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Interim reportJanuary-March 2011CEO Matti Rihko10 May 2011
Raisio Group Q1/2011
• Group net sales increase +47%• Brands Division’s net sales growth +68%• Acquisition of Big Bear complements our Glisten deal
extremely well • New meta-analysis results increase Benecol’s opportunities• Market situation in feeds and malt remained tight • Price volatility in raw materials continued and working
capital increased• Profitable EBIT in the feed protein business
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Key figures for the Divisions
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Brands
•68% growth in net sales
•Net sales 72.9 M€ vs. 43.4 M€
•+21% growth in EBIT
•EBIT 5.8 M€ vs. 4.8 M€ excluding one-off items
Business to Business
•Net sales 54.3 M€ vs. 43.3 M€
•Net sales growth resulted mainly from considerable price rises in raw materials
•EBIT 0.4 M€ vs. 0.1 M€
•Successful product innovations
Key figures, result
Q1/2011 Q1/2010 2010Continuing operations
Net sales M€ 126.6 86.4 443.0
Net sales change, % 46.5 -5.2 17.9
EBIT M€ 5.7* 4.3 19.4
EBIT, % 4.5* 5.0 4.4
EBITDA M€ 9.8* 7.8 35.3
Net financial expenses M€ -0.1* -0.1 -1.9
Earnings per share (EPS) € 0.03* 0.02 0.08
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*Excluding one-off items
Key figures, balance sheet
Q1/2011 Q1/2010 2010
Equity ratio % 56.7 70.5 67.6
Gearing % 16.5 -40.2 -22.5
Net interest-bearing debt M€ 50.7 -125.4 -72.9
Equity per share € 1.95 2.00 2.06
Gross investments M€ 65.5* 1.5 49.1*
SHARE
Market capitalisation** M€ 411.3 435.2 439.1
Enterprise value (EV) M€ 451.8 280.0 356.1
EV/EBITDA 12.1 7.6 10.1
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*Including acquisitions**Excluding the shares held by the company
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Brands Division
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Brands: Net sales growth +68 %
2011
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Brands: EBIT growth +21%
2011
Food: Western Europe
• Improved profitability in consumer products
• Upward trend of sales volume in consumer products in highly volatile and promotion-driven market
• Sales to catering and industrial customers grew with new airline/hotel business
• Increased sales in healthy snack bars and snacks for weight control
• Main brands: Honey Monster, Sugar Puffs, The Dormen, Harvest Cheweee and Fox’s
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Food: Northern Europe
• Nalle product family expanded into children’s foods
• Continued sales growth in Elovena brand
• Benecol global brand renewal carried out
• Sales of non-dairy products sold under Carlshamn brand doubled in a year
• Main brands: Elovena, Sunnuntai, Benecol, Carlshamn, Torino and Provena
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Food: Eastern Europe
• Good sales development in Russia and Ukraine; sales prices were increased to match price rise of grain raw materials
• Profitable operations despite the price volatility in raw materials
• Increased sales in Elovena and Provena products in Poland• Benecol product range expansion in Poland• Main brands: Nordic, Elovena, Benecol and Provena
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Benecol
• Great differences between the market areas of Benecol products
• Continued sales growth in the UK, the largest market of Benecol products
• Due to tough competition, slightly decreased volume in Poland and Spain
• Increased Benecol sales in new market areas, Asia and South America, with our partners’ successful marketing campaigns
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Business to Business
Business to Business
• Sales of rapeseed oil surplus from the food chain as raw material for renewable diesel improved the feed protein business
• Joint project with Finnish players to develop rapeseed variety suitable for renewable diesel production
• Tough price competition in malt continued • Raisio lost some market share in poultry
feeds due to price advantage of a competitor’s GMO feed
• Overcapacity in pork resulted in closures and temporary breaks in production on farms
• Raisio started cooperation in sourcing with Danish DLA to cut costs
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Price rise of raw materialsincreased B-to-B net sales
2011
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Profitable EBIT for B-to-B
2011
Raisio´s growth phase
Raisio’s growth phase• 2 acquisitions completed in the UK
- Glisten in April 2010, EV/EBITDA 6.7x
- Big Bear Group in February 2011, EV/EBITDA 7.0x
• Raisio has a 150 M€ foothold in the British breakfast, snack and confectionery markets
• Big Bear Group acquisition brought the necessary critical mass for future UK operations
• UK biggest brand market for Raisio
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Outlook unchanged 2011
• Raisio continues implementing its growth phase according to plan.
- Cash reserves 84.6 M€
• Particularly the Brands Division is expected to increase its net sales.
• Price volatility in raw materials continues to affect the Group’s net sales development
• Activeness in growth projects brings extensive costs in relation to the company size, thus undermining profitability in the short term.
• The Group’s target is to maintain the earlier profitability level of 4-5% also during the growth phase.
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