Atria Finland Ltd. Capital Markets Day 14.6.2007 - Atriagroup.com

Capital Markets Day
Atria Finland
8.12.2010
Matti Tikkakoski
8.12.2010 Matti Tikkakoski

Atria Finland
Review Q3
€ Million
Q3
2010
Q3
2009
Q1-Q3
2010
Q1-Q3
2009 2009
Net sales 195.9 190.8 553.9 574.4 781.9
EBIT 11.9 13.9 22.9 31.7 42.9
EBIT % 6.1 7.3 4.1 5.5 5.5
ROCE, 12 months rolling 8.6 10.1 10.2
• Atria Finland’s Q3/2010 net sales improved year-on-year by 2.7 per cent.
However, the net sales for the entire period January - September were down yearon-year
because of the disputes relating to collective bargaining in the spring
• During the summer season, Atria was particularly successful within the poultry
product group
• The average price in the product range was lower than in the previous year’s
comparison period. However, cost efficiency has been good, resulting in good
profitability
2
8.12.2010 Matti Tikkakoski

Atria Finland
• The 10-day production break caused by the strike
overloaded pig and bovine slaughterhouses in the
summer, and clearing this backlog increased the
amount of frozen stocks. The frozen stocks could
not be cleared because of the record-high amount
of imported meat in the market
• The steep rise in the price of feed at the end of the
period under review has put heavy cost pressure
on meat producers. The feed price is
approximately 50 per cent higher than last year
3
8.12.2010 Matti Tikkakoski

Finnish food business
• Consumer prices have risen since summer 2010.
• Total import of meat has been growing aggressively since
the end of 2009:
- Meat total +15 %
- Pork +23 %
- Beef +16 %
• Imported meat is pushing down the price of domestic
meat.
• Crop prices are expected to stabilize
• Competition between our customers is tense
• Megatrends:
- time management and convenience
- health and wellness
- taste
- transparency
4 8.12.2010
Matti Tikkakoski

Atria’s estimate of the market
development in value 1-11/2010:
Category
Development in value
%
Cold cuts: approx. -2,5 %
Sausages: approx. +-0 %
Convenience food: approx. +1,5 %
Meat: approx. -1,5 %
Poultry: approx. -2,5 %
5 8.12.2010
Matti Tikkakoski

Finland, Strategy in brief
Vision
The first choice for consumers and customers in fresh food in the Baltic Sea region
and European Part of Russia
Strategy 2010 – 2013
1. Dramatically improve international profitability
2. Strengthen market position and grow organically
Mission
Good food – Better mood
Strategic tools
1. Achieve sustainable
competitive advantage
through product
leadership (incl.
Brands)
4. Drive rapid profitability
enhancement in Russia
2. Focus on Atria brands
and profitability (incl.
structure) in Finland
5. Revenue enhancement
and implementation of
comprehensive turnaround
program in
Baltics
3. Create category and
brand strategy and
implement the
production network
optimisation in Sweden
6. Reduce working capital
6 8.12.2010
Matti Tikkakoski

Finland, Key Actions 2010-2011
• Product leadership as the distinctive
competitive advantage/strategy for Atria
Finland – without giving up customer
intimacy. More forces to consumer research
and consumer based productization. More
investments to marketing & PD
• More focus to Atria brands
• Price increases in subcategories /segments
• Low cost policy
• Planning & starting the structural
investments
7
8.12.2010 Matti Tikkakoski

Atria Finland
• Atria is planning to increase bovine slaughtering
efficiency and to invest in the Kauhajoki
slaughterhouse
• Atria's bovine slaughterhouses are currently
technologically outdated, and significant
investments in machinery and the premises are
required to improve efficiency.
• The rise in feed prices this autumn has brought on
severe profitability problems to the Finnish beef
chain.
• The aim is to improve the profitability of the chain
by cutting costs and streamlining operations.
• The annual cost savings to be achieved through
the plan are estimated at EUR 5.0 million.
8
8.12.2010 Matti Tikkakoski

Meat raw-material markets 2010
9 8.12.2010
Matti Tikkakoski

300
Price of Basic Ingredients
2008 - 2010
Euro / tonne
250
200
150
Soft Wheat (EU)
Barley (EU)
Maïs (EU)
Soja (CAF)
Hulls (EU)
Manioc (CAF)
C.G.F. (CAF)
100
50
Jan 08 April Juil Oct Jan 09 April Juil Oct Jan 10 April Juil Oct Jan-11
10 8.12.2010
Matti Tikkakoski

Pig carcass price in Europe
175
Development of the EU
Pig Carcasses price
€/100 kg
155
135
115
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
5 yr Avg (05-09) 2007 2008 2009 2010
11 8.12.2010
Matti Tikkakoski

EU exports of selected PIG products
1 539 646
464 234
150 979
296 526
EU-27 EXPORTS of PIG Meat
(Tonnes prod. weight)
1 322 846
439 483
115 182
215 823
1 461 108
481 106
132 045
232 761
463 389 398 053 454 899
Jan-Jul 08 Jan-Jul 09 Jan-Jul 10
1 800 000
1 600 000
1 400 000
1 200 000
1 000 000
800 000
600 000
400 000
200 000
Russia Hong Kong China
Japan South Korea Other destinations
0
Tonnes (product weight)
12 8.12.2010
Matti Tikkakoski

EU trade of PIG products
881 011
943 405
IMPORTS
1 083 230
1 238 138
1 556 961
EXPORTS
1 545 907
1 331 808
1 526 563
1 509 302
1 780 568
1 938 455
2 089 363
1 910 908
2 569 087
2 384 536
1 461 108
3 000 000
2 750 000
2 500 000
2 250 000
2 000 000
1 750 000
1 500 000
1 250 000
1 000 000
750 000
Tonnes product weight
500 000
46 135
59 720
71 937
51 641
63 800
55 918
56 077
54 499
72 276
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jan-
Jul 10
22 612
21 730
32 368
43 179
59 838
51 662
26 719
250 000
0
13 8.12.2010
Matti Tikkakoski

EU imports of beef and live animals (2):
IMPORTS of Beef & Veal into EU
(Tonnes cwe)
303 465
27 761
65 083
53 741
321 906
34 531
94 510
291 597
45 304
62 885
61 737 53 798
350 000
300 000
250 000
200 000
150 000
In
Tonnes
cwe
137 684
104 630 109 072
100 000
50 000
Jan-Sep 08 Jan-Sep 09 Jan-Sep 10
0
Brazil Uruguay Argentina
Australia New Zealand Other destinations
14 8.12.2010
Matti Tikkakoski

EU net import of beef and live animals
1 400
1 263
1 171
1 120
IMPORTS
EXPORTS
1 200
1 028
1 000
825
736
800
452
403
446
401
436 429
398
598 598
491
513
529
481
455
565
352
513
292
556
248
395
292
431
248
292283
Tonn
600
400
200
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jan-
Sep 10
0
15 8.12.2010
Matti Tikkakoski

16 8.12.2010
Matti Tikkakoski