Seinäjoki, Finland, 2016-07-21 07:00 CEST (GLOBE NEWSWIRE) --
Atria Plc, Interim Report, 21 July 2016 at 8.00 am
ATRIA PLC INTERIM REPORT 1 JANUARY – 30 JUNE 2016
Atria invests in growth
April–June 2016
- Consolidated net sales totalled EUR 341.3 million (EUR 337.5 million).
- Consolidated EBIT was EUR 6.1 million (EUR 8.4 million), or 1.8% (2.5%) of net sales.
- Lagerberg i Norjeby AB's business operations were transferred to Atria as of the beginning of May. Atria's annual net sales are expected to grow by about EUR 30 million. In June, Atria decided to invest EUR 14 million in Lagerbergs’ chicken production in Sweden.
- Atria will acquire a majority stake in Well-Beef Kaunismaa Ltd subject to the approval of the Finnish Competition and Consumer Authority. Atria's annual net sales are expected to grow by about EUR 40 million.
- Atria Finland's new pig cutting plant has entered the start-up phase.
- Atria sold a pig farm in Estonia and estates that it no longer needed in Estonia and Sweden.
January–June 2016
- Consolidated net sales totalled EUR 655.8 million (EUR 652.1 million).
- Consolidated EBIT was EUR 7.8 million (EUR 9.1 million), which is 1.2 per cent (1.4%) of net sales.
- EBIT growth was slowed by decreased sales prices, the costs of starting up the pig cutting plant and the costs incurred in taking over new businesses.
| Q2 | Q2 | H1 | H1 | ||
| EUR million | 2016 | 2015 | 2016 | 2015 | 2015 |
| Net sales | |||||
| Atria Finland | 233.9 | 233.7 | 458.6 | 445.9 | 929.0 |
| Atria Scandinavia | 88.8 | 80.3 | 164.5 | 165.4 | 330.5 |
| Atria Russia | 17.6 | 21.5 | 31.2 | 37.3 | 75.1 |
| Atria Baltic | 9.2 | 8.9 | 16.9 | 16.5 | 32.9 |
| Eliminations | -8.3 | -6.8 | -15.5 | -13.1 | -27.4 |
| Total net sales | 341.3 | 337.5 | 655.8 | 652.1 | 1,340.2 |
| EBIT | |||||
| Atria Finland | 3.0 | 4.7 | 4.7 | 6.6 | 29.8 |
| Atria Scandinavia | 3.5 | 2.5 | 4.2 | 4.4 | 12.8 |
| Atria Russia | 0.1 | 1.9 | -0.6 | -0.3 | -0.2 |
| Atria Baltic | -0.3 | 0.2 | -0.5 | 0.1 | -9.0 |
| Unallocated | -0.2 | -0.9 | 0.0 | -1.6 | -4.4 |
| EBIT, total | 6.1 | 8.4 | 7.8 | 9.1 | 28.9 |
| EBIT, % | 1.8 % | 2.5 % | 1.2 % | 1.4 % | 2.2 % |
| Profit before taxes | 4.8 | 6.0 | 4.5 | 4.4 | 20.1 |
| Earnings per share, EUR | 0.13 | 0.18 | 0.10 | 0.11 | 0.49 |
| EBIT includes items affecting comparability: | |||||
| Goodwill impairment | - | - | - | - | -9.1 |
| Pig farms sale | -1.0 | 1.9 | -1.0 | 1.9 | 1.9 |
| Sale of the real estate company | 1.4 | - | 1.4 | - | - |
| Adjusted EBIT | 5.7 | 6.5 | 7.4 | 7.2 | 36.1 |
Juha Gröhn, CEO
"Fierce price competition has continued in Atria's home markets of Finland, Sweden, Estonia, Russia and Denmark. The product groups currently facing the toughest price competition are meat products and pork in Finland and Estonia, as well as some meat-product segments in Scandinavia. During the spring, raw-material markets turned a corner as the price of pork began to rise in Europe. This change will increase the pressure for price rises among ready-made products.
During the first half of the year, Atria's Healthy Growth strategy was implemented systematically. Atria is looking for growth, both organic growth and expansion through acquisitions.
Atria acquired a foothold in the expanding Swedish poultry market by purchasing Lagerbergs. The transaction was complemented by the initiation of a EUR 14 million investment programme in the newly-acquired company. The aim is to make Lagerbergs a strong player on Nordic poultry markets by joining forces with Atria Finland's poultry operations.
In Finland, Atria will purchase a majority stake in Well-Beef Kaunismaa Ltd, a company that primarily sells raw meat products and beef on Food Service markets. Conclusion of the deal is subject to the approval of the competition authorities.
Atria's most significant investment is the modernisation of the Nurmo pig cutting plant. Cutting will become more efficient and annual costs will decrease by approximately EUR 8 million in comparison with previous figures. Commissioning of the plant began in May. Commissioning of the plant is currently increasing cutting costs and additional costs will decrease as the commissioning gathers pace.
Development of the Sibylla concept is continuing at pace, particularly in Russia. Sales are showing good development and there are currently more than 2,500 sales outlets in Russia.
During the first half of the year, Atria concluded three separate transactions to sell premises and businesses that it no longer needed. The Linnamäe pig farm and Vastse-Kuuste production plant in Estonia found new owners, as did the logistics unit in Gothenburg."
April–June 2016
Atria Group’s net sales for April–June totalled EUR 341.3 million (EUR 337.5 million). EBIT amounted to EUR 6.1 million (EUR 8.4 million). Adjusted EBIT was EUR 5.7 million (EUR 6.5 million). Sales volumes increased during the period under review. The decline in sales prices due to price competition has slowed down the growth in net sales and EBIT. Sales in Finland were weighted towards exports, wholesale and industrial sales, which weakened EBIT.
The Swedish Competition Authority and Consumer Agency unconditionally approved Atria's acquisition of the entire share capital of Lagerberg i Norjeby AB (Lagerbergs), a Swedish poultry company. The agreement between Atria and Lagerbergs was confirmed at the end of April and the business operations were transferred to Atria as of the start of May. The purchase price was approximately EUR 18 million, and it was paid in cash. Atria's annual net sales are expected to grow by about EUR 30 million. The transaction expands Atria's business into the Swedish poultry processing market.
In June, Atria’s Board of Directors approved a long-term investment programme worth EUR 14 million for the development of Lagerbergs’ operations. The investments will be devoted to improving the entire production chain, from chicken rearing and industrial production to strengthening Lagerbergs’ brand. The investments will take place in the period from 2016 to 2018.
Negotiations with the personnel concerning the investment project in Atria Finland's pig cutting plant located in Nurmo were concluded. The cutting plant’s operations will be reorganised and working methods revised. As a result of these arrangements, staffing will be reduced by 80 person-years by the end of 2016. The reduction in personnel will be implemented by means of natural attrition, internal transfers and pension arrangements. In addition, the plant will no longer subcontract cutting work. The value of the investment is approximately EUR 36 million, and it is expected to generate annual cost savings of some EUR 8 million in the plant’s operations. These savings will be realised in full as of the beginning of 2018. The first phase of the pig cutting plant will be commissioned this year.
Atria Finland will purchase 70 per cent of Well-Beef Kaunismaa Ltd's share capital. Well-Beef's business focuses on beef processing and wholesale business. Atria's annual net sales are expected to increase by approximately EUR 40 million. The transaction requires the approval of the Finnish Competition and Consumer Authority. Efforts will be made to conclude the transaction during the third quarter of this year.
Atria sold the Linnamäe pig farm located in Northern Estonia. The sale of the Linnamäe pig farm gave rise to a sales loss of approximately EUR 1 million. The pig farm was transferred into new ownership on 29 April 2016.
Atria centralised its industrial operations in Estonia at the Valga factory. Production of meat products was transferred from the Vastse-Kuuste factory to Valga and the real estate was sold. The sale had no impact on the company’s results. Production rearrangements were concluded by the end of the second quarter. The measures are expected to generate annual savings of approximately EUR 0.5 million.
Atria centralised its logistics operations in Sweden by moving them from Gothenburg to the Malmö plant. The logistics centre in Gothenburg was sold for a profit of EUR 1.4 million.
Atria Finland's net sales for April–June totalled EUR 233.9 million (EUR 233.7 million). The proportion of exports, wholesale and industrial sales of total sales volume has increased. Sales to retail and Food Service customers decreased correspondingly, which resulted in decreased market share. Tough price competition in the retail sector and a weakened sales structure weighed down EBIT. EBIT amounted to EUR 3.0 million (EUR 4.7 million).
Atria Scandinavia’s net sales for April–June totalled EUR 88.8 million (EUR 80.3 million). EBIT amounted to EUR 3.5 million (EUR 2.5 million). Adjusted EBIT was EUR 2.1 million (EUR 2.5 million). Net sales increased thanks to good sales trends in Sweden and the purchase of Lagerbergs.
Atria Russia's net sales for April–June totalled EUR 17.6 million (EUR 21.5 million). In the local currency, net sales grew by 3 per cent. EBIT amounted to EUR 0.1 million (EUR 1.9 million). Adjusted EBIT was EUR 0.1 million (EUR 0.1 million).
Atria Baltic's net sales for April–June totalled EUR 9.2 million (EUR 8.9 million). EBIT was EUR -0.3 million (EUR 0.2 million). Adjusted EBIT was EUR 0.7 million (EUR 0.2 million). Sales volumes were good, particularly in May and June. Sales of new minced meat products got off to a promising start. Cost-efficiency has improved from the previous year.
January–June 2016
Atria Group’s net sales for January–June totalled EUR 655.8 million (EUR 652.1 million). EBIT amounted to EUR 7.8 million (EUR 9.1 million). Adjusted EBIT was EUR 7.4 million (EUR 7.2 million). EBIT growth was slowed by decreased sales prices, the costs of starting up the pig cutting plant and the costs incurred in taking over new businesses.
Atria Finland’s net sales for January–June totalled EUR 458.6 million (EUR 445.9 million), up by EUR 12.8 million year-on-year. Increased sales volumes at the beginning of the year enabled net sales to grow. Average sales prices have decreased on home markets in comparison with the equivalent period last year. EBIT amounted to EUR 4.7 million (EUR 6.6 million).
Atria Scandinavia’s net sales for January–June totalled EUR 164.5 million (EUR 165.4 million). EBIT amounted to EUR 4.2 million (EUR 4.4 million). Adjusted EBIT was EUR 2.8 million (EUR 4.4 million). In the first half of the year, EBIT was weighed down by a weak sales structure.
Atria Russia’s net sales for January–June totalled EUR 31.2 million (EUR 37.3 million). In the local currency, net sales grew by 1.3 per cent. EBIT was EUR -0.6 million (EUR -0.3 million). Adjusted EBIT was EUR -0.6 million (EUR -2.2 million). EBIT improved thanks to efficiency improvement measures and a revamped product selection.
Atria Baltic’s net sales for January–June totalled EUR 16.9 million (EUR 16.5 million). EBIT was EUR -0.5 million (EUR 0.1 million). Adjusted EBIT was EUR 0.5 million (EUR 0.1 million). Atria's retail sales volumes showed positive development in the first half of the year. Sales of fresh and marinated meat showed particularly strong improvement.
| Key indicators | |||
| EUR million | 30.6.16 | 30.6.15 | 31.12.15 |
| Equity/share, EUR | 13.95 | 14.14 | 14.16 |
| Interest-bearing liabilities | 235.9 | 240.1 | 199.6 |
| Equity ratio, % | 44.8 % | 45.1 % | 47.4 % |
| Net gearing, % | 58.1 % | 58.8 % | 48.3 % |
| Gross investments in fixed assets | 42.8 | 28.8 | 56.9 |
| Gross investments, % of net sales | 6.5 % | 4.4 % | 4.2 % |
| Average personnel (FTE) | 4,340 | 4,399 | 4,271 |
| The principles for calculating key indicators were presented in the 2015 annual financial statements. | |||
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.
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 30 June 2016 as an attachment to this company announcement. 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, 21 July 2016, at 10:30 am at Atria Plc’s Helsinki office, Läkkisepäntie 23, Helsinki. The presentation material will be available on the company’s website (www.atria.com) after the publication of the financial statements and as an attachment to this company announcement.
ATRIA PLC
Boad of Directors
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.atria.com
