ATRIA GROUP PLC'S INTERIM REPORT, 1 JANUARY ? 30 SEPTEMBER 2005
Atria Group plc STOCK EXCHANGE RELEASE 26 October 2005
ATRIA GROUP PLC'S INTERIM REPORT, 1 JANUARY 30 SEPTEMBER 2005
Atria Group plc's turnover at the end of September stood at EUR 717.0 million
(EUR 613.5 million), which represents an increase of 16.9 per cent. The Group's
profit before taxes at the end of September amounted to EUR 28.9 million (EUR
31.7 million). However, the comparable profit from last year totalled EUR 28.0
million, because last year's IFRS result included Employee Pension Act items to
the amount of EUR 3.7 million (now EUR 0.1 million). The operational earnings
improvement amounted to EUR 0.8 million. The third quarter result totalled EUR
13.7 million (EUR 13.7 million). The comparable operational result last year,
excluding the IFRS result Employee Pension Act items, amounted to EUR 13.0
million (now EUR 13.6 million), including an earnings improvement of EUR 0.6
million (4.6 per cent).
CONSOLIDATED BALANCE SHEET
Assets
EUR million 30.9.05 30.9.04 31.12.04
Fixed assets
Intangible assets 21.5 13.1 13.8
Goodwill
on consolidation 36.5 34.6 34.6
Tangible assets 302.6 264.0 267.4
Calculatory tax receivables on benefit-based pension
responsibilities 0.1 1.3 0.1
Loan receivables and
other receivables 4.9 0.6 4.2
Investments 6.3 7.3 6.3
Total 371.9 320.9 326.4
Current assets
Inventories 55.6 43.0 48.0
Accounts receivable and
other receivables 141.2 98.5 131.6
Cash in hand
and at bank 23.6 16.5 12.6
Total 220.4 158.0 192.2
Assets, total 592.3 478.9 518.6
Liabilities
EUR million 30.9.05 30.9.04 31.12.04
Equity belonging to parent company's
shareholders 249.4 233.9 244.3
Minority interests 20.0 1.8 19.6
Equity, total 269.4 235.7 263.9
Long-term borrowed capital
Interest-bearing debts 82.1 82.5 83.2
Calculatory tax debts 21.0 14.3 21.4
Pension liabilities 0.4 4.9 0.4
Total 103.5 101.7 105.0
Short-term borrowed capital
Interest-bearing debts 109.0 45.1 32.8
Accounts payable and
other debts 110.4 96.4 116.9
Total 219.4 141.5 149.7
Borrowed capital,
total 322.9 243.2 254.7
Liabilities, total 592.3 478.9 518.6
CONSOLIDATED PROFIT AND LOSS ACCOUNT
EUR million 7-9/05 7-9/04 1-9/05 1-9/04 1-12/04
Turnover 248.2 215.8 717.0 613.5 833.7
Expenses, excl. the accrual of
benefit-based pensions -226.4 -194.4 -663.3 -560.1 -764.6
Accrual of benefit-
based pensions 0.1 0.7 0.1 3.7 8.1
Depreciations -8.0 -7.2 -24.0 -22.1 -27.9
Operating profit 13.9 14.9 29.8 35.0 49.3
* of turnover 5.6 6.9 4.2 5.7 5.9
Share of associated
company earnings 0.1 0.8 0.4 0.5
Financial income and
expenses -0.2 -1.3 -1.7 -3.7 -5.2
Profit before taxes 13.7 13.7 28.9 31.7 44.6
* of turnover 5.5 6.3 4.0 5.2 5.3
Taxes -3.8 -3.6 -7.9 -7.1 -8.5
Calculatory taxes on benefit-based
pensions' accrual -0.4 -1.2 -2.4
Profit for the financial
year 9.9 9.7 21.0 23.4 33.7
* of turnover 4.0 4.5 2.9 3.8 4.0
Attributable to:
Equity holders
of the parent 20.3 23.1 33.4
Minority interest 0.7 0.3 0.3
Total 21.0 23.4 33.7
Undiluted
earnings/share, 0.96 1.10 1.58
Earnings/share adjusted
by dilution effect, 0.96 1.10 1.58
CALCULATION OF CHANGES IN SHAREHOLDERS' EQUITY
mill. EUR
Equity belonging to the owners of parent company
Mino Share
rity's holders
share 'equity
in total
Share Above Trans Profits Total
equity par lation
rate differ.
funds funds
Shareholders'
equity 1 Jan, 2004 35.8 104.4 79.3 219.5 1.6 221.1
Changes in shareholder's
equity 1 Jan - 31 Dec, 2004
Translation differences 0.5 0.5 0.5
Increase in
minority interest 17.6 17.6
Profit for the
financial year 33.4 33.4 0.3 33.7
Distribution
of dividends -9.0 -9.0 -9.0
Shareholders'
equity 31 Dec, 2004 35.8 104.4 0.5 103.7 244.4 19.5 263.9
Shareholders'
equity 1 Jan, 2005 35.8 104.4 0.5 103.7 244.4 19.5 263.9
Changes in shareholder's
equity 1 Jan 30 Sep, 2005
Translation differences -2.7 -2.7 -2.7
Profit for the
financial year 20.3 20.3 0.7 21.0
Distribution
of dividends -12.6 -12.6 -12.6
0
Shareholders'
equity 30 Sep, 2005 35.8 104.4 -2.2 111.4 249.4 20.0 269.4
CONSOLIDATED CASH FLOW CALCULATION
EUR million 1-9/05 1-9/04 1-12/04
Cash flow
from operations 26.6 56.3 72.1
Financial items
and taxes -6.3 -9.8 -13.2
Cash flow
from operations 20.3 46.5 58.9
Investments
Investments in tangible
and intangible assets -65.4 -24.1 -33.9
Investments -2.7 -0.7 0.5
Cash flow
from investments -68.1 -24.8 -33.4
Loans drawn down 86.4 14.3 12.8
Loans repaid -15.0 -20.4 -28.5
Dividends paid -12.6 -9.0 -9.0
Cash flow
from financing 58.8 -15.1 -24.7
Change in liquid funds 11.0 6.6 0.8
INDICATORS
EUR million 1-9/05 1-9/04 1-12/04
Undiluted
earnings/share, 0.96 1.10 1.58
Earnings/share adjusted
by dilution effect, 0.96 1.10 1.58
Equity/share, 12.77 11.17 12.51
Interest-bearing debts 191.1 127.6 116.0
Equity ratio, % 45.5 49.3 50.9
Gross investments 68.1 26.0 37.3
Gross investments
/turnover, % 9.5 4.2 4.5
Personnel on average 4 238 3 621 3 638
SEGMENT-SPECIFIC DATA
GEOGRAPHICAL
EUR million 7-9/05 7-9/04 1-9/05 1-9/04 1-12/04 %
Turnover
Finland 162.1 133.0 468.6 386.3 525.8 63.1
Sweden 82.9 83.6 237.8 229.4 310.2 37.2
Others and eliminations 3.2 -0.8 10.6 -2.2 -2.3 -0.3
Total 248.2 215.8 717.0 613.5 833.7 100.0
Operating profit
Finland 11.2 11.2 25.1 27.0 37.7 76.5
Sweden 2.6 4.2 5.4 9.0 12.1 24.5
Others and eliminations 0.1 -0.5 -0.7 -1.0 -0.5 -1.0
Total 13.9 14.9 29.8 35.0 49.3 100.0
Investments
Finland 23.7 6.9 62.7 20.1 28.8 77.2
Sweden 1.0 0.9 2.9 4.0 6.9 18.5
Others 1.1 1.2 2.5 1.9 1.6 4.3
Total 25.8 9.0 68.1 26.0 37.3 100.0
EUR million 30.9.05 % 30.9.04 % 31.12.04 %
Funds
Finland 504.6 85.2 391.2 81.7 433.7 83.6
Sweden 132.4 22.4 141.2 29.5 137.7 26.6
Others and eliminations -44.7 -7.5 -53.5 -11.2 -52.8 -10.2
Total 592.3 100.0 478.9 100.0 518.6 100.0
Debts
Finland 245.0 75.9 167.5 68.9 180.2 70.7
Sweden 66.8 20.7 76.5 31.5 73.7 28.9
Others and eliminations 11.1 3.4 -0.8 -0.3 0.8 0.3
Total 322.9 100.0 243.2 100.0 254.7 100.0
BUSINESS-RELATED
EUR million 1-9/05 % 1-9/04 % 1-12/04 %
Turnover
Meat Industries 555.3 77.4 527.1 85.9 710.8 85.3
Wholesale Trade 184.9 25.8 96.7 15.8 136.3 16.3
Eliminations -23.2 -3.2 -10.3 -1.7 -13.4 -1.6
Total 717.0 100.0 613.5 100.0 833.7 100.0
LIABILITIES
EUR million 30.9.05 30.9.04 31.12.04
Debts for which collateral has been provided
in the form of mortgages and other securities
Loans from financial
institutions 88.3 71.4 66.2
Pension fund loans 6.1 6.0 6.0
Total 94.4 77.4 72.2
Mortgages and other securities given
as comprehensive security
Real-estate mortgages 77.3 75.6 74.3
Corporate mortgages 43.4 37.9 43.0
Other collateral 45.5 39.6 41.3
Total 166.2 153.1 158.6
Contingent liabilities
not included in the balance sheet
Unused limits 81.4 73.5 79.4
Guarantees 3.1 1.3 1.9
The figures are not audited.
The differences between the IFRS comparison data for the year 2004 and the data
as per the Finnish reporting standard were published on 19.4.2005 (IFRS 1.45)
and they may be viewed at our website www.atria.fi.
ATRIA CONTINUES ITS STRONG GROWTH, RUSSIA NOW ALSO TO JOIN
Atria Group plc's turnover at the end of September stood at EUR 717.0 million
(EUR 613.5 million), which represents an increase of 16.9 per cent. The Group's
profit before taxes at the end of September amounted to EUR 28.9 million (EUR
31.7 million). However, the comparable profit from last year totalled EUR 28.0
million, because last year's IFRS result included Employee Pension Act items to
the amount of EUR 3.7 million (now EUR 0.1 million). The operational earnings
improvement amounted to EUR 0.8 million. The third quarter result totalled EUR
13.7 million (EUR 13.7 million). The comparable operational result last year,
excluding the IFRS result Employee Pension Act items, amounted to EUR 13.0
million (now EUR 13.6 million), including an earnings improvement of EUR 0.6
million (4.6 per cent).
The successful domestic sales throughout the year and in the summer have
supported the positive earnings performance in the entire Atria Group.
Business operations in Finland
The subsidiaries Atria Oy and Liha ja Säilyke Oy are responsible for the
domestic business operations within the Atria Group. Atria Oy's operations
continued their positive development even after the end of the summer season.
Atria's supplier share expanded twice as fast as the market in total during the
summer season. The sales of retail-packed meat were particularly successful. The
market share of poultry products also grew considerably during the summer.
Atria's new products for the summer season were launched successfully. Atria
Oy's domestic retail sales have grown by almost nine per cent this year.
An important factor with regard to customer satisfaction and the development of
sales has been the flawless order-delivery process. The delivery capacity and
delivery reliability figures remained at over 99 per cent throughout the summer
season, which proved vital to the success of summer sales and to customer
satisfaction.
Atria's meat processing volume in Finland grew more than the total meat
production in the country. The increase in pork processing volume was 4.5 per
cent. In poultry processing production remained on a par with the previous year.
Atria's beef processing volume decreased by 4.5 per cent.
Beef production in Finland has decreased by nine per cent and pork production
has increased by two per cent. Chicken production and consumption in Finland
were slightly bigger than last year. (Source: Suomen Gallup Elintarviketieto Oy
1-9/2005)
The restricted supply of beef in particular fillet of beef in the domestic
market has limited the growth in sales. Atria plans to expand its range of
Lithells products and also offers a limited selection of imported cuts of beef
to its institutional catering customers. However, all Atria products are always
produced solely from domestic meat raw materials.
Liha ja Säilyke Oy's operations continue their positive trend, particularly in
the Forssan salad and cold cut groups. The new logistics centre was opened at
the beginning of the year and has also played an important role in the positive
development.
Sweden
The turnover produced by Lithells AB operating in Sweden amounted to EUR 237.8
million (EUR 229.4 million), which represents an increase of 3.7 per cent.
Lithells AB's operations include Atria Lithells AB, which produces meat products
and convenience food; Atria Concept AB, which operates in the fast food
business; and Svensk Snabbmat AB, which specialises in local wholesale. Atria
Lithells AB's result was weaker than last year due to the steep increase in the
price of raw material and the falling behind of sales prices. On the other hand,
the results of both Atria Concept AB and Svensk Snabbmat AB have shown positive
development. The consolidated Group result will fall somewhat short of last
year's figures but should be quite satisfactory overall.
Atria Lithells AB's factory in Sköllersta is the largest meat product factory in
Sweden and the company holds a 25 per cent market share in sausage production in
Sweden. The brand name Lithells is used in retail and institutional catering
products. Atria Concept AB operates some 1,700 Sibylla Inside points of sale in
Sweden, Finland, Poland and the Baltic States, as well as some 200 Sibylla fast
food stands on a franchising basis in Sweden. In addition, Atria Concept AB
operates some 150 Fyrkanten and Grillköket fast food stands.
Svensk Snabbmat AB is the market leader in the fast food market wholesale trade.
Both the company's turnover and result have grown steadily ever since the
company was acquired by Atria in 1998. Although the operations are not part of
the Group's core operations, the excellent profit yielded has made the owner
unwilling to give up the thriving and profitable business operations.
Baltic States
Atria's Baltic production facilities are located in Lithuania and Estonia.
Acquired in 2003, the Lithuanian subsidiary UAB Vilniaus Mesa has continued to
develop its operations. Vilniaus Mesa's annual turnover amounts to under EUR 10
million. The goal is to get to know the larger markets in the Baltic region
through the company and later to strengthen the Group's position with further
acquisitions.
Estonian AS Valga Lihatööstus became part of the Atria Group in January 2005.
Valga Lihatööstus' main products are various meat products. The company is the
market leader in Estonia in cold cut products and the goal is to strengthen this
position further. Valga Lihatööstus itself has strong beef and pork production
operations, which will be further strengthened in order to guarantee the supply
of raw material in the future.
In total, the Baltic companies only have a minor effect on this year's
consolidated Atria Group result.
Russia
At the end of June Atria decided to acquire the company PIT Produkt operating in
the St. Petersburg region. PIT Produkt is the second largest meat processing
company in the St. Petersburg region. The company is in the middle of an
investment programme aimed at increasing its production capacity and building a
logistics centre. Some local registrations are still required in order to close
the deal. These processes are time-consuming in Russia. The final closing is
expected to take place by the end of November at the latest.
PIT Produkt is experiencing strong growth in the St. Petersburg region. The
company's capacity to operate as a partner to the rapidly increasing number of
supermarkets and its popular branded products have caused the sales of PIT
Produkt's products to increase at such pace that the company finds it difficult
to cope with the demand. Thus Atria and PIT Produkt have agreed to start
planning a new factory immediately. The goal is to multiply the company's
current production capacity. A site for the new factory has already been
selected. Next year the company's sales target is USD 100 million.
Investments
Atria Oy's over EUR 20 million expansion of the pig slaughterhouse in Nurmo will
be completed in the spring of 2006. The facility's slaughtering capacity will
increase from fewer than 300 pigs to 600 pigs an hour. With the closing-down of
the pig slaughtering operations in Kuopio the new, automated line will bring
considerable cost savings and improved quality. The construction of the new
logistics centre was initiated in the summer. The investment amounts to EUR 37
million and the logistics centre will be completed and ready for use in
September 2007. The EUR 10 million investment in the meat product factory will
be opened in November. This investment includes a new, automatic production line
for skinless frankfurters.
Outlook for the end of the year
Atria expects sales to continue their strong growth during the remainder of the
year. The domestic result is expected to continue its positive development from
earlier in the year. No change is expected in the other business operations in
comparison with the first half of the year. According to earlier estimates, the
consolidated Group result will remain weaker than last year's result, but it
will be better than predicted in the estimates made at the beginning of the
year.
For additional information, please contact Mr Seppo Paatelainen, CEO, tel. +358
400 661 742.
ATRIA GROUP PLC
Seppo Paatelainen
Chief Executive Officer
DISTRIBUTION
Helsinki Stock Exchange
Principal media
www.atria.fi
The interim report will be mailed to you upon request and are available at our
website www.atria.fi.
