2011-07-28 07:00:00 CEST
2011-07-28 07:00:09 CEST
REGULATED INFORMATION
Atria Oyj - Interim report (Q1 and Q3)
Interim Report of Atria Plc 1 January - 30 June 2011
Seinäjoki, Finland, 2011-07-28 07:00 CEST (GLOBE NEWSWIRE) -- Atria Plc,
Interim Report, 28 July 2011, 8:00 am
INTERIM REPORT OF ATRIA PLC 1 JANUARY - 30 JUNE 2011
High raw material costs and too low sales prices burdened Atria's result
- net sales increased by 2.4% in comparison with the previous year
- EBIT for the period under review showed a loss of EUR 5.2 million (profit of
EUR 5.7 million)
- the Group's equity ratio is at the target level: 40.0% (40.4%)
- during the review period, Atria issued a profit warning and announced a
change in its 2011 EBIT forecast
Atria Group
Q2 Q2 H1 H1
------------------------------------
EUR million 2011 2010 2011 2010 2010
------------------------------------------------------------
Net sales 333.6 317.0 637.6 622.9 1,300.9
EBIT -0.9 4.7 -5.2 5.7 9.8
EBIT% -0.3 1.5 -0.8 0.9 0.8
Profit before taxes -4.4 3.5 -10.9 1.7 0.3
Earnings per share, EUR -0.15 0.10 -0.34 0.03 -0.18
Overview
Atria Group's H1 net sales came to EUR 637.6 million (EUR 622.9 million), with
growth of 2.4%. Calculated in fixed currencies, the net sales were at the same
level as last year. Atria Finland's net sales increased by 8.7%. Production
breaks caused by industrial action took place in Finland during the comparative
Q2 period of 2010. The decline of 5.7% in Atria Scandinavia's net sales is
mainly because of the discontinuation of consumer-packed meat production in the
summer of 2010 and slightly lower sales volumes. Atria Russia's net sales fell
by 3.9%. This was due to the decrease in sales in Moscow. In St Petersburg, the
sales volumes have remained stable. Atria Baltic's net sales were at the same
level as last year.
Atria Group's EBIT fell to a negative EUR 5.2 million (from EUR 5.7 million to
the positive), which was due to the weakened profitability of Atria Finland and
Atria Russia. During the review period, Atria issued a profit warning and
announced an amendment to its 2011 EBIT forecast. The company expects the
full-year EBIT to be significantly lower than the 2010 EBIT excluding
non-recurring items (which was EUR 21.6 million). According to an earlier
forecast, the 2011 EBIT would have been higher than EUR 21.6 million. The
company's net sales forecast remains unchanged. Net sales are expected to grow
somewhat in 2011.
Atria Finland's EUR 3.2 million EBIT (EUR 10.9 million) was decreased by raw
material prices that remained high and weakened sales structure. It was not
possible to transfer the raw material price increase in full to sales prices.
Exports now account for a greater proportion of total sales than in the
previous year.
Atria Russia's EBIT, -11.1 million euros (-4.9 million euros), was weakened by
the rapid increase in meat raw material prices at the end of last year as well
as the slow recovery of the demand for meat products. Performance during the
period was also burdened by the costs of the new plant completed last summer in
St Petersburg as well as the costs from the restructuring of operations.
Atria Scandinavia's EBIT was EUR 5.0 million (EUR 4.0 million). The figure for
the comparison year included a non-recurring cost item of EUR 2.0 million.
Atria Baltic's EBIT in Q2/2011 turned positive, and performance over the first
half of the year was narrowly profitable (H1/2010: EUR -2.1 million). The
positive development in earnings was due to the improvement in cost-efficiency
and sales structure during the review period as well as the non-recurring sales
gains achieved. The Q2/2011 EBIT includes EUR 0.6 million of non-recurring
sales gains. The EBIT for the first half of the year includes, in total, EUR
0.9 million in non-recurring sales gains.
The operating cash flow stood at EUR 8.8 million (EUR 3.6 million) and cash
flow from investments at EUR ‑17.5 million (EUR -28.8 million). The Group's
free cash flow was EUR -8.7 million (EUR -25.2 million). Net interest-bearing
liabilities came to EUR 424.4 million, with growth of EUR 13.0 million from
year end. Atria Scandinavia concluded an agreement with Nordea Finans Sverige
AB concerning sale of trade receivables. This decreased the company's trade
receivables by, in total, EUR 15.0 million at the end of the review period.
In January, Atria Plc made a decision to invest approximately EUR 26 million
in building and renovating the Kauhajoki bovine slaughterhouse and cutting
plant. Atria Plc also bought the shares of Kauhajoen Teurastamokiinteistöt Oy
held by Itikka Co‑operative. The final purchase price was EUR 6.1 million.
In the first half of the year, Atria Finland launched two efficiency
improvement programmes: for efficiency improvements in bovine slaughtering and
Nurmo production plant development. The total annual cost savings from these
measures amount to approximately EUR 10 million and will start materialising
during 2011, to be fully materialised no later than the beginning of 2013.
The reorganisation of production started by Atria Russia in 2010 is
progressing according to plan. Meat product production will be centralised,
moving from the Moscow and Sinyavino plants to the new Gorelovo plant, in St
Petersburg. The annual cost savings are projected to be EUR 6 million and
should begin to materialise during 2012. The savings will be fully realised as
of the beginning of 2013.
During the review period, Atria Scandinavia continued to enhance its
operations' efficiency by automating the production process for black pudding.
Production of black pudding is to be transferred from the Saltsjö-Boo plant, in
Stockholm, to Tranås. The efficiency improvement programme is expected to
generate annual cost savings of approximately EUR 1.0 million. The savings will
be fully realised as of the beginning of 2012.
Key indicators
EUR million 30.6.11 30.6.10 31.12.10
---------------------------------------------------------------
Shareholders' equity per share, EUR 15.02 15.90 15.68
Interest-bearing liabilities 432.7 444.1 429.9
Equity ratio, % 40.0 40.4 40.2
Gearing, % 101.3 98.3 96.4
Net gearing, % 99.3 95.8 92.2
Gross investments in fixed assets 24.4 27.1 46.2
Gross investments, % of net sales 3.8 4.4 3.5
Average number of employees (FTE) 5,642 5,812 5,81
Outlook for the future
Atria Plc announced an amendment to its 2011 EBIT forecast during the period
under review. The company expects the full-year EBIT to be significantly lower
than the 2010 EBIT excluding non-recurring items (which came to EUR 21.6
million). According to an earlier forecast, the 2011 EBIT figure would have
been higher than EUR 21.6 million. The company's net sales forecast remains
unchanged, with net sales expected to grow somewhat in 2011.
The key source of uncertainty in terms of growth in net sales is the difficult
market situation in Russia. Tightening competition may also slow down sales
growth.
Atria Finland's unexpectedly weak performance hampers the performance of the
whole Group. Atria Finland's performance has been weakened by the sharp rise in
prices of key raw materials in meat production as well as the market situation
for pork remaining difficult. The price development for raw materials will be
significant for the Group's performance in the latter part of the year also in
other business areas.
The meat raw material market should stabilise in 2011 from the situation in
2010. However, there is still pressure to raise meat raw material prices, e.g.
due to the increased costs of energy and animal feed. Consequently, prices of
end products can be expected to rise throughout the remainder of the year in
all of Atria's business areas. Consumption of food is expected to grow slightly
in Finland, Sweden, Denmark, and Estonia. Atria estimates that total Russian
demand for food products has started to grow moderately and will continue to be
slow in 2011.
Implementation of the product leadership strategy is progressing according to
plan. Highly visible launch campaigns will be carried out in various fields of
business in 2011.
Atria has initiated profitability improvement measures in various business
areas in 2010 and 2011. These measures will generate annual cost savings
totalling EUR 17 million. The savings will begin to materialise during 2011 and
will have fully materialised in 2013 at the latest.
Publication procedure
Atria Plc complies with the publication procedure in accordance with standard
5.2b of the Financial Supervisory Authority and publishes its 1 JANUARY - 30
JUNE 2011 interim report as an attachment to this company announcement. The
full interim report is available on the company's website at
www.atriagroup.com.
For more information, please contact: Juha Gröhn, CEO, Atria Plc, tel. +358 400
684 224.
Invitation to a press conference
A press conference conducted in Finnish will be arranged today 28 July 2011 at
9:30 am at Atria offices in Helsinki, address Läkkisepäntie 23, Helsinki. The
presentation material will be available on the company's website
(www.atriagroup.com/en/investors/FinancialInformation/quarterlyreports) after
the distribution of the interim report and as an attachment to this company
announcement.
ATRIA PLC
Juha Gröhn
CEO
DISTRIBUTION
Nasdaq OMX Helsinki Ltd
Major media
www.atriagroup.com
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