Renaissance from the fields to the world

When I joined Raisio last summer, I thought I was moving to a fairly traditional company. However, I have come to understand that Raisio is a fascinating combination of roots deep in the Finnish soil, outstanding R&D expertise, an international presence and strong brands. Indeed, Raisio’s strengths are built on its ability to combine the benefits of different approaches. Like a Renaissance man, Raisio has versatility, innovation and the ability to evolve and adapt to rapidly changing circumstances.

Volume growth and lessons from several markets

In 2024, volumes have increased: at the Group level, the increase was around 9% compared to the previous year. The trend was similar in all of our main markets and main categories. The stormy seas on the raw material markets calmed down to gentle ripples during the year. At the same time, we have consciously scaled back the role of grain trade with low levels of processing and focused on the production of strongly branded consumer products and processed raw materials.

Half of our net sales come from international markets outside Finland. Internationalising a brand requires a thorough understanding of markets and cultures, and the ability to adapt the products and messages to the needs of the target market while maintaining the core brand identity. It is a long and complex process that requires time, resources and flexibility. During the past year, we launched the Elovena® brand in the Netherlands and our snack biscuits in Sweden. These launches have not met all of our performance targets. In the long run, an organisation’s success is determined by its ability to learn and adapt to the world around it, and we have learned valuable lessons from these launches that will continue to support our ongoing internationalisation journey in the year ahead.

Great taste is an act of responsibility

You can choose Raisio products with a clear conscience because responsibility is an integral part of everything we do. At Raisio, we believe that by working with us, you are part of the solution to some of the biggest problems facing humanity.

We focus on the heart-healthiness of our product range. Last year, we supported the heart health of millions of people by supplying 260 million daily doses of plant stanol ester, which lowers harmful cholesterol. During the year, we launched 16 new Heart Symbol products in Finland, bringing the share of these products to 73% of our total consumer products. Fibre is the foundation of nutrition and well-being. Last year, we served 9,500 tonnes of dietary fibre to Finns in our consumer products. These are important figures, even though their magnitude and significance can be difficult to grasp. We operate on the premise that the increasing requirements for accuracy and verifiability in responsibility reporting are an advantage for Raisio, as they help separate the wheat from the chaff. Therefore, we report that 99.8% of the energy we used in 2024 was carbon neutral, although sometimes it might be tempting to round it up to 100%.

At the same time, it is important to recognise that no changes to our products — be it reducing sugar, adding fibre or making packaging more recyclable — will make any difference if consumers do not choose those products. That is why the deliciousness and convenience of our products are important pillars of responsibility.

Towards a bright future, in the short and the long term

Despite the challenges in the world around us, we enter the new year with confidence. Megatrends such as sustainability and well-being are fuelling our development. The economy is also expected to recover in the second half of 2025. However, we start from the premise that the responsibility for growth and profitability cannot be outsourced; it lies with us.

We are striving for clear progress in both the short and long term. We will continue to develop our responsiveness and adaptability without compromising on long-term development. We will continue to invest in our people, skills, research, product development and brands. We are in the final stages of our strategy process and will report more on it in the first quarter of the year.

The year 2025 kicked off with celebrations. This year marks the 30th anniversary of the launch of Benecol®. The brand celebrates its anniversary by working with healthcare professionals, continuing to help millions of people lower their cholesterol. At the same time, Elovena® is celebrating its 100th anniversary by being a strong presence in the everyday lives of our consumers and in the small but meaningful moments that, when shared with loved ones, are life at its best.

Raisio’s best days are still ahead of us. And not least because it is being built by a team of committed professionals who put their hearts and souls into their work. My warmest thanks to you and our partners for the past year.

I wish every one of you success and the best that life can give — the magic of everyday moments.

Pasi Flinkman
CEO, Raisio plc
February 2025

Financial Statements Bulletin 2024

In the third quarter, the business environment remained very similar to the second quarter. Due to the economic uncertainty and the slow decline in inflation, price remains a key driver of consumer choice, but consumer behaviour also continues to show signs of a budding resurgence of responsibility, convenience and wellness. Falling interest rates and rising purchasing power are paving the way for this trend to gain momentum.

There is variation between geographical areas in both consumer and retail behaviour. While Nordic retailers are increasingly seeking to serve other needs in addition to price consciousness, most English and Polish chains, for example, still focus heavily on price alone. We will not allow ourselves to rely on the recovery of the external environment; instead, we will actively seek growth and efficiency improvements ourselves, regardless of changes in the world around us. Our strategy work is progressing on schedule, and we will present our updated strategy during the first quarter of 2025.

Raisio’s products have a solid foundation, which is developing positively. Our growth has remained consistently strong and volume-driven also in the third quarter. Strong market positions and brands in our main markets are reducing our exposure to unhealthy price competition. At the same time, however, the market situation is slowing down our establishment in newer markets, as consumers’ willingness to try new products has declined.

Overall, we have witnessed a tentative decline in raw material prices this year, even though there have been divergent trends across product groups and cost items. As price volatility is expected to continue, the ability to anticipate and react remains important. Grain yields have been normal in terms of quantity, but the quality varies considerably. On the one hand, grain prices reduced our costs, but on the other hand they also increased price competition, especially in B2B channels, weighing on our profitability in the quarter. The comparable EBIT for the quarter is also impacted by the provision for retrospective payments to the authorities, without which we would have been very close to last year’s level. Our investments in future growth were also higher than in the previous year, as planned.

We have entered the last quarter of the year in good spirits. Breakfast oatmeal, snacks and heart health are popular all year round. Therefore, demand for our products is fairly stable throughout the year and we are not dependent on seasons, like many other food companies. As a result, the food industry’s holiday season is not causing us any holiday stress. Getting ready for the increasing regulation is a lot of work, but we believe that the Corporate Sustainability Reporting Directive, for example, will make our long-term sustainability efforts more transparent and allow us to also make better commercial use of them in the future. The last quarter of the year will also be partly spent preparing for the celebrations, as next year Elovena® will be 100 years old and Benecol® 30 years old. The celebrations will be reflected in both brands next year. The anniversary of the Elovena® brand in particular will be strongly present in everything we do right from the start of the year.

Looking back, I can say that I am also satisfied with the third quarter. Raisio’s employees have continued their good work in creating new solutions to build a healthier and more sustainable future and improving our efficiency. Thanks to them, the Benecol® brand has continued to grow in our largest markets in the UK and Finland, Elovena® has broken sales records in Finland and we launched Elovena® snack biscuits in September in ICA stores in Sweden.

As the Swedes say: Havre bra!

Pasi Flinkman
CEO, Raisio plc
November 2024

Interim Report January-September 2024

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 per cent 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) per cent 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) per cent.

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 rather 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.

Pasi Flinkman
CEO
August 2024

Half-Year Financial Report January-June 2024

The market environment has begun to show signs of stabilisation during the first quarter of the year. Volumes have stopped falling and, especially in the B2B sector, we are seeing a gradual increase in order volumes. Uncertainty is sustained by the protracted war in Ukraine and other regrettable unrest in recent times.

Net sales were practically on a par with the previous year, EUR 55.5 (56.5) million, with Easter being in March this year. Our comparable EBIT was EUR 4.2 (4.2) million, which accounted for 7.6 (7.5) per cent of net sales. Marketing costs were clearly higher than in the comparison period due to entering the Dutch and Belgian markets and a high number of new product launches. Profitability differences between segments were accentuated during the period, with Healthy Food improving both sales and profit, while Healthy Ingredients saw reduced sales value and profitability due to
price competition.

Cash flow improved significantly, reaching EUR 8.5 (3.3) million. The comparable return on invested capital (ROIC) also continued to develop positively, reaching 7.4 (6.4) per cent. As the times of crisis have somewhat subsided, we have been better able to optimise our working capital and have set clear targets for it going forward.

The cholesterol-lowering category has seen fierce price campaigning as consumers become more price-conscious. For Benecol® products, the first quarter was cautiously positive as the volume decline levelled off. Raisio is increasingly collaborating with healthcare professionals to raise awareness of Benecol® products. The UK, a key market for Raisio, has been given special attention when refining the strategy.

Sales of oat products have increased in both the B2C and B2B markets. Elovena®, which will celebrate its centenary next year, has entered the Dutch and Belgian markets during the period, in addition to its previous foreign markets in Poland, Ukraine, the Baltic countries and Sweden. To consolidate our position in the market, we are ready to invest substantially to establish the brand and further expand the range of products we sell.

The iconic Elovena® received a great recognition in March: According to the Sustainable Brand Index, consumers rank Elovena® as the most sustainable brand in Finland. In April, after the review period, Finland Chamber of Commerce selected Elovena® as the winner of the Brand of the Year 2024 competition. The jury’s reasons for the choice included the successful renewal of the Elovena® brand and the development of the product range in line with today’s trends. The benefits of the brand have been successfully integrated into the business and its development.

The plant protein category has fared poorly under the pressures of COVID-19 and inflation. This phenomenon is not limited to the Finnish market, where Härkis® is the leading brand; Europe has also seen a decline in demand on a broad front. It is clear that in the short term it is a question of taste and price compared to meat proteins, which is why we must persevere with our development work.

As the economy improves, the food market will certainly return to normal. Raisio has overcome difficult times before, staying true to its strategy. Our employees have embraced the company’s purpose and values as part of their daily work and are each developing the company in line with the strategy. My heartfelt thanks to all of you!

Pekka Kuusniemi

CEO

May 2024

Interim Report January-March 2024