comparable EBIT was EUR 6.5 (6.7) million, accounting for 11.4 (13.2)% of net sales. Comparable EBIT decreased by 4.0% in relation to the comparison period.
• EBIT was EUR 6.2* (6.7) million, which accounted for 10.9 (13.2)% of net sales.
• The Healthy Food Segment’s net sales totalled EUR 36.7 (34.0) million. Comparable EBIT was EUR 6.6 (5.3) million, accounting for 18.1 (15.4)% of net sales. EBIT was EUR 6.6 (5.3) million, which accounted for 18.1 (15.4)% of net sales.
• The Healthy Ingredients Segment’s net sales totalled EUR 29.6 (25.3) million. Comparable EBIT was EUR 0.2 (1.7) million, accounting for 0.7 (6.8)% of net sales. EBIT was EUR 0.2 (1.7) million, which accounted for 0.7 (6.8)% of net sales.
• The Group’s cash flow from continuing operations after financial items and taxes totalled EUR 0.9 (6.6) million.
• The overall effect of currency conversions was EUR -0.2 (0.7) million on net sales, EUR 0.0 (0.1) million on the comparable EBIT and EUR 0.0 (0.1) million on EBIT.

* EBIT includes a total of EUR 0.3 million in costs related to business expansion.

January–September 2022, continuing operations

• The Group’s net sales totalled EUR 165.2 (146.3) million, which signified a growth of 13.0%.
• Comparable EBIT was EUR 12.3*** (16.3) million, accounting for 7.5 (11.2)% of net sales. Comparable EBIT decreased by 24.5% in relation to the comparison period.
• EBIT was EUR 12.0* (15.6**) million, accounting for 7.3 (10.7)% of net sales.
• The Healthy Food Segment’s net sales totalled EUR 107.4 (99.1) million. Comparable EBIT was EUR 13.4 (13.8) million, accounting for 12.5 (13.9)% of net sales. EBIT was EUR 13.4 (13.6) million, which accounted for 12.5 (13.7)% of net sales.
• The Healthy Ingredients Segment’s net sales totalled EUR 86.6 (70.0) million. Comparable EBIT was EUR 1.6 (4.7) million, accounting for 1.9 (6.7)% of net sales. EBIT was EUR 1.6 (4.1) million, which accounted for 1.9 (5.9)% of net sales.
• The Group’s cash flow from continuing operations after financial items and taxes totalled EUR -0.5 (19.2) million.
• The comparable return on investments (ROIC) was 4.4 (8.3)% and the return on investments (ROIC) was 4.3 (7.9)%.
• The overall effect of currency conversions was EUR 0.8 (-0.2) million on net sales, EUR 0.1 (0.1) million on comparable EBIT and EUR 0.1 (0.1) million on EBIT.

* EBIT includes a total of EUR 0.3 million in costs related to business expansion.
**EBIT of the comparison period includes EUR 0.7 million in expenses related to the corporate acquisition.
***The comparable EBIT for the review period includes a return of EUR 1.1 million in pension fund surplus from previous years.

KEY FIGURES OF THE GROUP, continuing operations

CEO PEKKA KUUSNIEMI:

This year of completely exceptional conditions showed Raisio’s ability to rapidly recover its profit-making capacity. Manufacturing costs, which increased in an unprecedented manner, were incorporated as quickly as possible into sales prices. Inflation tried the purchasing power of consumers and will surely impact on consumption habits. The trend of eating at home will increase and consumers will pay ever more attention to prices while still putting their trust in strong and well-known brands. The harvest season has proven to be better than average in terms of both quantity and quality, and this is highly significant for both Raisio and the entire Finnish food system.

The Group’s net sales during the third quarter totalled EUR 56.5 (50.8) million, which signified a growth of 11.2 per cent.  A large part of that growth was derived from the increase in sales prices but also from the brilliant success of certain product groups. Despite the high inflation rate in the United Kingdom, Benecol® has performed well during the third quarter in this market which is important for Raisio. The immense development of the Elovena® brand continued throughout the review period and reached more than 35 per cent in relation to the comparison period. Products from our new production facility are already proving to be strong competitors for market leaders in different categories.

Comparable EBIT was EUR 6.5 (6.7) million, accounting for 11.4 (13.2) per cent of net sales. The low-quality harvest of the previous year still impacted on mill products manufactured in July and August, thereby notably decreasing the related profitability. In other areas, we have succeeded in responding to the sharp increases in cost levels, and we anticipate that the new harvest will also improve productivity.

Our long-term work to advance responsibility will also contribute to a positive result. Significant part of energy used in our own production facilities is produced by using biofuels. This is an excellent advantage within the prevailing conditions. All of Raisio’s own production facilities are currently carbon-neutral.  Investments remained lower during the review period, as planned, and now we are focusing on taking advantage of our new capabilities and the marketing of new product innovations. Due to the uncertainty caused by the operating environment, we have prepared for different types of supply disruptions and the increase in working capital is visible in our cash flow. When shifting from the previous harvest season to the new one, grain availability was low. In September we procured a lot of grain from the new harvest season. The cash flow from continuing operations after financial items and taxes totalled EUR 0.9 (6.6) million.

Raisioaqua, which was reported as discontinued operations at the start of the summer, has performed a lot better than anticipated. Projects aimed at developing operations, which were initiated already last autumn, as well as price increases that were realised during the season and customers’ loyalty to this innovative, Finnish fish feed manufacturer have made it possible to achieve net sales of more than EUR 11 million, EBIT of more than 7 per cent and cash flow during the review period of over EUR 6 million. I believe the notable improvement in performance capacity is intriguing for potential buyers, and we will carry to operate in accordance with the going concern principle until the business is sold.

This challenging time has demanded and will continue to demand a great deal from the personnel. A large number of Raisio employees contribute actively to the realisation of our strategy and all our efforts are moving us in a clear direction. The restlessness in the operational environment has shaken the foundations of the food system, but consistent and focused work will inevitably bear fruit.  My thanks to the entire personnel for a job well done.

OUTLOOK 2022

Raisio’s guidelines, published on 15 June 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  2 November 2022
Raisio plc
Board of Directors

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

The information in this Interim Report is unaudited.

The Finnish-language webcast concerning the Q3 result will take place at 12 noon on 2 November 2022. Raisio’s interim 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-q3

Raisio’s Financial Statement release for 2022 will be published on 08/02/2023.  

RAISIO PLC
At Raisio, we make food from the heart, with the aim of bringing health to ourselves and the Earth. We keep creating better plant-based and heart-healthy products so that eating healthily and within the Earth’s ecological capacity can be a pleasure. Our strong brands, such as Benecol®, Beanit®, Härkis® and Elovena®, turn our ambitions into reality. Through our responsibility work, we make the hard choices for consumers, so that they can choose Raisio products with confidence. We have around 380 healthy food colleagues in seven countries and export to more than 40 markets around the world. Raisio's shares are listed on Nasdaq Helsinki Ltd. In 2021, the Group’s comparable net sales for continuing operations were approximately EUR 200 million and the comparable EBIT was approximately EUR 21 million. www.raisio.com