ATRIA GROUP PLC'S FINANCIAL STATEMENTS,
1(7)
ATRIA GROUP PLC STOCK EXCHANGE RELEASE 24 FEB. 2004
The advance information system of the Finnish News Agency failed.
Atria Group plc's financial statement information, due to be
published through the agency at 10:00 tomorrow, was accidentally
released today. We will thus publish this stock exchange bulletin
in advance of schedule.
ATRIA GROUP PLC'S FINANCIAL STATEMENTS, 1 JAN. 31 DEC. 2003
The Group's turnover increased by 8.2% to EUR 765.1 million (EUR
707.0 million in 2002). Profit before extraordinary items was EUR
23.6 million (EUR 20.4 million). The Board of Directors proposes
that a dividend of 25% on the share capital be paid.
PROFIT AND LOSS ACCOUNT GROUP
(EUR Million) 1-12/2003 1-12/2002 change%
TURNOVER 765.1 707.0 8.2
NET OPERATING PROFIT 30.9 25.6 20.9
PROFIT BEFORE EXTRAORDINARY 23.6 20.4 15.9
ITEMS
PROFIT BEFORE TAXES 23.6 20.4 15.9
PROFIT 15.0 14.1 7.0
BALANCE SHEET, GROUP
(EUR Million)
ASSETS 31.12.2003 31.12.2002 change%
FIXED ASSETS
Intangible assets 47.5 50.1 -5.4
Tangible assets 255.4 243.8 4.7
Financial assets 6.1 5.0 21.4
CURRENT ASSETS
Inventories 47.9 46.1 4.0
Receivables 89.7 77.5 15.7
Cash in hand and at bank 9.9 16.5 -39.7
TOTAL 456.5 439.0 4.0
LIABILITIES
SHAREHOLDERS' EQUITY
Share capital and
other shareholders´equity 224.6 188.6 19.1
MINORITY INTEREST 1.6 1.2 28.7
CREDITORS
Long-term 104.3 123.4 -15.5
Short-term 126.0 125.8 0.2
TOTAL 456.5 439.0 4.0
CONSOLIDATED CASH
FLOW STATEMENT (EUR million) 1-12/2003 1-12/2002
Cash flow from operations 54.5 50.9
Financing items and taxes -15.1 -14.9
Cash flow from operating 39.4 36.0
activities
Investing activities -36.4 -66.1
Cash flow from investing -36.4 -66.1
activities
Issue of shares paid 26.4 -
Net change in loans -29.2 43.2
Dividends paid -6.7 -6.8
Net cash from financing -9.5 36.4
activities
Change in liquid funds -6.5 6.3
CONSOLIDATED LIABILITIES
(EUR million)
31.12.2003 31.12.2002 change%
DEBTS INVOLVING MORTGAGES OR
OTHER COLLATERAL AS SECURITY
Loans from financial 86.2 95.0 -9.2
institutions
Pension loans 5.3 5.4 -2.6
Total 91.5 100.4 -8.9
MORTGAGES AND OTHER COLLATERAL
GIVEN AS GENERAL SECURITY
Mortgages on real property 75.6 64.4 17.3
Mortgages on company assets 37.9 25.6 48.2
Other collateral 42.9 40.6 5.6
Total 156.4 130.6 19.7
MORGAGES AND OTHER COLLATERAL
GIVEN
ON BEHALF OF GROUP COMPANIES
Guarantees 34.5 21.8 58.3
CONTINGENT LIABILITIES NOT
INCLUDED IN THE BALANCE SHEET
Limits not used 76.3 82.3 -7.3
Guarantees 1.4 1.0 35.2
Leasing liabilities
Payable in the next
financial year 1.0 1.0 -2.6
Payable later 1.5 1.2 24.5
Total 2.5 2.2 12.2
The figures are not audited.
KEY FINANCIAL INDICATORS
2003 2002 2001 2000 1999
Turnover (EUR million) 765.1 707.0 637.4 615.7 555.7
Operating margin (EUR million) 59.1 50.9 52.0 38.7 36.0
% of turnover 7.7 7.2 8.2 6.3 6.5
Operating profit (EUR million) 30.9 25.6 28.9 18.8 16.7
% of turnover 4.0 3.6 4.5 3.1 3.0
Financial income/expenses -7.3 -5.2 -4.9 -5.3 -4.0
% of turnover 0.9 0.7 0.8 0.9 0.7
Profit before extraordinary items
(EUR million) 23.6 20.4 23.9 13.5 12.6
% of turnover 3.1 2.9 3.8 2.2 2.3
Profit before appropriations and
taxes (EUR million) 23.6 20.4 23.9 13.5 12.6
% of turnover 3.1 2.9 3.8 2.2 2.3
Return of equity (ROE) % 7.5 7.7 9.2 4.9 5.3
Return of investment (ROI) % 9.1 7.9 10.0 6.8 6.6
Equity ratio % 49.6 43.3 48.7 46.7 46.3
Gross investments in fixed
assets (EUR million) 36.4 66.0 23.2 32.1 56.5
% of turnover 4.8 9.3 3.6 5.2 10.1
Personnel 3377 3300 3241 3419 3264
Research and development expenses 6.7 6.1 5.5 5.8 4.3
% of turnover 0.9 0.9 0.9 0.9 0.8
Volyme of orders** - - - - -
* Booked in total as expenditure
for the financial year
** Not a significant indicator,
as orders are generally delivered
on the day following the order
KEY INDICATORS FOR SHARES
2003 2002 2001 2000 1999
12 m 12 m 12 m 12 m 12 m
Earnings per share (EPS) EUR 0.83 0.78 0.88 0.46 0.49
Shareholders' equity per share 10.65 10.45 10.01 9.40 9.20
EUR
Dividend/share EUR* 0.425 0.372 0.372 0.219 0.219
Dividend/profit %* 51.5 47.8 42.4 48.5 46.4
Effective dividend yield* 4.9 3.2 7.1 5.9 5.1
Price/earnings ratio (P/E) 10.50 8.67 5.97 8.26 9.11
Volume of shares
traded/thousands,
EUR million 190.9 121.8 94.9 67.9 78.3
Volume of shares A 2325 1249 1226 602 1529
traded/thousands:
Volume of shares traded % A 29.9 18.9 18.5 9.1 23.1
Number of shares, millions total 21.1 15.8 15.8 15.8 15.8
Number of shares, millions A 11.9 6.6 6.6 6.6 6.6
KII 9.2 9.2 9.2 9.2 9.2
Average number of shares adjusted
with share issue 18.3 18.1 18.1 18.1 18.1
Number of shares adjusted
with share issue 31.12. 21.1 18.1 18.1 18.1 18.1
SHARE PRICE TREND
Lowest of period A 6.81 5.85 3.81 4.02 4.05
Highest of period A 11.40 8.90 6.19 6.00 5.48
At the end of period A 9.05 7.70 6.00 4.29 4.95
Average price of the financial A 9.20 7.35 5.22 4.99 4.70
period
* the proposal of the Board of
Directors
ATRIA IMPROVES ITS EARNINGS
Atria improved its earnings compared with the previous year. The
greatest improvement was seen in its Swedish business functions.
In domestic business functions, earnings were significantly
weakened by the extremely poor state of the slaughterhouse
industry in all of Europe, which was due to the strong
overproduction of pork, but the earnings improvement in other
business functions to a large extent compensated for these losses.
However, the best earnings improvement was achieved by Lithells
AB, which is responsible for Swedish business functions; thanks to
the acquisition carried out in the previous year, it also achieved
significant turnover growth.
In 2003, the Atria Groups turnover rose to EUR 765.1 million (EUR
707.0 million), representing growth of 8.2% on the previous year.
Operating profit amounted to EUR 30.9 million (EUR 25.6 million),
up 20.9%, and profit before taxes to EUR 23.6 million (EUR 20.4
million), up 15.9%. Atria Group plc's Board of Directors proposes
that a dividend of EUR 0.425 per share be paid.
Domestic business functions
The very poor situation of the slaughterhouse industry posed
problems for domestic business functions. The strong worldwide
overproduction of pork made it difficult to influence this
situation. The profitability of the slaughterhouse industry was
partly in the red, as both export and domestic prices declined
below the profitability threshold. However, the other domestic
business functions meat products, convenience foods and poultry
were able to improve their earnings; thanks to the improvement
in the latter part of the year, the domestic business functions
racked up slightly better earnings than in the previous year.
Successful cost downscaling played a significant role in this. It
was possible to reduce costs in almost all business functions. The
production of both pork and beef increased in Finland; total
growth in the volumes of these meats processed by Atria amounted
to 7.4%.
Severe competition for market share is ongoing in the Finnish
retail sector. This has a knock-on effect on industry in the form
of strong price pressures. However, Atria managed to hold on to
its strong position in segments such as the grilling sausage
market, cold cuts and certain convenience foods. The poultry
business was also able to increase its degree of processing and
improve its market position. Atria was unwilling to compete for
market share by lowering prices and thus its sales volumes
remained at the previous year's level in most product groups.
In the poultry business, Atria built a plant extension with a
pricetag of about EUR 20 million, which substantially raised the
plant's manufacturing capacity and makes it possible to further
develop and diversify the product range in line with consumers'
demands.
Atria Oy, which attends to business operations in Finland, had
turnover of EUR 439.2 million, representing growth of 0.7%.
The subsidiary Liha ja Säilyke Oy mainly specialises in salads,
cold cuts and a narrow range of convenience foods and cold cuts.
The company continued to enjoy a favourable trend. The company
started up a plant extension at a cost of about EUR 6 million that
will enable it to ensure growth in the manufacturing capacity of
mission critical products and the development of logistic
functions. The extension will be completed in summer 2004.
Swedish business functions account for 40% of the Atria Group's
turnover
Last year, Lithells AB successfully integrated the business
functions of Samfood AB, which was acquired in the previous
autumn. The business functions of Samfood were heavily in the red
under their previous owner, but were realigned dramatically and
integrated with Lithells AB's functions. The profitability of the
acquired business functions already climbed into the black in
early spring 2003. Following the acquisition, Lithells AB is
responsible for the manufacture of close to a fourth of the meat
products on the Swedish market.
At present, the Lithells Group is divided into Atria Lithells AB,
which makes meat products, convenience foods and retail-packed
meat, Atria Concept AB, which is in the fast food business, and
Svensk Snabbmat AB, which is in the local wholesale business.
Because significant business benefits were achieved by integrating
the functions of Samfood AB and Atria Lithells AB, Samfood AB was
merged into Atria Lithells AB at the turn of 2003 and 2004. Meat
product manufacture was centralised at the Sköllersta plant in the
vicinity of Örebro. It became the largest meat product plant in
Sweden. The Malmö plant specialised mainly in convenience foods,
cold cuts and bacon products. The plant in Årsta, Stockholm, is
specialised solely in retail-packed meat production in close co-
operation with the Swedish company Coop Sverige AB.
The result of the fast food company Atria Concept AB was
significantly better than in the previous year. In addition to
close to 200 Sibylla fast food stands, which work on a franchising
principle, the acquisition of Samfood introduced about 100
Fyrkanten and over 60 Grillköket units into the company's
operations. Atria Concept AB presently holds a market share of
about 65% in the Swedish gatugökö fast food stand business. In
addition, Atria Concept has 925 Sibylla Inside units in Sweden,
369 in Finland and a total of 320 in Denmark, Poland and the
Baltic countries. Operations are growing and profitable in all
these countries. Atria Concept is believed to have good potential
for further growth because eating on the go is gaining ground.
The local wholesale company Svensk Snabbmat AB has, during all the
years it has been in Atrias ownership, been able to improve its
result year on year while increasing its turnover. The company's
key employees own about 12% of the company's shares. Further
favourable development is foreseen for its business operations.
Even though local wholesale is not part of the Atria Groups core
business functions, it has supported the development of Atrias
functions in Sweden and thus, for the time being at least, Atria
has not been willing to divest itself of this profitable business.
There are still many small manufacturers on the Swedish meat
product market. As chains spread in the retail sector, it is
thought that some of these companies are poorly positioned to
retain their market position in the future. It is believed that
Lithells AB is well-poised for developing its business operations
further.
Atria's new vision aims at business operations in the Baltic rim
In Atria's new vision, the company's goal is to be a strong player
in meat products and meal solutions in the Baltic rim. At present,
the Atria Group is the largest manufacturer and marketer of meat
products in the Nordic and Baltic countries. Last summer, Atria
acquired UAB Saltuva, which operates in Vilnius, Lithuania, and
renamed the company UAB Vilniaus Mesa after the companys
traditional brand. The company is currently building a new plant
that will be completed in April 2004 and for which it has received
substantial investment assistance from the Sapard fund. The aim is
to gradually and substantially step up the Lithuanian market share
from its present level of about 10%. The company also exports
products to Latvia. Atria aims to gradually strengthen its
position in the entire Baltic region.
At present, Atria is assessing opportunities for starting up the
manufacture of meat products in Western Russia. That market is
still evolving buoyantly and the business footing of companies has
also developed favourably. Atria believes that it will take a
decision during the first half of 2004 on whether to make inroads
into the Russian market.
Retail chains are going strongly international in the countries of
the Baltic rim as well. It is increasingly commonplace for the
same retail chains to operate in many countries. Stores own
brands are also gaining ground. In this light, Atria considers it
vital to seek to strengthen its position in these neighbouring
markets in order to maintain its business viability. Because the
market for meat products is largely local in all these countries,
the manufacture of said products must to a great extent be carried
out by each countrys domestic industry.
Atria's share issue is successful
Atria carried out a share issue in November-December in which the
number of Atria's listed Series A shares rose by 5.3 million.
Atria now has a total of 21.1 million shares. In the issue, one
new Series A share could be subscribed for with three existing
shares at a price of EUR 5 per share. The capital raised in the
share issue was EUR 26.4 million. The sedate state of the equity
market is apparent from the fact that this was the largest public
offering carried out in 2003.
Outlook for 2004
The international pork market bottomed out in autumn 2003. The
market has thus passed its low point. Although the market
situation will remain weak in the first half of 2004, Atria
believes that the profitability of the slaughterhouse industry
will improve in 2004, facilitated by the relatively good stocks
situation and sales in the domestic market, which got off to a
brisk start.
Severe competition for market share is ongoing in the Finnish
retail sector. This has a knock-on effect on industry in the form
of strong purchasing pressures. Naturally enough, this does not
create opportunities for significant increases in selling prices.
However, Atria's strong position in the grilling sausage market,
cold cuts and certain convenience foods ensures that the company
is in a good position to maintain the profitability of its
business functions at its present level.
The Atria Group's largest growth opportunities are still to be
found outside Finland's borders. All the subsidiaries of the
Lithells Group have a good earnings outlook. Likewise, the
consolidated result is expected to improve. Atria is only just
starting up its Baltic business functions, which are at present
still relatively small. However, these business functions are
believed to gradually develop to a level where they will support
the entire Group's turnover growth and earnings performance
objectives.
Atria Oy, which is responsible for business operations in Finland,
has carried out an extensive overhaul of its operating methods
within its organisation during the past year and a half. At
present, Atria's delivery reliability and delivery ability
indicators are very high. Atria was honoured as the Logistics
Company of the Year by the Finnish Association of Logistics in
2003.
Annual General Meeting, 5 May 2004
Atria Group plc's Annual General Meeting will be held at 14:00 on
5 May 2004 in Kuopio on the company's premises at the address
Ankkuritie 2, 70460 Kuopio, Finland.
The following matters will be dealt with at the meeting:
1. The matters specified as being the business of Annual General
Meetings in Article 16 of the Articles of Association
2. The Board of Directors' proposal to amend Article 8 of the
Articles of Association. The Board of Directors proposes that
Article 8 of the Articles of Association, which pertains to the
Board of Directors, be amended such that the Board of Directors
shall include 5-7 members instead of the former number of seven
ordinary members and six deputy members.
The right to attend the Annual General Meeting rests with
shareholders who have been recorded as shareholders by 23 April
2004 in the company's shareholder register maintained by Finnish
Central Securities Depository Ltd, unless otherwise stated in law.
In order to have the right to attend the Annual General Meeting,
shareholders must notify the company of their intention to do so
by 16:00 on Friday, 30 April 2004. Shareholders may register for
the meeting by mailing or telephoning the company's head office
(P.O. Box 900, FIN-60060 ATRIA, +358 6 416 8306 / Liisa Liukku) or
by mailing or telephoning the company's office in Kuopio (P.O. Box
147, FIN-70101 Kuopio, tel. +358 17 156 230 / Eija Vuorinne). The
letter must be received before the end of the registration
deadline. It is requested that any proxies be submitted to the
place of registration within the registration period.
Restrictions on trading by permanent insiders
On 21 February 2002, Atria Group plc's Board of Directors decided
that the period during which the company's permanent insiders may
trade shares is 14 days after the publication of Atria Group plc's
Interim Reports and financial statement bulletins. However, any
permanent insider who wishes to trade shares during this period
must request permission to do so in advance from the secretary of
the Board of Directors. At other times (closed windowö), insiders
may not trade shares. The restriction on trading also applies to
parties under the guardianship of permanent insiders and their
controlled corporations as defined in Section 5 of Chapter 1 of
the Securities Market Act.
Atria Group plc is a forward-looking food processing company that
is going international at a fast rate. Our brands are Atria, Chick
and Duke's as well as Sibylla, Lithells and Forssan. The Atria
Group's turnover is close to EUR 800 million of which Sweden
accounts for about EUR 300 million. We employ about 3500 people.
The largest production companies of the Atria Group are Atria Oy,
Lithells AB, Liha ja Säilyke Oy and UAB Vilniaus Mesa. The Atria
Group is the biggest company in the meat business in Finland and
the largest manufacturer of meat products in the Nordic countries
and the Baltic rim.
ATRIA GROUP PLC
Seppo Paatelainen
President
DISTRIBUTION
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