Interim Report of Atria Plc 1 January– 31 March 2018: Atria's net sales grew and earnings improved – Atria Finland leads the growth

Atria Plc, Interim Report, 26 April 2018 at 8.00 am


INTERIM REPORT OF ATRIA PLC 1 JANUARY– 31 MARCH 2018

Atria's net sales grew and earnings improved – Atria Finland leads the growth

January–March 2018


- The Group's net sales were EUR 345.4 million (EUR 332.5 million).
- Consolidated EBIT was EUR 3.5 million (EUR 1.2 million), which is 1.0 per cent (0.4%) of net sales.
- The net sales of Atria Finland grew by EUR 17.4 million.
- The weakened Russian rouble and Swedish krona brought down the Group’s net sales.
- The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.50 (EUR 0.46) be paid per share.

  Q1 Q1  
EUR million 2018 2017 2017
Net sales     
  Atria Finland 245.6 228.2 986.4
  Atria Sweden 69.6 72.6 307.2
  Atria Denmark & Estonia 23.1 23.4 98.9
  Atria Russia 17.3 18.7 85.7
  Eliminations -10.2 -10.4 -42.0
Total net sales 345.4 332.5 1,436.2
      
EBIT     
  Atria Finland 6.7 4.1 36.3
  Atria Sweden -3.2 -0.6 2.4
  Atria Denmark & Estonia 1.3 1.2 5.2
  Atria Russia -0.6 -1.7 0.8
  Unallocated -0.7 -1.7 -3.7
EBIT, total 3.5 1.2 40.9
EBIT% 1.0% 0.4% 2.8%
      
Profit before taxes 1.2 0.8 35.5
      
Earnings per share, EUR 0.00 -0.02 0.92
      
Items affecting comparability     
of EBIT:     
Divestment of subsidiary - - 1.4
Adjusted EBIT 3.5 1.2 39.6


Juha Gröhn, CEO

“Atria's net sales grew in the first quarter and EBIT improved. As the first quarter is the calmest business period of the year for the product groups represented by Atria, we can be satisfied with the growth in net sales. At the beginning of the year the EBIT level is usually below average as during this period sales are focused on products of low profitability. This year Easter was in March, which naturally reinvigorated sales and improved the sales structure.

In Finland, the year has started well both in terms of net sales and earnings. The operations of Estonia and Denmark have likewise met the targets. In Russia, earnings have increased since last year even though EBIT is negative. In Russia, the changes in seasonal demand are considerable as Russian consumers significantly focus their spending on Christmas but return to budget restrictive spending after the holiday season.

In Sweden, net sales in the local currency were at the same level as last year, but EBIT remained negative. EBIT was decreased by sluggishness in the poultry market, increased raw material prices and costs caused by employee arrangements.

The investment in the Nurmo pig cutting plant has been completed, and the investment in the poultry plant in Sweden has been implemented according to plan. A cutting line was inaugurated at the poultry plant in February.

The weakening of the Swedish krona and Russian rouble has been significant during the past months. The weakening of the currencies plays a part in the rising costs of imported materials.”


January–March 2018

Atria Group’s
net sales for January–March amounted to EUR 345.4 million (EUR 332.5 million). EBIT amounted to EUR 3.5 million (EUR 1.2 million). The net sales of Atria Finland grew by EUR 17.4 million year-on-year. In Finland, the growth in net sales is due to increased sales in all sales channels. The net sales of Atria Russia and Atria Sweden were brought down by the weakened Russian rouble and Swedish krona.

The Group’s EBIT improved from the previous year. Atria Finland’s improved EBIT was due to increases in sales volumes and good sales structure. In Sweden, EBIT was brought down by sluggishness in the poultry market, increased raw material prices and costs caused by employee arrangements. For Atria Denmark & Estonia, EBIT remained roughly at the same level year-on-year.

Atria Group's operational structure and financial reporting were altered as of the beginning of 2018. Atria Scandinavia's organisation was simplified and a separate segment was created for the operations in Sweden. The businesses in Denmark and Estonia now constitute a single business area and reporting segment. The name of the new business area is Atria Denmark & Estonia. Atria Group’s reporting segments as of 1 January 2018 are as follows: Atria Finland, Atria Sweden, Atria Russia and Atria Denmark & Estonia.

Changes were made to Atria Plc's Management Team as of 1 January 2018. The CFO, Heikki Kyntäjä, retired and Tomas Back was nominated Atria Plc's CFO, Executive Vice President and Deputy CEO. He was also nominated director of Atria Denmark. Jarmo Lindholm transferred from the position of Executive Vice President of the Atria Russia business area to become the Executive Vice President of the Atria Sweden business area. For the time being, the duties of the Executive Vice President of Atria Russia are being performed by Andrey Shkredov, Director of Finance, IT and Procurement. After the end of the review period, Atria announced that Ilari Hyyrynen (MBA) has been nominated Executive Vice President of the Atria Russia business area. He will assume his position on 9 July 2018, at the latest.

During the review period, the focus of Atria Group's corporate responsibility programme was on improving occupational safety and the implementation of the Atria Way of Leading training programme.

Atria Finland’s net sales for January–March totalled EUR 245.6 million (EUR 228.2 million). The growth in net sales was due to increased sales in all sales channels. The sales growth was especially positive in the poultry product group. EBIT amounted to EUR 6.7 million (EUR 4.1 million). The growth of EBIT was due to increases in sales volumes and good sales structure. The export of pork to China commenced a year ago has progressed according to plan.

Atria Sweden's net sales for January–March amounted to EUR 69.6 million (EUR 72.6 million). In the local currency, net sales grew slightly. EBIT was EUR -3.2 million (EUR -0.6 million). EBIT was brought down especially by the poor performance of poultry operations caused by the sluggishness of Swedish poultry markets and the expenses related to the inauguration of the new production plant investment. EBIT was brought down also by the increase in raw material prices and the weakened Swedish krona. The employee arrangements implemented during the review period resulted in some additional expenses.

Atria Denmark & Estonia’s net sales for January–March amounted to EUR 23.1 million (EUR 23.4 million). EBIT amounted to EUR 1.3 million (EUR 1.2 million).  In Estonia, Atria grew its sales to retail by approx. 10 per cent in terms of value year-on-year. In Denmark, sales to retail decreased by approx. 4 per cent. EBIT remained roughly at the same level year-on-year.

Atria Russia’s net sales for January–March amounted to EUR 17.3 million (EUR 18.7 million). In the local currency, net sales grew by 3,4 per cent. EBIT was EUR -0.6 million (EUR -1.7 million).  The growth in net sales is due to increased sales of Sibylla and Food Service products. The growth of EBIT was better thanks to sales structure improved from the previous year and good cost-efficiency.


Key indicators    
EUR million 31.3.18 31.3.17 31.12.17
      
Shareholders´ equity per share EUR 14.70 14.59 14.81
Interest-bearing liabilities 247.0 250.3 214.3
Equity ratio, % 46.4 % 46.0 % 47.5 %
Net gearing, % 56.6 % 57.7 % 49.0 %
Gross investments in fixed assets 12.0 12.2 53.9
% of net sales 3.5 % 3.7 % 3.8 %
Average FTE 4,370 4,370 4,449

The principles for calculating key indicators were presented in the 2017 annual financial statements.


Outlook for the future

Consolidated EBIT was EUR 40.9 million in 2017. In 2018, EBIT is expected to be better than in 2017. In 2018, net sales are expected to grow.


Board of Directors' proposal for profit distribution

The Board of Directors proposes that a dividend of EUR 0.50 be paid for each share for the 2017 financial period.


Disclosure

Atria Plc complies with the disclosure procedure in accordance with standard 5.2b of the Financial Supervisory Authority and publishes its interim report for 1 January to 31 March 2018 as an attachment to this stock exchange release. The full release is available on the company's website at www.atria.com.

For more information, please contact: Juha Gröhn, CEO, Atria Plc, tel. +358 400 684224.


Invitation to press conference

A press conference will be held in Finnish today, 26 April 2018, at 9:45 am at Finlandia Hall, in the Terassi room. Entrance is through door M4 or K4. The presentation material will be available on the company's website (www.atria.com) after the distribution of the interim report and as an attachment to this company announcement.


ATRIA PLC
Board of Directors


DISTRIBUTION
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Major media
www.atria.com