Its confectionery unit – which accounts for almost a third of group sales – reported a -9.3% drop in Q1 revenues to €23.4m ($25.5m), the company reported this morning.
Group sales declined -18.9% over the period (January-March 2017) to €92.5m ($107m).
“In the UK, the profitability of [the] confectionery business fell due to a sales decline in our own branded products and delivery difficulties,” said interim CEO Jarmo Puputti.
He also cited a weaker British pound after Brexit.
The company said some of its major private label confections were delisted and Raisio’s brand Poppets was also delisted by some retailers.
It also reported production difficulties at its UK confectionery plant.
However, it said its Czech confectionery business posted flat net sales driven by launches and new listings for its candy brand Pedro.
Raisio also gained confectionery sales with its major retail customer in Poland. But sales dropped for its Czech export brand Juicee Gummee due to increased competition.
Raisio’s confectionery unit
Raisio produces and sells its own brands such as Fox's Glacier, Juicee Gummee and Poppets, which account for more than a quarter of its confectionery sales.
Its remaining confectionery sales are for products it produces for private label customers.
The company operates a UK factory in Leicester that produces toffees, boiled sweets, mints and chocolate candies, while soft gum is produced at its plant in Rohatec, Czech Republic.
Expanding branded range
Raisio said in its financial report it will expand its branded confectionery range to capitalize on consumer trends such as genuine fruit juices, sugar-free candies, natural and responsible raw materials.
It said the confectionery market was “growing slowly” in many European markets, but highlighted consumer and government concerns over sugar, particularly in the UK.
The company said, demand for overall confectionery slightly increased in the UK, but said chocolate demand declined at the start of the year.
Hunt for new CEO
Raisio’s group CEO Matti Rihko resigned in January this year. Puputti has been appointed interim CEO, while the company searches for a full-time replacement.
Raisio forecasts it will “fall slightly short” of EBIT (Earnings before interest and taxes) posted in 2016 for the full year and said exchange rates will “significantly affect” its net sales for 2017.