Business risks

Atria as an investment

Business risks

Q3/2020

Coronavirus (COVID-19) and its effects on the health of Atria personnel, as well as on the company's sales, earnings and cash flow, were Atria's most significant risks in the third quarter. During the review period, the company's operations have been flexibly adjusted to the changing situations, and measures to safeguard the health and working capacity of personnel and maintain the reliability of product deliveries have continued. Atria has incurred some additional expenses owing to the hygiene requirements and adjustment of operations. The financial position and cash flow remained good in the review period.

The sustained duration of the coronavirus pandemic and the effects of the pandemic on the demand for food products, national economy and financial markets are factors that increase uncertainty both in the short and long term. It is difficult to forecast their effects, because the weighting of the uncertainties may also vary from one business area to another. As the speed of the virus spread gains momentum, the risk of production disturbances increases.

Governments have revitalised the economy during the pandemic by providing support and stimulus packages. For Atria, the most significant support package has been the 2.6 per cent reduction in the employer's TyEL payment in Finland for the period covering 1 May to 31 December 2020. In Sweden, the key forms of support have been the removal of the sick leave waiting period and sick leave compensation paid by the state.

Atria's ordinary food production risks are associated with the quality, availability, safety and price of ingredients and preparations. During the review period, African swine fever infections of wild boar in Germany affected the price, demand and supply of pork around the world. African swine fever is also found in China and Russia, and also in several European countries. Considering the risk of African swine fever spreading to Finland, Atria employs prevention measures at its own production plants and contract production farms.

Personnel is a resource of the utmost importance to Atria. Personnel risks are managed with preventive measures focusing on occupational safety and personnel healthcare, as well as training provision. The purpose of these measures is, on one hand, to safeguard personnel well-being and competence and, on the other, to guarantee successful implementation of Atria's strategy and attainment of its strategic objectives.

A more detailed description of the risks related to Atria's operations and of the company's risk management is featured in the 2019 Annual Report.