ATRIA OYJ STOCK EXCHANGE RELEASE 24 FEBRUARY 2003 AT 10.00 A.M. 1(7)
ATRIA OYJ'S FINANCIAL STATEMENTS 1 JANUARY - 31 DECEMBER 2002
Atria Group's turnover increased by 10.9 % amounting to EUR 707.0
million (EUR 637.4 million). Profit before extraordinary items was
EUR 20.4 million, (EUR 23.9 million ). The Board of Directors proposes
that a dividend of 25 % on the share capital be paid.
CONSOLIDATED INCOME STATEMENT (EUR MILLION)
1-12/2002 1-12/2001 change %
TURNOVER 707.0 637,4 10.9
OPERATING PROFIT 25.6 28.9 -11.5
PROFIT BEFORE EXTRAORDINARY
ITEMS 20.4 23.9 -14.8
GROUP'S PROFIT BEFORE TAXES 20.4 23.9 -14.8
PROFIT FOR THE FINANCIAL YEAR 14.1 15.9 -11.6
CONSOLIDATED BALANCE SHEET (EUR MILLION)
12/2002 12/2001 change %
ASSETS
FIXED ASSETS
Intangible assets 50.1 42.0 19.5
Tangible assets 243.8 209.8 16.2
Financial assets 5.0 5.4 -6.2
CURRENT ASSETS
Stocks 46.1 34.6 32.9
Debtors 77.5 70.3 10.4
Cash at bank and in hand 16.5 10.1 62.5
TOTAL 439.0 372.2 18.0
LIABILITIES
CAPITAL AND RESERVES
Share capital and other
shareholders' capital 188.6 180.7 4.4
MINORITY INTEREST 1.2 0.5 164.9
CREDITORS
Long-term 123.4 83.3 48.1
Short-term 125.8 107.7 16.8
TOTAL 439.0 372.2 18.0
CONSOLIDATED CASH FLOW
STATEMENT (EUR million) 1-12/2002 1-12/2001 change %
Cash flow from oprerations 50.9 47.1 8.1
Financing items and taxes -14.9 -12.2 22.1
Cash flow from operating 36.0 34.9 3.2
Cash flow from investing
activities -66.1 -23.2 184.9
Net change in loans 43.2 5.1 947.1
Dividends paid -6.8 -4.0 70.0
Net cash from financing
activities 36.4 -9.1 500.0
Cash in liquid funds 6.3 2.6 142.3
CONTINGENT LIABILITIES (EUR MILLION)
31.12.2002 31.12.2001 change %
LOANS SECURED BY MORTGAGES OR
OTHER SECURITIES
Loans from financial
institutions 95.0 71.8 32.3
Pension loans 5.4 8.3 -34.9
Total 100.4 80.1 25.3
MORTGAGES AND OTHER SECURITIES
GIVEN AS GENERAL SECURITIES
Property mortgages given 64.4 62.2 3.5
Company mortgages given 25.6 22.3 14.8
Other securities given 40.6 62.7 -35.2
Total 130.6 147.2 -11.3
MORTGAGES AND OTHER COLLATERAL GIVEN ON
BEHALF OF GROUP COMPANIES
Guarantees 21.8 - 100.0
CONTINGENT LIABILITIES AND LIABILITIES
NOT INCLUDED IN THE BALANCE SHEET
Limits not used 82.3 76.9 7.0
Guarantees 1.0 0.9 11.1
Leasing liabilities
Falling due in the next 12 months
1.0 1.0 -
Falling due at a later time 1.2 1.1 9.1
Total 2.2 2.1 4.8
The figures are not audited.
KEY FINANCIAL INDICATORS
2002 2001 2000 1999 1998
Turnover (EUR million) 707.0 637.4 615.7 557.7 519.2
Operating margin (EUR million) 50.9 52.0 38.7 36.0 36.8
% of turnover 7.2 8.2 6.3 6.5 7.1
Operating profit (EUR million) 25.6 28.9 18.8 16.7 14.5
% of turnover 3.6 4.5 3.1 3.0 2.8
Financial income/expenses
-5.2 -4.9 -5.3 -4.0 -4.4
% of turnover 0.7 0.8 0.9 0.7 0.9
Profit before extraordinary items
(EUR million) 20.4 23.9 13.5 12.6 10.1
% of turnover 2.9 3.8 2.2 2.3 1.9
Profit before appropriations and
taxes (EUR million) 20.4 23.9 13.5 12.6 8.8
% of turnover 2.9 3.8 2.2 2.3 1.7
Return of equity (ROE) % 7.7 9.2 4.9 5.3 3.8
Return of investment (ROI) %
7.9 10.0 6.8 6.6 5.8
Equity ratio % 43.3 48.7 46.7 46.3 52.6
Gross investments in fixed
assets (EUR million) 66.0 23.2 32.1 56.5 19.2
% of turnover 9.3 3.6 5.2 10.1 3.7
Personnel 3,300 3,241 3,419 3,264 3,045
Research and development expenses
6.1 5.5 5.8 4.3 4.0
% of turnover 0.9 0.9 0.9 0.8 0.8
Volyme of orders** - - - -
* Booked in total as expenditure for the financial year
** Not a significant indicator, as orders are generally delivered
on the day following the order
KEY INDICATORS FOR SHARES
2002 2001 2000 1999 1998
12 m 12 m 12 m 12 m 12 m
Earnings per share (EPS) EUR 0.89 1.00 0.52 0.54 0.39
Shareholders' equity per share
EUR 11.92 10.42 10.73 10.49 10.09
Dividend/share EUR* 0.425 0.425 0.25 0.25 0.25
Dividend/profit %* 47.8 42.4 48.5 46.4 65.2
Effective dividend yield* 3.2 7.1 5.9 5.1 5.3
Price/earnings ratio (P/E) 8.67 5.97 8.26 9.11 12.25
Volume of shares traded/thousands, EUR million
121.8 94.9 67.9 78.3 75.0
Volume of shares traded/thousands:
A 1,249 1,226 602 1,529 3,479
KI - - - - 260
Volume of shares traded %
A 18.9 18.5 9.1 23.1 79.1
KI - - - - 11.7
Number of shares, millions
total 15.8 15.8 15.8 15.8 15.8
Number of shares, millions
A 6.6 6.6 6.6 6.6 4.4
KI - - - - 2.2
KII 9.2 9.2 9.2 9.2 9.2
Average number of shares adjusted
with share issue 15.8 15.8 15.8 15.8 15.8
Number of shares adjusted
with share issue 31.12. 15.8 15.8 15.8 15.8 15.8
SHARE PRICE TREND
Lowest of period A 5.85 3.81 4.02 4.05 4.39
KI - - - - 4.73
Highest of period A 8.90 6.19 6.00 5.48 9.08
KI - - - - 9.25
At the end of period A 7.70 6.00 4.29 4.95 4.46
KI - - - - 5.30
Average price of the
financial period A 7.35 5.22 4.99 4.70 6.50
KI - - - - 7.48
* the proposal of the Board of Directors
WEAKENING OF DOMESTIC OPERATIONS CUTS INTO ATRIA'S EARNINGS
During the report year, due to the weakening of the profitability
of domestic business functions, the Atria Group did not match the
previous year's financial result. As Atria is first and foremost a
large slaughtering company, it suffered from the strong decline in
the profitability of slaughtering and meat-cutting operations. On
the other hand, the profitability of Swedish business functions
improved, reaching the target level. However, the realignment of
Samfood AB, which was integrated into the Swedish organisation at
the beginning of September, burdened earnings in the last months
of the year.
In 2002, profit before taxes amounted to EUR 20.4 million, while
in 2001 the result was EUR 23.9 million. Turnover came in at EUR
707.0 million (turnover in the previous year was EUR 637.4
million), representing growth of 10.9 per cent. Domestic business
operations exclusive of subsidiaries generated EUR 436.0 million,
representing growth of 1.2 per cent. Turnover of the Sweden-based
Lithells AB amounted to EUR 243.4 million, up 33.6 per cent. Liha
ja Säilyke Oy had turnover of EUR 40.2 million. The dividends
proposed by the company's Board of Directors, EUR 0.425 per share,
are at the previous year's level.
In its Finnish operations, Atria successfully increased its market
share in the retail sector. Atria assumed the position of market
leader in cold cut products. Likewise, Atria further consolidated
its leadership in the summertime market for grilling sausages.
However, the decline in the profitability of slaughtering and
meat-cutting had the greatest weakening effect on profitability.
Although the consumption of beef did not continue its downward
slide in Finland, a substantial amount of extraordinary costs
remained to be dealt with due to the BSE crisis; it was not
possible to transfer these costs into sales prices. The strong
Europe-wide overproduction of pork lowered sales prices in all
export countries, weakening the profitability of these business
functions. In the case of numerous products, the overall price
trend in retail store products was unsatisfactory in Finland.
Acquisition of Samfood business functions turns Atria into a major
player in Sweden
Last summer, Lithells AB acquired the business functions of
Samfood from Lantbrukarnas Riksförbund, the agricultural
producers' organisation of Sweden. Under its former owner,
Samfood's operations were in the red and its balance sheet was
overburdened. For this reason, Atria only acquired its business
functions, fixed assets, inventories and trademarks. At present,
Samfood's functions are being dynamically meshed with those of
Atria Lithells AB. Atria Lithells AB's plant in Sköllersta will
step up its output by about 30 per cent and will specialise in
meat products, while Samfood AB's Mälmö plant will specialise in
convenience foods, cold cut products and bacon and its Stockholm
plant in retail-packed meat. In the first half of the year, the
adjustment of operations will cause additional expenses, but it is
believed that Samfood AB's full-year earnings will be in the
black.
The post-adjustment goal is to merge the business functions of
Samfood AB and Atria Lithells AB. Even now, the companies have the
same core management handling production and marketing and the
same managing director at the helm.
Following the acquisition of the Samfood business functions,
Lithells emerged as a challenger to market leadership, falling
behind only a single local co-operative slaughtering company. The
market share of the products our Group manufactures is already
over 20 per cent. Because a large share of the market not held by
these two companies is divided between small local companies, it
is believed that Lithells is extremely well poised to claim an
even larger market share as the consolidation trend continues in
the retail sector.
At present Lithells AB comprises not only Atria Lithells AB and
Samfood AB but also Atria Concept AB, which is engaged in the fast
food business, and Svensk Snabbmat för Storkök Ab, which is in the
local wholesale business. The present (2003) size of the business
functions, including Samfood AB, is SEK 3.3 billion, or EUR 360
million. The Group is now in an excellent stage of development,
both in terms of its growth and profitability.
Meat market in trouble
The BSE case found in Finland in December 2001 had a substantial
impact on beef slaughtering and meat-cutting operations at the
beginning of 2002. The new BSE testing regulations and carcass-
handling procedures were widely implemented. These procedures
significantly complicated the entire beef production chain. Part
of the costs involved have become permanent burdens in the chain.
The situation improved, as far as testing procedures are
concerned, when BSE testing picked up its pace and the National
Veterinary and Food Research Institute EELA's unit in Kuopio began
to perform such tests in the summer. By the end of 2002, beef
consumption had returned to the same level as in the previous
year, having slipped by about six per cent during the first half
of the year. Demand for beef recovered clearly towards the end of
the year in the rest of the EU as well, although beef consumption
had slumped far more dramatically in the other EU countries than
in Finland following the outbreak of BSE in autumn 2001. In the
case of beef, the dry-aged Atria Takuumurea meats continued to
bolster their position during the report year as a high-quality
range of beef products. Takuumurea products are in good demand in
the institutional catering and retail markets. In the pork market,
producer price levels declined in 2002 in the entire EU area when
the market situation weakened. Pork production volumes have been
on the rise. The amount of pork processed by Atria has also risen,
especially in meat-cutting. In particular, the changes in the
market situation have impacted on the export market, where the
pork supply was at a higher level in the report year than in 2001.
Atria has traditionally exported pork to the Far East namely
Japan and Korea and to Russia, Sweden and the United States.
Atria's processed meat production in Finland
Atria is the Finnish market leader when it comes to products such
as cold cuts and grilling sausages. These products successfully
improved their positions last year and this trend is expected to
continue. Poultry consumption is still rising and our capability
of meeting demand will improve significantly once the extension to
Atria's poultry unit is completed in early summer. At that time,
we will also be able to lower costs. All in all, Atria has managed
to raise its degree of processing each year, but because meat
production is now rising vigorously in Finland, the relative
degree of processing cannot grow in the domestic market due to the
increased meat production volume. For this reason, our
subsidiaries and exports will assume greater significance in the
future.
Liha ja Säilyke Oy pruned its product range last year, focusing on
its core product areas: convenience foods and cold-cut production.
Its profitability trend remained favourable. A plot has been
acquired for the company with a view to the expansion of its
business premises.
Outlook for 2003
The first half of the year is always weak for earnings. This year,
we will post a loss during this period. It is the quietest part of
the year for demand. Strong beef production at a time when
domestic demand is at its lowest will put a damper on the Finnish
market. At the same time, strong overproduction in Europe and the
Russian purchase restrictions will hinder exports and lead to low
price levels. However, it is now expected that the European meat
market as a whole will improve towards the end of the year, and
the price levels will be rectified at that time.
Competition in the Finnish retail sector is continuing to heat up.
The retail sector's willingness to pull industry into the price
competition will make it more difficult to correct market price
levels in step with the rise in costs. In such a situation,
competition within the field also tends to increase.
At present, it is exceptionally difficult to predict full-year
earnings in Finland. Regarding our subsidiaries, including those
in Sweden, we believe that their total earnings will improve
compared with their level in 2002. The earnings target for the
entire Group's budget has been set at a higher level than the
final result for 2002. The Group's turnover is expected to rise to
EUR 850 million, of which Sweden will account for about EUR 360
million.
Annual General Meeting, 7 May 2003
Atria Oyj's Annual General Meeting will be held at 14:00 on 7 May
2003 in Kuopio on the company's premises at the address Ankkuritie
2, 70460 Kuopio, Finland.
The following matters will be dealt with at the meeting:
1. The matters specified as being the business of Annual General
Meetings in
Article 16 of the Articles of Association
2. The Board of Directors' proposal to amend Articles 1 and 2 of
the Articles of Association
The Board of Directors proposes that Article 1 of the Articles of
Association, concerning the business name and domicile of the
company, and Article 2, concerning its field of business, be
amended as follows:
Article 1: The company's business name and domicile
The company's business name is Atria Yhtymä Oyj in Finnish, Atria
Koncern Abp in Swedish and Atria Group plc in English. The company
is domiciled in Kuopio.
Article 2: The company's field of business
The company's field of business comprises slaughtering, meat-
processing and convenience foods as well as related industrial and
business operations. The company shall engage in these operations
either on its own or through subsidiaries.
The right to attend the Annual General Meeting rests with
shareholders who have been recorded as shareholders by 25 April
2003 in the company's shareholder register maintained by Finnish
Central Securities Depository Ltd, unless otherwise stated in law.
Shareholders may register by mailing or telephoning the company's
head office (P.O. Box 900, 60060 ATRIA, +358 6 416 8306 / Liisa
Liukku) or by mailing or telephoning the company's office in
Kuopio (P.O. Box 147, 70101 Kuopio, tel. +358 17 156 230 / Eija
Vuorinne). The letter must be received before the end of the
registration deadline. Any proxies should be submitted to the
place of registration within the registration period.
ATRIA OYJ
Seppo Paatelainen
Managing Director
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