Chief Executive's review
The year 2014 was twofold for Raisio. Weak performance at the beginning of the year was exceptional but we were able to correct the situation quickly during the second half of 2014. We solved problems in the businesses with the biggest challenges and, on the other hand, moved further with the businesses that were already doing well. In the last two quarters, Raisio reached higher EBIT than in the comparison periods, which shows that we are back on improving trend.
Our Benecol business acquisition from the affiliates of Johnson & Johnson completed in November 2014 was a good and important deal for Raisio. Through the acquisition, the UK, Ireland and Belgium are now Raisio's new, interesting home markets for Benecol products. The deal also included an amendment of the US-related agreement. The deal perfectly met all the criteria Raisio has set on its acquisitions and strongly supports the growth strategy of the Brands Division. Through the arrangement completed, we now have an opportunity to develop the Benecol business on our own terms, for the first time since 1997.
Brands Division aims for growth and better use of synergies
In December 2014, Raisio renewed the Brands Division's organisation to better meet the objectives set for the Group's growth phase concerning, for example, improvement of profitability and enhancement of organic growth. We aim to make clearly better use of the synergies between our branded operations and to enable business growth. Cereals and Snacks businesses in the UK and Northern Europe have been combined into a single entity, which allows us to use the best expertise available to tackle the challenges related to the UK's cereal business. In addition, all Benecol businesses have been combined into one entity, which enhances innovation and enables growth.
Raisio's EBIT weakened by some EUR 5 million from the comparison year and the same amount also affected the Brands Division's result. The Division's net sales, however, increased and for some businesses, the growth was so strong that it compensated for the losses of the UK's Cereals and Snacks unit. The fourth quarter already showed clearly the strong performance potential of the Brands Division.
Raisioagro's focus on innovations and expertise
Raisioagro carried out an extensive reorganisation of activities focusing on its cattle feeds, with Benecol as the global flagship, on its fish feeds, now called Raisioaqua, and on its grain trade and online store. Raisio terminated the productions of pig and poultry feeds and vegetable oils as we no longer see the market outlook strong enough. Raisioagro is now smaller but much more effective. In fact, the situation of the company is much better than many expected it to be. For example, return on investment was more than 10 per cent.
Raisioagro aims to be the leading operator in the agricultural sectors where success is based on innovations and expertise in feeding and plant cultivation. Innovations improving the effectiveness and profitability in agriculture and fish farming are at the core of Raisioagro's new strategy.
Benemilk –great opportunities
The international commercialisation of Benemilk is proceeding as planned. The year 2014 was really good: a commercial organisation was established for Benemilk, activity level was high and strong R&D efforts continued. We continue our commercial negotiations with several partner candidates in Asia, Europe, Oceania and North America.
Some of the partners have conducted their own production tests and commissioned feeding trials from external research institutes, which has extended negotiations as the analysis of results of each test easily takes several months. Further development of the Benemilk innovation has resulted in many new innovations that support our patent portfolio.
Continuous dividend growth since 2007
The Board of Directors' dividend proposal to the Annual General Meeting is EUR 0.14 per share. In 2015, Raisio expects its EBIT to return on its long-term upward trend.