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CEO’s review

Interim Report Q3 2021

The preparations for the new strategy period have proceeded well. The management was reorganised at the start of August to correspond with the strategy’s primary areas of focus, and a broader reorganisation involving codetermination negotiations was also initiated during the review period. The goal of the reorganisation process was to flatten the organisational structure and ensure appropriate resources for the demanding and interesting strategy period. In all our activities, we endeavour to ensure rapid decision-making and implementation on a broad scale throughout the organisation in a manner that is in keeping with our values.

During the third quarter, net sales grew 6.8% to achieve a total of EUR 69.5 (65.1) million. EBIT was EUR 8.2 (9.8) million during the third quarter and accounted for 11.8 (15.0)% of net sales. I am especially satisfied with the great development that has continued the whole year in the markets of the UK, Ireland and Poland. Month after month, an increasing number of consumers are finding Benecol products, inspired by our clear marketing communications and distribution channels. With regard to the acquisition of Verso Food in April, we have developed the activities and incorporated the synergies and, in a relatively short time period, managed to get the profitability of the business going in the right direction. Verso Food is now completely integrated into Raisio and its business activities are ready to help support growth during our upcoming strategy period.

In terms of weather, July was highly exceptional, which caused Raisioaqua’s sales to take a negative turn after the initial success at the start of the season. Raisioaqua’s sales are strongly seasonal dependent, so when the sales volumes dropped by half during this highly crucial sales month, it ended up weakening what was otherwise an excellent review period for the Group. In practice, the development in all other business areas was very encouraging.

Raisio has invested strongly in its capabilities to develop and produce plant-based products. The investments have totalled near EUR 70 million over the past three years. The investments of the third quarter were EUR 8.9 (10.1) million, or 12.8 (15.5) per cent of net sales. The current year’s investments have so far totalled EUR 21.4 (23.0) million, or 11.5 (12.8) per cent of net sales.

The largest single investment, our entirely new and carbon-neutral facility producing plant-based products, was completed as planned, on schedule and within budget. During the third quarter, we launched the first carefully consumer-tested products from the new facility in the Finnish market. We brought as many as 13 new products under the Benecol and Elovena brands to the market at the same time. Their impact on the sales of the third quarter has not yet been significant, since the first deliveries to the chains took place towards the end of the period and more intensive marketing measures did not get underway until after the end of the period. We have good reason to expect our sales indexes to develop strongly within the growing categories for plant-based products.

Cost inflation has accelerated in nearly all fields and there has been a great deal of public discourse about the rising price of food. In Raisio’s case, the increase in the price of grain, in particular, has been primarily the result of the unusually weak harvest season. The price of vital raw material and ingredient in producing plant stanol ester, the cholesterol-lowering ingredient in Benecol, has developed in a favourable direction for us and become less expensive opposite to the general price development of raw materials. The global supply of this raw material, plant sterol, has grown considerably faster than the demand.

The development of our resolutely built strategy has proceeded as planned. The personnel have truly embraced the importance of working together and are supported through a common programme that will enable us to utilise all our resources to realise this strategy. I wish to extend my warmest gratitude to the entire personnel for their good work during these exceptional times.

Pekka Kuusniemi
November 2021
Raisio Oyj:n toimitusjohtajan Pekka Kuusniemen katsaus

Raisio’s CEO Pekka Kuusniemi