•  Q1 sales fall to EUR116.7m (US$162.7m) from EUR128.3m
  •  EBIT down from EUR8m to EUR5.4m
  •  Cautions on FY outlook 
Raisio cautious on FY outlook

Raisio cautious on FY outlook

Finnish food group Raisio conceded its target of improving full-year EBIT could be more "challenging" after it booked a decline in first quarter sales and earnings.

The company said today (8 May) that sales in the three months to end-March fell 9% as a "strongly declining" cereal market and issues around snack bar production in the UK offset improved confectionery results in Europe. The decline in operating earnings was steeper still, with EBIT dropping 32.5%.

"Raisio's aim to continue the improvement of its EBIT seems more challenging than expected in terms of organic growth, although the improvement was estimated to focus on the second half of 2014 when the ongoing streamlining projects are completed," Raisio said.

Show the press release

Raisio’s EBIT EUR 5.4 million

Interim Report 8 May 2014 at 8:30 Finnish time

RAISIO’S EBIT EUR 5.4 MILLION

January-March 2014

  • The Group’s net sales totalled EUR 116.7 million (Q1/2013: EUR 128.3 million).
  • The Group’s EBIT excluding one-off items was EUR 5.4 million (EUR 8.0 million) accounting for 4.6% (6.2%) of net sales.
  • The Brands Division’s EBIT excluding one-off items was EUR 6.4 million (EUR 9.4 million) accounting for 8.9% (12.5%) of net sales.
  • Raisioagro’s EBIT totalled EUR 0.0 (-0.6) million.
  • Raisio’s guidance more challenging than previously.

 Raisio Group’s key figures excluding one-off items

    Q1/
2014
Q1/
2013
2013
Results        
Net sales M€ 116.7 128.3 557.6
   Change in net sales % -9.1 -4.9 -4.5
EBIT M€ 5.4 8.0 39.3
   EBIT % 4.6 6.2 7.1
Depreciation and impairment M€ 3.9 3.9 14.9
EBITDA M€ 9.3 11.9 54.3
Net financial expenses M€ -0.3 -0.4 -1.8
Earnings per share (EPS) 0.03 0.04 0.20
Balance sheet        
Equity ratio % 64.7 61.9 68.2
Gearing % -4.2 8.4 -8.6
Net interest-bearing debt M€ -13.3 26.2 -28.5
Equity per share 2.00 2.00 2.13
Gross investments M€ 4.8 1.7 16.5
Share        
Market capitalisation* M€ 750.3 470.3 683.1
Enterprise value (EV) M€ 737.0 496.5 654.6
EV/EBITDA   14.3 9.5 12.1

* Excluding the company shares held by the Group

CEO Matti Rihko’s review

"The Group’s all-year target is to improve EBIT. However, it is clear that this is challenging as at the year beginning, we are EUR 2.6 million behind last year. As a whole, Raisio’s EBIT was reasonable, but the situation differed from business to business. As expected, the situation in the UK's unit of cereals and snacks undermined the Brands Division’s performance; on the one hand, breakfast cereals suffered from strongly declining market and on the other, technical difficulties during the snack bar production transfer impaired our service level. However, Northern Europe and confectionery showed further improvement, so the overall picture of the Brands Division is twofold.

In April, Raisioagro started an extensive restructuring of activities with the aim of focusing resources on areas in which the added value created through new business and product innovations is the highest. Raisioagro’s priority areas were defined to be, above all, cattle feeds and fish feeds. For pig and poultry feeds, the company will examine alternatives to down scale, terminate or sell the business as the sector is in deep transition. Statutory cooperation negotiations related to the restructuring are expected to end by the Midsummer.

In accordance with its objective, Benemilk Ltd continues the efforts to commercialise the innovations internationally. The company is involved in active negotiations in several countries and continents and is already proceeding to the NDA stage with a number of major operators. Of the companies encountered during the Roadshow, all but one have expressed their willingness to continue the negotiations, which shows that interest in the innovation is strong. According to the best current estimate, it is possible that the first Benemilk launches could be finalised at the end of 2015, since the entire process from the agreement to the market entry of products can easily take a year."

Guidance

Raisio’s aim to continue the improvement of its EBIT seems more challenging than expected in terms of organic growth, although the improvement was estimated to focus on the second half of 2014 when the ongoing streamlining projects are completed.

Previous guidance in February 2014
In 2014, Raisio continues to improve its EBIT. The improvement is estimated to focus on the second half of 2014 when the ongoing streamlining projects are completed.

Original source: Raisio