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CEO’s review

Half-year Financial Report H1 2022

This half-year period has tested Raisio’s ability to react to unexpected situations. I am extremely satisfied with our capacity to operate within a completely exceptional market situation. The necessary decisions regarding the company structure in response to Russia’s war of aggression were made with prompt but careful consideration. The unprecedented rise in the price of key raw materials tried our profitability throughout the period, but price increases restored profitability towards the end of the period to a more acceptable level.

During the second quarter, we completed the sale of our consumer business in Russia and decided to transfer Raisioaqua to discontinued operations and start seeking out a new owner for the business. The fish feed business has sparked interest and we believe that the business will be sold during the current financial year. Once this occurs, Raisio can again focus specifically on its role as a manufacturer and global marketer of healthy foods and ingredients.

The net sales for the first half-year increased by 13.9% for a total of EUR 108.7 (95.5) million with a comparable EBIT of EUR 5.9 (9.6) million. During the second quarter, we managed to compensate for increased raw material, packaging and transport costs by raising our prices, thus giving us notably better profitability than the first quarter. Net sales for Q2 increased by 11.2% for a total of EUR 55.5 million and the comparable EBIT improved in relation to the comparison period for a total of EUR 4.4 (4.1) million and accounted for 7.9 (8.3)% of the net sales. It should be noted, in particular, that the most drastic price increases did not enter into effect until the beginning of June.

The considerable growth in net sales for continuing operations was affected by the increased sales prices but also by the success of new products within the markets. The growth of the Elovena® brand was gratifying, at more than 31 per cent over the comparison period. The enormous increase in the price of raw materials had a tangible impact on cash flow for a result of EUR -1.4 (12.6) million. Assuring the supply of raw materials was high on our priority list throughout the review period, since sufficiency within the exceptional situation has been uncertain. Our strong balance sheet enabled us to support the work of farmers experiencing financial difficulties by offering them short terms of payment and payments in advance for their next harvest. The war continues to place a strain on the global food system and it is vital for Raisio to safeguard its own operational ability within this turbulence. The grain harvest of the current period always carries uncertainties, but the outlook for the crops at this moment appears to be better than the situation experienced in 2021.

The changes initiated in the company’s structure will not alter our strategy to increase the healthy, plant-based foods produced by our company. In my opinion, the big picture still appears to show a demand for these products both in the Finnish and European markets. It is understandable that consumption habits will fluctuate as a result of the pandemic and war in Europe and the trends may not necessarily continue in a straightforward manner. Raisio’s strategic position is extremely interesting and we continue to resolutely implement our plan.

As one can see from the half-year figures, we were able to respond well to the unexpected turns of the spring season and for this, I extend my sincere gratitude to our entire personnel.

Pekka Kuusniemi
August 2022
Raisio Oyj:n toimitusjohtajan Pekka Kuusniemen katsaus

Raisio’s CEO Pekka Kuusniemi