Atria Plc's financial statement release 1 January - 31 December 2014

Seinäjoki, Finland, 2015-02-12 07:00 CET (GLOBE NEWSWIRE) -- Atria Plc, Financial Statement, 12 February 2015, at 8.00 am


ATRIA PLC’S FINANCIAL STATEMENT RELEASE 1 JANUARY – 31 DECEMBER 2014

Atria Group’s EBIT and net sales improved

1.10. – 31.12.2014
- Consolidated net sales totalled EUR 363.4 million (EUR 360.6 million).
- Consolidated EBIT was EUR 18.6 million (EUR 10.6 million).
- Atria Finland’s net sales totalled EUR 243.6 million (EUR 226.0 million).
- Atria Finland’s EBIT was EUR 15.6 million (EUR 9.1 million).
- Atria Scandinavia’s EBIT was EUR 4.7 million (EUR 5.7 million).
- Atria Russia’s EBIT was EUR -0.9 million (EUR -1.9 million).
- Atria Baltic’s EBIT came to EUR 0.1 million (EUR 0.1 million).

1.1. – 31.12.2014
- Consolidated net sales amounted to EUR 1,426.1 million (EUR 1,411.0 million).
- Consolidated EBIT was EUR 40.6 million (EUR 19.7 million).
- Atria Finland’s net sales totalled EUR 945.5 million (EUR 886.8 million).
- Atria Finland’s EBIT was EUR 33.6 million (EUR 32.9 million).
- Atria Scandinavia’s EBIT came to EUR 14.9 million (EUR 12.2 million).
- Atria Russia’s EBIT was EUR -5.7 million (EUR -21.0 million).
- Atria Baltic’s EBIT was EUR -0.0 million (EUR 0.1 million).
- The Group’s equity ratio was 44.0 per cent (31 December 2013: 42.2 %).
- The Group’s net liabilities decreased to EUR 250.7 million (31 December 2013: EUR 305.9 million).

*Non-recurring items are included in the reported figures

Review 1 October – 31 December 2014

Atria Group’s net sales for the fourth quarter totalled EUR 363.4 million (EUR 360.6 million). Net sales grew by EUR 2.8 million year-on-year. Consolidated EBIT was EUR 18.6 million (EUR 10.6 million). The fourth quarter EBIT includes a total of EUR 1.6 million of non-recurring items (EUR -2.0 million). EBIT without non-recurring items was EUR 16.9 million (EUR 12.6 million).

Atria revised its forecast in November, expecting the 2014 EBIT without non-recurring items to be at the same level as the previous year’s EBIT of EUR 37.0 million.

In Sweden, Atria concluded an agreement for the sale of the Falbygdens cheese business to Arla Foods AB, with a view to focusing on its core business. The transaction includes the transfer of the following to Arla: the Falbygdens cheese business and its employees, the production plant in Falköping and the Falbygdens brand. The number of transferred employees is about 100. The sale will reduce Atria’s annual net sales by approximately EUR 52 million and EBIT by some EUR 3 million. The assets and liabilities associated with the Falbygdens cheese business have been classified as assets held for sale. The deal is subject to the approval of the Swedish Competition Authority and Consumer Agency. On 15 December 2014, the Swedish Competition Authority announced its decision to carry out a phase two proceeding of the transaction.

Atria Finland’s net sales for the fourth quarter totalled EUR 243.6 million (EUR 226.0 million), showing growth of EUR 17.6 million year-on-year. This increase was due to the consolidation of the operations acquired from Saarioinen into Atria, and poultry feed sales. EBIT amounted to EUR 15.6 million (EUR 9.1 million). EBIT contains a refund of a tax-like payment in the amount of EUR 1.2 million as a non-recurring item. The increase in comparable EBIT was due to improved cost management and higher average sales prices year-on-year. The integration of the operations in Jyväskylä and Sahalahti into Atria’s production processes went well and enhanced productivity.

Atria Scandinavia’s net sales for the fourth quarter totalled EUR 94.9 million (EUR 102.9 million). At comparable exchange rates, net sales fell by 4.1 per cent year-on-year. This was due to the poor performance of the food market and an increase in the market share of private labels. EBIT for the fourth quarter amounted to EUR 4.7 million (EUR 5.7 million). EBIT was reduced by lower sales volumes.

Atria Russia’s net sales for the fourth quarter amounted to EUR 22.3 million (EUR 30.6 million). At comparable exchange rates, net sales remained stable year-on-year.  EBIT was EUR -0.9 million (EUR -1.9 million). EBIT without non-recurring items fell due to a significant increase in raw material prices. In late 2013, Atria launched an efficiency improvement programme and decided to discontinue industrial production and the operation of the logistics unit in Moscow by the end of 2014. As part of the programme, Atria has sold the real estate company in Moscow for EUR 12 million. A positive effect of EUR 0.5 million on earnings was recorded for the sale of the real estate and the reorganisation of operations. The results for the comparative period contain a non-recurring cost of EUR 2.0 million.

Atria Baltic’s net sales for the fourth quarter amounted to EUR 8.5 million (EUR 7.9 million). EBIT was EUR 0.1 million (EUR 0.1 million). Oversupply in the European meat market decreased pork prices towards the end of the year, affecting the ability of primary production to make a profit. In the retail sector, Atria brands increased their market share, particularly in consumer-packed meat.

Review 1 January – 31 December 2014

Atria Group’s net sales for the review period totalled EUR 1,426.1 million (EUR 1,411.0 million). Net sales grew by EUR 15.1 million year-on-year. EBIT amounted to EUR 40.6 million (EUR 19.7 million). EBIT without non-recurring items came to EUR 39.6 million (EUR 37.0 million).

Atria lowered its EBIT forecast in April: the company expected the 2014 EBIT without non-recurring items to be clearly lower than the previous year’s EBIT of EUR 37.0 million. Atria revised its forecast in November, expecting the 2014 EBIT without non-recurring items to be at the same level as the previous year’s EBIT of EUR 37.0 million. Rapid changes in the global meat market situation affected business predictability in 2014.  The reasons that led to the imbalance in the meat market included Russia’s import ban on EU meat and the decrease in the market price of pork in Europe. Predictability was further complicated by Atria’s exposure to high volatility in the value of the Russian rouble.

Atria’s share of the income from joint ventures and associates for January–December was EUR 6.2 million (EUR 2.3 million). A joint venture of Atria, the Finnish Meat Research Institute LTK Co-operative, sold its subsidiary Maustepalvelu Oy. LTK recorded a profit for the sale, of which EUR 7.3 million was paid to Atria as a dividend.

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 receivables from producers.

Investments in 2014 totalled EUR 62.7 million (EUR 41.1 million). During the review period, the Group’s free cash flow (operating cash flow - cash flow from investments) was EUR 44.3 million (EUR 54.1 million) and net liabilities decreased to EUR 250.7 million (31 December 2013: EUR 305.9 million).

Atria Finland’s net sales for January–December totalled EUR 945.5 million (EUR 886.8 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 the year amounted to EUR 33.6 million (EUR 32.9 million). EBIT includes EUR 0.8 million of non-recurring costs related to the takeover of the operations acquired from Saarioinen. EBIT also includes a profit of EUR 0.6 million from the sale of real estate company shares and a refund of a tax-like payment in the amount of EUR 1.2 million as a non-recurring item. EBIT for the comparative period contains EUR 1.1 million of non-recurring profit. The increase in EBIT was due to improved cost-efficiency and higher average sales prices year-on-year. The sale of Food Service products increased steadily over the course of the year. Retail sales fell short of the previous year’s figures.  Raw material prices were lower than in the year before.

Atria Scandinavia’s net sales for January–December totalled EUR 371.9 million (EUR 395.0 million). At comparable exchange rates, net sales fell by 1.9 per cent year-on-year. A decline in meat consumption and the strengthening of the market shares of private labels were the key reasons for the decrease in Atria Scandinavia’s net sales in 2014. EBIT for the year amounted to EUR 14.9 million (EUR 12.2 million). This increase was the result of improved cost-efficiency in the supply chain and more stable raw material prices.

Atria Russia’s net sales for January–December totalled EUR 98.8 million (EUR 121.5 million), representing a drop of EUR 22.7 million. At a comparable exchange rates, net sales fell by EUR 3.1 million year-on-year. This decrease in comparable net sales was due to the discontinuation of primary production in late 2013. EBIT for the year amounted to EUR -5.7 million (EUR -21.0 million). In late 2013, Atria launched an efficiency improvement programme and decided to discontinue industrial production and the operation of the logistics unit in Moscow by the end of 2014. As part of the programme, Atria has sold the real estate company in Moscow for EUR 12 million. A positive effect of EUR 0.5 million on earnings was recorded for the sale of the real estate and the reorganisation of operations. EBIT for the comparative period includes EUR 17.4 million of non-recurring costs. EBIT for the year without non-recurring items amounted to EUR -6.2 million (EUR -3.5 million). EBIT was reduced by an increase in raw material prices and the weakening of consumers’ purchasing power. Production cost-efficiency has improved from the previous year.

Atria Baltic’s net sales for January–December totalled EUR 34.5 million (EUR 32.9 million). EBIT for the year amounted to EUR -0.0 million (EUR 0.1 million). EBIT without non-recurring items was EUR 0.3 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.

Key indicators

Events after the period under review

At the beginning of January 2015, Atria decided to invest approximately EUR 36 million in expanding and modernising its pig cutting plant in Nurmo, Finland. New production facilities will be built next to the old plant, and the existing production facilities will be renovated and automated using the latest production technology. The new production facilities will measure around 4,500 m².

The investment will substantially raise the pig cutting plant’s productivity and profitability: it is expected to generate annual cost savings of some EUR 8 million in the pig cutting plant’s operations. Statutory employer-employee negotiations concerning the investment project were initiated immediately. The expected duration of the project is about two years, over the course of which the needs for reducing and relocating personnel will be specified. It is estimated that personnel will need to be reduced by no more than 80 person-years.

Outlook for the future

In 2014, consolidated EBIT without non-recurring items was EUR 39.6 million. In 2015, EBIT is projected to be at the same level and net sales are expected to decrease.

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 2014.

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 2014 as an attachment to this stock exchange release. The full release is available on the company’s website at www.atriagroup.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, 12 February 2015, at 9:30 am at Atria Plc’s Helsinki office, Läkkisepäntie 23, Helsinki. The presentation material will be available on the company’s website (www.atriagroup.com/en/investors/FinancialInformation/quarterlyreports) after the publication of the financial statements and as an attachment to this stock exchange release.

ATRIA PLC
Juha Gröhn
CEO

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