Raisio / FI. (rg) Not only the business environment of Finland’s Raisio Group has changed significantly during 2022 since Russia’s invasion of Ukraine. As a result, in the spring Raisio decided to abandon its consumer business in Russia and classify Raisioaqua Limited, which focuses on fish feed business, as assets held for sale. The combined net sales of these two businesses were almost EUR 50 million, or approximately 20 percent of the net sales of the entire Raisio in 2021.
Last summer, while the company’s business environment was undergoing these changes, Raisio launched a comprehensive and long-term change program to develop its business operations, accelerate growth and improve profitability. Due to the aforementioned measures, Raisio will update its long-term financial targets for the strategy period 2022-2025.
Raisio’s updated financial targets for the strategy period 2022-2025
- the compound annual growth rate (CAGR) for the entire Raisio Group is 9 percent (previously 5 percent)
- the CAGR of the combined net sales of the three strategic focus areas («Benecol» and plant stanol ester solutions; value added oat products and ingredients; plant proteins) is 11 percent (previously 7 percent)
- comparable Ebit of over 13 percent of the Group’s net sales in 2025 (previously over 10 percent).
- With these targets, the net sales in the financial year 2025 will exceed EUR 280 million, while the comparable Ebit will be more than EUR 36 million.
The fulfillment of these targets will be driven by the new production facilities commissioned over the recent years. Raisio expects that the increasing production volumes and the diversifying product categories will also improve the profitability of production. The profitability of the new factories is expected to turn positive in 2024 in accordance with the previous estimate.
The pursuit of growth will require additional investments in innovation and product development, for example. These expenses are planned to be covered through efficiency measures implemented mainly in production, sourcing and support functions.
The above-mentioned targets have been defined for Raisio’s current company structure and do not include potential business acquisitions. Raisio continues to actively search for acquisition targets that support the implementation of its strategy. Annual investments are estimated to exceed EUR 10 million in 2023-2025. The main focus of the investments will be on measures related to the improvement of efficiency, energy efficiency and yield. The company does not see any need for significant investments in capacity during the strategy period.
Raisio’s three strategic focus areas will remain unchanged
Updating the company’s financial targets will not affect Raisio’s strategy, which was published in the summer of 2021. Raisio will actively promote its strategic focus areas, which are described below, and their importance in relation to the business operations of the entire company will grow further.
«Benecol» and plant stanol ester solutions
Raisio continues to invest in growing the international «Benecol» brand. Plant stanol ester in «Benecol» products has been shown to lower cholesterol, and the health claim has been approved by the EU Commission. Furthermore, Raisio also invests in a research program to study other potential health-promoting properties of plant stanol ester.
Value added oats and ingredients
Raisio continues to expand internationally in the B2B market as well as in the consumer market based on the company’s strong expertise in oats.
Consumer choices are increasingly directed towards healthy and sustainably produced plant-based food. Raisio wants to strengthen its position in this promising market, whose long-term growth will be supported by the megatrends, in Finland as well as internationally.
These three focus areas account for approximately four-fifths of the net sales of the entire Raisio Group, and their combined net sales were about EUR 160 million in 2021. The comparable net sales of the entire Raisio Group, considering the withdrawal from the consumer business in Russia and the classification of Raisioaqua as assets held for sale, was approximately EUR 200 million in 2021.
In addition to the selected growth areas, Raisio has also other established businesses and brands that will continue as part of the company’s operations.
No changes to the dividend policy
Raisio’s goal is to reward its shareholders also during the years of building growth. The company’s dividend policy remains unchanged, and Raisio aims to continue to pay an annual dividend of 50-100 percent of the company’s earnings per share (EPS). In addition, the company aims to return value to its shareholders through, among other things, the payment of extra dividends as enabled by cash reserves.
Each year, the decisions concerning dividends and the distribution of profit are based on the proposals of the Board of Directors and subject to the approval of the respective Annual General Meeting. They also depend on the company’s capital structure, financial position, general economic and commercial conditions as well as outlook.