Raisio plc’s Interim Report 1-9/2018: Raisio’s Q3 down by Russian import ban on fish feeds
President and CEO Pekka Kuusniemi's review
“The divestment of our cattle feed business, reviewed by the Competition and Consumer Authority for the entire review period, was completed after the review period. The business transferred to the new owner on 1 November 2018 at the enterprise value of EUR 34 million. Raisio’s sales profit will total some EUR 12.5 million. With the sale of the cattle feed business, Raisio continues to focus on healthy, plant-based food and fish feeds. Strong megatrends support both of these businesses.
EBIT for Raisio’s Q3 was down from the comparison period, particularly due to the interrupted export of Raisioaqua’s fish feeds to Russia. The Division’s EBIT decreased by EUR 1.8 million and net sales by EUR 7.6 million from the comparison period. Active work is continued to lift the Russian import ban. At the moment, it is not possible to determine the exact date for the reopening of the Russian border.
Raisio also increased, as planned, marketing investments in its key brands Benecol and Elovena by some EUR 1 million to boost the sales of new products.
In line with our plans, we have initiated corrective measures in the markets where the development of net sales and profitability did not meet the expectations in the first half of the year. Thanks to the price increases carried out in Russia, net sales and profitability in local currency already returned to the comparison period level. In Poland, we have focused on our core business and carried out reorganisation measures. As a result, the net sales decline has been stopped and the negative performance of the first half of the year reversed. The Irish business previously run by an external distributor was taken over by Raisio’s own organisation in September. This change in the operating model allows the growth focus in the market where the Benecol brand already has a strong position.
An exceptionally dry growth season resulted in the lowest Finnish grain harvest in over 30 years. The grain harvest in Europe was also down from last year. In Finland, the grain price has significantly increased since last spring. With our strong brands, we can shift higher raw material costs to product prices.
Consumer interest in plant-based food continues to grow. Oat demand also continues to boom. At the end of August, Raisio launched a new oat innovation. Elovena Muru Oat Mince is a convenient product with plenty of oat, protein and fibre. Elovena Muru can be used in the same way as minced meat in all cooking, which multiplies its growth potential. Consumers have welcomed the novelty enthusiastically, and Elovena Muru has quickly gained a position where it can compete for the market leadership of the category.”