ATRIA PLC INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2017
Atria enjoyed a strong quarter – net sales and profitability increased in the third quarter
- The Group's net sales were EUR 360.8 million (EUR 339.1 million).
- The Group's EBIT was EUR 16.2 million (EUR 13.2 million), or 4.5 per cent (3.9%) of net sales.
- Atria initiated a development project to improve productivity at the Jyväskylä plant.
- Atria launched antibiotic-free chicken in Finland.
- The construction of new production lines at the poultry plant in Sweden has progressed in accordance with the investment programme.
- The Group's net sales amounted to EUR 1,061.7 million (EUR 994.9 million).
- The Group's EBIT was EUR 27.5 million (EUR 21.0 million), or 2.6 per cent (2.1%) of net sales.
- Exports to China began in May, and the first batches of meat arrived in China at the end of June.
- Work began on the construction of a solar power park at Atria's production plant in Nurmo in June, and the first part was taken into use at the end of July.
|Total net sales||360.8||339.1||1,061.7||994.9||1,351.8|
|Profit before taxes||14.3||11.8||23.3||16.3||26.1|
|Earnings per share, EUR||0.37||0.32||0.58||0.42||0.65|
|Pig farm sale||-||-||-||-1.0||-1.0|
|Sale of the real estate company||-||-||-||1.4||1.4|
CEO Juha Gröhn
“Atria's net sales have continued to grow throughout the year. The growth is based on a balanced foundation and is a consequence of the acquisitions completed in 2016, as well as organic growth.
Atria's profit increased year-on-year. Productivity trends have been good in all business areas, and they are the main reason for the improved profitability. Profitability trends in Finland, Russia and the Baltic countries have been favourable – third-quarter profits in Russia and the Baltic countries were encouragingly strong. The Scandinavian business has had a difficult year in 2017. The following reasons have influenced the decreased profitability in Scandinavia: raw material prices started rising more sharply in the first half of the year, and the costs of production and marketing relating to the ramp-up of the poultry business increased.
The economic recovery in Finland and Russia has had a positive effect on consumer demand in the business areas concerned. The Russian retail sector has finally begun to recover following years of contraction. In the Baltic countries and Scandinavia, market demand has remained stable in recent years.
The most important new products this year have been antibiotic-free chicken, which was launched in Finland at the beginning of September, and delicatessen products sold under the Ridderheims brand, which were simultaneously brought to three markets – Sweden, Norway and Finland. In Estonia, new products and classics for the barbecue season sold well. Sibylla continued to grow in Russia. Exports of pork from Finland to China have begun, and we expect export volumes for the full year to be more than 3 million kilos.
Some of the electrical energy required by the Nurmo plant is generated by the solar power park on the plant site. The project will be complete next autumn.”
Atria Group's net sales for July–September amounted to EUR 360.8 million (EUR 339.1 million). EBIT amounted to EUR 16.2 million (EUR 13.2 million). Net sales grew in all business areas. The acquisitions made in Finland and Sweden in 2016 supported growth. The increase in EBIT was due to good cost management and productivity improvements. Retail prices in Russia and Estonia were increased.
Atria Finland initiated a project to improve the profitability of production and increase productivity at the Jyväskylä production plant. The project identified overlaps in Atria’s current operations and the necessary reorganisation measures. Negotiations with the personnel concerning the reorganisation were initiated immediately. Atria estimates that centralising operations will result in annual savings of approximately EUR 1.2 million, most of which will be realised from June 2018 onwards. This would result in the reduction of approximately 25 man-years of work at the Jyväskylä production plant.
Atria Group's net sales for January–September amounted to EUR 1,061.7 million (EUR 994.9 million). EBIT was EUR 27.5 million (EUR 21.0 million).
In January, Atria Finland Ltd. made an agreement to deliver its first batch of meat to China. Atria will deliver over 3 million kilos of frozen pork products to China in 2017. The first batch of products arrived in China at the end of June.
Atria is working with Nurmon Aurinko Oy to build a solar power park next to Atria's Nurmo production plant. The construction project for Finland's largest solar power park reached a phase where the first solar panels could be taken into use in July. The first phase was commissioned according to plan.
Atria launched antibiotic-free chicken in August. The consumer packages bear the marking, “antibiotic-free”, which shows that no antibiotics of any kind were used when the chickens were raised. An equivalent concept for pork will be launched at the start of 2018.
The construction of new production premises at the poultry plant in Sweden has progressed in accordance with the investment programme. The new production plant will be taken into use at the end of 2018.
|Shareholders´ equity per share EUR||14.55||14.28||14.49|
|Equity ratio, %||46.0 %||46.3 %||46.5 %|
|Net gearing, %||56.6 %||55.7 %||50.5 %|
|Gross investments in fixed assets||38.5||54.0||82.9|
|% of net sales||3.6 %||5.4 %||6.1 %|
|The principles for calculating key indicators were presented in the 2016 annual financial statements.|
Events after the period under review
In August, Atria initiated a project to improve the profitability of production and increase productivity at the Jyväskylä production plant. Negotiations with the personnel were completed on 17 October 2017. The negotiations resulted in the decision to centralise pig slaughtering and cutting at Atria’s Nurmo plant. Beef processing in Jyväskylä will be unaffected.
The restructuring will result in annual savings of approximately EUR 1.2 million, which will be realised from June 2018 onwards. This means 17 redundancies and temporary lay-offs affecting every member of personnel at the Jyväskylä production plant. Every redundant member of personnel has been offered the opportunity to transfer to a different Atria unit.
Outlook for the future
Consolidated EBIT was EUR 31.8 million in 2016. In 2017, EBIT is expected to be better than in 2016 and net sales are expected to grow.
Atria Plc complies with the disclosure procedure in accordance with standard 5.2b of the Financial Supervisory Authority and publishes its interim report for 1 January to 30 September 2017 as an attachment to this stock exchange release. The full release is available on the company's website at www.atria.com.
For 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, 26 October 2017, at 9:45 am at Atria Plc’s Helsinki office, Läkkisepäntie 23, Helsinki. The presentation material will be available on the company's website (www.atria.com) after the distribution of the interim report and as an attachment to this company announcement.
Board of Directors
Nasdaq Helsinki Ltd