Interim Report of Atria Plc 1 January - 31 March 2016

Seinäjoki, Finland, 2016-04-28 07:00 CEST (GLOBE NEWSWIRE) -- Atria Plc, Interim Report, 28 April  2016  at 8.00 am

INTERIM REPORT OF ATRIA PLC 1 JANUARY– 31 MARCH 2016

Atria Group’s sales volumes increased, net sales remained steady

January–March 2016

- Consolidated net sales totalled EUR 314.5 million (EUR 314.5 million). When the businesses that were sold in 2015 are taken into account, comparable net sales increased by 2.5 per cent.
- Consolidated EBIT was EUR 1.6 million (EUR 0.7 million), or 0.5 per cent (0.2%) of net sales. Improved cost-efficiency and a good sales structure at Atria Russia supported the growth in EBIT.
- Atria is expanding its poultry operations and has signed an agreement to purchase Lagerberg i Norjeby AB, a Swedish poultry business.

Juha Gröhn, CEO

Price competition intensified in all market areas during the first quarter of 2016. In Finland in particular, pricing became a key competitive factor and served to weaken EBIT development. Sales volumes improved as expected – business was brisk – but prices were lower. The prices of Atria Finland's products decreased by an average of 5 per cent year-on-year. In some product categories the price decrease was even bigger. Productivity trends have been good in the Finnish business. Inventories of frozen meat are reasonably small because there has been plenty of export trade.

In Sweden, the prices of meat raw material have been high as customers and consumers favour Swedish meat. We have not been able to pass on this cost in full to the sales prices of meat products. By acquiring Lagerbergs, Atria will be able to enter the Swedish chicken market and we are aiming to grow more rapidly than the market as a whole in forthcoming years. This will require investments into the Lagerbergs brand, development of the product portfolio and industrial operations.

In Russia, this year has got off to a more stable start than the previous year, although consumer purchasing power has continued to decline. The availability of Russian raw materials has improved and some prices have decreased. Consumer purchasing behaviour has become polarised. Prices have a decisive impact on sales of everyday basics, while customers remain willing to pay relatively high prices when buying food for special occasions.

Our industrial efficiency in Estonia will improve as production is centralised in one factory – Valga. Our sales to retail customers increased, while industrial sales fell. The price of fresh meat has decreased year-on-year and price trends for meat products have been more stable.”


January–March 2016

Atria Group’s net sales for January–March amounted to EUR 314.5 million (EUR 314.5 million). EBIT amounted to EUR 1.6 million (EUR 0.7 million). Sales volumes have increased. The decline in sales prices due to price competition has weakened trends in net sales and EBIT. Improved cost-efficiency and a good sales structure at Atria Russia supported the growth in EBIT. The figures for the comparison period include the divested cheese business, which had annual net sales of approximately EUR 50 million and EBIT of approximately EUR 3 million. Taking this into consideration, the Group’s comparable net sales increased by 2.5 per cent.

Atria is expanding its poultry operations and has signed an agreement to purchase Lagerberg i Norjeby AB, a Swedish poultry business. Lagerbergs is the third largest supplier on the Swedish chicken market. The company has a production plant and its own chicken-rearing facility in Blekinge, Southern Sweden. Atria's annual net sales are expected to grow by about EUR 30 million. Efforts will be made to conclude the transaction during the second quarter of this year. On 1 April 2016 (after the period under review), the Swedish Competition Authority unconditionally approved the business transaction between Atria and Lagerbergs.

Lars Ohlin was appointed Atria Group's new Executive Vice President, Human Resources and member of Atria Group's management team as of 1 April 2016. Lars Ohlin will report to Juha Gröhn, the CEO.

Atria Finland’s net sales for January–March totalled EUR 224.7 million (EUR 212.2 million), up by EUR 12.5 million year-on-year. The increase in sales volumes enabled net sales to increase although sales prices decreased on home markets by an average of 5 per cent in comparison with the corresponding period last year. In some product categories the decrease in sales prices was even bigger. EBIT amounted to EUR 1.7 million (EUR 1.9 million). Atria’s productivity improved.

Atria Scandinavia’s net sales for January–March amounted to EUR 75.7 million (EUR 85.2 million). EBIT amounted to EUR 0.7 million (EUR 1.9 million). The figures for the comparison period include the divested cheese business, which had annual net sales of approximately EUR 50 million and EBIT of approximately EUR 3 million. Price competition has intensified.

Atria Russia’s net sales for January–March amounted to EUR 13.6 million (EUR 15.8 million). Net sales in the local currency were at the same level as year-on-year. EBIT was EUR -0.7 million (EUR -2.3 million).  The most significant reasons for the improved EBIT were a more efficient cost structure, a more profitable product selection and a bit lower raw material costs in comparison with the previous year.

Atria Baltic’s net sales for January–March totalled EUR 7.7 million (EUR 7.6 million). EBIT was EUR
-0.2 million (EUR -0.1 million). Atria's retail sales volumes showed positive development. Sales of fresh and marinated meat showed particularly strong improvement.  EBIT was weakened by decreased sales prices due to an oversupply of meat.

Events after the period under review

On 1 April 2016, the Swedish Competition Authority unconditionally approved Atria's acquisition of the entire share capital of Lagerberg i Norjeby AB, a Swedish poultry company. The parties confirmed the deal in April, and the operations will be consolidated into Atria from the beginning of May. The purchase price is approximately EUR 18 million and it will be paid in cash. Atria's annual net sales are expected to grow by about EUR 30 million.

Outlook for the future

Consolidated EBIT was EUR 28.9 million in 2015. In 2016, EBIT is expected to be better than in 2015. In 2016, net sales are expected to grow.

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 2015.

Disclosure

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 2016 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, 28 April  2016, at 9:30 am at Finlandia Hall, in the Terassi room. Entrance is through door M4 or K4. 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.


ATRIA PLC
Juha Gröhn
CEO


DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.atria.com