2024-04-23 07:00:00 CEST
2024-04-23 07:00:08 CEST
REGULATED INFORMATION
Atria Oyj - Interim report (Q1 and Q3)
Interim report of Atria Plc, 1 January - 31 March 2024
Atria Plc, Interim report, 23 April 2024, 8.00 am
Interim report of Atria Plc, 1 January-31 March 2024
Atria's results were good in a difficult market environment - all business areas
achieved a positive EBIT
January-March 2024
· Consolidated net sales totalled EUR 416.8 million (EUR 428.0 million). The
decrease in net sales resulted from lower feed sales prices and the weakening of
export and Foodservice sales volumes in Finland.
· Consolidated EBIT was EUR 8.0 million (EUR 10.9 million), or 1.9% (2.5%) of
net sales. The decrease in EBIT was due to lower net sales in Finland, the start
-up costs of the Nurmo poultry plant and general cost inflation.
· All business areas posted a positive EBIT during the review period. In
Sweden, the efficiency programme measures and centralisation of production
strengthened EBIT.
· The commissioning of the new Nurmo poultry plant and process optimisation
continued as planned.
· Atria entered into an agreement to acquire the entire share capital of the
Swedish convenience food company Gooh. The acquisition will be finalised in
early May.
· Meelis Laande (MBA) was appointed as CEO of Atria Estonia and a member of
the Atria Group's Management Team as of 1 April 2024.
· The Board of Directors proposes to the Annual General Meeting that the
company distribute a dividend of EUR 0.30 and a capital repayment of EUR 0.30
for 2023, totalling EUR 0.60 per share (EUR 0.70).
Q1 Q1
EUR million 2024 2023 2023
Net sales
Atria Finland 309.8 323.5 1,325.9
Atria Sweden 82.1 81.8 330.5
Atria Denmark & Estonia 30.7 28.2 122.2
Eliminations -5.8 -5.5 -25.9
Net sales, total 416.8 428.0 1,752.7
EBIT before items affecting comparability
Atria Finland 7.2 14.9 56.1
Atria Sweden 0.0 -3.3 -5.6
Atria Denmark & Estonia 1.4 -0.5 2.9
Unallocated -0.6 -0.2 -3.7
Adjusted EBIT 8.0 10.9 49.6
Adjusted EBIT, % 1.9 % 2.5 % 2.8 %
Items affecting comparability of EBIT:
Atria Finland
Impairment of trademark -2.5
Poultry business reorganization costs -3.1
Atria Sweden
Impairment of goodwill and trademarks -20.0
Business reorganization costs -2.6
Atria Denmark & Estonia
Impairment of goodwill and trademarks -20.0
Unallocated
Costs related to business arrangement -1.0
EBIT 8.0 10.9 0.4
EBIT, % 1.9 % 2.5 % 0.0 %
Profit before taxes 3.9 8.9 -11.2
Earnings per share, EUR 0.10 0.23 -0.70
Adjusted earnings per share, EUR 0.10 0.23 0.98
Kai Gyllström, CEO
“Net sales for January-March were EUR 416.8 million, which was EUR 11.2 million
lower than in the same period last year. Operating profit was EUR 8.0 million.
However, the net sales and EBIT for the period were at a very good level. EBIT
was positive in all business areas. A year ago, we posted record-breaking
results in the first quarter, and growth was also stronger than usual.
Considering the challenges in the market situation, we can be satisfied with our
start in 2024.
In Finland, the market has been challenging. Net sales decreased compared to the
previous year. Feed sales prices have come down as grain prices have fallen,
which negatively affected the net sales of our feed business compared to the
previous year. Similarly, Atria Finland's exports and Foodservice sales were
sluggish. Exports slowed down significantly for a few weeks due to strikes, and
the downturn in Foodservice sales is attributed to weakened consumer purchasing
power. Red meat is currently oversupplied on the market, which is putting
downward pressure on meat prices. In addition to the decline in net sales,
profits were weighed down by general cost inflation and the costs of
commissioning the poultry plant.
The closure of the Malmö plant in Sweden last year, the centralisation of
production at the Sköllersta plant and the changes in organisational structure
are now reflected in improved profitability. Atria's strengthened market
position in poultry products and Foodservice increased net sales during the
review period. Performance in Sweden ended slightly positive.
Price competition in the retail sector is fierce in Denmark. However, we were
able to increase exports, which led to improved net sales in Denmark. Results
also improved due to the completion of efficiency improvement projects. In
Estonia, Atria increased its market share in retail trade and further
strengthened its position as market runner-up. Atria Estonia reported good
results and increased net sales.
In March, Atria Sweden entered into an agreement to acquire the entire share
capital of the Swedish convenience food company Gooh. Gooh fits perfectly into
the Atria Group's strategic goal of growing in the convenience food segment and
improving Atria Sweden's profitable growth. Gooh's product range complements
Atria's existing convenience food offering. With a market share of around 25%,
Gooh is the market leader in the fresh microwaveable meals segment of Swedish
retail trade. Gooh products are sold in all major grocery chains and vending
machines in Sweden. This acquisition gives us new opportunities for product
innovation in the growing convenience food product group.
Atria Estonia invested in pork production in Estonia and acquired two pig farms
in southern Estonia. Pork consumption in Estonia is stable, and with the
acquisition, Atria also aims to ensure the supply of domestic pork in the
future.
Atria has an ambitious sustainability target for a carbon-neutral food chain.
The key to achieving this target is the consistent and continuous development of
sustainability activities. It is important for us to promote the Scope 3
emissions reduction targets of the Science Based Target initiative. We have
already started this work: we have launched numerous projects and developed
calculation models that measure progress towards this target. One example of a
significant sustainability project is the construction of a biogas plant near
the Nurmo plant, in which Atria is a shareholder. For Atria's value chain,
implementing this project means progress towards the carbon neutrality target.
Sustainability is at the heart of our strategy - and we will invest in it even
more in the coming years.”
January - March 2024
Atria Group's net sales in January-March were EUR 416.8 million
(EUR 428.0 million). Consolidated EBIT was EUR 8.0 million (EUR 10.9 million),
or 1.9% (2.5%) of net sales.
Atria Finland's net sales in January-March decreased, which was due to a
decrease in the feed business, exports and Foodservice sales. The decrease in
net sales in the feed business resulted from lower sales prices than in the
previous year. A strike at the ports slowed down export shipments for several
weeks, resulting in the revenue from Atria's export trade being significantly
lower than in the previous year. Foodservice sales in Finland weakened towards
the end of the review period. Net sales increased in other business areas.
The Group's EBIT was EUR 8.0 million (EUR 10.9 million). The lower EBIT in
Finland than in the comparison period is affected by the weakened market
situation for red meat, which is mainly due to reduced consumer purchasing
power. The commissioning of the new poultry plant in Nurmo and process
optimisation also resulted in additional costs. In addition, the costs of
supplies, commodities, pay agreements and external services remained high and
weighed on the profits.
Atria Sweden's centralisation of production at the Sköllersta plant last year
and the streamlining of the organisational structure are reflected in improved
profitability during the review period. Atria's market shares in retail trade
strengthened in a growing market.
In Estonia, profitability improved as a result of higher net sales and lower
prices for raw materials. In Denmark, increased exports and the efficiency
measures implemented last year improved the results.
Atria Finland's net sales for January-March were EUR 309.8 million (EUR 323.5
million). The decrease in net sales was due to a decrease in the feed business,
exports and Foodservice sales. The decrease in net sales in the feed business
resulted from lower sales prices than in the previous year. A strike at the
ports slowed down export shipments for several weeks, resulting in the net sales
from Atria's export trade being significantly lower than in the previous year.
Foodservice sales weakened towards the end of the review period. Sales to retail
increased slightly compared to the same period last year. General cost inflation
weakened consumer purchasing power. Consumers are saving on food purchases and
choosing more affordable products. EBIT totalled EUR 7.2 million (EUR 14.9
million). In addition to the decline in net sales, profits were weighed down by
the costs of commissioning the new poultry plant and general cost inflation. The
costs of supplies, external services and salary settlements were higher in the
review period than in the comparison period. The cost of energy was also higher
than in the comparison period. The lower EBIT than in the comparison period is
also affected by the weaker market situation for red meat, mainly due to reduced
consumer purchasing power. The commissioning of the new poultry plant in Nurmo
incurred costs during the review period. Performance optimisation of production
processes continued as planned. The Sahalahti poultry plant will be closed
during the spring.
Atria Sweden's January-March net sales were EUR 82.1 million (EUR 81.8 million).
Atria Sweden's market shares in retail trade strengthened in a growing market.
Sales increased in the Foodservice and fast-food channels. Net sales in the
comparison period include sales of products manufactured at the Malmö plant.
Some of the products were discontinued when the Malmö factory was closed in the
spring of 2023. EBIT totalled EUR 0.0 million (EUR -3.3 million). The closure of
the Malmö plant, the centralisation of production at the Sköllersta plant and
the streamlining of the organisational structure are now reflected in improved
profitability. Raw material prices have remained high during the review period.
The weakened Swedish krona increased the cost of imported raw materials. Energy
costs have decreased slightly compared to the same period last year.
Atria Sweden AB entered into an agreement in February to acquire the entire
share capital of the Swedish convenience food company Gooh. The acquisition has
received the required regulatory approval (Inspektionen för strategiska
produkter) and will be finalised in early May.
Atria Denmark & Estonia's net sales in January-March were EUR 30.7 million (EUR
28.2 million). EBIT totalled EUR 1.4 million (EUR -0.5 million). Price
competition in the retail sector is fierce in Denmark. Atria lost some of its
market share in cold cuts. The market for private label products in Denmark has
continued to grow. Export sales grew compared to the same period last year,
improving Atria Denmark's net sales. The efficiency programme implemented last
year improved the results. Atria Estonia further strengthened its market
position in the Estonian retail market. Sales of all product groups increased
during the review period, and Atria was able to increase its market share in the
growing market. Atria Estonia's results strengthened, driven by increased net
sales and lower raw material prices. In particular, feed prices are below those
of the previous year due to the decline in cereal prices.
Group key indicators
Q1 Q1
EUR million 2024 2023 2023
Net sales 416.8 428.0 1752.7
Adjusted EBIT 8.0 10.9 49.6
Adjusted EBIT, % 1.9 % 2.5 % 2.8 %
EBIT 8.0 10.9 0.4
EBIT, % 1.9 % 2.5 % 0.0 %
EPS, EUR 0.10 0.23 -0.70
Adjusted EPS, EUR 0.10 0.23 0.98
Shareholders´ equity per share EUR 13.64 15.66 13.82
Equity ratio, % 40.8 % 44.5 % 41.7 %
Adjusted return on equity (rolling 12m), % 6.7 % 9.4 % 7.2 %
Adjusted return on investment (rolling 12m), % 7.1 % 8.6 % 7.5 %
Sustainability: towards a carbon-neutral food chain
A carbon-neutral food chain is Atria's most important sustainability target.
Atria's emissions targets are officially approved by the Science Based Targets
initiative. Several projects contributed to progress towards this target during
the review period.
Atria has achieved a “B-” management-level rating for its climate efforts in the
annual ranking of the global non-profit organisation CDP. The rating rose by
three grades from the 2022 assessment. The increase in this rating is a
reflection of Atria's systematic work and commitment to climate action.
There was progress in the systematic measurement of the carbon footprint of
cattle farms. Together with Valio, Atria has created the Carbo® environmental
calculator for beef and suckler cow farms. At the beginning of the year, the
Carbo® calculator was made available to all of Atria's contractual production
facilities. With this calculator, Atria's more than 1,200 contract farms
specialising in beef production can calculate their farm's environmental impacts
and explore the most efficient ways to reduce them. Atria began working with
Valio and the Natural Resources Institute Finland to develop a national model
for calculating the carbon footprint of cattle farms in 2022. During 2023, the
environmental impact of beef production was calculated at 70 of Atria's contract
farms, which increased the coverage of carbon footprint data for beef.
Nurmon Bioenergia Oy is preparing to build an industrial-scale liquefied biogas
production plant near Atria's production plant in Nurmo. Atria is a minority
shareholder in the company. The project will boost the agricultural biogas
business and generate vitality and income for domestic agriculture. For Atria's
value chain, implementing this project means progress towards the carbon
neutrality target. Tuoretie Oy, which manages Atria's transports, will gradually
switch to biogas-powered fleets for food transport. New biogas vehicles will be
added at a rate of 3-4 vehicles annually as the refuelling network and
maintenance services expand. The goal is to achieve a reduction of about 10
million kilograms in carbon dioxide emissions by 2030 by gradually switching to
biogas. When complete, the plant will be one of the largest liquefied biogas
production plants in Finland. The biogas plant under construction in Nurmo will
produce renewable domestic energy and various biofertilisers from manure and
agricultural by-products from farms in the area. The new biogas plant is
expected to be ready in 2026. The project has a valid environmental permit and
has been granted an investment grant from the Ministry of Economic Affairs and
Employment. The liquefied biogas plant to be built in Nurmo will have a
production capacity of 117-gigawatt hours per year. This amount would reduce the
annual need for fossil diesel by 11.7 million litres, which, in turn, would
result in a reduction of about 40,000 tonnes in carbon dioxide emissions from
transport.
Future outlook and earnings guidance
Atria Group's adjusted EBIT in 2024 is expected to be smaller than in the
previous year (EUR 49.6 million).
The operating environment is expected to remain challenging in 2024,
particularly in terms of consumer behaviour. The construction and installation
work of the new poultry plant in Nurmo have proceeded according to schedule and
the plant is fully operational. Its performance will be optimised during 2024.
The challenging market situation and the achievement of the efficiency targets
set for the new poultry plant will have an impact on the year's result. Atria's
good market position, strong brands and good customer relationships, as well as
its reliable industrial processes, will nevertheless enable stable business,
also in 2024.
Proposal by the Board of Directors for dividend and capital repayment for 2023
The Board of Directors proposes that the company distribute a dividend of EUR
0.30 per share for 2023 and a capital repayment of EUR 0.30 per share totalling
EUR 0.60 per share (EUR 0.70 per share).
Disclosure
Atria Plc complies with the disclosure procedure in accordance with standard
5.2b of the Financial Supervisory Authority and publishes its interim report for
1 January to 31 March 2024 as an attachment to this stock exchange release. The
full release is available on the company's website at www.atria.com.
Publication of the interim report
Atria Plc's CEO Kai Gyllström will present the company's interim report in a
webcast today, 23 April, at 10:00 - 11:00 am. The webcast is available on
Atria's website at www.atria.com/sijoittajat/ in Finnish language. During the
webcast, you can ask questions in writing via chat. The recording of the press
conference and the presentation material of the event will be available during
the same day at https://www.atria.com/sijoittajat/taloustieto/osavuosikatsaus/.
ATRIA PLC
Board of Directors
For more information, please contact: Kai Gyllström, CEO, Atria Plc. Contacts
and interview requests via Communications Manager Marja Latvatalo, e-mail:
marja.latvatalo@atria.com, tel. +358 400 777 874.
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.atria.com
The interim report is available on our website at www.atria.com.
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