Raisio plc to sell its Russian consumer business and recognise impairment losses
Stock Exchange Release 29 April, 2022
Raisio has decided to sell its consumer business in Russia. The decision was based on a rapid strategic assessment, launched immediately after Russia’s invasion of Ukraine at the end of February.
Raisio has signed agreements to sell OOO Raisio Nutrition, the subsidiary responsible for Raisio’s consumer business in Russia, to the Russian company Copacker Agro Ltd. Raisio’s Russian subsidiary has used the Nordic trademark in the Russian and Belarusian markets, among others. In these markets, the rights to the trademark will be sold to the Estonian company Nordgate Trading Oü.
“We have strongly condemned Russia’s invasion of Ukraine. Due to the invasion, it is not possible for us to continue our operations in Russia and the decision to sell is in line with our values. The agreements concluded will allow a rapid and controlled exit from Russia. Under the current circumstances, the solution found is the best for both the company and the employees in Russia,” says Pekka Kuusniemi, CEO of Raisio Group.
The sale of OOO Raisio Nutrition and the Nordic trademark is expected to be completed by the end of May. The final completion of the transaction depends on the duration of the official proceedings. The total sale price is approximately EUR 1.5 million. As a result of the sale, Raisio will recognise an estimated impairment loss of EUR 2.9 million in its first quarter EBIT. The cumulative RUB/EUR translation difference related to the Russian consumer business is EUR 2.3 million at the end of Q1.
The impairment loss recognised on the Russian consumer business will not affect Raisio Group’s comparable EBIT. Raisio Group will classify the operations being sold as assets held for sale in the reporting for the first quarter of 2022 and report them as discontinued operations.
Upon completion of the sale, the total loss is estimated to be EUR 3.6 million. The figures presented are preliminary estimates and will be affected by factors such as changes in the RUB/EUR exchange rate at the time of the sale.
In addition to food products, Raisio has exported fish feed to Russia from Raisioaqua, a group company operating in Finland. The fish feed exports were also suspended at the beginning of March, following Russia’s invasion of Ukraine. Raisio Group will recognise an impairment loss of EUR 4.1 million on Raisioaqua’s fixed assets in the Q1 2022 EBIT. The impairment will not affect the comparable EBIT and will have no cash flow impact. Approximately 65% of Raisioaqua’s production has been directed to Russia.
Outlook
On 3 March 2022, Raisio withdrew its financial guidelines for 2022 due to the war in Ukraine and also because of the unprecedentedly rapid increase in the price of grain-based raw materials essential to Raisio and the uncertainty created by the challenges in the availability of these raw materials. The divestment of the Russian consumer business will not significantly affect the operating conditions of Raisio’s other businesses.
Raisio will restore its financial guidelines as business visibility and predictability improve. The 2021 comparative figure will be updated to reflect Raisio’s new business structure in the first quarter interim report to be published on 4 May 2022.
Further information:
Pekka Kuusniemi, CEO, tel. +358 50 537 3883
Mika Saarinen, CFO, tel. +358 40 072 6808
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®, Torino® and Benella®. 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 net sales totaled EUR 246 million and comparable EBIT was EUR 22 million. Raisio employs about 400 people. www.raisio.com.