Business risks

Atria as an investment

Business risks

Q3/2021

Atria's business, net sales and earnings can be affected by several uncertainties. Atria's 2020 Annual Report provides comprehensive information on risk management and business risks and can be found at www.atria.fi/en/group/investors/financial-information/annual-reports/.

The continuation of the COVID-19 pandemic and measures to prevent its spread constituted the main risk to Atria's business also in the third quarter of the year. The pandemic has affected the demand for products, the operation of factories, the health and well-being of personnel and the movement of people. National restrictions on restaurant operations, which had an immediate effect on Atria's business, have been partially removed during the review period. The implementation of vaccination programmes has progressed well in Atria's operating countries and the restrictions related to the pandemic have already been partially lifted. Globally, however, controlling the pandemic through vaccination programmes still contains uncertainties.

The dry and exceptionally warm summer reduced grain harvests in Finland. The rains in August also weakened the quality of the harvest. As a result, the costs of meat production farms have increased, and this has caused pressure to increase the price of meat.

The sharp rise in the price of natural gas has also increased the prices of other fuels. This and the deteriorating water situation as a result of the dry summer have pushed the price of exchange-traded electricity to record highs. Atria's hedging against electricity price risks has been effective, so the high price level has so far not affected production costs.

The digitalising and globalising world has brought with it cyber risks. Risks related to cyber crime and IT disruptions can also affect Atria's operations, either directly or through service providers' systems. Every effort is made to prevent and protect against them through systematic monitoring and security-enhancing measures.

A significant part of the pork processed at Atria's Nurmo plant is exported to China. On the Chinese market, the price of meat can fluctuate very quickly, which is a risk to both production and the price level.

African swine fever is encountered in several European countries, China and Russia. The poultry market experienced uncertainty, as cases of highly pathogenic avian influenza were detected in Europe. Considering the risk of these diseases spreading to Finland, Atria employs prevention measures at its own production plants and contract production farms.