Interim Report of Atria Plc 1 January - 31 March 2011

29.4.2011 08:00


INTERIM REPORT OF ATRIA PLC 1 January–31 March 2011

Atria Group’s
net profitability weakened

- EBIT for the review period showed a loss of EUR -4.2 million (EUR 1.0 million)
- Net sales were at the previous year’s level: EUR 304.0 million (EUR 305.9 million)
- Group's equity ratio rose to 41.2 per cent (40.2 per cent)
- Atria Finland’s net sales increased by 4.0 per cent but EBIT decreased significantly
- Atria Scandinavia and Atria Baltic improved their results
- Atria Russia’s result declined significantly compared to the Q1/2010 period

Atria Group

EUR million 2011 2010   2010
Net sales 304.0 305.9   1 300.9
EBIT -4.2 1.0   9.8
EBIT% -1.4 0.3   0.8
Profit before taxes  -6.6 -1.8   0.3
Earnings per share, EUR  -0.20 -0.07   -0.18


Atria Group’s net sales were at the same level as last year. Calculated in fixed currencies, the decrease in net sales was 3.5 per cent. Atria Finland’s net sales increased by 4.0 per cent, which was mainly due to the increased sales of less processed products. The decline of 7.5 per cent in Atria Scandinavia’s net sales is mainly explained by the discontinuation of consumer packed meat production in the summer of 2010 and slightly decreased sales volumes. Atria Russia’s net sales were at the previous year’s level and in Atria Baltic, net sales grew by 6.6 per cent.

Atria Group's EBIT fell to EUR -4.2 million (EUR 1.0 million), which was due to the weakened profitability of Atria Finland and Atria Russia. The decrease in Atria Finland's EBIT to EUR 0.6 million (EUR 4.9 million) was caused by higher meat raw material prices and a weakened sales structure. Exports now account for a greater proportion of total sales. It was not possible to transfer the raw material price increase in full to sales prices during the review period.

Atria Russia’s EBIT, EUR -5.6 million (EUR -2.3 million), was weakened by the rapid increase of raw material prices at the end of last year, as well as sluggish demand and the consequent intensification of competition. The performance was also burdened by the costs of the new plant completed in the St Petersburg region.

Atria Scandinavia's EBIT increased to EUR 2.3 million (EUR 0.6 million). The figure for the comparison year included a non-recurring cost item of EUR 2.0 million. Atria Baltic’s EBIT, EUR -0.2 million (EUR -1.2 million), showed a clear improvement, which is mainly explained by the measures implemented to improve efficiency, as well as by an improved sales structure.

The Group’s free cash flow (operating cash flow – cash flow from investments) was positive during the review period and net liabilities remained at EUR 411 million, the level seen at the end of the previous year. Atria Scandinavia concluded an agreement with Nordea Finans Sverige AB concerning the sale of trade receivables. The agreement decreased the company's trade receivables by a total of EUR 15.3 million at the end of the review period.

In January 2011, Atria Plc made a decision to invest approximately EUR 26 million in building and renovating the Kauhajoki bovine slaughterhouse and cutting plant. New production facilities will be built in Kauhajoki, and the existing production facilities will be renovated and automated using the latest production technology. Atria Plc will also buy the shares of Kauhajoen Teurastamokiinteistöt Oy from Itikka Co-operative. The purchase price is approximately EUR 7 million.

Atria Finland launched two efficiency improvement programmes, one of which aims to increase the efficiency of bovine slaughtering and cutting operations and bring down the excess capacity in slaughtering. The annual cost savings from the efficiency improvement programme are estimated at EUR 6 million. Cost savings will start to affect the result during 2012 and will be fully realised since the beginning of 2013.

In March, Atria Finland launched a second efficiency improvement programme at the Nurmo production plant units. Atria expects the programme to achieve annual savings of approximately EUR 4 million in its cost structure. The cost savings will be fully realised since the beginning of 2012.

Matti Tikkakoski resigned as President and CEO of Atria Plc at the beginning of March. His lump-sum severance payment of EUR 0.8 million, including social expenses, impacted the result for the first quarter. Juha Gröhn was appointed Atria Plc’s new CEO as of 18 March 2011.

Key indicators        
EUR million 31.3.11 31.3.10   31.12.10
Shareholders’ equity per share EUR 15.54 15.60   15.68
Interest-bearing liabilities 428.8 430.2   429.9
Equity ratio, % 41.2 40.2   40.2
Gearing, % 97.0 97.1   96.4
Net gearing, % 92.9 93.3   92.2
Gross investments in fixed assets 5.7 15.9   46.2
% of net sales 1.9 5.2   3.5
Average FTE 5,583 5,853   5,812


The meat raw material market should stabilise in 2011, compared with 2010. However, there is still a pressure to increase meat raw material prices due to risen costs. Consequently, the prices of end products can be expected to rise throughout the remainder of the year in all of Atria’s business areas. Consumption of food is expected to grow slightly in Finland, Sweden, Denmark and Estonia.

Product leadership strategy implementation is proceeding according to plan. In 2011 Atria will carry out visible product launches in various business areas.

In Russia, the increase in the overall demand for food products will be slow during 2011, according to Atria’s estimate. The slow recovery of the market for Atria’s product groups, along with intensified competition, has made it more difficult to implement price increases in Russia and, therefore, it has not been possible to include the substantially increased raw material prices in the sales prices to a sufficient extent. This year’s overall performance is also burdened by the full costs of the new production plant.

Atria estimates that the Russian food product market will start to grow moderately. The recovery will, however, be slower than previously anticipated.

At the end of last year, Atria launched an efficiency improvement programme in Moscow, which is progressing according to schedule. Annual cost savings gained from the efficiency improvement programme are estimated to amount to approximately EUR 6 million. The cost savings will be realised during 2012 and they will be fully realised since the beginning of 2013. With market growth and cost-saving measures, as well as the efficient production capacity of the new plant, Atria Russia's EBIT is expected to be positive in the latter part of 2013.

Atria Group's net sales are expected to grow somewhat in 2011. Growth in net sales will, however, be weighed down by the difficult market situation in Russia and the discontinuation of the production of consumer-packed meat in Sweden.

The Group’s EBIT excluding non-recurring costs stood at EUR 21.6 million in 2010. In 2011, the Group’s EBIT is expected to be higher than this. The key sources for uncertainty in terms of earnings development are the rising prices of cereals, feed and other raw materials, as well as the difficult market situation in Russia.

Dividend distribution proposal

On 31 December 2010, the parent company’s distributable profit stood at EUR 84.1 million. No significant changes have occurred in the company’s financial position since the end of the accounting period. The Board of Directors will propose to the Annual General Meeting that the company distribute a dividend of EUR 0.25 per share for 2010, a total of EUR 7 million.

New publication procedure

Atria Plc complies with the new publication procedure in accordance with standard 5.2b of the Financial Supervisory Authority and publishes its Q1/2011 interim report as an attachment to this company announcement. The full interim report is available on the company’s website at In future, Atria Plc will comply with this procedure concerning the publication of all its interim reports and financial statement bulletins.

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, 29 April 2011, at Finlandia Hall, in the Elyssa room. Entrance is through door M3. The presentation material will be available on the company’s website ( after the distribution of the financial statements and as an attachment to this company announcement.

Juha Gröhn

Nasdaq OMX Helsinki Ltd
Major media