Atria Plc, Financial Statement Release, 15 February 2018 at 8.00 am
ATRIA PLC’S FINANCIAL STATEMENT RELEASE 1 JANUARY – 31 DECEMBER 2017
Atria had a strong year – strategy brought good result
- The Group's net sales were EUR 374.4 million (EUR 356.8 million).
- Consolidated EBIT was EUR 13.4 million (EUR 10.8 million), or 3.6 per cent (3.0%) of net sales.
- Atria is centralising its production of pork by transferring operations from the Jyväskylä plant to Nurmo.
- Atria decided to alter the operative Group structure as of 1 January 2018: Atria Sweden became a separate business area, Denmark and Estonia were combined into a single business area.
- Consolidated net sales were EUR 1,436.2 million (EUR 1,351.8 million).
- Consolidated EBIT was EUR 40.9 million (EUR 31.8 million), or 2.8 per cent (2.3%) of net sales.
- EBIT was positive in all business areas. The investments and development programmes for improving productivity in line with the Healthy Growth strategy supported the growth in EBIT.
- Exports to China began in May, and the first batches of meat arrived in China at the end of June.
- Construction work began on a solar power park at Atria's production plant in Nurmo in June, and the first section was commissioned at the end of July.
- Atria launched antibiotic-free chicken in Finland.
- The construction of new poultry production facilities in Sweden has proceeded in line with the investment programme.
- The Board of Directors proposes that a dividend of EUR 0.50 (EUR 0.46) be paid for each share for the 2017 financial period.
|Total net sales||374.4||356.8||1,436.2||1,351.8|
|Profit before taxes||12.2||9.8||35.5||26.1|
|Earnings per share, EUR||0.33||0.22||0.92||0.65|
|Items affecting comparability:|
|Divestment of subsidiary||1.4||-||1.4||-|
|Pig farm sale||-||-||-||-1.0|
|Sale of the real estate company||-||-||-||1.4|
CEO Juha Gröhn
“Atria's net sales increased, and EBIT improved in the final quarter of the year and in 2017 as a whole. Growth from the beginning of the year amounted to approximately EUR 85 million, and EBIT improved by approximately EUR 10 million. EBIT was positive in all business areas. The Healthy Growth strategy has been put into practice – growth has been attained and profitability has improved. The boosted profitability is due in large part to product price management, and it is the result of long-term productivity development.
Economic trends on Atria's home markets are currently good, and this is also having a positive effect on the development of food markets.
Development in Finland, the Baltic states and Russia has corresponded to the targets. In Scandinavia, we were not able to meet our earnings targets, although net sales also increased in Scandinavia.
Competition will remain intense. Under these conditions, it is important to ensure that everyday business is conducted in a managed way with no surprises. Atria performed in a stable manner throughout 2017. The growth in sales of Atria's own brands was particularly pleasing.
The most successful product innovation in 2017 was the new packaging for minced meat. The packaging has won several international awards in the packaging field and, above all, minced meat has been commercially successful in its new packaging.
The investment in the Nurmo pig cutting plant has been completed in full, and commissioning is now underway in the sections that were the last to be completed. In Sweden, the investment in the poultry unit has proceeded on schedule and in line with cost estimates. The key parts of the investment are already in production use. At the end of the year, investment was proceeding in the cutting and packaging areas, and Atria will be using a fully modern poultry unit by the end of 2018.”
Atria Group's net sales for October–December amounted to EUR 374.4 million (EUR 356.8 million). EBIT amounted to EUR 13.4 million (EUR 10.8 million). Adjusted EBIT amounted to EUR 12.1 million (EUR 10.8 million). Net sales grew in all business areas. The improvement in net sales is based on organic growth. The increase in EBIT was due to profitable growth, good cost management and productivity improvements.
In October, Atria decided to centralise pig slaughtering and cutting by moving these operations from Jyväskylä to the 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 was offered the opportunity to transfer to a different Atria unit.
The decision was made to alter Atria Group's operational structure and financial reporting as of the beginning of 2018. Atria Scandinavia's organisation was simplified and a separate segment was created for the operations in Sweden. The businesses in Denmark and Estonia constitutes a single business area and reporting segment. The name of the new business area is Atria Denmark & Estonia. As of 1 January 2018, Atria Group's reporting segments are as follows: Atria Finland, Atria Sweden, Atria Russia and Atria Denmark & Estonia. Comparative financial data for 2017 according to the new segments will be published as an attachment to this release.
Changes were made to Atria Plc's Management Team as of 1 January 2018. The CFO, Heikki Kyntäjä, retired and Tomas Back was nominated Atria Plc's CFO and Deputy CEO. He was also nominated director of Atria Denmark. Jarmo Lindholm transfers from the position of Executive Vice President of the Atria Russia business area to become the Executive Vice President of the Atria Sweden business area. The process to identify a new EVP for the Atria Russia business area has begun. For the time being, the duties of the EVP of Atria Russia are being performed by the CFO, Andrey Shkredov.
Atria Finland's net sales for fourth quarter totalled EUR 260.7 million (EUR 246.6 million). Net sales grew in all sales channels. EBIT amounted to EUR 11.4 million (EUR 10.8 million). The rise in EBIT was due to profitable growth in net sales and good cost management.
Atria Scandinavia’s net sales for the fourth quarter totalled EUR 90.1 million (EUR 88.3 million). In the local currency, net sales grew by 2.4 per cent. EBIT amounted to EUR 2.2 million (EUR 0.7 million). EBIT includes EUR 1.4 million of capital gains on the sale of shares in Nordic Fast Food AB.
Atria Russia’s net sales for the fourth quarter amounted to EUR 21.7 million (EUR 21.1 million). In the local currency, net sales grew by 2.1 per cent. EBIT was EUR 0.8 million (EUR -0.6 million). An improved sales structure spurred the development of net sales. The improved EBIT was due to successful sales in the Christmas season, as well as a more profitable product selection.
Atria Baltic’s net sales for the fourth quarter amounted to EUR 9.5 million (EUR 8.8 million). EBIT amounted to EUR 0.5 million (EUR 0.6 million). Atria increased its net sales in the contracting market by almost 9 per cent year-on-year. Atria's overall retail market share rose to 14.3 per cent. Growth in the sales of minced meat products continued. Sales of seasonal Christmas products were also good.
Atria Group's net sales for January–December totalled EUR 1,436.2 million (EUR 1,351.8 million). EBIT was EUR 40.9 million (EUR 31.8 million). Adjusted EBIT amounted to EUR 39.6 million (EUR 31.4 million). Atria consistently implemented its Healthy Growth strategy and concentrated on achieving organic growth, which translated into improved net sales and profitability. Net sales increased and EBIT was positive in all business areas. The acquisitions completed during 2016 were part of the growth. The investments and development programmes for improving productivity in line with the Healthy Growth strategy supported the growth in EBIT.
In January, Atria Finland Ltd made an agreement to deliver its first batch of meat to China. Atria delivered approximately three million kilogrammes 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.
In August, Atria launched antibiotic-free chicken. 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 in February 2018. Atria's beef contract production farms initiated a pilot project to trial antibiotic-free beef production. The first batches of antibiotic-free beef will go on sale at the beginning 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 commissioned in phases by the end of 2018.
Atria Finland’s net sales for January-December amounted to EUR 986.4 million (EUR 932.3 million). The growth in net sales was due to increased sales in all channels and the consolidation of the Kaivon Liha business into Atria as of the beginning of the final quarter of 2016. EBIT amounted to EUR 36.3 million (EUR 24.2 million). Atria's focus on organic and profitable growth in line with its Healthy Growth strategy and its successful cost management translated into improvements in EBIT.
Atria Scandinavia’s net sales for January-December amounted to EUR 355.1 million (EUR 343.4 million). In the local currency, net sales grew by 4.8 per cent. The growth in net sales was mainly due to the consolidation of the Lagerbergs poultry company into Atria in 2016, with 2 per cent organic growth. EBIT amounted to EUR 4.8 million (EUR 8.4 million). Adjusted EBIT was EUR 3.5 million (EUR 7.0 million). The decrease in EBIT was due to the poor performance of the poultry business and higher raw material prices.
Atria Russia’s net sales for January-December amounted to EUR 85.7 million (EUR 71.8 million). In the local currency, net sales grew by 6.0 per cent. Net sales saw particularly good growth in the Sibylla product group and delicatessen products. EBIT was EUR 0.8 million (EUR -0.7 million). Price rises due to increased raw material prices and improved profitability of the product selection contributed to the growth in EBIT.
Atria Baltic’s net sales for January-December amounted to EUR 37.9 million (EUR 34.4 million). EBIT amounted to EUR 2.7 million (EUR 0.7 million). EBIT for the comparable period includes a capital loss of EUR 1 million. The increase in net sales was mainly due to new product launches. EBIT continued to grow thanks to improved sales and better productivity than in the previous year. Sales of new minced meat products and sausages with a high meat content (77.7 %) were excellent.
|Shareholders´ equity per share EUR||14.81||14.49|
|Equity ratio, %||47.5 %||46.5 %|
|Net gearing, %||49.0 %||50.5 %|
|Gross investments in fixed assets||53.9||82.9|
|% of net sales||3.8 %||6.1 %|
The accounting principles for the key figures are presented in the financial statements for the year 2016.
Outlook for the future
Consolidated EBIT was EUR 40.9 million in 2017. In 2018, EBIT is expected to be better than in 2017. In 2018, net sales are expected to grow.
Board of Directors' proposal for profit distribution
The Board of Directors proposes that a dividend of EUR 0.50 be paid for each share for the 2017 financial period.
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 31 December 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, 15 February 2018, starting at 9:45. Place: Scandic Hotel Simonkenttä, Simonkatu 9, Pavilion, 8th floor, 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
The Financial Statement Release is available on our website at www.atria.com.