Atria Plc, Financial Statement Release, 13 February 2019 at 8.00 am
ATRIA PLC’S FINANCIAL STATEMENT RELEASE 1 JANUARY – 31 DECEMBER 2018
Atria Finland's growth was strong – the Group result was brought down by increased raw material costs
- Consolidated net sales totalled EUR 376.9 million (EUR 374.4 million).
- Consolidated EBIT was EUR 6.7 million (EUR 13.4 million), or 1.8 per cent (3.6%) of net sales.
- Atria Finland's net sales kept growing, EBIT was weighed down by increased costs.
- Atria Sweden's and Russia's EBITs were weakened primarily by increased raw material costs.
- Consolidated net sales totalled EUR 1,438.5 million (EUR 1,436.2 million). At comparable exchange rates, net sales grew by 2%.
- Consolidated EBIT was EUR 28.2 million (EUR 40.9 million), or 2.0 per cent (2.8%) of net sales.
- Atria Finland drives the Group's growth: net sales exceeded EUR 1 billion and EBIT grew from the previous year.
- The weakened Swedish krona and Russian rouble brought down the Group’s net sales.
- Atria Sweden's EBIT was weighed down by increased raw material costs and the unfavourable sales structure of poultry operations.
- Atria Finland decided to invest EUR 3.4 million in the poultry operations in Nurmo and Sahalahti.
- The Board of Directors proposes that a dividend of EUR 0.40 (EUR 0.50) be paid for each share for the 2018 financial period.
|Atria Denmark & Estonia||25.4||25.3||97.4||98.9|
|Total net sales||376.9||374.4||1,438.5||1,436.2|
|Atria Denmark & Estonia||1.0||1.3||5.3||5.2|
|Profit before taxes||5.6||12.2||22.3||35.5|
|Earnings per share, EUR||0.12||0.33||0.58||0.92|
|Items affecting comparability|
|Divestment of subsidiary||-||1.4||-||1.4|
Juha Gröhn, CEO
“Atria's growth in Finland was strong and annual net sales exceeded EUR 1 billion for the first time. The Group’s net sales were at the same level as last year. The weakening of the Swedish krona and Russian rouble contracted our euro-denominated net sales in these markets. In Denmark & Estonia's business area, net sales were at the same level as last year.
EBIT was approximately EUR 28 million, which is smaller than last year. Finland's and Denmark & Estonia's results were as expected. The results of Sweden and Russia did not meet set targets. The increased costs of animal feed caused by the dry summer were transferred to meat raw material costs. The increase in costs has been the strongest in Russia, where the raw material costs increased especially towards the end of the year by more than 30% compared with the same period in the previous year.
Sweden's poultry plant investment programme was completed, and the plant is operating well. The development of sales volumes is as expected. The renewed plant enables the launching of new products in the market, balancing demand and supply. It is positive that also Swedish consumers are increasingly favouring fresh chicken.
In 2018, the value of inventories in our balance sheet increased, which weakened our operating cash flow. This development was affected in part by the increased costs of several raw materials and supplies.”
Atria Group's net sales for the fourth quarter amounted to EUR 376.9 million (EUR 374.4 million). EBIT amounted to EUR 6.7 million (EUR 13.4 million). The net sales of Atria Finland grew by EUR 7.8 million from the previous year. In Finland, sales to retail and to Food Service customers continued to grow during the last quarter of the year. Atria Sweden's net sales were reduced by the divestment of the Nordic Fast Food business operations in December 2017 and the weak Swedish krona. In Sweden, sales to retail of poultry products continued to grow during the last quarter of the year. For Atria Denmark & Estonia, net sales remained roughly at the same level year-on-year. The decrease of Atria Russia's net sales was due to the weakened exchange rate.
Atria Finland's EBIT fell slightly year-on-year. The increased costs of raw materials, especially meat, and other production assets weighed down Finland's EBIT during the last quarter of the year. In addition, the Group's EBIT was burdened by increased raw material costs in Sweden and Russia as well as Atria Sweden's unfavourable sales structure of poultry operations. Atria Denmark & Estonia's EBIT weakened slightly year-on-year.
In November, Atria decided to increase the production of cattle, pig and poultry feeds in the Koskenkorva plant in Ilmajoki. A new poultry feed production line as well as cattle and pig feed storage silos will be built for the feed plant. The investment will be executed by Suurusrehu Oy and Oy Feedmix AB, the owners of the properties leased by A-Rehu Oy. Through the investment, the production capacity of the Koskenkorva feed plant will increase about 30% in all feed types: cattle, pig and poultry feed. The investments will also improve the delivery reliability of chicken feeds. The investment will be executed in 2019 and will be in production use in early 2020.
Atria Finland's net sales for October–December totalled EUR 268.5 million (EUR 260.7 million). Net sales increased by EUR 7.8 million. Sales to retail and to Food Service customers continued to grow from the previous year. EBIT amounted to EUR 9.5 million (EUR 11.4 million). The increased costs of raw materials, especially meat, and other production assets weighed down EBIT during the last quarter of the year.
Atria Sweden's net sales for the fourth quarter amounted to EUR 74.1 million (EUR 77.7 million). In the local currency, net sales were at the same level as in the previous year. Sales of poultry products continued to grow during the last quarter of the year. Net sales were decreased by the divestment of the Nordic Fast Food business operations in December 2017 and the weakened Swedish krona. EBIT was EUR -1.1 million
(EUR 1.4 million). EBIT for the comparable period includes a sales profit of EUR 1.4 million. EBIT was weighed down by increased raw material costs and the unfavourable sales structure of poultry operations.
Atria Denmark & Estonia's net sales for October–December totalled EUR 25.4 million (EUR 25.3 million). EBIT amounted to EUR 1.0 million (EUR 1.3 million). In Estonia, Atria's sales to retail increased by approximately 5% in terms of value. Atria’s market share in Estonian retail was 14% in the product groups represented by the company. In Denmark, net sales and EBIT remained roughly at the same level year-on-year. In Denmark, the total market for cold cuts shrank, but Atria was able to increase its market share by 0.3%. Atria is the market leader in cold cuts in Denmark with a market share of 19%.
Atria Russia’s net sales for the fourth quarter amounted to EUR 19.9 million (EUR 21.7 million). EBIT was
EUR -2.6 million (EUR 0.8 million). The decrease in net sales was due to the weakening of the Russian rouble. In the local currency, net sales grew slightly. The sales of Food Service products, cured sausages and whole-meat products grew considerably from the previous year. During the last quarter of the year, meat raw material prices rose sharply, which weakened EBIT.
Atria Group's net sales for January–December totalled EUR 1,438.5 million (EUR 1,436.2 million). At comparable exchange rates, the Group's net sales grew by 2%. EBIT amounted to EUR 28.2 million (EUR 40.9 million). The net sales of Atria Finland grew by EUR 32.8 million from the previous year, totalling over EUR 1 billion. In Finland, sales to retail and to Food Service customers continued to grow steadily throughout the year. The weakened Swedish krona and Russian rouble brought down the Group’s net sales in January–December.
Atria Finland's and Denmark & Estonia's EBIT improved from last year. In Finland, the good result of the beginning of the year and the successful sales of the barbecue season strengthened EBIT. In Sweden, EBIT was weighed down by the poor profitability of poultry operations and increased raw material costs. In Russia, EBIT was brought down by significantly increased raw material costs.
In August, Atria successfully launched its new Vegyu brand, a 100% meat-free product range. The products of the versatile range include convenience foods, cold cuts, and cooking products. Vegyu is aimed at consumers looking for alternatives to meat-based products or variation in their meal solutions.
In September, Atria Finland decided to invest a total of EUR 3.4 million in the Nurmo and Sahalahti poultry production plants. The cutting capacity will be increased at both Nurmo and Sahalahti plant.
Atria Group's operational structure and financial reporting were altered as of the beginning of 2018. Atria Group’s reporting segments are as follows: Atria Finland, Atria Sweden, Atria Russia, and Atria Denmark & Estonia.
Atria Finland’s net sales for the year amounted to EUR 1,019.2 million (EUR 986.4 million). Net sales increased by EUR 32.8 million. The increase was a result of good sales to retail and to Food Service customers, which were clearly improved from the year before. EBIT amounted to EUR 36.7 million (EUR 36.3 million). The good result of the beginning of the year and the successful barbecue season strengthened EBIT. The increase of costs during the last quarter weighed down full-year EBIT.
Atria Sweden’s net sales for the year amounted to EUR 287.9 million (EUR 307.2 million). EBIT was
EUR -7.1 million (EUR 2.4 million). The decrease in net sales was caused by the weak Swedish krona and the divestment of the Nordic Fast Food business operations in December 2017. In the local currency, net sales were at the same level as last year. The full-year result was weighed down by increased raw material costs, the poor profitability of poultry operations, and employee arrangements at the beginning of the year.
Atria Denmark & Estonia’s net sales for the year amounted to EUR 97.4 million (EUR 98.9 million). EBIT amounted to EUR 5.3 million (EUR 5.2 million). The Estonian market for meat products has increased by approximately 2% during 2018. Atria's sales to retail have increased stronger than market throughout the year. In Denmark, net sales have been brought down by tight price competition. The business area's EBIT increased slightly thanks to good cost management and a favourable sales structure.
Atria Russia’s net sales for the year amounted to EUR 75.1 million (EUR 85.7 million). EBIT was EUR -4.0 million (EUR 0.8 million). The decrease in net sales was caused by the weakening of the rouble and decreased sales to retail. In the local currency, net sales fell by approximately 1.5%. The prices of meat raw materials have continued to rise throughout the year.
Atria Group's corporate responsibility projects proceeded according to plan during the review period.
Atria participates in the CARBO research project together with Valio, the Finnish Meteorological Institute, the Natural Resources Institute Finland, and the University of Eastern Finland. The goal of the project is to decrease the environmental impacts of the Finnish dairy and meat chain through data, new innovations and pilot farms based on the research project. At the same time, the export competitiveness of Finnish agriculture will be improved. The project has received a significant support of EUR 3.5 million from Business Finland. In its entirety, the project will span three years and total EUR 8 million.
As of the beginning of October, all of Atria Finland's beef and pork minced meats will be packed in new low-plastic minced meat packages. Some of Atria's minced meat products have been packed in this awarded packaging since the beginning of 2017. The new minced meat package contains 50% less plastic than traditional hard packages. On an annual level, this transition will decrease the amount of plastic waste by a total of 250,000 kg. The carbon footprint of the new package is 30% smaller than that of the traditional container package.
In Sweden, the Lönneberga cold cuts received an innovative and eco-friendly partly biomaterial-based packaging.
The solar power park in Nurmo was completed in September and the electricity produced by it replaces approximately 5% of the electricity required by the plant on an annual level. In connection with Nurmo's plant, Atria participates in the construction project of the biggest biogas plant in Finland. The biogas plant is constructed by Nurmon Bioenergia Oy, of which Atria owns 10%.
In February, Atria launched the antibiotic-free pork. All pork from Atria Family Farms is from pigs that have been reared entirely without antibiotics. The name of the Family Farm printed on the product package traces the origin of the meat all the way back to the farm.
The Atria Way of Leading training programme and the Safely Home From Atria occupational safety programme was implemented in all business areas.
|Shareholders´ equity per share EUR||14.69||14.81|
|Equity ratio, %||47.7 %||47.5 %|
|Net gearing, %||52.1 %||49.0 %|
|Gross investments in fixed assets||44.5||53.9|
|% of net sales||3.1 %||3.8 %|
Outlook for the future
Consolidated EBIT in 2018 was EUR 28.2 million. In 2019, EBIT is expected to be better than in 2018. At comparative exchange rates, the net sales for 2019 are expected to grow compared to the 2018.
Board of Directors' proposal for profit distribution
The Board of Directors proposes that a dividend of EUR 0.40 be paid for each share for the financial year 2018.
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 2018 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, 13 February 2018, starting at 9:45. Place: Scandic Hotel Simonkenttä, Simonkatu 9, Conference room Mansku, 1st 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.