2011-04-29 07:00:00 CEST
2011-04-29 07:00:12 CEST
REGULATED INFORMATION
Atria Oyj - Interim report (Q1 and Q3)
Interim Report of Atria Plc 1 January - 31 March 2011
Seinäjoki, Finland, 2011-04-29 07:00 CEST (GLOBE NEWSWIRE) -- Atria Plc,
Company Announcement, 29 April 2010, 8:00 am
INTERIM REPORT OF ATRIA PLC 1 January-31 March 2011
Atria Group's net profitability weakened
- EBIT for the review period showed a loss of EUR -4.2 million (EUR 1.0 million)
- Net sales were at the previous year's level: EUR 304.0 million (EUR 305.9
million)
- Group's equity ratio rose to 41.2 per cent (40.2 per cent)
- Atria Finland's net sales increased by 4.0 per cent but EBIT decreased
significantly
- Atria Scandinavia and Atria Baltic improved their results
- Atria Russia's result declined significantly compared to the Q1/2010 period
Atria Group
Q1
----------------------
EUR million 2011 2010 2010
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Net sales 304.0 305.9 1 300.9
EBIT -4.2 1.0 9.8
EBIT% -1.4 0.3 0.8
Profit before taxes -6.6 -1.8 0.3
Earnings per share, EUR -0.20 -0.07 -0.18
Overview
Atria Group's net sales were at the same level as last year. Calculated in
fixed currencies, the decrease in net sales was 3.5 per cent. Atria Finland's
net sales increased by 4.0 per cent, which was mainly due to the increased
sales of less processed products. The decline of 7.5 per cent in Atria
Scandinavia's net sales is mainly explained by the discontinuation of consumer
packed meat production in the summer of 2010 and slightly decreased sales
volumes. Atria Russia's net sales were at the previous year's level and in
Atria Baltic, net sales grew by 6.6 per cent.
Atria Group's EBIT fell to EUR -4.2 million (EUR 1.0 million), which was due to
the weakened profitability of Atria Finland and Atria Russia. The decrease in
Atria Finland's EBIT to EUR 0.6 million (EUR 4.9 million) was caused by higher
meat raw material prices and a weakened sales structure. Exports now account
for a greater proportion of total sales. It was not possible to transfer the
raw material price increase in full to sales prices during the review period.
Atria Russia's EBIT, EUR -5.6 million (EUR -2.3 million), was weakened by the
rapid increase of raw material prices at the end of last year, as well as
sluggish demand and the consequent intensification of competition. The
performance was also burdened by the costs of the new plant completed in the St
Petersburg region.
Atria Scandinavia's EBIT increased to EUR 2.3 million (EUR 0.6 million). The
figure for the comparison year included a non-recurring cost item of EUR 2.0
million. Atria Baltic's EBIT, EUR -0.2 million (EUR -1.2 million), showed a
clear improvement, which is mainly explained by the measures implemented to
improve efficiency, as well as by an improved sales structure.
The Group's free cash flow (operating cash flow - cash flow from investments)
was positive during the review period and net liabilities remained at EUR 411
million, the level seen at the end of the previous year. Atria Scandinavia
concluded an agreement with Nordea Finans Sverige AB concerning the sale of
trade receivables. The agreement decreased the company's trade receivables by a
total of EUR 15.3 million at the end of the review period.
In January 2011, Atria Plc made a decision to invest approximately EUR 26
million in building and renovating the Kauhajoki bovine slaughterhouse and
cutting plant. New production facilities will be built in Kauhajoki, and the
existing production facilities will be renovated and automated using the latest
production technology. Atria Plc will also buy the shares of Kauhajoen
Teurastamokiinteistöt Oy from Itikka Co-operative. The purchase price is
approximately EUR 7 million.
Atria Finland launched two efficiency improvement programmes, one of which aims
to increase the efficiency of bovine slaughtering and cutting operations and
bring down the excess capacity in slaughtering. The annual cost savings from
the efficiency improvement programme are estimated at EUR 6 million. Cost
savings will start to affect the result during 2012 and will be fully realised
since the beginning of 2013.
In March, Atria Finland launched a second efficiency improvement programme at
the Nurmo production plant units. Atria expects the programme to achieve annual
savings of approximately EUR 4 million in its cost structure. The cost savings
will be fully realised since the beginning of 2012.
Matti Tikkakoski resigned as President and CEO of Atria Plc at the beginning of
March. His lump-sum severance payment of EUR 0.8 million, including social
expenses, impacted the result for the first quarter. Juha Gröhn was appointed
Atria Plc's new CEO as of 18 March 2011.
Key indicators
EUR million 31.3.11 31.3.10 31.12.10
--------------------------------------------------------------
Shareholders' equity per share EUR 15.54 15.60 15.68
Interest-bearing liabilities 428.8 430.2 429.9
Equity ratio, % 41.2 40.2 40.2
Gearing, % 97.0 97.1 96.4
Net gearing, % 92.9 93.3 92.2
Gross investments in fixed assets 5.7 15.9 46.2
% of net sales 1.9 5.2 3.5
Average FTE 5,583 5,853 5,812
Outlook
The meat raw material market should stabilise in 2011, compared with 2010.
However, there is still a pressure to increase meat raw material prices due to
risen costs. Consequently, the 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.
Product leadership strategy implementation is proceeding according to plan. In
2011 Atria will carry out visible product launches in various business areas.
In Russia, the increase in the overall demand for food products will be slow
during 2011, according to Atria's estimate. The slow recovery of the market for
Atria's product groups, along with intensified competition, has made it more
difficult to implement price increases in Russia and, therefore, it has not
been possible to include the substantially increased raw material prices in the
sales prices to a sufficient extent. This year's overall performance is also
burdened by the full costs of the new production plant.
Atria estimates that the Russian food product market will start to grow
moderately. The recovery will, however, be slower than previously anticipated.
At the end of last year, Atria launched an efficiency improvement programme in
Moscow, which is progressing according to schedule. Annual cost savings gained
from the efficiency improvement programme are estimated to amount to
approximately EUR 6 million. The cost savings will be realised during 2012 and
they will be fully realised since the beginning of 2013. With market growth and
cost-saving measures, as well as the efficient production capacity of the new
plant, Atria Russia's EBIT is expected to be positive in the latter part of
2013.
Atria Group's net sales are expected to grow somewhat in 2011. Growth in net
sales will, however, be weighed down by the difficult market situation in
Russia and the discontinuation of the production of consumer-packed meat in
Sweden.
The Group's EBIT excluding non-recurring costs stood at EUR 21.6 million in
2010. In 2011, the Group's EBIT is expected to be higher than this. The key
sources for uncertainty in terms of earnings development are the rising prices
of cereals, feed and other raw materials, as well as the difficult market
situation in Russia.
Dividend distribution proposal
On 31 December 2010, the parent company's distributable profit stood at EUR
84.1 million. No significant changes have occurred in the company's financial
position since the end of the accounting period. The Board of Directors will
propose to the Annual General Meeting that the company distribute a dividend of
EUR 0.25 per share for 2010, a total of EUR 7 million.
New publication procedure
Atria Plc complies with the new publication procedure in accordance with
standard 5.2b of the Financial Supervisory Authority and publishes its Q1/2011
interim report as an attachment to this company announcement. The full interim
report is available on the company's website at www.atriagroup.com. In future,
Atria Plc will comply with this procedure concerning the publication of all its
interim reports and financial statement bulletins.
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, 29 April 2011,
at Finlandia Hall, in the Elyssa room. Entrance is through door M3. The
presentation material will be available on the company's website
(www.atriagroup.com/sijoittajat/taloustieto/osavuosikatsaukset) after the
distribution of the financial statements 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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