Interim Report of Atria Plc 1 January - 30 June 2015

Seinäjoki, Finland, 2015-07-30 07:00 CEST (GLOBE NEWSWIRE) -- Atria Plc, Interim Report, 30 July  2015 at 8.00 am


INTERIM REPORT OF ATRIA PLC 1 JANUARY–30 JUNE 2015

Atria Group’s EBIT at the previous year’s level

April–June 2015
- Consolidated net sales fell by 9.1% to EUR 337.5 million (EUR 371.4 million). At comparable exchange rates, the decline was 7.3%.
- Consolidated EBIT was EUR 8.4 million (EUR 8.4 million), or 2.5% (2.3%) of net sales. EBIT includes a total of EUR +1.9 million (EUR -0.4 million) of non-recurring items.
- Atria acquired the operations of Aalbaek Specialiteter, a Danish manufacturer of organic cold cuts.
- The sale of the Falbygdens cheese business to Arla in Sweden was completed on 1 April 2015.
- The Campofarm piggery real estate in Russia was sold.
- Net gearing was 58.8% (31 December 2014: 61.8%).

January–June 2015
- Consolidated net sales fell by 6.6% to EUR 652.1 million (EUR 698.4 million). At comparable exchange rates, the decline was 4.2%.
- Consolidated EBIT was EUR 9.1 million (EUR 5.8 million), or 1.4% (0.8%) of net sales. EBIT includes a total of EUR +1.9 million (EUR -1.2 million) of non-recurring items.
- Atria initiated an investment of EUR 36 million in the modernisation of a pig cutting plant in Nurmo, Finland.

April–June 2015

Atria Group’s net sales for April–June totalled EUR 337.5 million (EUR 371.4 million). Net sales fell by EUR 33.8 million year-on-year.  This decrease was due to a slow start of the barbecue season and the transfer of the Falbygdens cheese business to Arla on 1 April 2015. EBIT amounted to EUR 8.4 million (EUR 8.4 million), which includes a total of EUR +1.9 million (EUR -0.4 million) of non-recurring items.

Atria acquired the operations of Aalbaek Specialiteter A/S, a Danish manufacturer of organic cold cuts, for EUR 5.5 million. Aalbaek’s annual net sales amount to around EUR 10 million. Aalbaek is the top organic cold cuts brand in Denmark. The transaction will strengthen Atria’s market-leading position in cold cuts in Denmark. Aalbaek’s brands and business, including all agreements, were transferred to Atria as part of the deal, along with a charcuterie and production facilities in Farre. The operations were consolidated into Atria from 11 May 2015.

The Swedish Competition Authority approved the sale of Atria Scandinavia’s Falbygdens cheese business to Arla on 11 March 2015. The selling price is approximately EUR 30 million when the change in net working capital as per the sales agreement is taken into account. The operations were transferred to Arla Foods AB on 1 April 2015.  The sale will reduce Atria’s annual net sales by EUR 52 million and EBIT by EUR 3 million.

Atria sold a Russian subsidiary on 24 June 2015 for EUR 4.5 million. The company owned a farm property near Moscow. Non-recurring costs of EUR 0.6 million were recognised for the sale. Additionally, translation differences accrued in equity improved earnings by EUR 2.5 million.

Atria Finland’s net sales for April–June totalled EUR 233.7 million (EUR 246.5 million), down by EUR 12.8 million year-on-year. This decrease was due to lower consumer demand. The summer barbecue season started late, shrinking the total market for the product groups represented by Atria by some 2% in terms of value, compared to the corresponding period last year. EBIT amounted to EUR 4.7 million (EUR 5.9 million). EBIT was brought down by a decrease in meat prices, which was due to the oversupply of meat in the international market. Atria Finland’s cost-efficiency has remained at a good level.

Atria Scandinavia’s net sales for April–June totalled EUR 80.3 million (EUR 95.4 million). Net sales at comparable exchange rates were roughly the same as in the corresponding period last year, when the changes arising from the sale of the Falbygdens cheese business and the acquisition of Aalbaek are excluded. EBIT for April–June was EUR 2.5 million (EUR 3.4 million).  This decline was mainly due to the sale of the Falbygdens cheese business.

Atria Russia's net sales for April–June totalled EUR 21.5 million (EUR 25.9 million). Net sales in the local currency grew by 6.8% year-on-year.  This growth was due to price increases. EBIT came to EUR 1.9 million (EUR -1.1 million), which includes a total of EUR +1.9 million (EUR 0.0 million) of non-recurring items. Comparable EBIT was EUR 0.1 million (EUR -1.1 million). Comparable EBIT mainly improved due to price increases, the elimination of unprofitable products, and improved cost-efficiency in industrial operations.

Atria Baltic’s net sales for April–June totalled EUR 8.9 million (EUR 9.6 million). EBIT amounted to EUR 0.2 million (EUR -0.1 million). The comparative year includes EUR 0.4 million of non-recurring costs. The cold weather in the early summer reduced the sale of barbecue products. The profitability of exports and wholesale, along with primary production, deteriorated as a result of oversupply in the European meat market.


January–June 2015

Atria Group’s net sales for January–June totalled EUR 652.1 million (EUR 698.4 million). Net sales fell by EUR 46.3 million year-on-year. This decrease was due to a slow start of the barbecue season, the transfer of the Falbygdens cheese business to Arla and the weakening of the rouble over the comparative period. EBIT amounted to EUR 9.1 million (EUR 5.8 million), which includes a total of EUR +1.9 million (EUR -1.2 million) of non-recurring items. Comparable EBIT was EUR 7.2 million (EUR 7.1 million).

At the beginning of the year, Atria Finland launched an investment worth around 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 facilities will be renovated and automated using the latest production technology. The investment will substantially raise the pig cutting plant’s productivity and profitability: it is expected to generate annual cost savings of around EUR 8 million in the plant’s operations.

In May, Atria acquired the operations of Aalbaek Specialiteter A/S, a Danish manufacturer of organic cold cuts, for EUR 5.5 million. Aalbaek’s annual net sales amount to around EUR 10 million. Aalbaek is the top organic cold cuts brand in Denmark. The transaction will strengthen Atria’s market-leading position in cold cuts in Denmark. Aalbaek’s brands and business, including all agreements, were transferred to Atria as part of the deal, along with a charcuterie and production facilities in Farre. The operations were consolidated into Atria from 11 May 2015.

The Swedish Competition Authority approved the sale of Atria Scandinavia’s Falbygdens cheese business to Arla on 11 March 2015. The selling price is approximately EUR 30 million when the change in net working capital as per the sales agreement is taken into account. The operations were transferred to Arla Foods AB on 1 April 2015.  The sale will reduce Atria’s annual net sales by EUR 52 million and EBIT by EUR 3 million.

Atria sold a Russian subsidiary on 24 June 2015 for EUR 4.5 million. The company owned a farm property near Moscow. Non-recurring costs of EUR 0.6 million were recognised for the sale. Additionally, translation differences accrued in equity improved earnings by EUR 2.5 million.

Investments during the period under review totalled EUR 28.8 million (EUR 48.9 million). The Group’s free cash flow for the period (operating cash flow - cash flow from investments) was EUR 28.5 million (EUR -12.8 million) and net liabilities were EUR 237.2 million (31 December 2014: EUR 250.7 million).

Atria Finland’s net sales for January–June totalled EUR 445.9 million (EUR 463.4 million), down by EUR 17.5 million year-on-year.  This decline was due to lower consumer demand and the shrinking of the total market for the product groups represented by Atria. EBIT amounted to EUR 6.6 million (EUR 6.2 million). EBIT was brought down by a decrease in meat prices, which was due to the oversupply of meat in the international market. EBIT for the comparative period included EUR 0.8 million of non-recurring costs.

Atria Scandinavia’s net sales for January–June totalled EUR 165.4 million (EUR 183.8 million). This decrease was mainly due to the sale of the Falbygdens cheese business, completed on 1 April 2015. EBIT for January–June came to EUR 4.4 million (EUR 4.4 million).

Atria Russia's net sales for January–June totalled EUR 37.3 million (EUR 47.3 million). Net sales in the local currency grew by 6.2% year-on-year.  This growth was due to price increases. EBIT was EUR -0.3 million (EUR -3.2 million), which includes a total of EUR +1.9 million of non-recurring items. Comparable EBIT totalled EUR -2.2 million (EUR -3.2 million). In the first half of the year, EBIT was weighed down by an increase in raw material prices and lower consumer demand.

Atria Baltic’s net sales for January–June totalled EUR 16.5 million (EUR 17.0 million). EBIT for January–June was EUR 0.1 million (EUR -0.3 million). EBIT for the comparative period includes EUR 0.4 million of non-recurring costs. Prolonged oversupply in the international meat market and fierce price competition in the retail market have brought down meat prices. As a result, the consumption of fresh meat has increased while that of meat products has fallen.  Low prices have reduced the profitability of sales.

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.


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 JUNE 2015 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 July 2015 at 10:00 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
Board of Directors


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