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Atria Plc's Financial Statement Release 1 January - 31 December 2012

21.2.2013 08:05


ATRIA PLCS FINANCIAL STATEMENT RELEASE 1 JANUARY 31 DECEMBER 2012

Atria’s EBIT increased considerably, net sales up slightly

1 JANUARY – 31 DECEMBER 2012

- Consolidated net sales totalled EUR 1,343.6 million (EUR 1,301.9 million)
- Consolidated EBIT increased to EUR 30.2 million (EUR 8.0 million)
- Atria Finland’s EBIT grew to EUR 36.5 million (EUR 19.3 million)
- Atria Scandinavia’s EBIT was EUR 8.2 million (EUR 13.8 million)
- Atria Russia’s EBIT came to EUR -8.6 million (EUR -18.9 million)
- Atria Baltic’s EBIT was EUR -1.5 million (EUR -2.2 million)
- Consolidated EBIT includes EUR 0.5 million (EUR -2.2 million) of non-recurring costs
- The Group’s equity ratio was 41.5 per cent (39.5%)

1 OCTOBER – 31 DECEMBER 2012
- The Group’s net sales in Q4/2012 totalled EUR 360.6 million (EUR 338.7 million) and EBIT totalled EUR 7.8 million (EUR 4.1 million)

  Q4 Q4   Q1–Q4 Q1–Q4  
EUR million 2012 2011   2012 2011  
Net sales 360.6 338.7   1,343.6 1,301.9  
EBIT 7.8 4.1   30.2 8.0  
EBIT, % 2.2 1.2   2.2 0.6  
Profit before taxes 6.1 0.8   18.9 -4.7  
Earnings per share, EUR 0.18 -0.02   0.35 -0.24  
Non-recurring items* -0.5 -2.3   -0.5 -2.2  

*Non-recurring items are included in the reported figures.

Review 1 October – 31 December 2012

Atria Group’s net sales for the fourth quarter totalled EUR 360.6 million (EUR 338.7 million), showing growth of EUR 21.9 million year-on-year. EBIT increased to EUR 7.8 million (EUR 4.1 million). The fourth quarter EBIT includes a total of EUR 0.5 million of non-recurring costs (EUR -2.3 million).

In the year under review, the Atria Plc Board of Directors confirmed new long-term financial targets for the Group. In the context of the strategy process, the target for return on equity (ROE) has been revised, and targets for the proportion of international operations have been removed.

Atria’s new financial targets are as follows:
- EBIT: 5%
- Equity ratio: 40%
- Return on equity: 8%
- Dividend distribution of profit from period: 50%

Atria Finland’s fourth quarter net sales totalled EUR 221.4 million (EUR 206.9 million), showing growth of EUR 14.5 million year-on-year. EBIT increased to EUR 11.0 million (EUR 7.1 million). This increase was due to improved conditions in the meat market and higher sales prices. The EBIT for the reporting period includes a non-recurring expense of EUR 0.5 million relating to the termination of bovine slaughtering at the Kuopio plant. The EBIT for the reference year includes a non-recurring write-down of EUR 1.8 million for the value of the Forssa logistics site.

Atria’s Board of Directors decided in December to transfer the production of cured sausages from Finland to Atria Scandinavia’s production plant in Denmark. The aim is to improve productivity and thus strengthen the company’s position as a cured sausage producer. The Kuopio plant will cease producing cured sausages in autumn 2013. The move is expected to generate annual savings of approximately EUR 0.3 million. All Atria employees working at the Kuopio production plant will be offered the opportunity to be transferred to other company units. Cured sausages sold under the Atria brand will nevertheless still be manufactured using only Finnish meat.

Atria Plc purchased HKScan Finland Oy’s shares in pet food manufacturer Best-In Oy. Atria Plc and HKScan Finland Oy previously each held a 50 per cent interest in Best-In Oy, established in 2002. By an agreement signed on 20 December 2012, Atria Plc acquired the entire share capital of Best-In Oy. Best-In Oy is located in Kuopio, Finland and its net sales in 2012 were EUR 5.1 million. The company has 19 employees. Best-In Oy owns among others the Best-In, Hubert and CAT pet food brands. The acquisition created a profit of EUR 1.5 million, which is reported in the income statement after EBIT under "Income from joint-ventures and associates".

Atria Scandinavia’s fourth quarter net sales totalled EUR 103.2 million (EUR 97.7 million), showing growth of EUR 5.5 million year-on-year. In the local currency, net sales increased by 1.4 per cent year-on-year. EBIT was EUR 1.9 million (EUR 4.2 million), down EUR 2.3 million compared to the corresponding period last year. The decrease in EBIT was due to increasing meat raw material prices. Atria Scandinavia has not been able to pass on increased raw material costs in full to sales prices. The EBIT for the reference period includes a non-recurring sales profit of EUR 0.7 million for the sale of the Saltsjö-Boo facility.

Atria Russia’s fourth quarter net sales totalled EUR 32.8 million (EUR 31.1 million), showing growth of EUR 1.7 million year-on-year. In the local currency, net sales grew by 1.7 per cent year-on-year. EBIT was EUR -3.9 million (EUR -4.5 million), showing an improvement of EUR 0.6 million over the comparative period. The poor profitability of primary production weighed on the fourth quarter profits. Atria Russia also invested heavily in marketing to increase future sales volumes. 

Atria Russia’s EBIT includes a non-recurring profit from the sale of a Moscow plant facility and related non-recurring costs. In total these items had no impact on the EBIT. The facility in question has previously been reported under assets held for sale.

Atria Baltic’s fourth quarter net sales totalled EUR 8.8 million (EUR 8.9 million), showing a decrease of EUR 0.1 million year-on-year. EBIT was EUR -0.2 million (EUR -1.7 million). The improvement in the reporting period is due to an increase in the sales of further processed products. The EBIT for the reference period includes a non-recurring loss of EUR 1.2 million from the sale of a Lithuanian plant facility.

Review 1 January – 31 December 2012

Atria Group’s net sales in 2012 amounted to EUR 1,343.6 million (EUR 1,301.9 million), up EUR 41.7 million from 2011. EBIT increased substantially to EUR 30.2 million (EUR 8.0 million). Consolidated EBIT includes EUR 0.5 million of non-recurring costs (EUR -2.2 million).

The Group’s operating cash flow was EUR 99.6 million (EUR 50.3 million) and cash flow from investments was EUR -50.0 million (EUR -40.8 million). Consolidated free cash flow amounted to EUR 49.7 million (EUR 9.5 million). Interest-bearing net liablities came to EUR 363.9 million (EUR 402.8 million), down EUR 38.9 million from 2011. In the fourth quarter, Atria Finland signed agreements concerning the sale of trade receivables. These agreements decreased the company’s trade receivables by a total of EUR 61.2 million at the end of the period.

At the beginning of 2012, Atria Plc’s Board of Directors decided to terminate the share incentive plan for Atria Group’s key personnel and replace it with a new long-term reward programme. The share incentive plan no longer applied in 2012.

Atria Finland’s net sales in 2012 totalled EUR 819.5 million (EUR 793.7 million), showing growth of EUR 25.8 million year-on-year. EBIT amounted to EUR 36.5 million (EUR 19.3 million), up EUR 17.2 million from 2011. This increase was due to improved conditions in the meat market and higher sales prices across all customer accounts. In addition, the sales structure was more favourable and cost savings resulting from efficiency measures improved the performance. The EBIT for 2012 includes a non-recurring expense of EUR 0.5 million relating to the termination of bovine slaughtering at the Kuopio plant. The EBIT for the reference year includes a non-recurring write-down of EUR 1.8 million for the value of the Forssa logistics site.

Atria Scandinavia’s net sales in 2012 totalled EUR 387.8 million (EUR 374.9 million), showing growth of EUR 12.9 million year-on-year. In the local currency, net sales were at the same level as in the previous year. EBIT amounted to EUR 8.2 million (EUR 13.8 million). The reason for this decrease was the higher price of meat raw material in comparison with the previous year. Atria has not been able to pass on all of the increased raw material costs to sales prices. The EBIT for the reference period includes a non-recurring profit of EUR 0.7 million for the sale of the Saltsjö-Boo facility.

In January 2012, a programme was launched to improve the profitability of Atria Scandinavia’s production of meat products.  Atria is investing approximately EUR 4.7 million in new production equipment for the Malmö plant. The manufacture of ham products and the slicing of cold cuts was transferred from the Halmstad plant to the Malmö plant. The programme is expected to generate annual cost savings of approximately EUR 1.5 million. The savings began to materialise in 2012 and will be fully effective from the beginning of 2013.

Atria Russia’s net sales for the year amounted to EUR 126.3 million (EUR 123.0 million). In the local currency, net sales were at the same level as the year before. EBIT was EUR -8.6 million (EUR -18.9 million), showing an improvement of EUR 10.3 million over the previous year. This increase was due to efficiency improvement measures, price increases and the streamlining of the product range. The poor profitability of primary production weighed down fourth quarter profits. Atria Russia also invested heavily in marketing to increase future sales volumes. 

Atria Russia’s EBIT includes a non-recurring profit from the sale of a Moscow factory and related non-recurring costs. In total these items had no impact on the EBIT. The facility in question had previously been reported under assets held for sale. 

During the reporting period, Atria Russia launched a programme aimed at improving production efficiency at the Sinyavino and Gorelovo plants in St Petersburg. These measures are expected to generate annual cost savings of around EUR 2.0 million, which will be fully realised from the beginning of 2013. Meat products are now produced at the centralised Sinyavino and Gorelovo plants. 

Atria Baltic’s net sales for the year amounted to EUR 34.2 million (EUR 35.2 million). EBIT was EUR -1.5 million (EUR -2.2 million), which is EUR 0.7 million up year-on-year. The improvement in the reporting period is due to an increase in the sales of further processed products. EBIT in the reference period includes a total of EUR 0.3 million of non-recurring costs.

Olle Horm was appointed Executive Vice President of Atria Baltic and a member of Atria Group’s Management Team as of 15 August 2012.

Key indicators        
EUR million 31.12.12 31.12.11  
       
Equity/share. EUR 15.15 14.81  
Interest-bearing liabilities 370.5 409.4  
Equity ratio, % 41.5 39.5  
Gearing, % 85.9 97.1  
Net gearing, % 84.3 95.5  
Gross investments in fixed assets 56.2 47.0  
Gross investments, % of net sales 4.2 3.6  
Average number of personnel (FTE) 4 898 5 467  
           

Outlook for the future

The consolidated EBIT in 2012 was EUR 30.2 million. In 2013 it is expected to be higher still. Some growth in net sales is also expected for 2013.

Dividend proposal

The Board of Directors proposes that a dividend of EUR 0.22 per share be paid for the financial year 2012.

Disclosure

Atria Plc complies with the disclosure procedure in accordance with standard 5.2b of the Financial Supervisory Authority and publishes its financial statement release for 1 January to 31 December 2012 as an attachment to this stock exchange release. The full release is available on the company’s website at www.atriagroup.com.

More more information, please contact:
Juha Gröhn, CEO, Atria Plc, tel. +358 400 684224.

Invitation to press conference

A press conference will be held in Finnish today, 21 February 2013, at 9:30 am at Atria Plc’s Helsinki office, Läkkisepäntie 23, Helsinki. The presentation material will be available on the company’s website (www.atriagroup.com/en/investors/FinancialInformation/quarterlyreports) after the publication of the financial statements and as an attachment to this stock exchange release.

ATRIA PLC
Juha Gröhn
CEO

DISTRIBUTION
Nasdaq OMX Helsinki Ltd
Major media
www.atriagroup.com

 

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