Finnish better-for-you products business Raisio said it intends to shelve its 2022-2025 growth and profitability targets, following a year of flat sales in 2023.
In a statement accompanying its latest fiscal results, Raisio CEO Pekka Kuusniemi said “it is safe to say that achieving the December 2022 targets through organic growth is unrealistic”.
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He added: “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.”
Net sales for the for fourth quarter 2023 were €54.2m, ($58.4m) a 2.5% dip on the same period the year prior.
Its financial targets for the three-year period had included hitting a 9% CAGR for the whole Raisio Group, and 11% CAGR for the combined net sales of its three core product areas: low-cholesterol Benecol spreads and yogurt drinks, value added oat products and ingredients such as Elovena oatmeal, and its plant protein brands including Härkis.
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Regarding profits, Raisio had also looked to achieve a comparable EBIT rate of more than 13% of group net sales in 2025.
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By GlobalDataIt also intended to book total net sales exceeding €280m and comparable EBIT of more than €36m by fiscal year 2025.
Having initially set lower targets in 2021, the company revamped its growth strategy in 2022.
In a statement today (13 February), the company said it had been facing “slower than expected” short-term growth in the past year, “due to challenging market conditions.”
Raisio’s net sales plateaued year-on-year for the 12-month period ended December 2023, at €220m, a 0.6% drop on 2022.
EBIT for the 12 months rose 6.8% compared to 2022 at €19.1m but saw an annual decline of 47.6% in the three months ended December 2023, at €3.1m.
Finland remained Raisio’s biggest market, delivering 52% of its sales for the year. The UK saw 22% of sales, while other countries in Europe and the rest of the world made up 26%.
Commenting on Raisio’s performance, CEO Kuusniemi said: “The sharp fall in consumer purchasing power due to high inflation and rising interest rates caused major changes in the market environment during 2023.”
These difficulties included a drop in volumes, increasing consumer demand for cheaper and own-brand goods, making it a “surprisingly challenging” market for the company to navigate.
Benecol took a significant hit in Raisio’s portfolio. In the fourth quarter, net sales dipped 8.9% year-on-year at €26.2m and dropped 6.3% across the 12 months compared to the same point in 2022, at €106.5m.
The decline was particularly significant in the UK, it said, with inflation having a “significant impact on purchasing power and consumer demand”.
While the UK’s low-cholesterol products market dipped as a whole in 2023, the company said Benecol still retained “high” market share in the country.
Rasio’s plant proteins segment also recorded an annual decline of 17.7% in the fourth quarter at €1.2m and dropped 17.3% to €5.5m last January to December, compared to the same period in 2022.
It attributed the decline in the segment to the increasing competition in the plant-based protein market, with it having “been hit hardest by the current market turmoil.”
Despite the hit, Raisio stressed that it remained optimistic about the future of plant-based food “both in Finland and internationally” and did not intend to halt its innovation in the category.
The company’s value-added oat products and ingredients booked a 6.2% boost in sales in the fourth quarter at €14m, and a 12.8% annual increase across the 12 months, at €58m.
Last April, Raisio made changes to its executive board as part of a “comprehensive, long-term transformation program” which began in August 2022.
