Raisio PLC: Half-Year Financial Report 2024

Raisio / FI. (rg) Finland’s Raisio Group announced its Half-Year Financial Report January to June (H1-2024). Net sales, profitability and sales volumes improved. Ebit in H1-2024 was EUR 10.4 (9.0) million, which accounted for 9.2 (8.2) percent of net sales. Note: Ebitda and Ebit include EUR 1.1 (0.5) million in costs related to business expansion and EUR 0.3 (0.4) million in costs related to reorganisation.

Continuing Operations in H1-2024

Chief Executive’s Commentary

CEO Pasi Flinkman: «The crises and sharp fluctuations that have marked the grocery sector in recent years became less pronounced during the first half of the year. Our operating environment is on a positive trend, although the environment remains price-sensitive and difficult to predict due to weak consumer purchasing power and confidence. Price competition is particularly fierce in the B2B market. A gradual improvement in consumer confidence and lower inflation with lower interest rates are supporting a recovery in private consumption. The gradually improving economic outlook is also creating the conditions for a rebound in the demand for responsibly produced food.

«Despite the continued sluggishness in the market, Raisio’s sales volumes have returned to growth thanks to strong brands, interesting product launches and market share gains. Volumes improved in the first quarter of the year and continued to do so in the second quarter. As a result, both of our reportable business segments increased their sales value above the levels of the comparison period. Developments in our main markets have been particularly promising.

«Net sales in the second quarter increased by almost nine percent from the previous year’s level, amounting to EUR 57.3 (52.7) million. Our comparable Ebit grew by almost a third, reaching EUR 7.4 (5.7) million, or 13.0 (10.8) percent of net sales. Higher sales and an improved gross margin significantly improved our results, despite the investments in international growth, marketing and product development in line with our strategy, which were higher than in the comparison period. The comparable return on invested capital (ROIC) also continued to develop positively, reaching 9.3 (7.4) percent.

«Measures taken in the strategically important UK market have started to bear fruit and the sales of «Benecol» products are returning to growth, while the long-standing growth in Ireland has remained strong. Overall, our cholesterol-lowering products have played a significant role in our improved performance in the first half of the year.

«In the domestic market, «Elovena» has continued its strong development and has been an important driver of growth and market share gains for Raisio. The launch of Elovena in the Netherlands and Belgium, which started at the beginning of the year, continued in the second quarter. We have not yet reached the ambitious sales targets we set for the launch, but compared to our peers, the products have performed well in the market. We will continue to fund this expansion as planned throughout the rest of the year.

«The challenges in the plant protein market remain unchanged, and we are not expecting quick wins. The market shares of strong, well-known brands such as «Härkis» have remained high. The benefits of the planetary health diet are undeniable, and further growth is predicted globally in the longer term. Key factors for success in the market include high-quality products, the avoidance of opposition between plant-based and mixed diets, and the courage to seek competitive advantage by standing out.

«It is a privilege to work in the food industry. People are interested in food. We all have opinions about it and encounter it every day. In the food industry, we have a real opportunity to contribute to the health of our fellow human beings, the smooth running of their daily lives and the well-being of our planet. This makes working with food very meaningful.

«After the first few weeks as the new CEO, I find Raisio to be a fascinating combination of roots deep in the Finnish soil, a great capacity for renewal and a wealth of strong expertise. Inspiring examples of what our organisation is capable of include the traditional and iconic Elovena brand’s ability to stay in touch with the times, and the company’s in-depth research and development of plant stanols and carbon-neutral in-house production. Indeed, it is easy to be a proud new member of the Raisio team.»

Outlook 2024

Raisio projects the comparable Ebit for the financial year 2024 to be at the level of 2023 or slightly higher. Raisio’s comparable Ebit in 2023 was EUR 22.7 million.