Newsroom

Atria Plc, Financial Statement Release, 1 January – 31 December 2021

15.2.2022 08:00

Atria Plc, financial statement release, company announcement   February 15, 2022, 8.00 am


Atria Plc, Financial Statement Release, 1 January – 31 December 2021

Atria performed well in the demanding operating environment of 2021

October–December 2021
- Consolidated net sales totalled EUR 403.6 million (EUR 398.6 million).
- Consolidated EBIT was EUR 12.6 million (EUR 15.1 million), or 3.1 per cent (3.8%) of net sales.
- Consolidated adjusted EBIT was EUR 10.3 million (EUR 15.1 million). The EBIT adjustment item consists of a non-recurring refund of an employment pension contribution of EUR 2.3 million in Sweden.
- Consolidated net sales grew, which was mainly due to increased sales to Foodservice, fast food and feed customers.
- Sales to retail were level with the corresponding period of the previous year, and exports to China decreased as the market situation deteriorated towards the end of the year.
- Increased costs weakened EBIT in all business areas.


January–December 2021
- Consolidated net sales totalled EUR 1540.2 million (EUR 1504.0 million).
- Consolidated EBIT was EUR 6.4 million (EUR 40.5 million), or 0.4 per cent (2.7%) of net sales.
- Consolidated adjusted EBIT was EUR 49.2 million (EUR 40.5 million). The EBIT adjustment item consists of translation differences of EUR -45.1 million of the divested Russian subsidiary (OOO
Pit-Product) and a refund of an employment pension contribution of EUR 2.3 million in Sweden.
-
Increased costs brought down EBIT in all business areas at the end of the year.
-
Atria Finland's net sales and EBIT improved clearly. Sales grew in all sales channels, especially Foodservice sales and feed sales improved from the previous year.
-
The improvement in Atria Sweden's EBIT was due to good sales development to Foodservice and fast food customers and the non-recurring refund of an employment pension contribution of EUR 2.3 million.
- Atria Denmark & Estonia's EBIT was lower than in the previous year; which was due to sharply rising costs at the end of the year.
-
Atria Group's operational structure and segment reporting was changed. The reporting segments are Atria Finland, Atria Sweden and Atria Denmark & Estonia. As a result of the segment change, the Sibylla Rus company operating in the fast food business in Russia is reported as part of the Atria Sweden segment as of 1 January 2021.
- The sale of Atria's Russian subsidiary OOO Pit-Product was completed in April.
- In 2022–2023, Atria will invest approximately EUR 30 million in production restructuring in Sweden; production will be centralised at the Sköllersta plant and the Malmö plant will be closed.
-
Occupational safety at Atria has improved significantly during the last four years. In 2017, Atria's LTA frequency was 41 and in 2021, it has improved to 14, a decrease of 66% (Lost Time Accident frequency = number of accidents at work resulting in absence per million working hours).
- Consolidated adjusted earnings per share were EUR 1.27 (EUR 0.81). The Board of Directors proposes that a dividend of EUR 0.63 (EUR 0.50) be paid for each share for the 2021 financial period

After the review period
- In January 2022, Atria Finland received an export licence for poultry products to South Korea. The first product batch to South Korea will be shipped during February–March 2022.

 

Q4 Q4 Q1-Q4 Q1-Q4
EUR million 2021 2020 2021 2020
Net sales
   Atria Finland 293.2 284.5 1,105.7 1,066.3
   Atria Sweden 92.7 85.1 351.7 332.2
   Atria Denmark & Estonia 26.4 26.6 104.9 106.8
   Unallocated* 0.2 14.0 15.0 51.8
   Eliminations -8.9 -11.5 -37.1 -53.0
Net sales, total 403.6 398.6 1,540.2 1,504.0
EBIT before items affecting
comparability
   Atria Finland 10.6 14.4 48.1 43.1
   Atria Sweden 0.6 1.2 2.7 0.8
   Atria Denmark & Estonia 0.0 1.7 5.1 5.3
   Unallocated* -0.9 -2.2 -6.8 -8.7
Adjusted EBIT 10.3 15.1 49.2 40.5
Adjusted EBIT, % 2.5 % 3.8 % 3.2 % 2.7 %
Items affecting comparability
of EBIT:
Atria Sweden
  Refund of an employment pension contribution 2.3 0.0 2.3 0.0
Unallocated
  The effect of the sale of the subsidiary 0.0 0.0 -45.1 0.0
EBIT 12.6 15.1 6.4 40.5
EBIT, % 3.1 % 3.8 % 0.4 % 2.7 %
Profit before taxes 12.3 14.6 4.8 37.3
Earnings per share, EUR 0.34 0.22 -0.24 0.81
Adjusted earnings per share, EUR 0.26 0.22 1.27 0.81
* Net sales and EBIT of the sold subsidiary, OOO Pit-Product and Group costs are reported as "Unallocated".
** Included in other operating income.
*** Included in other operating expenses.


Juha Gröhn, CEO

Both in terms of growth and earnings, 2021 was strong for Atria. Atria's net sales increased to EUR 1540.2 million. Growth on the previous year was about EUR 36 million. The development was good considering that the sale of Atria's Russian subsidiary, OOO Pit-Product, was completed in April and had a reducing effect on full-year net sales. The Group's net sales, excluding the effect of the divested Russian subsidiary, increased by approximately 5 per cent.

Adjusted EBIT for 2021 was EUR 49.2 million. We can be satisfied with the result. In particular, performance in the first six months of 2021 was good. Although the exceptional circumstances caused by coronavirus have been prolonged, Atria's performance has been good. Everyday life has been performed without significant deviations in the production and delivery of products to our customers. Future-oriented business development work has also progressed as planned.

At the end of the year, sales were in line with expectations, but rising costs reduced profitability. The increase in costs has burdened Atria's domestic market in all business areas and has affected a wide range of raw materials, materials, supplies and services procured by Atria. Energy costs have also been rising. Comparable EBIT for the last three months of the year was EUR 10.3 million. The EUR 5 million drop in EBIT from 2020 was due to cost increases.

The market situation is decisively affected by the situation of the coronavirus pandemic and the resulting restrictions; Foodservice sales decline when eating out is restricted due to the virus. As the restrictions ease, Foodservice sales will quickly return to good levels. Restrictions following the emergence of the omicron coronavirus variant halted the recovering restaurant sales again at the end of the year. The retail sector as a whole has been unsurprising and sales have been stable. In retail, the strongest growth within product groups has been in convenience food sales.

Meat consumption remained stable in Atria's market area during 2021. According to studies, the total consumption of meat and the number of meat eaters have remained at the same level for several years. Consumption of red meat has declined slightly, but consumption of poultry continues to grow strongly.

Pork exports to China have continued, but at lower levels than a year earlier. The price level in China declined in the second half of 2021. We still have to wait for prices to rise and demand to strengthen.

Investments in the poultry plant at the Nurmo unit proceed according to plans.

The well-being and safety of our personnel is important to us, and our goal is a motivated, committed and well-being staff. We have worked long-term to improve occupational safety and that work has paid off. We have been able to reduce the number of accidents at work resulting in sick leaves by two-thirds since 2017. At the beginning of 2022, the high spreading rate of the omicron variant has increased the risk of disturbances. The most important operational issues at the moment are to adapt to rising costs and to manage pricing.”


October–December 2021

Atria Group’s net sales for the fourth quarter totalled EUR 403.6 million (EUR 398.6 million). Consolidated adjusted EBIT was EUR 10.3 million (EUR 15.1 million). Consolidated EBIT was EUR 12.6 million (EUR 15.1 million), or 3.1 per cent (3.8%) of net sales. EBIT includes a non-recurring refund of an employment pension contribution of EUR 2.3 million in Sweden. Consolidated net sales grew, which was mainly due to increased sales to Foodservice customers in all business areas and feed customers in Finland. Sales to retail were level with the corresponding period of the previous year. In Sweden and Russia, sales of Sibylla products were better year-on-year. The market situation for exports to China clearly deteriorated.

EBIT was lower than in the corresponding period of the previous year due to higher prices for several materials, supplies, commodities and external services in all business areas. Meat producer prices were higher year-on-year.

Ilari Hyyrynen, CEO of Atria's subsidiary Sibylla Russia and member of the Atria Group Management Team, resigned to take a position with another employer.

Atria Finland's net sales for October–December totalled EUR 293.2 million (EUR 284.5 million). The growth in net sales is due to increased sales to Foodservice and feed customers. Sales to retail were level with the corresponding period of the previous year, and exports decreased. EBIT was EUR 10.6 million (EUR 14.4 million). EBIT was lower than in the corresponding period of the previous year due to higher prices for several materials, supplies, commodities and external services. Meat producer prices were higher year-on-year. Profitability weakened due to higher costs.

Atria Sweden's net sales for the fourth quarter amounted to EUR 92.7 million (EUR 85.1 million). In the local currency, net sales grew by 6.7 per cent year-on-year. Sales of Foodservice and Sibylla products in Sweden were better year-on-year. Sales to retail were level with the corresponding period of the previous year. Sales of Sibylla products in Russia continued to grow. Due to coronavirus restrictions, domestic tourism has been brisk in Russia, which has grown the local fast food market. Adjusted EBIT was EUR 0.6 million (EUR 1.2 million). EBIT amounted to EUR 2.9 million (EUR 1.2 million). The EBIT adjustment item consists of a non-recurring refund of an employment pension contribution of EUR 2.3 million. Increased feed, transport and energy costs brought down EBIT during the review period.

Atria Denmark & Estonia's net sales for October–December totalled EUR 26.4 million (EUR 26.6 million). EBIT amounted to EUR 0.0 million (EUR 1.7 million). Atria’s net sales in Estonia increased by nearly 5 per cent, which was due to the growth of Atria's market shares and a favourable sales structure. In Denmark, sales to Foodservice and export customers increased year-on-year. Sales to retail were sluggish, although the market shares of private labels strengthened in Denmark. During the review period, EBIT was weighed down by rising costs for materials, supplies, energy and external services, as well as higher feed costs in Estonia.


January - December 2021

Atria Group's net sales for January–December totalled EUR 1540.2 million (EUR 1504.0 million). Adjusted EBIT was EUR 49.2 million (EUR 40.5 million). Consolidated EBIT was EUR 6.4 million (EUR 40.5 million). EBIT includes a translation difference entry of EUR -45.1 million of the divested Russian subsidiary (OOO Pit-Product) and a non-recurring refund of an employment pension contribution of EUR 2.3 million in Sweden. Atria Group's net sales increased during January–June owing to good sales to the retail sector and exports. With the lifting of coronavirus restrictions, sales to Foodservice and fast food customers strengthened during the second half of the year. Sales to feed customers were higher than in the previous year. Consolidated adjusted EBIT was boosted by good export development and lower costs in January–June. Towards the end of the year, the impact of cost inflation weakened profitability in all business areas.

The increase in Atria Finland's net sales was due to increased sales in all sales channels, especially Foodservice sales and feed sales improved from the previous year. Sales to export customers for the whole year grew from the previous year. EBIT growth was due to the increase in net sales and a favourable sales structure. Towards the end of the year, the impact of cost inflation weakened profitability.

In the local currency, Atria Sweden's net sales grew by 3.5 per cent year-on-year. During the first quarter, coronavirus restrictions had a negative impact on the Foodservice and fast food business. After that, the market started to recover with the removal of coronavirus restrictions, increasing towards the end of the year. Increased costs at the end of the year weakened EBIT. As a result of a segment change in Atria Group, the Sibylla Rus company operating in the fast food business in Russia is reported as part of the Atria Sweden segment as of 1 January 2021. The change had a positive effect on net sales and EBIT for the review period and the comparison period.

Atria Denmark & Estonia's EBIT was weaker than in the previous year. The decrease in net sales was due to a decline in Atria Denmark's retail sales.
EBIT strengthened during the first three quarters as a result of price increases during the first half of the year, low meat raw material prices and good cost control. At the end of the year, feed and production costs rose sharply.

In May, Atria decided to invest EUR 30 million in production restructuring in Sweden. The investment includes the expansion of production facilities and the purchase of new production equipment for the Sköllersta plant. As a result of the restructuring, Malmö's production will be transferred to the Sköllersta and Moheda plants in Sweden and to the Horsens plants in Denmark. The transfer of production is expected to be completed in 2023. By concentrating production, Atria wants to ensure its future competitiveness through more efficient production and logistics, which also have lower climate impacts. The restructuring is estimated to generate total annual savings of EUR 3.5 million for Atria.

Atria increased its stake in Well-Beef Kaunismaa Ltd by 20 per cent through share transactions made in March. Atria now owns 90 per cent of Well-Beef Kaunismaa's stock. In 2016, Atria acquired 70 per cent of the company's stock. Well-Beef Kaunismaa holds a strong position in the Finnish market as a manufacturer of high-quality hamburger patties and kebab products.

In February 2021, Atria concluded the sale of its Russian subsidiary OOO Pit-Product to Limited Liability Company Agricultural Complex Mikhailovskiy, which belongs to the Cherkizovo Group. The divestment, which transfers ownership of OOO Pit-Product to the buyer, was completed at the end of April. The purchase price was approximately EUR 32 million. In addition to a translation difference, the divestment had no further impact on Atria's Group profit. The divestment has an impact of around EUR 35 million on Atria Group's net sales. The business has been showing a loss. The divestment did not include Atria Russia's other subsidiary, Sibylla Rus LLC, which engages in fast food operations in Russia.

Cumulated translation differences associated with Pit-Product stood at EUR -45.1 million on the transaction date, 30 April 2021. The translation differences have accumulated from exchange rate fluctuations during the Pit-Product holding. Atria purchased Pit-Product in 2005. At that time, one euro corresponded to around RUB 34. At the time of the transaction, one euro was worth RUB 90. When divesting a foreign subsidiary, the cumulative translation differences associated with said subsidiary, which have already been recognised in equity, are recognised through profit or loss. Since the cumulated translation differences already reduce the Group's equity, this recognition has no impact on the Group's equity ratio or cash flow.


Atria Finland’s net sales for the year amounted to EUR 1105.7 million (EUR 1066.3 million). The increase in net sales was due to increased sales in all sales channels, especially Foodservice sales and feed sales improved from the previous year. Sales to export customers for the whole year grew from the previous year. Exports to China were twofold: strong growth in the first half of the year, but the market situation for Chinese exports clearly deteriorated in the second half of the year. EBIT increased to EUR 48.1 million (EUR 43.1 million). EBIT growth was due to the increase in net sales and a favourable sales structure. The end of the reduction in statutory employment pension contributions has had a negative impact on profit. Towards the end of the year, the impact of cost inflation weakened profitability. The poultry plant investment is progressing according to the planned schedule.

Atria Sweden’s net sales for the year amounted to EUR 351.7 million (EUR 332.2 million). In the local currency, net sales grew by 3.5 per cent year-on-year. During the first quarter, coronavirus restrictions had a negative impact on the Foodservice and fast food business. After that, the market started to recover with the removal of coronavirus restrictions. Adjusted EBIT was EUR 2.7 million (EUR 0.8 million). EBIT amounted to EUR 5.0 million (EUR 0.8 million). The EBIT adjustment item consists of a non-recurring refund of an employment pension contribution of EUR 2.3 million, which was realised in the last quarter of the year. At the end of the year, feed, transport and energy costs brought down EBIT development. As a result of a segment change in Atria Group, the Sibylla Rus company operating in the fast food business in Russia is reported as part of the Atria Sweden segment as of 1 January 2021. The change had a positive effect on net sales and EBIT for the review period and the comparison period.

Atria Denmark & Estonia’s net sales for the year amounted to EUR 104.9 million (EUR 106.8 million). EBIT amounted to EUR 5.1 million (EUR 5.3 million). The decrease in net sales was due to a decline in Atria Denmark's retail sales. EBIT strengthened during the first three quarters as a result of price increases during the first half of the year, low meat raw material prices and good cost control. At the end of the year, feed and production costs rose sharply, as a result of which full-year EBIT was lower than in the previous year.


Atria expands its sustainability programme – the goal is to reduce the environmental impact and carbon emissions of the entire value chain

Atria's goal is to be a forerunner in sustainability in its field. Due to climate change, Atria's most important goal today is a carbon-neutral food chain. To reach these goals, Atria has expanded its sustainability programme, the goal is which is to reduce the environmental impact and carbon emissions of the entire value chain together with supply chain partners. Sustainability is an integral part of Atria's strategy, business and daily work. Atria published its updated sustainability programme during the review period.

Atria now also states the carbon footprint of its pork products in its consumer packaging in Finland. The label on the packaging indicates the climate impact of the product throughout the production chain, converted into carbon dioxide equivalents. The carbon footprint is calculated and reported per product item (kg CO2e / product). The calculation covers about half of Atria's farm-traced pork in Finland and thus represents the average carbon footprint of Atria's pork products. The carbon footprint of Atria's pork is 3.21 CO2e per kilogramme of slaughter (2.55 CO2e per kilogramme of live weight). In addition to the pig, the carbon footprints marked on the packaging also take into account the packaging materials of the products, any other raw materials and the emissions allocated to the product from the processing of the product. Earlier this year, Atria introduced carbon footprint labelling for all chicken products.

Biogas trucks will be introduced for Atria's transports. Tuoretie Oy, which manages Atria Finland’s transports, will deploy vehicle combinations using liquefied biogas (LBG). The use of environmentally friendly biogas in transport can reduce life cycle greenhouse gas emissions by up to 90 per cent compared to conventional fuels. The use of biogas in transport is one step towards carbon-neutral food production. Atria has set a goal to significantly reduce the use of fossil fuels.

Atria's occupational safety has improved significantly over the past four years. In 2017, Atria launched the Safely Home from Atria programme to improve occupational safety and reduce the number of accidents at work. The goal of the programme is to reduce the LTA frequency from 41 in 2017 to 8 in 2025 (Lost Time Accident frequency = number of accidents at work resulting in absence per million working hours). Consistent work to improve working methods, practices, routines and, most importantly, work culture has really paid off. This is clearly reflected in the reduction in accidents resulting in sick leave. In 2017, Atria's LTA frequency was 41 and in 2021, it has improved to 14, a decrease of 66%.

 

Key indicators
EUR million 31.12.2021 31.12.2020
Shareholders´ equity per share EUR 16.08 14.96
Interest-bearing liabilities 209.9 218.1
Equity ratio, % 48.7 % 46.8 %
Net gearing, % 32.6 % 43.6 %
Gross investments 55.6 45.6
% of net sales 3.6 % 3.0 %
Average FTE 3,711 4,444


Events after the review period

Atria Plc donates a total of EUR 60,000 to three Finnish universities and one university of applied sciences. In addition, Atria donates EUR 5,000 to Food and Forest Development Finland to support agriculture and forestry in developing countries.

Donations are given to:
- Seinäjoki University of Applied Sciences, EUR 20,000
- University of Vaasa, EUR 20,000
- University of Eastern Finland, EUR 10,000
- University of Tampere, EUR 10,000
- FFD (Food and Forest Development Finland), EUR 5,000

In January 2022, Atria Finland received an export licence for poultry products to South Korea. The first product batch to South Korea will be shipped during February–March 2022. South Korea is a growing and large market for poultry consumption. The country has a population of 52 million and currently, the consumption of poultry is 16.9 kg per person per year.


Outlook for the future

In 2022, Atria Group's adjusted EBIT is estimated to be lower than in the previous year (EUR 49.2 million).

The significant and rapid rise in costs and the imbalance between global pork demand and supply will create uncertainty in the business environment in 2022. However, Atria's strong market position, long-term investment in its own brands, as well as good customer relationships and reliable industrial processes provide the preconditions for business stability even in these market situations.



Board of Directors' proposal for profit distribution 2021

The Board of Directors proposes that a dividend of EUR 0.63 (EUR 0.50) be paid for each share for the 2021 financial period.


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 2021 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.


Publication of the financial statement release

Atria Plc's CEO Juha Gröhn will present the company's financial statement release 2021 in a webcast today, February 15, at 10:00 - 11:00 am. The webcast is available on Atria's website at www.atria.fi/konserni/sijoittajat/ in Finnish language. During the webcast, you can ask questions in writing via chat. The recording of the press conference and the presentation material of the event will be available during the same day at www.atria.fi/konserni/sijoittajat/taloustieto/osavuosikatsaukset/.


ATRIA PLC
Board of Directors


DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.atria.com

The financial statement release is available on our website at www.atria.com.

 

Liitetiedostot