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CEO’s review

Interim Report Q3 2022

This year of completely exceptional conditions showed Raisio’s ability to rapidly recover its profit-making capacity. Manufacturing costs, which increased in an unprecedented manner, were incorporated as quickly as possible into sales prices. Inflation tried the purchasing power of consumers and will surely impact on consumption habits. The trend of eating at home will increase and consumers will pay ever more attention to prices while still putting their trust in strong and well-known brands. The harvest season has proven to be better than average in terms of both quantity and quality, and this is highly significant for both Raisio and the entire Finnish food system.

The Group’s net sales during the third quarter totalled EUR 56.5 (50.8) million, which signified a growth of 11.2 per cent. A large part of that growth was derived from the increase in sales prices but also from the brilliant success of certain product groups. Despite the high inflation rate in the United Kingdom, Benecol® has performed well during the third quarter in this market which is important for Raisio. The immense development of the Elovena® brand continued throughout the review period and reached more than 35 per cent in relation to the comparison period. Products from our new production facility are already proving to be strong competitors for market leaders in different categories.

Comparable EBIT was EUR 6.5 (6.7) million, accounting for 11.4 (13.2) per cent of net sales. The low-quality harvest of the previous year still impacted on mill products manufactured in July and August, thereby notably decreasing the related profitability. In other areas, we have succeeded in responding to the sharp increases in cost levels, and we anticipate that the new harvest will also improve productivity.

Our long-term work to advance responsibility will also contribute to a positive result. Significant part of energy used in our own production facilities is produced by using biofuels. This is an excellent advantage within the prevailing conditions. All of Raisio’s own production facilities are currently carbon-neutral. Investments remained lower during the review period, as planned, and now we are focusing on taking advantage of our new capabilities and the marketing of new product innovations. Due to the uncertainty caused by the operating environment, we have prepared for different types of supply disruptions and the increase in working capital is visible in our cash flow. When shifting from the previous harvest season to the new one, grain availability was low. In September we procured a lot of grain from the new harvest season. The cash flow from continuing operations after financial items and taxes totalled EUR 0.9 (6.6) million.

Raisioaqua, which was reported as discontinued operations at the start of the summer, has performed a lot better than anticipated. Projects aimed at developing operations, which were initiated already last autumn, as well as price increases that were realised during the season and customers’ loyalty to this innovative, Finnish fish feed manufacturer have made it possible to achieve net sales of more than EUR 11 million, EBIT of more than 7 per cent and cash flow during the review period of over EUR 6 million. I believe the notable improvement in performance capacity is intriguing for potential buyers, and we will carry to operate in accordance with the going concern principle until the business is sold.

This challenging time has demanded and will continue to demand a great deal from the personnel. A large number of Raisio employees contribute actively to the realisation of our strategy and all our efforts are moving us in a clear direction. The restlessness in the operational environment has shaken the foundations of the food system, but consistent and focused work will inevitably bear fruit. My thanks to the entire personnel for a job well done.

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

Raisio’s CEO Pekka Kuusniemi