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CEO’s review

Financial Statements Bulletin 2023

Net sales in 2023 were roughly at the previous year’s level, at EUR 219.5 million (220.8). At the same time, despite significant changes in volumes, we were able to improve profitability significantly: comparable EBIT was EUR 22.7 (18.4) million, accounting for 10.4 (8.3) per cent of net sales. Operational efficiency and price discipline were key to maintaining costs at the previous year’s level, despite inflationary pressures. Raisio’s cash flow was very strong at EUR 37.0 (11.2) million. Similarly, comparable return on invested capital improved to 9.2 (5.6) per cent.

The sharp fall in consumer purchasing power due to high inflation and rising interest rates caused major changes in the market environment during 2023. Volumes fell and demand shifted to less expensive products; in particular, supermarkets’ own-brand products grew at the expense of branded products. Raisio’s focus is on innovative, healthy and responsible branded products, and the market proved surprisingly challenging for us.

As a premium-priced product with health benefits, Benecol® saw the hardest impact of inflation in its almost 30 years of success. There were large differences in demand between markets. The UK’s post-Brexit macroeconomic crisis was also reflected in a significant volume decline for us, while in Ireland, the profitable double-digit growth that has been going on for several years continued throughout the financial year. We will continue our long-term work with healthcare professionals in all of our target markets, and once purchasing power improves, our profitable business will also grow in terms of volumes.

The strong growth of Elovena® products has continued despite the gloomy consumption environment. Our 20 per cent growth, numerous successful launches and increased market share in the drinkable and spoonable oat product
categories were truly great achievements during the year. As we have stated before, Elovena’s strategy also includes international growth, and in the coming days, we are launching sales through Albert Heijn, the leading grocery company in the Netherlands. We have worked persistently to enter one of the most attractive plant-based markets in Europe, and now it is becoming a reality. In the short term, this will bring cost pressures due to brand building, but this is an important and expected step for us.

Unfortunately, the plant protein market has suffered the most in relative terms from the market turmoil. In the Finnish market, where Härkis® is a leading brand, the whole category has declined quite sharply. We will continue to develop our products, and our basic assumption about the future need and growth of plant proteins has not disappeared, despite the market turmoil. Business-to-business sales were also under pressure as our customers’ final demand declined, but despite the pressure on prices, we were able to maintain our accounts thanks to our high-quality products and timely deliveries.

We updated the long-term objectives for the strategy period in December 2022. The 2023 financial year was marked by high inflation and rising interest rates, and we made an error in our assumption about the impact of these factors on consumer behaviour. Today, it is safe to say that achieving the December 2022 targets through organic growth is unrealistic. As a result, we announced in February 2024 that we will abandon our previously set growth targets for the period up to the end of 2025. We continue to believe in long-term growth in our key categories, but growth will be slower than expected in the short term due to the challenging market conditions. We will continue to promote the key priorities of our strategy in a systematic and sustained manner, now with a better understanding of the short-term market challenges.

I am very pleased with the results of our recent employee satisfaction survey. The response rate was very high at 91%, and the eNPS score was 40, which is an excellent score for a listed company based on the benchmark data we received. A stable, responsible employer is a desirable workplace and delivers improving business results. A sincere thank you to the employees of Raisio, which celebrates its 85th anniversary this year!

Pekka Kuusniemi
February 2023
Raisio Oyj:n toimitusjohtajan Pekka Kuusniemen katsaus

Raisio plc’s CEO Pekka Kuusniemi