Interim report of Atria Plc 1 January - 30 September 2014

Seinäjoki, Finland, 2014-10-30 07:00 CET (GLOBE NEWSWIRE) -- Atria Plc, Interim Report, 30 October 2014 at 8.00 am

INTERIM REPORT OF ATRIA PLC 1 JANUARY – 30 SEPTEMBER 2014

Atria Group's third-quarter results developed positively despite difficult market conditions

1 July – 30 September 2014
- Consolidated net sales totalled EUR 364.4 million (EUR 358.4 million).
- Consolidated EBIT was EUR 16.2 million (EUR -1.8 million*).
- Atria Finland's net sales totalled EUR 238.5 million (EUR 224.8 million).
- Atria Finland's EBIT was EUR 11.8 million (EUR 9.8 million).
- Atria Scandinavia's EBIT was EUR 5.9 million (EUR 4.7 million).
- Atria Russia's EBIT was EUR -1.5 million (EUR -16.4 million).
- Atria Baltic's EBIT was EUR 0.1 million (EUR 0.3 million).

1 January – 30 September 2014
- Consolidated net sales totalled EUR 1,062.7 million (EUR 1,050.4 million).
- Consolidated EBIT was EUR 22.0 million (EUR 9.1 million).
- Atria Finland's net sales totalled EUR 701.9 million (EUR 660.8 million).
- Atria Finland's EBIT was EUR 18.0 million (EUR 23.8 million).
- Atria Scandinavia's EBIT was EUR 10.2 million (EUR 6.5 million).
- Atria Russia's EBIT was EUR -4.8 million (EUR -19.1 million).
- Atria Baltic's EBIT was EUR -0.2 million (EUR -0.1 million).
- The Group's equity ratio was 42.1 per cent (31 December 2013: 42.2%).
- Atria lowered its EBIT forecast in April: the company expects the 2014 EBIT without non-recurring items to be clearly lower than the previous year's EBIT of EUR 37.0 million.
  

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


Review 1 July–30 September 2014

Atria Group's net sales for July–September totalled EUR 364.4 million (EUR 358.4 million). Net sales grew by EUR 6.0 million year-on-year. Consolidated EBIT was EUR 16.2 million (EUR -1.8 million). EBIT without non-recurring items was EUR 15.6 million (EUR 14.5 million).

Atria Finland's net sales for July–September totalled EUR 238.5 million (EUR 224.8 million), up by EUR 13.7 million year-on-year. This increase was due to the consolidation of the operations acquired from Saarioinen and the increase in poultry feed sales. Summer barbecue season sales were a success despite fierce price competition. The EUR 11.8 million EBIT (EUR 9.8 million) was EUR 2.0 million higher than the EBIT for the corresponding period last year. EBIT includes a non-recurring sales profit of EUR 0.6 million for the sale of real estate company shares. EBIT was increased by improved cost-efficiency.

Atria Scandinavia's net sales for July–September totalled EUR 93.3 million (EUR 99.7 million). At comparable exchange rates, net sales fell by 2.0 per cent year-on-year. This decrease was affected by the slow growth of the total market and stronger market position of private labels. EBIT amounted to EUR 5.9 million (EUR 4.7 million). The growth of EBIT was due to better cost-efficiency and the stable raw material prices.

Atria Russia's net sales for July–September totalled EUR 29.2 million (EUR 32.0 million). At a comparable exchange rate, net sales grew by 0.6 per cent year-on-year. The weak growth of comparable net sales was due to the decline in consumers' purchasing power and in retail sales, together with the discontinuation of primary production at the end of last year. Inflation in food prices is currently about 10 per cent (Source: Rosstat, Oct 2014). EBIT was EUR -1.5 million (EUR -16.4 million). EBIT for the comparative period includes EUR 15.4 million of non-recurring costs. The prices of meat raw materials continued to rise in July–September. Atria Russia was not able to fully pass on the increased costs to sales prices.

Atria Baltic's net sales for July–September totalled EUR 9.0 million (EUR 8.5 million). EBIT amounted to EUR 0.1 million (EUR 0.3 million). Atria's own brands sold well during the summer barbecue season. EBIT was weakened by tight price competition.


Review 1 January–30 September 2014

Atria Group's net sales for January–September totalled EUR 1,062.7 million (EUR 1,050.4 million). Net sales grew by EUR 12.3 million year-on-year. EBIT amounted to EUR 22.0 million (EUR 9.1 million). EBIT without non-recurring items amounted to EUR 22.6 million (EUR 24.4 million).

Atria lowered its EBIT forecast in April. The company expects the 2014 EBIT without non-recurring items to be clearly lower than the previous year's EBIT of EUR 37.0 million. According to the previously published EBIT forecast, the Group's EBIT for 2014 was estimated to be higher than EUR 37.0 million. Net sales are expected to grow in 2014. The EBIT forecast was adjusted due to the difficult conditions in the Finnish and Russian meat markets.

Atria's share of the January–September income from joint ventures and associates was EUR 5.4 million (EUR 1.9 million). Atria's joint venture, the Finnish Meat Research Institute LTK Co-operative, sold its subsidiary Maustepalvelu Oy. For the deal, LTK recognised a sales profit that increased Atria's share in LTK's net assets.

Atria acquired Saarioinen Oy's procurement, slaughtering and cutting operations for beef, pork and chicken. The operations were consolidated into Atria as of 1 February 2014. The purchase price was EUR 29.2 million. In addition, EUR 4.2 million was paid for producer receivables.

Investments during the period under review totalled EUR 55.3 million (EUR 29.2 million). The Group's free cash flow (operating cash flow - cash flow from investments) for the period was EUR -5.4 million (EUR 20.7 million) and net liabilities were EUR 311.5 million (31 December 2013: EUR 305.9 million).

Atria Finland's net sales for January–September totalled EUR 701.9 million (EUR 660.8 million). This increase was due to the consolidation of the operations acquired from Saarioinen as of the beginning of February and the launch of poultry feed sales at the beginning of the year. EBIT for January–September was EUR 18.0 million (EUR 23.8 million), down by EUR 5.8 million year-on-year. EBIT includes EUR 0.8 million of non-recurring costs related to the takeover of the operations acquired from Saarioinen and EUR 0.6 million of profit from the sale of real estate company shares. EBIT for the comparative period contains EUR 1.1 million of non-recurring profit. EBIT was weakened by tight price competition throughout the review period. The tightened competition is the result of the decline in consumers' purchasing power and the oversupply of meat in the EU meat market owing to Russia's import ban. The price of meat raw material has decreased compared to the previous year. Atria has made significant investments in marketing the Atria brand.

Atria Scandinavia's net sales for January–September totalled EUR 277.0 million (EUR 292.0 million). At comparable exchange rates, net sales fell by 1.1 per cent year-on-year. This decrease was affected by the slow growth of the total market and stronger market position of private labels. EBIT for January–September was EUR 10.2 million (EUR 6.5 million). This positive development is due to more stable raw material prices and improved cost-efficiency.

Atria Russia’s net sales for January–September amounted to EUR 76.5 million (EUR 90.8 million), representing a drop of EUR 14.3 million. At a comparable exchange rate, net sales fell by EUR 2.9 million year-on-year. The reason for this decrease in comparable net sales was the discontinuation of primary production at the end of last year and the decline in consumers' purchasing power and in retail sales. EBIT for January–September was EUR -4.8 million (EUR -19.1 million). EBIT for the comparative period includes EUR 15.4 million of non-recurring costs. Production cost-efficiency has improved from the previous year. Reduced EBIT was caused by the steep rise in raw material prices, which could not be fully transferred to sales prices.

Atria Baltic's net sales for January–September totalled EUR 26.0 million (EUR 25.0 million). EBIT for the period was EUR -0.2 million (EUR -0.1 million). EBIT without non-recurring items was EUR 0.2 million (EUR ‑0.1 million). In June, Atria sold a factory located in Vilnius, Lithuania. The deal resulted in a non-recurring sales loss of EUR 0.4 million. The positive performance was due to better cost-efficiency in production and the improved sales structure.
 

  
Short-term business risks

Short-term business risks associated with the Russian business environment have increased. Animal disease risk has increased due to the case of African swine fever detected in a wild boar in Estonia. Otherwise, no significant changes have occurred in Atria Group’s short-term business risks compared with the risks described in the financial statements for 2013.

Outlook for the future

The company expects the 2014 EBIT without non-recurring items to be clearly lower than the previous year's EBIT of EUR 37.0 million. Net sales are expected to grow in 2014.

Publication procedure
Atria Plc complies with the publication procedure in accordance with standard 5.2b of the Financial Supervisory Authority and publishes its 1 JANUARY – 30 SEPTEMBER 2014 interim report release as an attachment to this company announcement. The full interim report is available on the company’s website at www.atriagroup.com.

For more information, please contact Juha Gröhn, CEO, Atria Plc, tel. +358 400 684 224.

Invitation to a press conference
A press conference conducted in Finnish will be arranged today 30 October 2014 at 9:15 am at Atria offices in Helsinki, address Läkkisepäntie 23, Helsinki. The presentation material will be available on the company’s website (www.atriagroup.com/en/investors/FinancialInformation/quarterlyreports) after the distribution of the interim report and as an attachment to this company announcement.


ATRIA PLC
Juha Gröhn
CEO


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