Raisio Plc's Financial Statements Bulletin, February 13th, 2024 at 8.30 a.m. EET
Net sales in 2023 at previous year's level, profitability significantly improved in a challenging operating environment
FINANCIAL DEVELOPMENT IN BRIEF
OCTOBER-DECEMBER 2023, CONTINUING OPERATIONS
- The Group's net sales totalled EUR 54.2 (55.6) million, which signified a decrease of 2.5%.
- Comparable EBITDA was EUR 8.1 (8.5) million, which accounted for 14.9 (15.3) per cent of net sales.
- EBITDA was EUR 6.7* (8.3*) million, which accounted for 12.4 (15.0) per cent of net sales.
- Comparable EBIT was EUR 5.5 (6.0) million, accounting for 10.1 (10.9) per cent of net sales.
- EBIT was EUR 3.1* (5.9*) million, which accounted for 5.7 (10.5) per cent of net sales.
- The Group's cash flow from continuing operations after financial items and taxes totalled EUR 9.0 (10.8) million.
- Comparable earnings per share were EUR 0.04 (0.03) per share.
- Earnings per share were EUR 0.02 (0.03) per share.
*EBITDA and EBIT include EUR 1.1 million in costs related to business expansion, EUR 0.2 million in costs related to reorganisation and an impairment loss of EUR 1.1 million related to the impairment of the Honey Monster brand. EBITDA and EBIT for the comparison period include EUR 0.2 million in costs related to business expansion.
JANUARY-DECEMBER 2023, CONTINUING OPERATIONS
- The Group's net sales totalled EUR 219.5 (220.8) million, which signified a decrease of 0.6%.
- Comparable EBITDA was EUR 32.8 (28.3**) million, which accounted for 15.0 (12.8) per cent of net sales.
- EBITDA was EUR 30.3* (27.8*) million, which accounted for 13.8 (12.6) per cent of net sales.
- Comparable EBIT was EUR 22.7 (18.4**) million, accounting for 10.4 (8.3) per cent of net sales.
- EBIT was EUR 19.1* (17.9**) million, which accounted for 8.7 (8.1) per cent of net sales.
- The Group's cash flow from continuing operations after financial items and taxes totalled EUR 37.0 (11.2) million.
- The comparable return on invested capital (ROIC) was 9.2 (5.6) per cent and the return on invested capital (ROIC) was 7.9 (5.5) per cent.
- Comparable earnings per share were EUR 0.13 (0.08) per share.
- Earnings per share were EUR 0.11 (0.08) per share.
- The Board of Directors' dividend proposal for the Annual General Meeting is EUR 0.14 per share, of which EUR 0.11 is the basic dividend in accordance with the company's dividend policy and EUR 0.03 the supplementary dividend.
EBIT includes EUR 1.7 million in costs related to business expansion, EUR 0.9 million in costs related to reorganisation and an impairment loss of EUR 1.1 million related to the impairment of the Honey Monster brand. EBITDA and EBIT for the comparison period include EUR 0.5 million in costs related to business expansion.
**The comparable EBITDA and EBIT for the comparison period include a return of EUR 1.1 million in pension fund surplus from previous years.
CEO PEKKA KUUSNIEMI
Net sales in 2023 were roughly at the previous year's level, at EUR 219.5 million (220.8). At the same time, despite significant changes in volumes, we were able to improve profitability significantly: comparable EBIT was EUR 22.7 (18.4) million, accounting for 10.4 (8.3) per cent of net sales. Operational efficiency and price discipline were key to maintaining costs at the previous year's level, despite inflationary pressures. Raisio's cash flow was very strong at EUR 37.0 (11.2) million. Similarly, comparable return on invested capital improved to 9.2 (5.6) per cent.
The sharp fall in consumer purchasing power due to high inflation and rising interest rates caused major changes in the market environment during 2023. Volumes fell and demand shifted to less expensive products; in particular, supermarkets' own-brand products grew at the expense of branded products. Raisio's focus is on innovative, healthy and responsible branded products, and the market proved surprisingly challenging for us.
As a premium-priced product with health benefits, Benecol® saw the hardest impact of inflation in its almost 30 years of success. There were large differences in demand between markets. The UK's post-Brexit macroeconomic crisis was also reflected in a significant volume decline for us, while in Ireland, the profitable double-digit growth that has been going on for several years continued throughout the financial year. We will continue our long-term work with healthcare professionals in all of our target markets, and once purchasing power improves, our profitable business will also grow in terms of volumes.
The strong growth of Elovena® products has continued despite the gloomy consumption environment. Our 20 per cent growth, numerous successful launches and increased market share in the drinkable and spoonable oat product categories were truly great achievements during the year. As we have stated before, Elovena's strategy also includes international growth, and in the coming days, we are launching sales through Albert Heijn, the leading grocery company in the Netherlands. We have worked persistently to enter one of the most attractive plant-based markets in Europe, and now it is becoming a reality. In the short term, this will bring cost pressures due to brand building, but this is an important and expected step for us.
Unfortunately, the plant protein market has suffered the most in relative terms from the market turmoil. In the Finnish market, where Härkis® is a leading brand, the whole category has declined quite sharply. We will continue to develop our products, and our basic assumption about the future need and growth of plant proteins has not disappeared, despite the market turmoil. Business-to-business sales were also under pressure as our customers' final demand declined, but despite the pressure on prices, we were able to maintain our accounts thanks to our high-quality products and timely deliveries.
We updated the long-term objectives for the strategy period in December 2022. The 2023 financial year was marked by high inflation and rising interest rates, and we made an error in our assumption about the impact of these factors on consumer behaviour. Today, it is safe to say that achieving the December 2022 targets through organic growth is unrealistic.
As a result, we announced in February 2024 that we will abandon our previously set growth targets for the period up to the end of 2025. We continue to believe in long-term growth in our key categories, but growth will be slower than expected in the short term due to the challenging market conditions. We will continue to promote the key priorities of our strategy in a systematic and sustained manner, now with a better understanding of the short-term market challenges.
I am very pleased with the results of our recent employee satisfaction survey. The response rate was very high at 91%, and the eNPS score was 40, which is an excellent score for a listed company based on the benchmark data we received. A stable, responsible employer is a desirable workplace and delivers improving business results. A sincere thank you to the employees of Raisio, which celebrates its 85th anniversary this year!
OUTLOOK 2024
Raisio provides guidance for its 2024 comparable EBIT to either remain at the same level as 2023 or slightly increase. In 2023, Raisio's comparable EBIT was EUR 22.7 million.
In Raisio, Finland 12 February 2024
Raisio plc
Board of Directors
Further information:
Pekka Kuusniemi, CEO, tel. +358 50 537 3883
Mika Saarinen, CFO, tel. +358 40 072 6808
The Financial Statements Bulletin has not been audited.
Webcast targeted for analysts, investors and media will be held in Finnish by CEO Pekka Kuusniemi on February 13, 2024 at 12.00 EET. Webcast will be available on this link: https://raisio.videosync.fi/q4-2023
Raisio's financial releases in 2024:
Raisio plc's Annual Review for 2023 will be published on 14 March 2024. The Annual Review includes the financial statements, the consolidated financial statements, the Board of Directors' report, the auditor's report, the Supervisory Board's statement and the corporate responsibility report. Raisio will also publish its Corporate Governance Statement and Remuneration Report for 2023 at the same time.
Raisio's Interim Report for January-March will be published on 7 May 2024.
Raisio's Half-Year Financial Report for January-June will be published on 7 August 2024.
Raisio's Interim Report for January-September will be published on 5 November 2024.
RAISIO PLC
At Raisio, we make food from the heart, with the aim of bringing health to ourselves and the Earth. We keep creating better plant-based and heart-healthy products so that eating healthily and within the Earth's ecological capacity can be a pleasure. Our strong brands, such as Benecol®, Härkis® and Elovena®, turn our ambitions into reality. Through our responsibility work, we make the hard choices for consumers, so that they can choose Raisio products with confidence. We have around 350 healthy food colleagues in seven countries and export to more than 40 markets around the world. Raisio's shares are listed on Nasdaq Helsinki Ltd. In 2022, the Group's comparable net sales for continuing operations were approximately EUR 221 million and the comparable EBIT was approximately EUR 18 million. www.raisio.com
