Business Risks Q4/2023
Atria Group’s business, net sales or results can be affected by several uncertainties. Atria describes its business risks and risk management in detail in its Annual Report 2022, which is available at www.atria.com/en/investors/financial-information/annual-reports/.
In the fourth quarter of the year, both inflation and market interest rates were declining, but inflation has nevertheless remained at a high level. The costs of raw materials, other inputs and salaries have increased. Consumer purchasing power has been affected by the level of interest rates on consumer and mortgage loans. Changes in the purchasing power of consumers have an impact on Atria’s operations and profitability.
Atria’s broad product range, its ability to adjust its product selection to match customer needs and its well-known products have helped the company adapt to a situation where consumers have to plan their food purchases more carefully. Atria’s good market position and strong balance sheet have also helped in this challenging situation.
In line with its risk management policy, Atria has protected itself against hazard risks by insuring the risks outside the Group. In 2023, Atria’s deductible increased for property damage and business interruption insurance. This is due to changes in the insurance market resulting from the coronavirus, the unstable geopolitical situation and global claims development. In the event of a catastrophe, Atria’s own share of the costs of damage will be higher than before. As a result, Atria is currently investing more in risk management measures and business continuity plans and is raising the safety level of its plants.
Atria is prepared for increasing cybercrime and information system failures. Planned monitoring and continuous improvement of cyber security are practiced to guarantee quick responses in exceptional situations.
Neither the African swine fever nor the highly pathogenic avian influenza have spread during the winter months, but the risk of their spread still exists.
Atria owns about 2% of the Majakka Voima company. Majakka Voima Ltd owns shares in SF Power Company, which is the main shareholder of Fennovoima Ltd. The shareholders of SF Power Company have previously approached the shareholders of Majakka Voima with claims for compensation. Atria believes it is unlikely that the claims will result in any significant costs for Atria. Atria already fully wrote off the shares of Majakka Voima in its accounts in 2021.
In the second half of the year, the European Union published the latest versions of both the Corporate Sustainability Reporting Directive (CSRD) and the Taxonomy Regulation. Atria has mapped its sustainability risks for the purposes of both a dual materiality analysis and the identification of sustainable activities as referred to in the taxonomy. The clarification of the measures related to the impact and risk management will continue in 2024.