ATRIA GROUP PLC'S FINANCIAL STATEMENTS 1 JAN - 31 DEC 2004
ATRIA GROUP PLC STOCK EXCHANGE RELEASE 17 February 2005, 10:00 am
ATRIA GROUP PLC'S FINANCIAL STATEMENTS 1 JAN - 31 DEC 2004
The Group's turnover increased by 9.0% to EUR 833.7 million (EUR 765.1 million in
2003). Profit before extraordinary items was EUR 33.7 million (EUR 23.6 million).
The Board of Directors proposes that the company distributes dividends of EUR
0.595 per share for 2004, representing 35% of the par value of the shares.
PROFIT AND LOSS ACCOUNT GROUP
(EUR Million) 1-12/2004 1-12/2003 change%
TURNOVER 833.7 765.1 9.0
NET OPERATING PROFIT 38.8 30.9 25.5
PROFIT BEFORE EXTRAORDINARY ITEMS 33.7 23.6 42.6
PROFIT BEFORE TAXES 33.7 23.6 42.6
PROFIT 24.8 15.0 64.7
The taxes in the profit and loss account are equivalent tax on income
for the period under review.
BALANCE SHEET, GROUP
(EUR Million)
ASSETS 31.12.2004 31.12.2003 change%
FIXED ASSETS
Intangible assets 45.9 47.5 -3.2
Tangible assets 260.3 255.4 1.9
Financial assets 5.9 6.1 -2.8
CURRENT ASSETS
Inventories 48.0 47.9 0.2
Receivables 135.8 89.7 51.2
Cash in hand and at bank 12.6 9.9 27.3
TOTAL 508.5 456.5 11.4
LIABILITIES
SHAREHOLDERS' EQUITY
Share capital and
other shareholders´equity 240.8 224.6 7.2
MINORITY INTEREST 19.6 1.6 1148.9
CREDITORS
Long-term 98.4 104.3 -5.6
Short-term 149.7 126.0 18.8
TOTAL 508.5 456.5 11.4
KEY FIGURES (EUR)
31.12.2004 31.12.2003 change%
Gross investments in
fixed assets 33.8 36.4 -7.1
Gross investments
% of turnover 4.1 4.8 -
Personnel on average 3638 3377 7.7
Earnings per share 1.17 0.83 41.0
Shareholders' equity per share 11.42 10.65 7.2
Equity ratio, % 51.3 49.6 3.4
Interest-bearing debt 110.3 129.4 -14.8
CONSOLIDATED CASH
FLOW STATEMENT (EUR million) 1-12/2004 1-12/2003
Cash flow from operations 71.7 54.5
Financing items and taxes -13.2 -15.1
Cash flow from operating 58.5 39.4
activities
Investing activities -33.9 -36.4
Cash flow from investing -33.9 -36.4
activities
Issue of shares paid - 26.4
Net change in loans -14.8 -29.2
Dividends paid -9.0 -6.7
Net cash from financing activities -23.8 -9.5
Change in liquid funds 0.8 -6.5
CONSOLIDATED LIABILITIES
(EUR million)
31.12.2004 31.12.2003 change%
DEBTS INVOLVING MORTGAGES OR
OTHER COLLATERAL AS SECURITY
Loans from financial institutions 66.2 86.2 -23.2
Pension loans 6.0 5.3 13.2
Total 72.2 91.5 -21.1
MORTGAGES AND OTHER COLLATERAL
GIVEN AS GENERAL SECURITY
Mortgages on real property 74.3 75.6 -1.7
Mortgages on company assets 43.0 37.9 13.4
Other collateral 41.3 42.9 -3.6
Total 158.6 156.4 1.4
MORGAGES AND OTHER COLLATERAL
GIVEN
ON BEHALF OF GROUP COMPANIES
Guarantees - - -
CONTINGENT LIABILITIES NOT
INCLUDED IN THE BALANCE SHEET
Limits not used 79.4 76.3 4.1
Guarantees
For own liabilities 1.6 1.4 14.3
On behalf of others 0.3 - 100.0
Total 1.9 1.4 33.2
Leasing liabilities
Payable in the next
financial year 0.9 1.0 -10.0
Payable later 5.5 1.5 266.7
Total 6.4 2.5 156.0
The figures are not audited.
KEY FINANCIAL INDICATORS
2004 2003 2002 2001 2000
Turnover (EUR million) 833.7 765.1 707.0 637.4 615.7
Operating margin (EUR million) 69.2 59.1 50.9 52.0 38.6
% of turnover 8.3 7.7 7.2 8.2 6.3
Operating profit (EUR million) 38.8 30.9 25.6 28.9 18.8
% of turnover 4.7 4.0 3.6 4.5 3.1
Financial income/expenses -5.1 -7.3 -5.2 -4.9 -5.3
% of turnover 0.6 0.9 0.7 0.8 0.9
Profit before extraordinary items
(EUR million) 33.7 23.6 20.4 23.9 13.5
% of turnover 4.0 3.1 2.9 3.8 2.2
Profit before appropriations and
taxes (EUR million) 33.7 23.6 20.4 23.9 13.5
% of turnover 4.0 3.1 2.9 3.8 2.2
Return of equity (ROE) % 10.3 7.5 7.7 9.2 4.9
Return of investment (ROI) % 10.7 9.1 7.9 10.0 6.8
Equity ratio % 51.3 49.6 43.3 48.7 46.7
Gross investments in fixed
assets (EUR million) 33.8 36.4 66.0 23.2 32.1
% of turnover 4.1 4.8 9.3 3.6 5.2
Personnel 3638 3377 3300 3241 3419
Research and development expenses 7.0 6.7 6.1 5.5 5.8
% of turnover 0.8 0.9 0.9 0.9 0.9
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
2004 2003 2002 2001 2000
12 m 12 m 12 m 12 m 12 m
Earnings per share (EPS) EUR 1.17 0.83 0.78 0.88 0.46
Shareholders' equity per share EUR 11.42 10.65 10.45 10.01 9.40
Dividend/share EUR* 0.595 0.425 0.372 0.372 0.219
Dividend/profit %* 50.7 51.5 47.8 42.4 48.5
Effective dividend yield* 5.3 4.7 5.5 7.1 5.9
Price/earnings ratio (P/E) 9.62 10.90 8.67 5.97 8.26
Volume of shares traded/thousands,
EUR million 238.3 190.9 121.8 94.9 67.9
Volume of shares traded/thousands: A 3800 2325 1249 1226 602
KI 0.0 0.0 - - -
Volume of shares traded % A 32.0 29.9 18.9 18.5 9.1
KI 0.0 0.0 - - -
Number of shares, millions total 21.1 21.1 15.8 15.8 15.8
Number of shares, millions A 11.9 11.9 6.6 6.6 6.6
KI - - - - -
KII 9.2 9.2 9.2 9.2 9.2
Average number of shares adjusted
with share issue 21.1 18.3 18.1 18.1 18.1
Number of shares adjusted
with share issue 31.12. 21.1 21.1 18.1 18.1 18.1
SHARE PRICE TREND
Lowest of period A 8.55 6.81 5.85 3.81 4.02
KI 0.00 0.00 - - -
Highest of period A 11.75 11.40 8.90 6.19 6.00
KI - - - - -
At the end of period A 11.30 9.05 7.70 6.00 4.29
KI - - - - -
Average price of the financial A 9.42 9.20 7.35 5.22 4.99
period
KI - - - - -
* the proposal of the Board of
Directors
ATRIA'S YEAR 2004 BROUGHT STRONG GROWTH AND POSITIVE EARNINGS DEVELOPMENT
The year 2004 was successful for Atria in many ways. The company substantially
improved its earnings compared with the previous year. In Finland, Atria grew
profitably in all of the main product areas. In Sweden, we were able to retain
our strong market position and improve profitability even further. In the Baltic
countries, Atria made progress in Lithuania and also in Estonia by acquiring AS
Valga Lihatööstus, the second-largest company in the country's meat business.
This means that Atria was able to further strengthen its position as the largest
manufacturer of meat products in the Baltic Sea region.
In 2004, the Atria Group's turnover rose to EUR 833.7 million (EUR 765.1 million
in 2003), representing growth of 9.0% on the previous year. Operating profit
amounted to EUR 38.8 million (EUR 30.9 million), up 25.5%. Profit before taxes
stood at EUR 33.7 million (EUR 23.6 million), which represents an increase of
42.6%. The fourth quarter was also significantly better than a year earlier.
Profit before taxes from October to December was EUR 7.8 million (EUR 4.8
million), representing a 60.5% improvement on the previous year. The equity ratio
at the end of the year was 51.3%. Return on investment increased from the
previous year's 9.1% to 10.7%. The Board of Directors proposes that the company
distributes dividends of EUR 0.595 per share for 2004, representing 35% of the
par value of the shares.
Domestic business functions, Atria Oy
The domestic business functions, including the meat industries, meat product and
convenience food industries and poultry industries, achieved their targets and
were able to improve their earnings. As the market leader in the industry, Atria
further improved its market share in the domestic market, and earnings from the
domestic business functions outperformed the previous year's figures.
The quantitative targets for meat processing were actually exceeded. Increased
demand for pork both in the domestic and export markets in particular boosted the
favourable development of the meat industry. Atria's pork processing volume
increased by 6.9%, followed by a 0.2% growth in beef processing. Atria's market
share in pork processing increased to 31.4% and in beef processing to 43.3%.
Atria also strengthened its market leader position as a processor of meat. The
effect of the EU's eastern expansion on the meat market remained minor.
Atria made an investment decision concerning the construction of an international-
scale slaughtering unit in Nurmo. The pig slaughterhouse will be modernised,
doubling its processing capacity. The value of the investment is EUR 21 million,
and the project will be completed in the spring of 2006.
Growth of sales in Atria Oy's meat product and convenience food industries
achieved the planned level, and earnings development was favourable. The market
shares of Atria meat products and convenience foods increased in several product
groups. Atria's market leader position in cold cuts, grill sausages and packaged
meat strengthened further, which increased the utilisation rate of the production
lines to a very good level.
Atria Oy's poultry industries achieved the targets set for operations and
earnings, and the earnings were good. However, the increase in poultry
consumption in Finland slowed down in 2004, and towards the end of the year,
imports, mostly from Brazil, increased. Despite the changed market situation,
Atria was able to slightly improve the market shares of its poultry products. The
plant extension completed in 2003 created the preconditions for improved
productivity across the entire production process.
The pressure on sales prices has been intense during the year. This has resulted
an unsatisfactory price development in several products. Raw material prices have
simultaneously increased. However, Atria was able to achieve positive earnings
development thanks to favourable development of costs and an increasing sales
volume.
Atria Oy, which attends to business operations in Finland, had a turnover of EUR
486.9 million, representing growth of 10.8%.
Finland, Liha ja Säilyke Oy
The operations of Liha ja Säilyke Oy developed as planned in 2004. The company
focused its product range, which resulted in only a slight increase in turnover.
Turnover increased by 1.8% to EUR 41.6 million. The earnings for the period were
in line with the previous year's level and with the targets. The company's
strategy of focusing on its strong points, including salads, oven-baked
convenience foods, snack pastries, whole-meat products, frankfurters and special
grill sausages, was successful. The market share of salads marketed under the
Forssan brand increased to 30%. Liha ja Säilyke Oy's new logistics centre,
costing some EUR 6 million, is currently being introduced into use.
Lithells Group strengthened its position in Sweden
The business operations of the Lithells Group in Sweden comprise the meat
products company Atria Lithells AB, the fast food company Atria Concept AB, as
well as the local wholesale company Svensk Snabbmat för Storkök AB.
Lithells Group's turnover last year increased to EUR 310.2 million, representing
growth of 4.7%, and operating profit increased to EUR 11.4 million, representing
growth of 19.5%. The entire Group's earnings improved, and the profitability of
all business functions was good. Atria Lithells AB's earnings improved on the
previous year. The earnings improvement after three quarters was substantial, but
the whole year's figure was hampered by increased raw material prices in the
fourth quarter. The company's market shares in the manufacture of the main
product groups remained at an approximate level of 25%. Atria Lithells AB
improved the efficiency of its sausage production by centralising it to the
Sköllersta plant.
Atria Concept AB's position in the export markets for the shop-in-shop concept,
particularly in the Baltic countries and Poland, strengthened. The Sibylla chain
achieved the best development in the fast food stand business. Recognition of the
Sibylla trademark increased to 82%, and it was the most appreciated fast food
trademark among Swedish consumers. (Source: Survey by Temo AB, spring 2004)
Svensk Snabbmat AB strengthened its position as a wholesaler close to the
customer by opening a new outlet in Linköping. Last year was the sixth year in a
row to see increases in Svensk Snabbmat's turnover and profitability.
The development of all Lithells AB subsidiaries has been favourable, and the
companies have good market positions and earnings levels. The intention is to
develop all the subsidiaries in their segments through organic growth and
improved efficiency. The rapidly changing conditions of the industry may also
offer opportunities for external growth in the future.
Atria's position strengthened in the Baltic countries
The first full calendar year of Atria's Lithuanian subsidiary UAB Vilniaus Mesa
was one of change and construction. A new plant compliant with EU quality
standards was completed in the spring and inaugurated in September 2004. A new
Managing Director was appointed in November. Substantial investments and
rearrangements of operations hampered the company's profitability, and earnings
remained poor. Vilniaus Mesa has an approximate market share of 10% in the
Lithuanian grocery market in processed meat products (source A.C.Nielsen 2004).
The company has also increased its share in the Latvian market. In the long run
Atria intends to gain a substantially stronger position in Lithuania. There are
no other businesses in foreign ownership in the Lithuanian meat industry.
AS Valga Lihatööstus in Estonia became a part of Atria Group in January 2005.
Valga is the second largest company processing red meat in Estonia. Valga is
involved in the entire meat processing chain: partly in the farming of beef
cattle, in the slaughterhouse and meat cutting operations, as well as in
processed meat production.
Valga's main products include various types of high-quality sausages
(approximately 60% of turnover), smoked meat products, cold cuts, meat and
different special products. The company's brand name is Maks & Moorits.
Valga was established in 1910 and privatised in 1994. Since privatisation, Valga
has been successful and generated profits. Valga employed 369 people in 2003, and
in 2004 the average number of personnel was 350.
AS Valga Lihatööstus has a production facility in the town of Valga, close to the
Latvian border. During the last three years the company has invested
approximately EUR 8 million in production systems and equipment compliant with
the requirements of the EU and the EN ISO 9001:2000 quality management system.
The slaughterhouse, modernised in 2002, is one of the most modern in the Baltic
countries. Its processing capacity is 250 bovines and 1,000 pigs per day.
The objective of AS Valga Lihatööstus is to improve and increase marketing and
sales in Estonia and Latvia. Together with the Lithuanian subsidiary UAB Vilniaus
Mesa, the company strengthens Atria's operations and competitiveness in all of
the Baltic countries - Estonia, Latvia and Lithuania - to serve an expanding and
focusing clientele.
Atria and Russia
Atria has studied the possibilities of establishing itself in Russia for
approximately one and a half years. The company's intention has been to conduct
the most accurate surveys of customers, markets and business conditions, thus
decreasing the risk after a future investment. The market is very interesting for
Atria and provides the prerequisites for rapid growth of good companies. Now we
can state that our plans of establishment are at an advanced stage, but the final
schedule can only be disclosed once the final decisions are realised.
Outlook for 2005
Competition for consumers is intense within the retail trade sector, and price is
one of the crucial factors. The pressure on prices naturally affects
manufacturers as well. In these circumstances, the manufacturer's ability to
cooperate with retail trade in order to reduce the costs of the entire order-
delivery chain and improve availability corresponding to consumer needs has
become very important. Atria's intention is to satisfy the expectations of its
customers to the best possible degree, which is also evident as favourable sales
development. Atria expects its position on the domestic market to become even
stronger this year.
Increases in raw material prices in Sweden hamper the earnings of Atria Lithells
AB, but no radical changes are expected in the market.
Atria's operations in the Baltic countries are still undergoing intense change.
Internal and mutual arrangements are being made in the companies. An acquisition
in Russia is expected to create good opportunities for growth and strengthen
Atria's position as the largest manufacturer of processed meat products in the
Baltic Sea region.
Corporate Governance
Our Corporate Governance guidelines, any exceptions from them and the associated
personal data are published on our Web site www.atria.fi.
Transition to IFRS accounting standards
The introduction of the IFRS standards will not have any substantial effects on
the Group's earnings or balance sheet values. The most significant effect
concerns the processing of disability pensions in the 2004 figures. Atria will
present disability pensions as a separate figure on a designated row in its
reports, in order to facilitate the assessment of the change. We will present
comparative calculations for the opening and closing balance sheets of 2004 and
the interim reports as a separate release before disclosing the first quarter's
results. The interim reports for 2005, as well as the data for comparison, will
be disclosed in accordance with the IFRS accounting principles as recommended by
the Financial Supervision Authority.
Dividend proposal
The Board of Directors proposes that the company distributes dividends of EUR
0.595 per share for 2004, representing 35% of the par value of the shares.
Annual General Meeting, 3 May 2005
Atria Group plc's Annual General Meeting will be held on 3 May 2005 at 2:00 pm 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. Board of Directors' proposal to amend Article 15 of the Articles of
Association
The Board of Directors proposes that Article 15 of the Articles of Association,
concerning the venue of the General Meeting of Shareholders, be amended so that
the company's General Meetings of Shareholders shall be held either in Kuopio
or in Helsinki.
3. Board of Directors' proposal to authorise the Board of Directors to decide on
increasing the share capital by one or more new issues
The Board of Directors proposes that the authorisation granted to the Board of
Directors at the Annual General Meeting in the spring of 2004 for increasing
the share capital shall be extended for a period of one year from the Annual
General Meeting's decision of authorisation. The proposed authorisation would
supersede the one valid until 5 May 2005. Thus the authorisation would cover a
maximum of 4,218,545 Series A shares of the company, each with a par value of
EUR 1.70, and include the right to deviate from the shareholders' pre-emptive
right of subscription. The Board of Directors would be authorised to decide on
the subscription of shares against subscription in kind or under other specific
terms and conditions. The Board of Directors would be authorised to decide on
the parties eligible for subscription, the subscription price and the grounds
for setting the subscription price.
4. Sale of shares not transferred to the book-entry system
The Board of Directors proposes to the Annual General Meeting that in
accordance with Chapter 3 a, Section 3 a of the Companies Act, the meeting
shall decide to sell the company's Series A shares residing in a so-called
joint book-entry account and representing less than one per cent of the total
number of Series A shares, on behalf of the owners who have not submitted their
share certificate to the book-entry register or an account operator for
recording their right of ownership, and that the meeting shall authorise the
Board of Directors to initiate the necessary actions called for by the
decision.
The right to attend the Annual General Meeting rests with shareholders who have
been recorded as shareholders by 22 April 2005 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 4:00
pm on Thursday, 28 April 2005. Shareholders may register for the meeting by mail
or telephone by the above deadline. More detailed instructions will be provided
in the notice convening the meeting.
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 window"), permanent 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 Chapter 1, Section 5 of the Securities Market Act.
ATRIA GROUP PLC
Seppo Paatelainen
President
DISTRIBUTION
Helsinki Exchanges
Principal media
www.atria.fi
