Atria Group plc STOCK EXCHANGE RELEASE 18 August 2004 9.55 a.m.
ATRIA GROUP PLC'S INTERIM REPORT, 1 January 30 June 2004
The Atria Group's operating profit for the review period was EUR
16.0 million (EUR 11.6 million). The Group's profit before
extraordinary items was EUR 13.7 million (EUR 7.9 million).
Turnover amounted to EUR 397.7 million (EUR 374.8 million),
earnings per share to EUR 0.48 (EUR 0.35) and equity per share to
EUR 10.70 (EUR 11.83).
PROFIT AND LOSS ACCOUNT GROUP
(EUR Million) 1-6/2004 1-6/2003 1-12/2003
TURNOVER 397.7 374.8 765.1
NET OPERATING PROFIT 16.0 11.6 30.9
PROFIT BEFORE EXTRAORDINARY 13.7 7.9 23.6
ITEMS
PROFIT BEFORE TAXES 13.7 7.9 23.6
PROFIT 10.1 5.6 15.0
The taxes in the profit and loss
account are equivalent tax on
income for the period under
review. The change in Finland's
tax rate has also been taken
into account in taxes.
BALANCE SHEET, GROUP
(EUR Million)
ASSETS 30.6.2004 30.6.2003 31.12.2003
FIXED ASSETS
Intangible assets 45.6 47.8 47.5
Tangible assets 257.4 250.7 255.4
Financial assets 6.7 5.6 6.1
CURRENT ASSETS
Inventories 43.7 45.7 47.9
Receivables 98.2 88.1 89.7
Cash in hand and at bank 11.7 11.7 9.9
TOTAL 463.3 449.6 456.5
LIABILITIES
SHAREHOLDERS' EQUITY
Share capital and
other shareholders' equity 225.7 187.1 224.6
MINORITY INTEREST 1.6 1.2 1.6
CREDITORS
Long-term 92.4 113.8 104.3
Short-term 143.6 147.5 126.0
TOTAL 463.3 449.6 456.5
KEY FIGURES (EUR)
30.6.2004 30.6.2003 31.12.2003
Gross investments in
fixed assets 16.9 19.0 36.4
Gross investments
% of turnover 4.3 5.1 4.8
Personnel on average 3615 3564 3377
Earnings per share 0.48 0.35 0.83
Shareholders' equity per share 10.70 11.83 10.65
Equity ratio, % 49.1 41.9 49.6
Interest-bearing debt 133.7 168.8 129.4
CONSOLIDATED CASH
FLOW STATEMENT (EUR million) 1-6/2004 1-6/2003 1-12/2003
Cash flow from operations 23.6 14.4 54.5
Financing items and taxes -4.4 -5.7 -15.1
Cash flow from operating 19.2 8.7 39.4
activities
Investing activities -16.9 -19.0 -36.4
Cash flow from investing -16.9 -19.0 -36.4
activities
Issue of shares paid - - 26.4
Net change in loans 8.5 12.3 -29.2
Dividends paid -9.0 -6.7 -6.7
Net cash from financing -0.4 5.6 -9.6
activities
Change in liquid funds 1.8 -4.7 -6.5
CONSOLIDATED LIABILITIES
(EUR million)
30.6.2004 30.6.2003 31.12.2003
DEBTS INVOLVING MORTGAGES OR
OTHER COLLATERAL AS SECURITY
Loans from financial 69.1 99.5 86.2
institutions
Pension loans 5.7 5.1 5.3
Total 74.8 104.6 91.5
MORTGAGES AND OTHER COLLATERAL
GIVEN AS GENERAL SECURITY
Mortgages on real property 75.5 75.4 75.6
Mortgages on company assets 37.9 48.0 37.9
Other collateral 45.4 47.1 42.9
Total 158.8 170.5 156.4
MORGAGES AND OTHER COLLATERAL
GIVEN
ON BEHALF OF GROUP COMPANIES
Guarantees 34.4 34.3 34.5
CONTINGENT LIABILITIES NOT
INCLUDED IN THE BALANCE SHEET
Limits not used 76.3 77.7 76.3
Guarantees 1.4 0.9 1.4
Leasing liabilities
Payable in the next
financial year 0.8 0.9 1.0
Payable later 1.8 1.3 1.5
Total 2.6 2.2 2.5
The figures are not audited.
ATRIA PERFORMS WELL IN THE FIRST HALF OF THE YEAR
The firsthalf result of Atria Group plc, Finland's largest meat
company and the biggest manufacturer of meat products in the
Nordic and Baltic countries, improved substantially on the
previous year. Profit before taxes was EUR 13.7 million (EUR 7.9
million in 2003), representing growth of 73.9%. In the second
quarter in particular, which is the most important season for the
industry, Atria performed well, generating net profit of EUR 9.7
million (EUR 5.8 million). Turnover in the first half of the year
was EUR 397.7 million (EUR 374.8 million), an increase of 6.1%.
Operations developed well in the first part of the year both in
Finland and in Sweden. Earnings improved in all the main product
groups. Despite the weak trend in selling prices, Atria succeeded
in lifting its sales and profitability by means of increased
operational efficiency across the organisation and through cost
management.
Buoyant summer sales despite rainy weather
Atria racked up good sales in the most important season of the
year. The mainline product of the grill season, Class-A Wilhelm
grill sausage, strengthened further its market leader's position.
Sales of cold cuts and retail-packed meat showed a good trend.
Poultry sales also developed well, in step with successful product
commercialisation and an improvement in overall competitiveness.
The growth in Atria's retail sales in the first half of the year
clearly outpaced the overall market growth.
The outlook for the meat wholesaling and export business also
improved during the spring, and inventory levels fell.
Nonetheless, overall profitability in the meat industry is still
unsatisfactory. Notably, producer prices for pigs have risen in
the entire EU area. In Finland, prices have moved in lockstep with
the price level in the nearest competitor countries, Sweden and
Denmark, but are partly lower than in certain countries in
continental Europe, where production is at a lower level than
consumption.
Lithells in Sweden shows a good earnings trend
Good earnings were reported by all the companies of the Lithells
Group: Atria Lithells AB, which manufactures meat products and
convenience foods, Atria Concept AB, which is in the fast food
business, and Svensk Snabbmat AB, a local wholesaler. The Lithells
Group will report a substantial improvement in full-year earnings
because this year is the first full year after downsizing of the
Samfood business operations that were acquired in 2002. Keen
competition poses a tough challenge for the organisation to keep
up its positive earnings trend in coming years as well.
Lithells AB had first-half turnover of EUR 145.8 million. All the
businesses in Sweden accounted for 38.0% of Atria's consolidated
turnover.
Liha ja Säilyke Oy invests in a dispatching centre
Liha ja Säilyke Oy is a specialised company whose operations
continued on a positive trend. Turnover amounted to EUR 20.4
million (EUR 20.1 million). Because the company has partially
exited the mass-market products business and specialised even
further, turnover growth has been fairly small, but the measures
have had a positive impact on the entire companys earnings trend
in recent years. The dispatching centre functions will move into
new premises this autumn, with the breaking-in process getting
under way in August 2004. The premises which the previous
dispatching functions will make available are to be used for
developing and growing production operations.
Baltic countries
The new plant of Lithuania-based UAB Vilniaus Mesa has been placed
in operation stage by stage since May. The company's entire
production will move into the new plant during August. The company
is seeking to develop further its present market position in
Lithuania and Latvia. Over the long term, Atria is striving to
increase its operations throughout the Baltic area.
Russia
Since last autumn, Atria Group plc has been making an assessment
of the possibility of setting up operations in Russia. This effort
has included a market study and an extensive exploration of the
operating environment and companies in the meat-processing
industry. Atria has decided to proceed by way of an acquisition,
and the exploratory work is continuing on this basis. The process
has taken more time than anticipated because the aim is to carry
out the study and inquiries as thoroughly as possible in order to
reduce risks.
Investments
The Atria Group's investments in the first-half of the year came
to EUR 16.9 million. Lithells has an annual capital expenditure
level of about ten million euros. Atria Oy in Finland has decided
to centralise its pig slaughtering in Nurmo, for which purpose the
building of a new line has been started at an estimated cost of
EUR 21 million. The investment will be carried out during 2004-
2006. In order to cope with the needs brought by product
development and capacity bottlenecks and to keep overall
competitiveness at a continuing high level, Atria has decided on a
programme aiming at moving forward by one year the meat products
production investment in Nurmo that was planned for 2006. The
programme will cost just over EUR 10 million and comprise new
machine lines and production-improving investments.
The investments in Finland will not crimp Atria's possibilities of
moving ahead with its planned internationalisation programme.
Outlook for the future
Major changes are not expected to take place in Atria's present
market position in Finland and Sweden in the latter part of the
year. On the other hand, competition in the market will remain
tough, nor has the level of selling prices risen significantly,
despite the rise in raw material prices, for example. Atria is
nevertheless expecting full-year earnings to improve markedly on
the figure reported last year.
Of Finland's meat industry companies, Atria has the biggest share
of operations outside Finland. Although the Finnish market is of
course very important for the company, Atria is still targeting an
increase in the volume of operations abroad by strengthening the
company's position not only in Sweden, but above all in the Baltic
countries and in Russia.
Atria's profitability has improved thanks to successful processed
meat production and good performance in Sweden. The upswing in
profitability will support the company's ability to meet the
increasingly tough competition brought by globally expanding
trade. This means that Atria must have the ability to make further
inputs into developing functions both within Finland and beyond
its borders. Only then will Atria be in a position to ensure the
companys competitiveness and the viability of the entire meat
production chain in coming years as in the past.
ATRIA GROUP PLC
Seppo Paatelainen
President
DISTRIBUTION
Helsinki Exchanges
Principal media
Interim reports are mailed upon request and are available on our
Internet site, www.atria.fi
Newsroom