Interim report of Atria Plc 1 January - 30 September 2015
Atria Plc, Interim Report, 29 October 2015 at 8.00 am
INTERIM REPORT OF ATRIA PLC 1 JANUARY–30 SEPTEMBER 2015
Atria Group’s comparable EBIT at the previous year’s level
July–September 2015
– Consolidated net sales fell by 7.5% to EUR 337.1 million (EUR 364.4 million). At comparable exchange rates, the decline was 4.6%.
– Consolidated EBIT was EUR 15.1 million (EUR 16.2 million), or 4.5% (4.4%) of net sales. EBIT for the comparative period includes EUR 0.6 million of non-recurring income.
– The investment in the pig cutting plant in Nurmo is progressing according to plan.
– Atria Finland to improve the Sahalahti poultry unit’s productivity.
– Atria to increase efficiency in sales, marketing and logistics in Sweden
– Net liabilities declined, and net gearing was 55.8% (31 December 2014: 61.8%).
January–September 2015
– Consolidated net sales fell by 6.9% to EUR 989.2 million (EUR 1,062.7 million). At comparable exchange
rates, the decline was 4.3%.
– Consolidated EBIT was EUR 24.2 million (EUR 22.0 million), or 2.4% (2.1%) of net sales. BIT includes a total of EUR +1.9 million (EUR -0.6 million) of non-recurring items.
– Atria initiated an investment of EUR 36 million in the modernisation of the pig cutting plant in Nurmo.
– The sale of the Falbygdens cheese business to Arla in Sweden was completed in April.
– Atria acquired the operations of Aalbaek Specialiteter, a manufacturer of organic cold cuts, in Denmark in May.
– The Campofarm piggery real estate in Russia was sold in June.
| Q3 | Q3 | Q1–Q3 | Q1–Q3 | ||
| EUR million | 2015 | 2014 | 2015 | 2014 | 2014 |
| Group Net sales | 337.1 | 364.4 | 989.2 | 1,062.7 | 1,426.1 |
| EBIT | 15.1 | 16.2 | 24.2 | 22.0 | 40.6 |
| EBIT, % | 4.5% | 4.4% | 2.4% | 2.1% | 2.8% |
| Profit before taxes | 13.0 | 13.6 | 17.3 | 17.7 | 34.0 |
| Earnings per share, EUR | 0.27 | 0.35 | 0.38 | 0.45 | 0.93 |
| Non-recurring items* | - | 0.6 | 1.9 | -0.6 | 1.0 |
| Net sales by segment | |||||
| Atria Finland | 235.1 | 238.5 | 681.0 | 701.9 | 945.5 |
| Atria Scandinavia | 81.3 | 93.3 | 246.7 | 277.0 | 371.9 |
| Atria Russia | 19.1 | 29.2 | 56.5 | 76.5 | 98.8 |
| Atria Baltic | 8.4 | 9.0 | 24.9 | 26.0 | 34.5 |
| EBIT by segment | |||||
| Atria Finland | 9.5 | 11.8 | 16.1 | 18.0 | 33.6 |
| Atria Scandinavia | 5.2 | 5.9 | 9.6 | 10.2 | 14.9 |
| Atria Russia | 0.5 | -1.5 | 0.2 | -4.8 | -5.7 |
| Atria Baltic | 0.0 | 0.1 | 0.1 | -0.2 | -0.0 |
| *Non-recurring items are included in the reported figures | |||||
July–September 2015
Atria Group’s net sales for July–September totalled EUR 337.1 million (EUR 364.4 million). Net sales fell by EUR 27.3 million year-on-year. This decrease was partly due to the sale of the Falbygdens cheese business and the weakening of the rouble. Additionally, net sales were brought down by lower-than-usual sales during the barbecue season and intense competition. EBIT amounted to EUR 15.1 million (EUR 16.2 million). Comparable EBIT was roughly the same as in the corresponding period last year, EUR 15.1 million (EUR 15.6 million).
At the beginning of September, Atria Finland launched a project to improve the productivity of chicken production at the Sahalahti plant. The project will identify overlaps in Atria’s current operations and the areas in need of improvement at the plant. Atria estimates that removing overlapping functions and improving efficiency will result in annual savings of about EUR 1.5 million, which will be realised as of the second quarter of 2016.
In September, Atria Scandinavia initiated the reorganisation of its operations in Sweden. The reorganisation will affect sales, marketing and logistics. Atria estimates that the reorganisation and improved efficiency will result in annual savings of about EUR 1.8 million, most of which will be realized as of the beginning of 2016.
Atria Finland’s net sales for July–September totalled EUR 235.1 million (EUR 238.5 million), down by EUR 3.4 million year-on-year. EBIT amounted to EUR 9.5 million (EUR 11.8 million). EBIT for the comparative period includes EUR 0.6 million of non-recurring income. The decrease in net sales and profitability was due to weaker consumer demand and tougher competition, which resulted in lower sales prices. The sales of barbecue products were down from the year before. Atria Finland’s cost-efficiency has remained at a good level.
Atria Scandinavia’s net sales for July–September totalled EUR 81.3 million (EUR 93.3 million) and EBIT was EUR 5.2 million (EUR 5.9 million). The decrease in net sales and EBIT was due to the sale of the Falbygdens cheese business. The consolidation of Aalbaek Specialiteter’s operations into Atria has progressed well.
Atria Russia’s net sales for July–September totalled EUR 19.1 million (EUR 29.2 million). Net sales in euros fell mainly due to the weakening of the rouble. Net sales in the local currency decreased by 4.2% year-on-year, mainly because consumers shifted to lower-priced products. EBIT was EUR 0.5 million (EUR -1.5 million). EBIT improved due to price increases, the elimination of unprofitable products, a successful summer season for the Sibylla business, and improved cost-efficiency in general.
Atria Baltic’s net sales for July–September amounted to EUR 8.4 million (EUR 9.0 million). EBIT was EUR 0.0 million (EUR 0.1 million). The sales of barbecue products were lower than in the corresponding period last year due to the cold and rainy weather. Authorities have imposed regional export and sales bans in order to prevent the spread of African swine fever, which has reduced profitability and made it more difficult to use local meat.
January–September 2015
Atria Group’s net sales for January–September totalled EUR 989.2 million (EUR 1,062.7 million). Net sales fell by EUR 73.5 million year-on-year. This decrease was due to the sale of the Falbygdens cheese business and the weakening of the rouble over the comparative period. Additionally, net sales were brought down by lower-than-usual sales of barbecue products and intense competition. EBIT amounted to EUR 24.2 million (EUR 22.0 million), which includes a total of EUR +1.9 million (EUR -0.6 million) of non-recurring items. Comparable EBIT was EUR 22.3 million (EUR 22.6 million).
At the beginning of the year, Atria Finland launched an investment worth around EUR 36 million in expanding and modernising its pig cutting plant in Nurmo, Finland. New production facilities will be built next to the old plant, and the existing facilities will be renovated and automated using the latest production technology. The investment will substantially raise the pig cutting plant’s productivity and profitability: it is expected to generate annual cost savings of around EUR 8 million in the plant’s operations.
The Swedish Competition Authority approved the sale of Atria Scandinavia’s Falbygdens cheese business to Arla on 11 March 2015. The selling price was EUR 29.3 million when the change in net working capital as per the sales agreement was taken into account. The operations were transferred to Arla Foods AB on 1 April 2015. The sale will reduce Atria’s annual net sales by EUR 52 million and EBIT by EUR 3 million.
In May, Atria acquired the operations of Aalbaek Specialiteter A/S, a Danish manufacturer of organic cold cuts, for EUR 5.5 million. Aalbaek’s annual net sales amount to around EUR 10 million. Aalbaek is the top organic cold cuts brand in Denmark. The transaction will strengthen Atria’s market-leading position in cold cuts in the country. Aalbaek’s brands and business, including all agreements, were transferred to Atria as part of the deal, along with a charcuterie and production facilities in Farre. The operations were consolidated into Atria from 11 May 2015.
Atria sold a Russian subsidiary on 24 June 2015 for EUR 4.5 million. The company owned a farm property near Moscow. Costs of EUR 0.6 million were recorded for the sale as non-recurring items. Additionally, translation differences accrued in equity improved earnings by EUR 2.5 million.
Investments during the period under review totalled EUR 39.0 million (EUR 55.3 million). The Group’s free cash flow for the period (operating cash flow - cash flow from investments) was EUR 38.2 million (EUR -5.4 million) and net liabilities were EUR 224.3 million (31 December 2014: EUR 250.7 million).
Atria Finland’s net sales for January–September totalled EUR 681.0 million (EUR 701.9 million), down by EUR 20.9 million year-on-year. This decline was due to weaker consumer demand and tougher price competition. The sales of barbecue products were down from the year before. EBIT amounted to EUR 16.1 million (EUR 18.0 million). EBIT for the comparative period included EUR -0.2 million of non-recurring items. EBIT was brought down by a decrease in sales prices, which was due to the oversupply of meat in the international market and intense price competition. Atria Finland’s cost-efficiency has remained at a good level.
Atria Scandinavia’s net sales for January–September totalled EUR 246.7 million (EUR 277.0 million). This decrease was due to the sale of the Falbygdens cheese business, completed on 1 April 2015. EBIT for January–September was EUR 9.6 million (EUR 10.2 million). The consolidation of Aalbaek Specialiteter’s operations into Atria has progressed well.
Atria Russia’s net sales for January–September totalled EUR 56.5 million (EUR 76.5 million). Net sales in euros fell due to the weakening of the rouble. Net sales in the local currency grew by 2.3% year-on-year. EBIT was EUR 0.2 million (EUR -4.8 million), which includes a total of EUR +1.9 million of non-recurring items. Comparable EBIT came to EUR -1.7 million (EUR -4.8 million). The positive performance was due to increases in sales prices and better cost-efficiency. Atria has implemented all the planned structural reforms, which have had a positive impact on the EBIT. Meanwhile, EBIT was brought down by an increase in raw material prices and lower consumer demand.
Atria Baltic’s net sales for January–September totalled EUR 24.9 million (EUR 26.0 million). EBIT for January–September was EUR 0.1 million (EUR -0.2 million). EBIT for the comparative period includes EUR 0.4 million of non-recurring costs. Prolonged oversupply in the international meat market and fierce price competition in the retail market have brought down meat prices. The sales of barbecue products were lower than in the corresponding period last year due to the cold and rainy weather. In late summer, authorities imposed regional export and sales bans in order to prevent the spread of African swine fever, which reduces profitability and makes it more difficult to use local meat.
| Key indicators | ||||
| EUR million | 30.9.15 | 30.9.14 | 31.12.14 | |
| Equity/share, EUR | 14.07 | 14.38 | 14.22 | |
| Interest-bearing liabilities | 225.5 | 314.9 | 254.1 | |
| Equity ratio, % | 46.0 | 42.1 | 44.0 | |
| Gearing, % | 56.1 | 76.8 | 62.6 | |
| Net gearing, % | 55.8 | 75.9 | 61.8 | |
| Gross investments in fixed assets | 39.0 | 55.3 | 62.7 | |
| Gross investments, % of net sales | 3.9 | 5.2 | 4.4 | |
| Average FTE | 4,304 | 4,773 | 4,715 |
Outlook for the future
In 2014, consolidated EBIT without non-recurring items was EUR 39.6 million. In 2015, EBIT is projected to be roughly the same and net sales are expected to decrease.
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 – 30 SEPTEMBER 2015 interim report 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 29 October 2015 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
Board of Directors
DISTRIBUTION
Nasdaq OMX Helsinki Ltd
Major media
www.atriagroup.com