3 November 2009
• Raisio’s net sales from continuing operations in July–September totalled EUR 95.5 million (Q3/2008: EUR 123.9 million).
• The Group’s third-quarter EBIT from continuing operations, excluding one-off items, was EUR 7.3 million (EUR 6.7 million), accounting for 7.7 per cent (5.4%) of net sales.
• Cash flow from business operations in July–September totalled EUR +21.3 million (EUR +36.3 million).
• Earnings per share remained unchanged from the comparison period at EUR 0.03 (EUR 0.03).
• Raisio's outlook for 2009 remains unchanged.
• The divestment of the margarine business to Bunge was completed on 16 October 2009.
The figures for the comparison period are given in brackets in the text.
CEO MATTI RIHKO
“Raisio’s cumulative result for 2009 is solid and exceeds the target level of five per cent. As predicted, Raisio’s strong brands have further strengthened in difficult times, and the sales volumes of Benecol products have increased in many European markets.
The economic downturn has had the clearest impact on the demand for products offered by the Business to Business Division. The measures taken to enhance operations have not been able to fully match the decline in demand. Customers’ confidence in Raisio Feed has been restored, however, and the company has already succeeded to strengthen its position in the Finnish market.
Raisio took 2007 to be the year in which its turnaround had to succeed. We made quick progress to the next phase, that of profitability improvement, which continued through 2008 and 2009. Our performance improved rapidly, exceeding the targets set. The divestment of the margarine business will carry us into a growth period, which is expected to cover the years 2010 and 2011.”
RISKS AND SOURCES OF UNCERTAINTY IN THE NEAR FUTURE
Raisio’s strategic path has taken the company from turnaround to profitability and from profitability to growth. The divestment of the margarine business will carry Raisio into a period of growth, which may lead to considerable changes in the company’s structure and business in 2010 and 2011.
With raw material prices continuing to fluctuate, volatility control will be essential to Raisio’s profitability in the future. The main risks in the near future are related to any possible changes caused by the general economic development in the Group’s market areas. This particularly concerns the Business to Business Division’s operations.
The taxation on the sales profit from the divestment of Raisio’s chemicals business in 2004, totalling EUR 220 million, continues to be handled in court. Since the divestment, Raisio has considered the sales profit to be free of tax and has handled it accordingly in its accounting. Expert statements obtained by Raisio support this stance. Most recently, the Helsinki Administrative Court made a resolution, in August 2008, stating that the sales profit was free of tax. However, the Tax Administration’s Tax Recipients’ Legal Services Unit filed for leave to appeal and lodged an appeal with the Supreme Administrative Court in October 2008.
Risks related to Raisio’s operations are described in more detail in the 2008 financial statements and on the Group’s website under Corporate Governance. Risks for the near future are also discussed in the division reviews of this interim report.
OUTLOOK
Raisio’s original estimate of the Group’s outlook for 2009 remains unchanged and has been largely accurate.
"The volatility in quarterly results and between divisions will become more pronounced, but it will balance out at Group-level over the year. Even if food consumption and demand remain steady, the unpredictable outcome of a drawn-out economic crisis may reduce volumes in the short run, either directly or indirectly, through the food chain infrastructure. Nevertheless, any negative impact on results can be neutralised in a few months, and the reallocation of capacity will open up new opportunities for Raisio in the long term.
Raisio’s main target in 2009 is to maintain its stabilised position under difficult circumstances. Raisio’s volumes are expected to develop moderately in annual terms. The trend in net sales will depend on the price level of the 2009 crop. The company’s profitability will also develop moderately, and EBIT is predicted to account for 4–5 per cent of net sales. Cash flow from operations is expected to be clearly positive, but to fall short of the 2008 figures."