The market environment has begun to show signs of stabilisation during the first quarter of the year. Volumes have stopped falling and, especially in the B2B sector, we are seeing a gradual increase in order volumes. Uncertainty is sustained by the protracted war in Ukraine and other regrettable unrest in recent times.

Net sales were practically on a par with the previous year, EUR 55.5 (56.5) million, with Easter being in March this year. Our comparable EBIT was EUR 4.2 (4.2) million, which accounted for 7.6 (7.5) per cent of net sales. Marketing costs were clearly higher than in the comparison period due to entering the Dutch and Belgian markets and a high number of new product launches. Profitability differences between segments were accentuated during the period, with Healthy Food improving both sales and profit, while Healthy Ingredients saw reduced sales value and profitability due to
price competition.

Cash flow improved significantly, reaching EUR 8.5 (3.3) million. The comparable return on invested capital (ROIC) also continued to develop positively, reaching 7.4 (6.4) per cent. As the times of crisis have somewhat subsided, we have been better able to optimise our working capital and have set clear targets for it going forward.

The cholesterol-lowering category has seen fierce price campaigning as consumers become more price-conscious. For Benecol® products, the first quarter was cautiously positive as the volume decline levelled off. Raisio is increasingly collaborating with healthcare professionals to raise awareness of Benecol® products. The UK, a key market for Raisio, has been given special attention when refining the strategy.

Sales of oat products have increased in both the B2C and B2B markets. Elovena®, which will celebrate its centenary next year, has entered the Dutch and Belgian markets during the period, in addition to its previous foreign markets in Poland, Ukraine, the Baltic countries and Sweden. To consolidate our position in the market, we are ready to invest substantially to establish the brand and further expand the range of products we sell.

The iconic Elovena® received a great recognition in March: According to the Sustainable Brand Index, consumers rank Elovena® as the most sustainable brand in Finland. In April, after the review period, Finland Chamber of Commerce selected Elovena® as the winner of the Brand of the Year 2024 competition. The jury’s reasons for the choice included the successful renewal of the Elovena® brand and the development of the product range in line with today’s trends. The benefits of the brand have been successfully integrated into the business and its development.

The plant protein category has fared poorly under the pressures of COVID-19 and inflation. This phenomenon is not limited to the Finnish market, where Härkis® is the leading brand; Europe has also seen a decline in demand on a broad front. It is clear that in the short term it is a question of taste and price compared to meat proteins, which is why we must persevere with our development work.

As the economy improves, the food market will certainly return to normal. Raisio has overcome difficult times before, staying true to its strategy. Our employees have embraced the company’s purpose and values as part of their daily work and are each developing the company in line with the strategy. My heartfelt thanks to all of you!

Pekka Kuusniemi

CEO

May 2024

Interim Report January-March 2024

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!

Pekka Kuusniemi

CEO

February 2024

Financial Statements Bulletin 2023

The third quarter continued largely along the same lines as the previous one, with consumers’ purchasing behaviour remaining very cautious as a result of inflation and the uncertain economic situation. However, during the summer and early autumn, the demand situation in the Finnish consumer market improved somewhat for Raisio, while in our other main market, the UK, the cost of living crisis continued to challenge the sales volume of Benecol® products. The challenging market situation of B2B customers is also still reflected in the development of Raisio’s net sales.

The 2023 grain harvest in Finland was the third worst of the millennium. However, prices have not yet shown any significant changes, and I do not believe that we will be seeing the massive price increases that we witnessed two years ago. In any case, procurement prices are facing upward pressure because both the quantity and quality of the harvest are woefully low.

During the review period, the company’s net sales remained similar to the comparison period at EUR 56.1 (56.5) million. In the previous year, most of the price increases had already been made during the second quarter, so comparability is already quite good. Performance improved significantly, with comparable EBIT rising to EUR 7.4 (6.5) million, accounting for 13.1 (11.4) per cent of net sales. Cash flow after financial items and taxes was remarkably strong at EUR 15.0 (1.8) million. With the change programme launched in August last year, our operations are evolving in different areas and will gradually be reflected in our performance indicators.

Over the past two years, we have significantly upgraded our production capabilities, with a brand new plant for drinkable and spoonable plant-based products launched in autumn 2021 at our carbon-neutral industrial area in Raisio and a completely renewed pasta production line completed this summer. The commissioning of both of these new investments, worth over EUR 50 million in total, has gone well and the payback of the investments has started well. With regard to the new plant, it should be noted that Raisio had no market share in these categories before, and today we are a powerful player in the Finnish market, strongly challenging the market leader. The Elovena® brand has thus proven its strength also in new product areas and brought significant growth to our sales in Finland.

During the summer and early autumn, the availability of pasta in Finland has come up in the public debate, somewhat unexpectedly. The installation and commissioning of the Raisio pasta line coincided with supply problems in the industry, resulting in gaps on shop shelves. At the moment, demand has exceeded expectations and the factory employees are doing their best to ensure that Finnish consumers have enough good Finnish pasta. In our strategy, we have placed the Torino® pasta brand in the ‘local hero’ category, and its role is to contribute to a steady cash flow for the company and help ensure Finnish security of supply.

We have paved the way for international sales of oat products by carefully researching the European markets and working with customers in the most attractive geographical areas. We aim to establish a permanent position in markets much larger than Finland, and achieving this position will require a great deal of work and money. Achieving market positions in competitive consumer markets is expensive and even risky, but we believe that the strong Elovena® brand, which will soon be a century old, will also flourish on a global scale.
I wish to extend my sincere thanks to Raisio’s employees for their great work in the ever-changing market situation.

Pekka Kuusniemi

CEO

November 2023

Interim Report January-September 2023

The sharp rise in food prices, general inflation and the rapid rise in interest rates have had an unexpected impact on consumer purchase behaviour. The weakening of purchasing power has resulted in a significant drop in volumes as consumers seek to save on their daily spending, which has affected all of Raisio’s market areas. The biggest drop in volumes has been seen in the UK, where macroeconomic challenges have been widely felt in the grocery sector. In Ireland, however, demand for Benecol® products has continued to grow despite the inflation developments.

The volume challenges increased during the second quarter, and Raisio’s net sales fell by 5.1%. However, increasing efficiency in all operations significantly improved comparable EBIT, which amounted to EUR 5.7 (4.4) million and 10.8 (7.9) per cent of net sales. Cash flow after financial items and taxes was very strong at EUR 9.8 (-0.2) million. We have been able to quickly turn all key performance and profitability indicators in the right direction after the shock we suffered as a result of Russia’s invasion of Ukraine.

In a declining market, Raisio’s focus is on developing profitability, marketing efforts are targeted around the moment of purchase and efforts are made to make the most of the value of new product launches. The development of new products, made possible by the new production facilities, continues to accelerate, and consumers continue to be interested in innovative brand products, despite the recent trend towards frugality in food choices. The continued success of Elovena® products is an excellent demonstration of this, with a 20% growth during the review period.

The comprehensive modernisation of our pasta factory has progressed according to plan during the period. The new production line installed during the summer will be ready for production in August, and Torino® pasta products will again be produced in Raisio for Finnish consumers in a factory with state-of-the-art technology and product safety. The investment is worth EUR 4.1 million and the installation work will take approximately 10 weeks in total.

Raisio’s strategy focuses on the strengths we have developed over a long period of time, and we have a proven ability to respond quickly to changing market conditions and a resilient balance sheet that allows us to invest in future growth. My warmest thanks to Raisio’s staff for their continued good work in these exceptional times!

Pekka Kuusniemi

CEO

August 2023

Half-year Financial Report 2023