2016-10-27 07:00:01 CEST
2016-10-27 07:00:01 CEST
REGULATED INFORMATION
Atria Oyj - Interim report (Q1 and Q3)
Interim Report of Atria Plc 1 January - 30 September 2016
Acquisitions support Atria's growth strategy
Seinäjoki, Finland, 2016-10-27 07:00 CEST (GLOBE NEWSWIRE) -- Atria Plc,
Interim Report, 27 October 2016 at 8:00 am
INTERIM REPORT OF ATRIA PLC 1 JANUARY– 30 SEPTEMBER 2016
Acquisitions support Atria’s growth strategy
July–September 2016
- Consolidated net sales totalled EUR 339.1 million (EUR 337.1 million).
- Consolidated EBIT was EUR 13.2 million (EUR 15.1 million), which equates to
3.9% (4.5%) of net sales.
- The acquisition of the Lagerbergs poultry company provided Atria with growth.
- The Sibylla business showed strong growth in Russia; there are now more than
2,700 outlets.
- EBIT was held back by lower sales prices than in the comparison period, the
costs related to commissioning a new pig cutting plant in Finland, and the
costs of taking over Lagerbergs in Sweden.
January–September 2016
- Consolidated net sales totalled EUR 994.9 million (EUR 989.2 million).
- Consolidated EBIT was EUR 21.0 million (EUR 24.2 million), which equates to
2.1% (2.4%) of net sales.
- The business operations of the Lagerbergs poultry company were transferred to
Atria as of the beginning of May. Annual net sales are expected to grow by
about EUR 30 million. In June, Atria decided to invest EUR 14 million in the
poultry business in Sweden.
- Atria acquires a majority stake in Well-Beef Kaunismaa Ltd. The Finnish
Competition and Consumer Authority approved the transaction in September and
the acquisition was confirmed on 3 October 2016. Annual net sales are expected
to grow by about EUR 40 million.
- Atria sold a pig farm in Estonia and real estate that it no longer needed in
Estonia and Sweden.
- EBIT growth was slowed by decreased sales prices, the costs of commissioning
the new pig cutting plant and the costs incurred in taking over new businesses.
Q3 Q3 Q1–Q3 Q1–Q3
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EUR million 2016 2015 2016 2015 2015
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Net sales
Atria Finland 227.0 235.1 685.7 681.0 929.0
Atria Scandinavia 90.6 81.3 255.1 246.7 330.5
Atria Russia 19.5 19.1 50.6 56.5 75.1
Atria Baltic 8.7 8.4 25.6 24.9 32.9
Eliminations -6.7 -6.9 -22.1 -20.0 -27.4
Total net sales 339.1 337.1 994.9 989.2 1,340.2
EBIT
Atria Finland 8.7 9.5 13.4 16.1 29.8
Atria Scandinavia 3.5 5.2 7.7 9.6 12.8
Atria Russia 0.5 0.5 -0.1 0.2 -0.2
Atria Baltic 0.5 0.0 0.1 0.1 -9.0
Unallocated -0.1 -0.2 -0.1 -1.8 -4.4
EBIT, total 13.2 15.1 21.0 24.2 28.9
EBIT, % 3.9% 4.5% 2.1% 2.4% 2.2%
Profit before taxes 11.8 13.0 16.3 17.3 20.1
Earnings per share, EUR 0.32 0.27 0.42 0.38 0.49
EBIT includes items affecting comparability:
Goodwill impairment - - - - -9.1
Pig farms sale - - -1.0 1.9 1.9
Sale of the real estate company - - 1.4 - -
Adjusted EBIT 13.2 15.1 20.6 22.3 36.1
Juha Gröhn, CEO
“Price competition has been unusually fierce for the entire year and it has
weakened Atria’s results in comparison with the previous year. Cost management
is very important in the prevailing market environment. The cost level and
activities of Atria’s standard operations are in good order. Actions related to
company acquisitions and commissioning the Nurmo pig cutting plant have
temporarily increased costs but, in time, these increases will turn into
savings, growth and profit.
At the end of the third quarter, the price level began to rise in several of
Atria’s key product groups. This influenced – and will continue to influence –
the balancing of supply and demand on EU meat market. The balancing factor is
the increase in exports from the EU to East Asia.
The decrease in sales prices has also affected Atria’s growth rate. An active
approach to company acquisitions in line with the strategy has been a
prerequisite for maintaining growth. This year, Atria has made 2 major
acquisitions: the Lagerbergs poultry company in Sweden and Well-Beef Kaunismaa
Ltd, a Finnish company that processes beef. The acquired companies have
combined annual net sales of approximately EUR 70 million. Atria's financial
position is strong and enables the implementation of its growth strategy.
However, it is essential that Atria is also able to grow organically within its
current businesses. Everything is in place to enable this and several of the
businesses have demonstrated their ability to grow this year. Expanding export
opportunities to markets such as China will play a part in underpinning organic
growth.”
July–September 2016
Atria Group’s net sales for July–September totalled EUR 339.1 million (EUR
337.1 million). EBIT amounted to EUR 13.2 million (EUR 15.1 million). The
increase in net sales was due to the acquisition of the Lagerbergs poultry
company in Sweden and the increase in sales of Sibylla products in Russia. In
Finland, net sales were held back by fierce price competition. EBIT was
weakened by lower sales prices, the costs related to ramping up the new pig
cutting plant, and the costs of taking over the poultry business that was
acquired in Sweden.
On 12 September 2016, the Finnish Competition and Consumer Authority
unconditionally approved Atria’s acquisition of a 70% stake in Well-Beef
Kaunismaa Ltd. The purchase price is approximately EUR 16 million. The
agreement between Atria and Well-Beef Kaunismaa to conclude the acquisition was
confirmed on 3 October 2016, after the review period.
Well-Beef Kaunismaa’s product range complements Atria’s selections of beef
products. The company’s customers are mainly fast-food chains and other Food
Service customers. Well-Beef Kaunismaa holds a strong position in the Finnish
market as a manufacturer of high-quality hamburger patties and kebab products.
Atria’s annual net sales are expected to grow by about EUR 40 million.
Well-Beef Kaunismaa has a production plant in Turku with approximately 50
employees.
The Sibylla concept has continued to show strong growth in Russia. The number
of Sibylla sales outlets has increased to more than 2,700.
Atria Finland’s net sales for July–September totalled EUR 227.0 million (EUR
235.1 million). EBIT amounted to EUR 8.7 million (EUR 9.5 million). Atria did
not take part in the intensified price competition in the retail and Food
Service markets and, as a result, sales volumes decreased in comparison with
the comparable period of last year. The costs of the transitional phase related
to commissioning the new pig cutting plant had a negative effect on EBIT.
Atria Scandinavia’s net sales for July–September totalled EUR 90.6 million (EUR
81.3 million). EBIT amounted to EUR 3.5 million (EUR 5.2 million). The increase
in net sales was mainly due to the Lagerbergs poultry company acquired in April
2016. EBIT was weighed down by increases in raw material prices, the sales
structure and the costs incurred in taking over Lagerbergs.
Atria Russia’s net sales for July–September totalled EUR 19.5 million (EUR 19.1
million). In the local currency, net sales grew by 5.4%. EBIT amounted to EUR
0.5 million (EUR 0.5 million). The growth in net sales was accelerated by a
revamped product selection, a growth in sales to retailers and good sales of
Sibylla products.
Atria Baltic’s net sales for July–September amounted to EUR 8.7 million (EUR
8.4 million). EBIT amounted to EUR 0.5 million (EUR 0.0 million). Sales volumes
were good. Sales of the new minced meat products launched at the beginning of
the year increased rapidly, while sales of grill sausages were weaker than in
the previous year. The price of pork began to rise during the review period,
which boosted the profitability of the business.
January–September 2016
Atria Group’s net sales for January–September totalled EUR 994.9 million (EUR
989.2 million). EBIT amounted to EUR 21.0 million (EUR 24.2 million). Adjusted
EBIT was EUR 20.6 million (EUR 22.3 million). EBIT growth was slowed by
decreased sales prices, the costs of ramping up the pig cutting plant and the
costs incurred in taking over the poultry business acquired in Sweden.
Once completed, Atria Finland’s pig cutting plant will be one of Europe’s most
modern cutting plants. The first phase of the cutting plant will be
commissioned in 2016, after which the old cutting plant will be modernised. The
entire project will be complete in 2017. The value of the investment is
approximately EUR 36 million, and it is expected to generate annual cost
savings of some EUR 8 million in the plant’s operations. These savings will be
realised in full as of the beginning of 2018. Employer-employee negotiations
concerning the project have been concluded. The cutting plant’s operations will
be reorganised and, as a result of these arrangements, staffing will be reduced
by 80 person-years by the end of 2016.
In April, the Swedish Competition Authority and Consumer Agency unconditionally
approved Atria’s acquisition of the entire share capital of Lagerberg i Norjeby
AB (Lagerbergs), a Swedish poultry company. The agreement between Atria and
Lagerbergs was confirmed at the end of April and the business operations were
transferred to Atria as of the start of May. The purchase price was EUR 18.7
million, and it was paid in cash. Atria’s annual net sales are expected to grow
by about EUR 30 million. The transaction expands Atria’s business in Sweden
into the poultry market.
In June, Atria’s Board of Directors approved a long-term investment programme
worth EUR 14 million for the development of the poultry business in Sweden. The
investments will be devoted to improving the entire production chain, from
chicken rearing and industrial production to product marketing. The investments
will take place in the period from 2016 to 2018.
Atria centralised its logistics operations in Sweden by moving them from
Gothenburg to the Malmö plant. The logistics centre in Gothenburg was sold for
a profit of EUR 1.4 million.
Atria sold the Linnamäe pig farm located in Northern Estonia. The sale of the
Linnamäe pig farm gave rise to a sales loss of approximately EUR 1 million. The
pig farm was transferred into new ownership as of 29 April 2016.
Atria centralised its industrial operations in Estonia at the Valga factory.
Production of meat products was transferred from the Vastse-Kuuste factory to
Valga and the real estate was sold. The sale had no impact on the company’s
results. Production rearrangements were concluded by the end of the second
quarter. The measures are expected to generate annual savings of approximately
EUR 0.5 million.
Atria Finland’s net sales for January–September totalled EUR 685.7 million (EUR
681.0 million). Increased sales volumes at the beginning of the year enabled
net sales to grow. EBIT amounted to EUR 13.4 million (EUR 16.1 million). A
decline in sale prices and the costs of the transitional phase related to
commissioning the new pig cutting plant had a negative effect on EBIT.
Atria Scandinavia’s net sales for January–September totalled EUR 255.1 million
(EUR 246.7 million). EBIT amounted to EUR 7.7 million (EUR 9.6 million).
Adjusted EBIT was EUR 6.2 million (EUR 9.6 million). The increase in net sales
was mainly due to the acquired poultry business. EBIT was weighed down by the
effects of the sales structure and the costs incurred in taking over
Lagerbergs.
Atria Russia’s net sales for January–September totalled EUR 50.6 million (EUR
56.5 million). In the local currency, net sales grew by 2.8%. EBIT was EUR -0.1
million (EUR 0.2 million). Adjusted EBIT was EUR -0.1 million (EUR -1.7
million). Adjusted EBIT was boosted by increased sales of Sibylla products,
stabilisation of raw material prices and increased sales to retailers.
Atria Baltic’s net sales for January–September totalled EUR 25.6 million (EUR
24.9 million). EBIT amounted to EUR 0.1 million (EUR 0.1 million). Adjusted
EBIT was EUR 1.1 million (EUR 0.1 million). Atria’s retail sales volumes showed
positive development in the first half of the year. Sales of minced meat
products and fresh meat showed particularly strong improvement. Long-term work
to increase cost efficiency has led to improved profitability.
Key indicators
EUR million 30.9.16 30.9.15 31.12.15
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Equity/share, EUR 14.28 14.07 14.16
Interest-bearing liabilities 230.2 225.5 199.6
Equity ratio, % 46.3% 46.0% 47.4%
Net gearing, % 55.7% 55.8% 48.3%
Gross investments in fixed assets 54.0 39.0 56.9
Gross investments, % of net sales 5.4% 3.9% 4.2%
Average personnel (FTE) 4,291 4,304 4,271
The principles for calculating key indicators were presented in the
2015 annual financial statements.
Outlook for the future
Consolidated EBIT was EUR 28.9 million in 2015. In 2016, EBIT is expected to be
better than in 2015. In 2016, net sales are expected to grow.
Disclosure
Atria Plc complies with the disclosure procedure in accordance with standard
5.2b of the Financial Supervisory Authority and publishes its financial
statement release for 1 January to 30 September 2016 as an attachment to this
company announcement. The full release is available on the company’s website at
www.atria.com.
For more information, please contact: Juha Gröhn, CEO, Atria Plc, tel. +358 400
684224.
Invitation to press conference
A press conference will be held in Finnish today, 27 October 2016, at 9:45 am
at Atria Plc’s Helsinki office, Läkkisepäntie 23, Helsinki. The presentation
material will be available on the company’s website (www.atria.com) after the
publication of the financial statements and as an attachment to this company
announcement.
ATRIA PLC
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