Raisio PLC: Interim Report 01 January to 31 March 2019

Raisio / FI. (rg) Finland’s Raisio Group announces its Interim Report for the period 01 January to 31 March (Q1/2019). The Group started the implementation of its new strategy, net sales decline has stopped, Raisio said in its statement. Financial development in brief, continuing operations:

• The Group’s net sales totalled EUR 49.9 (49.7) million. Comparable Ebit was EUR 5.0 (6.3) million, accounting for 10.0 (12.6) percent of net sales. Ebit was EUR 5.0 (4.4) million, accounting for 10.0 (8.8) percent of net sales.
• As from January 2019, Raisio’s reportable segments are Healthy Food and Healthy Ingredients.
• The Healthy Food Unit’s net sales totalled EUR 34.7 (35.1) million. Comparable Ebit was EUR 4.0 (5.0) million, accounting for 11.5 (14.1) percent of net sales. Ebit was EUR 4.0 (4.8) million, accounting for 11.5 (13.7) percent of net sales.
• The Healthy Ingredients Unit’s net sales totalled EUR 21.8 (21.3) million. Ebit was EUR 1.3 (2.4) million, accounting for 6.2 (11.0) percent of net sales.
• The Group’s cash flow from business operations after financial items and taxes were EUR 4.5 (-0.8) million.
• The Group’s outlook for 2019 remains unchanged.

Key figures of the Group

		01-03/2019	01-03/2018	01-12/2018
Net sales,	Mio.EUR	49.9	49.7	228.2
Change in net sales	%	0.4	-4.1	-2.7
Comparable Ebit	Mio.EUR	5.0	6.3	25.6
Comparable Ebit of net sales	%	10.0	12.6	11.2
Ebit	Mio.EUR	5.0	4.4	16.6
Ebit of net sales	%	10.0	8.8	7.3
Comparable Ebitda	Mio.EUR	6.6	7.7	31.3
Ebitda	Mio.EUR	6.6	5.8	31.0
Comparable earnings per share	EUR	0.03	0.03	0.12
Earnings per share	EUR	0.03	0.02	0.08

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President’s and Chief Executive’s Commentary

President and CEO Pekka Kuusniemi commented the results as follows: «It has now been 80 years since Raisio was founded. In 2019, our completely reorganised company is living the year zero, with a clear focus. Last year, we built basic pillars for our operations: purpose, values and strategy with a closely related responsibility programme. Based on these pillars, the company structure has been thoroughly examined and transformed to support the growth goals of the future. The strategy is built on the company’s long-term, strong areas of knowledge, i.e., the cholesterol-lowering market leader Benecol and strongly megatrend-driven oats with related expertise and innovations of the company.

«Responsibilities of our business units, Healthy Food and Healthy Ingredients, corresponding to the new structure are based on a clear division between the business ideas. Healthy Food focuses on the branded consumer products with European retail chains as customers. The Healthy Ingredients organisation operates in the global B-to-B field with ingredients creating added value to Raisio’s customers. With this business division, we make our operations considerably more customer-oriented and transparent, organic growth being our main goal.

«Implementation of the strategy started immediately after its release. I am happy to say that the strategy was well received by the whole organisation; the staff have started its determined implementation in the review period. One of the major events during the review period was the signing of a frame agreement with an Italian Dr. Schär, a global leader in gluten-free foods. Combined expertise of the companies opens new interesting business opportunities for both far into the future.

«In the review period, we continued our product price increases due to rapid, unprecedented rise in raw material prices last autumn. The latest price increases will be fully effective in the second quarter while the impact of the rise in raw material prices can still be seen in the comparable Ebit of the review period. However, the margin has developed to the right direction during the review period and we will see, already in the second quarter, a positive effect on the company’s full-year performance.

«The setbacks Raisioaqua faced last year are behind us now. Customer loyalty has remained at a good level and with our competitive advantages, such as the Baltic Blend feeds and Benella brand, we expect strongly upbeat performance. In the Q1s, there is hardly any demand for fish feeds. However, expenses are arising as the business is preparing for the season. As the year progresses and the waters warm up, the investments start to produce when the fish start to eat again. In terms of sales, the Q3 is typically the best of the season.

«The ongoing uncertainty with the Brexit solution keeps our organisation busy. A significant part of the Benecol brand net sales is generated in the UK and we are maintaining our ability to secure uninterrupted availability of products to the Benecol consumers in the event of possible import-related delays.»

Outlook for 2019

The Group’s outlook remains unchanged. In 2019, Raisio expects its net sales for continuing operations to grow (2018: EUR 228.2 million) and comparable Ebit to be over 10 per cent of net sales. Raisio will continue its investments in the brands, R+D and the company’s own production in its most important product categories.