Atria Plc, Interim report, 25 October 2018 at 8:00 am


INTERIM REPORT OF ATRIA PLC 1 JANUARY – 30 SEPTEMBER 2018

Atria Group's net sales were at the previous year’s level. In Finland, the result improved – in Sweden, profitability declined

July-September 2018
- Consolidated net sales totalled EUR 357.1 million (EUR 360.8 million).
- Consolidated EBIT was EUR 12.7 million (EUR 16.2 million), which is 3.5 per cent (4.5%) of net sales.
- Atria Finland's net sales and market share continued to grow.
- The Group's EBIT was brought down by the poor profitability of Atria Sweden and Russia.
- Atria will invest EUR 3.4 million in poultry production in Nurmo and Sahalahti.

January-September 2018
- Consolidated net sales totalled EUR 1,061.6 million (EUR 1,061.7 million).
- Consolidated EBIT was EUR 21.5 million (EUR 27.5 million), which is 2.0 per cent (2.6%) of net sales.
- Atria Finland's net sales and EBIT increased.
- The Group's net sales were brought down by the weakened Swedish krona and Russian rouble.
- Atria Sweden's EBIT was weighed down by the poor profitability of poultry operations and increased raw material costs.
- Atria Plc lowered its EBIT and net sales forecast for 2018. The full-year EBIT of the Group is expected be lower than EBIT in 2017. Net sales are expected to remain at the 2017 level.

Juha Gröhn, CEO

“The moderately good economy has had a positive impact on consumer demand, and market development has remained favourable in all the countries in our business areas. The poultry and convenience food product groups showed the largest growth. Eating out continues to increase its popularity, yielding interesting opportunities for increasing Food Service sales. On the other hand, the increased demand has raised the costs of several materials, supplies and services. Price competition has continued strong.

In Finland, sales over the summer were a success, with Atria as the market leader of barbecue products. We can be content with both our growth and profitability.

In Sweden, the growth and profitability targets were not reached. This was influenced by high raw material costs, the poor profitability of poultry operations, and the persistently weak Swedish krona, thus increasing the costs of imported materials and supplies.

The business operations of Denmark & Estonia met their set earnings target. The growth target was not met due to some the meat products losing their place in store selections in a fierce price competition in Denmark.

The profit and net sales in Russia did not meet set targets. The prices of meat raw materials have risen in two peaks – first in spring and for a second time in early autumn. This has resulted in a lowered margin level. The sales of Sibylla products have been good. Likewise, Food Service sales are on the rise.

The hot and dry summer decreased crop harvests all over Europe. The prices of cereals, crops and animal feed have increased strongly during the autumn. The price of meat is also on the rise. Atria is preparing for increased raw material costs.”

July–September 2018

Atria Group’s net sales for July-September totalled EUR 357.1 million (EUR 360.8 million). EBIT amounted to EUR 12.7 million (EUR 16.2 million). Atria Finland's net sales grew by EUR 5.1 million from the previous year; sales to retail and Food Service customers continued to grow. Atria Sweden's net sales were reduced by the weak Swedish krona and the divestment of the Nordic Fast Food business operations in December 2017. The sales to retail of poultry increased. Atria Denmark & Estonia's net sales were at the same level as last year. Atria Russia's decrease in net sales was caused by a weakened exchange rate and decreased sales to retail.

Atria Finland's EBIT increased thanks to improved sales structures. The Group's EBIT was burdened by increased raw material costs in Sweden and Russia as well as Atria Sweden's poor profitability of poultry operations. Atria Denmark & Estonia's EBIT improved year-on-year.

In August, Atria launched its new Vegyu brand, a 100 % meat-free product range. The products of the versatile range include convenience foods, cold cuts, and cooking products. Vegyu is aimed at consumers looking for alternatives to meat-based products or variation in their meal solutions.

Atria Finland faces the growth in the poultry market by investing a total of EUR 3.4 million in the Nurmo and Sahalahti poultry production plants. The cutting capacity will be increased at both Nurmo and Sahalahti plant. The projects will be carried out in late 2018 and spring 2019.

Atria Finland's net sales for July-September totalled EUR 250.1 million (EUR 245.0 million). Net sales increased by EUR 5.1 million. Sales to retail and to Food Service customers continued to grow from the previous year. EBIT amounted to EUR 13.6 million (EUR 13.1 million). The growth of EBIT was thanks to a better sales structure than during the corresponding period last year.

Atria Sweden's net sales for July-September totalled EUR 72.5 million (EUR 78.6 million). In the local currency, net sales were at the same level year-on-year. The sales of poultry products grew considerably during the summer, improving net sales. On the other hand, net sales were decreased by the weakened Swedish krona and the divestment of the Nordic Fast Food business operations in December 2017. EBIT was EUR -1.0 million (EUR 0.7 million). The decrease in EBIT was due to the poor performance of poultry operations. In addition, the persistently weak Swedish krona raised the prices of imported raw materials.

Atria Denmark & Estonia's net sales for July-September totalled EUR 24.7 million (EUR 25.0 million). EBIT amounted to EUR 1.6 million (EUR 1.4 million). In Estonia, Atria's sales to retail grew by approximately 6 per cent in terms of value, and in Denmark the net sales fell slightly. The sales structure for July–September was better than last year.

Atria Russia's net sales for July-September totalled EUR 19.4 million (EUR 22.4 million). EBIT was EUR -0.8 million (EUR 1.3 million). The decrease in net sales was the result of a weakened Russian rouble and decreased sales to retail customers. In the local currency, net sales fell by approximately 4 per cent. The sales of Sibylla and Food Service products strengthened compared to last year. EBIT was weakened by increased raw material prices and decreased sales volumes to retail.

January–September 2018

Atria Group's net sales for January-September totalled EUR 1,061.6 million (EUR 1,061.7 million). EBIT amounted to EUR 21.5 million (EUR 27.5 million). The net sales of Atria Finland grew by EUR 25 million from the previous year.  The weakened Swedish krona and Russian rouble brought down the Group’s net sales in January–September.

Atria Finland and Denmark & Estonia's EBIT increased thanks to improved sales structures. In Sweden, EBIT was weighed down by the poor profitability of poultry operations, the weakened krona, and increased raw material costs. In Russia, the result was brought down by significantly increased raw material costs.

Atria Group's operational structure and financial reporting were altered as of the beginning of 2018. Atria Group’s reporting segments are as follows: Atria Finland, Atria Sweden, Atria Russia, and Atria Denmark & Estonia.

Atria Group's corporate responsibility projects proceeded according to plan during the review period. The Atria Way of Leading training programme and the Safely Home from Atria occupational safety programme were implemented in all business areas. The solar power park was completed in September, and in February the company launched its antibiotic-free pork products. The Group initiated the revision of Atria's strategy for corporate responsibility.

Atria Finland’s net sales for January-September totalled EUR 750.7 million (EUR 725.7 million). Net sales increased by EUR 25.0 million. Sales to retail and to Food Service customers has clearly improved from the year before.  EBIT amounted to EUR 27.2 million (EUR 24.9 million). The sales structure during January–September was better than during the corresponding period last year. 

Atria Sweden’s net sales for January-September totalled EUR 213.8 million (EUR 229.5 million). EBIT was EUR -6.0 million (EUR 1.0 million). The decrease in net sales was caused by the weak Swedish krona and the divestment of the Nordic Fast Food business operations in December 2017. In the local currency, net sales were at the same level year-on-year. EBIT was weighed down by further increases in raw material costs, the poor profitability of poultry operations, and employee arrangements at the beginning of the year. The profitability of poultry operations has weakened due to an unfavourable sales structure and the price pressure caused by the sluggishness in the market at the beginning of the year. The commissioning of the renewed poultry plant continued during the third quarter according to plan.

Atria Denmark & Estonia's net sales for January-September totalled EUR 72.0 million (EUR 73.6 million). EBIT amounted to EUR 4.3 million (EUR 3.9 million). In Estonia, Atria's sales to retail increased during January-September. In Denmark, the net sales decreased due to tight price competition. The EBIT of the business area increased slightly thanks to good cost management and a favourable sales structure.

Atria Russia’s net sales for January-September totalled EUR 55.2 million (EUR 64.0 million). EBIT was EUR -1.4 million (EUR 0.1 million). The decrease in net sales was caused by the weakening of the rouble and decreased sales to retail. In the local currency, the net sales fell by approximately 2 per cent. EBIT was brought down by increased meat raw material prices.

Outlook for the future

The consolidated EBIT in 2017 was EUR 40.9 million. In 2018, EBIT is expected to be lower than in 2017. In 2018, net sales are expected to remain at the 2017 level.

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 30 September 2018 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, 25 October 2018, at 9:45 am at Scandic Hotel Simonkenttä, Simonkatu 9, conference room Mansku, 1^st floor, Helsinki. 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
Board of Directors

DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.atria.com