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Operating environment

Economic situation in Europe continued unstable and it is challenging for the companies to maintain margins. Raisio has also reacted to the situation even though grocery trade was not subject of the strongest pressure. Raisio had decided that 2013 would be the year of enhanced operations and synergy benefits. In 2013, the company delivered the best EBIT in the current Raisio's history despite the weakened market conditions in Europe.

Raisio's 2013 was a year enhanced operations and synergy benefits.

In the companies operating in many markets and categories, the targets needing management's special attention are changing more and more rapidly in the changing operating environment. In Raisio's Northern European Consumer brands unit, the reorganisation and product range renewal were successfully completed and the unit's profitability improved significantly. At the moment, the focus of improvement is on the UK's unit of cereals and snacks.

Competition continued challenging in the consumer product markets

In the UK, sales in consumer products continued price-driven. Raisio has decreased its promotional activity, which, together with the sugar debate, decreased sales of Raisio's breakfast cereals. We are looking for solutions to the situation through internal organisational changes and by strengthening our branding expertise.

Sales were up in confectionery sold under retailers' private label brands in the Western European markets. Raisio has well-known confectionery brands of its own and the company is a major producer of retailers' private label confectionery.

Competition continued challenging in the Finnish consumer product market, which was partly due to the economic conditions in Finland. Thanks to the efficiency measures and product range renewal, sales in Raisio's key brands increased on the comparison period in Finland.

Competition remained intense in the main European markets for cholesterol-lowering functional foods. Sales in private label products were up largely due to the weak economic situation in Europe. As for the Benecol product markets, there are still significant differences in sales development between the countries. Sales in Benecol products increased in Finland, Poland and Asia.

In the agriculture sector, the focus on the efficiency improvement

Improved efficiency of food production and product safety both play a key role when building the future sustainable food chain. Many global challenges related to the food and agriculture sector can be turned into opportunities and profitable business with innovations supporting sustainable development. Benemilk dairy cattle feeds are a good example of a top innovation: they increase milk yields and improve milk contents while improving the efficiency of milk production.

Benemilk – Raisio's top innovation

Dairy market conditions remained positive in Finland and milk production showed a clear increase of 1.4 per cent after a few years' stagnation. In practice, production growth meant 106 litres more milk per cow a year, which provided the dairy farmers with an additional income of almost 14 million euros. Benemilk has a market share of about 10 per cent of the Finnish dairy cattle feeds.

Raisioagro's new method for fatty acid optimisation for the final growth stage of salmon received a lot of positive feedback in Finland. Raisioagro's product concept Hercules LP Opti takes advantage of the new invention enhancing the production chain of farmed salmon while improving the profitability of fish farming in a sustainable way. Expensive and limitedly available fish oil can be replaced with rapeseed oil. This almost halves the amount of fish oil in the feeds used during the farming period while maintaining the beneficial fatty acid composition of the fish.

Sustainable production enhancement and improved profitability with new salmon feed invention

For the companies serving producers, expertise will be increasingly important as the number of farms decreases, farm size increases and customer needs change. Raisioagro actively develops its service concept and expertise to be the leading operator in the industry with the most innovative products and ecological solutions to meet the needs of grain and livestock farms.