Atria Plc's financial statement release 1 January - 31 December 2011

Atria Plc, Financial Statement Release, 16 February 2012, 8:00 am

*Extraordinary items are included in the reported figures.

Review Q4/2011

Atria Group’s net sales for the last quarter came to EUR 338.7 million (EUR 346.7 million) and fell EUR 8.0 million year-on-year. The EBIT was EUR 4.1 million (EUR 4.4 million). The result for the last quarter includes a total of EUR -2.3 million of non-recurring costs.

Atria Finland’s net sales for the last quarter were EUR 206.9 million (EUR 213.9 million) and fell EUR 7.0 million year-on-year. Wholesale and export trade decreased during the last quarter, which weighed down net sales development. The EUR 7.1 million EBIT (EUR 7.8 million) was EUR 0.7 million lower than the EBIT for the corresponding period last year. The international meat market situation cleared and the price level of meat rose at the end of the year. The EBIT includes a non-recurring depreciation item in the amount of EUR -1.8 million on the value of the Forssa logistics site.

Atria Scandinavia’s net sales of EUR 97.7 million for the last quarter were at the level of the same period last year (EUR 98.0 million). The EBIT of EUR 4.2 million (EUR 5.6 million) decreased EUR 1.4 million year-on-year, which was mainly due to higher prices for meat raw material. The EBIT includes a non-recurring sales profit of EUR 0.7 million following the sale of a factory in Saltsjö-Boo.

Atria Russia’s net sales of EUR 31.1 million for the last quarter (EUR 32.2 million) decreased EUR 1.1 million compared to the previous year. During the period, the prices of meat raw material increased by about 10 per cent, and these cost increases could not be fully transferred to sales prices. The operating loss of EUR -4.5 million for the last quarter (EUR -7.6 million) decreased EUR 3.1 million compared to the corresponding period last year.

Atria Baltic’s net sales came to EUR 8.9 million for the last quarter (EUR 8.7 million) and it increased EUR 0.2 million year-on-year. EBIT showed a loss of EUR -1.7 million (EUR -0.7 million). The EBIT for the quarter includes a non-recurring sales loss of EUR -1.2 million following the sale of a factory in Lithuania.

Review 1 January – 31 December 2011

Atria Group’s full-year EBIT was EUR 1,301.9 million (EUR 1,300.9 million). EBIT for 2011 was EUR 8.0 million (EUR 9.8 million). The Group’s EBIT includes a total of EUR -2.2 million of non-recurring costs (EUR -11.8 million), of which EUR -0.8 million is related to the severance pay of Atria Plc's previous CEO.

Atria Finland’s full-year net sales increased by EUR 25.9 million to EUR 793.7 million (EUR 767.8 million). The comparison period in 2010 included production breaks resulting from industrial action. Atria Finland’s full-year EBIT came to EUR 19.3 million (EUR 30.7 million), which decreased EUR 11.4 million year-on-year. EBIT improved during the second half of 2011 following a weak first half. H1/2011 EBIT came to EUR 3.2 million (EUR 10.9 million) and in H2/2011, it was EUR 16.1 million (EUR 19.7 million). The development of EBIT during the second half of 2011 was significantly better than during the first half of the year. The reasons for this were tight cost control and the improvement of the demand in the meat market. The full-year EBIT includes a non-recurring depreciation item in the amount of EUR -1.8 million on the value of the Forssa logistics site.

The decline of EUR of 16.7 million in Atria Scandinavia’s full-year net sales is mainly due to the discontinuation of the production of consumer-packed meat in the summer of 2010. In the local currency, the company’s net sales fell by 8.4 per cent. EBIT for 2011 was EUR 13.8 million (EUR 13.9 million). The figure for the reference year includes EUR -2.3 million of non-recurring costs relating to the shutdown of the Årsta plant. EBIT for the financial period includes a non-recurring sales profit of EUR 0.7 million following the sale of a factory in Saltsjö-Boo. Also in Scandinavia, the result improved toward the end of the year. H1/2011 EBIT came to EUR 5.0 million (EUR 4.0 million), whereas in H2/2011, EBIT rose to EUR 8.9 million (EUR 9.9 million). The performance during the latter part of the year was weighed down by the rise in meat raw material prices.

Atria Russia’s full-year net sales fell by EUR 6.2 million, which was caused by sales decreasing in Moscow and by weakened Russian rouble. 2011 EBIT increased by EUR 9.0 million to EUR -18.9 million (EUR -27.9 million). EBIT for the reference period includes a total of EUR -9.5 million of non-recurring costs (goodwill impairment of EUR -10.8 million and non-recurring profits of EUR 1.3 million). Atria Russia’s operating loss decreased during the last two quarters. The H1/2011 result was EUR -11.1 million (EUR -4.9 million) and the result in H2/2011 was EUR -7.8 million (EUR -23.0 million). The reasons for the performance improvement in the latter part of the year were improved cost-efficiency and streamlining of the product range. EBIT for the financial period does not include any non-recurring costs.

Atria Baltic’s 2011 net sales of EUR 35.2 million (EUR 35.0 million) improved by EUR 0.2 million. Atria Baltic’s full-year EBIT improved by EUR 1.5 million to EUR -2.2 million (EUR -3.7 million). Full-year EBIT includes a total of EUR -0.3 million of non-recurring costs: a sales profit of EUR 0.9 million resulting from business restructuring and a loss resulting from the sale of a factory in Lithuania of EUR -1.2 million.

The Group’s operating cash flow was EUR 50.3 million (EUR 44.6 million) and cash flow from investments was EUR -40.8 million (EUR -40.2 million). Atria Group’s free cash flow was EUR 9.5 million (EUR 4.4 million). The Group’s interest-bearing liabilities came to EUR 409.4 million, showing a decrease of EUR 20.6 million compared to 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 15.5 million at the end of the financial period.

In January 2011, Atria Plc made a decision to invest approximately EUR 26 million in building and renovation work at the Kauhajoki bovine slaughterhouse and cutting plant. Atria Plc also bought the shares of Kauhajoen Teurastamokiinteistöt Oy, which owns the slaughterhouses, from Itikka Co-operative. The final purchase price was EUR 6.1 million.

Two efficiency improvement programmes were launched at Atria Finland during the early part of 2011: improvement of the efficiency of bovine slaughtering operations and a development programme at the Nurmo production plant. The total annual cost savings of these measures are approximately EUR 10 million. Some of these savings were realised in 2011 and the full amount will be realised from the beginning of 2013.

A development programme launched in 2010 to improve the efficiency of Atria Russia's production capacity and profitability was completed in accordance with the plan. Meat products are now produced at the Gorelovo and Sinyavino plants in St Petersburg. In Moscow there are pizza production and a logistics centre. The annual cost savings are estimated at EUR 7.5 million. Some of these savings were realised in 2011 and the full amount will be realised from the beginning of 2013.

Atria Scandinavia enhanced its efficiency by automating the production process for black pudding. The production of black pudding was transferred from the Saltsjö-Boo plant in Stockholm to Tranås. The efficiency improvement programme will generate annual cost savings of approximately EUR 1 million. The cost savings will be fully realised from the beginning of 2012.

The implementation of the product leadership strategy continued according to plan. Strengthening of the brands represented by Atria, ensuring the competitiveness of the existing products and developing new, innovative products are highlighted in the product leadership strategy.

Outlook for the future

Atria estimates that uncertainty in the global economy will continue in 2012. Also in Atria's business areas economic growth and development of markets are subject to uncertainty.

Possibly weakening purchasing power has less impact on the food sector than on the purchases of consumer durables.

The demand of meat market improved during the latter part of 2011. At the moment, the balance of demand and supply is clearly better than a year ago. Frozen stocks are small. As a user of Finnish raw material, Atria Finland benefits from this market situation. In Atria’s other business areas, where raw materials are acquired quickly on fluctuating global markets, a rise in raw material costs may cause problems.

Approximately EUR 10 million of the cost savings from the previously launched efficiency programmes will be realised during 2012.

During 2011 Atria has made significant new product launches that are expected to have positive impact on sales and profit in all market areas.

The Group’s EBIT was EUR 8.0 million in 2011. EBIT is expected to be essentially higher in 2012, as result improvement will focus on the latter part of the year. Some growth in net sales is expected for 2012.

Dividend proposal

The Board of Directors proposes that a dividend of EUR 0.20 be paid for each share for the financial year 2011.

Publication procedure

Atria Plc complies with the publication procedure in accordance with standard 5.2b of the Financial Supervisory Authority and publishes its 1 JANUARY – 31 DECEMBER 2011 financial statement release as an attachment to this company announcement. The full interim report is available on the company’s website at www.atriagroup.com.

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 16 February 2012 at 9:30 am at Atria offices in Helsinki, address Läkkisepäntie 23, Helsinki. The presentation material will be available on the company’s website (www.atriagroup.com/en/investors/FinancialInformation/quarterlyreports) after the distribution of the interim report and as an attachment to this company announcement.


ATRIA PLC
Juha Gröhn
CEO


DISTRIBUTION
Nasdaq OMX Helsinki Ltd
Major media
www.atriagroup.com