Annual Report • Mar 27, 2018
Annual Report
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Annual Report 2017
| 2017 | 2016 | |
|---|---|---|
| Net sales, EUR million | 1,436.2 | 1,351.8 |
| EBIT, EUR million | 40.9 | 31.8 |
| EBIT, % | 2.8 | 2.3 |
| Adjusted EBIT, EUR million | 39.6 | 31.4 |
| Balance sheet total, EUR million | 909.8 | 909.4 |
| Return on equity (ROE), % | 6.7 | 4.7 |
| Equity ratio, % | 47.5 | 46.5 |
| Net gearing, % | 49.0 | 50.5 |
Net sales
EUR 1,436.2 million
The Group's net sales were EUR 1,436.2 million, which was EUR 84.4 million more than in 2016. Net sales grew in all business areas.
EBIT
EUR 40.9 million The Group's EBIT was EUR 40.9 million, representing 2.8 per cent of net sales. EBIT grew in all business areas other than Atria Scandinavia.
Net sales by business area
7
Gross investments, % of net sales %
13 14 15 16 17 Earnings per share 1.00 0.80 0.60 0.40 0.20 -0.20 -0.40 EUR 0.92
Atria is one of the leading meat and food companies in the Nordic countries, Russia and Estonia. The company is 115 years old and is respected by its customers, personnel and owners. Our company's development and growth are based on excellent commercial excellence, efficient operations and a way of work that respects consistent, sustainable success.
Our main product, Good Food, leads to a better mood and sustainable value for all of our stakeholders. Our good food is responsibly and ethically produced, nutritious and safe. In 2017, our net sales was about EUR 1.44 billion and we employed approximately 4,500 meat and food experts in Finland, Sweden, Denmark, Russia and Estonia. Atria Plc's shares have been listed on Nasdaq Helsinki Ltd since 1991.
Atria Plc .......................................................2 Atria's key indicators.................................3 From the CEO ...........................................4 Strategy .......................................................6 Value creation..........................................16 Corporate responsibility........................ 17
| Business area reviews 18 | |
|---|---|
| Atria Finland18 | |
| Atria Scandinavia 22 | |
| Atria Russia 26 | |
| Atria Baltic 28 | |
| Reseach and development 30 | |
| Financial statements | |
|---|---|
| and annual report 32 | |
| Corporate Governance Statement110 | |
| Investor reporting 130 | |
| Contact details 131 | |
Atria Group's operational structure and financial reporting was changed as of 1 January 2018. The segments to be reported on are: Atria Finland, Atria Sweden, Atria Russia and Atria Denmark & Estonia.
"New technology must be adopted bravely."
In 2017, Atria's net sales grew by EUR 85 million to EUR 1,436 million. EBIT was EUR 40.9 million, improving by EUR 9 million in comparison to the previous year. The Healthy Growth strategy is being realised.
We achieved growth through the corporate acquisitions made earlier, but also organically. It is interesting that our sales under our own brands grew stronger, particularly in Finland and Estonia. Atria is a developer of strong brands, even though we also manufacture products for our customer' brands.
The licence to export pork to China granted to Atria progressed to the commercial phase when the first loads from the Nurmo plant headed off to China at the beginning of May. The development of China's market situation and the purchasing behaviour of Chinese customers is decisive for the balance of the European meat market. There is no other market of the kind anywhere else in the world.
Alongside China, we took big commercial steps in our home markets as well.
In early autumn, Atria introduced a chicken to the Finnish market, the production of which does not, at any point, employ antibiotics. The Finnish meat production method and the health of Finnish animals are among the best in the world, but consumers have not really been informed about it. Now they will be.
Atria's antibiotic-free chicken is only one example of its commercial success, which was achieved in all of its sales channels. Our sales in Finland grew by more than EUR 50 million.
In Russia, Atria achieved a positive operating result. Product lines have been renewed, new sales channels sought and productivity has been improved. Atria Russia today is noticeably different from Atria Russia five years ago. Previously, the majority of sales consisted of sales to a chained retail trade sector. This has now been joined with other channels and customer groups. Sibylla's success continues to be strong from one year to the next, and the number of sales outlets keeps on growing.
The result in Estonia was excellent. The market situation has been favourable and, thanks to a period of structural change that spanned several years, the business area's own operations are in good shape. The new minced meat products have been a success, proving that you can achieve profitable growth even with basic products.
The more than two-year investment project in the complete renovation of the Nurmo pig-cutting plant was completed in late 2017. The end result is the most modern cutting plant in the world, whose process automation, combined with the digitalised monitoring of product flows, is taking productivity and the traceability of products on a new level. Benefits are yielded both by the rise in productivity and productisation.
Regarding other investments in the Nurmo plant, the adoption of solar power as a new form of energy was the most important one. Although the solar power will not be sufficient to meet our entire need for electrical energy, Atria must take part in the use of renewable energy. New technology must be adopted bravely.
In Sweden, Atria is modernising the poultry plant it acquired in 2016. Parts of the modernised plant have already been taken into use, and the project will be completed by the end of 2018. The market situation for chicken weakened at the beginning of 2017. A strong demand-driven situation slipped into overproduction, and prices declined. As a result, the profitability of the poultry business grew weaker. By the end of last year, however, the market situation was showing signs of a budding recovery.
***
Even the best strategy will fail to take a company forward if the day-to-day work is not up to the task. You have to keep your promises to your customers and the consumers. You have to have the drive to get enthusiastic about doing things even better tomorrow than you did today. The world is full of opportunities – not just threats!
I would like to thank every Atria employee and our shareholders and partners for our smooth cooperation.
Seinäjoki, March 2018 Juha Gröhn CEO
Atria's strategic goal is to improve profitability, accelerate growth and increase the company's shareholder value. To achieve this goal, the company is implementing its strategy extending to 2020 and named Atria's Healthy Growth.
Atria aims to grow mainly organically, by developing and growing its existing businesses. The aim is to speed up growth through new product segments and new market areas.
Alongside organic growth, Atria is actively mapping opportunities for acquisitions and other arrangements that generate healthy growth. These can supplement existing
business operations, but also open up entirely new product segments or market areas. Atria manages its strategy of Healthy Growth through three main themes shared by all of its business areas.
Each business area (segment) of Atria implements its own development projects in line with the main themes in seven focal areas:
Atria uses market and consumer data precisely and innovatively, and aims to be a pioneer in knowledge management in its industry.
Atria strengthens the management and development of its brands and categories. The company's strong brands are wellpositioned to grow even stronger.
Atria develops and reinforces its sales, sales tools and customer cooperation with an open mind. The company wants to be the most preferred and trusted partner in its business.
Atria will increase the efficiency of operations and productivity with regard to individual jobs, teams, departments, units, businesses and production plants.
Atria will improve its operations, processes and steering throughout the supply chain, in close cooperation with the chain's different operators.
Atria optimises its important resources, such as expertise and technology, raw materials and energy as well as work processes and times.
| Enablers | Main themes | IMPLEMENTATION OF ATRIA'S HEALTHY GROWTH STRATEGY Realisation of themes in 2017* |
|---|---|---|
| 1. Strong finances Atria's strong balance sheet and good financial position enable growth and development measures in line with the strategy. 2. Systematic investments Atria executes systematic investments which allow it to maintain and improve |
Commercial excellence |
• Atria's sales grew in all of its business areas • Atria began exporting pork to China (page 10). • Atria introduced antibiotic-free labelled products to the Finnish market (page 13). • The number of Sibylla outlets rose to more than 6,000 internationally (page 14). |
| the productivity and competitiveness of its operations, also in the long term. 3. Efficiency Atria enables the productivity of its operations and the competitiveness of its products with the efficient operation of its entire supply chain. 4. Sound market and customer intelligence Atria is a pioneer in the use of consumer and market data. This allows for the development and precisely timed |
Efficiency | • The large-scale investment concerning the new pig-cutting plant at Nurmo was completed (page 11). • The programme to renew the Lagerbergs chicken production in Sweden progressed according to plan (page 12). • Atria centralised pork slaughtering and cutting from Jyväskylä to Nurmo (page 11). • Atria invested in emission-free solar power of its own in Nurmo (page 15). |
| market entry of commercially successful product groups and products. |
Atria Way of Work |
• The Atria Way of Leading progressed into the first practical projects and measures in the different business areas. • The Atria Way of Work action plan progressed into projects promoting productivity and competence, among other, and occupational safety, as of the beginning of 2018. |
Atria develops its management, which must be interactive, engaging and developing. Atria aims to get things done – to focus on solutions, rather than problems.
Further information on Atria's risks and risk management is available in the
* The realisation of the themes is presented in more detail in the reviews concerning each business area.
Target EBIT 5% Equity ratio 40% Return on equity 8% Dividend distribution of the profit for the period 50%
| Realisation in 2017 | Realisation in 2016 |
|---|---|
| 2.8% | 2.3% |
| 47.5% | 46.5% |
| 6.7% | 4.7% |
| 54.4%* | 71.2% |
* Board of Directors' proposal
• The improvement of profitability and productivity in all countries of
operation
• Investments in growth in Finland, including meat operations, the feed business and production automation • Structural streamlining of operations
in Sweden and Russia
| STRATEGY AND OPERATING ENVIRONMENT | ||||
|---|---|---|---|---|
| Atria's Healthy Growth | Changes in the operating environment |
Megatrends with an impact |
||
| responds to changes in the operating environment Atria's operating environment is developing strongly, although the speed and focus of the changes varies from one business area to the next. As a financially strong, profitable company in line with its strategic goals, Atria will be able to renew and respond to the continuous changes in the business environment in all of its business areas. Atria's Healthy Growth provides seamless support for the company's mission and vision. Atria's values and responsible operations contribute to the implementation of the strategy. |
Atria's strategy responds to the following kinds of changes in the operating environment: • purchasing power in Atria's home markets is growing only modestly • competition in the industry and distribution channels is tough • affordability is becoming increasingly important for consumers • the consumption of white meat is growing, while the consumption of red meat is decreasing slightly; overall consumption remains unchanged • consumers' power within sales channels is growing • consumer behaviour is fragmenting, consumption is becoming more individualised • the number of alternatives to meat, e.g. vegetable-based food product groups, is growing • easy and fast eating is becoming increasingly relevant • the quality and healthiness of food is becoming increasingly important • the origin of food and the responsibility and transparency of operations are becoming increasingly important. |
The following megatrends have a particularly significant impact on Atria's operating environment and operations: • the global economy • climate change and the sufficiency of natural resources • population growth, growth in the consumption of food in emerging economies • urbanisation, the aging of the population and smaller family sizes • digitalisation and robotics, changes in work and consumption. |
||
| Atria's strategic progression | ||||
| debt and increase its equity ratio. | Atria's Healthy Growth strategy is a consistent continuation of the strategy for the previous period. In the previous period, Atria implemented significant efficiency improvement programmes and investments, which improved its competitiveness, particularly with regard to the productivity of industrial operations. At the same time, the company was able to reduce its net |
|||
| INTERNATIONAL GROWTH |
IMPROVING PRODUCTIVITY | ATRIA'S HEALTHY GROWTH |
We enjoy our work.
Way of Work
Atria's exports of pork to China started according to plans, and the export volumes slightly exceeded the original. The volume exported amounted to approximately three million kilos. The outlook in terms of exports is promising.
Atria initiated export deliveries of pork to China in the spring of 2017, and the first batches of meat were delivered to Chinese customers as agreed, in the summer. Atria's production plant in Nurmo was the first Finnish company to secure an export licence for the Chinese market in 2016, and the first delivery agreement, concerning approximately three million kilos, was signed in January 2017.
The export licence granted to the Nurmo production plant by the Chinese authorities has opened up a market area that, for Atria, is entirely unprecedented in terms of its size. The export licence offers good opportunities for increasing export volumes and diversifying the product range to all products that can be produced from a pig carcass. Atria developed its marketing in China strongly during the year, and the feedback received on both the products and Atria's operations was positive.
China is by far the largest and most strongly growing market area for pork in the world. The country's production and consumption of pork accounts for roughly 55 per cent of the world's pork production, totalling about 55 million tonnes a year. Thanks to a rise in the standard of living, demand for pork has grown considerably for several years now. Pork is
an essential part of Chinese cuisine and the entire Chinese culture.
In 2017, China's imports of pork and the by-products of slaughtering grew even more than expected. The growth has been accelerated by a reduction in the number of the country's own pigs. Due to the high demand, the average prices of pork remained strong.
The extensive project concerning Atria Finland's new pig-cutting plant in Nurmo was completed. The cutting plant, which represents state-of-the-art technology in its industry even on a global scale, improved the productivity of Atria's pork production, for example, and the traceability of products.
The new pig-cutting plant at Nurmo improves Atria's competitiveness both at home and in exports. Thanks to modern automation and digital technology, the cutting plant's productivity has increased significantly. Opportunities for productisation have also increased. Among other things, the technology enables the farm-specific traceability of increasingly small batches of meat, which has great commercial significance.
The facilities of the new pig-cutting plant and the process's technical solutions have been dimensioned in such a way that they allow for the flexible integration of new and supplementing technologies as capacity requirements change. In 2017, the volume of pork processed by Atria was some 75 million kilos. At the end of the year, Atria centralised its pork production in Jyväskylä to the Nurmo plant.
Atria Scandinavia's large-scale investment and development programme to improve poultry operations in Sweden progressed on schedule. The programme, which increases efficiency in the entire supply chain of Lagerbergs, raises the capacity of chicken production to a significant degree and improves the operations' profit-earning potential.
Atria Scandinavia expanded its operations to Sweden's growing poultry market by acquiring the poultry firm Lagerberg i Norjeby AB (Lagerbergs) in the spring 2016. Immediately after the transaction, Atria launched an approximately EUR 14 million investment programme aiming to bring the operations to a new level. The plan includes the modernisation of the entire production chain – from rearing and slaughtering to cutting and packaging – by the end of 2018. In addition to the poultry plant, the chain covers farms owned by the company, chicken rearing facilities and an extensive network of contract producers.
Besides the investment programme, Atria sharpened the business strategy in terms of the Lagerbergs trademark, product development and marketing. For example, the emphasis in the Lagerbergs product range has shifted from whole birds to cut products. This has increased the number of product items significantly. The diversification of the product range was also visible in a larger market share. Atria Scandinavia is the third largest operator in Sweden's strongly developing poultry market.
In the autumn, Atria launched antibiotic-free-labelled poultry products under the Atria Family Farm name on the Finnish market. At the turn of the year, the company was also able to add the same label to some of its pork products. Atria's antibiotic-free production allows it to respond to great challenges in consumer demand.
The antibiotic-free label added to the poultry and pork packages of Atria Family Farm products is an indication that no antibiotics have been used in the rearing of the animals. The animals are healthy and have been cared for so well that there has been no need for antibiotics.
Atria's chicken production is already entirely free of antibiotics. Throughout the production chain, animals are medicated in extremely minimal degrees and, even then, only when necessary, under controlled conditions and in line with withdrawal periods. During the year, Atria carried out an extensive programme to extend its policy of no antibiotics to its pork chain as well. The programme commercial culmination occurred at the turn of the year, when Atria delivered the first antibioticfree pork products to retail stores. Atria's goal is for roughly 40 per cent of its entire pork production to be verifiably free of antibiotics in 2018.
At the beginning of 2018, Atria also introduced the first batches of antibiotic-free beef to the market.
Demands for pure and safe food have also grown stronger in Finland. Risks related to purity and safety occur in the production and use of food, whether it is of animal or plant origin. Regarding the production of meat, consumers are particularly concerned about the excessive use of antibiotics. In many countries, antibiotics are routinely fed to production animals to promote growth and prevent diseases. The excess use of antibiotics accelerates the emergence of antibiotic-resistant bacteria – i.e. bacteria that can resist the effect of antibiotics – which can be transmitted to humans via foodstuffs or directly from animals. The World Health Organisation considers resistance to antibiotics to be one of the most significant global health threats.
Finland's largest and simultaneously its first solar power project of an industrial scale, named Atria Sun, progressed successfully to its final phase: the production of the solar power plant was connected to Atria's network in the summer. The entire solar power park is set to be completed in 2018, when the 24,000 solar panels will produce approximately 5,600 megawatt hours a year for the Nurmo plant. The amount corresponds to roughly 5 per cent of the plant's annual electricity need. Self-produced solar power is a significant advantage during the summer months, when the
plant's cooling requirement is high.
The solar power park is notable even on the Nordic scale, given that there is only one more solar power facility, which is located in Denmark, with more capacity in the Nordic countries. Atria Sun is a concrete indication of Atria's investments in renewable, emission-free forms of energy and in new technologies and methods. The project is valued at approximately EUR 7 million. Atria implements the project in co-operation with the Solarigo Systems.
Atria launched a strategically important project to develop sales. This Grouplevel project, named Sales Excellence, aims to raise Atria's sales to a new level and improve the operating conditions for sales in all business areas. The project supports the core of Atria's Healthy Growth – in other words, increased sales in current and new product groups.
Atria developed its Group-wide wastage project kicked off in the previous year. The main goal of this project is to ensure that the meat raw material is used as precisely and carefully as possible in various stages of the meat processing. Reducing waste has a significant impact on both productivity and competitiveness. Reducing waste by roughly 1 per cent in the Finnish operations alone generates annual savings totalling nearly EUR 10 million. from a broader perspective, food waste as a whole is a crucial challenge for the entire food chain: from primary production to the industrial sector, trade and households. The economic and environmental effects of food waste are considerable.
Minimising meat production and,
The former open compost field of the Nurmo plant is now home to 15,000 solar panels. Another 9,000 panels will be located on the rooftops and lawns of the plant area.
sector approx. ................................20% Households approx......................30%
Source: Motiva Ltd., the Ministry of Agriculture and Forestry 2017
The number of sales outlets for the Sibylla concept grew by more than 10 per cent for the second year in a row. The growth was strongest in Russia, in addition to which new growth markets also opened up for the concept.
For several years now, the growth of the Sibylla concept has been the strongest in Russia. By the end of the year, there were more 3,000 Sibylla sales outlets in the country. This represents about half of the more than 6,000 sales outlets for the Sibylla concept located in a total of 10 countries. The concept also expanded into new markets, the most significant of which were the UK and South Korea.
In Sweden, the country in which the concept originated,
Atria and Sibylla franchising entrepreneurs renewed their cooperation model to speed up growth. Atria sold its share in the marketing company of the Sibylla chain to FIAB, which represents the franchising entrepreneurs in Sweden. Atria will continue to own the rights to the Sibylla trademark, develop the productisation and the brand, and deliver the meat products to Sibylla customers. The Sibylla trademark is one of the most well-known food brands in Sweden.
In all its business areas, Atria takes into account the economic, social and environmental aspects of its operations. The priorities for these development vary slightly depending on the business area's operations and stakeholder requirements.
Atria acknowledges its responsibility towards all of its stakeholders. Stakeholders' are increasingly interested in Atria's corporate responsibility. Domestic origin, traceability and animal welfare are important for Atria's two most important stakeholders; customers and consumers. Investors and financiers, for instance, are interested in financial performance, Atria's energy and material usage and company's efforts to combat climate change.
Atria reports its responsible operations and its goals actively and transparently. The objectives and results of
| GROUP LEVEL COMMITMENTS | |||||||
|---|---|---|---|---|---|---|---|
| Group-level commitments: |
Economic responsibility Environmental | responsibility | Social responsibility | ||||
| • Meeting financial targets in a manner that enables the company to generate long-term added value for its shareholders and other stakeholders and increase well being in its local communities and in society. • Operational risk management and healthy business principles. |
• An environmentally sound food chain based on the sustainable use of natural resources and the fulfilment of statutory obligations. |
• An open, transparent production chain. • Safe, healthy, nutritious food for various consumer needs. • Inspired and skilled people build success. |
Focus areas in business areas | ||||
| Focus areas | Finland Scandinavia Russia | Baltic | |||||
| Profitability | ● | ● | ● | ● | ● | ||
| Risk management | ● | ● | ● | ● | ● | ||
| Environmental protection |
● | ● | ● | ● | ● | ||
| Energy efficiency | ● | ● | ● | ● | ● | ● | |
| Sustainable use of natural resources |
● | ● | ● | ● | ● | ● | |
| Safe, healthy products | ● | ● | ● | ● | ● | ● | ● |
| Responsible primary production |
● | ● | ● | ● | ● | ● | |
| Employee well-being | ● | ● | ● | ● | ● | ● | |
| Social impact | ● | ● | ● | ● |
Atria Finland is responsible for the Group's operations in Finland, the Group's most important business area. Atria Finland develops, manufactures, markets and sells fresh meat and other foodstuffs and provides services related to them. Atria is the market leader in Finland's slaughterhouse industry and several meat categories and has significant export operations. The number of personnel is about 2,300. Atria's subsidiary A-Farmerst Ltd is responsible for the sourcing of meat and develops the production of Finnish meat. All of the meat used in the products of the Atria brand is Finnish.
| Strategy enablers | Strategic focal points | Realisation of focal points in 2017 |
|---|---|---|
| 1. Large scale Enables supply to large, growing |
Market insight | • The roles of market research, intelligence and analyses were strengthened. |
| and more diverse demand. 2. Strong competitive position Atria is the market leader or number two in its main categories, and the market leader in the slaughterhouse industry. |
Category and brand management |
• The most significant commercial efforts were allocated to the product categories of poultry, convenience food and consumer-packed meat. • The origin of the meat gained emphasis as the competitive advantage of the Atria brand: The Atria Family Farm concept grew considerably due to the antibiotic-free product categories, for example (page 13). |
| 3. Strong and valued brands Atria is the most well-known food brand in the meat industry; this facilitates the market introduction of new categories and the creation of new markets. 4. Efficiency The efficiency of industrial processes and consistent investments in the improvement |
Commercial excellence | • Sales grew in all sales channels. • Strong market share: Atria's manufacturing share in the retail trade sector was 24 per cent and in the food service sector, some 21 per cent. |
| Daily operational efficiency |
• The extension and modernisation project Nurmo's pig cutting plant was completed, and the highly automated production started (page 10). • The slaughter and cutting of pigs was centralised to Nurmo from the production plant at Jyväskylä, which continues to process beef. • The meat volumes processed by Atria totalled approximately 171.5 million kilos. |
|
| of productivity ensure price competitiveness. 5. A reliable and transparent meat |
Supply chain efficiency | • Atria's order–supply chain and the entire value chain of from field to table was developed in close cooperation with various operators, particularly primary production. |
| chain Good cooperation with primary production secures deliveries and growth. |
Resource optimisation | • Atria Finland's operating system was granted an ISO 50001 energy management certificate covering all locations. • Atria Sun, the biggest solar power park in Finland, began its production at Nurmo (page 15). |
| The Atria Way of Leading |
• The supervisor programme Atria Way of Leading and the action programme Atria Way of Work focused on the development of competence, material efficiency and occupational safety, among other things. |
"Profitable growth in all sales channels, good cost control and improved productivity provide us with a sound basis for growth and performance."
Mika Ala-Fossi Executive Vice President, Atria Finland
EBIT EUR 36.3 million (EUR 24.2 million in 2016)
EBIT increased by EUR 12.1 million in comparison to the corresponding period in the previous year and was EUR 36.3 million. This represented 3.7 per cent of net sales. The improved result was driven by the profitable growth of net sales and sound cost control.
Net sales EUR 986.4 million (EUR 932.3 million in 2016)
Atria Finland's net sales increased by EUR 54.1 million in comparison to the corresponding period in the previous year and were EUR 986.4 million. Net sales grew due to increased sales in all sales channels and the integration of Well-Beef Ltd. into Atria in the fourth quarter of 2016. The biggest increase in sales took place in the product categories of poultry and convenience food.
Core categories • Cold cuts
• Meat products, such as sausages
• Fresh meat and
consumer-packed meat • Poultry products • Convenience food • Animal feed
Atria Finland's leading brand is Atria, one of the best-known and most valuable food brands in Finland.
| Category | Change in overall markets1) |
Manufacturing share2) |
Atria's brands3) |
|
|---|---|---|---|---|
| Value | Volume | |||
| Consumer-packed meat | 1.0% | -1.3% | 28% | #1 |
| Poultry | -0.3% | 0.0% | 44% | #2 |
| Sausages | 0.7% | -0.4% | 23% | #2 |
| Cold cuts | -0.7% | -2.9% | 20% | #1 |
| Convenience food | 9.7% | 4.4% | 16% | #2 |
| Total | 3.0% | 0.7% | 24% | #1 |
1) Percentage of change in comparison to 2016
2) Atria as a supplier 3) The market position of product categories sold under the Atria brand
Atria is the market leader of Finland's slaughtering industry and the market number one or two in its main product categories. Atria is strong both in the market for its own brand
and for private labels.
Page source: Atria Insight, 2018
The following consumer trends in the food industry are among those effecting Atria Finland's operations and product range.
| Trend | Atria's answers |
|---|---|
| 1. Responsibility | • Atria's Family Farm concept, a responsible method for the production of food and the traceability of meat all the way up to individual farms (page 13) • Environmentally efficient product and packaging innovations, such as the new minced meat package (page 30) |
| 2. Easiness | • On-the-go product categories, including Atria Heat & Eat and Atria Eat & Go (page 31) • Product categories for versatile use, such as the Atria Vuolu product categories (page 31) • Easy meat dishes, such as Atria Bravuuri Karjalanpaisti and Kalkkunafilee |
| 3. Well-being and individuality | • Increasing the volume of white meat, Atria's poultry product range and products with a high vegetable content. • Diversifying the Atria Family Farm's chicken range for different uses and the development of the Jyväbroiler brand |
Finland's meat processing markets
EUR 2.8 billion
The total value of the meat and meat product market in the distribution channels of the retail trade and the food service sectors.
-0.2
The average consumer prices of meat and meat products remained on par with the previous year, when they declined by 3.4 per cent.
Source: Statistics Finland/Kantar TNS Agri Oy, 2018
Atria's sound management of the supply chain increases the predictability of operations alongside delivery reliability.
EBIT decreased by EUR 3.6 million in comparison to the corresponding period in the previous year and was EUR 4.8 million. Adjusted EBIT was EUR 3.5 million (EUR 7.0 million in 2016). The result weakened due to increased raw material costs and bird disease cases which lowered demand for domestic poultry.
Atria Scandinavia's net sales grew by EUR 11.7 million in comparison to the corresponding period in the previous year and were EUR 355.1 million. In local currency, net sales grew by 4.8 percent. The manufacturing share of Atria's poultry products in Sweden grew slightly, while the shares of other product categories in Sweden and Denmark decreased slightly.
Core categories
• Meat products, including sausages
• Cold cuts
• Convenience food • Poultry products
• Vegetable and delicatessen products
Atria Scandinavia's best-known brands in Sweden are Lithells and Sibylla, which is also Atria Group's most international brand. In Denmark, the best-known brand is 3-Stjernet.
Atria Scandinavia produces and markets meat products, meals and delicatessen products mainly for the Swedish and Danish markets. It also has an international fast food concept business. The production plants are located in Sweden and Denmark. The company boasts valued, widely known brands, many of which are market leaders in their respective categories. The number of personnel is about 1,000. The majority of the meat raw material used by the company is Swedish.
| Strategy enablers | Strategic focal points | Implementation of focal points in 2017 |
|---|---|---|
| 1. Large scale Enables meeting large, growing and |
Market insight | • The roles of market research and analyses were strengthened. |
| diversifying demand 2. Strong competitive position Market number two in its main categories in Sweden, market number one in Denmark 3. Strong and valued brands Facilitate the market introduction of new categories and the creation of new markets 4. Efficiency Centralised operations and consistent investments in production and sourcing processes improve price competitiveness |
Category and brand management |
• The most important product category-specific investments in Sweden were allocated to chicken products and, in Denmark, to organic cold cuts (page 31). |
| Commercial excellence | • Atria's manufacturing share in the product categories of sausages and cold cuts was 16.3 per cent and in chicken product categories, 9 per cent. • Atria's manufacturing share in Denmark's cold cut markets was 18.5 per cent. |
|
| Daily operational efficiency |
• The EUR 14 million modernisation project of the poultry plant progressed according to the programme (page 12). • Production-related investments aiming to increase capacity and productivity were carried out. |
|
| Supply chain efficiency | • Focal points of development included the primary production of chicken and the entire chicken chain as well as the logistics operations centralised to the Malmö plant. |
|
| Resource optimisation | • The energy and material efficiency of production was improved systematically. |
|
| The Atria Way of Leading |
• The supervisor programme Atria Way of Leading and the action programme Atria Way of Work focused on the development of competence and occupational safety. |
"Atria is well-positioned to become the leading manufacturer of cold cuts and sausages in Sweden. The goal is driven by our increasingly efficient poultry plant and the entire chicken chain. In Denmark, growth is driven by organic product categories, among others."
Tomas Back Executive Vice President, Atria Scandinavia
Consumption of poultry meat has more than doubled in Sweden in the 2000s. Domestic meat production have not been able to meet demand growth and imports have increased significantly.
Source: Jordbruksverket, 2017
| Category | Change in overall markets1) |
Manufacturer share2) |
Market position3) |
|
|---|---|---|---|---|
| Value | Amount | |||
| Sausages and cold cuts |
0.9% | -1.2% | 16.3% | #2 |
| Poultry | -3.7% | -5.9% | 9.0% | #3 |
| Category | Change in overall markets1) |
Manufacturer share2) |
Market position3) |
|
|---|---|---|---|---|
| Value | Amount | |||
| Cold cuts | 2.0% | -1.3% | 18.5% | #1 |
1) Percentage of change in comparison to 2016
2) Atria as a supplier
3) The market position of product categories sold under the Atria brand
The following consumer trends in the food industry are among those effecting Atria's operations and product range in Sweden and Denmark.
• The supplementation of product categories based on red meat with product categories based on
| Trend | Atria's answers |
|---|---|
| 1. The responsibility of food production |
• The use of domestic meat raw material to the greatest extent possible poultry meat and organic raw materials • Transparent and responsible production and entire food chain |
| 2. Easiness | • On-the-go product categories that are quick to prepare • Versatile product categories of cold cuts accounts |
| 3. Well-being and individuality |
• Increasing the volume of Atria's poultry product range • Increasing the volume of vegetable-based alternatives • The nutritiousness, safety and purity of meat |
• The development of the Sibylla concept in the fast food segment and growth in food service
EUR 190million
The value of the fresh poultry products represented by Atria in Sweden's retail market in 2017.
-4%
The overall change in fresh poultry products in 2017; the reason for the sudden decline in demand lies in the bird disease cases that occurred early in the year. The situation normalised towards the end of the year.
Average annual growth in fresh poultry products; growth in 2016 was 13%
EUR 1.22 billion
The markets for sausages and cold cuts in Sweden's retail trade and the market for cold cuts in Denmark's retail trade in total.
The development of consumers' purchasing power in Sweden
The development of consumers' purchasing power
The food service market in Sweden grew by 5.2 per cent, while growth in the retail trade sector was 2.4 per cent. The out-of-home market is growing in all of Atria's market areas. The fast food segment, which has grown for several years now, is a good example of this.
Page Source: Atria Insight, 2018
EBIT EUR 0.8 million (EUR -0.7 million in 2016)
EBIT increased by EUR 1.1 million in comparison to the corresponding period in the previous year and was EUR 0.8 million. Profitability improved due to both increased sales prices and a more profitable range of products in Russia's retail trade sector, which recovered towards the end of the year.
Net sales EUR 85.7 million (EUR 71.8 million in 2016)
Atria Russia's net sales grew by EUR 13.9 million in comparison to the corresponding period in the previous year and were EUR 85.7 million. Rouble-denominated net sales grew by six per cent. The growth was driven by the expansion of the Sibylla concept and particularly the increased sales of delicatessen products.
Customers
Atria Russia markets its meat products and convenience foods mainly in the St. Petersburg and Moscow regions. Industrial operations are concentrated in St. Petersburg. In addition to its own brands, Atria's position in the market is strengthened by the Sibylla concept and contract manufacturing. The number of personnel is about 860. Atria procures its meat raw material from the international meat markets in addition to Russia.
| Strategy enablers | Strategic focal points | Implementation of focal points in 2017 |
|---|---|---|
| 1. Large scale Enables supply for growing and more |
Market insight | • Reinforced the role of market research and leveraged the Market Insight group synergy. |
| diverse demand. 2. Strong competitive position Market leader or number two in selected segments in St. Petersburg; strong |
Category and brand management |
• The most significant investments were made in the Sibylla brand and the product categories of pizza. • Investments in the growth of the Casademont brand (page 31). |
| operator in the fast food segment throughout its operating area. |
Commercial excellence | • The Sibylla concept grew by 17 per cent, to a total of approximately 3,100 sales outlets (page 14). • Food service sales grew by 16 per cent. |
| 3. Strong and valued brands Known food brands facilitate the market introduction of new categories and the creation of new markets. |
Daily operational efficiency |
• The capacity utilisation rate of Gorelovo, the main plant in St. Petersburg, grew. • The investment project concerning a new automation line began at the Sinyavino plant. |
| 4. Efficiency Concentrating the majority of production in a plant with a cutting-edge technology in St. Petersburg and investments in the |
Resource optimisation | • Development targets included particularly measures related to the availability and price of the meat raw material. |
| entire operating chain improve price competitiveness. |
The Atria Way of Leading |
• The supervisory programme Atria Way of Leading focused on competence development and leadership. |
"The recovery of Russia's retail trade sector after four years of recession, the strong development of the Sibylla concept and the growing food service market provide a good growth platform for Atria in Russia."
Jarmo Lindholm Executive Vice President, Atria Russia
Atria Russia's main brands are Pit-Product and CampoMos. These are complemented with the Atria brand, introduced to market in 2016. The Sibylla concept business is active in Russia, Belarus and Kazakhstan. The company collaborates with the Spanish brand, Casademont.
EUR 0.7–1.0billion Market share for Atria's meat products
in St. Petersburg's retail trade sector. The value is approximately threefold in the Moscow area.
The development of retail sales in 2017
(-5.0% in 2016).
Market share for Atria's product categories in St. Petersburg's retail trade sector.
EBIT EUR 2.7 million (EUR 0.7 million in 2016)
EBIT increased to EUR 2 million and was EUR 2.7 million. The EBIT for the previous year includes a sales loss of EUR 1 million. Profitability improved due to an increase in productivity and successes in product categories of a higher price range.
Net sales EUR 37.9 million (EUR 34.4 million in 2016)
Atria Baltic's net sales grew by EUR 3.5 million in comparison to the corresponding period in the previous year and were EUR 37.9 million. The growth was driven by the successful launches of new product categories as well as increased sales during the grilling and Christmas seasons.
Core categories
• Meat products, particularly sausages
• Cold cuts
• Fresh and consumer packed meat
Atria Baltic's main brand is Maks&Moortis, which is complemented by VK and Wõro. Atria Scandinavia is responsible for sales of the Sibylla concept in the Baltic region.
Atria Baltic produces and markets its meat products mainly in Estonia. The company is home to well-known brands and it is the second biggest operator in the market. The number of personnel is about 280. The company has its own primary production; Atria is Estonia's second largest pork producer.
as well.
Strategy enablers Strategic focal points Implementation of focal points in 2017 Enables supply for growing and more diverse demand. 2. Strong competitive position Number two in selected market segments in Estonia; a strong operator in primary production 3. Strong and valued brands Known food brands facilitate the market introduction of new categories and the creation of new markets. The concentration of meat product production in one plant boosts productivity, while investments in the entire operating chain improve price competitiveness. Category and brand management Daily operational efficiency The Atria Way of Leading
"Atria's progress in Estonia is visible as improved profitability and a bigger market share. Our productivity has increased, and particularly new product categories have been commercial successes."
Olle Horm Executive Vice President, Atria Baltic
| EUR | 205 | million | |
|---|---|---|---|
Value of the market for meat products in the Estonian retail trade sector. In 2016, the value stood at EUR 199 million.
1.9% Development of sales in the retail trade sector in 2017. The quantitative development was approximately -1.8 per cent.
Market share for Atria's meat products in Estonia's retail trade sector. Atria's share grew for the second consecutive year.
Atria's product, marketing and sales development emphasises sound consumer and customer understanding. The extensive research data and precise analysis related to these constitute essential competitive factors for Atria in the markets, characterised by fragmented consumer behaviour and tough price competition over customers, and concerning the entire industry.
Research and development EUR 12.9 million
Atria's research and development investments decreased slightly, totalling
EUR 12.9 million.
Number of new products 406
The number of new products includes new packages and new product support innovations.
The delightful success of minced meat products has driven the growth of Atria Baltic in product categories with a higher added value.
Atria Finland's efforts in the development of packages were successful. The company's new minced meat package was welcomed by retail stores and consumers alike – as well as the juries of competitions held in the industry. The international World Packaging Organisation (WPO) recognised the package with a WorldStar in its category. In the Nordic Scanstar competition, the package was selected as the best in the entire competition, and in Finland, it was selected as the 2017 responsibility act of the year in K-Ruoka Awards.
This minced meat package – which represents a wholly new packaging innovation – is simple, stylish and functional. The package, made from flexible plastic, is materialefficient and saves space in everything from transportation and store shelves to refrigerators and waste receptacles. The new package reduces the need for plastic raw material and waste, too – by up to 150 tonnes per year.
Atria Scandinavia introduced a new organic product category to Denmark's cold cut market under the 3-Stjernet brand. Atria also has the Aalbaek brand in Denmark. Aalbaek is Denmark's leading and one of Europe's most important brands for premium organic meat products. The share that organic meat accounts for in terms of all meat and meat products sold in Denmark is the highest in the world.
The antibiotic-free chicken products of Atria Family Farm enjoyed one of the most successful launches in 2018 (page 13).
The new products in the Heat & Eat and Eat & Go ranges, which are part of Atria's convenience food product categories, as well as the versatile products in Atria's Vuolu range are good examples of food products that facilitate and speed up consumers' everyday life.
The new Pastejköket vegetable pâté was one of Atria Scandinavia's most successful new products. It was also recognised in events related to a number of food industry product launches.
| New products | 2017 | 2016 | ||
|---|---|---|---|---|
| Business area | Qty | % of net sales | Qty | % of net sales |
| Atria Finland | 118 | 10 | 92 | 6 |
| Atria Scandinavia | 221 | 3 | 220 | 4 |
| Atria Russia | 26 | 6 | 53 | 7 |
| Atria Baltic | 41 | 12 | 37 | 7 |
» Atria's research and development activities are discussed in the Report by the Board of Directors (page 37).
2017 Financial statements
| . | |
|---|---|
| 35 - 5 - 5 - 5 - 5 - 5 - 5 - 5 - 5 - 5 | |
| . | |
| IFRS | |
| l statements, IFRS 57 | |
| nts, FAS |
|
| ncial statements, FAS 98 | |
| 104 |
The strategy for Healthy Growth was realized – growth was achieved and profitability improved.
In line with the Healthy Growth strategy implemented by Atria, the increase in the company's net sales was based on organic growth. It was supported by the acquisitions of Well-Beef Ltd. (Kaivon Liha) and the poultry firm Lagerbergs completed in the previous year. Atria did not make any corporate acquisitions in the period under review. Growth was also accelerated by the opening of a new market area in China and higher sales in the home markets.
Atria grew profitably in all of its business areas. Earnings development in Finland, Russia and the Baltic countries was strong. An increase in the prices of raw materials and challenges in the poultry business impaired the company's ability to make a profit in Scandinavia. The positive earnings development of the entire Group was driven above all by improved profitability and sound cost management. Individual commercial successes also played a significant role.
Market demand for the product groups represented by Atria developed positively. Economic recovery increased overall demand particularly in Finland and Russia. The growth was smaller in the business areas of Scandinavia and the Baltic countries. The consumer prices of meat and processed meat products grew only marginally stronger due to tough competition in both the retail sector and the meat industry. Atria was able to retain, and partly even strengthen, its market shares in various business areas.
The company's balance sheet and financial position was good during the period under review.
Atria's Healthy Growth strategy aims for profitable growth achieved in a healthy manner. The company pursues primarily organic growth, by developing and expanding its current operations. Growth is accelerated by the development of new product segments and the opening of new market areas. Corporate acquisitions and other possible corporate arrangements are explored as measures complementing organic growth. Atria's Healthy Growth strategy allows it to respond to continuous changes in the operating environment and increase the company's shareholder value in the long term.
Atria implements its strategy through three Group-wide growth themes. Each business area (segment) deploys the themes by implementing initiatives, projects and measures in line with seven focal points.
Atria's financial targets:
| • EBIT 5% | |
|---|---|
| • Equity ratio40% | |
| • Return on equity8% |
• Dividend distribution of the profit for the period................. 50%
Atria Plc invites its shareholders to the Annual General Meeting to be held on Friday, 26 April 2018 in Helsinki at the Finlandia Hall.
The agenda includes matters that are to be discussed by the Annual General Meeting in accordance with Article 14 of the Articles of Association.
A notice of the Annual General Meeting was published in national newspapers on 16 March 2018. The AGM documents are available on the company website at www.atria.com.
| Financial Statement Release 2017 15 February 2018 | |
|---|---|
| Annual Report 2017 In week 13/2018 | |
| Interim Report Q1 (3 months) 26 April 2018 | |
| Half Year Financial Report (6 months) 19 July 2018 | |
| Interim Report Q3 (9 months) 25 October 2018 |
Atria's financial information will be published in real time on the company website at www.atria.com.
Atria Group's full-year net sales amounted to EUR 1,436.2 million (EUR 1,351.8 million). EBIT was EUR 40.9 million (EUR 31.8 million). EBIT includes a EUR 1.4 million sales gain recognised from the disposal of the shares in Nordic Fastfood AB. Adjusted EBIT was EUR 39.6 million (EUR 31.4 million). Atria implemented its Healthy Growth strategy systematically and focused on the achievement of organic growth, which was visible as an increase of both net sales and profitability. Net sales grew, and EBIT was positive in all of the business areas. Investments in line with the Healthy Growth strategy and development programmes aiming to improve profitability support a stronger EBIT.
In January, Atria Finland Ltd. made an agreement on delivering the first batch of meat to China. In 2017, Atria delivered approximately three million kilos of frozen pork products to China. The first batches of products arrived in China in late June.
Atria is building Finland's largest solar power park in the area of the Nurmo production plant in cooperation with Nurmon Aurinko Ltd. The construction of this solar power park has progressed to the phase in which the first solar panels were taken into use in July.
In August, Atria Finland launched an antibiotic-free chicken meat. The marking "antibiotic-free" on consumer packages indicates that no antibiotics have been used in the rearing of the chickens. A corresponding concept regarding pork will be launched in February 2018. A pilot project on the production of antibiotic-free beef was initiated at Atria's contract production farms for beef. The first batches of antibiotic-free beef went on sale at the beginning of 2018.
In October, Atria decided to centralise the slaughtering and cutting of pigs to the Nurmo plant. Beef will continue to be processed in Jyväskylä. This restructuring will yield annual savings of approximately EUR 1.2 million, which will materialise as of June 2018. This also means that the employment relationship of 17 people was terminated and that the entire personnel of the Jyväskylä production plant will be subject to layoffs. All of those whose employment was terminated were offered the possibility to start working at other Atria units.
The construction of new production facilities for the poultry plant in Sweden has progressed according to investment programme. The modernised production plant will be taken into use in phases by the end of 2018.
Atria Group decided to change its operational structure and financial reporting as of the beginning of 2018. The organisation of Atria Scandinavia was simplified and the operations in Sweden were established a segment of their own. The operations in Denmark and Estonia were brought under a single business area and reporting segment. The new business area is called Atria Denmark & Estonia. Atria Group's reporting segments as of 1 January 2018 are: Atria Finland, Atria Sweden, Atria Russia and Atria Denmark & Estonia.
Atria Plc's Management Team was subject to changes effective as of 1 January 2018. As CFO Heikki Kyntäjä retired, Tomas Back was appointed CFO and Deputy CEO of Atria Plc. He was also appointed Director of Atria Denmark. Jarmo Lindholm transferred from the position of Executive Vice President of the Atria Russia business area to EVP of the Atria Sweden business area. The application process aiming to find a new EVP for Atria Russia is underway. For now, the duties of the EVP are taken care of by Andrey Shkredov, CFO of Atria Russia.
During the review period, the Group's free cash flow (cash flow from operations – cash flow from investments) was EUR 19.2 million (EUR -2.5 million). Cash flow from operations was EUR 64.5 million (EUR 64.8 million), and cash flow from investments was EUR -45.3 million (EUR -67.3 million). Cash flow from operations was weakened due to an increase in paid financial expenses and taxes from the comparison year. The Group's investments during the period totalled EUR 53.9 million (EUR 82.9 million).
Atria Finland's full-year net sales were EUR 986.4 million (EUR 932.3 million). The increase in net sales was attributable to increased sales in all sales channels and the integration of Well-Beef's business operations into Atria as of the final quarter of 2016. EBIT was EUR 36.3 million (EUR 24.2 million). The focus on organic and profitable growth in line with the strategy of Healthy Growth and the successful management of costs were visible as an increase in EBIT.
Atria Scandinavia's full-year net sales amounted to EUR 355.1 million (EUR 343.4 million). In the local currency, net sales grew by 4.8 per cent. The increase in net sales was mainly attributable to the integration of the poultry firm Lagerbergs into Atria in 2016; organic growth was 2 per cent. EBIT was EUR 4.8 million (EUR 8.4 million). EBIT includes a EUR 1.4 million sales gain recognised from the disposal of the shares in Nordic Fastfood AB. Adjusted EBIT was EUR 3.5 million (EUR 7.0 million). The decrease in EBIT was due to the weak result of the poultry business and a rise in the prices of raw materials.
Atria Russia's full-year net sales were EUR 85.7 million (EUR 71.8 million). In the local currency, net sales grew by 6.0 per cent. Net sales grew, particularly in the Sibylla product group and in delicatessen products. EBIT was EUR 0.8 million (EUR -0.7 million). The increase in EBIT was influenced by the price increases made as a result of a rise in raw material prices and a more profitable product selection.
Atria Baltic's full-year net sales were EUR 37.9 million (EUR 34.4 million). EBIT was EUR 2.7 million (EUR 0.7 million). The growth in net sales was primarily attributable to the launch of new products. EBIT continued to grow, thanks to improved sales and better productivity. The sales of new minced meat products and sausages with a high meat content (77.7 per cent) were very successful.
| 2017 | 2016 | 2015 | |
|---|---|---|---|
| Net sales | 1,436.2 | 1,351.8 | 1,340.2 |
| EBIT | 40.9 | 31.8 | 28.9 |
| EBIT, % | 2.8 | 2.3 | 2.2 |
| EBIT includes non-recurring items | 1.4 | 0.4 | -7.2 |
| Earnings per share, EUR | 0.92 | 0.65 | 0.49 |
| Dividend/share, EUR* | 0.50 | 0.46 | 0.40 |
| Dividend/profit, %* | 54.4 | 71.2 | 81.9 |
| Return on equity, % | 6.7 | 4.7 | 3.6 |
| Equity ratio, % | 47.5 | 46.5 | 47.4 |
| Net gearing, % | 49.0 | 50.5 | 48.3 |
* The Board of Directors' proposal, key figures are presented more detailed on page 51.
Monetary policy in the euro area and in the Nordic countries continued to be very light. All Euribor rates were negative during the past year. Long-term interest rates were likewise on an extremely low level. The liquidity of the financial market and the availability of financing remained good and even significant events in world politics failed to upset the financial markets. Nor were there any notable changes in the terms for commercial banking.
Atria Plc refinanced a committed credit facility of EUR 25 million, due to mature in November 2019, by taking out a new EUR 25 million committed credit facility with a maturity of five years. Short-term funding was acquired mainly through commercial papers. The Group's liquidity remained good. To ensure liquidity at all times, the company had an average of EUR 105 million of unused committed credit lines during the year.
At the end of the accounting period, on 31 December 2017, fixed-interest debts accounted for 16.0 per cent (64.1 per cent) of the Group's liabilities.
Atria's main product groups are fresh and consumer packed meat, poultry products, meat products such as sausages and cold cuts, and convenience food. Atria aims to serve its stakeholders by exploiting research and development activities in its operations in diverse ways, both in the further development of existing products and the planning of new ones.
Product development relies on consumer and customer understanding in identifying new product needs. Product development is guided by these identified market needs. In addition, development work accounts for the flavour, healthiness, safety, and usability as well as responsibility of all products. In terms of responsibility, we have systematically developed the food chain from the field to the table over the long term, and in 2017, we launched the antibiotic-free Atria Family Farm poultry products. The range of our antibioticfree products will also expand in February 2018 with the pork products of Atria Family Farm and the antibiotic-free beef products available to order on Atria's online store.
In 2017, Atria introduced 118 products for the retail and food service markets. The launch of a new minced meat package occurred at the beginning of 2017. This package, developed in cooperation with consumers and the retail trade sector, was welcomed in the markets and recognised with a number of awards for its environmental friendliness. Among other things, the package was selected as the responsibility act of the year and as a Worldstar Winner, by the World Packaging Organisation. The package enables us to reduce plastic waste by around 150,000 kilos per year.
Our research and development operations in Finland focused on expanding the Atria Family Farm product line (antibiotic-free products) and developing food preparation solutions that make daily life both faster and easier for consumers. Examples of products that facilitate and speed up consumers' everyday life include the new convenience foods sold under the Heat & Eat and Eat & Go lines, as well as the versatile products of the Vuolu product line and the Jyväbroiler products seasoned with fresh herbs, introduced to the market at the beginning of the summer season. New products accounted for more than 10 per cent of total sales.
Atria Scandinavia brought all product categories and private labels to the Danish and Swedish markets, thereby accounting for 221 new products: 59 new products in Denmark and 162 in Sweden. The product development of Atria Scandinavia had two important focal areas in 2017. The first one involved the development of new concepts, products and packages in relation to the revamping of the Ridderheims brand, and the second one the development of a new poultry product category. In addition to these, product development invested in the development of new packages in the sausage and cold cut categories. The new Pastejköket vegetable pâté was one of the most successful new products, and it received awards in several food industry events related to product launches. The 3-Stjernet product range was complemented with a new organic product concept. In Sweden and Denmark, new products accounted for some 3 per cent of total sales.
In 2017, Atria Russia brought 26 new products to the market, 17 of which were aimed at the retail trade and food service customers and 9 of which belonged to the Sibylla product family. Atria Russia's focus in product development is on delicacies in the higher price category. In 2017, Atria was the only non-Spanish certified manufacturer to be granted the right to produce jamón serrano. Other successful launches of new products included consumer packaged bacon, frankfurters wrapped in bacon in the Sibylla product family and ham products for food service customers. The sales of these products were robust and strengthened Atria's image as an innovative product developer. The proportion of new products in terms of the value of total sales was 6 per cent and in terms of volume, 5 per cent.
Atria Baltic introduced a total of 41 new products to the market, consisting mainly of convenience food and sausages. The goal in 2017 was to complement the popular range of cooked minced meat products with new ones. The first filled mince meat patties were launched onto the Estonian market in late 2017. The most popular new products last year were the meat products with a 77.7 per cent meat content and minced meat products. New products accounted for roughly 12 per cent of total sales.
Percentage of net sales spent on research and development in Atria Group in 2015–2017:
| EUR million | 2017 | 2016 | 2015 |
|---|---|---|---|
| Research and development | 12.9 | 13.1 | 12.4 |
| % of net sales | 0.9 | 1.0 | 0.9 |
Incidents related to the quality and safety of raw materials and products in any part of the chain, from primary production to consumption, are conventional short-terms risks involving Atria's operating environment. The price development in raw materials, the general economic situation, market development and the operations of competitors may create uncertainty in the development of demand for Atria's products.
Other potential short-term uncertainties in Atria's operations are related to the implementation of strategy, maintaining or improving the financial results of the business areas, and the integration of acquired businesses.
African swine fever continues to cause disruption in Estonia. The risk is that African swine fever will spread to Finland. Atria relies on several precautionary measures to prevent the disease from spreading into its production facilities, aiming to manage the risk.
Changes in the value of the Russian rouble and the Swedish krona are reflected in the Group's euro-denominated net sales and results. The Annual Report contains a more detailed description of the risks related to operations.
Risks and risk management at Atria are described in more detail on page 43.
The Annual General Meeting (AGM) decided that the composition of the Supervisory Board would be as follows:
Atria Plc's Board of Directors has the following composition:
| Member | Term ends |
|---|---|
| • Nella Ginman-Tjeder | 2019 |
| • Esa Kaarto | 2018 |
| • Pasi Korhonen | 2019 |
| • Jukka Moisio | 2020 |
| • Seppo Paavola | 2020 |
| • Kjell-Göran Paxal | 2018 |
| • Jyrki Rantsi | 2019 |
| • Harri Sivula | 2018 |
Atria Plc's Management Team was composed of the following people:
| Member | Term ends | Member | Term ends |
|---|---|---|---|
| • Juho Anttikoski | 2019 | • Jukka Kaikkonen | 2019 |
| • Mika Asunmaa | 2019 | • Juha Kiviniemi | 2020 |
| • Reijo Flink | 2020 | • Ari Lajunen | 2018 |
| • Lassi-Antti Haarala | 2018 | • Mika Niku | 2018 |
| • Jussi Hantula | 2018 | • Pekka Ojala | 2020 |
| • Henrik Holm | 2018 | • Heikki Panula | 2019 |
| • Hannu Hyry | 2019 | • Ahti Ritola | 2019 |
| • Veli Hyttinen | 2020 | • Risto Sairanen | 2020 |
| • Pasi Ingalsuo | 2020 | • Timo Tuhkasaari | 2020 |
| • Jussi Joki-Erkkilä | 2018 | Twenty members in total | |
| • Marja-Liisa Juuse | 2018 |
In its constitutive meeting following the Annual General Meeting, Atria Plc's Supervisory Board elected Jukka Kaikkonen as the new Chairperson and re-elected Juho Anttikoski as Deputy Chairperson of the Supervisory Board.
The AGM decided that the Board of Directors would consist of eight (8) members. Seppo Paavola and Jukka Moisio, whose terms were due to expire, were re-elected as members of the Board of Directors for the next three-year term. Nella Ginman-Tjeder, Esa Kaarto, Pasi Korhonen, Kjell-Göran Paxal, Jyrki Rantsi and Harri Sivula will continue as members of the Board of Directors. When the 2018 Annual General Meeting comes to an end, the terms of Board members Esa Kaarto, Kjell-Göran Paxal and Harri Sivula are due to expire, and the terms of Board members Nella Ginman-Tjeder, Pasi Korhonen and Jyrki Rantsi are due to expire at the close of the 2019 AGM. The constitutive meeting of the Board of Directors elected Seppo Paavola as the Chairperson and Jyrki Rantsi as the Deputy Chairperson.
The members of the Management Team report to CEO Juha Gröhn.
Atria Group decided to change its operational structure and financial reporting as of the beginning of 2018. The operations in Denmark and Estonia were brought under a single business area and reporting segment. The new business area is called Atria Denmark & Estonia. Atria Sweden is reported as its own segment. Atria Group's reporting segments as of 1 January 2018 are: Atria Finland, Atria Sweden, Atria Russia and Atria Denmark & Estonia.
Atria Plc's Management Team was subject to changes effective as of 1 January 2018. As CFO Heikki Kyntäjä retired, Tomas Back was appointed CFO and Deputy CEO of Atria Plc. He was also appointed Director of Atria Denmark. Jarmo Lindholm transferred from the position of Executive Vice President of the Atria Russia business area to EVP of the Atria Sweden business area. The application process aiming to find a new EVP for Atria Russia is underway. For now, the duties of the EVP are taken care of by Andrey Shkredov, CFO of Atria Russia.
Atria Plc's governance is described in more detail in the separate Corporate Governance Statement.
The following people were elected to Atria Plc's Nomination Committee, appointed by the AGM:
The Nomination Committee elected Jukka Kaikkonen as its Chairperson.
| 2017 | 2016 | 2015 | |
|---|---|---|---|
| Atria Finland | 2,314 | 2,214 | 2,214 |
| Atria Scandinavia | 996 | 980 | 930 |
| Atria Russia | 860 | 819 | 812 |
| Atria Baltic | 279 | 302 | 315 |
| Group total | 4,449 | 4,315 | 4,271 |
| Salaries and benefits for the period, Group total (EUR million) |
189.6 | 181.6 | 176.1 |
Atria's long-term incentive plan was implemented per earning period, which consists of three one-year periods.
Payments from the earning period implemented in 2015–2017 were based on the Group's earnings per share (EPS) excluding extraordinary items. Bonuses earned during the period will be paid in instalments in the coming years. Cash rewards earned under the plan for the entire 2015–2017 earning period are capped at EUR 4.5 million. The plan ended on 31 December 2017, and it covered a maximum of 45 people. The plan covers the CEO and the rest of the Group's Management Team. The bonuses accrued for the entire earning period of 2015–2017 totalled EUR 2.1 million.
The maximum bonus payable under Atria Plc's short-term incentive plan is 25–50 per cent of the annual salary, depending on the performance impact and requirement level of each individual's role. The criteria in the bonus scheme are the performance requirements and net sales at Group level and in the area of responsibility of the person concerned. In addition to the CEO and other members of the Group's Management Team, Atria Plc's bonus schemes cover approximately 40 people.
Atria Plc's Board of Directors decided on the long-term incentive scheme of key personnel for the period 2018–2020. The new scheme, based on a shares and a cash bonus, is divided into three one-year periods, with the first earning period beginning on 1 January 2018 and ending on 31 December 2018. The possible bonus in the scheme is based on the company's earnings per share (70 per cent) and organic growth (30 per cent).
The bonuses for the 2018 earning period are paid in three equal parts in 2019, 2020 and 2021, partly as company shares and partly in cash. The cash proportion aims to cover any taxes and tax-like payments incurred by the person due to the bonus. If the person's employment relationship or service contract ends prior to the payment of the bonus, the bonus is not usually paid.
The share-based incentive scheme covers a maximum of 40 persons. The maximum value of the bonuses to be paid on the basis of the 2018 earning period is not more than EUR 2 million. The new incentive scheme aims to encourage Atria's management to acquire company shares and to enhance the company's long-term increase in value by their decisions and activities.
The consolidated EBIT in 2017 was EUR 40.9 million. EBIT is expected to be better in 2018 than in 2017. Net sales are expected to grow in 2018.
Atria Plc did not receive any flagging notifications in 2017.
Shares from series A have right of priority to a dividend of EUR 0.17, after which KII-series shares are paid a dividend of up to EUR 0.17. If distributable dividends remain after this, series A and series KII shares entitle their holders to an equal right to a dividend.
Atria's Articles of Association include a pre-emptive purchase clause concerning the KII shares. If series KII shares are transferred to a party outside the company or to a shareholder within the company who has not previously owned series KII shares, the proposed recipient of the shares must inform the Board of Directors without delay, and series KII shareholders have the right to pre-emptively purchase the shares under certain conditions. In addition, the acquisition of series KII shares by means of transfer requires approval by the company. Series A shares have no such limitations.
Information on the breakdown of shareholding, shareholders and management holdings can be found under the heading "Shares and shareholders" on pages 49 and 50.
The General Meeting authorised the Board of Directors to decide, on one or several occasions, on the acquisition of a maximum of 2,800,000 of the company's own Series A shares with funds belonging to the Company's unrestricted equity, subject to the provisions of the Companies Act regarding the maximum number of treasury shares to be held by a company. The Company's own series A shares may be acquired for use as consideration in any acquisitions or other arrangements relating to the Company's business, to finance investments, as part of the Company's incentive scheme, to develop the Company's capital structure, to be otherwise further transferred, to be retained by the Company or to be cancelled.
The shares shall be acquired in a proportion other than that of the shareholders' current shareholdings in the Company in public trading arranged by Nasdaq Helsinki Ltd at the trading market price of the moment of acquisition. The shares shall be acquired and paid for in accordance with the rules of Nasdaq Helsinki Ltd and Euroclear Finland Oy. The Board of Directors was authorised to decide on the acquisition of the company's own shares in all other respects.
The authorisation shall supersede the authorisation granted by the AGM on 28 April 2016 to the Board of Directors to decide on the acquisition of the company's own shares, and it shall remain valid until the closing of the next AGM or until 30 June 2018, whichever is first.
The AGM authorised the Board of Directors to decide, on one or several occasions, on an issue of a maximum of 5,500,000 new series A shares or on the disposal of any series A shares held by the company through a share issue and/or by granting option rights or other special rights entitling people to shares as referred to in Chapter 10, section 1 of the Limited Liability Companies Act. The authorisation may be exercised to finance or execute any acquisitions or other arrangements or investments related to the company's business, to implement the company's incentive scheme or for other purposes subject to the Board of Directors' decision.
The Board is also authorised to decide on all terms and conditions of the share issue and of the granting of special rights as referred to in Chapter 10, section 1 of the Limited Liability Companies Act. The authorisation thus also includes the right to issue shares in a proportion other than that currently held by the shareholders under the conditions provided by law, the right to issue shares against or without payment and the right to decide on a share issue to the company itself without payment – subject to the provisions of the Limited Liability Companies Act regarding the maximum number of treasury shares to be held by a company.
The authorisation supersedes the share issue authorisation granted by the AGM on 28 April 2016 to the Board of Directors and is valid until the closing of the next AGM or until 30 June 2018, whichever is first.
The AGM authorised the Board of Directors to decide on the donation of a maximum of EUR 100,000 to universities or other educational institutions.
The parent company's shareholders' equity on 31 December 2017 comprises the invested unrestricted equity fund of EUR 248,729,608.85, the treasury share fund of EUR -1,277,443.82 and profits of EUR 75,141,822.55, of which profit for the period totals EUR 15,148,469.99.
The Board of Directors will propose to the Annual General Meeting that the distributable funds be used as follows: • A dividend of EUR 0.50 per share be paid, totalling EUR 14,078,208.00 • To be retained as equity, EUR 308,515,779.58 322,593,987.58
| To be retained as equity, EUR | 308, | |
|---|---|---|
Atria's non-financial statement includes information on how Atria manages environmental and social matters, respect for human rights and anti-corruption and bribery matters.
The aforementioned issues fall under the scope of corporate responsibility, which is an integral part of Atria's business and its corporate culture. Corporate responsibility is integrated into all levels of Atria's operations: goals, values, operating strategies, management and day-to-day work. Atria's corporate responsibility is visible in the entire chain of food production – from primary production, through Atria's plants, to the consumer. Atria develops and implements responsible business operations in the areas of financial, social and environmental responsibility within the framework of its Handprint programme. The company's measures with regard to corporate responsibility are described in more detail in Atria's Corporate Responsibility Report. The Corporate Responsibility Report is available on Atria's website at https://www.atria.fi/en/group/corporate-responsibility/corporate-responsibility-reporting/. Our responsibility is also evident in our Code of Conduct, which guides our day-to-day operations (www.atria.fi/globalassets/atriagroup/vastuullisuus/atriantoimintaperiaatteet/atria-code-of-conduct.pdf).
Atria acknowledges its responsibility towards all of its stakeholders. Stakeholders' are increasingly interested in particularly the environmental and social matters of corporations. In addition to reporting, stakeholders expect companies to have goals for improving aspects related to corporate responsibility. Investors and financiers, for instance, are interested in a corporation's efforts to combat climate change. Domestic origin, traceability and animal welfare are important for customers and consumers. Atria listens to and actively considers its stakeholders' wishes and needs in terms of responsible operations. The transparency, openness and interactiveness of operations are also an integral aspect of Atria's responsibility.
Climate change is a global threat, and Atria invests in fighting climate change throughout the production chain. Atria has included carbon footprint accounting in its indicators for curbing climate change. Efficiency is part of Atria's strategy. It maintains and improves profitability. Among other things, Atria invests in the efficient use of raw materials, the reduction of wastage and waste, as well as the improvement of energy efficiency. Increasing the share of renewable energy sources in total energy consumption is part of Atria's energy policy. In Finnish primary production, Atria promotes the use of domestic vegetable protein instead on imported soy in the feed of production animals. Measures are also in place to reduce the environmental impact of transportation.
Healthy Growth
RESOURCES AND
Our good food is responsibly and ethically produced, nutritious and safe.
materials • Meat raw materials: pork, beef, poultry
• Other raw materials
• Packaging and other materials
Production
• 19 production plants in five countries
Human resources and development
• 4,449 food-industry experts
Investments
• Investments: EUR 54 million
Financing • Equity and liabilities: EUR 910 million
For producers and partners Purchases from producers, subcontractors and other partners • Purchasing and other expenses: EUR 1,159 million
Responsibility GOOD FOOD – BETTER MOOD. CUSTOMER CONSUMER
Food products for retail, the food service industry and export customers • Net sales and other income: EUR 1,442 million
For personnel • Salaries and fees: EUR 189.6 million
For society • Taxes and social security expenses: EUR 59 million
For shareholders and financiers • Dividends: EUR 13 million
• Financial income and expenses: EUR 7 million
For communities Support for public and private organisations and associations
Around 98 per cent of production side streams are used, particularly by the feed and energy industries. Approximately 0.1 per cent of all material flows end up in landfill sites or are treated as hazardous waste.
Around 80 per cent of wastewater is pre-treated before being discharged into the municipal sewage network. The vast majority of the energy used is for generating process heating and cooling. The indirect environmental impact is mostly due to primary production and transportation.
PRODUCTION PROCESSES: Efficiency COMMERCIAL PROCESSES: Commercial excellence VALUE AND MANAGEMENT PROCESSES: • Atria Way of Work • Atria Way of Leading
We create inspiring food for every occasion. Our success is based on inspired people and the most attractive brand.
PRIMARY PRODUCTION
ATRIA'S INDUSTRIAL AND COMMERCIAL OPERATIONS
Atria's Code of Conduct is a set of ethical guidelines for day-to-day activities within Atria, approved by Atria Plc's Board of Directors. Atria's Code of Conduct is based on the laws and collective agreements of the countries in which Atria operates as well as on international conventions and recommendations regulating responsible operations in terms of human rights and anti-corruption, for example.
The Code of Conduct was prepared on the basis of an extensive discussion of values conducted within the company and involving Atria's entire personnel. Atria's Code of Conduct describes Atria's policies in terms of environmental and HR matters, quality and product safety (Safe Atria Quality), stakeholder operations and the integrity of business, including respect for human rights and anticorruption and bribery measures. Atria's Code of Conduct is part of its extensive Handprint programme. The Handprint programme is essentially a collection of the principles, practices and results of Atria's responsible operations. It also serves as the basis for their communication to the personnel and external stakeholders.
Atria requires its suppliers and subcontractors to follow Atria's Code of Conduct or equivalent responsibility principles, of at least the same level, in their operations. Furthermore, purchase contracts obligate partners to meet Atria's requirements for product quality, procedures and the delivery chain.
Atria's own production farms and contract production farms invest in the well-being of animals. Low levels of drug use can be considered one measure of animal welfare. Chicken, pigs and cows reared entirely without antibiotics have been launched in Finland. In Finland, Atria's pork production process is part of the national Quality Assurance system, the criteria of which are tougher than those provided in legislation.
Atria's contractual partners are audited on a regular basis. The audits pay attention to food safety, for instance, as well as the responsibility of operations, such as the consideration of environmental and social matters, the realisation of human rights and anticorruption and bribery measures.
Compliance with the Code of Conduct is an integral part of Atria's Corporate Responsibility Programme. Corporate responsibility is managed at Group and local levels. The shared Code of Conduct is determined at the Group level. The Group also ensures compliance with the Code and determines the development projects and target state applicable to all business areas. Responsibility is developed as part of day-to-day operational management across Atria's business areas. The personnel are provided with training related to various aspects of corporate responsibility in accordance with Atria's training plan. The steering groups of the business areas analyse the operating environment and key stakeholders' expectations with regard to responsibility, and also integrate the implementation of the necessary development measures into their business plans. Their realisation is assessed in the internal and external audits of the business areas.
The results of the development measures are reported in Atria's Corporate Responsibility Report. Atria bases its reporting work on the international Global Reporting Initiative (GRI) G4 guidelines. Atria has selected the essential measurements and indicators relevant to its operations and stakeholders from the GRI guidelines.
Atria's risk management process is based on the ISO 31000 risk management standard. The objective of risk management is to support the realisation of Atria's strategy and the achievement of goals, to prevent unfavourable events from occurring and to safeguard business continuity.
Atria defines risk as the effect of uncertainty on the company's objectives. Risks can cause positive or negative deviations from set goals. Risks may be caused by events within Atria, or by external conditions or events. Atria is subject to many different risks. For the identification and monitoring of risks, these are divided into four categories: strategic risks, operational risks, liability risks and financial risks.
The following table contains a brief summary of the most significant risks related to Atria's operations. These risks together or separately may have a favourable or adverse effect on Atria's business, results, financial standing, competitiveness or reputation. The risk table also describes the most significant risks identified in terms of non-financial information, including personnel and social matters and environmental issues.
Atria has not identified any significant risks related to human rights, corruption or bribery the materialisation of which was likely to have adverse effects on Atria's operations. Any possible risks related to the realisation of human rights or anti-corruption or bribery are managed with the help of personnel training and audits.
| Risk | Description | Risk management |
|---|---|---|
| Raw material price risk | The profitability of Atria's business is greatly affected by changes in the global market prices of meat raw materials. |
Atria manages this risk by means of centralised control of meat purchasing and price variation clauses for raw material. |
| Risks related to customers and consumer demand |
The retail trade in the food industry is highly centralised in all of Atria's key markets, which creates opportunities to build diverse forms of customer cooperation over the long term. On the other hand, this may increase dependence on individual customers. Over the long term, changes in consumer behaviour may change the pattern of demand for Atria's products across different product categories. |
In its risk management, Atria makes use of its strong market position, efficient industrial processes, high level of quality and well-known brands. The company is making preparations for changes in consumption habits and the need to adapt its operations by investing in consumer-oriented product development. |
| Risks related to animal diseases and animal welfare |
The health and well-being of animals are key elements of Atria's quality, responsibility and profitability. An animal disease discovered at a critical point in Atria's production chain could interrupt production in the unit concerned and disrupt operations throughout the chain. A serious new animal disease, such as African swine fever or avian influenza, may lead to import and export restrictions on meat products. |
Atria uses several stages of internal monitoring to detect potential hazards related to animal health and welfare at the earliest possible phase. |
| Product safety risk | As a food manufacturing company, Atria's priority is to ensure the high quality and safety of raw materials and products throughout the production chain. |
Atria has modern methods in place to ensure the safety of production processes and to eliminate various microbiological, chemical and physical hazards. Atria ensures the safety of its products in compliance with the operating practices required by its food safety management and quality certification. |
| Liability risks | Atria has production plants in Finland, Sweden, Denmark, Estonia and Russia. A fire or other unexpected incident may result in plant operations being suspended. Low temperatures and repetitive movements are characteristic of work performed within the food industry. The work is often physically demanding and requires the use of cutting machines and tools, which increases the risk of accidents at work. |
All of Atria's production facilities are insured against material damage and business interruptions through the Group's insurance programmes. A risk analysis is prepared annually or biannually at key plants. Continuity planning is in place to limit the potential damage caused by business interruptions. Atria aims to prevent occupational accidents, the risks of occupational disease and the related costs by investing significantly in safety at work and the continuous improvement of working methods and tools. |
| Financial risks | The key risks related to financing Atria's operations are currency transaction and translation risks as well as refinancing risk. |
The goal of financial risk management is to reduce the effect that price fluctuations on the financial markets and other uncertainty factors have on earnings, the balance sheet and cash flow, as well as to ensure sufficient liquidity. Atria's financing risk management is discussed in more detail in Note 27 to the financial statements. |
Atria has selected its carbon footprint, and the consumption of renewable and non-renewable energy and the energy efficiency directly linked to it, as the most important indicator of environmental matters. Clean water is a crucial part of Atria's production process and sanitation. It is used in sufficient amounts, but the unnecessary consumption of water is avoided. In social matters, the well-being, safety and right kind of competence of the personnel are materially important for the business operations and developed in a goaloriented way. The personnel is inducted in Atria's Code of Conduct in relation to the protection of human rights and anti-corruption and bribery.
At Atria, the generation of greenhouse gases in the entire production chain and transportation is unavoidable, but concrete measures and new plans to reduce their impact have been and are continuously carried out and prepared. The curbing of climate change is accounted for in Atria's strategic policies, and it is consistent with Atria's performance targets.
The efficient allocation and use of resources as well as the reduction of wastage and waste volumes increase the efficiency of energy consumption. These measures have been implemented in Group-level and country-specific development projects and in the context of the continuous improvement of production processes.
Roughly one-thirds of the electrical and heat energy used by Atria derives from renewable energy sources. The construction of Finland's largest solar power park began at our Nurmo plant in 2017. When completed, it will produce around 5 per cent of the electricity used by the Nurmo plant.
Atria Finland's minced meat package innovation – an easy-to-open vacuum pack – reduces packaging waste to a significant degree and requires less space in transport and storage. It also improves the shelf life of the minced meat.
Through carbon footprint accounting, Atria seeks to identify opportunities to reduce and manage greenhouse gas emissions in its production chain.
The calculation and reporting of our carbon footprint are based on the international calculation and reporting standard, the Greenhouse Gas Protocol (World Business Council for Sustainable Development and World Resources Institute). The emissions calculation covers the operational boundaries and the organisational boundaries in accordance with Scope 1 and 2.
Scope 1 (red colour) covers the direct emissions of the energy sources owned by and under the control of the reporting company used for heating and production. Scope 2 (grey) covers emissions from indirect purchased electricity, steam and heat production, and cooling.Scope 2 reporting is based on a costbased calculation method and employs the emission values of known energy sources or the national residual mix. With regard to Russia, the calculation employs the location-based CO2 emission value reported by the International Energy Agency (IEA). In terms of the IEA's residual mix and the national residual mix, the calculation uses the carbon dioxide emission values of 2016, since the values for 2017 are not yet available.
Atria
2016 2017
The following indicators also have a direct connection to the carbon footprint and the curbing of climate change:
At Atria, social responsibility towards personnel covers employee well-being, safety, competence development and fair remuneration. All Atria employees have an Atria Way of Work (WoW), determined by the personnel itself. Significant investments are made in wellbeing within programmes that last for years, throughout the career of an employee. Atria also pays attention to improving safety at work, which is monitored with the help of several indicators. The quality of the company's operations and products depends on its employees' knowledge and skills. Therefore, Atria invests in the training of its personnel, and the competence of the entire organisation is improved in line with the talent management programme. At Atria, social responsibility applicable to the personnel covers remuneration.
At the beginning of 2017, Atria launched a multiyear leadership development programme in all of its operating countries. All supervisors in Atria Group take part in the training. The Atria Way of Leading (WOL) programme establishes common principles and practices for leadership which allow supervisors to develop operations and steer employees towards agreed objectives. The programme is essential for Atria's success in a rapidly changing and competitive operating environment.
The achievement of the goals related to social and personnel matters is monitored with the help of the following indicators.
Energy efficiency by business area
Direct energy consumption by sources
Total water consumption by source
Water consumption by production
* There are differences in the method of calculation by business area. The method of calculation in Atria Finland has been changed in 2016.
Target level -20%
Reducing the lost-time injury frequency rate by 20 per cent in comparison with the previous year. The change in the accident frequency rate in Russia seems to be large in terms of the percentage, as the comparison rate was low. The target for 2017 was not achieved.
Respect for human rights is the basis of Atria's HR policy and part of Atria's Code of Conduct. Atria respects and supports internationally recognised human rights principles and requires all of it employees as well as its suppliers and subcontractors to comply with them, and promotes their realisation in all of its business areas. Atria ensures its suppliers are committed to the following conventions and recommendations in audits.
Atria is committed to the following international conventions and recommendations:
Compliance with healthy and responsible business practices is the foundation for all of Atria's operations. Atria has zero tolerance for any kind of corruption or bribery in its operations. Atria's employees must not give or receive benefits, gifts or hospitality that could inappropriately influence business decisions. Atria has organised training related to the detection and prevention of corruption bribery as part of its WoL programme, in addition to which the Group also organised anti-trust training in 2017. All new employees are familiarised with the Code of Conduct as part of Atria's new employee orientation programme.
Atria has a Whistleblowing channel through which its employees can report, in addition to the report they make to their supervisor, any suspected breaches of Atria's Code of Conduct and suspicions concerning illegal activities within the company. All suspicions are handled as confidentially as possible, and Atria will take the measures required by the reports. The indicator is the number of reports received through the Whistleblowing channel, of which there none in 2017.
| Number of shares | Shareholders | Shares | ||
|---|---|---|---|---|
| Number | % | 1 000 shares | % | |
| 1–100 | 5,573 | 44.53 | 276 | 0.98 |
| 101–1,000 | 5,863 | 46.84 | 2,116 | 7.49 |
| 1,001–10,000 | 1,003 | 8.01 | 2,454 | 8.68 |
| 10,001–100,000 | 62 | 0.50 | 1,557 | 5.51 |
| 100,001–500,000 | 8 | 0.06 | 1,079 | 3.82 |
| 500,001–1,000,000 | 3 | 0.02 | 2,257 | 7.98 |
| 1,000,001– | 4 | 0.03 | 18,528 | 65.55 |
| Total | 12,516 | 100.00 | 28,268 | 100.00 |
| Shareholder type | Shares | |||
|---|---|---|---|---|
| Number | % | 1 000 shares | % | |
| Companies | 391 | 3.12 | 18,312 | 64.78 |
| Financial and insurance institutions | 21 | 0.17 | 1,456 | 5.15 |
| Public corporations | 8 | 0.06 | 753 | 2.66 |
| Non-profit organisations | 87 | 0.70 | 370 | 1.31 |
| Households | 11,985 | 95.76 | 5,009 | 17.72 |
| Foreign owners | 24 | 0.19 | 24 | 0.08 |
| Total | 12,516 | 100.00 | 25,924 | 91.71 |
| Nominee-registered, total | 9 | 2,344 | 8.29 | |
| KII | A | Total | % | |
|---|---|---|---|---|
| Itikka Co-operative | 4,914,281 | 3,537,652 | 8,451,933 | 29.90 |
| Lihakunta | 4,020,200 | 3,838,797 | 7,858,997 | 27.80 |
| Mandatum Life | 982,363 | 982,363 | 3.48 | |
| Pohjanmaan Liha Co-operative | 269,500 | 480,038 | 749,538 | 2.65 |
| Varma Mutual Pension Insurance Company | 524,640 | 524,640 | 1.86 | |
| Oy Etra Invest Ab | 200,000 | 200,000 | 0.71 | |
| OP Life Assurance Company Ltd | 182,701 | 182,701 | 0.65 | |
| Sijoitusrahasto Taaleritehdas Arvo Markka Osake | 130,000 | 130,000 | 0.46 | |
| Elo Mutual Pension Insurance Company | 126,289 | 126,289 | 0.45 | |
| Norvestia Oyj | 115,672 | 115,672 | 0.41 |
| KII | A | Total | % | |
|---|---|---|---|---|
| Itikka Co-operative | 49,142,810 | 3,537,652 | 52,680,462 | 47.42 |
| Lihakunta | 40,202,000 | 3,838,797 | 44,040,797 | 39.64 |
| Pohjanmaan Liha Co-operative | 2,695,000 | 480,038 | 3,175,038 | 2.86 |
| Mandatum Life | 982,363 | 982,363 | 0.88 | |
| Varma Mutual Pension Insurance Company | 524,640 | 524,640 | 0.47 | |
| Oy Etra Invest Ab | 200,000 | 200,000 | 0.18 | |
| OP Life Assurance Company Ltd | 182,701 | 182,701 | 0.16 | |
| Sijoitusrahasto Taaleritehdas Arvo Markka Osake | 130,000 | 130,000 | 0.12 | |
| Elo Mutual Pension Insurance Company | 126,289 | 126,289 | 0.11 | |
| Norvestia Oyj | 115,672 | 115,672 | 0.10 | |
Holdings by the members of the Board of Directors and the Supervisory Board, the CEO and Deputy CEO, and members of the Group Management Team amounted to 76,355 Series A shares on 31 December 2017, representing 0.27% of the shares and 0.07% of the voting rights conferred by them.
| Month | Trading, EUR | Trading, qty | Monthly low | Monthly high |
|---|---|---|---|---|
| January | 4,963,046 | 407,196 | 11.44 | 12.61 |
| February | 3,658,635 | 316,022 | 10.91 | 12.32 |
| March | 2,802,102 | 262,046 | 10.37 | 11.30 |
| April | 3,942,225 | 360,936 | 10.33 | 11.45 |
| May | 2,559,498 | 229,957 | 10.70 | 11.50 |
| June | 1,511,784 | 143,014 | 10.11 | 11.27 |
| July | 3,982,286 | 369,122 | 10.15 | 11.43 |
| August | 2,792,009 | 244,565 | 11.07 | 11.72 |
| September | 2,902,669 | 249,445 | 11.25 | 12.00 |
| October | 2,714,540 | 228,351 | 11.58 | 12.17 |
| November | 4,845,224 | 394,395 | 12.00 | 12.96 |
| December | 2,103,433 | 176,016 | 11.72 | 12.70 |
| Total | 38,777,452 | 3,381,065 | ||
| EUR million | 31 Dec 2017 | 31 Dec 2016 | 31 Dec 2015 | 31 Dec 2014 | 31 Dec 2013 |
|---|---|---|---|---|---|
| Net sales | 1,436.2 | 1,351.8 | 1,340.2 | 1,426.1 | 1,411.0 |
| EBIT | 40.9 | 31.8 | 28.9 | 40.6 | 19.7 |
| % of net sales | 2.8 | 2.3 | 2.2 | 2.8 | 1.4 |
| Financial income and expenses | -7.3 | -6.3 | -9.2 | -12.7 | -15.2 |
| % of net sales | -0.5 | -0.5 | -0.7 | -0.9 | -1.1 |
| Profit before taxes | 35.5 | 26.1 | 20.1 | 34.0 | 6.9 |
| % of net sales | 2.5 | 1.9 | 1.5 | 2.4 | 0.5 |
| Return on equity (ROE), % | 6.7 | 4.7 | 3.6 | 6.6 | -1.0 |
| Return on investment (ROI), % | 7.3 | 5.9 | 5.6 | 8.3 | 3.7 |
| Equity ratio, % | 47.5 | 46.5 | 47.4 | 44.0 | 42.2 |
| Interest-bearing liabilities | 214.3 | 217.8 | 199.6 | 254.1 | 334.7 |
| Gearing, % | 49.8 | 51.6 | 49.3 | 62.6 | 81.3 |
| Net gearing, % | 49.0 | 50.5 | 48.3 | 61.8 | 74.3 |
| Gross investments | 53.9 | 82.9 | 56.9 | 62.7 | 41.1 |
| % of net sales | 3.8 | 6.1 | 4.2 | 4.4 | 2.9 |
| Average number of personnel | 4,449 | 4,315 | 4,271 | 4,715 | 4,669 |
| Research and development costs | 12.9 | 13.1 | 12.4 | 13.9 | 11.8 |
| % of net sales * | 0.9 | 1.0 | 0.9 | 1.0 | 0.8 |
| Order stock** | - | - | - | - | - |
* Booked in total as expenditure for the financial year
** Not a significant indicator as orders are generally delivered on the day after being placed
| EUR million | 31 Dec 2017 | 31 Dec 2016 | 31 Dec 2015 | 31 Dec 2014 | 31 Dec 2013 |
|---|---|---|---|---|---|
| Earnings per share (EPS), EUR | 0.92 | 0.65 | 0.49 | 0.93 | -0.15 |
| Equity/share, EUR | 14.81 | 14.49 | 14.16 | 14.22 | 14.45 |
| Dividend/share, EUR* | 0.50 | 0.46 | 0.40 | 0.40 | 0.22 |
| Dividend/profit, %* | 54.4 | 71.2 | 81.9 | 43.0 | -142.8 |
| Effective dividend yield* | 4.1 | 4.0 | 4.4 | 6.0 | 2.8 |
| Price/earnings (P/E) | 13.2 | 17.8 | 18.5 | 7.1 | -50.2 |
| Market capitalisation | 342.3 | 324.8 | 255.8 | 187.1 | 218.5 |
| Market capitalisation, series A | 230.9 | 219.0 | 172.5 | 126.2 | 147.4 |
| Share turnover/1,000 shares, series A | 3,381 | 3,313 | 5,443 | 3,035 | 3,223 |
| Share turnover %, series A | 17.7 | 17.4 | 28.6 | 15.9 | 16.9 |
| Total number of shares, million | 28.3 | 28.3 | 28.3 | 28.3 | 28.3 |
| Number of shares, series A | 19.1 | 19.1 | 19.1 | 19.1 | 19.1 |
| Number of shares, series KII | 9.2 | 9.2 | 9.2 | 9.2 | 9.2 |
| Average share issue-adjusted number of shares |
28.3 | 28.3 | 28.3 | 28.3 | 28.3 |
| Average share issue-adjusted number of shares on 31 Dec |
28.3 | 28.3 | 28.3 | 28.3 | 28.3 |
* Board of Directors' proposal for 2017 to be submitted to the Annual General Meeting convening on 26 April 2018
| Lowest of the period | 10.11 | 7.61 | 6.62 | 6.43 | 6.01 |
|---|---|---|---|---|---|
| Highest of the period | 12.96 | 12.22 | 10.50 | 8.89 | 8.39 |
| At the end of the period | 12.11 | 11.49 | 9.05 | 6.62 | 7.73 |
| Average rate during the period | 11.47 | 9.49 | 9.03 | 7.46 | 7.21 |
Alongside the IFRS figures, Atria publishes certain other widely used financial indicators which can be derived from the income statement and balance sheet. The formulas for calculating these financial indicators are presented below.
| Adjusted EBIT | In addition to reporting EBIT, the company publishes an adjusted EBIT indicator to describe the actual financial development of the business and to improve comparability between different periods. The adjusted EBIT is determined by adjusting the EBIT recognised in the income statement for items that affect comparability. These may include events that are not part of the ordinary business activities, such as the restructuring of operations, capital gains and losses attributable to the sale of operations, impairment, and the costs of discontinuing significant operations. |
|
|---|---|---|
| Gross investments | Investments in tangible and intangible assets, including acquired businesses | |
| FTE | = Hours worked during the review period | * 100 |
| Number of working days during the review period * normal working hours per day | ||
| Return on equity (%) | = Profit/loss for the accounting period Equity (average) |
* 100 |
| Return on investment (%) | = Profit/loss before tax + interest and other financial expenses Equity + interest-bearing financial liabilities (average) |
* 100 |
| Equity ratio (%) | = Equity Balance sheet total – advance payments received |
* 100 |
| Gearing (%) | = Interest-bearing financial liabilities Equity |
* 100 |
| Net interest-bearing liabilities = Interest-bearing financial liabilities – cash and cash equivalents | ||
| = Interest-bearing financial liabilities – cash and cash equivalents | ||
| Net gearing (%) | Equity | * 100 |
| = Profit for the period attributable to the owners of the parent company | ||
| Earnings/share (basic) | Weighted average of outstanding shares | |
| Equity/share | = Equity attributable to the owners of the parent company Undiluted number of shares on 31 Dec |
|
| Dividend/share | = Dividend distribution from the accounting period Undiluted number of shares on 31 Dec |
|
| Dividend/profit (%) | = Dividend/share Earnings per share (EPS) |
* 100 |
| Effective dividend yield (%) | = Dividend/share Closing price at the end of the accounting period |
* 100 |
| Price/earnings (P/E) | = Closing price at the end of the accounting period Earnings per share |
|
| Average price | = Overall share turnover (EUR) Undiluted average number of shares traded during the accounting period |
|
| Market capitalisation |
= Number of shares at the end of the accounting period * closing price on 31 Dec | |
| Share turnover (%) | = Number of shares traded during the accounting period | * 100 |
| Undiluted average number of shares |
| EUR 1,000 | Note | 1 Jan –31 Dec 2017 1 Jan –31 Dec 2016 | |
|---|---|---|---|
| Net sales | 1, 2, 30 | 1,436,188 | 1,351,752 |
| Costs of goods sold | 7, 8, 30 | -1,262,875 | -1,187,387 |
| Gross profit | 173,313 | 164,365 | |
| Sales and marketing expenses | 3, 7, 8 | -92,392 | -89,389 |
| Administrative expenses | 4, 7, 8, 30 | -42,668 | -43,024 |
| Other operating income | 5, 30 | 5,694 | 4,565 |
| Other operating expenses | 6, 8 | -3,043 | -4,755 |
| EBIT | 1 | 40,904 | 31,762 |
| Financial income | 9, 27 | 11,917 | 20,246 |
| Financial expenses | 9, 27 | -19,211 | -26,563 |
| Net financial items | -7,294 | -6,317 | |
| Income from investments accounted for using the equity method | 15 | 1,904 | 679 |
| Profit/loss before taxes | 35,514 | 26,124 | |
| Income taxes | 10, 18 | -7,146 | -6,571 |
| Profit/loss for the accounting period | 28,368 | 19,553 | |
| Profit attributable to: | |||
| Owners of the parent | 25,859 | 18,189 | |
| Non-controlling interests | 2,509 | 1,364 | |
| Total | 28,368 | 19,553 | |
| Basic earnings per share, EUR | 11 | 0.92 | 0.65 |
| Earnings per share adjusted by the dilution effect, EUR | 11 | 0.92 | 0.65 |
| EUR 1,000 | Note | 1 Jan –31 Dec 2017 1 Jan –31 Dec 2016 | |
|---|---|---|---|
| Profit/loss for the accounting period | 28,368 | 19,553 | |
| Other items of comprehensive income after tax: | |||
| Items not reclassified to profit or loss | |||
| Actuarial gains/losses from benefit-based pension obligations | 10, 25 | -51 | -46 |
| Items reclassified to profit or loss when specific conditions are met | |||
| Cash flow hedges | 9, 10, 27 | 2,126 | 1,838 |
| Translation differences | 9, 10, 27 | -6,139 | 6,586 |
| Total comprehensive income for the financial period | 24,304 | 27,931 | |
| Comprehensive income distribution for the financial period: | |||
| Owners of the parent | 21,873 | 26,664 | |
| Non-controlling interests | 2,431 | 1,267 | |
| Total | 24,304 | 27,931 | |
The notes on pages 57 to 95 are an integral part of the consolidated financial statements.
| ASSETS, EUR 1,000 | Note | 31 Dec 2017 | 31 Dec 2016 |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 1, 12, 31, 32 | 408,665 | 403,974 |
| Biological assets | 13 | 637 | 625 |
| Goodwill | 14, 31 | 166,800 | 169,932 |
| Other intangible assets | 14, 31 | 89,094 | 93,566 |
| Investments in joint ventures and associates | 15, 30 | 14,715 | 13,610 |
| Other financial assets | 16, 27 | 1,196 | 1,103 |
| Trade receivables, loans and other receivables | 17, 27 | 9,156 | 11,101 |
| Deferred tax assets | 10, 18 | 6,023 | 7,437 |
| Total | 696,286 | 701,348 | |
| Current assets | |||
| Inventories | 19, 31 | 93,025 | 89,783 |
| Biological assets | 13 | 3,130 | 3,171 |
| Trade and other receivables | 20, 27, 30, 31 | 113,684 | 108,813 |
| Current tax assets | 538 | 1,735 | |
| Cash and cash equivalents | 21, 27, 31 | 3,137 | 4,591 |
| Total | 213,514 | 208,093 | |
| Total assets | 1 | 909,800 | 909,441 |
| EQUITY AND LIABILITIES, EUR 1,000 | Note | 31 Dec 2017 | 31 Dec 2016 |
| Equity attributable to the shareholders of the parent company | |||
| Share capital | 48,055 | 48,055 | |
| Share premium | |||
| Treasury shares | -1,277 | -1,277 | |
| Other funds | -420 | -2,547 | |
| Invested unrestricted equity fund | 249,073 | 249,073 | |
| Translation differences | -50,795 | -44,736 | |
| Retained earnings | 173,937 | 161,162 | |
| Total | 10, 11, 18, 22, 27 | 418,573 | 409,730 |
| Non-controlling owners' share | 12,105 | 12,427 | |
| Total equity | 430,678 | 422,157 | |
| Non-current liabilities | |||
| Interest-bearing financial liabilities | 23, 27 | 122,424 | 177,864 |
| Deferred tax liabilities Other liabilities |
10, 18, 31 24, 27 |
47,231 8,066 |
49,167 10,814 |
| Pension obligations | 25 | 6,320 | 7,167 |
| Total | 184,041 | 245,012 | |
| Current liabilities | |||
| Interest-bearing financial liabilities | 23, 27 | 91,850 | 39,983 |
| Trade and other payables | 26, 27, 30, 31 | 202,130 | 199,564 |
| Current tax liabilities | 1,101 | 2,725 | |
| Total | 295,081 | 242,272 | |
| Total liabilities | 1 | 479,122 | 487,284 |
| Total equity and liabilities | 909,800 | 909,441 |
The notes on pages 57 to 95 are an integral part of the consolidated financial statements.
| of the parent company | Equity attributable to the owners | Non control ling owners' share |
Total equity |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Share | Share | Treasury | Other | Invested unrest ricted equity |
Trans lation diffe |
Retained | |||||
| EUR 1,000 | Note | capital | premium | shares | funds | fund | rences | earnings | Total | ||
| Equity on 1 Jan 2016 | 48,055 | 138,502 | -1,277 | -4,387 | 110,571 | -51,416 | 160,159 400,207 | 4,608 | 404,815 | ||
| Transfers between items |
-138,502 | 138,502 | 0 | 0 | |||||||
| Non-controlling interest related to acquisition of subsidiary |
24, 31 | -5,877 | -5,877 | 6,550 | 673 | ||||||
| Total comprehensive income for the financial period | |||||||||||
| Profit/loss for the accounting period |
18,189 | 18,189 | 1,364 | 19,553 | |||||||
| Other items of comprehensive income |
|||||||||||
| Cash flow hedges | 27 | 1,838 | 1,838 | 1,838 | |||||||
| Actuarial losses from pension benefits |
25 | -46 | -46 | -46 | |||||||
| Translation differences |
9, 10 | 2 | 6,680 | 6,682 | -95 | 6,586 | |||||
| Transactions with owners |
|||||||||||
| Dividend distribution |
22 | -11,263 | -11,263 | -11,263 | |||||||
| Equity on 31 Dec 2016 | 48,055 | 0 | -1,277 | -2,547 | 249,073 | -44,736 | 161,162 | 409,730 | 12,427 | 422,157 | |
| Minority share of divested subsidiary |
32 | 0 | -2,585 | -2,585 | |||||||
| Non-controlling interest related to acquisition of |
|||||||||||
| subsidiary | 24, 31 | -81 | -81 | -81 | |||||||
| Total comprehensive income for the financial period | |||||||||||
| Profit/loss for the accounting period | 25,859 | 25,859 | 2,509 | 28,368 | |||||||
| Other items of comprehensive income | |||||||||||
| Cash flow hedges | 27 | 2,126 | 2,126 | 2,126 | |||||||
| Actuarial losses from pension benefits |
25 | -51 | -51 | -51 | |||||||
| Translation differences |
9, 10 | 1 | -6,059 | -6,058 | -81 | -6,139 | |||||
| Transactions with owners |
|||||||||||
| Dividend distribution |
22 | -12,952 | -12,952 | -165 | -13,117 | ||||||
| Equity on 31 Dec 2017 | 48,055 | 0 | -1,277 | -420 | 249,073 | -50,795 | 173,937 | 418,573 | 12,105 | 430,678 | |
The notes on pages 57 to 95 are an integral part of the consolidated financial statements.
| EUR 1,000 | Note | 1 Jan –31 Dec 2017 | 1 Jan –31 Dec 2016 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Payments received from sales | 1,429,104 | 1,357,028 | |
| Payments received from other operating income | 2,817 | 2,950 | |
| Payments on operating expenses | -1,349,580 | -1,285,557 | |
| Interest paid and payments on other financial expenses | 9 | -16,443 | -13,892 |
| Interest payments received and other financial income | 9 | 8,322 | 11,561 |
| Direct taxes paid | 10 | -9,713 | -7,242 |
| Cash flow from operating activities | 64,507 | 64,848 | |
| Cash flow from investments | |||
| Investments in tangible and intangible assets | -53,144 | -42,641 | |
| Acquired businesses, net of cash acquired on the date of acquisition | 31 | -30,217 | |
| Sold operations, net of cash acquired on the date of sale | 32 | 4,030 | 5,241 |
| Change in long-term loan receivables | 2,309 | 1,413 | |
| Change in other investments | 671 | -1,250 | |
| Dividends received and returns of capital | 797 | 135 | |
| Cash flow from investments | -45,337 | -67,319 | |
| Cash flow from financing activities | |||
| Draw down of long-term loans | 113,257 | ||
| Repayment of long-term loans | -5,463 | -88,289 | |
| Increase (+)/decrease (-) in short-term loans | 1,986 | -9,581 | |
| Dividends paid | 22 | -13,117 | -11,263 |
| Cash flow from financing activities | -16,594 | 4,124 | |
| Change in cash and cash equivalents | 2,576 | 1,653 | |
| Cash and cash equivalents at the beginning of the financial period | 4,591 | 4,140 | |
| Effect of exchange rate changes | -4,030 | -1,202 | |
| Cash and cash equivalents at end of the financial period | 21 | 3,137 | 4,591 |
The notes on pages 57 to 95 are an integral part of the consolidated financial statements.
The parent company of the Atria Group, Atria Plc, is a Finnish public limited liability company established according to the laws of Finland and domiciled in Kuopio, Finland. The company has been listed on Nasdaq Helsinki Ltd. since 1991. Copies of the consolidated financial statements are available online at www.atria.com and at the parent company's head office at Itikanmäenkatu 3, Seinäjoki, Finland; postal address: PO Box 900, 60060 ATRIA, Finland.
Atria Plc and its subsidiaries manufacture and market food products, especially meat products, poultry products, meals and food concepts. Atria's market area covers Finland, Sweden, Denmark, European Russia and the Baltic countries. Atria's subsidiaries are also located in this area. In 2017, the Group's operations were divided into four business areas: Atria Finland, Atria Scandinavia, Atria Russia and Atria Baltic.
The financial statements were approved by the Board of Directors for publication on 14 February 2018. According to the Finnish Limited Liability Companies Act, the shareholders are entitled to approve or reject the financial statements in the Annual General Meeting (AGM) to be held after their publication. The AGM can also make a decision to revise the financial statements.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) approved for use in the EU. IAS and IFRS standards valid on 31 December 2017 have been followed, as well as SIC and IFRIC interpretations. The IFRS refer to standards and interpretations thereof approved for application in the EU in compliance with the proceedings provided in Regulation (EC) 1606/2002, as referred to in the Finnish Accounting Act and subsequent regulations. The notes to the consolidated financial statements also comply with Finnish accounting and corporate legislation.
The consolidated financial statements have been prepared on an acquisition cost basis with the exception of biological assets, available-for-sale financial assets, financial assets and liabilities measured at fair value through profit or loss and derivative financial instruments. From the moment of classification, the assets held for sale are measured at the lower of their book value and fair value less cost to sell.
The financial statement data is presented in thousands of euros, with sums rounded off to the nearest thousand.
• Disclosure Initiative – Amendments to IAS 7. From now on, companies must disclose changes in liabilities arising from financing activities. This covers changes arising from financing cash flows (such as the withdrawal and repayment of debts) as well as changes unrelated to cash flows, such as acquisitions, transfers, accrued interest and unrealised exchange rate differences. As a result of the amendment, Atria has added a reconciliation of interest-bearing liabilities in Note 23.
• IFRS 9, Financial Instruments, takes effect on 1 January 2018. IFRS 9 changes the classification and measurement of financial assets and liabilities, the determination of their impairment and the application principles of hedge accounting.
The new standard will not bring significant changes to the recognition and measurement of the Group's financial assets. • A majority of the Group's financial assets are trade receivables, loan receivables and other receivables. They are measured at amortised cost. According to the business model, these investments are kept until the due date and the cash flows based on the
The treatment of financial liabilities will not change. The rules concerning derecognition have been transferred as is from standard IAS 39 Financial Instruments: Recognition and Measurement.
The new rules applicable to hedge accounting will bring hedge accounting closer to the Group's risk management practices. More hedge relationships than before may meet the conditions for the application of hedge accounting, because the standard complies
with a more principled approach. The retrospective effectiveness testing and the 80–125 per cent effectiveness requirement pursuant to IAS 39 will be abandoned. In hedge relationships pursuant to IFRS 9, the amount of effectiveness is expected to be smaller than before. The impact in Atria Group will be related primarily to hedge accounting applicable to electricity, regarding which the systempriced risk and regional price difference risk can be treated separately in hedge accounting.
The Group will adopt the standard in the financial period beginning on 1 January 2018. The new rules will be applied in the Group retroactively as of 1 January 2018 in such a way that the practical aids permitted by the standard are exercised.
• IFRS 15 Revenue from Contracts with Customers, takes effect on 1 January 2018. The new standard replaces the IAS 11 and IAS 18 standards for the recognition of revenue and their interpretation.
IFRS 15 applies a five-step approach to the recognition of revenue based on contracts with customers by identifying contracts with customers and the separate performance obligations, determining the transaction price of the contract, allocating the transaction price to each of the separate performance obligations, and recognising the revenue as each performance obligation is satisfied.
The main principle of the new standard is that revenue is recognised when control over the goods or service is transferred to the customer. A majority of the Group's contracts with customers concern the sale of foodstuffs. Delivery usually takes place within 24 hours and control is transferred in connection with delivery.
The adoption of the standard has no significant effect on the Group's income statement, balance sheet or cash flow. IFRS 15 has no impact on the company's systems and processes.
The standard will be taken into use in the financial period beginning on 1 January 2018 non-retrospectively, through additional disclosure.
• IFRS 16 Leases, takes effect on 1 January 2019. The new standard will replace the current IAS 17, Leases.
IFRS 16 has an impact primarily on the accounting of lessees, because from a lessee's perspective, the standard abandons the current division into operating and finance leases. As a result, all other lease agreements, apart from low value and short-term leases, are recognised in the balance sheet. An asset and a financial liability applicable to the lease payment obligation will, in the future, be recognised with regard to applicable leases. The standard also has an effect on the income statement, given that overall costs are typically higher at the beginning of a lease's validity and lower towards its end. In addition, the lease expenses will be replaced by interest and depreciation, which will have an impact on key figures such as EBIT.
Lessors' accounting will not be subject to significant changes; instead, leases will continue to be classified as finance leases or operating leases.
Atria will commence an assessment concerning the adoption of the standard in 2017. The Group's leases have been identified and the requirements to be set for the system needed to manage leases have been mapped.
At the end of the financial period, the Group had noncancellable lease obligations of approximately EUR 30 million based on operating leases. The majority of these will be recognised in the balance sheet in accordance with IFRS 16. The evaluation of the adjustment resulting from the amended definition of lease term and the different treatment of changing leases and extension and termination options is still incomplete. Because of this, it is not yet possible to estimate the amount of the right-of-use assets and lease liabilities to be recognised in connection with the adoption of the new standard, nor how this will impact the Group's result and classification of cash flows in the future.
The standard will be adopted in the financial period beginning on 1 January 2019. The intention is to use a simplified procedure to carry out the transition and the comparative figures of the year preceding adoption will not to be adjusted.
When preparing the financial statements, discretion must be used in applying the accounting policies. In addition, the management must make assessments and assumptions that concern the future and affect assets and liabilities in relation to responsibilities, profits and costs. The realised values may deviate from the original assessments and assumptions.
The Group management must make discretionary decisions regarding the choice and application of accounting policies. This particularly affects cases where the IFRS norms in force contain alternative recognition, measurement or presentation procedures. The management has exercised discretion in the valuation and classification of assets and financial items, in the recognition of deferred tax assets and provisions, and in the classification of associated companies and joint ventures as materially significant.
The assessments are based on the management's best estimate at the end date of the reporting period. They are affected by previous experiences as well as assumptions about the future that are deemed the most likely at the end of the period and are related to the expected developments in the Group's financial environment. Any changes in the assessments and assumptions are recognised in the accounting period in which the assessment or assumption is adjusted and in all subsequent accounting periods.
The assets and liabilities acquired in business combinations are valued using the fair value at the time of acquisition. Situations in which there exist functioning markets that provide fair values for assets and liabilities are rare. This is why the measurement of fair value requires the management's discretion and assumptions. In the case of tangible assets, comparisons have been made with the market price of corresponding assets, and the assets have been tested for impairment due to their condition, age, wear and other similar factors. The fair value of intangible assets is determined based on assessments of asset cash flows. The management believes that the assessments and assumptions are sufficiently detailed to be used as the basis for fair value measurement.
The Group reviews any indication of the impairment of tangible and intangible assets at least at the end date of each reporting period. The Group conducts annual impairment tests on goodwill and intangible assets with indefinite useful lives. It also assesses any indication of impairment in accordance with the accounting policies.
Deferred tax assets are recognised for the amount which it is likely that taxable profit will be generated in the future, against which the temporary difference can be utilised. The Group assesses the principles for recognising deferred tax in connection with the financial statements. To this end, it has assessed how likely subsidiaries are to have recoverable taxable income against which the unused tax losses or unused tax credits can be utilised.
The consolidated financial statements include the parent company Atria Plc and all of its subsidiaries. Subsidiaries are companies over which the Group has control. The group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries acquired during the financial year are consolidated from the date of their acquisition and divested subsidiaries are included up to their date of sale.
The acquisition method of accounting is used to account for acquisitions of separate entities or businesses by the Group. Consideration transferred and the identifiable acquired assets and assumed liabilities of the acquired business are measured at fair value at acquisition date. Consideration transferred includes the fair value of an asset or liability arising from a contingent consideration arrangement. The costs of acquisition are charged to the income statement in the period in which they are incurred and the related services are received. The net assets and accepted and contingent liabilities acquired in business combinations are valued at fair value at the time of the acquisition. The interest of non-controlling owners in the acquisition target is recognised on acquisition basis either at fair value or based on their relative share of the identifiable net assets of the acquisition target.
Where the consideration transferred together with the non-controlling interest and the fair value of the previously held interest exceeds the fair value of the acquired net assets, the excess is recorded as goodwill in the balance sheet. If the sum total of the consideration, the amount of the non-controlling interest and previously held interest is less than the fair value of the acquired net assets, the difference is recorded in the income statement.
All intra-Group transactions, receivables and liabilities and income and expenses are eliminated. Profits and losses due to intra-Group transactions leading to the recognition of an asset are also eliminated. The accounting policies applied by subsidiaries have been, where necessary, revised to match the Group policies.
The parent company's changes of ownership of the subsidiaries, which do not lead to a loss of control, are treated as equity transactions. When shares are purchased from non-controlling shareholders, the difference between the consideration paid and the book value of the share acquired of the net assets of the subsidiary is recognised in equity. Profit or loss from the sale of shares to noncontrolling shareholders is also recognised in equity.
When the control or major influence by the Group ceases to exist, any remaining interest is measured at fair value on the date of the loss of control and the change in book value is recognised in the income statement. This fair value serves as the original book value when the remaining interest is later recognised as an associated company, joint venture or financial assets. In addition, the amounts of said entity previously recognised in other comprehensive income are treated as if the Group had directly disposed of the associated assets and liabilities. This may mean that amounts previously recognised as other comprehensive income are reclassified to the income statement.
Associates are companies in which the Group holds voting rights of between 20 per cent and 50 per cent and in which the Group has significant influence but which is does not control.
A joint arrangement is an arrangement in which two or more parties have joint control. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. The Group's joint arrangements are joint ventures.
Investments in associates and joint ventures are consolidated using the equity method. When using the equity method, the investment is initially recognised at acquisition cost and this amount is increased or decreased to recognise the investor's share of the subsequent profits or losses of the investee after the time of acquisition. The Group's investment in associates and joint ventures includes any goodwill identified on the acquisition.
If the interest in an associate company is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified as profit or loss.
The Group's share of associates' post-acquisition profits or losses is recognised under operating profit in the income statement. The book value of the investment is adjusted accordingly. If the Group's share of the loss of an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group will not recognise further losses if it does not have a legal or factual obligation to do so and it has not made payments on behalf of the associate.
Items included in the financial statements of each of the Group companies are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in euros (EUR), which is the parent company's functional currency and the parent company's and the Group's presentation currency.
Foreign currency transactions are translated using the exchange rates prevailing at the dates of the transactions. Foreign currency receivables and liabilities are translated using the exchange rate prevailing at the end of the reporting period. Exchange differences arising from translation are recognised in the income statement and presented within operating profit. Exchange gains and losses from forward exchange agreements protecting financial transactions are included in financial income and expenses as part of the fair value change of the agreements. Those exchange rate changes of derivative financial instruments that are qualifying cash flow hedges or are used to effectively protect foreign net investments and net investment related loans have been recognised in other comprehensive income.
The income statements and balance sheet items of the Group companies outside the euro area are accounted for in the currency that is the currency of the operating region of the company in question. The income statements of Group companies outside the euro area are translated into euros at the average exchange rate for the accounting period and the balance sheets at the closing exchange rate. Differences resulting from the translation are recognised as part of translation differences in other comprehensive income. The translation differences arising from the elimination of the acquisition costs of subsidiaries outside the euro area and the hedge profits deriving from the corresponding net investments are recognised in other comprehensive income as well. When a foreign operation is partially disposed of or sold, exchange rate differences in equity are recognised in the income statement.
Goodwill and fair value adjustments arising on the acquisition of the foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
Property, plant and equipment are stated at the cost of purchase or construction less accumulated depreciation and impairment losses.
If the tangible fixed asset consists of several parts with different useful lives, each part is treated as a separate asset. The costs arising from replacing the part are capitalised. Other subsequent expenditure is included in the acquisition cost only if it is probable that the future benefit connected to the asset will benefit the Group, and the acquisition cost of the asset can be reliably determined. All other repair and maintenance costs are recognised in the income statement as an expense as incurred.
Depreciation is recorded using a straight-line method over the estimated useful lives of the assets as follows:
No depreciation is carried out on land and water. Asset items that cannot be recognised under property, plant and equipment due to their nature or depreciation periods are recognised as other tangible assets.
The residual value and useful life of assets are reviewed annually at the closing of the accounts and, if necessary, adjusted so that the book value is equal to the recoverable amount.
The depreciation of property, plant and equipment ends when the asset item is classified as available for sale in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations.
Gains and losses on the disposal or transfer of property, plant or equipment are included in other operating income or expenses.
Lease contracts concerning tangible assets in which the Group has a significant share of the risks and rewards related to ownership are classified as finance leases. Finance leases are entered in the balance sheet at the fair value of the leased asset on the day the lease period begins, or at a lower value that corresponds to the present value of the minimum lease payments. The depreciation of assets acquired from finance leases is made for the period of their useful life or a shorter leasing period. Lease payments are apportioned between a finance charge and debt amortisation over the lease period, so that the interest rate for the outstanding liability in each financial year remains constant. Lease obligations are included in interest-bearing debts.
Leases where the risks and rewards related to ownership remain with the lessor are accounted for as operating leases, where rental payments are recognised as expenses in the income statement during the lease period.
Goodwill represents the Group's share of difference between the consideration transferred and the identifiable acquired assets and assumed liabilities measured at fair value at the acquisition date. Goodwill is tested annually for impairment. For this purpose, goodwill has been allocated to cash-generating units. The Group's cash-generating units are classified by business segment based on the operations and location of subsidiaries. They are Atria Finland, Atria Scandinavia, Atria Russia and Atria Baltic.
Goodwill is entered in the balance sheet at cost less impairment losses. An impairment loss recognised for goodwill is not reversed.
An Intangible asset is initially capitalised in the balance sheet at cost if the cost can be measured reliably and it is probable that the company will receive future economic benefit from the asset.
Intangible assets with a limited useful life are amortised on a straight-line method over their estimated useful lives. Intangible assets with indefinite useful lives are not amortised, but instead they are tested annually for impairment.
Depreciation is recorded using a straight-line method as follows:
| • Customer relationships 3–8 years | |
|---|---|
| • Trademarks 5–20 years | |
| • Other intangible assets *)5–10 years |
*) Includes software and subscription fees
On each closing date, the Group reviews intangible and tangible assets to see whether there are any indications of impairment. If there are such indications, the recoverable amount from said asset is estimated. The recoverable amount of cash from goodwill and intangible assets with indefinite useful lives is assessed annually and whenever indications of impairment are detected. The recoverable amount is the higher of the present value of the future cash flows (value in use) and the fair value of the asset less costs of disposal. If the recoverable amount cannot be assessed per item, the impairment need is observed on the level of cash-flow generating units, i.e. at the lowest unit level which is mainly independent of other units and at which cash flows can be distinguished from other cash flows.
Impairment loss is recognised if the book value of the asset is higher than the recoverable amount. Impairment loss is recognised immediately in the income statement. If the impairment loss arises with regard to a cash-generating unit, it is first allocated to reduce the goodwill and then to reduce the other assets of the unit pro rata. The useful life of the depreciated asset is re-evaluated in conjunction with the recognition of an impairment loss. An impairment loss recognised for an asset other than goodwill is reversed if there has been a change in the estimates used to determine the amount recoverable from the said asset. However, the impairment loss may not be reversed in excess of what the asset's book value would be without the recognition of the impairment loss. An impairment loss recognised for goodwill is never reversed.
Inventories are measured at the lower of cost or probable net realisable value. The cost is determined using the first-in first-out (FIFO) method. The acquisition cost for finished and unfinished products consists of raw materials, direct labour costs, other direct costs, and the appropriate share of manufacturing-related variable overheads and fixed overheads at a normal level of operations. The net realisable value is the estimated selling price in the ordinary course of business, less the estimated selling expenses.
The Group's biological assets are living animals. They are measured at fair value, less estimated sales-related expenses. Productive animals are included in tangible assets and other animals are included in inventories.
The fair value of productive animals has been measured at cost less an expense corresponding to a reduction of value in use caused by aging. There is no available market price for productive animals. The fair value of slaughter animals equals their market price, which is based on the company's slaughter animal procurement/sales in the local market.
The Group's financial assets are classified in the following categories:
The classification is made on their purpose of use, and the assets are classified in connection with the initial recognition.
Regular purchases and sales of financial assets are recognised or derecognised using trade date i.e. the date on which the Group undertakes to purchase or sell the asset. Financial assets are classified as non-current assets when they fall due more than 12 months from the closing date. If the financial assets are intended to be kept for less than 12 months, they are classified as current assets. The Group derecognises financial assets when it has lost its right to receive the cash flows or when it has substantially transferred all the risks and rewards of ownership to an external party.
At the end of each reporting period the Group assesses whether there is objective evidence that a financial asset or group of financial assets is impaired if they have not been measured at the fair value from the beginning of the period.
Financial assets that are held for trading are classified in this category. Financial assets held for trading are acquired mainly to generate profit from changes in short-term market prices. The derivatives used by the Group that are not subject to hedge accounting in accordance with IAS 39 have been classified as held for trading. The assets belonging to this category have been classified as current assets and are carried at fair value.
Unrealised and realised profits and losses due to changes in the fair value of the "financial assets at fair value through profit or loss" category are recognised in the income statement in the accounting period in which they occur.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The trade and other receivables as well as cash and cash equivalents are included in the Group's loans and receivables. They are recognised at amortised cost.
Available-for-sale financial assets are non-derivative assets that have been classified in this category or that have not been classified in any other category. They are included in non-current assets unless they fall due or are intended to be kept for less than 12 months from the closing date, in which case they are included in current assets. Exchange differences and changes in the fair value of assets classified as available for sale are recognised under other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value changes in equity are included in the income statement as financial income and expenses. Dividends on available-for-sale equity instruments are recognised in the income statement when the Group's right to receive payments is established as financial income. The fair values of quoted financial assets are determined based on the market value. If the market for a financial asset is not active (and for unlisted securities), fair value is established through valuation techniques. These include the use of recent arm's-length transactions between independent parties, fair values of other instruments that are substantially similar and discounted cash flow analysis. The models make maximum use of market inputs and they rely as little as possible on entity-specific inputs.
When derivative contracts are entered into, they are recognised at fair value and subsequently they are re-measured at their fair value. The recognition of changes in the fair value of derivatives depends on whether the derivative instrument qualifies for hedge accounting and, if so, on the hedged item. The Group designates certain derivatives as either: • interest rate hedges, currency or electricity price risks associated with a recognised asset or liability or a highly probable forecast
transaction (cash flow hedge); or
• net investment hedges in a foreign operation (a net investment hedge).
The relationship between hedging instruments and hedged items is documented at the inception of the hedging transaction. Risk management objectives and strategies for undertaking various hedge transactions are documented as well. The Group documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedge transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as current assets or liabilities.
The fair value of forward exchange agreements is calculated by applying the forward rate on the balance sheet date. The fair value of interest rate swaps is calculated by discounting the future cash flows using interest rate curves for the currencies in question. Electricity derivatives are measured at fair value using the market prices at the balance sheet date.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in other comprehensive income and accumulated in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement under the appropriate item. Gains and losses accumulated in equity are re-reclassified in the income statement in the periods when the hedged item affects profit or loss (for example, when the forecast purchase that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventories or fixed assets), the gains and losses previously deferred in equity are transferred from equity and included in the initial acquisition cost of the asset. The deferred amounts are ultimately recognised in costs of goods sold in case of inventories, or in depreciations in case of fixed assets. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at the time remains in equity and is recognised in the income statement only when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement under the appropriate account.
Hedges of net investments in foreign operations are accounted for in the same way as cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other items of the total comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Gains and losses accumulated in equity are included in the income statement when the foreign operation is partially disposed of or sold.
Certain derivative financial instruments do not meet the criteria for hedge accounting. All changes in the fair value of these derivatives are immediately recognised in the appropriate account of the income statement.
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment.
Cash and cash equivalents comprise cash and bank deposits available on demand. Available credit limits are included in current interest-bearing liabilities.
Non-current assets are classified as held for sale if their book value is to be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary. Furthermore, management must be committed to the sale, which should be expected to occur within one year of the date of classification.
Immediately before being classified as held for sale, these assets are measured in accordance with the applicable IFRS standards. Thereafter, the assets are measured at the lower of their book value and fair value less cost to sell. These assets are no longer depreciated after the classification.
Ordinary shares are presented as share capital. Expenses related to the issue or acquisition of equity instruments are presented as a deductible item under equity.
If a Group company acquires shares in the company, the consideration paid for them and the expenses arising directly from the acquisition, taking into consideration the tax effect, are deducted from the shareholders' equity until the shares are either cancelled or reissued. If the shares are reissued, the consideration received for them less transaction costs directly attributable to the shares is included in the shareholders' equity, taking into consideration the tax effect.
Financial liabilities (other than derivative instruments) are initially recognised at the fair value net of the transaction costs incurred. They are later measured at amortised cost using the effective interest rate method. Financial liabilities are classified as current or non-current liabilities.
A one-off credit fee related to committed credit facilities is recognised as prepayment for liquidity services and amortised over the period of the facility to which it relates. The credit limit fees related to such facilities are similarly expensed based on the passing of time.
A provision is entered when the Group has, as a result of a past event, a legal or constructive obligation, and it is probable that an outflow of resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are valued at the present value of the expenses required to cover the obligation. The amounts of provisions are reviewed on each closing date and adjusted to correspond to the best estimate at that time. Changes in provisions are recognised in the income statement in the same item where the original provision was entered.
Net sales are determined on the basis of the fair value of considerations received or to be received for the sale of products and services, raw materials and supplies, and are adjusted by indirect taxes and discounts based on normal contractual principles applied in the industry. Revenue from the sale of goods is recognised when the risks and rewards of owning the goods have been transferred to the buyer and revenue from services when the service has been completed. Rental income is recognised on a straight-line basis over the lease period.
Interest rates are recognised based on the passing of time, taking into account the effective income from the asset. Dividend income is recognised when the shareholders' right to payment is established.
The Group companies have various pension plans in accordance with local conditions and practises throughout the operating countries. Pension arrangements are classified as either defined contribution plans or defined benefit pension plans.
In defined contribution plans, the Group makes fixed payments into a separate unit. The Group has no legal or constructive obligation to make additional payments if the recipient of the payments cannot pay the pension benefits in question. All plans that do not fulfil these conditions are defined benefit pension plans.
Payments made into defined contribution plans are recognised in the income statement in the reporting period to which they apply. The Group's pension plans are mainly defined contribution plans.
In defined benefit plans the company still has an ongoing obligation for the plan even after the payment for the period has been made. For arrangements classified as defined benefit plans, actuarial estimates acquired on a yearly basis serve as the grounds for recognising an expense and liability or asset in the financial statements. Actuarial gains or losses are recognised as equity refunds or a charge in other comprehensive income in the financial period in which they occur.
Atria's long-term incentive plan includes an earning period consisting of periods of three years.
Possible payments from the earning period implemented in 2015–2017 was based on the Group's earnings per share (EPS) excluding non-recurring items. Bonuses earned during the period will be paid in instalments in the coming years. Cash rewards payable under the plan for the entire 2015–2017 earning period are capped at EUR 4.5 million. The plan will end on 31 December 2017, and it covers a maximum of 45 people.
Research expenditure is recognised as an expense in the income statement. Expenditure on development activities related to new products is capitalised in the balance sheet when there is enough certainty that the future economic benefits are expected to be available from the product and the Group has the intention and resources to finalise the development. Capitalised development expenditure is recognised in project-specific expenses over the useful life of the product. The asset is amortised from the time it is ready for use. The Group has no capitalised development expenses.
Grants received as compensation for expenses are recognised in the income statement, while expenses connected with the grant are entered as costs. Such grants are entered under other operating income. The nature of the grants varies from one country to the next and the grants are only recognised after all the terms and conditions of the grant have been met, so the company does not have a repayment obligation regarding grants received.
Government grants, such as grants received for the acquisition of property, plant and equipment, are recognised as a deduction in the book value of property, plant and equipment when it is reasonably certain that the grant will be received and that the Group company fulfils the prerequisites for receiving the grant. Grants are recognised as income in the form of lower depreciation during the useful life of the asset.
The Group income statement includes the current taxes of Group companies based on taxable profit for the financial period according to local tax regulations as well as adjustments to prior year taxes and changes in deferred taxes. Taxes are entered in the income statement unless they are related to other comprehensive income or to items recognised directly in equity. In this case the tax is also entered in other comprehensive income or directly in equity. The taxes, based on taxable profit for the financial year, are calculated using the current tax rate of each country.
Deferred taxes are recognised from all temporary differences between the book value and the tax base. The biggest temporary differences arise from the depreciation of property, plants and equipment and fair value measurements in connection with acquisitions. No deferred tax is recognised for non-deductible goodwill impairment, and no deferred tax is recognised for the undistributed profits of subsidiaries if the difference is not likely to dissolve in the foreseeable future.
Deferred tax is calculated using the tax rates provided on the balance sheet date. Deferred tax assets are recognised to the amount for which it is likely that taxable profit will be generated in the future against which the temporary difference can be utilised. Deferred tax assets are recognised for confirmed losses made by Group companies in amounts for which it is likely that the assets can be utilised to offset future taxable profits.
The Group's operating segments are based on the Group's internal organisational structure and internal financial reporting, which Atria's Board of Directors uses in strategic and operative decision-making. The Board of Directors assesses the performance of the operating segments based on net sales, EBIT and return on capital employed for the year. The Group has four recognisable geographical segments that differ essentially from one another in terms of the functioning of the markets. They are Atria Finland, Atria Scandinavia, Atria Russia and Atria Baltic. In addition, Group costs are now reported separately in unallocated items. Group costs consist of personnel and administration costs as well as other costs that are not allocated to the business areas. A segment's assets and liabilities are items that can be directly attributed or reasonably allocated to the segment. Transactions between the segments take place at market prices.
The Group has two major customers, and the value of the trade with each of them forms between 10 per cent and 15 per cent of the Group's net sales. The net sales in question are reported in the operating segments Finland, Russia and Baltic.
| Operating segments | Atria Finland |
Atria Scandinavia |
Atria Russia |
Atria Baltic |
Unallocated Eliminations | Group | |
|---|---|---|---|---|---|---|---|
| Accounting period that ended on 31 Dec 2017 | |||||||
| Net sales | |||||||
| External | 969,375 | 343,221 | 85,713 | 37,879 | 1,436,188 | ||
| Internal | 17,034 | 11,835 | -28,869 | 0 | |||
| Total net sales | 986,409 | 355,056 | 85,713 | 37,879 | 0 | -28,869 | 1,436,188 |
| EBIT | 36,305 | 4,813 | 812 | 2,719 | -3,745 | 40,904 | |
| Financial income and expenses | -7,294 | ||||||
| Income from joint ventures and associates | 1,904 | ||||||
| Income taxes | -7,146 | ||||||
| Profit for the period | 28,368 | ||||||
| Assets | 480,709 | 341,450 | 66,037 | 28,904 | -7,300 | 909,800 | |
| Liabilities | 234,521 | 210,412 | 36,107 | 5,382 | -7,300 | 479,122 | |
| Investments | 23,368 | 24,283 | 2,916 | 3,371 | 53,938 | ||
| Depreciation and impairment |
26,534 | 12,469 | 4,693 | 2,358 | 46,054 | ||
| Items affecting comparability*: | |||||||
| Sale of a subsidiary | 1,350 | 1,350 | |||||
| Adjusted EBIT | 36,305 | 3,463 | 812 | 2,719 | -3,745 | 0 | 39,554 |
*) The categorisations into items affecting comparability are unaudited.
| Operating segments | Atria Finland |
Atria Scandinavia |
Atria Russia |
Atria Baltic |
Unallocated Eliminations | Group | |
|---|---|---|---|---|---|---|---|
| Accounting period that ended on 31 Dec 2016 | |||||||
| Net sales | |||||||
| External | 913,421 | 332,159 | 71,750 | 34,422 | 1,351,752 | ||
| Internal | 18,873 | 11,219 | -30,092 | 0 | |||
| Total net sales | 932,294 | 343,378 | 71,750 | 34,422 | 0 | -30,092 | 1,351,752 |
| EBIT | 24,174 | 8,394 | -657 | 698 | -847 | 31,762 | |
| Financial income and expenses | -6,317 | ||||||
| Income from joint ventures and associates | 679 | ||||||
| Income taxes | -6,571 | ||||||
| Profit for the period | 19,553 | ||||||
| Assets | 483,453 | 344,465 | 73,201 | 32,856 | -24,534 | 909,441 | |
| Liabilities | 251,510 | 210,921 | 43,245 | 6,142 | -24,534 | 487,284 | |
| Investments | 46,622 | 30,887 | 2,497 | 2,895 | 82,901 | ||
| Depreciation and impairment |
28,496 | 12,014 | 4,126 | 2,258 | 46,894 | ||
| Items affecting comparability*: | |||||||
| Pig farm sale | -1,019 | -1,019 | |||||
| Sale of the real estate company |
1,417 | 1,417 | |||||
| Adjusted EBIT | 24,174 | 6,977 | -657 | 1,717 | -847 | 0 | 31,364 |
*) The categorisations into items affecting comparability are unaudited.
| 2. NET SALES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Sale of goods | 1,423,646 | 1,341,708 |
| Services, rents and other sales | 12,542 | 10,044 |
| Total | 1,436,188 | 1,351,752 |
| 3. RESEARCH AND DEVELOPMENT EXPENSES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Research and development costs recognised as expenditure | 12,889 | 13,136 |
| 4. REMUNERATIONS PAID TO AUDITORS, EUR 1,000 2017 |
2016 |
|---|---|
| Firm of authorised public accountants: | ||
|---|---|---|
| Auditing fees | 352 | 351 |
| Reports and statements | 13 | 14 |
| Total | 365 | 365 |
| 5. OTHER OPERATING INCOME, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Proceeds from sales of fixed assets *) | 1,515 | 1,537 |
| Grants received | 1,259 | 913 |
| Other | 2,920 | 2,115 |
| Total | 5,694 | 4,565 |
*) Atria divested its 51 per cent holding in the subsidiary Nordic Fastfood AB on 1 December 2017. The transaction price was EUR 4.0 million. Atria Scandinavia recognised a sales gain of EUR 1.4 million from the transaction.
In Sweden, Atria sold the real estate company KB Joddlaren on 1 June 2016. The company owns a logistics property in Gothenburg. The transaction price was EUR 3.8 million and Atria Scandinavia recognised a EUR 1.4 million sales gain from the transaction.
| 6. OTHER OPERATING EXPENSES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Sales loss from fixed assets *) | 16 | 1,029 |
| Depreciation and impairment of intangible assets | 3,651 | 2,729 |
| Other | -624 | 997 |
| Total | 3,043 | 4,755 |
*) Atria sold a pig farm located in northern Estonia during the 2016 financial period. The sale of the pig farm gave rise to a sales loss of approximately EUR 1 million, recognised in other operating expenses.
| 7. PERSONNEL EXPENSES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Expenses from employee benefits: | ||
| Salaries | 189,587 | 181,556 |
| Pension costs – defined-contribution plans | 28,244 | 28,797 |
| Pension costs – defined-benefit plans | -25 | -16 |
| Other staff-related expenses | 23,795 | 22,459 |
| Total | 241,601 | 232,796 |
| Information on employee benefits for managerial employees is presented in note 30. | ||
| Expenses from employee benefits by function: | ||
| Costs of goods sold | 188,048 | 180,149 |
| Sales and marketing expenses | 30,782 | 30,136 |
| Administrative expenses | 22,771 | 22,511 |
| Total | 241,601 | 232,796 |
| Group personnel on average by business area (FTE): | ||
| Finland | 2,314 | 2,214 |
| Scandinavia | 996 | 980 |
| Russia | 860 | 819 |
| Baltic countries Total |
279 4,449 |
302 4,315 |
| 8. DEPRECIATION AND IMPAIRMENT, EUR 1,000 | 2017 | 2016 |
| Depreciation and impairment by function: | ||
| Costs of goods sold | 35,849 | 38,922 |
| Sales and marketing expenses | 3,302 | 2,420 |
| Administrative expenses | 3,009 | 2,823 |
| Other operating expenses | 3,894 | 2,729 |
| Total | 46,054 | 46,894 |
| 9. FINANCIAL INCOME AND EXPENSES, EUR 1,000 | 2017 | 2016 |
| Financial income: | ||
| Interest income from loan receivables | 2,024 | 2,373 |
| Exchange rate gains from financial liabilities and loan receivables measured at amortised cost | 3,055 | 4,086 |
| Other financial income | 1 | |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| - Derivative instruments - not in hedge accounting *) | 6,837 | 7,292 |
| Total | 11,917 | 13,751 |
| Financial expenses: | ||
| Interest expenses from financial liabilities measured at amortised cost | -8,030 | -7,805 |
| Exchange rate losses from financial liabilities and loan receivables measured at amortised cost | -7,288 | -6,005 |
| Other financial expenses | -1,168 | -1,090 |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| – Derivative instruments – not in hedge accounting **) | -2,725 | -5,168 |
| Total | -19,211 | -20,068 |
| Total financial income and expenses | -7,294 | -6,317 |
| Items related to financial instruments and recognised in other items of total comprehensive income before taxes: | ||
| Cash flow hedges | 2,663 | 2,304 |
| Translation differences | -6,139 | 6,586 |
| Total | -3,476 | 8,890 |
| 7. PERSONNEL EXPENSES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Expenses from employee benefits: | ||
| Salaries | 189,587 | 181,556 |
| Pension costs – defined-contribution plans | 28,244 | 28,797 |
| Pension costs – defined-benefit plans | -25 | -16 |
| Other staff-related expenses | 23,795 | 22,459 |
| Total | 241,601 | 232,796 |
| Information on employee benefits for managerial employees is presented in note 30. | ||
| Expenses from employee benefits by function: | ||
| Costs of goods sold | 188,048 | 180,149 |
| Sales and marketing expenses | 30,782 | 30,136 |
| Administrative expenses | 22,771 | 22,511 |
| Total | 241,601 | 232,796 |
| Group personnel on average by business area (FTE): | ||
| Finland | 2,314 | 2,214 |
| Scandinavia | 996 | 980 |
| Russia | 860 | 819 |
| Baltic countries | 279 | 302 |
| Total | 4,449 | 4,315 |
| 8. DEPRECIATION AND IMPAIRMENT, EUR 1,000 | 2017 | 2016 |
| Depreciation and impairment by function: | ||
| Costs of goods sold | 35,849 | 38,922 |
| Sales and marketing expenses | 3,302 | 2,420 |
| Administrative expenses | 3,009 | 2,823 |
| Other operating expenses | 3,894 | 2,729 |
| Total | 46,054 | 46,894 |
| 9. FINANCIAL INCOME AND EXPENSES, EUR 1,000 | 2017 | 2016 |
| Financial income: | ||
| Interest income from loan receivables | 2,024 | 2,373 |
| Exchange rate gains from financial liabilities and loan receivables measured at amortised cost | 3,055 | 4,086 |
| Other financial income | 1 | |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| - Derivative instruments - not in hedge accounting *) | 6,837 | 7,292 |
| Total | 11,917 | 13,751 |
| Financial expenses: | ||
| Interest expenses from financial liabilities measured at amortised cost | -8,030 | -7,805 |
| Exchange rate losses from financial liabilities and loan receivables measured at amortised cost | -7,288 | -6,005 |
| Other financial expenses | -1,168 | -1,090 |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| – Derivative instruments – not in hedge accounting **) | -2,725 | -5,168 |
| Total | -19,211 | -20,068 |
| Total financial income and expenses | -7,294 | -6,317 |
| Items related to financial instruments and recognised in other items of total comprehensive income before taxes: | ||
| Cash flow hedges | 2,663 | 2,304 |
| Translation differences | -6,139 | 6,586 |
| Total | -3,476 | 8,890 |
| 7. PERSONNEL EXPENSES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Expenses from employee benefits: Salaries |
189,587 | 181,556 |
| Pension costs – defined-contribution plans | 28,244 | 28,797 |
| Pension costs – defined-benefit plans | -25 | -16 |
| Other staff-related expenses | 23,795 | 22,459 |
| Total | 241,601 | 232,796 |
| Information on employee benefits for managerial employees is presented in note 30. | ||
| Expenses from employee benefits by function: | ||
| Costs of goods sold | 188,048 | 180,149 |
| Sales and marketing expenses | 30,782 | 30,136 |
| Administrative expenses | 22,771 | 22,511 |
| Total | 241,601 | 232,796 |
| Group personnel on average by business area (FTE): | ||
| Finland | 2,314 | 2,214 |
| Scandinavia | 996 | 980 |
| Russia | 860 | 819 |
| Baltic countries | 279 | 302 |
| Total | 4,449 | 4,315 |
| 8. DEPRECIATION AND IMPAIRMENT, EUR 1,000 | 2017 | 2016 |
| Depreciation and impairment by function: | ||
| Costs of goods sold | 35,849 | 38,922 |
| Sales and marketing expenses | 3,302 | 2,420 |
| Administrative expenses | 3,009 | 2,823 |
| Other operating expenses | 3,894 | 2,729 |
| Total | 46,054 | 46,894 |
| 9. FINANCIAL INCOME AND EXPENSES, EUR 1,000 | 2017 | 2016 |
| Financial income: | ||
| Interest income from loan receivables | 2,024 | 2,373 |
| Exchange rate gains from financial liabilities and loan receivables measured at amortised cost | 3,055 | 4,086 |
| Other financial income | 1 | |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| - Derivative instruments - not in hedge accounting *) | 6,837 | 7,292 |
| Total | 11,917 | 13,751 |
| Financial expenses: | ||
| Interest expenses from financial liabilities measured at amortised cost | -8,030 | -7,805 |
| Exchange rate losses from financial liabilities and loan receivables measured at amortised cost | -7,288 | -6,005 |
| Other financial expenses | -1,168 | -1,090 |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| – Derivative instruments – not in hedge accounting **) | -2,725 | -5,168 |
| Total | -19,211 | -20,068 |
| Total financial income and expenses | -7,294 | -6,317 |
| Items related to financial instruments and recognised in other items of total comprehensive income before taxes: | ||
| Cash flow hedges | 2,663 | 2,304 |
| Translation differences | -6,139 | 6,586 |
| Total | -3,476 | 8,890 |
*) Derivative income related to rouble-denominated currency hedges was EUR 1.8 million (EUR 0.7 million). **) Derivative expenses related to rouble-denominated currency hedges were EUR 1.1 million (EUR 2.8 million).
| 10. INCOME TAXES, EUR 1,000 | 2017 | 2016 | |
|---|---|---|---|
| Taxes in the income statement: | |||
| Tax based on the taxable profit for the period | 7,748 | 5,778 | |
| Retained taxes | 17 | 789 | |
| Deferred tax | -619 | 4 | |
| Total | 7,146 | 6,571 | |
| Balancing of taxes in income statement and profit before taxes: | |||
| Profit before taxes | 35,514 | 26,124 | |
| Taxes calculated with the parent company's 20.0 per cent tax rate | 7,103 | 5,225 | |
| Effect of foreign subsidiaries' deviating tax rates | -499 | -304 | |
| Retained taxes | -195 | 789 | |
| Effect of income from joint ventures/associates | -381 | -136 | |
| Effect of tax-free income | -129 | -207 | |
| Effect of costs that are non-deductible in taxation | 581 | 136 | |
| Unrecognised deferred tax assets | 578 | 1,141 | |
| Changes in tax rate | 2 | ||
| Other changes | 88 | -75 | |
| Total | 7,146 | 6,571 | |
| Taxes recognised in other items of total comprehensive income | Before tax | Tax effects | After tax |
| 2017: | |||
| Cash flow hedges | 2,662 | -536 | 2,126 |
| Actuarial losses from pension obligations | -66 | 15 | -51 |
| Translation differences | -6,139 | -6,139 | |
| Total | -3,543 | -521 | -4,064 |
| 2016: | |||
| Cash flow hedges | 2,302 | -464 | 1,838 |
| Actuarial losses from pension obligations | -59 | 13 | -46 |
| Translation differences | 6,586 | 6,586 |
Total 8,829 -451 8,378
| 11. EARNINGS PER SHARE, EUR 1,000 | 2017 | 2016 |
|---|---|---|
Basic earnings per share are calculated by dividing the parent company's shareholder's profit for the period by the weighted average number of outstanding shares.
| Profit (+)/loss (-) for the accounting period attributable to the owners of the parent company | 25,859 | 18,189 |
|---|---|---|
| Weighted average of shares for the period (1,000 pcs) | 28,156 | 28,156 |
| Basic earnings per share | 0.92 | 0.65 |
When calculating the earnings per share adjusted by the dilution effect, the dilution effect from all potential dilutive conversions of ordinary shares is taken into account in the weighted average number of shares.
| Land and water |
Buildings and structures |
Machinery and equipment |
Other tangible assets |
Acquisitions in progress |
Total | |
|---|---|---|---|---|---|---|
| Acquisition cost, 1 Jan 2017 | 9,738 | 453,475 | 615,055 | 10,792 | 47,593 | 1,136,653 |
| Increases | 26,686 | 53,507 | 1,561 | 81,754 | ||
| Decreases | -8,088 | -40 | -31,422 | -39,550 | ||
| Exchange differences | -366 | -3,850 | -6,820 | -535 | 491 | -11,080 |
| Acquisition cost, 31 Dec 2017 | 9,372 | 476,311 | 653,654 | 11,778 | 16,662 | 1,167,777 |
| Accumulated depreciation and impairment, 1 Jan 2017 |
0 | -224,323 | -502,928 | -5,402 | -26 | -732,679 |
| Decreases | 6,733 | 40 | 6,773 | |||
| Depreciation | -11,325 | -27,048 | -1,843 | -40,216 | ||
| Exchange differences | 1,429 | 5,257 | 324 | 7,010 | ||
| Accumulated depreciation and impairment, 31 Dec 2017 |
0 | -234,219 | -517,986 | -6,881 | -26 | -759,112 |
| Book value, 1 Jan 2017 | 9,738 | 229,152 | 112,127 | 5,390 | 47,567 | 403,974 |
| Book value, 31 Dec 2017 | 9,372 | 242,092 | 135,668 | 4,897 | 16,636 | 408,665 |
| Land and water |
Buildings and structures |
Machinery and equipment |
Other tangible assets |
Acquisitions in progress |
Total | |
| Acquisition cost, 1 Jan 2016 | 9,652 | 452,089 | 587,588 | 8,484 | 25,322 | 1,083,135 |
| Acquisition of a subsidiary | 2 | 5,241 | 13,729 | 37 | 77 | 19,086 |
| Increases | 50 | 3,477 | 19,897 | 977 | 38,777 | 63,178 |
| Decreases | -610 | -13,016 | -5,792 | -1 | -16,911 | -36,330 |
| Exchange differences | 644 | 5,684 | -367 | 1,295 | 328 | 7,584 |
| Acquisition cost, 31 Dec 2016 | 9,738 | 453,475 | 615,055 | 10,792 | 47,593 | 1,136,653 |
| Accumulated depreciation and impairment, 1 Jan 2016 | -217,981 | -466,933 | -3,490 | -11 | -688,415 | |
| Acquisition of a subsidiary | -1,047 | -10,823 | -11 | -11,881 | ||
| Decreases | 6,741 | 4,474 | 1 | 11,216 | ||
| Depreciation | -11,372 | -29,427 | -1,319 | -15 | -42,133 | |
| Exchange differences | -664 | -219 | -583 | -1,466 | ||
| Accumulated depreciation and impairment, 31 Dec 2016 | -224,323 | -502,928 | -5,402 | -26 | -732,679 | |
| Book value, 1 Jan 2016 | 9,652 | 234,108 | 120,655 | 4,994 | 25,311 | 394,720 |
Assets acquired under financial leasing contracts are included in machinery and equipment. The acquisition cost recognised on the basis of the financial leasing contracts was EUR 1.2 million (EUR 1.2 million) and accumulated depreciation was EUR 0.5 million (EUR 0.5 million). The book value of assets was EUR 0.7 million (EUR 0.7 million).
The tangible assets used as loan collateral amount to EUR 9.5 million (EUR 9.8 million).
| 13. BIOLOGICAL ASSETS, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Biological assets: | ||
| Productive | 637 | 625 |
| Consumable | 3,130 | 3,171 |
| At the end of the period | 3,767 | 3,796 |
| Amounts of biological assets at the end of the period: | ||
| Boars, sows, gilts / qty | 3,790 | 3,757 |
| Pigs for fattening / qty | 26,793 | 24,577 |
| Chicken eggs and chicks / 1,000 qty | 2,803 | 2,868 |
| Production of agricultural products during the period: | ||
| Pork / 1,000 kg | 5,081 | 5,442 |
| Chicks / 1,000 qty | 36,517 | 29,479 |
The fair value of productive biological assets is based on the original acquisition price less a cost corresponding to the reduction of value in use due to the ageing of the animals. The fair value of slaughter animals equals their market price, which is based on the company's slaughter animal procurement/sales in the local market.
| Intangible assets | Goodwill | Trademarks | Customer relationships |
Other intangible assets |
Total |
|---|---|---|---|---|---|
| Acquisition cost, 1 Jan 2017 | 185,396 | 78,312 | 19,245 | 30,978 | 313,931 |
| Increases | 3,002 | 3,002 | |||
| Decreases | -24 | -24 | |||
| Exchange differences | -3,225 | -1,722 | -135 | -126 | -5,208 |
| Acquisition cost, 31 Dec 2017 | 182,171 | 76,590 | 19,110 | 33,830 | 311,701 |
| Accumulated depreciation and impairment, 1 Jan 2017 |
-15,464 | -5,938 | -4,819 | -24,212 | -50,433 |
| Depreciation on decreases | 24 | 24 | |||
| Depreciation | -1,053 | -2,428 | -2,357 | -5,838 | |
| Exchange differences | 93 | 214 | 24 | 109 | 440 |
| Accumulated depreciation, 31 Dec 2017 | -15,371 | -6,777 | -7,223 | -26,436 | -55,807 |
| Book value, 1 Jan 2017 | 169,932 | 72,374 | 14,426 | 6,766 | 263,498 |
| Book value, 31 Dec 2017 | 166,800 | 69,813 | 11,887 | 7,394 | 255,894 |
| Intangible assets | Goodwill | Trademarks | Customer relationships |
Other intangible assets |
Total |
|---|---|---|---|---|---|
| Acquisition cost, 1 Jan 2016 | 173,466 | 70,221 | 10,056 | 29,386 | 283,129 |
| Acquisition of a subsidiary | 15,903 | 9,092 | 9,189 | 1 | 34,185 |
| Increases | 1,524 | 1,524 | |||
| Decreases | -72 | -72 | |||
| Exchange differences | -3,973 | -1,001 | 139 | -4,835 | |
| Acquisition cost, 31 Dec 2016 | 185,396 | 78,312 | 19,245 | 30,978 | 313,931 |
| Intangible assets | Goodwill | Trademarks | Customer relationships |
Other intangible assets |
Total |
|---|---|---|---|---|---|
| Accumulated depreciation and impairment, 1 Jan 2016 |
-15,558 | -5,396 | -3,029 | -21,994 | -45,977 |
| Depreciation on decreases | 31 | 31 | |||
| Depreciation | -829 | -1,793 | -2,139 | -4,761 | |
| Exchange differences | 94 | 287 | 3 | -110 | 274 |
| Accumulated depreciation, 31 Dec 2016 | -15,464 | -5,938 | -4,819 | -24,212 | -50,433 |
| Book value, 1 Jan 2016 | 157,908 | 64,825 | 7,027 | 7,392 | 237,152 |
| Book value, 31 Dec 2016 | 169,932 | 72,374 | 14,426 | 6,766 | 263,498 |
| Goodwill | Trademarks | |||
|---|---|---|---|---|
| 2017 | 2016 | 2017 | 2016 | |
| Atria Finland | 28,438 | 28,438 | 2,500 | 2,500 |
| Atria Scandinavia | 138,362 | 141,494 | 49,084 | 50,192 |
| Atria Russia | 3,087 | 3,331 | ||
| Atria Baltic | 2,857 | 2,857 | ||
| Total | 166,800 | 169,932 | 57,528 | 58,880 |
Impairment testing:
| Key assumptions for 2017 | Atria Finland | Atria Scandinavia |
Atria Russia brand |
Atria Baltic |
|---|---|---|---|---|
| Long-term net sales growth rate | 1.0% | 1.0% | 2.5% | 1.0% |
| Discount rate defined before taxes | 5.1% | 5.1% | 15.8% | 5.9% |
| Atria | Atria Russia |
| Key assumptions for 2016 | Atria Finland | Atria Scandinavia |
Atria Russia brand |
Atria Baltic |
|---|---|---|---|---|
| Long-term net sales growth rate | 1.0% | 1.0% | 2.5% | 1.0% |
| Discount rate defined before taxes | 4.4% | 4.4% | 17.1% | 6.1% |
The recoverable amount of a cash-generating unit is defined on the basis of value-in-use calculations. These calculations, which use cash flow forecasts based on management-approved budgets and strategic targets, are defined before taxes and extend over a five-year period. Cash flows after this period are extrapolated using the growth rates presented above.
The most important assumptions used in Atria's impairment testing for cash flow forecasts are growth in net sales and long-term EBIT margin. The growth and profitability assumptions used are based on the net sales growth rates and profitability levels that business areas will experience in the near future. EBIT margins are expected to be close to the Group's targeted level of 5 per cent.
Growth rate assumptions are moderate in all market areas. The higher growth projection in Russia is due to its higher inflation rate, higher market growth expectations and the relatively high growth projection for meat consumption. Due to the relatively stable development of the food industry and moderately optimistic growth forecasts, it is unlikely that the growth rate assumptions will generate impairment losses in the future.
As regards EBIT margins, impairment losses must be recognised in Finland if the long-term level remains below 78 per cent of the assumed level. In Scandinavia, the EBIT percentage should be approximately 83 per cent and, in the Baltic countries, 53 per cent below the assumption before the need for impairment arises.
Discount rates would give rise to impairment losses (all cash flow forecasts being equal) if they increased by 8.3 percentage points in Finland, 5.4 percentage points in Scandinavia and 2.7 percentage points in the Baltic countries. Clearly higher discount rates would mean that the market situation has changed and that the change could also affect Atria's cash flows. Therefore, the aforementioned increases in discount rates do not directly mean that there would be a need for impairment.
A separate test was conducted on a brand with an indefinite useful life for Atria Russia. An increase of over 6.2 percentage points would lead to the recognition of impairment.
| 15. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES, EUR 1,000 | 2017 | 2016 | ||
|---|---|---|---|---|
| ------------------------------------------------------------- | -- | -- | ------ | ------ |
| Effect on the Group's earnings: | ||
|---|---|---|
| Associates | 484 | 171 |
| Joint ventures | 1,420 | 508 |
| Total | 1,904 | 679 |
| Book values in the consolidated statement of financial position: | ||
| Associates | 3,916 | 3,528 |
| Joint ventures | 10,799 | 10,082 |
Honkajoki Oy is a recycling facility for animal-based raw materials located in Honkajoki, Finland. The company has the subsidiaries Findest Protein Oy and GMM Finland Oy. Atria Plc owns 50 per cent of the company and has joint control in it with HKScan Finland. Honkajoki Group's figures, which are reported according to the Finnish Accounting Standards (FAS), have been consolidated using the equity method.
| Summary of Honkajoki Group's results: | ||
|---|---|---|
| Net sales | 32,339 | 30,158 |
| EBIT | 3,318 | 1,674 |
| Profit before taxes | 3,046 | 1,679 |
| Profit/loss for the accounting period | 2,494 | 1,335 |
| Summary of Honkajoki Group's balance sheet: | ||
| Assets | ||
| Non-current assets | 27,925 | 21,206 |
| Current assets | 9,721 | 13,023 |
| Total assets | 37,646 | 34,229 |
| Liabilities | ||
| Non-current liabilities | 9,372 | 8,653 |
| Current liabilities | 7,502 | 6,651 |
| Total liabilities | 16,874 | 15,304 |
| Net assets | 20,772 | 18,925 |
| Balancing of the summary of financial information for Honkajoki Group: | ||
| Profit/loss for the accounting period | 2,494 | 1,335 |
| Share of non-controlling interest | -26 | 19 |
| Income from joint venture (50%) | 1,234 | 677 |
| Net assets, 1 Jan | 18,925 | 17,590 |
| Profit/loss for the accounting period | 2,494 | 1,335 |
| Other changes | -107 | |
| Dividend distribution | -540 | |
| Net assets at the end of the accounting period | 20,772 | 18,925 |
| Share of non-controlling interest | 239 | 320 |
| Share of joint venture (50%) | 10,267 | 9,302 |
| Non-material investments in joint ventures | ||
| Book value in the consolidated statement of financial position | 532 | 779 |
| Effect on earnings in the consolidated income statement | 186 | -169 |
| Non-material investments in associates |
| Book value in the consolidated statement of financial position | 3,916 | 3,528 |
|---|---|---|
| Effect on earnings in the consolidated income statement | 484 | 171 |
The joint ventures and associates are listed in Note 33.
| 16. OTHER FINANCIAL ASSETS, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Other financial assets include available for sale financial assets: | ||
| Available for sale financial assets, 1 Jan | 1,103 | 1,103 |
| Increases | 100 | |
| Decreases | -7 | |
| Available for sale financial assets, 31 Dec | 1,196 | 1,103 |
| Available for sale financial assets include the following euro-denominated items: | ||
| Unlisted securities | 1,196 | 1,103 |
| Total | 1,196 | 1,103 |
| 17. TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES, EUR 1,000 | 2017 | 2016 |
| Balance sheet values | ||
| Trade receivables from producers | 3,178 | 2,651 |
| Loan receivables | 4,932 | 7,112 |
| Other receivables | 301 | 905 |
| Derivative instruments – in hedge accounting | 738 | 422 |
| Derivative financial instruments – not in hedge accounting | 7 | 11 |
| Total | 9,156 | 11,101 |
| 16. OTHER FINANCIAL ASSETS, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Other financial assets include available for sale financial assets: | ||
| Available for sale financial assets, 1 Jan | 1,103 | 1,103 |
| Increases | 100 | |
| Decreases | -7 | |
| Available for sale financial assets, 31 Dec | 1,196 | 1,103 |
| Available for sale financial assets include the following euro-denominated items: | ||
| Unlisted securities | 1,196 | 1,103 |
| 1,196 | 1,103 | |
| Total | ||
| 17. TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES, EUR 1,000 | 2017 | 2016 |
| Balance sheet values | ||
| Trade receivables from producers | 3,178 | 2,651 |
| Loan receivables | 4,932 | 7,112 |
| Other receivables | 301 | 905 |
| Derivative instruments – in hedge accounting | 738 | 422 |
| Derivative financial instruments – not in hedge accounting | 7 | 11 |
| Total | 9,156 | 11,101 |
| EUR | 8,867 | 10,226 |
|---|---|---|
| SEK | 279 | 864 |
| Other | 10 | 11 |
| Total | 9,156 | 11,101 |
The "trade receivables from producers" account includes feed and animal trading receivables from animal payments that fall due in more than 12 months. The credit risk of these receivables is explained in Note 20.
No impairment has been recognised for loans and other receivables. The maximum credit risk for loans and other receivables is equivalent to their book value.
| 18. DEFERRED TAX ASSETS AND LIABILITIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Deferred tax assets: | ||
| Tax asset to be realised in more than 12 months | 5,760 | 7,158 |
| Tax asset to be realised within 12 months | 263 | 279 |
| Total | 6,023 | 7,437 |
| Deferred tax liabilities: | ||
| Tax liability to be realised in more than 12 months | 47,197 | 49,111 |
| Tax liability to be realised within 12 months | 34 | 56 |
| Total | 47,231 | 49,167 |
| Deferred tax assets by balance sheet item: | ||
| Intangible and tangible assets | 273 | 755 |
| Inventories | 91 | 64 |
| Trade and other receivables | 396 | 843 |
| Interest-bearing and non-interest-bearing liabilities | 1,189 | 1,843 |
| Recognised losses | 4,074 | 3,932 |
| Total | 6,023 | 7,437 |
| Deferred tax liabilities by balance sheet item: | ||
| Intangible and tangible assets | 47,024 | 49,009 |
| Inventories | 20 | 27 |
| Trade and other receivables | 6 | |
| Interest-bearing and non-interest-bearing liabilities | 181 | 131 |
| Total | 47,231 | 49,167 |
| Change in deferred taxes: | ||
| Recognised in the income statement | 619 | -4 |
| Recognised in other items of total comprehensive income | -521 | -451 |
| Changes from acquired/sold businesses | 60 | -4,091 |
| Exchange differences | 364 | 1,083 |
| Total | 522 | -3,463 |
Deferred tax assets for unused tax losses are recognised to the amount for which obtaining tax benefits on the basis of taxable profit is likely. Deferred tax assets unrecognised for the period were EUR 0.5 million (1.1 million).
Of the deferred tax assets recognised for confirmed losses, EUR 3.6 million relate to Russia. Russia's tax legislation changed as of 1 January 2017 in such a way that while confirmed losses no longer expire, only losses equal to 50 per cent of the amount of taxes paid can be deducted from the taxable income in 2017–2020. The legislative amendment has been confirmed until 2020.
| 19. INVENTORIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Materials and supplies | 44,372 | 44,836 |
| Unfinished products | 2,836 | 2,591 |
| Finished products | 42,623 | 39,451 |
| Other inventories | 3,194 | 2,905 |
| Total | 93,025 | 89,783 |
During the accounting period, EUR 1.1 million (EUR 1.0 million), i.e. the amount used to lower the book value of the inventories to a value comparable with the net realisable value, was recognised as expenses.
| 20. CURRENT TRADE RECEIVABLES AND OTHER RECEIVABLES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Trade receivables | 75,859 | 70,167 |
| Trade receivables from producers | 14,699 | 14,779 |
| Loan receivables | 3,542 | 5,165 |
| Other receivables | 10,820 | 10,109 |
| Derivative instruments – in hedge accounting | 413 | 146 |
| Derivative financial instruments – not in hedge accounting | 1,779 | 426 |
| Accrued credits and deferred charges | 6,572 | 8,021 |
| Total | 113,684 | 108,813 |
Fair values do not deviate significantly from balance sheet values.
In Atria Group, credit risk from trade receivables is considered small in proportion to the scope of the operations. The Group's trade receivables are dispersed over several market areas and numerous customers. Credit loss risk is managed with credit insurance, bank guarantees and other guarantees, as well as advance invoicing. Each business area has been assigned a separate credit policy that takes the special features of the market area into account. Credit risk is examined and monitored on a case-by-case basis for major customers and customer groups.
Material items in accrued credits and deferred charges consist of prepaid expenses of purchase invoices, lease receivables and tax amortisations.
| Breakdown of trade receivables and items booked as credit losses | 2017 | Credit losses |
Net 2017 |
|
|---|---|---|---|---|
| Not due | 78,479 | 0 | 78,479 | |
| Overdue | Less than 30 days | 7,149 | 0 | 7,149 |
| 30–60 days | 1,280 | 6 | 1,286 | |
| 61–90 days | 396 | 0 | 396 | |
| More than 90 days | 3,305 | -57 | 3,248 | |
| Total | 90,609 | -51 | 90,558 | |
| Breakdown of trade receivables and items booked as credit losses | 2016 | Credit losses |
Net 2016 |
|
|---|---|---|---|---|
| Not due | 69,152 | -13 | 69,139 | |
| Overdue | Less than 30 days | 10,831 | -277 | 10,554 |
| 30–60 days | 1,323 | -152 | 1,171 | |
| 61–90 days | 442 | -57 | 385 | |
| More than 90 days | 3,747 | -50 | 3,697 | |
| Total | 85,495 | -549 | 84,946 |
| Current receivables were divided between currencies as follows: | 2017 | 2016 |
|---|---|---|
| EUR | 70,572 | 67,420 |
| SEK | 20,794 | 17,693 |
| RUB | 11,428 | 13,286 |
| DKK | 6,016 | 4,799 |
| USD | 3,105 | 2,672 |
| NOK | 687 | 1,202 |
| Other | 1,082 | 1,741 |
| Total | 113,684 | 108,813 |
| 21. CASH AND CASH EQUIVALENTS, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Cash in hand and at banks | 3,137 | 4,591 |
Shares are divided into A and KII series, which differ in terms of voting rights. A series shares have one vote per share and KII series shares have ten votes per share. Shares from series A are entitled to a dividend of EUR 0.17, after which KII-series shares are paid a dividend of up to EUR 0.17. If there is still more dividend available for distribution, A and KII series shares have the same entitlement to the dividend. All issued shares have been paid in full. The share has no nominal value or a maximum number.
| Number of shares outstanding (1,000 pieces) | A series | KII series | Total |
|---|---|---|---|
| 1 Jan 2016 | 18,952 | 9,204 | 28,156 |
| No changes in the accounting period | |||
| 31 Dec 2016 | 18,952 | 9,204 | 28,156 |
| No changes in the accounting period | |||
| 31 Dec 2017 | 18,952 | 9,204 | 28,156 |
The portion of share subscription payments recognised in share premium in compliance with the conditions of plans prior to the new Limited Liability Companies Act (624/2006) taking effect.
At the decision of the Annual General Meeting of 28 April 2016, the share premium was reduced by a transfer of all the assets therein, EUR 138,502,108.85, to the company's invested unrestricted equity fund. The share premium reductions were not subject to costs, and they did not affect the number of shares in the company, the rights conferred by the shares or the shareholders' relative ownership stakes.
The treasury shares reserve contains the acquisition cost of own shares held by the Group. In 2008 and 2009, the Group's parent company, Atria Plc, acquired 145,102 series A shares on the stock exchange for an acquisition cost of EUR 1.3 million. In 2008, 35,260 of the acquired shares and, in 2010, 3,280 shares were transferred to key persons as a part of the Group's share incentive plan. At the end of the year, the parent company held a total of 111,312 (111,312) treasury shares.
| Other funds | 2017 | 2016 |
|---|---|---|
| Hedging fund | ||
| Effective portion of currency and commodity derivatives. | 804 | -173 |
| Effective portion of interest rate derivatives | -1,326 | -3,012 |
| Deferred tax | 102 | 638 |
| Total | -420 | -2,547 |
The Other funds item includes a hedge fund in which the effective portions of changes in the fair value of the derivative financial instruments used for hedging are recognised. Hedge accounting results for currency and commodity derivatives are transferred from equity to the income statement for adjustment of purchase expenses and, correspondingly, the hedging result for interest rate derivatives is transferred for adjustment of interest expenses.
This reserve contains other equity investments and the share subscription price to the extent that it is not recognised in share capital according to a separate decision, as well as the value of shares earned before 2012 on the basis of the share incentive plan, calculated at the rate of the grant date.
At the decision of the Annual General Meeting of 28 April 2016, the share premium was reduced by a transfer of all the assets therein, EUR 138,502,108.85, to the company's invested unrestricted equity fund.
The following are recognised: the translation differences from the translation of the financial statements of foreign subsidiaries, as well as the translation of fair value adjustments of goodwill, assets and liabilities arising in conjunction with the acquisition of the said companies. Profits and losses arisen from hedges of net investments in foreign operations are also recognised as translation differences when the hedge accounting criteria are met.
| Parent company's distributable shareholders' equity | 2017 | 2016 |
|---|---|---|
| Invested unrestricted equity fund | 248,730 | 248,730 |
| Retained earnings | 59,994 | 62,459 |
| Treasury shares | -1,277 | -1,277 |
| Profit for the period | 15,148 | 10,486 |
| Total | 322,594 | 320,397 |
| Dividend per share paid for the period | 2017 | 2016 |
| Dividend/share, EUR | 0.46 | 0.40 |
| Dividend distributed by the parent company | 12,952 | 11,263 |
The Board of Directors proposes to the Annual General Meeting to be held on 26 April 2018 that a dividend of EUR 0.50 per share be distributed, totalling EUR 14,078,208.00.
| 23. INTEREST-BEARING FINANCIAL LIABILITIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Balance sheet values | ||
| Non-current: | ||
| Bonds | 50,000 | |
| Loans from financial institutions | 111,450 | 111,551 |
| Pension fund loans | 9,550 | 14,850 |
| Other liabilities | 1,000 | 1,000 |
| Finance lease obligations | 424 | 463 |
| Total | 122,424 | 177,864 |
| Current: | ||
| Bonds | 50,000 | |
| Loans from financial institutions | 3,887 | 903 |
| Commercial papers | 31,000 | 33,000 |
| Pension fund loans | 5,300 | 5,300 |
| Other liabilities | 1,409 | 505 |
| Finance lease obligations | 254 | 275 |
| Total | 91,850 | 39,983 |
| Total interest-bearing liabilities | 214,274 | 217,847 |
| The fair values of interest-bearing loans do not deviate significantly from balance sheet values. | ||
| With fixed interest rates | 16.0,% | 64.1,% |
| With variable interest rates | 84.0,% | 35.9,% |
| Average interest rate | 2.30% | 2.60% |
| Non-current liabilities mature as follows: | ||
| 2018 | 55,857 | |
| 2019 | 4,120 | 3,642 |
| 2020 | 2,092 | 2,092 |
| 2021 | 2,092 | 42,092 |
| 2022 | 72,092 | 32,092 |
| Later | 42,027 | 42,087 |
| Total | 122,424 | 177,864 |
| 23. INTEREST-BEARING FINANCIAL LIABILITIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Balance sheet values | ||
| Non-current: | ||
| Bonds | 50,000 | |
| Loans from financial institutions | 111,450 | 111,551 |
| Pension fund loans | 9,550 | 14,850 |
| Other liabilities | 1,000 | 1,000 |
| Finance lease obligations | 424 | 463 |
| Total | 122,424 | 177,864 |
| Current: | ||
| Bonds | 50,000 | |
| Loans from financial institutions | 3,887 | 903 |
| Commercial papers | 31,000 | 33,000 |
| Pension fund loans | 5,300 | 5,300 |
| Other liabilities | 1,409 | 505 |
| Finance lease obligations | 254 | 275 |
| Total | 91,850 | 39,983 |
| Total interest-bearing liabilities | 214,274 | 217,847 |
| The fair values of interest-bearing loans do not deviate significantly from balance sheet values. | ||
| With fixed interest rates | 16.0,% | 64.1,% |
| With variable interest rates | 84.0,% | 35.9,% |
| Average interest rate | 2.30% | 2.60% |
| Non-current liabilities mature as follows: | ||
| 2018 | 55,857 | |
| 2019 | 4,120 | 3,642 |
| 2020 | 2,092 | 2,092 |
| 2021 | 2,092 | 42,092 |
| 2022 | 72,092 | 32,092 |
| Later | 42,027 | 42,087 |
| Total | 122,424 | 177,864 |
| 23. INTEREST-BEARING FINANCIAL LIABILITIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Balance sheet values | ||
| Non-current: | ||
| Bonds | 50,000 | |
| Loans from financial institutions | 111,450 | 111,551 |
| Pension fund loans | 9,550 | 14,850 |
| Other liabilities | 1,000 | 1,000 |
| Finance lease obligations | 424 | 463 |
| Total | 122,424 | 177,864 |
| Current: | ||
| Bonds | 50,000 | |
| Loans from financial institutions | 3,887 | 903 |
| Commercial papers | 31,000 | 33,000 |
| Pension fund loans | 5,300 | 5,300 |
| Other liabilities | 1,409 | 505 |
| Finance lease obligations | 254 | 275 |
| Total | 91,850 | 39,983 |
| Total interest-bearing liabilities | 214,274 | 217,847 |
| The fair values of interest-bearing loans do not deviate significantly from balance sheet values. | ||
| With fixed interest rates | 16.0,% | 64.1,% |
| With variable interest rates | 84.0,% | 35.9,% |
| Average interest rate | 2.30% | 2.60% |
| Non-current liabilities mature as follows: | ||
| 2018 | 55,857 | |
| 2019 | 4,120 | 3,642 |
| 2020 | 2,092 | 2,092 |
| 2021 | 2,092 | 42,092 |
| 2022 | 72,092 | 32,092 |
| Later | 42,027 | 42,087 |
| Total | 122,424 | 177,864 |
| EUR | 86,963 | 104,498 |
|---|---|---|
| SEK | 108,057 | 90,754 |
| DKK | 10,623 | 12,851 |
| RUB | 8,228 | 9,743 |
| NOK | 403 | |
| Total | 214,274 | 217,847 |
| Finance lease obligations | 2017 | 2016 |
|---|---|---|
| Total amount of minimum lease payments: | ||
| In less than a year | 258 | 294 |
| Between one and five years | 466 | 525 |
| Total | 724 | 819 |
| Present value of minimum lease payments: | ||
| In less than a year | 254 | 275 |
| Between one and five years | 424 | 463 |
| Total | 678 | 738 |
| Future interest accumulation | 46 | 81 |
| Total | 724 | 819 |
| The benefit-based pension cost is determined as follows: | ||
|---|---|---|
| Costs based on services in the period | 68 | |
| Costs based on services in previous periods | -63 | |
| Benefits paid | -218 | -228 |
| Interest expenses | 193 | 207 |
| Pension costs in the profit and loss account | -25 | -16 |
| Items recognised in other items of total comprehensive income due to reassessment |
66 | 59 |
| Pension costs in total comprehensive income | 66 | 59 |
| Changes to liabilities in the balance sheet: | ||
| Liability of the ITP2 pension arrangement at the beginning of the accounting period | 7,167 | 7,425 |
| Pension costs in the profit and loss account and total comprehensive income | 41 | 43 |
| Sale of a subsidiary | -676 | |
| Exchange differences | -212 | -301 |
| At the end of the period | 6,320 | 7,167 |
| Actuarial assumptions used (%): | ||
| Discount rate | 2.50 | 2.80 |
| Inflation rate | 1.90 | 1.50 |
| Costs based on services in the period | 68 | |
|---|---|---|
| Costs based on services in previous periods | -63 | |
| Benefits paid | -218 | -228 |
| Interest expenses | 193 | 207 |
| Pension costs in the profit and loss account | -25 | -16 |
| Items recognised in other items of total comprehensive income due to reassessment |
66 | 59 |
| Pension costs in total comprehensive income | 66 | 59 |
| Changes to liabilities in the balance sheet: | ||
| Liability of the ITP2 pension arrangement at the beginning of the accounting period | 7,167 | 7,425 |
| Pension costs in the profit and loss account and total comprehensive income | 41 | 43 |
| Sale of a subsidiary | -676 | |
| Exchange differences | -212 | -301 |
| At the end of the period | 6,320 | 7,167 |
| Actuarial assumptions used (%): | ||
| Discount rate | 2.50 | 2.80 |
| Inflation rate | 1.90 | 1.50 |
The Group's Swedish companies have defined-benefit pension arrangements (ITP2). Most of the ITP2 pension arrangements are provided by the occupational pension insurance company Alecta as multiple-employer arrangements, so the funds and liabilities within them cannot be allocated to an individual company. For this reason, the ITP2 pension arrangements managed by Alecta are treated as defined contribution plans in the financial statements. The remaining ITP2 pension arrangements are financed through the FPG/PRI system, and they are treated as defined benefit plans as of the 2011 accounting period.
| 26. CURRENT TRADE AND OTHER PAYABLES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Trade payables | 106,281 | 102,109 |
| Advances received | 2,388 | 1,871 |
| Other liabilities | 45,841 | 45,505 |
| Derivative instruments – in hedge accounting | 249 | 194 |
| Derivative financial instruments – not in hedge accounting | 162 | 2,829 |
| Accruals and deferred income | 47,209 | 47,056 |
| Total | 202,130 | 199,564 |
Material items in accrued liabilities consist of personnel expenses and the amortisation of debt interests.
| EUR | 141,002 | 126,705 |
|---|---|---|
| SEK | 42,880 | 49,784 |
| RUB | 9,784 | 14,637 |
| DKK | 7,048 | 6,622 |
| PLN | 805 | 1,112 |
| NOK | 349 | 351 |
| USD | 218 | 329 |
| Other | 44 | 24 |
| Total | 202,130 | 199,564 |
| 24. OTHER NON-CURRENT LIABILITIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Other liabilities *) | 6,142 | 6,877 |
| Derivative instruments – in hedge accounting | 1,431 | 3,550 |
| Derivative financial instruments – not in hedge accounting | 53 | 167 |
| Accruals and deferred income | 440 | 220 |
| Total | 8,066 | 10,814 |
*) Other liabilities include the current value, EUR 6.0 million, of the put option related to the acquisition of the minority share in the subsidiary acquired in 2016, Well-Beef Ltd.
Other non-current liabilities are in euros.
| 25. PENSION OBLIGATIONS, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| The benefit-based pension liability in the balance sheet is determined as follows: | ||
| Present value of funded obligations | 6,320 | 7,167 |
| Fair value of assets | 0 | 0 |
| Deficit(+) / Surplus(-) | 6,320 | 7,167 |
| Pension liability in the balance sheet | 6,320 | 7,167 |
| 2016 | Withdrawals | Payments | differences | 2017 |
|---|---|---|---|---|
| 50,000 | 50,000 | |||
| 111,551 | -163 | 62 | 111,450 | |
| 903 | 3,082 | -98 | 3,887 | |
| 33,000 | -2,000 | 31,000 | ||
| 20,150 | -5,300 | 14,850 | ||
| 1,000 | 1,000 | |||
| 505 | 964 | -60 | 1,409 | |
| 738 | -77 | 17 | 678 | |
| 217,847 | 4,046 | -7,600 | -19 | 214,274 |
| Exchange |
*) Net change
The treasury policy approved by the Board of Directors defines the general principles of financial risk management. The Board has delegated the management of financial risks to the Treasury Committee, while the practical management of financial risks is centrally handled by the Group's Treasury unit. The goal of financial risk management is to reduce the effect that price fluctuations on the financial markets and other uncertainty factors have on earnings, the balance sheet and cash flow, as well as to ensure sufficient liquidity. Treasury, together with the business areas, aims to identify, assess and hedge against all risks in accordance with the treasury policy. The main risks related to financing are interest rate risk, currency risk, liquidity and refinancing risk and credit risk. Commodity risks and capital structure management are also discussed at the end of this section.
Interest rate risk is managed by dividing financing into instruments with floating and fixed interest rates and by hedging with interest rate derivatives. During the accounting period, the Group used interest rate swaps in interest rate risk management. The Group links interest rate risk management to the interest margin indicator that is forecast by dividing the 12-month rolling operating margin by the forecast net interest rate expenses. The lower the EBITDA is in relation to net financing costs, the larger the share of debt that must have a fixed interest rate. The Group's interest-bearing debt on the balance sheet date was EUR 214.3 million (EUR 217.8 million), of which EUR 34.4 million (EUR 139.6 million) or 16.0 per cent (64.1 per cent) had fixed interest rates. The ratio of debt with fixed and floating interest rates is at the level defined by the Group's treasury policy.
The interest rate risk is mainly directed at the Group's interest-bearing liabilities because the amount of money market investments and related interest rate risk is low. The Group's operational cash flow is to a large extent independent of fluctuations in interest rates. At the time of the financial statements, Atria Plc had three interest rate swaps subject to hedge accounting. The maturity of both of the interest rate swaps amounting to EUR 25 million is less than a year and for this reason they are no longer accounted for in the share of the loan portfolio with a fixed interest rate.
The sensitivity analysis of net interest rate expenses is based on a 1 per cent change in interest rates, which is considered reasonably realistic. It is calculated for year-end interest-bearing, variable-rate net liabilities that are expected to remain the same over the accounting period. The interest rate swaps are taken into account in the calculation. In simulations, the same change in interest rate is used for all currencies. On 31 December 2017, net variable-rate liabilities amounted to EUR 176.8 million (EUR 73.7 million). At the end of 2017, an increase of one percentage point in interest rates corresponded to a change of EUR +/-1.8 million in the Group's annual interest rate expenses (EUR +/-0.7 million). The effect on equity would be EUR 1.5 million (EUR 2.0 million) with an increase of one per cent and EUR -1.6 million (EUR -2.1 million) with a decrease of one per cent.
Atria Group operates in many currency zones and is exposed to currency-related risks. Currency risks arise from forecast transactions, assets and liabilities booked into the balance sheet and net investments in the operations of foreign subsidiaries. The subsidiaries hedge the currency risk related to commercial, operational items according to their currency risk policy for each business area. Each currency risk policy has been approved by the Treasury Committee.
In Finland and Sweden, hedge accounting is applied to the aforementioned currency hedges. Currency risk is monitored according to the 12-month rolling cash flow forecast, and hedges are carried out for periods of 1 to 6 months using forward exchange agreements. The cash flows hedged during this time are expected to occur and affect profit or loss. Transaction risks arise from, among other things, the eurodenominated meat raw material imports of Atria's companies in Sweden as well as from Atria Russia's USD-denominated meat raw material imports and euro-denominated purchases of goods other than meat. In Atria's Finnish operations, currency flows and risks are relatively low and are mainly related to USD and SEK-denominated exports.
The Group has net investments in the operations of foreign subsidiaries that are exposed to currency risks. The Treasury Committee decides on net investment hedges on a case-by-case basis. At the time of the financial statements, there were no derivative agreements in force for net investment hedging. The parent company grants financing to the subsidiaries in their home currencies and has hedged the currencydenominated loan receivables from the subsidiaries through currency loans and forward exchange agreements.
During the accounting period, translation differences recognised in the consolidated statement of comprehensive income amounted to EUR -6.1 million (EUR +6.6 million). At the end of the year, the value of net investments exposed to fluctuations of the rouble was EUR 47.6 million (EUR 50.1 million).
If, at the end of the accounting period, the euro had been 10 per cent weaker/stronger than the Swedish krona (all other factors being equal), profit before taxes would have been EUR 0.5 million higher/lower due to the Swedish subsidiaries' unhedged euro-denominated net position of accounts receivable and accounts payable (EUR 0.2 million). The effect on equity would have been EUR 0.6 million (EUR 0.3 million). Sensitivity analyses also take into account the effects of currency derivatives, which offset the effects of change in exchange rates.
Atria Plc's Treasury raises the majority of the Group's interest-bearing capital. Liquidity and refinancing risks are managed through a balanced loan maturity structure and by having sufficient committed credit facilities with sufficiently long maturities, by using many financial institutions and instruments to raise finance and by keeping a sufficient amount of cash funds. Atria uses commercial papers for short-term financing and liquidity management. There were EUR 105.0 million (EUR 105.0 million) in unutilised committed credit facilities at the end of the year, and EUR 169.0 million (EUR 167.0 million) of the EUR 200 million commercial paper programme had not been used at the end of the accounting period. The average maturity of the Group's loans and committed credit limits was 3 years 4 months (3 years 9 months).
The main covenant used in loan agreements is a minimum equity ratio covenant of 30 per cent. The Group's equity ratio has been approximately 40 per cent for many years, and the Group will continue to ensure an equity ratio higher than the level required by the covenant. According to the terms of loan agreements, the implementation of covenants is reported to financiers either quarterly or semi-annually.
According to the view of Group management, there was no significant liquidity accumulation in financial assets or financial sources.
The table below shows the maturity analysis for financial liabilities and derivative financial instruments (undiscounted figures). The capital payments and revenue of derivative liabilities and assets are related to forward exchange agreements, and interest payments to interest rate swaps.
| Maturity, 31 Dec 2017 | |||||
|---|---|---|---|---|---|
| EUR 1,000 | < 1 years | 1–5 years | > 5 years | Total | |
| Bonds | Instalments | 50,000 | 50,000 | ||
| Interest payments | 2,182 | 2,182 | |||
| Loans | Instalments | 41,596 | 121,065 | 935 | 163,596 |
| Interest payments | 2,009 | 7,416 | 114 | 9,539 | |
| Finance lease obligations | Instalments | 254 | 424 | 678 | |
| Derivative liabilities and assets *) |
Capital payments | 162,602 | 162,602 | ||
| Capital income | -165,608 | -165,608 | |||
| Interest payments | 1,015 | 1,243 | 2,258 | ||
| Other payables | Instalments | 7,386 | 6,142 | 13,528 | |
| Trade payables | Payments | 106,281 | 106,281 | ||
| Accruals and deferred income Payments | 45,049 | 440 | 45,489 | ||
| Total | Total payments | 418,374 | 136,730 | 1,049 | 556,153 |
| Total income | -165,608 | 0 | 0 | -165,608 | |
| Net payments | 252,766 | 136,730 | 1,049 | 390,545 | |
| Maturity, 31 Dec 2016 | |||||
|---|---|---|---|---|---|
| 1 000 EUR | < 1 years | 1–5 years | > 5 years | Total | |
| Bonds | Instalments | 50,000 | 50,000 | ||
| Interest payments | 2,177 | 2,182 | 4,358 | ||
| Loans | Instalments | 39,708 | 85,314 | 42,087 | 167,109 |
| Interest payments | 2,236 | 8,594 | 488 | 11,317 | |
| Finance lease obligations | Instalments | 277 | 464 | 741 | |
| Derivative liabilities and | |||||
| assets *) | Capital payments | 140,972 | 140,972 | ||
| Capital income | -143,628 | -143,628 | |||
| Interest payments | 1,656 | 2,174 | 3,830 | ||
| Other payables | Instalments | 9,198 | 6,877 | 16,075 | |
| Trade payables | Payments | 102,109 | 102,109 | ||
| Accruals and deferred income Payments | 47,056 | 220 | 47,276 | ||
| Total | Total payments | 345,388 | 155,824 | 42,575 | 543,787 |
| Total income | -143,628 | 0 | 0 | -143,628 | |
| Net payments | 201,760 | 155,824 | 42,575 | 400,159 |
*) There is an agreement on the offsetting right with all derivative counterparties. The figures for derivative liabilities and assets presented in the table are gross amounts. If the figures were offset, derivative liabilities would amount to EUR 1.0 million (EUR -5.7 million).
Credit risk is managed at Group level in accordance with the Group's risk management policy approved by the Board of Directors. The credit risk related to financing (counterparty risk) is managed by selecting only well-established highly rated counterparties with good credit ratings. The Group's liquid assets are only invested with counterparties that meet the above-mentioned criteria. This is also the procedure when entering into financing and derivative agreements. The credit risk related to derivatives is also reduced by the fact that all payments made in relation to interest rate derivatives are net payments. Atria has only made derivatives with banks that are among Atria's main lenders.
The credit risk of the Group's operative business is related to our customers, of which the main ones are large retail chains. Part of the Group's trade receivables are related to feed and animal trading in primary production. The credit risk related to this is higher, but also more dispersed. The Group's trade receivables are also dispersed over several market areas and many customers.
Credit loss risk is managed with securities, such as credit insurances and bank guarantees as well as with advance invoicing. Each business area has been assigned a separate credit policy that takes the special features of the market area into account. Credit risk is examined and monitored on a case-by-case basis for major customers and customer groups. The breakdown of trade receivables is illustrated in Note 20.
The Group is exposed to commodity risks, the most significant of which are meat raw material and electricity. Fluctuations in the price of meat raw material affect profitability in the short term, but efforts are made to pass on the price increases to sales prices as soon as possible.
Fluctuations in the price of electricity are hedged with forward electricity agreements according to the Group's electricity procurement policy. The hedging levels in the policy are shown in the table below.
| Period | Hedging level minimum |
Hedging level maximum |
|---|---|---|
| 1–12 months | 70% | 100% |
| 13–24 months | 40% | 80% |
| 25–36 months | 0% | 50% |
| 37–48 months | 0% | 40% |
| 49–60 months | 0% | 30% |
Hedge accounting in accordance with IFRS is applied to electricity hedges. The valuation differences, EUR +0.8 million (EUR +1.9 million), of the effective portion of electricity derivatives which meet the criteria for hedge accounting were recognised in the equity hedge fund, and the valuation differences, EUR -0.2 million (EUR +0.5 million), of ineffective derivatives were recognised in the income statement.
If the market price for electricity derivatives changed by +/-10 per cent from the level of 31 December 2017, the effect on equity would be EUR +/-1.1 million (EUR +/-1.1 million), on the assumption that all hedges are 100 per cent effective.
In capital structure management, the Group aims to ensure normal operating conditions under all circumstances and to maintain an optimal capital structure in terms of capital costs.
The Group monitors the development of its capital structure primarily through the equity ratio, for which the Group has set a target level of 40 per cent. Based on this equity ratio, the company estimates that the availability and total cost of new capital are optimal.
Equity ratio is affected by balance sheet total and equity. The company is able to affect the balance sheet total and, thereby, the capital structure through the management of working capital, the amount of investments and the sale of business operations or assets. Correspondingly, the company can affect the amount of its own equity through dividend distribution and share issues.
In the assessment of investments and divestments, the Group uses the Group's weighted average cost of capital (WACC) as reference. This way, the Group tries to ensure that its assets generate at least an amount corresponding to the average cost of its capital.
| Realised | 31 Dec 2017 | 31 Dec 2016 |
|---|---|---|
| 47.5% | 46.5% |
| EUR 1,000 2017 Balance sheet item |
Financial assets and liabilities recognised at fair value through profit or loss |
Derivative financial instruments under hedge accounting |
Loans and receivables |
Available-for sale financial assets |
Financial liabilities |
Balance sheet value in total |
|---|---|---|---|---|---|---|
| Non-current assets | ||||||
| Trade receivables | 3,178 | 3,178 | ||||
| Other financial assets | 1,196 | 1,196 | ||||
| Loan receivables | 4,932 | 4,932 | ||||
| Other receivables *) | 301 | 301 | ||||
| Derivative financial instruments |
7 | 738 | 745 | |||
| Current assets | ||||||
| Trade receivables | 90,558 | 90,558 | ||||
| Loan receivables | 3,542 | 3,542 | ||||
| Other receivables *) | 3,994 | 3,994 | ||||
| Accrued credits and deferred charges *) |
6,572 | 6,572 | ||||
| Derivative financial instruments |
1,779 | 413 | 2,192 | |||
| Cash and cash equivalents | 3,137 | 3,137 | ||||
| Total financial assets | 1,786 | 1,151 | 116,214 | 1,196 | 0 | 120,347 |
| Non-current liabilities | ||||||
| Loans | 122,000 | 122,000 | ||||
| Finance lease obligations | 424 | 424 | ||||
| Derivative financial instruments |
53 | 1,431 | 1,484 | |||
| Accruals and deferred income **) |
440 | 440 | ||||
| Current liabilities | ||||||
| Loans | 91,596 | 91,596 | ||||
| Finance lease obligations | 254 | 254 | ||||
| Trade payables | 106,281 | 106,281 | ||||
| Other liabilities **) | 7,386 | 7,386 | ||||
| Accruals and deferred income **) |
47,209 | 47,209 | ||||
| Derivative financial instruments |
162 | 249 | 411 | |||
| Total financial liabilities | 215 | 1,680 | 0 | 0 | 375,590 | 377,485 |
*) Do not include VAT or income tax assets.
**) Do not include VAT or income tax liabilities.
Fair value hierarchy:
EUR 1,000
| Balance sheet item | 31 Dec 2017 | Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|
| Non-current assets | ||||
| Available-for-sale financial assets |
||||
| – Unlisted shares | 1,196 | 1,196 | ||
| Derivative financial instruments | 745 | 745 | ||
| Current assets | ||||
| Derivative financial instruments | 2,192 | 2,192 | ||
| Total | 4,133 | 0 | 2,937 | 1,196 |
| Non-current liabilities | ||||
| Bonds | 50,000 | 50,000 | ||
| Derivative financial instruments | 1,484 | 1,484 | ||
| Current liabilities | ||||
| Derivative financial instruments | 411 | 411 | ||
| Total | 51,895 | 0 | 51,895 | 0 |
| Balance sheet item | 31 Dec 2016 | Level 1 | Level 2 | Level 3 |
| Non-current assets | ||||
| Available-for-sale financial assets |
||||
| – Unlisted shares | 1,103 | 1,103 | ||
| Derivative financial instruments | 433 | 433 | ||
| Current assets | ||||
| Derivative financial instruments | 572 | 572 | ||
| Total | 2,108 | 0 | 1,005 | 1,103 |
| Non-current liabilities | ||||
| Bonds | 50,000 | 50,000 | ||
| Derivative financial instruments | 3,717 | 3,717 | ||
| Current liabilities | ||||
| Derivative financial instruments | 3,023 | 3,023 | ||
| Total | 56,740 | 0 | 56,740 | 0 |
Level 1: Prices listed on active markets for identical assets and liabilities The fair value of financial instruments traded in active markets is based on market prices listed on the closing date. Markets are regarded as active if listed prices are readily and regularly available from the stock exchange, broker, industry group, price information service or supervisory authority, and these prices represent actual and regularly occurring market events between independent parties. The current purchase price is used as the listed market price for financial assets.
Level 2: Fair values can be determined either directly (i.e. as prices) or indirectly (i.e. derived from prices). A fair value is established through valuation techniques for financial instruments that are not traded in active markets (such as OTC derivatives). These valuation techniques make maximum use of observable market information, when available, and rely as little as possible on company-specific assessments. If all significant input required for determining the fair value of the instrument is observable, the instrument is on level 2.
Level 3: Fair values are not based on verifiable market prices.
If one or more significant piece of input information is not based on observable market information, the instrument is classified as level 3. Assessments by external parties are used to measure financial instruments and, if such assessments are not available, the company's own calculations/assessments are used.
| EUR 1,000 | Financial assets and liabilities recognised at fair value through profit |
Derivative financial instruments under hedge |
Loans and | Available-for sale financial |
Financial | Balance sheet |
|---|---|---|---|---|---|---|
| 2016 Balance sheet item | or loss | accounting | receivables | assets | liabilities | value in total |
| Non-current assets | ||||||
| Trade receivables | 2,651 | 2,651 | ||||
| Other financial assets | 1,103 | 1,103 | ||||
| Loan receivables | 7,112 | 7,112 | ||||
| Other receivables *) | 905 | 905 | ||||
| Derivative financial instruments |
11 | 422 | 433 | |||
| Current assets | ||||||
| Trade receivables | 84,946 | 84,946 | ||||
| Loan receivables | 5,165 | 5,165 | ||||
| Other receivables *) | 2,908 | 2,908 | ||||
| Accrued credits and deferred charges *) |
7,380 | 7,380 | ||||
| Derivative financial instruments |
426 | 146 | 572 | |||
| Cash and cash equivalents | 4,591 | 4,591 | ||||
| Total financial assets | 437 | 568 | 115,658 | 1,103 | 0 | 117,766 |
| Non-current liabilities | ||||||
| Loans | 177,400 | 177,400 | ||||
| Finance lease obligations | 464 | 464 | ||||
| Derivative financial instruments |
167 | 3,550 | 3,717 | |||
| Current liabilities | ||||||
| Loans | 39,706 | 39,706 | ||||
| Finance lease obligations | 277 | 277 | ||||
| Trade payables | 102,109 | 102,109 | ||||
| Other liabilities **) | 9,198 | 9,198 | ||||
| Accruals and deferred income **) |
47,056 | 47,056 | ||||
| Derivative financial |
instruments 2,829 194 3,023 Total financial liabilities 2,996 3,744 0 0 376,210 382,950
*) Do not include VAT or income tax assets.
**) Do not include VAT or income tax liabilities
| Unlisted shares | 2017 | 2016 |
|---|---|---|
| Opening balance 1 Jan | 1,103 | 1,103 |
| Increases | 100 | |
| Decreases | -7 | |
| Closing balance 31 Dec | 1,196 | 1,103 |
| Fair values of derivative instruments, EUR 1,000 | Derivative assets 31 Dec 2017 |
Derivative liabilities 31 Dec 2017 |
Net fair value 31 Dec 2017 |
Net fair value 31 Dec 2016 |
|---|---|---|---|---|
| Forward exchange agreements | ||||
| Cash flow hedges under IAS 39 hedge accounting | 113 | 6 | 107 | -88 |
| Other hedges | 1,724 | 13 | 1,711 | -2,527 |
| Interest rate swaps, due in more than one year | ||||
| Cash flow hedges under IAS 39 hedge accounting | 1,326 | -1,326 | -3,012 | |
| Electricity derivatives | ||||
| Cash flow hedges under IAS 39 hedge accounting | 1,087 | 348 | 739 | -76 |
| Other hedges | 13 | 202 | -189 | -32 |
| Total | 2,937 | 1,895 | 1,042 | -5,735 |
| Nominal values of derivative financial instruments, EUR 1,000 | 31 Dec 2017 | 31 Dec 2016 |
| 4,396 8,134 |
|---|
| 123,308 112,721 |
| 80,000 80,000 |
| 9,986 10,741 |
| 256 387 |
| 217,947 211,984 |
| 28. OTHER LEASES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Group as lessee: | ||
| Minimum lease payments based on non-cancellable leases | ||
| Within one year | 12,806 | 13,351 |
| Within more than one year and a maximum of five years | 7,435 | 13,066 |
| After more than five years | 5,666 | 8,140 |
| Total | 25,907 | 34,557 |
| Rents recognised as cost | 15,029 | 11,337 |
The terms and conditions of the leases vary. The Group companies rent properties, machinery and equipment.
| 29. CONTINGENT LIABILITIES, EUR 1,000 | 2017 | 2016 |
|---|---|---|
| Debts with mortgages or other collateral given as security | ||
| Loans from financial institutions | 1,594 | 1,694 |
| Pension fund loans | 4,416 | 5,273 |
| Total | 6,010 | 6,967 |
| Mortgages and other securities given as comprehensive security | ||
| Real estate mortgages | 2,664 | 2,796 |
| Corporate mortgages | 1,117 | 3,920 |
| Total | 3,781 | 6,716 |
| Contingent liabilities not included in the balance sheet | ||
| Guarantees | 248 | 335 |
Atria Group's related parties include the members of the Board of Directors and the Supervisory Board, the CEO, the Deputy CEO and other members of the management team, their immediate families and the companies in which they have a controlling interest. Other related parties include the Group's joint ventures and associated companies, as well as the shareholding Itikka Co-operative, Lihakunta and Pohjanmaan Liha Co-operative and the subsidiaries of these companies.
Group companies, Group joint ventures and associates are presented in more detail in Note 33.
All business transactions that are entered into with related parties and are not eliminated in the consolidated financial statements are recognised as related party transactions.
| Transactions with related parties and related-party assets and liabilities | Joint ventures and associates |
Other related parties |
Total |
|---|---|---|---|
| 1 Jan –31 Dec 2017 | |||
| Sale of goods | 3,085 | 7,344 | 10,429 |
| Sale of services | 16 | 79 | 95 |
| Rental income | 4,415 | 123 | 4,538 |
| Purchase of goods | 16,038 | 11,403 | 27,441 |
| Purchase of services | 48,986 | 109 | 49,095 |
| Rental costs | 5,553 | 5,068 | 10,621 |
| Transactions with related parties and related-party assets and liabilities | Joint ventures and associates |
Other related parties |
Total |
|---|---|---|---|
| 31 Dec 2017 | |||
| Trade receivables | 395 | 215 | 610 |
| Other receivables | 145 | 145 | 290 |
| Trade payables | 5,680 | 964 | 6,644 |
| Transactions with related parties and related-party assets and liabilities | Joint ventures and associates |
Other related parties |
Total |
|---|---|---|---|
| 1 Jan –31 Dec 2016 | |||
|---|---|---|---|
| Sale of goods | 3,821 | 7,024 | 10,845 |
| Sale of services | 17 | 27 | 44 |
| Rental income | 99 | 123 | 222 |
| Purchase of goods | 14,700 | 10,887 | 25,587 |
| Purchase of services | 49,094 | 86 | 49,180 |
| Rental costs | 21 | 4,880 | 4,901 |
| 31 Dec 2016 | |||
| Trade receivables | 783 | 382 | 1,165 |
| Other receivables | 4 | 519 | 523 |
| Trade payables | 5,269 | 42 | 5,311 |
The sale of goods and services to related parties is based on the Group's valid price lists. The largest expense item under purchase of services is formed by the logistics services purchased from Tuoretie Oy.
| Employee benefits and fees of the Group's key managerial personnel (on an accrual basis) | 2017 | 2016 |
|---|---|---|
| Short-term employee benefits | 3,310 | 2,800 |
| Post-employment benefits (group pension benefits) | 250 | 252 |
| Total | 3,560 | 3,052 |
The key personnel in the Group's management are the members of the Board of Directors and the Supervisory Board, the CEO, the Deputy CEO and the other members of the Group's Management Team.
Group pension benefits have been arranged for the members of Atria Group's Management Team who are within the scope of Finnish social security. The retirement age under the group pension insurance is 63 years for the members of the Management Team. The pension plan is contribution-defined, and the annual payment is based on the monthly salary (monetary salary and fringe benefits) of the insured.
Atria's long-term incentive plan was implemented per earning period, which consisted of three one-year periods. Payments from the earning period implemented in 2015–2017 were based on the Group's earnings per share (EPS) excluding extraordinary items. Bonuses earned during the period will be paid in instalments in the coming years. Cash rewards payable under the plan for the entire 2015–2017 earning period are capped at EUR 4.5 million. The plan ended on 31 December 2017, and it covered a maximum of 45 people. The bonuses accrued for the entire earning period of 2015–2017 totalled EUR 2.1 million.
The maximum amount of bonus for the short-term incentive plan of Atria Plc is 25 per cent to 50 per cent of the annual salary, depending on the effect on the result and the level of competence required to perform the duties. The criteria in the bonus system comprise Group-level and business area-specific operating profit and net sales targets. In addition to the CEO and other members of the Management Team, Atria Plc's bonus scheme covers approximately 40 people.
| Salaries, benefits and pension contributions for the members of the Supervisory | Salaries and | Contributions to the supplementary pension |
|
|---|---|---|---|
| Board and the Board of Directors, the CEO and the Deputy CEO | benefits | scheme | Total |
| Members of the Supervisory Board: | |||
| Kaikkonen Jukka, Chairperson since 27 April 2017 | 16 | 16 | |
| Hyry Hannu, Chairperson until 27 April 2017 | 9 | 9 | |
| Anttikoski Juho, Deputy Chairperson | 13 | 13 | |
| Other members of the Supervisory Board | 55 | 55 | |
| Total | 92 | 0 | 92 |
| Members of the Board of Directors: | |||
| Paavola Seppo, Chairperson | 69 | 69 | |
| Rantsi Jyrki, Deputy Chairperson | 54 | 54 | |
| Ginman-Tjeder Nella | 27 | 27 | |
| Kaarto Esa | 68 | 68 | |
| Korhonen Pasi | 34 | 34 | |
| Moisio Jukka | 26 | 26 | |
| Paxal Kjell-Göran | 41 | 41 | |
| Sivula Harri | 28 | 28 | |
| Total | 347 | 0 | 347 |
| CEO: | |||
| Gröhn Juha | 585 | 130 | 716 |
| Deputy CEO: | |||
| Kyntäjä Heikki, CFO | 252 | 29 | 281 |
Atria Plc acquired the entire share capital of Lagerberg i Norjeby AB (Lagerbergs), a Swedish poultry company. The deal was approved by the Swedish Competition Authority and Consumer Agency on 1 April 2016. 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 transaction price of EUR 18.7 million was paid in cash.
The transaction allowed Atria to expand its business into the Swedish poultry market. The company is the third largest supplier on the Swedish chicken market. The Lagerbergs brand transferred to Atria in connection with the transaction.
In Sweden, demand for chicken has increased steadily in recent years. In 2015, the retail market for poultry increased by seven per cent.
Lagerbergs has a production plant and its own chicken-rearing facilities in Blekinge, Southern Sweden. In addition to the chickens produced at its own rearing facilities, Lagerbergs acquires chickens from the contract producers located near the production plant. The company employs 120 people. Atria's annual net sales are expected to grow by about EUR 30 million.
| Lagerberg i Norjeby AB | Fair values employed in the acquisition |
|---|---|
| Property, plant and equipment | 6,372 |
|---|---|
| Intangible assets | |
| Business contracts | 4,753 |
| Brand | 5,720 |
| Non-current financial assets | 879 |
| Inventories | 1,799 |
| Current receivables | 3,999 |
| Cash in hand and at bank | 2,808 |
| Total assets | 26,329 |
Atria divested its 51 per cent holding in the subsidiary Nordic Fastfood Ab on 1 December 2017. The transaction price was EUR 4.0 million. Atria Scandinavia recorded a profit of EUR 1.4 million on the sale, recognised under other operating income.
On 29 April 2016, Atria sold the pig farm located in northern Estonia. The sale of the pig farm gave rise to a sales loss of approximately EUR 1 million, recognised in other operating expenses.
In Sweden, Atria sold the real estate company KB Joddlaren on 1 June 2016. The company owns a logistics property in Gothenburg. The transaction price was EUR 3.8 million, and Atria Scandinavia recorded a profit of EUR 1.4 million on the sale, recognised under other operating income.
| Lagerberg i Norjeby AB | Fair values employed in the acquisition |
|---|---|
| Non-current liabilities | 2,970 |
| Deferred tax liabilities | 2,673 |
| Current liabilities | 5,836 |
| Total liabilities | 11,480 |
| Net assets | 14,849 |
| Goodwill | 3,895 |
| Purchase price | 18,744 |
| Effect of the acquisition on cash flow | 15,937 |
Atria acquired 70 per cent of the share capital of Well-Beef Ltd. (Kaivon Liha). The transaction price was EUR 15.3 million. The agreement concerning the transaction between Atria and Well-Beef Ltd. was confirmed on 3 October 2016. Well-Beef Ltd's production plant is located in Turku, and it employs approximately 50 people.
The acquisition allows Atria to increase the added value and profitability of the beef chain. Well-Beef Ltd. has strong know-how in the manufacturing of high-quality hamburger patties and kebab products, as well as a significant market position in the growing fast food segment in Finland. Well-Beef Ltd's customers consist mainly of fast food chains and other food service sector customers. The company's brand is Well Beef. The integration of the business operations will result in significant synergy benefits from the procurement of meat to the distribution of products.
Atria's annual net sales are expected to grow by about EUR 40 million.
| Well-Beef Ltd. Fair values employed in the acquisition |
|
|---|---|
| Property, plant and equipment | 1,062 |
| Intangible assets | |
| Customer relationships | 4,631 |
| Brand | 3,606 |
| Other long-term expenditure | 35 |
| Inventories | 1,362 |
| Current receivables | 3,169 |
| Total assets | 13,865 |
| Deferred tax liabilities | 1,674 |
| Current liabilities | 2,525 |
| Total liabilities | 4,200 |
| Net assets | 9,665 |
| Goodwill | 12,168 |
| Non-controlling interest in the fair value (Note 24) | 6,550 |
| Purchase price payable in cash | 15,283 |
| Acquisition's effect on cash flow 31 Dec 2016 | 14,281 |
This calculation is final.
The most significant subsidiaries of Atria Group are Atria Finland Ltd, Atria Sverige AB, Atria Danmark A/S, OOO Pit-Product and Atria Eesti AS, all of which are manufacturers of foodstuffs, as well as A-Farmers Ltd, which is responsible for animal procurement and trading, and A-Rehu Oy, which manufactures animal feed.
| Group companies by business area | Domicile | Holding, % Share of votes, % | |
|---|---|---|---|
| Atria Finland: | |||
| Ab Botnia-Food Oy *) | Finland | 100.0 | 100.0 |
| A-Farmers Ltd | Finland | 97.9 | 99.0 |
| A-Liha Jyväskylä Oy | Finland | 100.0 | 100.0 |
| A-Lihatukkurin Oy *) | Finland | 100.0 | 100.0 |
| A-Logistics Ltd | Finland | 100.0 | 100.0 |
| A-Pekoni Nurmo Oy | Finland | 100.0 | 100.0 |
| A-Pihvi Kauhajoki Oy | Finland | 100.0 | 100.0 |
| A-Pihvi Kuopio Oy | Finland | 100.0 | 100.0 |
| A-Rehu Oy | Finland | 51.0 | 51.0 |
| A-Sikateurastamo Oy | Finland | 100.0 | 100.0 |
| Atria Finland Ltd | Finland | 100.0 | 100.0 |
| Atria-Chick Oy | Finland | 100.0 | 100.0 |
| Atria-Lihavalmiste Oy | Finland | 100.0 | 100.0 |
| Atria-Meetvursti Oy | Finland | 100.0 | 100.0 |
| Atria Plc | Finland | ||
| Atria-Tekniikka Oy | Finland | 100.0 | 100.0 |
| Atria-Tuoreliha Oy | Finland | 100.0 | 100.0 |
| Atria-Valmisruoka Oy | Finland | 100.0 | 100.0 |
| Best-In Oy | Finland | 100.0 | 100.0 |
| Kauhajoen Teurastamokiinteistöt Oy | Finland | 100.0 | 100.0 |
| Kiinteistö Oy Tievapolku 3 | Finland | 100.0 | 100.0 |
| Liha ja Säilyke Oy | Finland | 100.0 | 100.0 |
| Mestari Forsman Oy *) | Finland | 100.0 | 100.0 |
| Nurmon Bioenergia Oy | Finland | 100.0 | 100.0 |
| Rokes Oy | Finland | 100.0 | 100.0 |
| Sahalahden Broiler Oy | Finland | 100.0 | 100.0 |
| Suomen Kalkkuna Oy | Finland | 100.0 | 100.0 |
| Well-Beef Ltd. | Finland | 70.0 | 70.0 |
| Atria Scandinavia: | |||
| Atria Concept SP Z.o.o | Poland | 100.0 | 100.0 |
| Atria Danmark A/S | Denmark | 100.0 | 100.0 |
| Atria Denmark Holding A/S | Denmark | 100.0 | 100.0 |
| Atria Scandinavia AB | Sweden | 100.0 | 100.0 |
| Atria Sverige AB | Sweden | 100.0 | 100.0 |
| Ridderheims AS | Norway | 100.0 | 100.0 |
| Atria Russia: | |||
|---|---|---|---|
| Atria-Invest Oy | Finland | 100.0 | 100.0 |
| OOO Pit-Product | Russia | 100.0 | 100.0 |
| Atria Baltic: |
| Atria Eesti AS | Estonia | 100.0 | 100.0 |
|---|---|---|---|
| Atria Farmid OÜ | Estonia | 100.0 | 100.0 |
| OÜ Atria *) | Estonia | 100.0 | 100.0 |
*) Dormant company
The consolidated financial statements include all subsidiaries.
Owners with non-controlling interests accounted for an insignificant share of Atria Group's profit for the period and retained earnings.
| Group joint ventures and associates | Domicile | Holding, % Share of votes, % | |
|---|---|---|---|
| Group joint ventures: | |||
| Honkajoki Oy *) | Finland | 50.0 | 50.0 |
| Länsi-Kalkkuna Oy | Finland | 50.0 | 50.0 |
| Group associates: | |||
| Domretor Oy | Finland | 24.9 | 24.9 |
| Findest Protein Oy | Finland | 33.1 | 33.1 |
| Finnpig Oy | Finland | 50.0 | 50.0 |
| Foodwest Oy | Finland | 33.5 | 33.5 |
| Kiinteistö Oy Itikanmäen Teollisuustalo | Finland | 13.2 | 13.2 |
| Transbox Oy | Finland | 25.7 | 25.7 |
| Tuoretie Oy | Finland | 33.3 | 33.3 |
*) Reported as a significant joint venture (Note 15).
| Note | 1 Jan– 31 Dec 2017 |
1 Jan– 31 Dec 2016 |
|
|---|---|---|---|
| NET SALES | 2.1 | 38,512 | 37,632 |
| Other operating income | 2.2 | 4,263 | 3,425 |
| Personnel expenses | 2.3 | -3,465 | -2,601 |
| Depreciation and impairment |
2.4 | ||
| Planned depreciation | -21,217 | -21,432 | |
| Other operating expenses |
2.5 | -6,346 | -5,779 |
| EBIT | 11,748 | 11,245 | |
| Financial income and expenses |
2.6 | -3,394 | -2,982 |
| PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES |
8,354 | 8,262 | |
| Appropriations | 2.7 | 10,571 | 5,816 |
| Income taxes | 2.8 | -3,776 | -3,592 |
| PROFIT/LOSS FOR THE ACCOUNTING PERIOD |
15,148 | 10,486 |
| A s s e t s | Note | 1 Jan– 31 Dec 2017 |
1 Jan– 31 Dec 2016 |
|---|---|---|---|
| FIXED ASSETS | |||
| Intangible assets | 3.1 | ||
| Intangible rights | 23 | 27 | |
| Other long-term | |||
| expenditure Total intangible assets |
6,153 6,176 |
5,671 5,698 |
|
| Tangible assets | 3.1 | 223,022 | 225,166 |
| Investments | 3.2 | ||
| Interests in Group | |||
| companies | 317,556 | 318,056 | |
| Interests in associates | 3,331 | 3,881 | |
| Other shares and interests | 1,065 | 1,072 | |
| Total investments | 321,952 | 323,010 | |
| TOTAL FIXED ASSETS | 551,151 | 553,873 | |
| CURRENT ASSETS | |||
| Non-current receivables | 3.3 | 151,424 | 156,398 |
| Current receivables | 3.3 | 130,214 | 122,929 |
| Cash in hand and at bank | 134 | 3,522 | |
| TOTAL CURRENT ASSETS | 281,772 | 282,849 | |
| T o t a l a s s e t s | 832,923 | 836,723 | |
| L i a b i l i t i e s | Note 31 Dec 2017 31 Dec 2016 | ||
| EQUITY | 3.4 | ||
| Share capital | 48,055 | 48,055 | |
| Share premium | 0 | 0 | |
| Treasury shares | -1,277 | -1,277 | |
| Invested unrestricted equity fund | 248,730 | 248,730 | |
| Retained earnings | 59,993 | 62,459 | |
| Profit/loss for the accounting period |
15,148 | 10,486 | |
| TOTAL EQUITY | 370,649 | 368,453 | |
| ACCRUED APPROPRIATIONS | 3.5 | ||
| Depreciation difference | 80,341 | 82,862 | |
| LIABILITIES | |||
| Non-current liabilities | 3.6 | 119,697 | 174,901 |
| Current liabilities | 3.7 | 262,236 | 210,507 |
| TOTAL LIABILITIES | 381,933 | 385,407 | |
| T o t a l l i a b i l i t i e s | 832,923 | 836,723 | |
| 1 Jan– 31 Dec 2017 |
1 Jan– 31 Dec 2016 |
|
|---|---|---|
| CASH FLOW FROM OPERATING ACTIVITIES |
||
| Payments received from sales | 38,352 | 37,353 |
| Other business revenue | 4,263 | 3,425 |
| Payments on operating expenses |
-9,313 | -8,351 |
| Cash flow from operating activities before financial items and taxes |
33,303 | 32,427 |
| Dividends received | 304 | 78 |
| Interest received and other financial income |
7,788 | 10,837 |
| Interest paid and financial expenses |
-14,558 | -13,206 |
| Tax paid | -4,796 | -1,323 |
| Cash flow from operating activities | 22,040 | 28,813 |
| CASH FLOW FROM INVESTMENTS |
||
| Investments in tangible and intangible assets |
-19,551 | -27,279 |
| Other investments | 1,057 | -5,601 |
| Change in Group receivables | -565 | 14,917 |
| Change in loan receivables | 2,495 | 0 |
| Cash flow from investments | -16,564 | -17,962 |
| CASH FLOW FROM FINANCING ACTIVITIES |
||
| Loan payments | -1,005 | 21,628 |
| Change in Group liabilities | 5,093 | -20,675 |
| Dividends paid | -12,952 | -11,263 |
| Cash flow from financing activities | -8,864 | -10,310 |
| CASH FLOW FROM OPERATING ACTIVITIES |
22,040 | 28,813 |
| CASH FLOW FROM INVESTMENTS |
-16,564 | -17,962 |
| CASH FLOW FROM FINANCING ACTIVITIES |
-8,864 | -10,310 |
| TOTAL | -3,389 | 540 |
| Change in cash and cash equivalents |
||
| Cash and cash equivalents 1 Jan | -3,522 | -2,982 |
| Cash and cash equivalents 31 Dec | 134 | 3,522 |
| Change | -3,389 | 540 |
Atria Plc's financial statements have been drawn up in accordance with Finland's Accounting Act and the other rules and regulations pertaining to the compilation of financial statements (FAS).
Atria Plc is the parent company of Atria Group, and its domicile is in Kuopio, Finland. Copies of Atria Plc's consolidated financial statements are available at the company's head office at Itikanmäenkatu 3, Seinäjoki; postal address: P.O. Box 900, 60060 ATRIA, Finland.
In the balance sheet, tangible and intangible assets are entered at their direct acquisition cost less planned depreciation and value adjustments. Depreciation is implemented on a straight-line basis over the service life of the assets. Contributions received for the acquisition of tangible assets are entered as a decrease in acquisition costs. These contributions are not significant.
| Buildings | Seinäjoki | 40 years |
|---|---|---|
| other locations | 25 years | |
| Machinery and equipment | Seinäjoki | 10 years |
| other locations | 7 years | |
| Software | 5 years | |
| Other long-term items | 10 years |
In the balance sheet, financial instruments are measured at acquisition cost less value adjustments.
Items expressed in foreign currencies have been converted into euro at the exchange rate quoted by the European Central Bank. The exchange differences of the realised currency-denominated loans are presented under financial items.
Financial instruments are measured primarily in accordance with Chapter 5, section 2 of the Accounting Act. Receivables at nominal value, although at a maximum probable value. Securities and others of the kind falling under the scope of financial assets at acquisition cost or, if their probable normal value on the closing date is less than that, at this value. Liabilities at nominal value or, if the debt is tied to an index or some other basis for comparison, to the value higher than the nominal value pursuant to the changed basis for comparison.
Interest rate risk is managed by dividing financing into instruments with floating and fixed interest rates and by hedging with interest rate derivatives. During the accounting period, the company used interest rate swaps in interest rate risk management. Interest rate swaps are accounted for as hedging. Atria Plc's subsidiaries operate in several currency areas, due to which the company is exposed to risks related to different currencies. Currency risks arise from forecast transactions, as well as assets and liabilities booked into the balance sheet. To hedge from currency fluctuations, the company makes forward exchange agreements not subject to hedge accounting, but the derivatives are accounted for as hedging. The company recognises interest rate swaps at fair value in accordance with the alternative method permitted by Chapter 5, section 2a of the Accounting Act, and the profit and loss from them is recognised under financial income and expenses in the income statement.
EUR 1,000
| 1 Jan – 31 Dec 2017 |
1 Jan – 31 Dec 2016 |
|
|---|---|---|
| 2.1. NET SALES | 38,512 | 37,632 |
The company's rental income is presented as net sales because it corresponds with the present nature of the company's operations.
| Service charges from Group companies |
4,101 | 3,050 |
|---|---|---|
| Other | 163 | 376 |
| Total | 4,263 | 3,425 |
| 16 | 12 |
|---|---|
| 1,122 | |
| 72 | 71 |
| 1,558 | 809 |
| 2,760 | 2,002 |
| 624 | 521 |
| 81 | 78 |
| 705 | 599 |
| 3,465 | 2,601 |
| 1,130 |
Pension commitments of members of the Board of Directors and the CEO: The company's statutory pensions are defined contribution plans and have been arranged through an insurance company (see Note 30 to the consolidated financial statements).
| Depreciations of tangible and | ||
|---|---|---|
| intangible assets | 21,217 | 21,432 |
Depreciation specification per balance sheet item is included under section 3.1.
| 31 Dec | |
|---|---|
| 2017 |
31 Dec 2016
Intangible assets:
| Intangible rights | ||
|---|---|---|
| Acquisition cost 1 Jan | 1,483 | 1,483 |
| Increases | 0 | 0 |
| Decreases | 0 | 0 |
| Acquisition cost 31 Dec | 1,483 | 1,483 |
| Cumulative depreciation 1 Jan | -1,455 | -1,450 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -4 | -6 |
| Cumulative depreciation 31 Dec | -1,460 | -1,455 |
| Book value 31 Dec | 23 | 27 |
| Other long-term expenditure | ||
| Acquisition cost 1 Jan | 26,817 | 25,484 |
| Increases | 2,550 | 1,333 |
| Decreases | 0 | 0 |
| Acquisition cost 31 Dec | 29,367 | 26,817 |
| Cumulative depreciation 1 Jan | -21,146 | -19,234 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -2,068 | -1,912 |
| Cumulative depreciation 31 Dec | -23,214 | -21,146 |
| Book value 31 Dec | 6,153 | 5,671 |
| Total intangible assets | 6,176 | 5,698 |
| Tangible assets: | ||
| Land and water | ||
| Acquisition cost 1 Jan | 1,197 | 1,207 |
| Increases | 0 | 0 |
| Decreases | 0 | -10 |
| Acquisition cost 31 Dec | 1,197 | 1,197 |
| Buildings and structures | ||
| Acquisition cost 1 Jan | 299,335 | 298,635 |
| Increases | 19,956 | 700 |
| Decreases | 0 | 0 |
| Acquisition cost 31 Dec | 319,291 | 299,335 |
| Cumulative depreciation 1 Jan | -162,990 | -156,429 |
| Depreciation on decreases | 0 | |
| Depreciation for the accounting period | 0 | |
| -6,534 | -6,560 | |
| Cumulative depreciation 31 Dec | -169,524 | -162,990 |
| Book value 31 Dec | 149,767 | 136,345 |
| Machinery and equipment | ||
| Acquisition cost 1 Jan | 327,946 | 323,175 |
| Increases | 30,003 | 4,943 |
| Decreases Acquisition cost 31 Dec |
-4 357,945 |
-172 327,946 |
| 2.5. OTHER OPERATING EXPENSES |
1 Jan – 31 Dec 2017 |
1 Jan – 31 Dec 2016 |
|---|---|---|
| Other operating expenses | 6,346 | 5,779 |
| Including administration, marketing, energy, cleaning, |
operational and other costs as well as fees paid to auditors.
| Fees paid to auditors / | ||
|---|---|---|
| Auditing fees | ||
| PricewaterhouseCoopers Oy | 179 | 178 |
| Tax consulting | 0 | 0 |
| Other fees | 0 | 0 |
| Total | 179 | 178 |
| Return on long-term investments | ||
|---|---|---|
| From other companies | 304 | 78 |
| Total | 304 | 78 |
| Other interest and financial income |
||
| From Group companies | 3,179 | 3,201 |
| From other companies | 6,108 | 7,480 |
| Total | 9,287 | 10,681 |
| Interest expenses and other financial expenses | ||
| To Group companies | 266 | 379 |
| Impairment on the Group's investments |
0 | 0 |
| To other companies | 12,718 | 13,362 |
| Total | 12,984 | 13,741 |
| Total financial income and expenses |
-3,394 | -2,982 |
| Interest expenses and other financial expenses include exchange rate gains/ losses (net) |
-6 | 198 |
| 2.7. APPROPRIATIONS | ||
| Difference between planned depreciation and depreciation implemented in taxation |
2,521 | 536 |
| Group contributions | 8,050 | 5,280 |
| Total | 10,571 | 5,816 |
| Income taxes on operations | 3,776 | 3,592 |
|---|---|---|
| ---------------------------- | ------- | ------- |
| 31 Dec 2017 |
31 Dec 2016 |
|
|---|---|---|
| Cumulative depreciation 1 Jan | -282,666 | -269,888 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -12,436 | -12,778 |
| Cumulative depreciation 31 Dec | -295,101 | -282,666 |
| Book value 31 Dec | 62,844 | 45,280 |
| Other tangible assets | ||
| Acquisition cost 1 Jan | 2,822 | 2,808 |
| Increases | 91 | 13 |
| Decreases | 0 | 0 |
| Acquisition cost 31 Dec | 2,913 | 2,822 |
| Cumulative depreciation 1 Jan | -1,754 | -1,577 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -175 | -177 |
| Cumulative depreciation 31 Dec | -1,929 | -1,754 |
| Book value 31 Dec | 984 | 1,068 |
| Advance payments and acquisitions in progress |
||
| Acquisition cost 1 Jan | 41,276 | 20,804 |
| Changes +/- | -33,046 | 20,472 |
| Acquisition cost 31 Dec | 8,231 | 41,276 |
| Tangible assets total | 223,022 | 225,166 |
| Non-depreciated acquisition cost of machinery and equipment |
62,844 | 45,280 |
The share of items other than production machinery and equipment is not significant in amount.
The acquisition costs of completely depreciated and scrapped items are presented as decreases.
| Parent company holding, % 2017 |
Parent company holding, % 2016 |
|
|---|---|---|
| Group companies: | ||
| Ab Botnia-Food Oy, Seinäjoki | 100 | 100 |
| Atria Eesti AS, Valga, Estonia | 100 | 100 |
| Atria Scandinavia AB, Sköllersta, Sweden | 100 | 100 |
| Atria Finland Ltd, Kuopio | 100 | 100 |
| Atria-Invest Oy, Seinäjoki | 100 | 100 |
| A-Farmers Ltd, Seinäjoki | 97,9 | 97,9 |
| Best-In Oy, Kuopio | 100 | 100 |
| Kauhajoen Teurastamokiinteistöt Oy, Kauhajoki |
100 | 100 |
| Kiinteistö Oy Tievapolku 3, Helsinki | 100 | 100 |
| Liha ja Säilyke Oy, Forssa | 63,2 | 63,2 |
| Mestari Forsman Oy, Seinäjoki | 100 | 100 |
| OÜ Atria, Tallinn, Estonia | 100 | 100 |
| Rokes Oy, Forssa | 100 | 100 |
| Suomen Kalkkuna Oy, Seinäjoki | 100 | 100 |
31 Dec 2016
| Foodwest Oy, Seinäjoki | 33,5 | 33,5 |
|---|---|---|
| Honkajoki Oy, Honkajoki | 50,0 | 50,0 |
| Kiinteistö Oy Itikanmäen Teollisuustalo, Seinäjoki |
13,2 | 13,2 |
| Finnish Meat Research Institute, Hämeenlinna |
50,0 | |
| Länsi-Kalkkuna Oy, Säkylä | 50,0 | 50,0 |
| Transbox Oy, Helsinki | 18,6 | 18,6 |
| Tuoretie Oy, Seinäjoki | 33,3 | 33,3 |
| Loan receivables | 155 | 2,650 |
|---|---|---|
| Receivables from Group companies: | ||
| Loan receivables | 151,269 | 153,748 |
| Total non-current receivables | 151,424 | 156,398 |
| Trade receivables | 10 | 0 |
|---|---|---|
| Other receivables | -4 | -4 |
| Accrued credits and deferred charges | 1,782 | 443 |
| Receivables from Group companies: | ||
|---|---|---|
| Trade receivables | 1,823 | 1,674 |
| Other receivables | 117,711 | 114,667 |
| Accrued credits and deferred charges | 8,892 | 6,150 |
Total current receivables 130,214 122,929
| charges: | ||
|---|---|---|
| – Group contributions | 8,050 | 5,280 |
| – amortised interest | 843 | 979 |
| – valuation of forward contracts | 1,634 | 0 |
| – other | 147 | 334 |
| Total | 10,674 | 6,592 |
| Share capital 1 Jan | 48,055 | 48,055 |
|---|---|---|
| Share capital 31 Dec | 48,055 | 48,055 |
| Share premium 1 Jan | 0 | 138,502 |
| Transfer to invested unrestricted equity fund |
0 | -138,502 |
| Share premium 31 Dec | 0 | 0 |
| Total restricted equity | 48,055 | 48,055 |
| 31 Dec 2017 |
31 Dec 2016 |
|
|---|---|---|
| Own shares 1 Jan | -1,277 | -1,277 |
| Own shares 31 Dec | -1,277 | -1,277 |
| Invested unrestricted equity fund 1 Jan | 248,730 | 110,228 |
| Transfer from share premium | 0 | 138,502 |
| Invested unrestricted equity fund 31 Dec | 248,730 | 248,730 |
| Retained earnings 1 Jan | 72,945 | 73,722 |
| Dividend distribution | -12,952 | -11,263 |
| Retained earnings 31 Dec | 59,993 | 62,459 |
| Profit/loss for the accounting period | 15,148 | 10,486 |
| Retained earnings 31 Dec | 75,142 | 72,945 |
| Total unrestricted equity | 322,594 | 320,397 |
| Total equity | 370,649 | 368,453 |
At the end of the financial period on 31 December 2017, the company held a total of 111,312 treasury shares, accounting for 0.394 per cent of the shares in the company and 0.1 per cent of the voting rights. The number of treasury shares did not change during the period.
| Calculation of distributable funds: | 31 Dec 2017 |
31 Dec 2016 |
|---|---|---|
| Invested unrestricted equity fund | 248,730 | 248,730 |
| Retained earnings | 59,993 | 62,459 |
| Profit/loss for the accounting period | 15,148 | 10,486 |
| Treasury shares | -1,277 | -1,277 |
| Total | 322,594 | 320,397 |
| 3.5. ACCRUED APPROPRIATIONS | 31 Dec 2017 |
31 Dec 2016 |
|---|---|---|
| Depreciation difference | 80,341 | 82,862 |
| 3.6. NON-CURRENT LIABILITIES | ||
| Bonds | 0 | 50,000 |
| Loans from financial institutions | 110,000 | 110,000 |
| Pension fund loans | 8,000 | 10,513 |
| Accrual | 147 | 51 |
| Total | 118,147 | 170,563 |
| Liabilities to Group companies: | ||
| Other non-current liabilities | 1,550 | 4,338 |
| Total non-current liabilities | 119,697 | 174,901 |
| Loans maturing later than in five years: | ||
| Loans from financial institutions | 40,000 | 70,000 |
| Pension fund loans | 0 | 2,000 |
| Total | 40,000 | 72,000 |
The bond amounting to EUR 50 million issued by Atria Plc in 2013 matures in 2018 (interest rate 4.4%)
| Loans from financial institutions | 84,505 | 32,998 |
|---|---|---|
| Pension fund loans | 2,513 | 2,513 |
| Trade payables | 2,951 | 3,217 |
| Other payables | 933 | 941 |
| Accrual | 4,518 | 6,484 |
Liabilities to Group companies:
| Other non-current liabilities | 2,788 | 2,788 |
|---|---|---|
| Trade payables | 527 | 643 |
| Other payables | 163,470 | 160,870 |
| Accrual | 32 | 53 |
| Total current liabilities | 262,236 | 210,507 |
Material items included in accruals and deferred income:
– accruals of salaries and social security
| payments | 832 | 634 |
|---|---|---|
| – interest accruals | 2,171 | 2,208 |
| – valuation of forward contracts | 0 | 1,537 |
| – amortised taxes | 971 | 1,990 |
| – other | 577 | 169 |
| Total | 4,550 | 6,537 |
| 2017 | 2016 | |||
|---|---|---|---|---|
| Number of | EUR | Number of | EUR | |
| Series A (1 vote/ share) |
19,063,747 | 32,408 | 19,063,747 | 32,408 |
| Series KII (10 votes/share) |
9,203,981 | 15,647 | 9,203,981 | 15,647 |
| Total | 28,267,728 | 48,055 | 28,267,728 | 48,055 |
31 Dec 2017 31 Dec 2016
4.1. SECURITIES GIVEN, CONTINGENT LIABILITIES AND OTHER LIABILITIES
Contingent liabilities and other liabilities not included in the balance sheet
| On behalf of Group companies | 54,878 | 56,435 |
|---|---|---|
| On behalf of others | 0 | 0 |
| Total | 54,878 | 56,435 |
Minimum rents paid based on other leases
| Within one year | 650 | 693 |
|---|---|---|
| Within more than one year and a maximum of five years |
1,191 | 1,668 |
| After more than five years | 2,662 | 2,808 |
| Total | 4,502 | 5,168 |
The company has made the property investments referred to in the Value Added Tax Act. The remaining verification liability of these investments assessed for each verification period is:
| Year of completion of the investment |
Remaining amount of verification liability |
|
|---|---|---|
| 2008 | 0 | 144 |
| 2009 | 138 | 275 |
| 2010 | 72 | 107 |
| 2011 | 532 | 709 |
| 2012 | 363 | 453 |
| 2013 | 434 | 521 |
| 2014 | 556 | 649 |
| 2015 | 1,466 | 1,676 |
| 2016 | 1,517 | 1,707 |
| 2017 | 1,007 | |
| Total | 6,083 | 6,241 |
The company is obliged to verify reductions in VAT on property investments if the taxable use of the properties decreases during the verification period
To be hedged:
A loan of EUR 30 million, 17 June 2015–23 June 2022, interest 6-month Euribor
Hedging derivative:
Interest rate swap with a nominal value of EUR 30 million, 23 June 2016–23 June 2022; the company receives a 6-month Euribor rate and pays a fixed interest; the fair value of the agreement on the closing date is EUR -904,000. The cash flow from the interest rate swap is recognised in the income statement with the same periods as the interest flows from the hedged loan from the closing date until 23 June 2022.
A loan of EUR 50 million with floating interest rate, until 30 April 2018, interest 6-month Euribor Hedging derivatives:
Interest rate swap with a nominal value of EUR 25 million, 31 October 2011–30 April 2018; the company receives a 6-month Euribor rate and pays a fixed interest; the fair value of the agreement on the closing date is EUR -213,000. Interest rate swap with a nominal value of EUR 25 million, 31 October 2011–30 April 2018; the company receives a 6-month Euribor rate and pays a fixed interest; the fair value of the agreement on the closing date is EUR -209,000. The cash flow from the interest rate swaps is recognised in the income statement with the same periods as the interest flows from the hedged loan with a floating interest rate from the closing date until 30 April 2018.
| Seinäjoki, 15 March 2018 | |
|---|---|
| Seppo Paavola Chairperson |
Nella Ginman-Tjeder |
| Esa Kaarto | Pasi Korhonen |
| Jukka Moisio | Kjell-Göran Paxal |
| Jyrki Rantsi | Harri Sivula |
| Juha Gröhn CEO |
A report on the audit performed has been issued today.
Seinäjoki, 15 March 2018 PricewaterhouseCoopers Oy Firm of authorised public accountants
Samuli Perälä Authorised public accountant
| Fair values of derivative instruments: |
Derivative assets 31 Dec 2017 |
Derivative liabilities 31 Dec 2017 |
Net fair value 31 Dec 2017 |
Net fair value 31 Dec 2016 |
|---|---|---|---|---|
| Forward exchange agreements (maturity less than a year) |
1,634 | 1,634 | -1,537 | |
| Total | 1,634 | 1,634 | -1,537 | |
| Nominal values of derivative financial instruments: |
31 Dec 2017 |
31 Dec 2016 |
||
| Forward exchange agreements |
115,391 | 102,810 | ||
| Total | 115,391 | 102,810 |
The grounds employed to determine the fair value of derivative financial instruments are consistent with the Group's principles. Detailed information concerning derivatives (including risk management and hierarchy levels) are presented in Note 27 to the consolidated financial statements.
| Balance sheet item |
31 Dec 2017 |
Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|
| Current assets | ||||
| Derivative financial instruments |
1,634 | 1,634 | ||
| Balance sheet item |
31 Dec 2016 |
Level 1 | Level 2 | Level 3 |
| Current liabilities | ||||
| Derivative financial instruments |
1,537 | 1,537 | ||
Level 1 Input for identical assets and liabilities, prices quoted on functional markets
Level 2 Quoted prices belonging to levels other than level 1, observable for assets and liabilities either directly or indirectly. Level 3 Assets and liabilities subject to input not based on verifiable market prices.
In our opinion
Our opinion is consistent with the additional report to the Board of Directors.
We have audited the financial statements of Atria Plc (business identity code 0841066-1) for the year ended 31 December 2017. The financial statements comprise:
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We have not provided non-audit services to the parent company or to the group companies. In addition, we have not provided nonaudit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014.
• Overall group materiality: 2,600,000 euros.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial statements as a whole.
| Overall group materiality | 2,600,000 euros (previous year 2,500,000 euros) |
|---|---|
| How we determined it | Overall group materiality is 2,600,000 euros. Materiality has been determined taking into consideration net sales, gross profit and profit before taxes. |
| Rationale for the materiality benchmark applied | We chose profit before taxes as the main benchmark because, in our view, it is the benchmark most commonly used by users of the financial statements to measure the performance of the group. It is also a generally accepted benchmark. We have also chosen net sales and gross margin as benchmarks as we consider these to be relevant for the users of the financial statements when assessing the performance of the group. |
We tailored the scope of our audit, taking into account the structure of the group, the accounting processes and controls, and the industry in which the group operates.
Atria group had four reportable segments during the financial year: Atria Finland, Atria Scandinavia, Atria Russia and Atria Baltic. Our audit procedures addressed all four reportable segments. Our audit scope included the parent company and subsidiaries in Finland, Sweden, Russia, Estonia and Denmark.
We have pre-defined the types of audit procedures aimed at the financial information of each part of the group. In cases where a group component auditor has performed the audit work, we have instructed their work with group audit instructions which have included e.g. our risk assessment, materiality, audit approach and centralized audit procedures.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
(Translation of the Finnish Original)
| KEY AUDIT MATTER in the audit of the group |
How our audit addressed the key audit matter | KEY AUDIT MATTER in the audit of the group |
How our audit addressed the key audit matter |
|---|---|---|---|
| Revenue recognition | Valuation of inventories | ||
| Refer to the Accounting policies for the consolidated financial statements and Note 2 Net sales Net sales are determined on the basis of the fair value of considerations received or to be received for the sale of products and services, raw materials and supplies. Net sales are adjusted by indirect taxes and discounts based on normal contractual principles applied in the industry. Revenue from the sale of goods is recognised when the risks and rewards of owning the goods have been transferred to the buyer. Revenue from services is recognised when the service has been completed. Revenue recognition is considered a key audit matter in the audit of the group due to the financial significance of net sales |
Our audit procedures included for example the following procedures: • Evaluation of internal control activities over revenue recognition and testing of key controls. • Checking significant new sales contracts and terms of agreement to verify correct IFRS accounting treatment. • Testing sales cut-off of individual sales transactions by comparing to delivery documents and by checking significant credit notes issued after year-end. • Testing of discounts and rebate accruals on a sample basis. • Analysis of revenue transactions and journal entries posted to revenue using computer-aided audit and data analysis techniques. In addition to these procedures, we have tested a sample of revenue transactions recorded during the financial year. |
Refer to Accounting policies for the consolidated financial statements and note 19 Inventories Inventories are measured at the lower of cost or probable net realisable value. The cost for finished and unfinished products consists of raw materials, direct labour costs, other direct costs and the appropriate share of manufacturing-related variable overheads and fixed overheads at a normal level of operations. The net realisable value is the estimated selling price in the ordinary course of business, less the estimated selling expenses. Valuation of inventories is considered a key audit matter in the audit of the group due to its financial significance and as it includes judgement as described in the accounting principles. |
controls over inventory. valuation of inventories. entries posted to inventory and cost of sales. mathematic accuracy of the calculations. |
| in the financial statements. Valuation of goodwill and trademarks Refer to Accounting policies for the consolidated financial statements and Note 14 Goodwill and other intangible assets |
Our audit procedures included for example the following procedures: • We discussed the accounting policies and significant management's |
Key audit matter in the audit of the parent company | on inventories in the custody of third parties. How our audit addressed the key audit matter |
| The group tests annually goodwill and the intangible assets with indefinite useful lives for possible impairment. Goodwill in the Atria Group consolidated balance sheet totalled to 167 million euros and trademarks with indefinite useful lives to 58 million euros at 31 December 2017. Goodwill and trademarks with indefinite useful lives have been allocated to the four cash generating units Atria Finland, Atria Scandinavia, Atria Russia and Atria Baltic. Impairment testing for goodwill and other intangible assets are subject to significant management judgement. The fair value of intangible assets is determined based on estimates of future cash flows. Key assumptions in these estimates include e.g. growth in net sales, profitability levels, and discount rates. The valuation of goodwill and trademarks is considered a key audit matter in the audit of the group due to its financial significance as well as due to the high degree of management judgement involved in the impairment testing. |
estimates and assumptions. • Where possible, we compared the key variables of discount rate and long-term growth rate of net sales to information generally available at the market. • We reconciled the estimates of future cash flows to the strategy information approved by the board of directors. • We tested the appropriateness of the key assumptions applied to the cash flow estimates and consistency of accounting policies in relation to previous accounting periods. • We assessed the historical accuracy of management's estimates including growth of net sales and profit margin by comparing these to actual results for the period. • We tested mathematical accuracy of the calculations. • We performed sensitivity analyses for the key variables e.g. to test information provided in note 14 regarding sensitivity of the calculations. |
Valuation of subsidiary shares and loan receivables Refer to Notes to the parent company financial statements 3.2 Investments and 3.3 Receivables Value of shares in subsidiaries in the Atria Plc financial statements at 31 December 2017 totalled 318 million euros and loan receivables from group companies 151 million euros. Valuation of shares in subsidiaries and loan receivables in accordance with the Accounting Act is subject to management judgement. These valuations include significant management judgement in relation to for example subsidiaries projected future cash flows. Valuation of subsidiary shares and loan receivables is considered a key audit matter in the audit of the parent company due to its financial significance as well as due to the high degree of management judgement involved in the valuation. |
projected future cash flows. used in the valuation of shares in subsidiaries. those to the actual results for the period. |
Our audit procedures included for example the following procedures: • Evaluation of the purchasing process and testing of key internal controls over inventory.
• Testing of appropriateness of the accounting principles relating to valuation of inventories.
• Testing the book value of inventories e.g. by using computer-
aided audit and data analysis techniques. We tested price variances,
valuation principles and higher than expected price changes of inventory items on a sample basis. In addition, we have tested journal entries posted to inventory and cost of sales.
• Assessment of the appropriateness of key assumptions and variables used in the valuation of inventory, such as market price, and testing of mathematic accuracy of the calculations.
• Participation in stock taking of inventories and obtaining confirmation on inventories in the custody of third parties.
Our audit procedures included for example the following procedures: • We assessed the book value of Atria Plc's shares in subsidiaries based on the subsidiary's equity and the management estimates of the projected future cash flows.
• We discussed with the management the most significant assumptions used in the valuation of shares in subsidiaries.
• We evaluated reliability of estimates from previous years by comparing those to the actual results for the period.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the audit of the consolidated financial statements or the parent company financial statements.
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company's and the group's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or to cease operations, or there is no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
PricewaterhouseCoopers Oy or auditors employed by it were first appointed as auditors by the annual general meeting on 10 May 1999. Our appointment represents a total period of uninterrupted engagement of 19 years.
The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion
• the information in the report of the Board of Directors is consistent with the information in the financial statements • the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Seinäjoki 15 March 2018 PricewaterhouseCoopers Oy Authorised Public Accountants
Samuli Perälä Authorised Public Accountant (KHT)
Atria Plc ("Atria" or "the company") is a Finnish public company, and the responsibilities and obligations of its governing bodies are determined by Finnish law. The parent company, Atria Plc, and its subsidiaries constitute the international Atria Group. The company is domiciled in Kuopio.
Responsibility for the administration and operations of Atria Group lies with the governing bodies of the parent, Atria Plc. These are the General Meeting, the Supervisory Board, the Board of Directors and the CEO.
Atria's decision-making and corporate governance comply with the Finnish Limited Liability Companies Act, the regulations applicable to publicly listed companies, Atria Plc's Articles of Association, the charters for Atria's Board of Directors and its committee, and the rules and guidelines of Nasdaq Helsinki Ltd. Atria follows the Finnish Corporate Governance Code which took effect on 1 January 2016 ("Corporate Governance Code"). The full Corporate Governance Code is available on the website of the Securities Market Association at www.cgfinland.fi. In accordance with the comply or explain principle, the company departs from the recommendations of the Code as follows (the departures are explained under the relevant points):
• As an exception to recommendation 6 of the Corporate Governance Code, the term of office of each Board member is three years in
• As an exception to recommendations 17 and 18a of the Corporate Governance Code, one of the three members on the Nomination
Atria Plc has prepared this Corporate Governance Statement in accordance with the Corporate Governance Code. The Corporate Governance Statement is presented as a report separate from the Report by the Board of Directors.
The Articles of Association and the pre-emptive purchase clause can be found in their entirety on the company's website at www.atria. com, under Investors, Corporate Governance.
There is a shareholder agreement between Lihakunta and Itikka Co-operative, two of Atria's shareholders, where they have agreed to ensure that they are both represented on the Supervisory Board in proportion to their holdings of Series KII shares in the company. The parties will also ensure that the Chairman of the Supervisory Board and the Deputy Chairman of the Board of Directors are nominated by one party and the Chairman of the Board of Directors and the Deputy Chairman of the Supervisory Board by the other party.
Regarding the distribution of Board positions, it has been agreed that each of the parties may nominate three ordinary members and their deputy members to the Board of Directors. The agreement also includes stipulations on the mutual proportion of shareholding and on the procedures followed when either party acquires more series KII shares directly or indirectly. According to the agreement, the acquisition of series A shares is not considered in the evaluation of the mutual proportion of shareholding.
Furthermore, Lihakunta, Itikka Co-operative and Pohjanmaan Liha Co-operative, which hold shares in Atria, have shareholder agreement where they have agreed to ensure that Pohjanmaan Liha Co-operative has one representative on the Supervisory Board. The agreement also includes stipulations on Pohjanmaan Liha Co-operative's shareholding.
The company is not aware of any other shareholder agreements.
Despite the above, the Annual General Meeting, as stated in section 3 below, decides on the number of members of the company's Supervisory Board and of the Board of Directors and their election.
The Corporate Governance Statement can be found in its entirety on the company's website at www.atria.com, under Investors, Corporate Governance.
The General Meeting is Atria Plc's highest decision-making body. At the General Meeting, shareholders decide, among other things, on the approval of the financial statements and the use of the profit shown on the balance sheet; the discharge of the members of the Board of Directors and of the Supervisory Board, as well as the CEO, from liability; the number of members of the Supervisory Board and of the Board of Directors, and their election and remuneration; and the election of one or more auditors and the auditor's remuneration.
The Annual General Meeting is held annually by the end of June on a date designated by the Board of Directors, and the agenda includes matters that are to be handled by the Annual General Meeting in accordance with the Limited Liability Companies Act and
| Corporate Governance Statement111 | |
|---|---|
| Articles of Association111 | |
| Shareholder agreement111 | |
| Corporate Governance Statement111 | |
| Annual General Meeting111 | |
| Nomination Board 112 | |
| Supervisory Board 113 | |
| Board of Directors 114 | |
| Duties of the Board of Directors 114 | |
| Meeting practices and information flow 114 | |
| Composition of the Board of Directors 115 | |
| Board Committees 119 | |
| CEO 120 | |
| Management Team 120 | |
| Remuneration 120 | |
| Internal control, risk management and internal audit 124 | |
| Risk management at Atria 124 | |
| Internal audit 124 | |
| Auditing 125 | |
| Insider policy125 | |
| Communications 126 |
| Remuneration of the members of the Supervisory Board 126 | |
|---|---|
| Remuneration of the members of the Board of Directors127 | |
| Bonus scheme for the CEO and other management 128 | |
| Incentive plans for management and key personnel 128 | |
| Long-term incentive plan 128 | |
| Short-term incentive plan 129 | |
| Pension benefits 129 | |
| Share incentive plan 129 |
| Name | Year of birth |
Education | Main occupation Attendance in meetings | Shareholding on 31 December 2017 |
|
|---|---|---|---|---|---|
| Jukka Kaikkonen | 1963 | Agrologist | Farmer | 2/2 | 500 |
| Henrik Holm | 1966 | Farmer | 2/2 | 430 | |
| Esa Kaarto | 1959 | M.Sc (Agr.) | Farmer | 2/2 | 1,100 |
| Timo Sallinen | 1970 | M.Sc. (Econ.) Head of Listed Securities |
2/2 | 0 |
In accordance with Atria Plc's Articles of Association, the company has a Supervisory Board elected by the Annual General Meeting. The Supervisory Board consists of a minimum of 18 and a maximum of 21 members, who are elected for a term of three years at a time. Persons aged sixty-five (65) or older cannot be elected to the Supervisory Board. The Supervisory Board elects a Chairman and a Deputy Chairman from amongst its members for a term of one year at a time. The Supervisory Board meets four times a year on average.
The duties of the Supervisory Board are specified in the Limited Liability Companies Act and Atria Plc's Articles of Association. The duties of the Supervisory Board are:
• Supervising the company's administration which is under responsibility of the Board of Directors and the CEO;
• Providing instructions to the Board of Directors on matters that are of far-reaching consequence or important in principle; and
• Submitting its statement on the financial statements and the auditors' report to the Annual General Meeting.
The company has a Supervisory Board because shareholders of the company representing more than 50% of the votes granted by the company's shares have expressed their satisfaction with the current model of the Supervisory Board based on the Articles of Association, because it brings a far-reaching perspective on the company's operations and decision-making.
Following the Annual General Meeting held in 2017, the 20 members of Atria Plc's Supervisory Board are as follows:
| Name | Born | Member as of |
Education | Main occupation | Attendance in meetings |
Shareholding on 31 December 2017 |
|---|---|---|---|---|---|---|
| Hannu Hyry (Chairman until 27 April 2017) |
1956 | 2013 | Farmer | 4/4 | 144 | |
| Jukka Kaikkonen (Chairman from 27 April 2017) |
1963 | 2013 | Agrologist | Farmer | 4/4 | 500 |
| Juho Anttikoski (Deputy Chairman) |
1970 | 2009 | Farmer | 4/4 | 4,000 | |
| Mika Asunmaa | 1970 | 2005 | Farmer | 4/4 | 6,000 | |
| Reijo Flink | 1967 | 2014 | Agrologist | CEO | 4/4 | 4,660 |
| Lassi-Antti Haarala | 1966 | 2006 | Agrologist | Farmer | 4/4 | 6,000 |
| Jussi Hantula | 1955 | 2012 | Agrologist | Farmer | 4/4 | 791 |
| Henrik Holm | 1966 | 2002 | Farmer | 3/4 | 430 | |
| Veli Hyttinen | 1973 | 2010 | Agrologist | Farmer | 4/4 | 1,500 |
| Pasi Ingalsuo | 1966 | 2004 | Agrologist | Farmer | 4/4 | 4,000 |
| Jussi Joki-Erkkilä | 1977 | 2016 | Agricultural entrepreneur |
3/4 | 0 | |
| Marja-Liisa Juuse | 1963 | 2015 | Farmer | 4/4 | 250 | |
| Juha Kiviniemi | 1972 | 2010 | M.Sc. (Agr.) | Farmer | 4/4 | 300 184 company authority |
| Ari Lajunen | 1975 | 2013 | M.Sc. (Agr.) | Farmer | 4/4 | 0 |
| Mika Niku | 1970 | 2009 | Farmer | 4/4 | 300 | |
| Pekka Ojala | 1964 | 2013 | Agrologist | Farmer | 4/4 | 100 |
| Heikki Panula | 1955 | 2005 | M.Sc. (Agr.) | Farmer | 4/4 | 500 |
| Ahti Ritola | 1964 | 2013 | BBA | Farmer | 4/4 | 0 400 company authority |
| Risto Sairanen | 1960 | 2013 | Farmer | 4/4 | 0 | |
| Timo Tuhkasaari | 1965 | 2002 | Farmer | 4/4 | 600 |
All members of Atria Plc's Supervisory Board are members of the administrative bodies of the company's principal owners – Lihakunta, Itikka Co-operative and Pohjanmaan Liha Co-operative. All members of the Supervisory Board are dependent of the company and of significant shareholders.
In 2017, Atria Plc's Supervisory Board met four (4) times, and the average attendance of the members was 98%.
the Articles of Association and any other proposals mentioned in the notice of the meeting. Extraordinary General Meetings may be convened as needed.
Under the Limited Liability Companies Act, a shareholder has the right to have a matter falling within the competence of the General Meeting dealt with by the General Meeting if the shareholder so demands in writing from the Board of Directors well in advance of the meeting, so that the matter can be mentioned in the notice. Where applicable, the shareholder must submit a request to have the matter dealt with by the General Meeting by the date set by the company, which is published on the company's website at www.atria.com. The request, together with the accompanying justification or proposed resolution, must be sent in writing to Atria Plc, Group Legal Affairs, P.O. Box 900, FI-60060 ATRIA.
General Meetings are convened by the Board of Directors. General Meeting is held in the company's domicile, Kuopio, or in Helsinki. The notice to convene the General Meeting is communicated by publishing the notice on the Company's website and by a company announcement at the earliest three (3) months and at the latest three (3) weeks before the General Meeting, but nevertheless no later than nine (9) days prior to the record date for the General Meeting. In addition, the Board of Directors may decide to publish the notice, or a notification concerning the delivery of the notice, in one or more Finnish national newspapers determined by the Board of Directors, or in any other manner it may decide.
A shareholder registered in the shareholder register maintained by Euroclear Finland Ltd on the record date of the General Meeting has the right to participate in the General Meeting. To have the right to participate in General Meeting, shareholders must register with the company by the day mentioned in the notice of the meeting, which can be no earlier than ten (10) days before the meeting.
According to recommendation 3 of the Corporate Governance Code the CEO, members of the Board of Directors and members of Supervisory Board shall be present at the General Meeting. The auditor shall be present at the Annual General Meeting. Candidates for Board or Supervisory Board shall be present at the General Meeting deciding on their election.
The company's Annual General Meeting for 2017 was held in Helsinki on 27 April 2017. The meeting was attended, either in person or by a representative, by a total of 220 holders of A shares, representing a total of 9,677,779 shares and votes, and three (3) holders of KII shares, representing a total of 9,203,981 shares and 92,039,810 votes. The minutes of the meeting as well as other documents related to the meeting are available on Atria's website at www.atria.com, under Investors, Annual General Meeting.
Atria Plc has a Shareholders' Nomination Board pursuant to recommendation 18b of the Corporate Governance Code. Atria Plc's Annual General Meeting held on 3 May 2012 established a Nomination Board and confirmed its written charter. The charter was amended by a decision made at the Annual General Meeting on 6 May 2014 and again on 27 April 2017. In accordance with its charter, the Nomination Board preparer proposals concerning the remuneration of the Board of Directors and Supervisory Board and the election of the members of the Board of Directors for the next Annual General Meeting.
Shareholders or their representatives who own series KII shares as well as the largest holder of series A shares who does not own series KII shares, or a representative thereof, shall be elected to the Nomination Board. The right to nominate a representative to the Nomination Board is determined on the basis of the shareholder register maintained by Euroclear Finland Ltd in accordance with the situation on the first banking day of the September preceding the Annual General Meeting. The Chairman of the Board of Directors will also be appointed on the Nomination Board as an expert member.
If a shareholder does not wish to exercise his or her right to nominate a member, the right will be transferred to the next largest series A shareholder in accordance with the shareholder register, who would not otherwise have the right to nominate a member. Some shareholders are obligated to notify the company of certain changes in shareholding (flagging obligation) when necessary under the Finnish Securities Markets Act. Such shareholders may present a written request to the company's Board of Directors by the end of August for the holdings of corporations or foundations controlled by the shareholder, or the shareholder's holdings in several funds or registers, to be combined when calculating voting rights.
The Nomination Board is convened by the Chairman of the Board of Directors, and the Nomination Board elects a Chairman from amongst its members. The Nomination Board shall present its proposal to the Board of Directors by the first day of February preceding the Annual General Meeting.
On 12 September 2017, the owners of Atria's KII shares and the largest owner of series A shares nominated the following members on the Nomination Board: Jukka Kaikkonen (Lihakunta), Henrik Holm (Pohjanmaan Liha Co-operative), Esa Kaarto (Itikka Co-operative) and Timo Sallinen (Varma Mutual Pension Insurance Company). Jukka Kaikkonen was elected as the Chairman of the Nomination Board and Seppo Paavola, the Chairman of Atria's Board of Directors, acts as the Nomination Board's expert member.
The Nomination Board which prepared the proposal for the Annual General Meeting of 2018 convened two times. The Nomination Board submitted its proposals for the Annual General Meeting to be held on 26 April 2018 to the Board of Directors on 19 January 2018. The proposals were published in the form of a stock exchange release on 19 January 2018.
In accordance with the Articles of Association, Atria's Board of Directors has a minimum of five (5) and a maximum of nine (9) members. The term of office of a member of Atria's Board of Directors departs from the term of one year specified in recommendation 6 of the Corporate Governance Code. As per the Articles of Association, the term of a member of the Board of Directors is three (3) years. Shareholders representing more than 50% of the votes have stated that the term of three (3) years is appropriate for the longterm development of the company and have not seen the need to shorten the term from that specified in the Articles of Association. As an exception to recommendation 10 of the Corporate Governance Code, three of the eight members on the Board of Directors are independent of the company. It is the company's view that an understanding of Atria's business requires in-depth knowledge of and commitment to the meat industry from the majority of the Board's members.
Atria's Board of Directors takes care of the company's administration and its appropriate organisation. The Board of Directors is responsible for the appropriate organisation of the supervision of the company's accounting and asset management.The Board of Directors has confirmed a written charter concerning the duties of the Board, the matters to be dealt with, meeting practices and the decision-making procedure. According to this charter, the Board of Directors supervises and monitors company`s operations and management and discusses and decides on significant matters related to the company's strategy, investments, organisation and financing. The charter lays down the following key duties for the Board of Directors:
The Board of Directors assesses its operations and working methods regularly by conducting a self-evaluation once a year.
The Board of Directors meets at regular intervals about 10 times during the term in accordance with a separate meeting schedule confirmed in advance by the Board, and when necessary. In 2017, the Board of Directors met 13 times. The average attendance of the members of the Board of Directors was 98%.
During the meetings of the Board of Directors, the CEO gives a review of the financial situation of the Group by business area. The review also covers forecasts, investments, organisational changes and other issues that are important for the Group.
The company provides the Board of Directors with sufficient information on the company's operations to enable the Board to properly perform its duties. The agenda of a meeting is delivered to the members of the Board of Directors at least one week before the meeting. The meeting material is prepared by the CEO and the secretary of the Board of Directors according to the instructions provided by the Chairman. The meeting material is delivered to the members at least three days before the meeting.
| Name | Seppo Paavola, Chairman |
Jyrki Rantsi, Deputy Chairman |
|---|---|---|
| Year of birth | 1962 | 1968 |
| Education | Agrologist (secondary school graduate) | Agrologist |
| Main occupation | Farmer | Farmer, pork producer |
| Relevant work experience | • Rural Centre of Central Ostrobothnia, Farm advisor, 1991–1996 • Agricultural entrepreneur 1996–present |
Agricultural entrepreneur |
| Member of the Board since | 2012 | 2013 |
| Concurrent key positions of trust |
• Itikka Co-operative, Supervisory Board, member 2000–present, Deputy Chairman 2008–2011 and Chairman 2012–present • Perhonjokilaakso Co-operative Bank (former Kaustinen Co-operative Bank), Board of Directors, Chairman 2002–present • Pellervo Confederation of Finnish Co-operatives, Board of Directors, Member 2012–present • Co-operative Advisory Board, Member 2012–2017 |
• Lihakunta, Board of Directors, Deputy Chairman 2013–2015 and Chairman 2015–present • Finnpig Oy, Board of Directors, Member 2013– present • A-Farmers Ltd, Board of Directors, Deputy Chairman 2015–present |
| Past key positions of trust | Atria Plc, Supervisory Board, Member 2006–2009 and Deputy Chairman 2009–2012 |
|
| Independence | Dependent of the company and significant shareholders |
Dependent of the company and significant shareholders |
| Shareholding on 31 December 2017 |
4,000 | 700 |
| Share-based rights in the company |
None | None |
| Attendance in meetings | 13/13 | 13/13 |
6.3 Composition of the Board of Directors
| Name | Pasi Korhonen | Jukka Moisio |
|---|---|---|
| Year of birth | 1975 | 1961 |
| Education | M.Sc. (Econ.), MBA | |
| Main occupation | Farmer | Huhtamäki Oyj, CEO |
| Relevant work experience | Farmer | • Huhtamäki Oyj, CEO 2009–present • Ahlström Oyj (various duties) 1991–2008 |
| Member of the Board since | 2016 | 2014 |
| Concurrent key positions of trust |
• Lihakunta, Board of Directors, Member 2013– present and Deputy Chairman 2016–present • Kainuun maa- ja metsäsäätiö, Board of Directors, Member 2013–present • Sotkamo Municipal Council, Counsillor 2005– present |
Finnish Fair Co-operative, Supervisory Board, Member |
| Past key positions of trust | ||
| Independence | Dependent of the company and significant shareholders |
Independent of the company and significant shareholders |
| Shareholding on 31 December 2017 |
0 | 0 |
| Share-based rights in the company |
None | None |
| Attendance in meetings | 13/13 | 13/13 |
For Atria, diversity represents a part of the company's responsible business. When planning the composition of Atria's Board of Directors, diversity is considered from a variety of aspects, also accounting for the extent of the company's business operations and its development needs.
The aim in the selection of a diverse Board of Directors is for the Board to support the development of Atria's current and future business. The selection also aims to ensure that the Board has core competence from a variety of fields within the value chain of Atria's business operations, a wide range of experience of entrepreneurship and business activities, as well as know-how and understanding of international business required by the company's strategy. Rather than every member of the Board being qualified in all of the aforementioned areas, the aim is that every Board member possess some skills in one or more of the aforementioned areas. The diversity of the Board of Directors is furthermore supported by the members' other complementary skills, their training and experience from different occupational fields and industries, as well as by a consideration of the Board members' age and gender distribution. A constructively questioning and challenging Board of Directors brings added value to the management's activities and diversifies the Board's work. In addition to the aforementioned areas, the selection considers the candidates' ability to spend a sufficient amount of time on their Board duties.
Atria aims to promote the selection of Board members who are as qualified as possible, with merits from various segments of the value chain regarding the Board's composition and that candidates of both genders have equal opportunities to be selected for the Board. It is Atria's goal that both genders are represented on the Board of Directors and if there are two equally qualified candidates, a representative of the minority sex is prioritized.
To achieve the objectives set in the principles on diversity, the Board of Directors has actively conveyed these objective to Atria's shareholders. During the 2017 financial period, one of the Board members was a woman while the rest were men. The share of the minority sex in the Board has been 12.5 percent. The company's minimum objective with regard to both genders being represented has therefore been fulfilled. The company's objective with regard to multi-professional core competencies covering the various segments of the value chain has also been fulfilled, given the members' in-depth knowledge of the meat industry, as well as of commercial and industrial activities.
The Board of Directors may decide to establish committees to handle duties designated by the Board. The Board confirms the committees' charters.
The Board of Directors has one board committee: the Nomination and Remuneration Committee. The Board of Directors appoints the members of the Committee from amongst its members according to the Committee's charter. The Committee has no autonomous decision-making power. The Board of Directors makes decisions on the basis of the Committee's preparations and proposals. The Committee reports regularly to the Board of Directors, which supervises the operations of the Committee.
The Nomination and Remuneration Committee has three (3) members. The Nomination and Remuneration Committee consists of the Chairman, Deputy Chairman and one member of the Board of Directors elected by the Board itself. As an exception to recommendations 17 and 18a of the Corporate Governance Code, one (1) of the three members of the Nomination and Remuneration Committee is independent of the company. The Nomination and Remuneration Committee consists of the members of Board of Directors which mostly are dependant of company and significant shareholders. Chairman and deputy chairman of the board of directors are nominated in accordance with the shareholders' agreement made between Lihakunta and Itikka Co-operatives. In accordance with recommendations 17 and 18a of the Corporate Governance Code, the company's CEO or other members of the Board of Directors who are a part of the company's management cannot serve as members of the Nomination and Remuneration Committee.
The aim of the Nomination and Remuneration Committee is to prepare the CEO's and Deputy CEO's as well as the management's terms of employment, ensure the objectivity of decision-making, enhance the achievement of the company's goals through bonus schemes, increase the company's value and ensure that bonus schemes are transparent and systematic. The aim of the Nomination and Remuneration Committee is also to ensure that the merit pay systems are linked to the company's strategy and the results obtained.
According to its charter, the duties of the Nomination and Remuneration Committee are as follows:
• Preparing the terms of the service contracts of the CEO and Deputy CEO and bringing them before the Board of Directors • Preparing the remuneration, fees and other employment benefits of the directors who report to the CEO and bringing them before
| Name | Kjell-Göran Paxal | Harri Sivula |
|---|---|---|
| Year of birth | 1967 | 1962 |
| Education | Agrologist | M.Sc. (Admin.) |
| Main occupation | Farmer, piglet and pork producer | Acting Managing Director of Tokmanni Group Corporation |
| Relevant work experience | • Oy Foremix Ab, Feed salesman 1990–1997 • Pohjanmaan Liha Co-operative, Primary Production Manager 1990–1997 |
• GS1 Finland Oy, Managing Director 2015–2017 • Restel Ltd, CEO 2010–2014 • Onninen Oy, CEO 2006–2010 • Kesko Corporation/Kesko Food, various duties, 1987–2006 |
| Member of the Board since | 2012 | 2009 |
| Concurrent key positions of trust |
• Pohjanmaan Liha Co-operative, Board of Directors, Deputy Member 1999–2001, Deputy Chairman 2002–2009 and Chairman 2010– present • A-Farmers Ltd, Board of Directors, Deputy Member 2001–2002 and Member 2003–present • Oy Foremix Ab, Board of Directors, Member 2004–2009 and Chairman 2010–present • A-Rehu Oy, Board of Directors, Member 2010– present • Ab WestFarm Oy, Board of Directors, Chairman 2010–present |
• Tokmanni Oyj, Board of Directors, Chairman 2011–present • Leipurin Oy, Board of Directors, Member 2014– present • Makua Foods Oy, Board of Directors, Member 2015–present • GS1 Finland Oy, Board of Directors, Member 2016–present • Dieta Oy, Board of Directors, Member 2016– present • TylöHelo Oy, Board of Directors, Member 2017– present • Kamux Oyj, Board of Directors, Member 2017– |
| Past key positions of trust | Central Union of Swedish-Speaking Agricultural Producers in Finland, Board of Directors, Deputy Member 1999–2001 |
• Olvi Oyj, Board of Directors, Member 2007–2011 • Norpe Oy, Board of Directors, Member 2010–2013 • Leipurin Oyj, Board of Directors, Member 2010– 2013 • Nets, Supervisory Board, Member 2011–2013 |
| Independence | Dependent of the company and significant shareholders |
Independent of the company and significant shareholders |
| Shareholding on 31 December 2017 |
2,166 | 10,000 |
| Share-based rights in the company |
None | ei |
| Attendance in meetings | 13/13 | 12/13 |
The members of the Board of Directors are obliged to provide the Board with information sufficient to assess their skills and independence and to notify the Board of any changes to the information.
| Name | Juha Gröhn, CEO |
Heikki Kyntäjä, CFO, Deputy CEO |
President, Atria Finland |
|---|---|---|---|
| Joined Atria in | 1990 | 2009 | 2000 |
| Year of birth | 1963 | 1952 | 1971 |
| Education | M.Sc. (Food Sc.) | B.Sc. (Econ) | Meat industry technician |
| Relevant work experience |
• Atria Plc, CEO since 2011 • Atria Scandinavia, Executive Vice President & Atria Plc, Deputy CEO 2010–2011 • Atria Finland Ltd, Executive Vice President & Atria Plc, Deputy CEO 2016–2010 • Atria Ltd, Director, Meat Industry; Vice Managing Director 2004–2006 • Atria Ltd, Director, Steering; Vice Managing Director 2003–2004 • Atria Ltd, Director, Steering; Vice Managing Director 1999–2003 • Atria Ltd, Director, Meat Products and Convenience Food Industries1993–1998 • Itikka-Lihapolar, R&D Manager 1991–1993 • Lihapolar, Foreman 1990–1991 |
• Atria Plc, CFO 2011–2017 & Deputy CEO 2014–2017 • Atria Finland Ltd, Finance Director 2009–2011 • ABB Oy, Lowvoltage instruments, VP Supply Management 2008– 2009 • ABB Oy, Lowvoltage instruments, VP Finance & Control 2001–2008 • ABB Transmit Oy, VP Finance & Control 1995–2000 • ABB Strömberg Sähkönjakelu Oy, VP Finance & Control 1991–1995 • ABB Motors Oy, Business Controller 1988–1990 • Stromberg Inc., Cleveland, OH, USA, Business Controller 1986–1988 • Hackman, Taloustavarat Oy, Financial Manager 1978–1986 • General Motors Finland, Auditor, finance department 1976–1978 |
• Atria Finland, Executive Vice President since 2011 • Atria Finland, Director, Product Business 2007–2011 Business 2006–2007 2003–2006 2000 |
| Concurrent key positions of trust |
• Finnish Food and Drink Industries' Federation (ETL), Board of Directors, Member since 2012– • East Office of Finnish Industries Ltd, Board of Directors, Member |
ELO Mutual Pension Insurance Company, Supervisory Board, Member since 2016 |
• Länsi Kalkkuna Oy, Board of Member since 2007 since 2011 Member since 2011 |
| Past key positions of trust |
Finnish Food and Drink Industries' Federation (ETL), Board of Directors, Chairman 2013–2015 |
||
|---|---|---|---|
| Shareholding on 31 December 2017 |
20,500 | 1,000 | 940 |
The Chairman of the Nomination and Remuneration Committee convenes the Committee as needed. At the meetings, the matters belonging to the duties of the Committee are reviewed. The Nomination and Remuneration Committee may invite other people to join its meetings if deemed necessary and may use external experts to assist the Committee in fulfilling its duties.
The Chairman of the Nomination and Remuneration Committee is Seppo Paavola and the other members are Jyrki Rantsi and Harri Sivula. Seppo Paavola and Jyrki Rantsi are dependent of the company and of significant shareholders. Harri Sivula is independent of the company and of significant shareholders. In 2017, the Nomination and Remuneration Committee met six (6) times, and the average attendance of the members was 100% as follows: Seppo Paavola 6/6; Jyrki Rantsi 6/6; and Harri Sivula 6/6.
As noted in section 4 above, Atria Plc's Annual General Meeting has established a separate Nomination Board to prepare proposals concerning the election and remuneration of the members of the Board of Directors as well as the remuneration of the members of the Supervisory Board for the next Annual General Meeting.
The company has a CEO who is in charge of managing the company's day-to-day operations in accordance with the instructions and orders issued by the Board of Directors and informing the Board of Directors of the development of the company's operations and financial performance. The CEO also is also responsible for ensuring the legality of the company's accounting and the reliability of asset management. The CEO is appointed by the Board of Directors, which decides on the terms of his or her service contract.
Since March 2011, Atria Plc's CEO has been Juha Gröhn, M.Sc. (Food Sc.).
Atria Group has a Management Team chaired by the CEO. The Management Team assists the CEO in planning the operations and in operational management. The duties of the Management Team include, among others, preparing strategic plans and putting them into practice, handling significant projects and organisational changes as well as reviewing and implementing the Group's risk management measures in their respective areas of responsibility.
In 2017, the Management Team met eleven (11) times.
Atria Board of Directors nominated Tomas Back as CFO and Deputy CEO as Heikki Kyntäjä retired as of 1 January 2018. At the same time Jarmo Lindholm was nominated as Executive Vice President of the Atria Sweden business area and CFO Andrey Shkredov was nominated as acting Executive Vice President of Atria Russia.
Atria Board of Directors decided to alter Atria Group's business areas and reporting segments 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 Plc has prepared a Remuneration Statement – which constitutes a part of this Corporate Governance Statement – in accordance with the Corporate Governance Code. The statement is available on the company's website at www.atria.com under Investors, Corporate Governance.
Atria Group's Management Team on 31 December 2017:
| Name | Pasi Luostarinen, Executive Vice President Marketing & Market Insight |
Lars Ohlin, Executive Vice President Human Resources |
|---|---|---|
| Joined Atria in | 2000 | 2007 |
| Year of birth | 1966 | 1958 |
| Education | M.Sc. (Econ.) | BA (International Business Administration) |
| Relevant work experience |
• Atria Plc, Executive Vice President Marketing & Marketing Insight since 2016 • Atria Finland Ltd, Senior Vice President Marketing & Product Development 2011–2016 • Atria Plc and Atria Finland Ltd, Group Vice President Brand Management & Cold Cuts / Senior Vice President Meatproducts 2007– 2011 • Atria Plc, Group Vice President Marketing & Product Development 2006–2007 • Atria Plc, Atria Finland Ltd and Atria Swerige AB, Marketing Director 2000–2006 • Valio Oy, Marketing Director 1997– 2000 • British American Tobacco Nordic, Trade Development Manager 1996– 1997 • Fazer Makeiset Oy, Key Account Manager/ Category Manager 1993– 1996 • Mallasjuoma Oy, Product Manager 1991–1993 |
Human Resources since 2016 2016 • Atria Scandinavia AB, Business Director 2000–2007 • AB Bra Böcker, Business Area 1997–2000 1995–1997 Market Development Director 1992–1995 1992 • Master Foods Sweden, Product manager 1987–1988 1987 |
| Concurrent key positions of trust |
||
| Past key positions of trust |
||
| Shareholding on 31 December |
1,880 | 510 |
• Atria Plc, Executive Vice President Human Resources since 2016 • Atria Scandinavia AB, Senior Vice President Human Resources 2014–
• Ridderheims & Falbygdens (Atria Deli), General Manager 2010–2014 • Atria Scandinavia AB, Business Development Director 2007–2010 • AB Sardus, Business Development
• AB Bra Böcker, Business Area Director, Nationalencyklopedin
• AB Forte, Vice Managing Director
• Master Foods Finland and Baltics, Market Development Director
• Master Foods Sweden and Finland, Human Resource Director 1988–
• Master Foods Sweden, Product manager 1987–1988 • AB Findus, Product manager 1984–
2017
| Name | Tomas Back, Executive Vice President, Atria Scandinavia |
Jarmo Lindholm, Executive Vice President, Atria Russia |
Olle Horm, Executive Vice President, Atria Baltic |
|---|---|---|---|
| Joined Atria in | 2007 | 2002 | 2012 |
| Year of birth | 1964 | 1973 | 1967 |
| Education | M.Sc. (Econ.) | M.Sc. (Econ.) | Engineer |
| Relevant work experience |
• Atria Scandinavia, Executive Vice President 2011–2017 • Atria Baltic, Executive Vice President 2010–2011 • Atria Plc, CFO 2007–2010 • Huhtamäki Americas / Rigid Europe, CFO 2003–2007 • Huhtamäki Oyj, Financial Manager/ CFO 1996–2002 • Huhtamäki Finance Oy, Financial Manager, Lausanne 1990–1995 |
• Atria Russia, Executive Vice President 2011–2017 • Atria Plc, Group Vice President, Product Leadership 2010–2011 • Atria Finland Ltd, Group Vice President, Product Group Management and Product Development, Commercial Director 2005–2010 • Atria Ltd, Marketing Manager 2002– 2005 • AC Nielsen, Account Manager, Marketing Manager 2000–2002 • Unilever Finland, Customer Service Manager & e-Business 1998–2000 |
• Atria Baltic, Executive Vice President since 2012 • Maag Meat Industry, Managing Director 2009–2012 • Skanska EMV AS, Director 2008– 2009 • Rakvere Lihakombinaat AS, Director 2000–2008 • EMV AS, Head of transportation and equipment department 1998–1999 • EK AS, Management and development duties 1992–1998 |
| Concurrent key positions of trust |
• Swedish Meat Industry Association, Board of Directors, Deputy Chairman and Member since 2012 • Swedish Food Federation, Board of Directors, Member since 2012 • Svensk Fågel Service Ab, Board of Directors, Member since 2017 |
East Office of Finnish Industries Oy, Board of Directors, Member since 2012 |
• Estonian Food Industry Federation, Board of Directors, Member • Estonian Pig Breaders Association, Board of Directors, Member |
| Past key positions of trust |
|||
| Shareholding on 31 December 2017 |
1,880 | 1,020 |
The company's Board of Directors and CEO are responsible for the company's adequate internal control. The Board of Directors determines the operating principles of internal control. Internal control is a process incorporated into everything that Atria does, aiming to ensure the achievement of the company's strategic and financial objectives. The purpose of internal control is to ensure that Atria's operations are efficient and in line with the company's strategy, that all financial and operational reports are reliable, that the Group's operations comply with the applicable laws and regulations, and that the company's internal principles and codes of conduct are complied with.
Atria has Group-level instructions and rules valid in all of the Group's business areas and business units. The company seeks to ensure compliance with the instructions and rules by way of training and information bulletins as well as with the help of various control activities. The business areas and/or business units may furthermore have their own specific instructions and/or training related internal control.
Atria has strategic and annual financial goals which steer the operations of the entire Group. These goals have been communicated to all business areas, and they have been agreed on and approved as part of the strategy process or the annual goal-setting process. The achievement of the financial goals is monitored on a monthly and quarterly basis in each business area and at Group level. Atria's internal control ensures that the instructions given by the management are followed and that financial reporting is carried out reliably and appropriately. The procedures involved include the documentation of financial processes, various instructions related to financial administration and briefing related to control measures. The control measures consist of both preventive and investigative measures. Typical controls include approval, insurance, verification, reconciliation, operational inspections, the protection of assets, segregation of duties and the administration of access rights.
The objective of risk management is to support the realisation of Atria's strategy and the achievement of targets, to prevent unfavourable events from occurring and to safeguard business continuity. Atria's risk management operations are guided by the Risk Management Policy, approved by the Board of Directors, which specifies risk management goals, principles, responsibilities and powers, together with the principles of risk assessment and reporting.
Risk management at Atria is systematic and dynamic, and supports the continuous development of the organisation. It is based on a uniform model for risk identification, assessment and reporting in all business areas and Group administration, and forms an integral part of the annual planning process. In risk assessment, a risk management plan is drawn up for managing the risks identified.
Atria defines risk as the effect of uncertainty on the company's objectives. Risks can cause positive or negative deviations from the objectives. Risks may be caused by events within Atria, or by external conditions or events. For reporting purposes, Atria's risks are divided into four categories: strategic risks, operational risks, liability risks and financial risks.
The Board of Directors approves the Risk Management Policy and any changes to it, and supervises the implementation of the principles specified in the policy. The Group's CEO is responsible for the appropriate organisation of risk management at Atria, and the CFO sees to the development of the risk management and risk reporting framework.
The members of the Group's Management Team are responsible for identifying and assessing strategic risks and for implementing risk management in their respective areas of responsibility. The management teams of the business areas are responsible for identifying and assessing risks and for implementing risk management in their respective business areas. The directors of the business areas ensure that the management teams fulfil their risk management and risk reporting responsibilities.
The Group's Treasury Committee is responsible for identifying and assessing financial risks and for implementing risk management throughout the Group. When preparing an annual plan for internal audit, key observations from the risk assessments made as part of the Group's planning process are taken into account. Every Atria employee is responsible for identifying and assessing risks associated with their work and any other risks that they encounter, and for drawing attention to and preventing such risks.
Major risks and uncertainties which the Board of Directors is aware of are discussed in more detail in the Report by the Board of Directors under "Risk management at Atria".
Atria's Group Control function handles internal audits in collaboration with an external service provider. An audit plan is drawn up annually for internal audit and approved by the Board of Directors. The priority areas of the audit plan are affected by risk management, issues identified as part of the Group's internal reporting, goals related to improving the quality and efficiency of the operations, and current issues in the company's business environment. Where necessary, internal audit also conducts separate studies commissioned by the Board of Directors or the Group's management.
Internal audit ensures and evaluates the functioning of the company's internal control system, the relevance and efficiency of the activities, and compliance with guidelines. It also aims to promote the quality of the operations and process, ensure the achievement of Atria's targets, support the development of risk management practices, and highlight best practices and opportunities in various functions.
Internal audit assesses the following areas:
The results of internal auditing are documented and discussed with the audited area of operation and Group management. A summary of the audit results is presented to the Board of Directors at least once a year. Regular discussions are held with the auditor to ensure that the audit activities cover a sufficiently wide range of operations and to avoid overlapping activities.
In accordance with the Articles of Association, the company has at least one (1) and no more than four (4) regular auditors; the number of deputy auditors may not exceed this. The auditors and deputy auditors must be public accountants or firms of independent public accountants authorised by the Finnish Chambers of Commerce. The term of service of the auditors ends at the conclusion of the Annual General Meeting following their election.
The auditor provides Atria's shareholders with an Auditor's Report document in accordance with the law, in conjunction with the company's financial statements, and reports regularly to the Board of Directors and management. The auditor participates in a Board meeting at least once a year, on which occasion a discussion of the audit plan and the results of auditing is arranged.
In 2017, Atria Plc's Annual General Meeting elected PricewaterhouseCoopers Ltd., a firm of authorised public accountants, as the company's auditor for a term ending at the closing of the next Annual General Meeting. According to the firm, the auditor in charge is Authorised Public Accountant Samuli Perälä. The remuneration is paid to the auditor according to an invoice accepted by the company.
In 2017, the Group paid EUR 352,000 to PricewaterhouseCoopers Ltd. as the auditor's remuneration. The company did not pay anything for services not related to auditing.
Atria complies with Nasdaq Helsinki Ltd.'s Guidelines for Insiders. Atria's Board of Directors has furthermore confirmed Atria's insider policy, which complement other insider guidelines and include instructions concerning insiders and insider administration. The company's insider policy has been distributed to all Managers as defined by the company, as well as to the people involved in the preparation of periodic disclosure or who have regular access to unpublished financial information. The guidelines are furthermore available on the company's intranet.
The Market Abuse Regulation (EU No 596/2014) has been applied since 3 July 2016. Atria has not established a permanent insider list and insider information is controlled by project-specific insider registers, which are established according to need. All project-specific insiders are informed of their insider status in writing and provided with the appropriate insider instructions.
Atria has determined that the members of the Board of Directors, members of the Supervisory Board, the CEO and the Deputy CEO satisfy the definition of Managers with a notification obligation. The company maintains a list of the Managers and their closely associated persons.
The company maintains a list of the Managers and Atria's project-specific insiders subject to a notification obligation in cooperation with Euroclear Finland Oy. The company's legal department and CFO monitor compliance with the insider guidelines. Managersand peoples, involved in the preparation of periodic disclosure or who have regular access to unpublished financial information, right to trade in the company's financial instruments has been restricted in such a way that the aforementioned people may not trade in the company's shares 30 days prior to the publication of an interim report and a release of the financial statements and further should the period between the end of a review period and the publication of the report/release exceed 30 days.
The company has defined its related parties and maintains a list of such related parties. Atria monitors and assesses related-party transactions to ensure that any possible conflicts of interest are accounted for in the appropriate manner in the decision-making of the company.
The aim of Atria's investor reporting is to ensure that the market is, at all times, in possession of information correct and sufficient to determine the value of Atria's shares. An additional aim is to provide the financial markets with comprehensive information to enable active participants in the capital markets to form a justified image of Atria as an investment.
Atria has established a silent period for its investor relations communications; this period covers 30 calendar days prior to the publication of interim reports and annual reports. If there is more than 30 days between the end of the reporting period and the review / release publication, this period is silent. During this period, Atria issues no statements on its financial standing.
Atria publishes financial information in real time on its website at www.atria.com. The site contains annual reports, interim reports, and press and stock exchange releases. Information on the company's largest shareholders is updated regularly on the website. The disclosure policy approved by Atria's Board of Directors describes the key principles and procedures followed by Atria as a listed company in its communications with the media, capital markets and other stakeholders. Atria's disclosure policy is available in its entirety on the company's website at www.atria.com, under Investors, Disclosure Policy.
This remuneration statement of Atria Plc ("Atria" or "the company") is a consistent description of the remuneration of the company's Board of Directors and management pursuant to the Corporate Governance Code.
The Annual General Meeting decides on the remuneration of the members of the Supervisory Board annually, on the basis of the proposal prepared to the Annual General Meeting by the Shareholders' Nomination Board. The remuneration paid to the Supervisory Board in 2017 was as follows:
The members of the Supervisory Board have no share incentive plans or share-based bonus schemes, nor are they entitled to any other financial benefits besides the remunerations decided on by the Annual General Meeting.
In 2017, the monthly and meeting fees paid to the members of the Supervisory Board for participating in the work of the Supervisory Board (including fees for work performed in other companies within the same Group) were as follows:
| Name | Work of the Supervisory Board |
Benefits from Group companies |
Total (EUR) |
|---|---|---|---|
| Hannu Hyry, Chairman until 26 April 2017 | 8,500 | 8,500 | |
| Jukka Kaikkonen, Chairman from 26 April 2017 | 15,500 | 15,500 | |
| Juho Anttikoski, Deputy Chairman | 12,750 | 12,750 | |
| Asunmaa Mika | 2,000 | 2,000 | |
| Flink Reijo | 1,250 | 1,250 | |
| Haarala Lassi Antti | 2,250 | 2,250 | |
| Hantula Jussi | 2,000 | 2,000 | |
| Holm Henrik | 3,000 | 3,000 | |
| Hyttinen Veli | 2,250 | 10,800 | 13,050 |
| Ingalsuo Pasi | 2,000 | 4,500 | 6,500 |
| Joki-Erkkilä Jussi | 1,500 | 1,500 | |
| Juuse Marja-Liisa | 2,000 | 2,000 | |
| Kiviniemi Juha | 2,000 | 2,000 | |
| Lajunen Ari | 2,250 | 2,250 | |
| Niku Mika | 2,000 | 4,500 | 6,500 |
| Ojala Pekka | 2,750 | 2,750 | |
| Panula Heikki | 2,000 | 2,000 | |
| Ritola Ahti | 2,000 | 2,000 | |
| Sairanen Risto | 2,250 | 2,250 | |
| Tuhkasaari Timo | 2,000 | 2,000 | |
| TOTAL | 72,250 | 19,800 | 92,050 |
The Annual General Meeting decides on the remuneration of the members of the Board of Directors annually, on the basis of the proposal prepared to the Annual General Meeting by the Shareholders' Nomination Board. Remuneration is handled in the form of monetary compensation. The members of the Board of Directors have no share incentive plans or share-based bonus schemes, nor are they entitled to any other financial benefits besides the remunerations decided on by the Annual General Meeting.
The remuneration paid to the Board of Directors in 2017 was as follows: Until 26 April 2018:
The Annual General Meeting of 2017 decided, in accordance with the proposal of the Nomination Committee, to increase the remuneration and compensation of the members of the Board of Directors and the increased remuneration paid as of 27 April 2017 as follows:
In 2017 monthly fees and meeting fees paid to the members of the Board of Directors for participating in the procedures of the Board of Directors (including being a member of the Board of another company that is part of the same Group) were the following:
| Name | Position | Board of Directors and committee work |
Benefits from Group companies |
Total (EUR) |
|---|---|---|---|---|
| Seppo Paavola | Chairman | 69,300 | 69,300 | |
| Jyrki Rantsi | Deputy Chairman | 42,300 | 11,700 | 54,000 |
| Nella Ginman-Tjeder | Member | 26,700 | 26,700 | |
| Esa Kaarto | Member | 33,300 | 34,500 | 67,800 |
| Pasi Korhonen | Member | 33,600 | 33,600 | |
| Jukka Moisio | Member | 25,800 | 25,800 | |
| Kjell-Göran Paxal | Member | 33,000 | 8,100 | 41,100 |
| Harri Sivula | Member | 28,200 | 28,200 | |
| TOTAL | 292,200 | 54,300 | 346,500 |
The remuneration of Atria Plc's management aims to promote the company's long-term financial success and competitiveness and the favourable development of shareholder value. The bonus scheme for the management consists of a fixed monthly salary, merit pay and pension benefits. The company has a share incentive plan since 1 January 2018.
The Board of Directors' Nomination and Remuneration Committee prepares the following for a decision to be made by the Board of Directors: (i) the terms of the service contracts of the CEO and Deputy CEO; (ii) the remuneration, fees and other employment benefits of the directors who report to the CEO; (iii) the forms and criteria of the bonus and incentive schemes of top management; and (iv) the content and group assignments of the pension programmes of the company's management.
Atria Plc's Board of Directors decides on the remuneration, other financial benefits and criteria applied in the merit pay system for the Group's CEO and Management Team, as well as the merit pay principles used for other management members.
The directors of each business area and the Group's CEO decide on the remuneration of the members of the management teams of the various business areas according to the one-over-one principle. The performance bonus systems for the management teams of the business areas are approved by the Group's CEO.
The base salary for CEO is EUR 501,206/year containing fringe benefits. According to the terms of short-term incentive plan decided by the Board of Directors the CEO can earn yearly not more than 50 % of the yearly salary as merit pays. According to the terms of longterm incentive plan decided by the Board of Directors the CEO can earn yearly not more than 33 % of the yearly salary as merit pays.
The retirement age for the CEO is 63 years. The CEO nevertheless has the right to retire at the age of 60. The pension arrangement is payment-based and the amount of pension is based on the CEO's annual earnings at Atria Group as specified by the Board of Directors. The earnings include monetary salary and fringe benefits without cash payments of incentive schemes.
According to the CEO's contract, the period of notice is six months for both parties. If the company terminates the contract, the CEO is entitled to the salary for the period of notice and severance pay, which together correspond to 18 months' salary. There are no terms and conditions for any other compensation based on the termination of employment.
Atria's long-term incentive plan was implemented until 31 December 2017 in earning periods, which consisted of three one-year periods. Possible payments from the earning period implemented in 2015–2017 was based on the Group's earnings per share (EPS) excluding extraordinary items. Bonuses earned during the period will be paid in instalments in the coming years. Cash rewards earned under the plan for the entire 2015–2017 earning period are capped at EUR 4.5 million. The plan ended on 31 December 2017, and it covered a maximum of 45 people. The plan covers the CEO and the rest of the Group's Management Team. The bonuses accrued for the entire earning period of 2015–2017 totalled EUR 2.1 million.
The maximum bonus payable of Atria Plc's short-term incentive plan is 25% to 50% of annual salary, depending on the performance impact and requirement level of each individual's role. The criteria in the merit pay scheme are the performance requirements and net sales at Group level and in the area of responsibility of the person concerned. In addition to the CEO and other members of the Group's Management Team, Atria Plc's merit pay schemes cover approximately 40 people.
Managerial group pension benefits confirmed by Atria's Board of Directors have been arranged for the members of Atria Group's Management Team who are covered by Finnish social security. The retirement age of the group pension insurance is 63 years for the members of the Management Team. The retirement age determined in the insurance agreement can be changed if the earningsrelated pension legislation is changed. Members of the Management Team nevertheless have the right to retire at the age of 60. The pension plan is payment-based, and the pension is based on the annual earnings (monetary salary and fringe benefits) of the insured as specified by the Board of Directors.
The financial benefits paid to the CEO and the Management Team in 2017 were as follows:
| Salaries | Fringe benefits | Merit pay | Supplementary pension contributions |
Total (EUR) | |
|---|---|---|---|---|---|
| CEO Juha Gröhn | 501,206 | 20,683 | 63,500 | 130,472 | 715,861 |
| Deputy CEO: Heikki Kyntäjä | 217,943 | 13,261 | 21,156 | 28,900 | 281,260 |
| Other members of the Management Team |
1,453,535 | 86,017 | 280,832 | 90,412 | 1,910,796 |
| TOTAL | 2,172,683 | 119,962 | 365,488 | 249,784 | 2,907,917 |
Atria Plc's Board of Directors decided on the long-term incentive scheme of key personnel for the period 2018–2020. The new scheme, based on a shares and a cash bonus, is divided into three one-year periods, with the first earning period beginning on 1 January 2018 and ending on 31 December 2018. The possible bonus in the scheme is based on the company's earnings per share (70 per cent) and organic growth (30 per cent).
The remuneration for 2018 will be paid in three equal installments in 2019, 2020, 2021 partly as A shares and partly in cash. The money order is intended to cover taxes and tax-related fees for the person in charge of the roof. If a person's employment or service terminates before the payment of the premium, the premium will generally not be paid.
The target group of the share-based incentive scheme comprises a maximum of 40 people. The total amount of commissions payable on earnings period 2018 is EUR 2 million. The purpose of the new bonus scheme is to encourage Atria's management to acquire the company's shares and to increase the company's long-term appreciation through its decisions and operations.
Atria Plc's Annual General Meeting held on 27 April 2017 authorised the Board of Directors to decide on (i) the acquisition of a maximum of 2,800,000 of the company's own series A shares; and (ii) an issue of a maximum of 5,500,000 new series A shares and/ or on the disposal of any series A shares held by the company through a share issue or by granting option rights or other special rights entitling people to shares as referred to in Chapter 10, Section 1 of the Limited Liability Companies Act, in both cases under terms and conditions which enable the use of the acquired and/or issued shares as part of the company's incentive plan.
Head Office: Itikanmäenkatu 3, Seinäjoki Finland Box 900, FI-60060 ATRIA Tel. +358 20 472 8111 www.atria.com
Head office: Atriantie 1, Seinäjoki, Finland Box 900, FI-60060 ATRIA Tel. +358 20 472 8111 firstname.lastname@ atria.com www.atria.com
Box 1000 FI-60061 ATRIA
Itikanmäenkatu 3, Seinäjoki Finland Box 900, FI-60060 ATRIA
Itikanmäenkatu 3, Seinäjoki, Finland Box 900, FI-60060 ATRIA
Commercial functions: Läkkisepäntie 23 FI-00620 Helsinki, Finland
Other offices and plants: Rahikkatie 95 FI-61850 Kauhajoki, Finland
Ankkuritie 2, Kuopio Box 147, FI-70101 Kuopio
Pusurinkatu 48 FI-30100 Forssa
Suluntie 1 FI-40340 Jyväskylä
Isoniementie 79 FI-36420 Sahalahti
Offices: Sweden Concept, Private Label & Export Löfströms Allé 5 SE-172 66 Sundbyberg Box 1023 SE-172 21 Sundbyberg Sweden Tel. +46 10 482 39 10 [email protected] firstname.lastname@ atria.com www.atria.se
Södra Långebergsgatan 12 SE-421 32 Västra Frölunda, Sweden Tel. +46 10 482 36 00
Drottninggatan 14 SE-252 21 Helsingborg, Sweden Tel. +46 10 482 35 10
Sockenvägen 40 SE-697 80 Sköllersta, Sweden Tel. +46 10 482 30 00
Skogholmsgatan 12 SE-213 76 Malmö Box 446 SE-201 24 Malmö, Sweden Tel. +46 10 482 35 00
Hjälmarydsvägen 2 SE-573 38 Tranås Box 1018 SE-573 28 Tranås, Sweden Tel. +46 10 482 37 00
Maskingatan 1 SE-511 62 Skene, Sweden Tel. +46 10 482 38 00
Johannelundsgatan 44 SE-506 40 Borås Box 940 SE-501 10 Borås, Sweden Tel. +46 10 482 38 10
Östanåkravägen 2 SE-342 62 Moheda, Sweden Tel. +46 10 482 37 10
Fordonsgatan 3 692 71 Kumla Tel. +46 19 57 18 78
Per Kroghs vei 4C 1065 Oslo, Norge Tel: + 47 22 42 24 43
Ul.Krowoderskich Zuchów 14 31-272 Kraków Poland Tel: +48 12 661 20 33
Aage Jensen Bakken 1 DK-8700 Horsens Tel. +45 76 28 25 00
Anlaegsvej 3 DK-7323 Give Tel. +45 76 28 25 00
Langmarksvej 1 DK-8700 Horsens, Denmark Tel. +45 76 28 25 00
OOO Pit -Product Obukhovskoy Oborony pr. 70 RUS-192029 Saint-Petersburg, Russia Tel. +7 812 33 66 888 +7 812 412 88 22 [email protected] firstname.lastname@ atria.com www.atriarussia.ru
Metsa str. 19 EE-68206 Valga, Estonia Tel. +372 767 9900 [email protected], firstname.lastname@ atria.com www.atria.ee
Pärnu mnt 158 EE-11317 Tallinn, Estonia
The aim of Atria's investor reporting is to ensure that the market has at all times correct and sufficient information available to determine the value of Atria's share. In addition the aim is to provide the financial markets with versatile information, based on which those active in the capital markets can form a justified image of Atria as an investment object.
Atria has established a silent period for its investor relations communications; this period covers 30 calendar days prior to the publication of interim reports and annual reports and, if there are more than 30 days between the end of the review period and the publication of the report/release, the period in question. Atria will not issue any statements on its financial standing during this period.
Atria publishes financial information in real time on its web pages at www.atria.com. Here you can find annual reports, interim reports and press and company announcements. The company's largest shareholders and insiders as well as their holdings are updated regularly to the web pages.
Atria Plc published a total of 22 company announcements in 2016. The releases can be found on the Atria Group website www.atria.com.
The disclosure policy approved by the Atria Board of Directors describes the key principles followed by Atria as a listed company in its communications with the capital markets and other stakeholders. The disclosure policy is available in full on the company's website.
Hanne Kortesoja Communication and IR manager Tel: + 358 400 638 839 e-mail: [email protected]
CARNEGIE INVESTMENT BANK AB Iiris Theman Tel. +358 9 6187 1241 e-mail: [email protected]
EVLI PANKKI OYJ Joonas Häyhä Tel. +358 9 4766 9662 e-mail: firstname.lastname @evli.com POHJOLA PANKKI OYJ Niclas Catani Tel. +358 10 252 8780 e-mail: [email protected]
INDERES OY Sauli Vilen Tel. +358 44 0258 908 e-mail: [email protected]
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