Raisio PLC: Half-Year Financial Report 2019

Raisio / FI. (rg) Finland’s Raisio Group announced its First Half Financial Report – January to June 2019 (H1-2019). The Company’s net sales increased and Ebit improved in April to June (Q2/2019).

Financial development in brief

April to June 2019

• The Group’s net sales totalled EUR 62.7 (59.7) million.
  Ebit was EUR 7.3 (6.5) million, accounting for 11.6 (10.9) percent of net sales.
• The Healthy Food Unit’s net sales totalled EUR 34.2 (33.7) million.
  Ebit was EUR 4.5 (3.8) million, accounting for 13.2 (11.2) percent of net sales.
• The Healthy Ingredients Unit’s net sales totalled EUR 34.7 (32.3) million.
  Ebit was EUR 3.9 (3.3) million, accounting for 11.3 (10.3) percent of net sales.

January to June 2019

• The Group’s net sales totalled EUR 112.6 (109.5) million.
  Ebit was EUR 12.2 (10.9) million, accounting for 10.9 (9.9) percent of net sales.
  Comparable Ebit was EUR 12.2 (12.8) million, accounting for 10.9 (11.7) percent of net sales.
• The Healthy Food Unit’s net sales totalled EUR 68.9 (68.7) million.
  Ebit was EUR 8.5 (8.6) million, accounting for 12.3 (12.5) percent of net sales.
  Comparable Ebit was EUR 8.5 (8.7) million, accounting for 12.3 (12.7) percent of net sales.
• The Healthy Ingredients Unit’s net sales totalled EUR 56.6 (53.6) million.
  Ebit was EUR 5.3 (5.7) million, accounting for 9.3 (10.6) percent of net sales.
• The Group’s cash flow from business operations after financial items and taxes totalled EUR 7.9 (-0.2) million.
• The Group’s outlook for 2019 remains unchanged.

Key figures of the Group

		4-6/2019	4-6/2018	1-6/2019	1-6/2018	1-12/2018
Net sales	Mio.EUR	62.7	59.7	112.6	109.5	228.2
Change in net sales	%	4.9	-2.7	2.8	-3.3	-2.7
Comparable Ebit	Mio.EUR	7.3	6.5	12.2	12.8	25.6
Comparable Ebit of net sales	%	11.6	11.0	10.9	11.7	11.2
Ebit	Mio.EUR	7.3	6.5	12.2	10.9	16.6
Ebit of net sales	%	11.6	10.9	10.9	9.9	7.3
Comparable Ebitda	Mio.EUR	8.9	7.9	15.4	15.6	31.3
Ebitda	Mio.EUR	8.9	7.9	15.4	13.7	31.0
Comparable earnings per share	EUR	0.05	0.03	0.08	0.06	0.12
Earnings per share	EUR	0.05	0.03	0.08	0.05	0.08

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President’s and Chief Executive’s Commentary

President and CEO Pekka Kuusniemi commented the results as follows: «In Raisio’s new strategy, the defined theme for 2019 is to ensure the growth and profitability of our core business. Already during the Q1, we were able to stop the net sales decline and in the review period, we saw a clear upturn in growth in terms of both net sales and profitability. Net sales increased by almost five per cent and profitability improved by over 10 per cent from the comparison period. Already after two quarters, the benefits of our customer-oriented new organisation structure are visible; we see significant new potential especially in our BtoB operations.

«The determined implementation of the strategy is also shown in our investment decision announced in the review period. Construction work on our new production plant specialising in the development and production of plant-based value-added products started after the review period, at the beginning of July. With the completion of one of the largest investment projects in the Finnish food industry of recent years, Raisio’s ability to launch innovative, plant-based products is taken to the next level. Recruitment of key personnel for both product development and production is already underway. The investment, funded through our strong cash position and cash flow, will support Raisio’s organic growth.

«Both our business units, Healthy Food and Healthy Ingredients, improved their performance from the comparison period. Our product price increases due to the sharp rise in grain prices were completed in the Q2. We were also able to raise the selling prices of Benecol products, as the cost of raw material, sterol, and manufacturing overheads had been rising for some time. Raisioaqua had a strong start to the new fish feed season and, in line with our strategy, we got market openings in Sweden and Poland.

«As for margins, we have not reached the comparison period level yet, but our strategic focus on fewer and stronger brands, combined with streamlining of the organisational structure carried out in the previous fiscal year, supported cost management over the comparison period. Our Q2 investments were three times higher than in the comparison period and focused on the development of our international oat business. Nonetheless, cash flow was positive in the review period. More attention has been paid to the management of our strong cash position and as a result, our financial income developed quite positively during the spring.

«Megatrends support the company’s major product categories. With farmed fish, it is possible to produce healthy food for consumers effectively and in an increasingly eco-friendly way. The positive health effects of oats are gaining increasing attention also outside the Nordic countries. Benecol’s heart health benefits are undeniable, and we are now investigating, together with the University of Maastricht, the possible alleviating effects of plant stanol on the symptoms in the asthmatics.»

Guidance 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.