Raisio's Financial Statements Bulletin 2019: Raisio stabilised its core business operations and achieved profitable growth
President and CEO Pekka Kuusniemi:
Raisio’s final quarter of the year was weighed down by the escalation of uncertainty that continued on the British market throughout the year up until the confirmation of the UK general election results. A positive turn in UK consumer confidence occurred towards the end of December and was also visible in terms of the demand for Benecol products. Furthermore, we have intentionally reduced our intermediary trade in grain, which is not part of our core business due to its low profitability. In relation to the comparison period, this move has caused a downward trend in net sales.
The year 2019 was the first year of Raisio’s new, focused direction as a company providing healthy, plant-based foods and ingredients. In terms of the long-term development of our activities, we have made good progress in several different areas. Promising steps have been taken to reinforce our value-based activities, to advance in our responsibility programme and to significantly improve occupational safety at our production facilities. These steps, together with our personnel’s determined implementation of our strategy, gave us the capacity to achieve results far into the future.
Net sales for the financial period increased by 3.5% for a total of EUR 236.3 million (228.2) and, at the same time, relative profitability rose to 11.5 (11.2)%. Despite the considerable rise in raw material costs at the start of the year, we were able to maintain profitability and to further invest in the recognition of our key brands. Success in product development is a prerequisite for future growth and, for that reason, we have determinedly increased our investments, particularly in terms of recruiting people who have strong expertise in the properties and possibilities of plant-based raw materials.
The determined implementation of our strategy is also visible in our realised investment decisions. During the financial period, we invested EUR 19.5 (3.6) million to develop the competitiveness of our plant-based product range. The construction of the new production facility for plant-based products, rising within Raisio’s carbon-neutral industrial area, is proceeding on schedule and the modernisation process of the Nokia mill was completed during December. Cash flow increased significantly from the previous financial period for a final figure of EUR 23.3 (11.5) million. Even after the strong increase in investments, cash flow reached to EUR 5.6 million.
The uncertain political situation in the UK threw a shadow over the Healthy Food segment for the entire year. As a whole, however, the profitability of the segment improved, but the impact of the price increases on the volume was reflected negatively, particularly in our most competitive product categories. The new Healthy Ingredients segment had an especially encouraging start and was responsible for the growth in the Group’s net sales. Both Raisioaqua’s fish feed business and our value-added grain products improved their performance over that of the previous financial period in a promising way. New market openings supported growth and, at the same time, reduce geographical risk.
I am personally thrilled, in particular, with the hard work our personnel has invested to implement our strategy and I am confident that the decisions that have been made are steering Raisio in the right direction. We are supported by megatrends and our long-term work will help us to assure a solid position, also internationally, in the plant-based product market.