Annual Report • Mar 25, 2013
Annual Report
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| Atria in brief 2 |
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|---|---|
| Business environment in brief3 | |
| Atria Plc, year 2012 7 |
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| CEO's interview9 | |
| Review of operations, year 2012 | |
| Atria Finland 11 |
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| Atria Scandinavia18 | |
| Atria Russia 22 | |
| Atria Baltic 26 |
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| Strategy 29 |
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| Product development and marketing 34 |
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| Corporate responsibility35 | |
| Financial statement and annual report37 | |
| Corporate Governance |
111 |
| Investor reporting135 | |
| Contact information137 |
Atria's market area
Atria Plc is a growing and international Finnish food company. Atria Group is one of the leading food companies in the Nordic countries, Russia and the Baltic region.
Atria's net sales in 2012 amounted to EUR 1,343.6 million and it employed an average of 4,898 people. The Group is divided into four business areas: Atria Finland, Atria Scandinavia, Atria Russia and Atria Baltic.
Atria's customer groups are consumer goods retailers, Food Service customers and the food industry. In addition, it has a Fast Food concept based on its own brands.
Atria's roots go back to 1903, when its oldest shareholding cooperative was founded. Today, Atria Plc's shares are quoted on the NASDAQ OMX Helsinki Ltd stock exchange.
Atria Finland develops, manufactures and markets fresh food and related services in Finland. The company's net sales in 2012 amounted to EUR 819.5 million and the number of employees was 2,048.
Atria Finland's leading brand is Atria, one of the best-known and most valuable food brands in Finland. Atria is the market leader in many of its product groups in Finland. Its total market share in the consumer goods retail trade is approximately 25 per cent.
In Finland, meat consumption is growing at an annual rate of 1–3 per cent. Of all meat consumed in 2012, 81 per was of domestic origin. Since pork and beef production has fallen steadily for several years, the increased demand has been satisfied by imports. In 2012, imports grew by 12 per cent. In Finland, only poultry production has increased in proportion to demand.1)
The Finnish consumer goods retail market is highly concentrated. The two operators with greatest sway in the market are S-Group and K-Group. They have massive pricing power and a lot of private label products, also in the product groups offered by Atria. These private label products account for 5–25 per cent of sales, depending on the product group2). In 2012, the prices of all meat products in the Finnish consumer retail trade increased by an average of 7.7 per cent1).
The biggest companies in the meat products industry in Finland are Atria and HK Ruokatalo Oy. Atria is the biggest operator in the slaughter industry. Its market share of pork processing is over 40 per cent2). Medium-sized players include the privately-owned companies Saarioinen Oy, Oy Snellman Ab and Pouttu Oy.
1) Source: Suomen Gallup Elintarviketieto, 2013 2) Source: Atria, 2013
Atria Scandinavia produces and markets meat products, meals and delicatessen products mostly in Sweden and Denmark. The company's net sales in 2012 amounted to EUR 387.8 million and the number of employees was 1,119.
Atria Scandinavia has an extensive selection of brands. The best-known brand in Sweden is Sibylla, which is also Atria's most international brand. In Denmark, the best-known brand is 3-Stjernet. Atria Scandinavia holds the second position in the cold cuts and sausages product groups in both Sweden and Denmark.
In Sweden, the demand for fresh food in the daily consumer goods trade is increasing by 1–2 per cent annually. However, pork production has decreased for several years in Sweden, which has increased the share of imported meat in the market. In 2012, pig slaughter volumes decreased dramatically, by around 9 per cent. Of all meat consumed in Sweden, around 65 per cent is domestically produced. 3)
The daily consumer goods trade in Sweden is highly concentrated, with the ICA Group dominating the market. Other significant players include Coop and Axfood. In Denmark, the consumer goods retail trade is dominated by Danske Supermarked, Coop and SuperGros. In Sweden, the share of private labels was around 19 percent of food sales in 2012 and, in Denmark, it was approximately 20 percent. 4)
Around half of the Swedish meat processing market is dominated by small companies with annual net sales of less than SEK 50 million. The largest company in the market is Scan AB, which is owned by HKScan. Atria is second in the market. In Denmark, the sector is dominated by Danish Crown.
Atria Russia produces and markets its products mainly in the St Petersburg and Moscow regions. The company's net sales in 2012 amounted to EUR 126.3 million and the number of employees was 1,384.
Atria Russia's brands are Pit-Product and CampoMos. With a market share of approximately 20 per cent, the Pit-Product brand is the market leader in its product groups in St Petersburg's consumer goods retail trade. CampoMos has a small market share in Moscow and St Petersburg.
In Russia, the demand for fresh meat and meat products increased on average by 4–7 per cent between 2010 and 2012. The market for all product groups offered by Atria was worth EUR 2.7 billion in Moscow and EUR 0.9 billion in St Petersburg. The market for processed meat alone (including cold cuts and sausages) in Moscow was worth approximately EUR 1.5 billion and in St Petersburg approximately EUR 0.5 billion.5)
Although large, swift investments have been made in Russia in the primary production of pork, the country remains the world's biggest net importer of meat. The situation is about to change, however, not least due to a national food strategy approved in 2010. It stipulates that the country will strive to significantly increase its self-sufficiency in all key foodstuffs. The targeted self-sufficiency rate in processed meat products is 85 per cent by 2020. Meat imports are currently curbed by strict import quotas and other regulations. Following Russia's entry into the World Trade Organization in the summer of 2012, import quotas will be phased out.6)
The share of modern consumer goods retailers as marketplaces for food is rapidly gaining ground in Russia, although traditional marketplaces and market halls still dominate, with a share of over 50 per cent. The consumer goods retail trade is highly fragmented, but chains are increasingly gaining ground. The combined market share of the three largest consumer retail chains is approximately 5 per cent of total sales throughout Russia. The largest chains are Magnit and X5RetailGroup.5)
The consolidation of the meat processing industry is in its early days in Russia, and there are few international companies. Atria is the largest foreign operator in the sector.
Atria Baltic produces and markets its products mainly in Estonia. The company's net sales in 2012 amounted to EUR 34.2 million and the number of employees was 347.
By roots and nature, Atria Baltic's brands in Estonia are local brands that, with the centralisation of the consumer goods retail trade, have grown into national brands. Key brands are Maks & Moorits and Wõro.
Customers
In Estonia, the increase in demand for fresh meat and processed meat products has been curbed by rising prices. The average price increase in 2012 was around 10 per cent. The price of consumerpacked meat increased by as much as 15 per cent.7) The price has a massive impact on consumer behaviour, since food accounts for 25 per cent of the average Estonian citizen's expenditure.
Estonia's own meat production is mostly sufficient to cover consumer demand. The country imports some pork, particularly from the other Baltic and eastern European countries within the EU.
The Estonian consumer goods retail trade has undergone a modernisation and consolidation process since the country joined the EU in 2004. Nordic chains have a prominent position in the country, the largest ones being Rimi Baltic, owned by the Swedish ICA Group, and Prisma, owned by the Finnish S-Group. Local operators include ETK and Maxima.
Estonia's largest meat industry company is Rakvere Lihakombinaat, which is owned by HKScan. Atria is the second largest producer in the country.
7) Source: Statistic Estonia, 2012
| 2012 | 2011 | |
|---|---|---|
| Net sales | 1,343.6 | 1 301.9 |
| EBIT | 30.2 | 8.0 |
| EBIT % | 2.2 | 0.6 |
| Balance sheet total | 1,041.6 | 1,067.5 |
| Return on equity % | 2.4 | -1.5 |
| Return on investment % | 4.7 | 1.7 |
| Equity ratio % | 41.5 | 39.5 |
| Net gearing % | 84.3 | 95.5 |
+3.2 %
Net sales increased by EUR 41.7 million to EUR 1,343.6 million. Most of the growth – EUR 25.8 million – came from the Atria Finland business area. Atria Scandinavia's net sales increased by EUR 12.9 million, Atria Russia's by EUR 3.3 million. Atria Baltic's net sales decreased by EUR 1.0 million.
EUR +22.2 million
EBIT nearly tripled to EUR 30.2 million. Atria Finland's EBIT came to EUR 36.5 million and Atria Scandinavia's EBIT came to EUR 8.2 million. Atria Russia made an operating loss of EUR 8.6 million and Atria Baltic made a loss of EUR 1.5 million.
Atria Finland EUR 819.5 mill. Atria Scandinavia EUR 387.8 mill. Atria Russia EUR 126.3 mill.
Atria Baltic EUR 34.2 mill.
Juha Gröhn CEO, Atria Plc
CEO Juha Gröhn, Atria's earnings improved many times over, to approximately 30 million euros. At the same time, net sales increased moderately. How would you comment on the development?
At Atria, our absolute focus in all operations has been on improving profitalibility, even at the expense of growth. There is a time and place for growth as long as the foundations for profitability are in order. We were able to solidify these foundations substantially.
The keys to profitability improvements were in Finland and Russia. Profits in Finland rebounded back to the level that we have normally attained. In Russia, our losses shrank significantly. In Sweden and Denmark, the year was largely spent on tough pricing negotiations: increased raw material costs were passed on to sales prices on several occasions, but we did not manage to raise prices sufficiently quickly in customer negotiations. In Estonia, sales did not develop as targeted and our plants were underutilised. In the Baltic countries, we need more tonnes and more euros.
Once again, the market situation in 2012 contained many surprises. In the first half of the year, it seemed that prices were levelling off and the market situation for cereals and meat was stabilising. In early summer, however, cereal and soy prices increased globally, as harvest forecasts and then actual harvests came through. The rising cost of cereals and feed meant that farms' meat production expenses increased radically. The second half of the year required the food production chain to find ways to adapt to the new cost level. In Finland, the fresh meat trade makes up a large portion of Atria's business. The domestic origin promise of Atria's meat raw material in Finland covers all meat. The continuity and development of primary production is thus of crucial importance in Finland.
Developments in the Russian market were rapid. Quick turns were experienced in the primary production of pork. The market price of pigs sold for slaughter fell by around 30 per cent from September to the end of the year. The price development was the opposite to that elsewhere in the global market. The trend was due to increased production and insufficient slaughtering and meatcutting capacity in Russia, as well as increased imports towards the end of the year. Most of the meat used by Atria Russia is imported from Finland and elsewhere. Atria does not have its own slaughter or cutting plant in Russia.
In the new "Atria's way to number 1" strategy, growth elements are highlighted alongside profitability improvement. Would you like to throw more light on these?
Besides improving profitability, and also to improve profitability, Atria needs growth. Austerity measures and efficiency alone will not help us succeed, although cost-efficiency and measures to improve it are important. We must excel at dealing with our customers. We must excel at
managing our product groups in better alignment with consumer and customer wishes. We can only become number one through better efficiency, business excellence and Atria's own operating concept – by implementing these three themes in unison.
As it stands, Atria is a highly diverse company; just look at the geographical reach of our operations, diversity of product groups, number of customers, distribution routes and the number of staff. What is more, the increasing complexity and fast-moving nature of many food markets have the effect of potentially fragmenting Atria's operations. In such an operating environment, we need a common set of principles and a shared way of working within Atria. Strong shared values give us – both as individuals and as a group – more confidence, freedom and chance of success. Responsibility is one of these values. I am not saying that we sell responsibility – we sell food produced in compliance with responsible principles.
In 2012 we worked hard and determinedly to improve our profits, operations and future chances of success. We did well. We took many steps towards our new goal of making Atria number one. I would like to thank every one of you, Atria employees and partners, for successful cooperation in the best interest of our customers, our shareholders and our company.
Seinäjoki, February 2013
Juha Gröhn CEO, Atria Plc
Net sales increased to EUR 819.5 million. Most of the growth is due to increased sales prices.
EBIT nearly doubled to EUR 36.5 million. The market as a whole showed signs of stabilising and sales prices increased, while Atria notably improved its own performance.
A stabilised market situation, increased efficiency and successful sales at increased prices nearly doubled Atria Finland's profits and strengthened its market position.
Atria Finland's net sales increased by EUR 25.8 million to EUR 819.5 million. In the second half of the year, growth improved further, bringing fourth quarter net sales up EUR 14.5 million from a year earlier. This represents more than 50 per cent of the annual growth. After a good summer, Atria also achieved excellent sales in the important Christmas season.
Atria Finland's profitability improved substantially. EBIT for the period was EUR 36.5, up 17.2 million from the previous year. The EBIT per cent was 4.5.
Profitability had already started to improve at the end of the previous year. The situation on the European meat market and, subsequently, also on the Finnish meat market, returned to normal. Demand and prices improved in both the consumer goods retail sector and the Food Service sector. The market was demanddriven and Atria's sales structure remained good throughout the year. Atria also improved its profitability through productivity improvements which led to significant cost savings.
The annual capacity of the Kauhajoki bovine slaughter and cutting facility will increase to 40 million kilograms. The value of the investment is approximately EUR 26 million.
The estimated annual cost savings achieved through efficiency improvement programmes are some EUR 10 million.
The revamping of the Seinäjoki broiler hatchery will secure delivery capacity and competitiveness in peak seasons.
99%
Delivery reliability to customers remained at a record-high level of 99.5 per cent.
Atria Finland's decision to transfer bovine slaughtering and cutting to Kauhajoki will improve the profitability of the entire beef supply chain. Profitability and cost efficiency per kilogram of beef will improve significantly. This has made Atria's beef offering increasingly competitive.
The new Kauhajoki bovine slaughtering facility was completed at the end of 2012 and production was phased in throughout early 2013. Atria's EUR 26 million investment in the plant raises its bovine slaughtering capacity in Finland from 26 million to 40 million kilograms.
The refurbishment of the Seinäjoki broiler hatchery also progressed on schedule. Machinery and equipment investments amounting to EUR 6 million will be completed in early 2013. A new marketing standard which came into force in the EU in 2010 has significantly increased the demand for fresh chicken whilst also posing new logistical challenges for the entire supply chain. The refurbished broiler hatchery meets this challenge.
read more: Strategy, Profitability improvement programmes 2011–2012, pages 31, 32
On average, food prices in the consumer retail trade increased by 5.2%.
On average, the prices of all meat products in the consumer retail trade increased by 7.7%. The increase was sharpest in beef: prices rose by 12%.
Atria strengthened its market share amongst manufacturers to more than 25%.
Food sales in the consumer retail sector increased. The total value of sales grew by approximately 5.7 per cent. Some of this came from increased volumes, not purely from price increases. Large hypermarkets increased their sales most, but small supermarkets showed the fastest growth.1) The value of Food Service sales also grew significantly with hotels and restaurants taking the lead.
On average the sales prices of meat products increased by almost 8 per cent. The accumulated long-term need for price increases was partially satisfied. The price increase was greatest and sharpest in beef, at roughly 12 per cent. The price of pork also increased by around 11 per cent. Poultry prices increased more moderately, although increasing sales volumes partially compensated for the lower price increase.
Atria Finland's total market share in the consumer goods retail trade improved even further. Atria is the biggest producer in the sector with a market share of over 25 per cent.2) Atria Foodservice's position in the catering sector also grew stronger. Atria's improved market position depends on sustained customer- and consumer-oriented efforts and on flexibly adjusting the offering to respond to the prevailing market situation.
Atria focused its marketing investments on strengthening its own brands across all marketing and sales channels. The new Family Farm Chicken concept was a great commercial success. Atria's Hienoin Pihviliha ("Finest Steak") brand and making steak part of the Kulinaari product family also strengthened Atria's position in the high-end product groups.
1) Source: Finnish Grocery Trade Association, 2013 2) Source: Atria Finland, 2013
The price of Finnish meat raw material was on average nearly 10 per cent up from the previous year.
+8% Poultry -5% Beef -8% Pork
Pig farms' profitability problems further reduced pork procurement volumes. Atria still remains Finland's leading pork and beef processor.
Although consumer prices of meat products rose starkly and Atria paid its contract producers prices that were occasionally over 10 per cent more than the previous year depending on the animals stocked, the long-term profitability problems related to meat production remained unsolved. The rise in commodity prices essential for meat production – cereals and animal feed – continued sharply and unpredictably. > Read more under "CEO's interview".
Meat production issues led to a profitability challenges for the fifth consecutive year at pig farms. Pork production fell by 4 per cent and consumption by one per cent.
The market situation for beef producers was slightly positive. Consumption increased by one per cent to over 100 million kilograms. The domestic production though decreased by 3 per cent. Atria took this opportunity to invest significantly in the development and marketing of new beef products. The new bovine slaughter facility in Kauhajoki offers excellent premises for profitable growth and even stronger market leadership.
Poultry consumption also increased and continues to increase steadily. The increase in 2012 was over 5 per cent and the growth forecast for 2013 is 3 per cent. Due to its investments in poultry production Atria is well positioned to grow at a rate higher than the market in general. The growth is also supported by the new poultry fodder plant of Itikka Co-operative and broiler producers. The new factory will almost double A-Rehu's production capacity to 240 million kilograms in 2013. The value of the investment is around EUR 14 million.
Mika Ala-Fossi Executive Vice President Atria Finland
We need to have a good variety of approaches in the Finnish market, where volume growth is very low. We are seeking growth in all five core product groups: cold cuts, cookery products, poultry, fresh meat and convenience foods. We proceed by product group, by segment and by customer. We go beyond the product group level, to a segment level. We have selected 25 key segments, each with its own clear growth targets and means to achieve them.
This is a real challenge in the current post-recession market. Prices and costs, obviously, play a key role. Since price competition in the market is bound to continue to be very tough, we must be extremely cost-aware at every stage of the Atria meat and food chain. Our operations must be the most efficient in the sector. In beef and chicken production, in particular, we are well set to achieve this, thanks to our recent investments.
January-December 2012 Source: Suomen Gallup Elintarviketieto Oy
In 2012, a total of 382 million kilograms of meat was produced in Finland, while total consumption was approximately 405 million kilograms (volumes counted as bones included). Production remained fairly stable while consumption and imports increased. Imported meat mostly ended up in the catering business and as raw material for processed meat products. Only a small volume of imported meat is sold directly in consumer retail trade.
| Meat total , mill. kg |
2012 | Change % compared to previous year |
|---|---|---|
| Production | 381.7 | -1 |
| Consumption | 403.7 | 1 |
| Export | 51.2 | -19.3 |
| Import | 77.8 | 15.9 |
| Consumption domestic content, % | 80.7 | -3.1 |
| PORK, mill. kg | 2012 | Change % compared to previous year |
| Production | 192.7 | -4 |
| Consumption | 194.7 | -1 |
| Export | 30.0 | -37 |
| Import | 34.7 | 19.3 |
| Consumption domestic content, % | 82.2 | -4.4 |
| BEEF, mill. kg | 2012 | Change % compared to previous year |
| Production | 80.2 | -3 |
| Consumption | 100.8 | 1 |
| Export | 0.8 | -50 |
| Import | 22.2 | 19.8 |
| Consumption domestic content, % | 78.0 | -4.8 |
| POULTRY, mill. kg | 2012 | Change % compared to previous year |
| Production | 107.4 | 6 |
| Consumption | 101.8 | 4 |
| Export | 20.3 | 10.3 |
| Import | 15.9 | 8.8 |
The Finnish meat market underwent a radical shift in 2009 as consumption exceeded production. Previously this had only been the case briefly in 1999–2001.
In the long term, meat consumption in Finland will increase in the next years by 1–3 per cent per person. Chicken consumption is growing fastest. Beef consumption is on a steady path. Most of the beef is sold as minced meat regardless of economic trends. The sales of valuable cuts, however, are fairly sensitive to economic cycles. Pork consumption is also stable. Imports make up for decreased domestic production.
Meat consumption patterns change slowly: cooking sausages are still number one in Finland. In addition to their ease of use, sales are boosted by their popularity at summer barbecues.
Source: TNS, Suomen Gallup Elintarviketieto Oy, 2012
Net sales increased to EUR 387.8 million. This was due to increased prices and rising sales volumes in key product groups.
performance was affected by aggressive price increases in meat raw materials.
"Atria Scandinavia's own brands sold well: the market position grew stronger in key product groups."
Atria Scandinavia's net sales increased by 3.4 per cent to EUR 387.8 million. In the local currency, net sales were at the previous year's level. Sales increased most in cold cuts in Sweden and Denmark and in cooking sausages and hamburger products in Sweden.
Atria's profitability weakened due to increased raw material costs. The company did not succeed in passing these on to consumer prices in full. The prices of meat raw materials have increased dramatically. In just over 18 months, the price of Swedish pork used by Atria increased by around 30 per cent and the price of beef by 25 per cent1). In Sweden, the global trend of rising raw material prices has been further accelerated by a stark reduction in domestic production. In 2012, pig slaughter volumes decreased by 9.3 per cent and bovine slaughter volumes by 8.9 per cent2). In Sweden, only around 70 per cent of pork used was domestically produced3).
1) Source: Atria, 2013 2) Source: Kött&Chark Företagen, 2012 3) Source: Svensk kött, 2012
EUR 4.7 million
Atria invested nearly EUR 5 million in new meat processing equipment at the Malmö plant. In the previous year, Atria invested more than EUR 2 million in increasing the efficiency of black pudding and liver pâté production at the Tranås plant.
EUR 1.5 million
The transfer of production from the Halmstad plant to Malmö will generate approximately EUR 1.5 million in annual savings from 2013 onwards.
Read more under: Strategy, Profitability improvement programmes 2011–2012
At the beginning of 2012, Atria Scandinavia decided to close its Halmstad plant and to move the production of ham products and the slicing of cold cuts to a single production plant in Malmö. By concentrating these operations, Atria has significantly increased its competitiveness through economies of scale in production and logistics. The Malmö plant is Atria's second biggest in Sweden after the Sköllersta plant. Its annual output is around 18 million kilograms.
The transfer of Halmstad's production to Malmö was part of Atria Scandinavia's profitability programme. In four years, the number of plants has been cut from 18 to 8, productivity has increased and the cost structure has lightened.
The price of processed meat pro ducts increased on average by 3.7% in Sweden. Trade volumes fell by around 2.3%4).
Atria strengthened its position in the Swedish cold cuts market, and the value of retail sales of Atria's branded products increased by 12% 5).
Measured by the number of sales outlets, the international Sibylla concept grew by 15%. Net sales increased by more than 10%.
Breakdown of Atria Scandinavia's net sales by sales channel.
The Swedish economy grew sluggishly in 2012. This development was directly reflected in the trade of food products: sales remained nearly unchanged. Atria Scandinavia was nevertheless able to grow.
Atria's sales of cold cuts, a key product group for the company, increased significantly more than the market overall. Volume growth in sausages also exceeded market growth, although not as substantially as in the cold cuts sector. Besides the growth in retail sales of consumer goods, Atria Foodservice sales also increased, boosted by positive developments in the Swedish restaurant and catering sector. In Denmark, the cold cuts market increased by approximately 3 per cent1) and Atria's 3-Stjernet brand achieved above-market growth.
Atria Scandinavia's marketing efforts focused on its strong brands and value-added products in line with its strategy. The company continued to invest in the Lönneberga brand while also strengthening the Lithells brand with significant inputs. The Sibylla Shop-in-Shop concept was also promoted by substantial investments and 430 new outlets opened during 2012. The growth was strongest in the Russian market.
1) Source: AC Nielsen
Consumer goods retail, Sweden Atria Foodservice
Tomas Back Executive Vice President Atria Scandinavia
We will grow organically through our strong product brands. We know the growth potential of our key product groups: cold cuts, cooking sausages and deli products. We have a total of 18 brands. We know the type of investments needed to strengthen each brand, and we are making strategic choices accordingly. We invest more intensively in brands which we aim to make number one in the market. We are also seeking growth through innovations. Consumption patterns are changing and individual preferences are formed rapidly. It is important that we are the first to respond – preferably with foresight.
The price of meat raw material is very difficult to anticipate. It is also a challenge to fully pass on rising costs to consumer prices as markets are only expected to recover slightly and at a slow pace. Under these circumstances we can best improve our profitability in two ways: by taking care of our own price competitiveness and by generating more added value for our customers and consumers. Our productivity, and thereby our price competitiveness, has already improved greatly. Generating more added value, in turn, means further expanding our portfolio and our cooperation with customers in each product group. We are aiming for profitable, win-win cooperation.
Net sales increased to EUR 126.3 million. The growth mostly occurred in the St Petersburg area.
EBIT was EUR 8.6 million negative. This was EUR 10.3 million better than in the previous year.
"Atria Russia's profitability improved as planned, with the company's operating loss shrinking to less than half of the previous year's value."
Atria Russia's net sales increased by 2.7 per cent to EUR 126.3 million. In the local currency, net sales were at the same level as in the previous year. The weak growth resulted from falling sales volumes in the Moscow region; the company cut many unprofitable products from its offering. Sales were good in the St Petersburg area, and the company maintained market leadership in its product groups.
Atria Russia's profitability improved significantly. The operating loss shrank by more than EUR 10.3 million to EUR -8.6 million. By the end of 2012, the company's EBIT had improved for six consecutive quarters. Atria's profitability improved as the cost structure was significantly lightened through efficiency measures and stronger sales prices. On the other hand, earnings potential was impaired by the high price of imported meat and reduced profitability in own primary production.
Atria now produces most of its products at two plants in St Petersburg instead of the previous three. At Gorelovo, Atria operates one of Russia's most advanced and efficient facilities for meat processing.
The estimated annual cost savings achieved through efficiency improvement programmes are EUR 9.5 million.
Read more under: Strategy, Profitability improvement programmes 2011–2012
The profitability of Atria Russia's meat product operations has improved significantly since production was mostly concentrated at the Gorelovo plant in St Petersburg. Atria's second plant in the St Petersburg area, Sinyavino, focuses on the production of cured sausages and the Moscow plant focuses on pizza production. Concentrating the production and logistics at the stateof-the-art Gorelovo plant has improved the price competitiveness of Atria's product groups and lightened the company's cost structure. The cost savings will come to around EUR 7.5 million a year when they are fully realised in 2013.
In addition to savings achieved through centralised production, Atria Russia reorganised production at the Gorelovo and Sinyavino plants in spring 2012, resulting in estimated annual cost savings of EUR 2 million from the beginning of 2013.
To improve profitability, Atria Russia strives to increase the sales volumes of its current product groups while also launching new product groups with higher margins than in the traditional volume products. An example of a high-margin product group is convenience food. To ensure its competitive edge, Atria acquired Food Safety System Certification (FSSC) for Gorelovo's convenience foods line. Once audits at other departments of the plant have been completed in 2013, Atria will be Russia's first certified producer of meat products.
On average, food prices in the con sumer retail trade increased by 7%.
The consumption of meat products increased by 4% in terms of volume.
20 Atria Russia is a market leader in its %
product groups in the St Petersburg area with a market share of around 20%.
Sources: Atria, 2012
The sales of all food products in the Russian consumer retail trade increased following rapid increases in private consumption. The sales of meat and processed meat products increased in terms of volume, and prices improved slightly. However, the rising price level was not enough to compensate for the ballooning prices of international meat raw materials. Despite the improved market situation, price competition remained tough in both the Moscow and St Petersburg markets.
With the Pit-Product brand, Atria Russia is a market leader in its product groups in the St Petersburg area. Its market share is approximately 20 per cent1). In the Moscow region, market share fell to less than 2 per cent1). In the Moscow region, sales fell due to drastic measures to cut back unprofitable products belonging to the CampoMos brand. The total number of products was cut from more than 200 to around 75. This will notably improve the focus of marketing and sales efforts. New sales channels were also introduced. Besides modern, centrally operated consumer goods retail chains, Atria is also approaching small independent shops. These still constitute the main food distribution channel in Moscow. In St Petersburg, small shops account for around 40 per cent of all retail trade.
In addition to its retail collaboration, Atria intensified its cooperation in the Food Service sector. The sector's rapid growth is especially boosted by the increase of hotel and catering services.
Fast food consumption is also increasing in Russia, which gave a boost to the Sibylla concept. In the two years between 2010 and 2012, the number of Sibylla outlets increased by one third to around 750.
1) Atria's own estimate.
Jarmo Lindholm Executive Vice President Atria Russia
Profitability improvement is Atria Russia's strategic key goal, although growth is also stressed. Do these two goals go hand in hand, Jarmo Lindholm?
Certainly, since achieving improved profitability also requires growth. Our primary target is to turn the loss-making business into a permanently profitable one in the second half of 2013. After that we will seek sustained, profitable growth. We were able to cut losses to less than a half in 2012 through fairly radical structural solutions, and in the third quarter our operating result was briefly positive. We also rooted out the loss-making elements in our product portfolio. We will continue to improve profitability, but most of the corrective measures have now been taken. Of course, a key instrument in profitability improvement is price, both at source and at the customer end. We will develop our raw material procurement practices with an eye to greater competitiveness and aim for sustainable margins on our brand products.
The greatest growth potential for Atria lies in the cold cuts segment. We are experienced in productising, producing and marketing cold cuts. This product group is also our biggest product group in the Russian market in terms of value. In these product groups we are also a forerunner in the market, so we always have an advantage in pricing. We are seeking to grow fastest in the convenience foods sector and with the Sibylla concept. Easy meals are popular among the expanding middle class in Russia; we are taking our share of the growth. Of course we still strive to strengthen our position in the sausage market as well; in frankfurters, Pit-Product is head and shoulders above others in St Petersburg.
Net sales fell by EUR 1.0 million to EUR 34.2 million. Primary production sales decreased substantially.
EBIT was EUR 1.5 million negative. This was EUR 0.7 million less than in the previous year.
"Atria Baltic's profitability improved, first and foremost due to improved production efficiency."
Atria Baltic's net sales decreased, amounting to EUR 34.2 million. The decline mainly resulted from lower primary production sales. Besides tough domestic price competition, cheap pork imports were entering the market. Atria refrained from extreme price competition.
Profitability improved somewhat. The operating loss shrank by 32 per cent to EUR 1.5 million. Profitability improved through the long-term measures taken to reduce costs and increase efficiency. Positive progress towards the end of the year was boosted by an improved sales structure. However, earnings potential was impaired by increased feed costs and other costs in primary production.
With an annual slaughter volume of 65,000 pigs, Atria is Estonia's second biggest pig producer, and, therefore, its performance in primary production has a great impact on Atria Baltic's growth and profitability.
Meat and meat product prices increased in Estonia on average by nearly 10 per cent.
13%
Atria's market share was 13 per cent in cold cuts and 11 per cent in cooking sausages. The market share of both product groups fell in comparison with the previous year.
Source: Atria, 2012
Food prices were a key factor in Estonia's four per cent annual inflation. Consumer prices of meat and meat products increased on average by nearly 10 per cent. The price of consumer-packed meat increased by 15 per cent, the price of cold cuts by 8.5 per cent and the price of cooking sausages by nearly 7 per cent.1) These price increases were due to accumulated price pressure in the entire meat chain.
The drastic price increases led to significantly falling sales of processed meat products, such as frankfurters and cooking sausages, and Atria lost market share in these product groups during the period.2) On the other hand, Atria managed to increase its sales of consumer-packed fresh meat by more than 40 per cent. Sales of marinated meat also increased by a third.
At the end of the year there was some improvement in the breakdown of Atria's sales. Atria also succeeded in increasing the sales of its further processed and more profitable products.
To boost sales, Atria Baltic continued to invest in strengthening its own brands. A major revamp of the Maks & Moorits key brand, implemented in 2011, was followed by a crystallisation and re-positioning of the Wõro brand. Wõro has been positioned as a more inexpensive option, featuring reliable quality and safe origin of the meat raw material.
1) Source: Statistic Estonia, 2012 2) Source: AC Nielsen, 2013
Olle Horm Executive Vice President (as of 15 August 2012) Atria Baltic
The recipe will have to involve both the market and our own operations. The profitability of our operations has improved drastically; in other words, the basic elements of competitiveness are well in hand. Now is the time to boost our sales and marketing. This will be our main focus. We have to increase sales markedly. This will strengthen our market position and negotiating power. However, we must not increase our market share at the expense of profitability – not even in the short term. In the tough competitive market in Estonia, we still have product groups in which profitable growth can be achieved.
We are seeking rapid growth in the meat products segment, both in fresh and marinated meat. But I want to stress that growth can only happen if markets recover. The rise in consumer prices is expected to slow down in 2013, but only slightly. Our profitability has been hampered by the cost pressures affecting primary production. There is not much we can do about the price of cereals or feed, but we can alter the primary production sales structure. We are going to substantially cut down on the sales of carcasses, which have very narrow margins, and focus on further processed products.
In summer 2012, the Atria Plc Board of Directors approved a new corporate strategy extending to 2015, with a view to improving margins, boosting growth and increasing the company's value.
Atria will implement this new strategy by developing the following three operational dimensions: commercial excellence, efficiency and the Atria Way of Work. The priorities are the same for all business areas.
Atria will improve its commercial excellence to reinforce its position as the first choice for customers and consumers. This will be achieved through category leadership and continuous improvement.
Atria is well-placed to improve its profitability through operational efficiency.
By unifying its values and way of working, Atria will safeguard sustainable growth beyond the current strategy period.
| Target | Achieved in 2012 | |
|---|---|---|
| EBIT | 5% | 2.2% |
| Equity ratio | 40% | 41.5% |
| Return on equity (ROE) | 8% | 2.4% |
| Distribution of dividends (% of the profit for the year) |
50% | 63% |
Financial targets revised
The Atria Plc Board of Directors revised the Group's long-term financial targets at the end of the year. The most significant change was a decrease in the target for return on equity (ROE) from 12 to 8 per cent from 2013. The previous target of achieving 50 per cent of sales from international operations was completely removed.
• Atria made no new acquisitions. Instead, it focused on developing operations and improving profitability.
• Atria acquires the company Kauhajoki Teurastamokiinteistöt Oy.
• Atria acquires the shares in pet food manufacturer Best-In Oy. The company acquired the entire share capital of Best-In.
| MEASURES | Estimated yearly savings | |
|---|---|---|
| Atria Finland | Centralising bovine slaughtering in Kauhajoki | EUR 6 million |
| Nurmo efficiency improvement programme | EUR 4 million | |
| Centralising cured sausage production by moving it to Atria Scandinavia's production plant in Denmark |
EUR 0.3 million | |
| Atria Scandinavia | Centralising black pudding production in Tranås | EUR 1 million |
| Centralising production of ham products and slicing of cold cuts in Malmö |
EUR 1.5 million | |
| Atria Russia | Centralising production of meat products by moving it to the Gorelovo and Sinyavino plants |
EUR 7.5 million |
| Efficiency improvement programme at Gorelovo and Sinyavino plants |
EUR 2 million | |
| Atria Baltic | No programmes in 2011 or 2012. 2010: shutdown of the Ahja plant and transferral of production to the Valga and Vastse-Kuuste plants. |
EUR 1 million |
The profitability of Atria's business is greatly affected by global risks associated with changes in the availability and market price of meat raw material. The price risk in cereals and other raw materials is also connected to Atria's own primary production. Atria aims to protect itself against unfavourable fluctuations in production costs by adjusting production where necessary. Atria also tries to anticipate changes through the pricing of end products.
In Atria Russia's operations, changing restrictions and import duties on meat, along with other regulations, constitute special characteristics of the market.
Report by the Board of Directors p. 38 Financial risk management, Notes to the Consolidated Financial Statements p. 89
The risk map below shows examples of risks to Atria's operations.
ATRIA
EUR12 million Atria used a total of EUR 12 million in research and development operations.
360
Atria launched 360 new products in 2012. This figure includes new packages and new product support innovations. Atria is engaged in a project to develop its product range management, R&D and marketing processes. The project is expected to produce successful results within two to three years.
Atria increased its R&D and marketing investments to strengthen the position of its own brands in all business areas.
The development of Atria's product groups is guided by the needs of consumers, the retail sector and other customers. In order to make its offering more customer-driven, Atria has systematically stepped up investment in research and development. The Group's research and development operations focus on researching consumer behaviour and market data. Atria also participates in applied research in the areas of product and packaging technology and food science.
In line with its strategy, Atria focuses on strengthening its own brands. New products and successful marketing are the key to achieving this objective. The aim is to substantially increase the share of new products in terms of both net sales and EBIT. Currently, they account for approximately five per cent of net sales. A further goal of introducing new product groups and products is to increase the size of the food market as a whole.
Atria uses all customer and consumer marketing channels for its marketing efforts. It strives to differentiate itself from the competition through innovative and distinctive marketing communications.
| New products | Amount | Share in Group net sales, % | ||
|---|---|---|---|---|
| Atria Finland | 130 | 6 | ||
| Atria Scandinavia | 136 | 2.4 | ||
| Atria Russia | 18 | 5 | ||
| Atria Baltic | 76 | 12.2 |
Atria has nearly 70 corporate responsibility development projects under way. Most of these are related to food safety and employee well-being.
Atria has published a separate Corporate Responsibility Report, describing the key events, results and impacts in 2012. Atria uses the international Global Reporting Initiative (GRI) Guidelines as the basis for reporting, as applicable. To read the report and learn more about other corporate responsibility matters at Atria, go to www.atriagroup.com/en/ corporateresponsibility
To order a printed report, please contact Atria's Corporate Communications unit at [email protected]
Atria worked systematically to promote the responsibility of its operations, with a view to securing its current and future operating conditions.
Atria's corporate responsibility policy is encapsulated in its mission, "Good food – better mood". For Atria, the concept of good food covers the entire food chain from primary production to the dining table. Atria's good food is produced in a responsible and ethical manner; it is safe, healthy and nutritious. Good food leads to a better mood and added value for all of Atria's stakeholders.
In accordance with the principles of sustainable development, Atria takes into account the economic, social and environmental aspects of its operations in all of its business areas.
Atria's corporate responsibility policy is embodied in its day-to-day work with stakeholders. The principal stakeholders include the following:
Other stakeholders include subcontractors, local communities, educational institutes and the media.
Atria has an extensive corporate responsibility programme called Atria's Handprint. The programme describes the principles, practices, projects and results of the company's responsible operations.
Atria develops responsible ways of working as part of its day-to-day management. The progress made is measured in seven priority areas, which are as follows:
By making improvements in all of these priority areas, Atria aims to become the number one company for responsible food production in its areas of operation.
| 37 |
|---|
| 38 |
| Atria Plc's shareholders and shares51 |
| Group key indicators53 |
| 55 |
| Notes to the consolidated financial statement59 |
| Parent Company Financial Statement (FAS)101 |
| 103 |
| Signatures108 |
| 109 |
Atria Plc invites its shareholders to the Annual General Meeting, which will be held on Friday, 26 April 2013 in Helsinki at the Finlandia Hall.
The AGM will address the following matters, among others: 1. Matters to be addressed at the AGM as set out in Article 16 of the Articles of Association.
The invitation to the AGM is published in national newspapers on 19 March 2013. The AGM documents are available in Atria's website at www.atriagroup.com.
| 2012 Financial statement | 21 February 2013 |
|---|---|
| 2012 Annual Reportduring week 13 | |
| Interim Report Q1 (3 months) | 26 April 2013 |
| Interim Report Q2 (6 months) | 25 July 2013 |
| Interim Report Q3 (9 months) | 1 November 2013 |
Atria's financial information will be published in real time on the company website at www.atriagroup.com.
Atria Group's EBIT improved considerably in 2012. The trend was particularly positive in Finland and Russia, where long-term cost reductions and higher productivity resulted in improved performance. The stabilisation of the meat market situation also contributed to Atria Finland's improvement in performance as exports strengthened and the price of imported meat remained high. On the other hand, Atria Scandinavia, which uses imported meat to some extent, was at a disadvantage due to high raw material prices.
Fluctuations in raw material prices have become a permanent feature, and they are more frequent compared to previous years. Quick oscillations in raw material prices make it difficult for food companies to perform well. In 2012, primary production costs increased globally due to higher demand and, in some areas, modest harvests.
The food industry is growing faster in terms of value than in terms of volume, which means that the consumption of further-processed products will record the highest growth. The strongest growth potential in Atria's area of operation is in Russia. Increasingly fierce competition within the food industry is a common phenomenon due to the abundance of industrial capacity and the slower-than-expected development of demand.
The consumer goods market is growing due to rising prices in all of Atria's business areas. In Sweden, growth has been slower than elsewhere, but the development of the Food Service business is strong. The Russian market is growing in all product groups. In Finland, economic uncertainty has had no effect on the demand for food. For example, overall meat consumption in Finland increased by some 1 per cent in 2012.
The market situation affects Atria's strategic choices. In the new strategy, clear choices were made about the core business of the entire Atria Group and the local core business of each business area. Meat products, such as sausages and cold cuts, are the Group's core business. Local core businesses are, for example, the slaughtering and cutting industry in Finland and Estonia and the convenience food and poultry industry in Finland. Atria Group's business development focuses on the areas that are important to customers and consumers.
Preparations for Atria's new Group strategy began in early 2012. The new strategy focuses on three themes:
Commercial excellence is a prerequisite to reach the top in the purchase decisions of consumers and customers, and it can be achieved by managing product groups under their guidance. The main objective of product group management is to increase the size of the market.
Being an industrial group, it is important to Atria that productivity, factory utilisation rates, raw material utilisation and operational control be in order. Operational efficiency ensures profitability. During the new strategy period, special attention will be paid to production efficiency throughout the Group.
The construction of a more harmonised and stronger Atria requires a common operational culture, values and principles. At the end of 2012, Atria launched a discussion on common values across the entire organisation.
Atria Plc's Board of Directors confirmed the new long-term financial targets for the Group. In the context of the strategy process, the targets for return on equity (ROE) have been revised and those for the share of international operations have been removed.
Atria's corporate responsibility projects were taken forward in Atria's Handprint programme. At Atria Finland and Atria Scandinavia, the Handprint projects focus on the environment, animal welfare, product safety, nutrition, personnel and communications. In addition, packaging materials and food waste management have been at the heart of environmental responsibility. Animal welfare development projects have progressed as planned at Atria Finland. At Atria Baltic, the focus has been on developing the nutritional content of products and special attention has been paid to reducing the amount of salt and fat. At Atria Russia, the Handprint programme has focused on developing personnel know-how, product safety management systems and product quality consistency.
In the accounting period, the Group had over 50 ongoing corporate responsibility projects, including the following:
A separate corporate responsibility report was published as part of Atria's Handprint programme during the accounting period.
Atria Group's net sales in 2012 amounted to EUR 1,343.6 million (EUR 1,301.9 million), up EUR 41.7 million from 2011. EBIT increased considerably to EUR 30.2 million (EUR 8.0 million).
Atria Finland's net sales totalled EUR 819.5 million (EUR 793.7 million), showing growth of EUR 25.8 million year-on-year. EBIT amounted to EUR 36.5 million (EUR 19.3 million), up EUR 17.2 million from 2011. This increase was due to improved conditions in the meat market and higher sales prices across all customer accounts. In addition, the sales structure was more favourable and cost savings resulting from efficiency measures improved Atria's performance.
Atria Plc purchased HKScan Finland Oy's shares in pet food manufacturer Best-In Oy. Atria Plc and HKScan Finland Oy previously each held a 50 per cent interest in Best-In Oy, established in 2002. By an agreement signed on 20 December 2012, Atria Plc acquired the entire share capital of Best-In Oy. Best-In Oy is located in Kuopio, Finland and its net sales in 2012 were EUR 5.1 million.
Atria Scandinavia's net sales totalled EUR 387.8 million (EUR 374.9 million), showing growth of EUR 12.9 million year-on-year. EBIT amounted to EUR 8.2 million (EUR 13.8 million). The reason for this decrease was the higher price of meat raw material in comparison with the previous year. Atria has not been able to pass on all of the increased raw material costs to sales prices.
In January, a programme was launched to improve the profitability of Atria Scandinavia's production of meat products. Atria is investing approximately EUR 4.7 million in new production equipment for the Malmö plant. The manufacture of ham products and the slicing of cold cuts were transferred from the Halmstad plant to the Malmö plant. The programme is expected to generate annual cost savings of approximately EUR 1.5 million. The savings began to materialise in 2012 and will be fully realised as of the beginning of 2013.
Atria Russia's net sales amounted to EUR 126.3 million (EUR 123.0 million). EBIT was EUR -8.6 million (EUR -18.9 million), showing an improvement of EUR 10.3 million over the previous year. This increase was due to efficiency measures, price increases and the streamlining of the product range. The poor profitability of primary production weighed down fourth quarter profits. Atria Russia also invested heavily in marketing to increase future sales volumes.
During the review period, Atria Russia launched a programme in order to improve production efficiency at the Sinyavino and Gorelovo plants in St Petersburg. These measures are expected to generate annual cost savings of around EUR 2.0 million, which will be fully realised from the beginning of 2013. Meat products are now produced at the centralised Sinyavino and Gorelovo plants.
Atria Baltic's net sales for the year amounted to EUR 34.2 million (EUR 35.2 million). EBIT was EUR -1.5 million (EUR -2.2 million), which is EUR 0.7 million up year-on-year. The improvement in the review period is due to an increase in the sales of further-processed products. Olle Horm was appointed General Manager of Atria Baltic and a member of Atria Group's Management Team as of 15 August 2012.
| 2012 | 2011 | 2010 | |
|---|---|---|---|
| Net sales | 1,343.6 | 1,301.9 | 1,300.9 |
| EBIT | 30.2 | 8.0 | 9.8 |
| EBIT, % | 2.2 | 0.6 | 0.8 |
| Balance sheet total | 1,041.6 | 1,067.5 | 1,111.6 |
| Return on equity, % | 2.4 | -1.5 | -1.0 |
| Return on investments, % | 4.7 | 1.7 | 1.9 |
| Equity ratio, % | 41.5 | 39.5 | 40.2 |
| Net gearing, % | 84.3 | 95.5 | 92.2 |
Consolidated EBIT was EUR 30.2 million (EUR 8.0 million). This substantial increase was due to improved conditions in the meat market and higher sales prices. In addition, cost savings resulting from efficiency measures improved Atria's performance.
The Nomination Committee proposed to the General Meeting that the remuneration of the members of the Board of Directors be kept at the same level as in 2012. The Nomination Committee further proposed to the General Meeting that three members be appointed to the Board of Directors to replace members who have served a full term (Komulainen and Romanainen) and a resigning member (Heikkilä). The Nomination Committee proposed that Maisa Romanainen, who is due to resign, be re-elected to the Board of Directors. The remaining two candidates will be confirmed and a notification thereof will be given at a later stage.
Atria Finland launched a programme to improve the profitability of convenience food production. Atria is investigating options to transfer the production of convenience food from Karkkila to other Atria Finland production sites. Employer-employee negotiations concerning the reorganisation plans have been launched. The programme is expected to generate annual cost savings of EUR 1 million. The negotiations affect a total of 32 people at the Karkkila production plant.
Atria Group's research and development activities focus on researching consumer behaviour and market data in all of the Group's business areas. In addition, Atria participates in applied research in the areas of product and packaging technology and food science.
Atria Finland launched 130 new products in the consumer goods and Food Service markets in 2012. Among its most successful launches were the Family Farm chicken products. These new products account for 6 per cent of total sales in Finland.
Atria Scandinavia launched 136 new products across all product groups. Successful launches were made in the 3-Stjernet, Lönneberga and Pastejköket cold cut products. In Sweden and Denmark, new products accounted for some 2.4 per cent of total sales.
Atria Russia's product portfolio increased by 18 new products in 2012: 6 types of cold cuts, 5 types of frankfurters and 7 minced meat products. An entirely new product category – pre-cooked minced meat products – was introduced in Russia. Skinless frankfurters in resealable packages were last year's most significant launch. At present, all CampoMos and Pit-Product frankfurters are skinless and packaged in resealable packages. The new products accounted for approximately 5 per cent of total sales.
Atria Baltic launched 76 new products. Marinated meat products and grill sausages succeeded best. In Estonia, new products and redesigned packaging were special focus areas. New products accounted for 12.2 per cent of total sales.
Proportion of net sales spent on research and development in Atria Group in 2010–2012:
| 2012 | 2011 | 2010 | |
|---|---|---|---|
| Research and development, EUR million | 12.0 | 11.9 | 10.3 |
| % of net sales | 0.9 | 0.9 | 0.8 |
The European debt crisis has kept inflation low and economic growth close to zero. During the past year, both long- and short-term interest rates continued to decrease. The uncertainty related to the solution of the debt crisis as well as the challenging economic situation were reflected in the financial markets, keeping the maturities of corporate loans shorter than they would normally be. The increasingly strict regulations of the financial sector and the anticipated solvency requirements have kept loan margins higher than what they were before the crisis.
Atria Plc took out a EUR 30 million bullet loan with a five-year maturity in February and a EUR 20 million pension fund loan with a ten-year maturity in December. The assets from the loans were used to amortise short-term pension fund loans. The new loans were taken out to keep the average life of the loan portfolio at the desired level. Short-term funding was acquired through commercial papers, as in previous years. The Group's liquidity remained good; to ensure liquidity at all times, Atria had an average of EUR 150 million of unused committed credit lines during the year.
Atria Finland Ltd signed agreements concerning the sale of trade receivables. These agreements decreased the company's trade receivables by a total of EUR 61.2 million at the end of the accounting period.
At the end of the accounting period (31 December 2012), fixed interest debts accounted for 49.8% (50.2%) of the Group's liabilities.
Atria's business is exposed to a variety of external and internal risks, whose effects on the results may be negative or positive. The purpose of Atria's proactive risk management activities, implemented consistently across the Group, is to support the execution of Atria's strategy and the achievement of targets, as well as to secure business continuity if the risks are realised.
Atria's risk management operations are guided by the Risk Management Policy, which has been approved by the Board of Directors, and its harmonised operating models for risk assessment and reporting. Risk management is applied to identify, assess and manage factors that jeopardise the attainment of goals. A risk assessment in accordance with the risk management policy is implemented yearly in all business areas and Group operations. The significance of a risk is assessed as a combination of the event's probability and economic impact. The most significant risks observed are prioritised throughout the Group and reported to the Board of Directors annually. The Management Teams of the business areas and the Group Management Team are responsible for implementing the required risk management measures in their respective areas of responsibility.
The profitability of Atria's business is greatly affected by the global risk associated with changes in the availability and market price of meat raw material. The price risk in cereals is also connected to Atria's own primary production. Atria aims to protect itself against unfavourable fluctuations in production costs by adjusting production where necessary and by anticipating changes in the pricing of end products. The Group applies a uniform currency risk policy to hedge against currency risks relating to raw material procurement. The Group makes active use of currency derivatives, particularly in order to hedge foreign currency-denominated material purchases in Sweden against currency risks.
Products sold under the Atria brand in Finland are manufactured using only Finnish meat. Consequently, changes in the production volumes and availability of Finnish meat raw material may affect Atria Finland's profitability in the long run. Changes in meat consumption may have a similar impact on production volumes and the Group's business as a whole.
In Atria Russia's operations, changing restrictions and import duties on meat and other regulations are characteristic to the market. Atria Russia's production plant in Gorelovo in the St Petersburg region enables increased efficiency and the launch of new product groups in the Russian market. Atria Russia will continue implementing its projects to manage capacity in 2013.
Retail trade in the food industry is highly consolidated in all of Atria's key markets, which creates opportunities to build diverse forms of cooperation over the long term. On the other hand, this increases dependence on individual customers. The strength of Atria's market position and brands improve its negotiating position.
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. An animal disease discovered at a critical point in Atria's production chain could interrupt production in the unit concerned and disrupt the entire chain's operations. Internal monitoring involving multiple stages is applied to detect potential hazards as early as possible.
The economic downturn increases the risk of weakening liquidity and credit losses among Atria's customers. As a result of more efficient credit control, no significant credit losses were incurred. A significant proportion of Atria's trade receivables in Finland are related to feed and animal trading in primary production. The profitability of agricultural production and producers' liquidity may be reduced by sharp changes in the price of inputs.
Significant changes in energy costs, such as electricity and gas prices, may affect Atria's profitability. Atria uses derivatives to hedge against unfavourable changes in accordance with its hedging policy.
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. Atria aims to prevent occupational accidents, disease risks and related costs by investing in safety at work and the continuous improvement of work methods and tools.
Atria has 17 production plants in Finland, Sweden, Denmark, Estonia and Russia. All of these are insured against material damage and business interruptions through the Group's insurance programmes.
Atria manages its financial risks in accordance with the financing policy approved by the Board of Directors. The Board of Directors has delegated the application and implementation of the financing policy and the management of financing risks to the Group's Treasury unit, which consists of the CEO, CFO, Managing Director of Atria Scandinavia, Group Controller and Treasurer. The practical management of financial risks is the responsibility of the Group's Treasury unit. The aim of the Group's financial risk management is to reduce the effect on earnings, the balance sheet and cash flow due to price fluctuations in the financial markets and other uncertainty factors, and to ensure sufficient liquidity. The main risks related to financing are interest rate risk, currency risk, liquidity and refinancing risk and credit risk. Atria's financial risk management is discussed in more detail in the notes to the financial statements on page 89.
The General Meeting decided that the composition of Atria Plc's Supervisory Board shall be as follows: Lassi-Antti Haarala, Henrik Holm, Mika Niku, Juho Tervonen and Tomi Toivonen, who were due to resign, were re-elected for the next three-year term, Jari Puutio was elected to replace Seppo Paavola, and Jussi Hantula was elected to replace Juha-Matti Alaranta.
In its constitutive meeting following the General Meeting, Atria Plc's Supervisory Board re-elected Ari Pirkola as its Chairman and elected Juho Anttikoski as its new Deputy Chairman.
The General Meeting decided that the Board of Directors will consist of seven members. Tuomo Heikkilä, Esa Kaarto and Harri Sivula, who were due to resign, were re-elected. After Martti Selin, Chairman of the Board since 2005, announced his unavailability, Seppo Paavola was elected as a new member to replace him on the Board. Kjell-Göran Paxal was also elected as a new member to the Board. Timo Komulainen and Maisa Romanainen shall continue as members.
In its constitutive meeting following the General Meeting, Atria Plc's Board of Directors elected Seppo Paavola as its new Chairman and Timo Komulainen as its Deputy Chairman.
Atria Plc's Board of Directors now has the following composition: Chairman of the Board: Seppo Paavola; Deputy Chairman: Timo Komulainen; members: Tuomo Heikkilä, Esa Kaarto, Kjell-Göran Paxal, Maisa Romanainen and Harri Sivula.
Olle Horm was appointed General Manager of Atria Baltic and a member of Atria Group's Management Team. He started in his post on 15 August 2012.
The members of the Management Team report to CEO Juha Gröhn.
Atria Plc's governance is described in more detail in "Corporate Governance Statement" on page 112.
The General Meeting resolved to set up a Nomination Committee comprising shareholders or shareholders' representatives to prepare proposals concerning the election and remuneration of members of the Board of Directors for the next Annual General Meeting. Shareholders or their representatives who own Series KII shares are selected for the Nomination Committee, as well as the largest holder of Series A shares who does not own Series KII shares, or a representative of such a shareholder. The Chairman of the Board of Directors will also be appointed on the Nomination Committee as an expert member.
| 2012 | 2011 | 2010 | |
|---|---|---|---|
| Atria Finland | 2,048 | 2,113 | 2,089 |
| Atria Scandinavia | 1,119 | 1,153 | 1,205 |
| Atria Russia | 1,384 | 1,812 | 2,048 |
| Atria Baltic | 347 | 389 | 470 |
| Atria Group total | 4,898 | 5,467 | 5,812 |
| Salaries and benefits for the period, Group total (EUR million) |
182.7 | 181.8 | 180.9 |
At the beginning of 2012, the Board of Directors of Atria Plc decided to discontinue the share-based incentive plan, which, therefore, no longer applied in 2012. In February 2012, the Board of Directors decided to adopt a new long-term merit pay system for the Group's key personnel. The new plan has three 12-month periods: 2012, 2013 and 2014. The earning period for the plan ends on 31 December 2014. The compensation earned in an earning period is determined after the period is over based on progress against set targets. The plan offers an opportunity to earn cash rewards for reaching targets established for the relevant earning period. Any profit from the plan is based on the Group's earnings per share (EPS). Cash rewards payable under the plan throughout the course of its earning period, between 2012 and 2014, are capped at EUR 4.5 million. The new plan covers 40 of Atria Group's key personnel.
Atria Plc's Board of Directors has determined the management and key personnel's merit pay system for 2012. The maximum bonus payable to Atria Plc's CEO and Management Team is 35 to 50 per cent of annual salary, depending on the performance impact and requirement level of each individual's role. The criteria in Atria Plc's merit pay system are the performance requirements and working capital at Group level and in the area of responsibility of the person concerned. In addition to the CEO, Deputy CEO and Management Team, Atria Plc's merit pay system covers approximately 40 Group executives.
The well-being of the environment is essential to the operations of Atria and the food industry as a whole. Atria Group's environmental responsibility is built around three main elements:
The key environmental aspects that Atria can influence through its operations are energy and water consumption, wastewater load and waste prevention. Transport and primary production have a significant indirect impact on the environment. We are well aware of the environmental impacts of primary production. Therefore, we encourage primary production operators to engage in eco-efficient operations and to commit to the conditions of the EU environmental subsidies. As regards transport, we monitor fuel consumption and the European emission standards for vehicles, which indicate the level of hazardous emissions released by the engine.
Environmental management at Atria is based on environmental legislation and the fulfilment of stakeholder expectations. Environmental management at Atria Finland and, to some extent, at Atria Scandinavia is based on an environmental management system certified in compliance with the ISO 14001 standard. In other business areas, the company strives to achieve a corresponding level of environmental management. Environmental solutions are developed in collaboration with local environmental groups and through networking with the best experts in the area. In Finland, Atria has a representative on the Environmental Committee of the Finnish Food and Drink Industries' Federation.
| Targets 2012 | Results 2012 | Targets 2013 |
|---|---|---|
| Managing direct environ | Enhanced consumption of | Managing direct environ |
| mental impacts. | utilities in proportion to pro | mental impacts. |
| Identifying and managing | duction. | Identifying environmental |
| environmental impacts | impacts throughout the pro | |
| throughout the production | duction chain and promoting | |
| chain. | eco-efficiency. |
In the food industry, energy is needed to heat and cool premises, for production-related heating and cooling processes and to maintain material flows and the cold chain. Total energy consumption and consumption per kilo produced decreased by 6 per cent during the period under review.
The food industry uses large amounts of water, partly to uphold production hygiene. In addition to frequent washing of premises, water is also needed as a processing aid, for instance, in product cooling. The efficiency improvements at the Russian plants are indicated by the stabilisation of absolute water consumption in the period under review. The Group's total water consumption fell by 3 per cent.
Atria strives to minimise the environmental impact of groundwater consumption in cooperation with local utilities by increasing the use of surface water as needed and by levelling off consumption peaks using a variety of technical solutions.
The volume of wastewater generated by Atria corresponds to its water consumption. At the larger production sites, Atria pre-treats its effluents before flushing them into the municipal sewage network. Plant-specific environmental permits determine the target values for wastewater quality. The plants monitor compliance with the target values carefully. The BOD7 load of Atria Finland's effluents decreased in the period under review thanks to the modernisation and increased efficiency of pre-treatment facilities. As Atria's Scandinavian and Estonian business areas do not measure BOD7 values, their load has been estimated in reporting on the basis of loads generated by similar facilities.
Greenhouse gas emissions arising from Atria's heat production (EN3) and calculated as carbon dioxide equivalents decreased during the period under review due to the harmonisation of calculation methods.
The by-products of food production are carefully utilised. A total of 98 per cent of the by-products that are useless for Atria's core business are reused. The market price of raw materials and local infrastructure play a key role in the eventual destination of by-products. The prevention of waste generated in the product lifecycle is greatly influenced by the choice of packaging.
Atria Finland's environmental management is handled by a steering group that works under the Management Team and is in charge of planning and monitoring environmental management. The steering group has representatives from production, product and packaging development and support. The composition of the group ensures that management encompasses all of the areas in which Atria can control its environmental impact. The group addresses changes in legislation and stakeholder groups, analyses the results achieved in the previous year, discusses the investments required and sets targets for the upcoming period.
The key objective in the environmental strategy period is to support business operations through a controlled use of natural resources. The objectives have been adapted to fit changes in the business environment, of which the most significant continue to be the advancement of energy efficiency and the prevention of waste generation.
The consolidated EBIT in 2012 was EUR 30.2 million. In 2013, it is expected to be higher still. Some growth in net sales is also expected for 2013.
The breakdown of the parent company's share capital is as follows: Series A shares (1 vote/share) 19,063,747 Series KII shares (10 votes/share) 9,203,981
Series A shares have preference for a dividend of EUR 0.17, after which Series KII shares are paid a dividend of up to EUR 0.17. If dividend funds 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 shareholding distribution, shareholders and management holdings can be found under the heading "Shares and shareholders".
The General Meeting authorised the Board of Directors to decide on the acquisition of a maximum of 2,800,000 of the company's own A shares, in one or several tranches, with funds belonging to the company's unrestricted equity, subject to the provisions of the Limited Liability Companies Act regarding the maximum number of treasury shares to be held by a company. The company's own 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 will be acquired irrespective of the proportion of the shareholders' current shareholdings in public trading arranged by NASDAQ OMX Helsinki Ltd, at the trading price at the moment of acquisition. The shares will be acquired and paid for in accordance with the rules of NASDAQ OMX Helsinki Ltd and Euroclear Finland Oy. The Board of Directors is authorised to decide on the acquisition of treasury shares in all other respects.
The authorisation supersedes the authorisation granted by the Annual General Meeting on 29 April 2011 to the Board of Directors to decide on the acquisition of the company's own shares and is valid until the closing of the next Annual General Meeting or until 30 June 2013, whichever is first.
The General Meeting authorised the Board of Directors to decide on an issue, in one or several tranches, of a maximum of 12,800,000 new A shares or on an issue of any A shares held by the company through a share issue and/or by granting option rights or other special rights entitling holders 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 plan or for other purposes subject to the Board's 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. Therefore, the authorisation also includes the right to issue shares in a proportion other than that of the shareholders' current shareholdings in the company under the conditions provided by law, the right to issue shares against payment or without charge and the right to decide on a share issue without payment to the company itself, subject to the provisions of the Limited Liabilities Companies Act on the maximum number of treasury shares.
The authorisation supersedes the share issue authorisation granted by the Annual General Meeting on 29 April 2011 to the Board of Directors, and is valid until the closing of the next Annual General Meeting or until 30 June 2013, whichever is first.
The parent company's shareholders' equity on 31 December 2012 comprises the invested unrestricted equity fund of EUR 110,227,500.00, treasury share fund of EUR -1,277,443.82 and profits of EUR 94,996,404.86, of which profit for the period totals EUR 10,962,651.10.
The Board of Directors proposes to the General Meeting that the profits be used as follows:
| • A dividend of EUR 0.22/share be paid, totalling |
EUR 6,194,411.52 |
|---|---|
| •To be retained as shareholders' equity | EUR 88,801,993.34 |
| EUR 94,996,404.86 |
No significant changes have occurred in the company's financial position since the end of the accounting period. The company's liquidity is good and, according to the Board of Directors, the proposed dividend does not compromise the company's solvency.
Shareholders by number of shares owned, 31 Dec 2012
| Number of shares | Shareholders | Shares | |||
|---|---|---|---|---|---|
| Number | % | 1,000 shares | % | ||
| 1–100 | 4,956 | 40.66 | 254 | 0.90 | |
| 101–1,000 | 6,000 | 49.23 | 2,301 | 8.14 | |
| 1,001–10,000 | 1,135 | 9.31 | 2,793 | 9.88 | |
| 10,001–100,000 | 83 | 0.68 | 2,272 | 8.04 | |
| 100,001–500,000 | 9 | 0.07 | 2,019 | 7.14 | |
| 500,001–1,000,000 | 3 | 0.03 | 2,318 | 8.20 | |
| 1,000,001–999,999,999,999 | 2 | 0.02 | 16,311 | 57.70 | |
| Total | 12,188 | 100.00 | 28,268 | 100.00 |
| Business sector | Shareholders | Shares | |||
|---|---|---|---|---|---|
| Number | % | 1,000 shares | % | ||
| Companies | 530 | 4.35 | 18,539 | 65.58 | |
| Financial and insurance institutions | 43 | 0.35 | 1,009 | 3.57 | |
| Public corporations | 14 | 0.12 | 1,532 | 5.42 | |
| Non-profit organisations | 102 | 0.84 | 490 | 1.74 | |
| Households | 11,472 | 94.13 | 5,943 | 21.02 | |
| Foreign owners | 27 | 0.22 | 105 | 0.37 | |
| Total | 12,188 | 100.00 | 27,621 | 97.70 | |
| Nominee-registered, total | 10 | 649 | 2.30 |
| Major shareholders, 31 Dec 2012 | 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 Insurance Company Limited | 800,858 | 800,858 | 2.83 | |
| Varma Mutual Pension Insurance Company | 767,411 | 767,411 | 2.71 | |
| Pohjanmaan Liha Co-operative | 269,500 | 480,038 | 749,538 | 2.65 |
| Veritas Pension Insurance Company | 416,000 | 416,000 | 1.47 | |
| Kuisla Reima | 307,000 | 307,000 | 1.09 | |
| Sijoitusrahasto Taalerintehdas Arvo Markka Osake | 180,000 | 180,000 | 0.64 | |
| Norvestia Oyj | 152,672 | 152,672 | 0.54 | |
| Mutual Insurance Company Pension Fennia | 126,289 | 126,289 | 0.45 | |
| Major shareholders by voting rights, 31 Dec 2012 | 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 Insurance Company Limited | 800,858 | 800,858 | 0.72 | |
| Varma Mutual Pension Insurance Company | 767,411 | 767,411 | 0.69 | |
| Veritas Pension Insurance Company | 416,000 | 416,000 | 0.37 | |
| Kuisla Reima | 307,000 | 307,000 | 0.28 | |
| Sijoitusrahasto Taalerintehdas Arvo Markka Osake | 180,000 | 180,000 | 0.16 | |
| Norvestia Oyj | 152,672 | 152,672 | 0.14 | |
| Mutual Insurance Company Pension Fennia | 126,289 | 126,289 | 0.11 |
The members of the Board of Directors and Supervisory Board, and the CEO and deputy CEO owned a total of 61,771 Series A shares on 31 December 2012, representing 0.22% of shares and 0.06% of the voting rights conferred by them.
| Month | Trading, EUR | Trading, no. | Monthly low | Monthly high |
|---|---|---|---|---|
| January | 1,391,482 | 213,109 | 6.00 | 6.83 |
| February | 2,132,117 | 336,227 | 6.00 | 6.76 |
| March | 1,281,117 | 215,547 | 5.67 | 6.20 |
| April | 1,565,438 | 265,364 | 5.60 | 6.14 |
| May | 1,240,884 | 218,262 | 5.00 | 6.15 |
| June | 772,007 | 154,478 | 4.76 | 5.44 |
| July | 1,193,679 | 235,336 | 4.80 | 5.35 |
| August | 852,931 | 169,212 | 4.95 | 5.24 |
| September | 772,874 | 148,366 | 5.05 | 5.32 |
| October | 1,562,046 | 302,943 | 5.00 | 5.30 |
| November | 4,571,699 | 726,759 | 5.59 | 7.08 |
| December | 3,031,713 | 473,907 | 6.19 | 6.62 |
| Total | 20,367,986 | 3,459,510 |
| EUR million | 31 Dec 2012 | 31 Dec 2011 | 31 Dec 2010 | 31 Dec 2009 | 31 Dec 2008 |
|---|---|---|---|---|---|
| Net sales | 1,343.6 | 1,301.9 | 1,300.9 | 1,316.0 | 1,356.9 |
| EBIT | 30.2 | 8.0 | 9.8 | 27.5 | 38.4 |
| % of net sales | 2.2 | 0.6 | 0.8 | 2.1 | 2.8 |
| Financial income and expenses | -14.7 | -14.1 | -11.1 | -12.4 | -22.3 |
| % of net sales | 1.1 | 1.1 | 0.9 | 0.9 | 1.6 |
| Profit before taxes | 18.9 | -4.7 | 0.3 | 16.5 | 16.7 |
| % of net sales | 1.4 | -0.4 | 0.0 | 1.3 | 1.2 |
| Return on equity (ROE), % | 2.4 | -1.5 | -1.0 | 1.7 | 2.5 |
| Return on investment (ROI), % | 4.7 | 1.7 | 1.9 | 4.7 | 5.3 |
| Equity ratio, % | 41.5 | 39.5 | 40.2 | 39.7 | 38.4 |
| Interest-bearing liabilities | 370.5 | 409.4 | 429.9 | 425.8 | 448.4 |
| Gearing, % | 85.9 | 97.1 | 96.4 | 97.5 | 103.1 |
| Net gearing, % | 84.3 | 95.5 | 92.2 | 89.4 | 94.6 |
| Gross investments in fixed assets | 56.2 | 47.0 | 46.2 | 33.0 | 152.6 |
| % of net sales | 4.2 | 3.6 | 3.5 | 2.5 | 11.2 |
| Average number of personnel | 4,898 | 5,467 | 5,812 | 6,214 | 6,135 |
| Research and development costs | 12.0 | 11.9 | 10.3 | 9.4 | 9.9 |
| % of net sales * | 0.9 | 0.9 | 0.8 | 0.7 | 0.7 |
| Order stock** | - | - | - | - | - |
* Booked in total as expenditure for the financial year
** Not a significant indicator as orders are generally delivered on the day following the order being placed
| EUR million | 31 Dec 2012 | 31 Dec 2011 | 31 Dec 2010 | 31 Dec 2009 | 31 Dec 2008 | |
|---|---|---|---|---|---|---|
| Earnings per share (EPS), EUR | 0.35 | -0.24 | -0.18 | 0.25 | 0.42 | |
| Equity/share, EUR | 15.15 | 14.81 | 15.68 | 15.39 | 15.34 | |
| Dividend/share, EUR * | 0.22 | 0.20 | 0.25 | 0.25 | 0.20 | |
| Dividend/profit, %* | 63.1 | -84.5 | -138.9 | 99.5 | 48.1 | |
| Effective dividend yield * | 3.5 | 3.4 | 2.8 | 2.3 | 1.7 | |
| Price/earnings (P/E) | 17.9 | -25.1 | -50.0 | 44.0 | 27.9 | |
| Market capitalisation | 177.0 | 168.2 | 254.4 | 312.6 | 327.9 | |
| Share turnover/1,000 shares | A | 3,460 | 5,094 | 9,702 | 7,389 | 4,077 |
| Share turnover, % | A | 18.1 | 26.7 | 50.9 | 38.8 | 21.4 |
| Total number of shares, million | 28.3 | 28.3 | 28.3 | 28.3 | 28.3 | |
| Number of shares | A | 19.1 | 19.1 | 19.1 | 19.1 | 19.1 |
| 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 | |
| Share issue-adjusted number of shares on 31 Dec | 28.3 | 28.3 | 28.3 | 28.3 | 28.3 | |
| Share price development, EUR | ||||||
| Lowest of the period | A | 4.76 | 4.99 | 8.74 | 6.50 | 10.51 |
| Highest of the period | A | 7.08 | 9.15 | 13.48 | 13.00 | 18.29 |
| At end of the period | A | 6.26 | 5.95 | 9.00 | 11.06 | 11.60 |
| Average price during the period | A | 5.89 | 7.21 | 10.93 | 10.76 | 14.04 |
* Proposal of the Board of Directors
| Profit/loss for the period | ||
|---|---|---|
| Return on equity (%) | = Equity (average for the period) |
100 * |
| Profit before tax + interest and other financial expenses | ||
| Return on investment (%) | = Equity + interest-bearing financial liabilities (average) |
100 * |
| Equity | ||
| Equity ratio (%) | = Balance sheet total - advance payments received |
100 * |
| Interest-bearing financial liabilities = |
||
| Gearing (%) | Equity | 100 * |
| 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 per share (basic) | = Weighted average of outstanding shares |
|
| Equity attributable to the owners of the parent company | ||
| Equity/share | = Undiluted number of shares on 31 Dec |
|
| Dividend distribution during the period | ||
| Dividend per share | = Undiluted number of shares on 31 Dec |
|
| Dividend/share | ||
| Dividend/profit (%) | = Earnings per share (EPS) |
100 * |
| Dividend/share | ||
| Effective dividend yield (%) | = Closing price at the end of the period |
100 * |
| Closing price at the end of the period | ||
| Price/earnings (P/E) | = Earnings per share |
|
| Overall share turnover in euro | ||
| Average price | = Undiluted average number of shares traded during the period |
|
| Market capitalisation | = Number of shares at the end of the period * closing price on 31 Dec |
|
| Share turnover (%) | Number of shares traded during the period = |
100 * |
| Undiluted average number of shares |
| EUR 1,000 | Notes | 1 Jan–31 Dec 2012 | 1 Jan–31 Dec 2011 |
|---|---|---|---|
| Net sales | 1, 2 | 1,343,580 | 1,301,861 |
| Costs of goods sold | 7, 8 | -1,172,519 | -1,162,670 |
| Gross margin | 171,061 | 139,191 | |
| Sales and marketing expenses | 3, 7, 8 | -95,881 | -90,464 |
| Administrative expenses | 4, 7, 8 | -44,157 | -42,422 |
| Other operating income | 5 | 3,811 | 8,424 |
| Other operating expenses | 6 | -4,624 | -6,765 |
| EBIT | 1 | 30,210 | 7,964 |
| Financial income | 9 | 14,631 | 13,843 |
| Financial expenses | 9 | -29,329 | -27,977 |
| Net financial items | -14,698 | -14,134 | |
| Income from joint ventures and associates | 15 | 3,395 | 1,447 |
| Profit/Loss before taxes | 18,907 | -4,723 | |
| Income taxes | 10, 18 | -8,842 | -1,902 |
| Profit for the year | 10,065 | -6,625 | |
| Profit attributable to | |||
| Owners of the parent company | 9,823 | -6,664 | |
| Non-controlling interests | 242 | 39 | |
| Total | 10,065 | -6,625 | |
| Earnings per share (basic), EUR | 11 | 0.35 | -0.24 |
| Diluted earnings per share, EUR | 11 | 0.35 | -0.24 |
| EUR 1,000 | |||
|---|---|---|---|
| Income for the accounting period | 10,065 | -6,625 | |
| Other items of total comprehensive income after tax: | |||
| Financial assets available for sale | 9, 10, 16, 29 | 6 | -9 |
| Cash flow hedge | 9, 10, 29 | -1,222 | -6,219 |
| Actuarial losses from benefit-based pension obligations | 10, 27 | -408 | -1,580 |
| Translation differences | 9 | 6,937 | -2,864 |
| Total comprehensive income for the year | 15,378 | -17,297 | |
| Comprehensive income attributable to: | |||
| Owners of the parent company | 15,063 | -17,348 | |
| Non-controlling interests | 315 | 51 | |
| Total | 15,378 | -17,297 |
| Assets, EUR 1,000 | Notes | 31 Dec 2012 | 31 Dec 2011 |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 1, 12 | 476,065 | 464,380 |
| Biological assets | 13 | 1,464 | 1,367 |
| Goodwill | 14 | 168,502 | 163,076 |
| Other intangible assets | 14 | 78,446 | 74,363 |
| Investments in joint ventures and associates | 15, 32 | 14,640 | 13,883 |
| Other financial assets | 16, 29 | 1,748 | 1,638 |
| Trade receivables, loans and other receivables | 17, 29 | 11,636 | 19,946 |
| Deferred tax assets | 10, 18 | 15,487 | 15,943 |
| Total | 767,988 | 754,596 | |
| Current assets | |||
| Inventories | 19 | 114,268 | 108,188 |
| Biological assets | 13 | 5,504 | 5,298 |
| Trade and other receivables | 20, 29 | 140,047 | 176,798 |
| Current tax tax assets | 4,758 | 11,601 | |
| Cash and cash equivalents | 21, 29 | 6,556 | 6,618 |
| Total | 271,133 | 308,503 | |
| Non-current assets available for sale | 22 | 2,507 | 4,422 |
| Total assets | 1 | 1,041,628 | 1,067,521 |
| Equity and liabilities, EUR 1,000 | Notes | 31 Dec 2012 | 31 Dec 2011 |
| Equity attributable to the shareholders of the parent company | |||
| Share capital | 48,055 | 48,055 | |
| Share premium | 138,502 | 138,502 | |
| Treasury shares | -1,277 | -1,277 | |
| Other funds | -5,627 | -4,406 | |
| Invested unrestricted equity fund | 110,571 | 110,571 | |
| Translation differences | -10,333 | -17,192 | |
| Retained earnings | 148,316 | 144,528 | |
| Total | 10, 11, 18, 23, 24, 29 | 428,207 | 418,781 |
| Share of non-controlling interests | 3,240 | 2,920 | |
| Total equity | 431,447 | 421,701 | |
| Non-current liabilities | |||
| Interest-bearing financial liabilities | 25, 29 | 264,337 | 297,128 |
| Deferred tax liabilities | 10, 18 | 47,364 | 47,952 |
| Other liabilities | 26, 29 | 7,572 | 4,193 |
| Pension obligations | 27 | 8,132 | 7,252 |
| Total | 327,405 | 356,525 | |
| Current liabilities | |||
| Interest-bearing financial liabilities | 25, 29 | 106,142 | 112,248 |
| Trade and other payables | 28, 29 | 175,498 | 176,569 |
| Current tax liabilities | 1,136 | 478 | |
| Total | 282,776 | 289,295 | |
| Total liabilities | 1 | 610,181 | 645,820 |
| Total equity and liabilities | 1,041,628 | 1,067,521 |
| Equity attributable to the owners of the parent company | Share of non control ling interests |
Total equity |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR 1,000 | Note | Share capital |
Share premium |
Treasury shares |
Other funds |
Invested unre stricted equity fund |
Transla tion dif ferences |
Retained earnings |
Total | ||
| Equity on 1 Jan 2011 | 48,055 | 138,502 | -1,271 | 1,822 | 110,571 | -14,314 | 159,811 | 443,176 | 2,867 | 446,043 | |
| Total comprehensive income for the year |
|||||||||||
| Profit for the year Other items of total comprehensive income |
-6,664 | -6,664 | 39 | -6,625 | |||||||
| Financial assets available for sale |
-9 | -9 | -9 | ||||||||
| Cash flow hedge | -6,219 | -6,219 | -6,219 | ||||||||
| Actuarial losses from pension benefits |
27 | -1,580 | -1,580 | -1,580 | |||||||
| Translation differences | -2,878 | -2,878 | 14 | -2,864 | |||||||
| Transactions with owners | |||||||||||
| Treasury shares | 23 | -6 | -6 | -6 | |||||||
| Share incentive | 24 | 0 | 0 | ||||||||
| Distribution of dividends | 23 | -7,039 | -7,039 | -7,039 | |||||||
| Equity on 31 Dec 2011 | 48,055 | 138,502 | -1,277 | -4,406 | 110,571 | -17,192 | 144,528 | 418,781 | 2,920 | 421,701 | |
| Total comprehensive income for the year |
|||||||||||
| Profit for the year | 9,823 | 9,823 | 242 | 10,065 | |||||||
| Other items of total comprehensive income |
|||||||||||
| Financial assets available for sale |
6 | 6 | 6 | ||||||||
| Cash flow hedge | -1,222 | -1,222 | -1,222 | ||||||||
| Actuarial losses from pension benefits |
27 | -408 | -408 | -408 | |||||||
| Translation differences | -5 | 6,864 | 6,859 | 78 | 6,937 | ||||||
| Transactions with owners | |||||||||||
| Treasury shares | 23 | 0 | 0 | ||||||||
| Share incentive | 24 | 0 | 0 | ||||||||
| Distribution of dividends | 23 | -5,632 | -5,632 | -5,632 | |||||||
| Equity on 31 Dec 2012 | 48,055 | 138,502 | -1,277 | -5,627 | 110,571 | -10,328 | 148,311 | 428,207 | 3,240 | 431,447 |
| EUR 1,000 | Notes | 1 Jan–31 Dec 2012 | 1 Jan–31 Dec 2011 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Sales income | 1,387,809 | 1,318,347 | |
| Payments received from other operating revenue | 2,078 | 6,661 | |
| Payments on operating expenses | -1,270,714 | -1,263,994 | |
| Interest paid and payments on other operating financial expenses | -30,308 | -26,171 | |
| Dividends received | 82 | 44 | |
| Interest payments received and other financial income | 14,548 | 13,799 | |
| Direct taxes paid | -3,888 | 1,607 | |
| Cash flow from operating activities | 99,607 | 50,293 | |
| Cash flow from investments | |||
| Investments in tangible and intangible assets | -50,382 | -34,201 | |
| Sold subsidiary shares | 34 | 1,985 | |
| Acquired subsidiary shares | 33 | -1,828 | -6,052 |
| Change in long-term loan receivables | 850 | -1,774 | |
| Change in other investments | 1,415 | -749 | |
| Cash flow from investments | -49,945 | -40,791 | |
| Cash flow from financing | |||
| Draw down of long-term loans | 50,000 | 50,000 | |
| Repayment of long-term loans and change in short-term loans | -94,613 | -64,188 | |
| Dividends paid | 23 | -5,632 | -7,039 |
| Cash flow from financing | -50,245 | -21,227 | |
| Change in cash and cash equivalents | -583 | -11,725 | |
| Cash and cash equivalents at the start of the accounting period | 21 | 6,618 | 18,530 |
| Effect of exchange rate changes | 521 | -187 | |
| Cash and cash equivalents at the end of the accounting period | 6,556 | 6,618 |
The parent company of the Atria Group, Atria Plc, is a Finnish public company formed in accordance with Finnish law and domiciled in Kuopio, Finland. The company has been listed on Nasdaq OMX Helsinki Ltd since 1991. Copies of the consolidated financial statements are available online at www. atriagroup.com or from the parent company's head office at Itikanmäentie 3, Seinäjoki; postal address: P.O. Box 900, FI-60060 ATRIA.
Atria Plc and its subsidiaries manufacture and market food products, especially meat products, poultry products, meals and food concepts. Atria has established Finland, Sweden, Denmark, European Russia and the Baltic countries as its market area. Atria's subsidiaries are also located in this area. The Group's operations are 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 20 February 2013. According to the Finnish Companies Act, the shareholders are entitled to approve or reject the financial statements in the Annual General Meeting 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) endorsed by the EU. IASs and IFRSs valid on 31 December 2012 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 stipulated 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 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 units of 1,000 euros, with sums rounded off to the nearest thousand.
a) New and amended standards to be applied by the financial period beginning on 1 January 2012 No such IFRS standards or IFRIC interpretations became effective in this financial period which significantly affect the consolidated financial statements.
Relative consolidation of joint ventures is no longer permissible. The standard will have no material impact on Atria's consolidated financial statements.
When preparing the financial statements, the management must make assessments and assumptions concerning the future and affecting assets and debts in relation to responsibilities, profits and costs. The realised values may deviate from the original assessments and assumptions. In addition, discretion must be used in applying the accounting policies.
The Group management must make discretionary decisions regarding the choice and application of accounting policies. This, in particular, applies to cases where the IFRS practice in force contains alternative recognition, measurement or presentation procedures. The management has exercised judgment in the classification of assets and financial items and in the recognition of deferred tax assets and reserves.
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 economic 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. In significant business combinations, the Group has used an external advisor when measuring the fair value of tangible and intangible assets. 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 caused by their 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 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. At the end of the accounting period, the value of the intangible assets to be tested annually was EUR 240.9 million. The recoverable amounts of cash-generating units are measured on the basis of value-in-use calculations. The cash flows estimated in these calculations are based on the five-year financial plans approved by the management (Note 14).
No impairment losses were booked based on impairment testing in the period under review. Additional information on the recoverable amount susceptibility to changes in the assumptions used can be found in Note 14.
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 is in control when it owns over half of the voting rights or otherwise has control over the company. Control refers to the right to decide on the company's financial and operating principles in order to reap benefit from its operations. The acquired subsidiaries are consolidated from the moment the Group gains control in them until said control ends.
Business combinations are accounted for using the acquisition method. Paid consideration and the identifiable net assets and accepted liabilities of the acquired business are valued at fair value at the time of the acquisition. Paid consideration includes the fair value of an asset or liability arising from a contingent
consideration arrangement. Acquisition costs are entered as expenses as they arise. The net assets, 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 amounts of identifiable net assets of the acquisition target.
The amount by which the sum total of paid consideration, non-controlling owners' share in the acquisition target and the fair value of the previously held interest exceeds the Group's share of the fair value of the acquired net assets, is recognised as goodwill in the balance sheet. If the sum total of the consideration, non-controlling owners' share and previously held interest is less than the fair value of the acquired net assets of the subsidiary, the difference is recognised through profit or loss.
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 transactions conducted with non-controlling shareholders 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 non-controlling shareholders is also recognised in equity.
When the control or large 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 through profit or loss. This fair value serves as the original book value when the remaining interest is later recognised as an associate, joint venture or financial assets. In addition, the amounts of the said entity previously recognised in other comprehensive income are treated as if the Group had directly assigned the associated assets and liabilities. This may mean that amounts previously entered as other comprehensive income become accounted for through profit or loss.
Associates are companies in which the Group has considerable influence but no control. This is usually the case when the Group holds shares which entitle it to 20–50 per cent of the voting rights. The investments in associates are accounted for using the equity method. When using the equity method, the investment is originally entered at acquisition cost and this amount is augmented or reduced by entering the investing company's share of the subsequent profits or losses of the investment object after the time of acquisition.
If the interest in an associate diminishes but a large influence remains, only a relative share of the amounts previously recognised in other comprehensive income is accounted for through 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 is as great as or greater than its interest in the associate, any other unsecured receivables
included, the Group will not adjust the loss up if it does not have a legal or factual obligation to do so and it has not made payments on behalf of the associate.
Joint ventures are companies in which the Group and other parties exercise joint control based on an agreement. Within the Group, joint ventures are consolidated using the equity method.
The functional and presentation currency of the parent company is the euro. The consolidated financial statements are presented in thousands of euros.
Foreign currency business transactions have been translated into euros at the exchange rate on the date of transaction. Foreign currency receivables and liabilities have been translated into euros at the exchange rate on the closing date. Exchange gains and losses arising from foreign currency transactions as well as receivables and liabilities have been recognised in the income statement, excluding those exchange rate changes of derivative financial instruments that are qualifying cash flow hedges or are used to effectively protect foreign net investments and loans that are part of a net investment in a foreign operation. These translation differences have been recognised in other comprehensive income. Exchange gains and losses from operations are included in the appropriate item before operating profit. Exchange gains and losses from forward exchange agreements protecting financial transactions and foreign currency-denominated loans are included in financial income and expenses.
The profit and financial position of Group companies outside the euro zone 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 zone are translated into euros at the average exchange rate in the reporting period, and the balance sheets at the rate on the closing date. The exchange difference arising from the use of different translation rates is recognised in other comprehensive income. The translation differences arising from the elimination of the acquisition costs of subsidiaries outside the euro zone and the hedge profit deriving from the corresponding net investments are recognised in other comprehensive income. When a foreign operation is partially disposed of or sold, exchange rate differences recognised in equity are recognised through profit or loss as a sales gain or loss.
Property, plant and equipment are recognised at original acquisition cost, less accumulated depreciation and any impairment.
If the property, plant or equipment consists of several parts with different useful lives, each part is treated as a separate asset. In this case, the costs arising from replacing the part are activated. Otherwise, later costs are included in the book value of the property, plant and equipment 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. Other repair and maintenance costs are recognised through profit or loss after they have materialised.
Depreciation is calculated as straight-line depreciation according to the estimated useful life as follows:
No depreciation is made on land and water. Assets that are not suited for recognition in property, plant and equipment accounts: Land and water, Buildings and structure, Machinery 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 or less than the recoverable amount.
The depreciation of property, plant and equipment stops when the property, plant or equipment is classified as available for sale in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations.
Gains and losses accumulated from the disposal or transfer of property, plant or equipment are included in other operating income or expenses.
Leases concerning tangible assets where the Group has a considerable 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 current value of the minimum lease payments. The depreciation of assets acquired with 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 handled as other leases. Rental payments due to other leases are recognised as expenses in the income statement, based on the straight-line method during the lease period.
Goodwill is the amount by which the acquisition cost exceeds the Group's share of the fair value of the acquired subsidiary's identifiable net assets at the time of acquisition. Goodwill arising from the acquisition of subsidiaries is recognised in intangible assets. Goodwill is tested annually for impairment and entered in the balance sheet at acquisition cost less accrued impairment losses. An impairment loss recognised for goodwill is not reversed.
Goodwill is tested annually for impairment. For this purpose, goodwill is 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 Estonia. Goodwill is measured at original acquisition cost less impairment.
Intangible assets are entered in the balance sheet at original acquisition cost if the acquisition cost of the asset can be reliably determined and if it is probable that the expected financial benefit from the asset will benefit the company.
Intangible assets with a limited useful life are recognised as expenses based on straight-line depreciation in the income statement during their known or estimated useful life. No depreciation is booked for intangible assets with indefinite useful lives, but they are instead tested annually for impairment.
Depreciation periods:
| •Customer relationships | 3–8 years |
|---|---|
| •Trademarks | 5–10 years |
| • Other intangible assets *) |
5–10 years |
*) Includes computer software, subscription fees etc.
On each closing date, the Group reviews intangible and tangible assets to see whether they show indications of impairment. If there are such indications, the recoverable amount from the 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 fair value of the asset less costs to sell or, if higher, the asset's value in use. 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 original cost or probable net realisable value. The acquisition cost is determined using the 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 consist of live animals and growing crops. Biological assets are valued at fair value, less estimated sales-related expenses. Productive animals are included in tangible assets and other biological assets are included in inventories.
Agricultural products harvested of the biological assets at harvest time are valued at fair value, less estimated sales-related expenses. Valuation after harvest is conducted in accordance with inventory valuation principles.
The fair value of productive biological assets is based on acquisition price less a cost corresponding to the reduction of value in use due to the aging of the animals. There is no available market price for productive animals. The fair value of consumable biological assets (slaughter animals) equals their market price, which is based on the company's slaughter animal procurement / sales in the local market. The fair value of consumable biological assets (growing crops) is based on production costs.
Classification
The Group's financial assets are divided into the following groups:
The classification is made on the basis of the purpose of the acquisition, and the assets are classified in connection with the original acquisition.
Financial assets recognised at fair value through profit or loss:
A financial asset belongs to this category if it has been acquired for trading purposes or if it has been initially recognised at fair value through profit or loss. Financial assets held for trading are acquired mainly to generate profit from changes in short-term market prices. The derivatives used by the company that do not fulfil the hedge accounting conditions in IAS 39 have been classified as held for trading. The assets belonging to this category have been classified as current assets.
Loans and other receivables are non-derivative financial assets which involve payments that are fixed or determinable and which are not listed on active markets. They are included in current assets, except when they fall due within more than 12 months of the end date of the reporting period. These assets are classified as non-current assets. The trade and other receivables as well as cash and cash equivalents in financial assets are also included in the Group's loans and other receivables.
Financial assets available for sale are non-derivative assets that have been prescribed to this group or that have not been prescribed to any other group. 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.
Regular purchases and sales of financial assets are recognised on the basis of the trading date, i.e., the date on which the Group commits 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. Financial assets are derecognised when the rights to receive cash flows from investments have expired or have been transferred to another party and the Group has transferred substantially all risks and rewards of ownership.
Investments in financial assets not recognised at fair value through profit or loss are initially recognised at fair value plus all transaction costs that are directly attributable to the acquisition or issue. Financial assets recognised at fair value through profit or loss are initially recognised at fair value, and all transaction costs are expensed in the income statement. Financial assets recognised at fair value through profit or loss and available-for-sale financial assets are subsequently measured at fair value. Loans and other receivables are measured at amortised cost using the effective interest method.
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. Exchange differences and changes in the fair value of assets classified as available for sale are recognised in other comprehensive income and are presented in the fair value fund, taking into consideration the tax effect.
When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are transferred to 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. The fair values of quoted investments are based on current bid prices. 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. Whether there is objective proof of impairment of a financial asset or financial asset category is estimated on each closing date. In the case of equity securities classified as available for sale, a significant
or prolonged decline in the fair value of the security below its acquisition cost is considered as an indicator that the securities are impaired. If any such evidence exists, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised through profit or loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments will not be reversed through the income statement.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured at fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The derivatives hedge accounting is applied to are defined as either:
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 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. 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 recycled in the income statement in the periods when the hedged item affects profit or loss (for example, when the anticipated purchase that is hedged takes place). However, when the anticipated 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 anticipated transaction occurs. When a anticipated 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 item.
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 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 item of the income statement.
Trade receivables are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest rate method and taking impairment into account. Provisions for impairment for trade receivables are recognised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired.
If the impairment loss decreases in a later accounting period, and the reduction can be objectively linked to a transaction that has taken place after the recognition of the impairment loss, the recognised loss is reversed through profit or loss.
Cash and cash equivalents comprise cash and bank deposits available on demand. Items classified as cash and cash equivalents have a maximum maturity of three months from acquisition. 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 the tax effect into consideration, 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 the tax effect into consideration.
Financial liabilities are initially recognised at fair value. They are later measured at amortised cost using the effective interest rate method. Financial liabilities are included in current and non-current liabilities.
A one-off credit fee related to committed credit facilities is spread over the duration of the agreement. The credit limit fees related to such facilities are recognised as a cost based on the passing of time.
A provision is entered when the Group has, due to a past event, a judicial or factual obligation, and the obligation is likely to materialise and the sum of the obligation can be reliably estimated. Provisions are valued at the current 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 include profits from the sale of products and services, as well as raw materials and equipment, adjusted by indirect taxes and discounts.
Revenue from the sale of articles is recognised when the risks and rewards of owning the article have been transferred to the buyer. Revenue from services is recognised when the service has been completed.
Rental income:
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.
Pension arrangements are classified as either defined benefit or defined contribution 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 refund or charge through other comprehensive income in the financial period in which they occur.
The Group has in place a long-term reward programme for key personnel. Any profit from the programme is based on the Group's earnings per share (EPS). The programme has three 12-month periods (2012, 2013 and 2014) and the full earning period ends on 31 December 2014. The reward earned is determined after the period has expired based on how well the targets have been achieved. The benefits paid under the programme are measured annually and recognised as expenses and liabilities arising from employee benefits spread over the earnings period.
In February 2012, the Atria plc Board of Directors decided to end the share-based incentive programme for Atria Group's key persons. The system was no longer in use in 2012. The incentive programme was launched in 2007. Incentives based on the share incentive plan were paid partly in the form of Series A shares and partly in cash. The cash payments covered any taxes or similar costs associated with the incentives. More information on share-based payments is provided in Note 24.
Research expenditure is recognised as an expense in the balance sheet. Development expenditure related to individual projects is activated in the balance sheet when there is enough certainty that the asset in question can be technically implemented and will probably generate a future financial benefit. Activated development expenditure is recognised as project-specific expenses over the useful life of the asset. The asset is amortised from the time it is ready for use. The Group has no activated 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. In the period under review, production subsidies for agricultural operations in Russia have been recognised as government grants. The nature of the grants varies from one country to the next and the grants are only paid after all the terms and conditions of the grant have been met, so the company does not have a repayment obligation regarding grants received. No significant change is anticipated regarding the amount of grants.
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 tax expense in the income statement consists of current tax, tax adjustments from previous financial years, and deferred taxes. Taxes are entered in the income statement except if they are connected 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. Current tax is calculated from taxable profit based on the valid tax rate of each country. The tax is adjusted by possible taxes related to previous periods.
Deferred taxes are calculated from all temporary differences between the book value and tax base. The biggest temporary differences arise from the depreciation of property, plant and equipment and fair value measurement in connection with acquisitions. No deferred tax is booked for non-deductible goodwill impairment and no deferred tax is booked for the subsidiaries' undistributed profits if the difference is not likely to dissolve in the foreseeable future.
Deferred tax is calculated using the tax rates provided by 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.
The Group's operating segments are based on the Group's internal organisational structure and internal financial reporting, which the Group's Board of Directors uses in strategic and operative decision-making. The Group's 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 mainly consist of personnel and administration costs. A segment's assets and liabilities are items that can be directly attributed or reasonably allocated to the segment. Best-In Oy, which was acquired during the accounting period, is included in the Atria Finland business segment. The transactions between the segments take place at market price.
The Group has two customers, and the value of the trade with the two of them forms between 10 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 countries.
| Operating segments | Finland | Scandinavia | Russia | Baltic | Unallocated | Eliminations | Group |
|---|---|---|---|---|---|---|---|
| Net sales | |||||||
| External | 804,523 | 378,768 | 126,256 | 34,033 | 1,343,580 | ||
| Internal | 14,981 | 9,026 | 144 | -24,151 | 0 | ||
| Total net sales | 819,504 | 387,794 | 126,256 | 34,177 | 1,343,580 | ||
| EBIT | 36,511 | 8,187 | -8,586 | -1,489 | -4,413 | 30,210 | |
| Financial income and expenses | -14,698 | ||||||
| Income from joint ventures and associates | 3,395 | ||||||
| Income taxes | -8,842 | ||||||
| Profit for the period | 10,065 | ||||||
| Assets | 447,106 | 399,087 | 172,735 | 43,879 | -21,179 | 1,041,628 | |
| Liabilities | 177,095 | 282,524 | 159,254 | 12,487 | -21,179 | 610,181 | |
| Investments | 38,633 | 11,989 | 5,091 | 521 | 56,234 | ||
| Depreciation | 24,756 | 11,916 | 10,328 | 2,628 | 49,628 | ||
| Impairment | 31 | 116 | 147 |
| Operating segments | Finland | Scandinavia | Russia | Baltic | Unallocated | Eliminations | Group |
|---|---|---|---|---|---|---|---|
| Net sales | |||||||
| External | 777,956 | 365,820 | 122,961 | 35,124 | 1,301,861 | ||
| Internal | 15,724 | 9,068 | 84 | -24,876 | 0 | ||
| Total net sales | 793,680 | 374,888 | 122,961 | 35,208 | 1,301,861 | ||
| EBIT | 19,299 | 13,826 | -18,939 | -2,150 | -4,072 | 7,964 | |
| Financial income and expenses | -14,134 | ||||||
| Income from joint ventures and associates | 1,447 | ||||||
| Income taxes | -1,902 | ||||||
| Profit for the period | -6,625 | ||||||
| Assets | 480,265 | 382,639 | 180,391 | 44,980 | -20,754 | 1,067,521 | |
| Liabilities | 235,774 | 265,920 | 152,993 | 11,887 | -20,754 | 645,820 | |
| Investments | 28,676 | 10,456 | 6,867 | 959 | 46,958 | ||
| Depreciation | 25,558 | 11,448 | 10,110 | 2,806 | 49,922 | ||
| Impairment | 33 | 36 | 69 | ||||
| Impairment of non-current assets available for sale |
1,800 | 1,800 |
| 2. Net sales , EUR 1,000 |
2012 | 2011 |
|---|---|---|
| Sale of goods | 1 333 396 | 1 287 262 |
| Sale of services | 1 781 | 5 650 |
| Other sales | 8 403 | 8 949 |
| Total | 1 343 580 | 1 301 861 |
R&D costs recognised as expenditure 12 021 11 890
| Auditing fees | 486 | 508 |
|---|---|---|
| Reports and statements | 51 | 14 |
| Tax consulting | 6 | 25 |
| Other remunerations | 14 | 27 |
| Total | 557 | 574 |
| Sales income from fixed assets *) | 1 733 | 1 763 |
|---|---|---|
| Contributions received | 82 | 399 |
| Other **) | 1 996 | 6 262 |
| Total | 3 811 | 8 424 |
*) 2012 includes, for example, a non-recurring profit from the sale of a Moscow factory
**) including, for example, rental income and in 2011 also sales income from by-products
| Sales loss from fixed assets | 2 876 | |
|---|---|---|
| Impairment of fixed assets | 147 | 1 869 |
| Depreciation on intangible assets | 941 | 1 013 |
| Other *) | 3 536 | 1 007 |
| Total | 4 624 | 6 765 |
*) Includes, among other things, credit losses; non-recurring costs related to a Moscow factory in 2012 and costs related to the sale of by-products in 2011.
| Expenses from employee benefits: | ||
|---|---|---|
| Salaries | 182 749 | 181 770 |
| Pension costs - contribution plans | 27 404 | 28 594 |
| Pension costs - benefit-based plans | 187 | 159 |
| Other personnel-related expenses | 23 339 | 21 619 |
| Total | 233 679 | 232 142 |
| Information on management employee benefits is presented in Note 32. Information on share incentives is presented in Note 24. | ||
| Expenses from employee benefits by function: | ||
| Costs of goods sold | 177 632 | 178 547 |
| Sales and marketing expenses | 33 554 | 31 059 |
| Administrative expenses | 22 493 | 22 536 |
| Total | 233 679 | 232 142 |
| 2012 | 2011 | |
|---|---|---|
| Group personnel on average by business area (FTE): | ||
| Finland | 2,048 | 2,113 |
| Scandinavia | 1,119 | 1,153 |
| Russia | 1,384 | 1,812 |
| Baltic | 347 | 389 |
| Total | 4,898 | 5,467 |
| Depreciation and impairment by function: | ||
|---|---|---|
| Costs of goods sold | 44,334 | 44,348 |
| Sales and marketing expenses | 1,813 | 1,830 |
| Administrative expenses | 2,508 | 2,731 |
| Other operating expenses | 1,120 | 1,082 |
| Total | 49,775 | 49,991 |
| Financial income: | ||
|---|---|---|
| Interest income from loan assets | 3,604 | 3,152 |
| Exchange rate gains from financial liabilities and loan receivables measured at amortised cost | 6,414 | 7,577 |
| Dividends received from financial assets for sale | 83 | 44 |
| Other financial income | 83 | 6 |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| - Derivative financial instruments – not in hedge accounting | 4,447 | 3,064 |
| Total | 14,631 | 13,843 |
| Financial expenses: | ||
| Interest expenses from financial liabilities valued at amortised cost | -16,683 | -14,587 |
| Exchange rate losses from financial liabilities and loan receivables measured at amortised cost | -1,008 | -6,428 |
| Other financial expenses | -1,896 | -1,545 |
| Changes in the value of financial assets recognised at fair value through profit or loss | ||
| - Derivative financial instruments – not in hedge accounting | -9,742 | -5,417 |
| Total | -29,329 | -27,977 |
| Total financial income and expenses | -14,698 | -14,134 |
| Items related to financial instruments and recognised in other items of | ||
| total comprehensive income before taxes: | ||
| Cash flow hedge | -1,624 | -8,228 |
| Financial assets available for sale | 8 | -14 |
| Translation differences | 6,937 | -2,864 |
| Total | 5,321 | -11,106 |
| 10. Income ta xes , EUR 1,000 |
2012 | 2011 | |
|---|---|---|---|
| Taxes in the income statement: | |||
| Tax based on the taxable profit for the period | 9,118 | 4,758 | |
| Retained taxes | 391 | -55 | |
| Deferred tax | -667 | -2,801 | |
| Total | 8,842 | 1,902 | |
| Balancing of income statement taxes to profit before taxes | |||
| Profit before taxes | 18,907 | -4,723 | |
| Taxes calculated with the parent company's 24.5% tax rate (2011: 26 %) | 4,632 | -1,228 | |
| Effect of foreign subsidiaries' deviating tax rates | 2,031 | 2,679 | |
| Retained taxes | 443 | -574 | |
| Effect of income from joint ventures/associates | -832 | -376 | |
| Effect of tax-free income | -106 | -538 | |
| Effect of costs that are non-deductible in taxation | 1,977 | 1,800 | |
| Unrecognised deferred tax assets | 2,120 | 1,356 | |
| Utilisation of previously unrecognised tax losses | -117 | ||
| Changes in tax rate | -1,621 | -1,246 | |
| Other changes | 198 | 146 | |
| Total | 8,842 | 1,902 | |
| Taxes recognised in other items of total comprehensive income | Before tax | Tax effects | After tax |
| 2012: | |||
| Cash flow hedge | -1,619 | 397 | -1,222 |
| Financial assets available for sale | 8 | -2 | 6 |
| Actuarial losses from pension obligations | -415 | 7 | -408 |
| Translation differences | 6,937 | 6,937 | |
| Total | 4,911 | 402 | 5,313 |
| 2011: | |||
| Cash flow hedge | -8,228 | 2,009 | -6,219 |
| Financial assets available for sale | -14 | 5 | -9 |
| Actuarial losses from pension obligations | -2,075 | 495 | -1,580 |
| Translation differences | -2,864 | -2,864 | |
| Total | -13,181 | 2,509 | -10,672 |
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 for the period attributable to the owners of the parent company | 9,823 | -6,664 |
|---|---|---|
| Weighted average of shares for the period (1,000) | 28,156 | 28,157 |
| Basic earnings per share | 0.35 | -0.24 |
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.
| Machinery | ||||||
|---|---|---|---|---|---|---|
| Land and | Buildings and | and | Other tangible | Acquisitions in | ||
| water | structures | equipment | assets | progress | Total | |
| Acquisition cost, 1 Jan 2012 | 12,499 | 463,964 | 544,151 | 3,075 | 28,284 | 1,051,973 |
| Business combinations | 1,433 | 1,433 | ||||
| Increases | 8 | 27,288 | 28,995 | 2,032 | 28,493 | 86,816 |
| Decreases | -2,205 | -6,180 | -56 | -33,033 | -41,474 | |
| Exchange differences | 329 | 4,905 | 6,977 | 24 | 40 | 12,275 |
| Acquisition cost, 31 Dec 2012 | 12,836 | 493,952 | 575,376 | 5,075 | 23,784 | 1,111,023 |
| Accumulated depreciation and impairment, | ||||||
| 1 Jan 2012 | -192,002 | -394,065 | -1,515 | -11 | -587,593 | |
| Business combinations | -658 | -658 | ||||
| Decreases | 1,840 | 5,047 | 56 | 6,943 | ||
| Depreciation | -12,559 | -34,448 | -374 | -47,381 | ||
| Impairment | -2 | -145 | -147 | |||
| Exchange differences | -1,483 | -4,630 | -9 | -6,122 | ||
| Accumulated depreciation and impairment, | ||||||
| 31 Dec 2012 | -204,206 | -428,899 | -1,842 | -11 | -634,958 | |
| Book value, 1 Jan 2012 | 12,499 | 271,962 | 150,086 | 1,560 | 28,273 | 464,380 |
| Book value, 31 Dec 2012 | 12,836 | 289,746 | 146,477 | 3,233 | 23,773 | 476,065 |
| Machinery | ||||||
|---|---|---|---|---|---|---|
| Land and | Buildings and | and | Other tangible | Acquisitions in | ||
| water | structures | equipment | assets | progress | Total | |
| Acquisition cost, 1 Jan 2011 | 12,981 | 464,275 | 537,911 | 2,849 | 16,109 | 1,034,125 |
| Business combinations | 63 | 1,571 | 1,010 | 9 | 1,324 | 3,977 |
| Increases | 1 | 5,804 | 29,052 | 257 | 25,790 | 60,904 |
| Decreases | -438 | -5,959 | -23,438 | -29 | -14,832 | -44,696 |
| Exchange differences | -108 | -1,727 | -384 | -11 | -107 | -2,337 |
| Acquisition cost, 31 Dec 2011 | 12,499 | 463,964 | 544,151 | 3,075 | 28,284 | 1,051,973 |
| Accumulated depreciation and impairment, | ||||||
| 1 Jan 2011 | -182,844 | -379,871 | -1,311 | 0 | -564,026 | |
| Business combinations | -254 | -345 | -5 | -604 | ||
| Decreases | 3,947 | 20,333 | 29 | 24,309 | ||
| Depreciation | -12,977 | -34,229 | -236 | -47,442 | ||
| Impairment | -12 | -46 | -11 | -69 | ||
| Exchange differences | 138 | 93 | 8 | 239 | ||
| Accumulated depreciation and impairment, | ||||||
| 31 Dec 2011 | -192,002 | -394,065 | -1,515 | -11 | -587,593 | |
| Book value, 1 Jan 2011 | 12,981 | 281,431 | 158,040 | 1,538 | 16,109 | 470,099 |
| Book value, 31 Dec 2011 | 12,499 | 271,962 | 150,086 | 1,560 | 28,273 | 464,380 |
Assets acquired with financial leasing contracts are included in machinery and equipment. The acquisition cost recognised on the basis of the financial leasing contracts was EUR 5.8 million (EUR 6.3 million) and accumulated depreciation was EUR 4.1 million (EUR 3.4 million). Book value of assets was EUR 1.7 million (EUR 2.9 million).
The value of property, plant and equipment includes borrowing costs of EUR 0.3 million (EUR 0.03 million). During the 2012 accounting period, the Group did not receive government grants for the acquisition of fixed assets (EUR 0.2 million).
The tangible assets used as loan collateral amount to EUR 11.7 million (EUR 12.0 million).
| 13. Biological assets , EUR 1,000 |
2012 | 2011 |
|---|---|---|
| Biological assets: | ||
| Productive | 1,464 | 1,367 |
| Consumable | 5,504 | 5,298 |
| At end of the period | 6,968 | 6,665 |
| Amounts of biological assets at the end of the period: | ||
| Boars/number | 52 | 52 |
| Sows, gilts/number | 8,024 | 7,310 |
| Pigs for fattening/number | 55,921 | 48,986 |
| Chicken eggs, chicken chicks / number | 2,368,446 | 2,232,914 |
| Growing crops/hectares | 1,414 | 2,000 |
| Production of agricultural products during the period: | ||
| Pork/1,000 kg | 7,412 | 9,607 |
| Beef/1,000 kg | 15 | |
| Chicken chicks/1,000 pcs | 22,582 | 20,774 |
| Milk/1,000 kg | 1,303 | |
| Cereal/1,000 kg | 4,845 | 5,641 |
Agricultural production is practised in order to control raw material risks in the meat product business. Any increase in the cost of agricultural production is, if possible, passed on in the production chain to the meat product business and meat product sale prices.
| Intangible assets | Goodwill | Trademarks | Customer relationships |
Other intangible assets |
Total |
|---|---|---|---|---|---|
| Acquisition cost, 1 Jan 2012 | 183,321 | 73,820 | 2,347 | 21,175 | 280,663 |
| Business combinations | 1,080 | 2,500 | 1 | 3,581 | |
| Increases | 1,959 | 1,959 | |||
| Decreases | -1,268 | -92 | -1,360 | ||
| Exchange differences | 2,873 | 2,239 | 116 | 5,228 | |
| Acquisition cost, 31 Dec 2012 | 187,274 | 78,559 | 1,079 | 23,159 | 290,071 |
| Accumulated depreciation and impairment, 1 Jan 2012 |
-20,245 | -4,883 | -1,695 | -16,401 | -43,224 |
| Business combinations | 0 | ||||
| Depreciation on decreases | 1,268 | 40 | 1,308 | ||
| Depreciation | -410 | -290 | -1,547 | -2,247 | |
| Impairment | 0 | ||||
| Exchange differences | 1,473 | -334 | -99 | 1,040 | |
| Accumulated depreciation, 31 Dec 2012 | -18,772 | -5,627 | -717 | -18,007 | -43,123 |
| Book value, 1 Jan 2012 | 163,076 | 68,937 | 652 | 4,774 | 237,439 |
| Book value, 31 Dec 2012 | 168,502 | 72,932 | 362 | 5,152 | 246,948 |
| Intangible assets | Goodwill | Trademarks | Customer relationships |
Other intangible assets |
Total |
|---|---|---|---|---|---|
| Acquisition cost, 1 Jan 2011 | 193,487 | 74,143 | 2,347 | 20,052 | 290,029 |
| Business combinations | 72 | 72 | |||
| Increases | 1,105 | 1,105 | |||
| Decreases | -10,386 | -570 | -28 | -10,984 | |
| Exchange differences | 220 | 247 | -26 | 441 | |
| Acquisition cost, 31 Dec 2011 | 183,321 | 73,820 | 2,347 | 21,175 | 280,663 |
| Accumulated depreciation and impairment, 1 Jan 2011 |
-30,564 | -5,014 | -1,325 | -14,676 | -51,579 |
| Business combinations | -3 | -3 | |||
| Depreciation on decreases | 10,386 | 522 | 7 | 10,915 |
| Intangible assets | Goodwill | Trademarks | Customer relationships |
Other intangible assets |
Total |
|---|---|---|---|---|---|
| Depreciation | -364 | -370 | -1,746 | -2,480 | |
| Impairment | 0 | ||||
| Exchange differences | -67 | -27 | 17 | -77 | |
| Accumulated depreciation, 31 Dec 2011 | -20,245 | -4,883 | -1,695 | -16,401 | -43,224 |
| Book value, 1 Jan 2011 | 162,923 | 69,129 | 1,022 | 5,376 | 238,450 |
| Book value, 31 Dec 2011 | 163,076 | 68,937 | 652 | 4,774 | 237,439 |
Goodwill and intangible assets with indefinite useful lives are allocated to the Group's cash-generating units as follows:
| Goodwill | Trademarks | |||
|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |
| Atria Finland | 4,801 | 3,721 | 2,500 | |
| Atria Scandinavia | 154,640 | 150,294 | 60,488 | 58,788 |
| Atria Russia | 5,311 | 5,128 | ||
| Atria Estonia | 9,061 | 9,061 | 4,148 | 4,148 |
| Total | 168,502 | 163,076 | 72,447 | 68,064 |
The acquisition of Best-In Oy during the 2012 accounting period increased goodwill and trademark value at Atria Finland.
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, are defined before taxes and extend over a five-year period. Cash flows after the five-year forecast period are extrapolated using the growth rates presented below. The growth rate used does not exceed the average long-term growth rate of the industry in which the unit that generates the cash flow operates.
| Key assumptions for 2012 | Atria Finland | Atria Scandinavia | Atria Russia brand | Atria Estonia |
|---|---|---|---|---|
| Long-term net sales growth rate | 1.0 % | 1.0 % | 4.5 % | 1.0 % |
| Discount rate defined before taxes | 3.9 % | 4.3 % | 10.4 % | 4.6 % |
| Key assumptions for 2011 | Atria Finland | Atria Scandinavia | Atria Russia brand | Atria Estonia |
| Long-term net sales growth rate | 1.0 % | 1.0 % | 4.5 % | 1.0 % |
| Discount rate defined before taxes | 5.3 % | 4.8 % | 12.4 % | 6.8 % |
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 profitability levels and growth rate in net sales that the company will experience in the near future in Finland and Scandinavia. EBIT margins are expected to be close to the Group's targeted level of 5%. The improving long-term profitability of the Baltic region is based on the assumptions that the ongoing improvement measures, the more profitable use of meat raw material and the improvement of the general market situation will make the company profitable in the next few years.
Growth percentage assumptions are moderate in all market areas. Russia's higher growth projection 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 if the long-term level in Scandinavia and Estonia remains about 70% below the assumption. In Finland, the EBIT percentage should be approximately 80% below the assumption before the need for impairment arises.
Discount rates could produce impairment losses (all cash flow forecasts being equal) if they increased by 4.8 percentage points in Scandinavia and 3.0 percentage points in Estonia. In Finland, an increase by over 10 percentage points would lead to depreciation. Clearly higher discount rates would mean that the market situation has changed in such a way that the change could affect Atria's cash flows as well. Therefore, the above-mentioned increases in discount rates do not directly mean that there would be a need for impairment.
In the financial statements, a separate test was conducted on a trademark with an indefinite useful life for Atria Russia. The testing did not indicate a need for impairment loss recognition. On the basis of a sensitivity analysis, an impairment loss is not likely to be recognised for the trademark in the coming years, either.
| Investments in joint ventures | ||||||
|---|---|---|---|---|---|---|
| and associates | 2012 | 2011 | ||||
| In joint ventures: | ||||||
| At the beginning of the period | 5,918 | 4,635 | ||||
| Share of earnings for the period | 3,863 | 1,702 | ||||
| Dividends received | -533 | -419 | ||||
| Other changes | -2,242 | |||||
| At the end of the period | 7,006 | 5,918 | ||||
| In associates: | ||||||
| At the beginning of the period | 7,965 | 7,227 | ||||
| Share of earnings for the period | -468 | -255 | ||||
| Dividends received | -61 | -128 | ||||
| Other changes | 198 | 1,121 | ||||
| At the end of the period | 7,634 | 7,965 | ||||
| Total | 14,640 | 13,883 | ||||
| Joint ventures and associates | Domicile | Assets | Liabilities | Net sales | Profit/loss | Holding (%) |
| 2012: | ||||||
| Joint ventures: | ||||||
| Honkajoki Oy Group | Honkajoki | 23,601 | 10,066 | 28,130 | 4,633 | 50,0 |
| Länsi-Kalkkuna Oy | Säkylä | 3,541 | 2,631 | 27,194 | 21 | 50,0 |
| Associates: | ||||||
| OOO Dan-Invest | Krasnodar, Russia | 44,502 | 38,282 | 676 | -3,001 | 26,0 |
| Findest Protein Oy *) | Kaustinen | 2,076 | 1,193 | 3,672 | -253 | 41,7 |
| Finnpig Oy Group | Seinäjoki | 3,002 | 2,508 | 3,289 | 108 | 50,0 |
| Foodwest Oy | Seinäjoki | 1,140 | 306 | 2,137 | -19 | 33,5 |
| Kiinteistö Oy Itikanmäen Teollisuustalo | Seinäjoki | 3,716 | 25 | 190 | -7 | 13,2 |
| Finnish Meat Research Institute, | ||||||
| LTK Co-operative | Hämeenlinna | 11,128 | 1,961 | 22,375 | 202 | 40,7 |
| Param Para AB | Stockholm, Sweden | 2,912 | 2,498 | 3,818 | 19 | 24,0 |
| Transbox Oy | Helsinki | 1,811 | 1,428 | 5,642 | 5 | 25,7 |
| Tuoretie Oy | Seinäjoki | 8,052 | 7,103 | 63,246 | 14 | 33,3 |
| 2011: | ||||||
| Joint ventures: | ||||||
| Best-In Oy | Kuopio | 1,754 | 782 | 5,263 | 132 | 50,0 |
| Honkajoki Oy Group | Honkajoki | 18,111 | 8,059 | 26,814 | 3,103 | 50,0 |
| Länsi-Kalkkuna Oy | Säkylä | 3,723 | 2,833 | 25,864 | 168 | 50,0 |
| Associates: | ||||||
| OOO Dan-Invest | Krasnodar, Russia | 34,728 | 26,592 | 655 | -2,004 | 26,0 |
| Findest Protein Oy *) | Kaustinen | 2,578 | 1,377 | 3,604 | 1 | 41,7 |
| Finnpig Oy Group | Seinäjoki | 2,929 | 1,902 | 3,269 | 28 | 50,0 |
| Foodwest Oy | Seinäjoki | 1,232 | 379 | 2,081 | 66 | 33,5 |
| Kiinteistö Oy Itikanmäen Teollisuustalo | Seinäjoki | 3,716 | 18 | 194 | 13,2 | |
| OÜ LKT Invest | Valga, Estonia | 240 | 21 | 26,0 | ||
| Finnish Meat Research Institute, | ||||||
| LTK Co-operative | Hämeenlinna | 11,300 | 2,181 | 21,712 | 775 | 40,7 |
| Param Para AB | Stockholm, Sweden | 1,099 | 769 | 3,196 | 50 | 24,0 |
| Transbox Oy | Helsinki | 1,529 | 1,155 | 5,900 | 5 | 23,0 |
| Tuoretie Oy | Seinäjoki | 9,485 | 8,539 | 61,773 | 21 | 33,3 |
*) Holding: direct 16.6% and indirect 25.1%
| 2012 | 2011 | |
|---|---|---|
| Other financial assets include financial assets available for sale: | ||
| Financial assets available for sale, 1 Jan | 1,638 | 1,586 |
| Increases | 110 | 167 |
| Decreases | -115 | |
| Financial assets available for sale, 31 Dec | 1,748 | 1,638 |
| Financial assets available for sale include the following items: | ||
| Listed securities | 182 | 167 |
| Unlisted securities | 1,566 | 1,471 |
| Total | 1,748 | 1,638 |
| Financial assets available for sale are denominated in the following currencies: | ||
| EUR | 1,748 | 1,638 |
| Balance sheet values 2012 |
Balance sheet values 2011 |
|
|---|---|---|
| Trade receivables from producers | 3,364 | 10,763 |
| Loan receivables | 6,852 | 8,166 |
| Other receivables | 1,399 | 996 |
| Accrued credits and deferred charges | 21 | 21 |
| Total | 11,636 | 19,946 |
| Fair values do not deviate significantly from balance sheet values. | ||
| Non-current receivables were divided into currencies as follows: | ||
| EUR | 10,478 | 19,085 |
| SEK | 1,128 | 634 |
| RUR | 202 | |
| Other | 30 | 25 |
| Total | 11,636 | 19,946 |
The "trade receivables from producers" account includes feed and animal trading receivables from animal payments, which fall due in more than 12 months. The credit risk of these receivables is explained in Note 20.
During the 2012 accounting period, Atria Finland signed an agreement concerning the sale of trade receivables of producers. This agreement decreased non-current receivables by EUR 7.3 million.
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.
| Deferred tax assets and liabilities | 2012 | 2011 |
|---|---|---|
| Deferred tax assets: | ||
| Tax asset to be realised in more than 12 months | 15,053 | 15,328 |
| Tax asset to be realised within 12 months | 434 | 615 |
| Total | 15,487 | 15,943 |
| Deferred tax liabilities: | ||
| Tax liability to be realised in more than 12 months | 47,352 | 47,952 |
| Tax liability to be realised within 12 months | 12 | |
| Total | 47,364 | 47,952 |
| Deferred tax assets by balance sheet item: | ||
| Intangible and tangible assets | 1,305 | 1,251 |
| Inventories | 475 | 761 |
| Trade and other receivables | 834 | 666 |
| Interest-bearing and non-interest-bearing liabilities | 3,404 | 2,773 |
| Recognised losses | 9,469 | 10,492 |
| Total | 15,487 | 15,943 |
| Deferred tax liabilities by balance sheet item: | ||
| Intangible and tangible assets | 47,241 | 47,797 |
| Financial assets | 34 | 31 |
| Inventories | 65 | |
| Trade and other receivables | 77 | 59 |
| Interest-bearing and non-interest-bearing liabilities | 12 | |
| Total | 47,364 | 47,952 |
| Change in deferred taxes: | ||
| Recognised in the income statement | 667 | 2,801 |
| Recognised in other items of total comprehensive income | 402 | 2,509 |
| Acquisition of subsidiaries | -637 | -1,745 |
| Exchange differences | -300 | -230 |
| Total | 132 | 3,335 |
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. The losses during the accounting period, for which deferred tax assets have been left unrecognised, amount to EUR 15.7 million (EUR 9.7 million).
| Deferred tax assets recognised from confirmed losses age as follows: | Atria Russia |
|---|---|
| 2016 | 41 |
| 2017 | 563 |
| 2018 | |
| 2019 | 2,761 |
| 2020 | 4,445 |
| 2021 | 1,659 |
| Total | 9,469 |
| 2012 | 2011 | |
|---|---|---|
| Materials and supplies | 50,087 | 55,830 |
| Unfinished products | 15,308 | 13,581 |
| Finished products | 45,247 | 34,740 |
| Other inventories | 3,626 | 4,037 |
| Total | 114,268 | 108,188 |
During the accounting period, EUR 1.3 million (EUR 1.5 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.
| 2012 | 2011 | |
|---|---|---|
| Trade receivables | 88,605 | 117,144 |
| Trade receivables from producers | 25,463 | 32,436 |
| Loan receivables | 2,673 | 2,927 |
| Other receivables | 13,076 | 14,922 |
| Derivative financial instruments – in hedge accounting | 51 | |
| Derivative financial instruments – not in hedge accounting | 55 | |
| Accrued credits and deferred charges | 10,124 | 9,369 |
| Total | 140,047 | 176,798 |
Fair values do not deviate significantly from balance sheet values.
During the 2012 accounting period, Atria Finland signed agreements concerning the sale of trade receivables. These agreements decreased current trade receivables by EUR 42.6 million and trade receivables from producers by EUR 11.3 million.
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 many customers. Credit loss risk is managed with securities, such as credit insurance 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.
Trade receivables from producers account include feed and animal trading receivables from animal payments. The receivables situation and security values are monitored regularly in accordance with the credit policy.
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 | 2012 | Credit losses | Net 2012 |
|---|---|---|---|
| Not due | 95,706 | -104 | 95,602 |
| Overdue Less than 30 days |
14,209 | -25 | 14,184 |
| 30–60 days | 1,605 | -42 | 1,563 |
| 61–90 days | 776 | -54 | 722 |
| More than 90 days | 2,985 | -988 | 1,997 |
| Total | 115,281 | -1,213 | 114,068 |
| Breakdown of trade receivables and items booked as credit losses | 2011 | Credit losses | Net 2011 |
| Not due | 131,699 | 131,699 | |
| Overdue Less than 30 days |
13,860 | 13,860 | |
| 30–60 days | 1,322 | 1,322 | |
| 61–90 days | 904 | 904 | |
| More than 90 days | 2,395 | -600 | 1,795 |
| Total | 150,180 | -600 | 149,580 |
| Current receivables were divided into currencies as follows: | 2012 | 2011 | |
| EUR | 79,165 | 121,542 | |
| SEK | 27,842 | 23,028 | |
| RUR | 21,109 | 21,062 | |
| DKK | 7,387 | 6,400 | |
| USD | 1,343 | 1,925 | |
| NOK | 1,073 | 1,155 | |
| Other | 2,128 | 1,686 | |
| Total | 140,047 | 176,798 |
| 2012 | 2011 | |
|---|---|---|
| Cash in hand and at banks | 6,556 | 6,618 |
| Finland | Russia | Baltic | Total | |
|---|---|---|---|---|
| 2012: | ||||
| Land and water | 146 | 146 | ||
| Buildings and structures | 1,246 | 1,098 | 2,344 | |
| Other tangible assets | 17 | 17 | ||
| Total | 1,409 | 0 | 1,098 | 2,507 |
| 2011: | ||||
| Land and water | 146 | 146 | ||
| Buildings and structures | 1,246 | 1,915 | 1,098 | 4,259 |
| Other tangible assets | 17 | 17 | ||
| Total | 1,409 | 1,915 | 1,098 | 4,422 |
Non-current assets available for sale account include industrial real estate in Vilnius (balance sheet value EUR 1.1 million) and logistics real estate in Forssa, Finland (balance sheet value EUR 1.4 million). The Group sells actively real estate, but sales periods are partly longer due to the depressed market situation. The Group expects sales to come through after the markets have recovered.
An industrial property in Moscow was sold during the 2012 accounting period. A sales profit of EUR 1.4 million was recognised for the transaction.
Part of an industrial property in Vilnius was sold during the 2011 accounting period, and a sales loss of EUR 1.2 million was recognised for the transaction. In addition, an impairment of EUR 1.8 million was recognised for the logistics centre in Forssa during the 2011 accounting period.
Shares are divided into A and KII series, which differ in terms of voting rights. Series A shares have one vote per share and Series KII shares have ten votes per share. Series A shares have preference for a dividend of EUR 0.17, after which Series KII 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 maximum number.
| Number of shares outstanding (1,000) | A series | KII series | Total |
|---|---|---|---|
| 1.1.2011 | 18,953 | 9,204 | 28,157 |
| Returned from share incentive plan | -1 | -1 | |
| 31.12.2011 | 18,952 | 9,204 | 28,156 |
| No changes in the accounting period | |||
| 31.12.2012 | 18,952 | 9,204 | 28,156 |
Portion of share subscription payments recognised in share premium in compliance with the conditions of plans prior to the new Limited Liability Companies Act (21.7.2006/624) taking effect.
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 shares (serie A) 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 personnel 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 treasury shares (111,312 treasury shares).
| Other funds | 2012 | 2011 |
|---|---|---|
| Fair value reserve | 104 | 98 |
| Hedging fund | -5 731 | -4 504 |
| Total | -5 627 | -4 406 |
The "Other funds" item includes the fair value reserve and hedging fund. Changes in the fair value of available-for-sale financial assets are recognised in the fair value reserve, while the effective portions of changes in the fair value of the derivative financial instruments used for hedging are recognised in the hedging fund.
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.
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 are recognised as translation differences. 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 equity | 2012 | 2011 |
|---|---|---|
| Invested unrestricted equity fund | 110 228 | 110 228 |
| Retained earnings | 84 034 | 78 343 |
| Treasury shares | -1 277 | -1 277 |
| Profit for the period | 10 963 | 11 322 |
| Total | 203 946 | 198 615 |
| Dividend per share paid for the period | 2012 | 2011 |
| Dividend/share, EUR | 0,20 | 0,25 |
| Dividend distributed by the parent company | 5 631 | 7 039 |
The Board of Directors proposes to the Annual General Meeting to be held on 26 April 2013 that the company pay EUR 0.22 per share in dividend, totalling EUR 6,194,411.52.
Atria Plc had a share incentive plan in place for key personnel in the Group with three earning periods, namely the calendar years of 2010, 2011 and 2012. At the beginning of 2012, the Board of Directors decided to discontinue the share-based plan, which, therefore, was no longer used in 2012. Incentives based on the share incentive plan are paid partly in the form of Series A shares and partly in cash. The cash payments covered any taxes or similar costs associated with the incentives. The recipients were not allowed to transfer the shares for a period of two years from the end of the earning period. Profit from the programme for the earning periods 2010 and 2011 was linked to consolidated EBIT and return on capital employed (ROCE) for the year. The cap on share incentives was set at 100,100 of Atria Plc's A shares a year for 2010 and 2011. However, no shares were awarded based on performance in 2010 and 2011. In the 2007–2009 earning periods, a total of 38,540 Series A shares held by the company were transferred at no cost to key personnel under the incentive plan (35,260 shares for 2007 and 3,280 shares for 2009). Of these shares, 4,750 have since returned to the company.
| Earnings period | 2012 | 2011 |
|---|---|---|
| Grant date | 3 Feb 2011 | |
| Earnings period begins | 1 Jan 2011 | |
| Earnings period ends | 31 Dec 2011 | |
| Maximum number of shares granted as remuneration | 100,100 | |
| Share release | 31 Dec 2013 | |
| Number of people | 43 | |
| Earnings criteria: | ||
| - Operative EBIT | 80 % | |
| - Capital employed | 20 % | |
| Achievement of earnings criteria, % | 0 % | |
| Number of share incentives granted | 0 | |
| Share price listed on grant date, EUR | 8.61 | |
| Share price listed on balance sheet date, EUR | 5.95 |
| Balance sheet values 2012 |
Balance sheet values 2011 |
|
|---|---|---|
| Non-current | ||
| Bonds | 40,000 | 80,000 |
| Loans from financial institutions | 179,792 | 164,574 |
| Pension fund loans | 41,764 | 49,021 |
| Other liabilities | 2,011 | 2,014 |
| Finance lease obligations | 770 | 1,519 |
| Total | 264,337 | 297,128 |
| Current | ||
| Bonds | 40,000 | |
| Loans from financial institutions | 15,801 | 14,644 |
| Commercial papers Pension fund loans |
33,300 8,157 |
86,500 6,157 |
| Other liabilities | 7,884 | 3,622 |
| Finance lease obligations | 1,000 | 1,325 |
| Total | 106,142 | 112,248 |
| Total interest-bearing liabilities | 370,479 | 409,376 |
| The fair values of interest-bearing loans do not deviate significantly from balance sheet values. With fixed interest rates |
49,8 % | 50,2 % |
| With variable interest rates | 50,2 % | 49,8 % |
| Average interest rate | 2,98 % | 3,24 % |
| Non-current liabilities mature as follows: | 2012 | 2011 |
| 2013 | 81,042 | |
| 2014 | 91,546 | 89,571 |
| 2015 | 10,895 | 8,870 |
| 2016 | 7,985 | 6,012 |
| 2017 | 85,210 | 53,005 |
| 2018 | 55,485 | |
| Later | 13,216 | 58,628 |
| Total | 264,337 | 297,128 |
| Interest-bearing liabilities are divided into currencies as follows: | 2012 | 2011 |
| EUR | 151,167 | 217,525 |
| SEK | 155,290 | 134,608 |
| DKK | 12,838 | 13,957 |
| RUR | 50,081 | 42,222 |
| LTL | 1,104 | 1,064 |
| Total | 370,479 | 409,376 |
| Finance lease obligations | 2012 | 2011 |
| Total amount of minimum lease payments: | ||
| In less than a year | 1,034 | 1,441 |
| Between one and five years | 809 | 1,699 |
| After more than five years | 30 | |
| Total | 1,843 | 3,170 |
| Present value of minimum lease payments: |
| In less than a year | 1,000 | 1,328 |
|---|---|---|
| Between one and five years | 770 | 1,495 |
| After more than five years | 20 | |
| Total | 1,770 | 2,843 |
| Future interest accumulation | 73 | 327 |
Total 1,843 3,170
| 2012 | 2011 | |
|---|---|---|
| Other liabilities | 2 | 2 |
| Derivative financial instruments – in hedge accounting | 7,310 | 4,166 |
| Derivative financial instruments – not in hedge accounting | 252 | 17 |
| Accruals and deferred income | 8 | 8 |
| Total | 7,572 | 4,193 |
| Non-current liabilities consist of the following currencies: | ||
| EUR | 5,983 | 3,075 |
| SEK | 1,589 | 1,106 |
| Other | 12 | |
| Total | 7,572 | 4,193 |
The Group's Swedish companies have defined-benefit pension arrangements (ITP2). Most of the ITP2 pension arrangements are provided by the Alecta occupational pension insurance company 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.
| The benefit-based pension liability in the balance sheet is determined as follows: | 2012 | 2011 |
|---|---|---|
| Present value of funded obligations | 8,132 | 7,252 |
| Fair value of assets | 0 | 0 |
| Deficit(+)/Surplus(-) | 8,132 | 7,252 |
| Pension liability in the balance sheet | 8,132 | 7,252 |
| The benefit-based pension cost is determined as follows: | 2012 | 2011 |
| Costs based on performances in the period | 124 | 81 |
| Benefits paid | -197 | -163 |
| Interest expenses | 259 | 241 |
| Pension costs in the profit and loss account | 187 | 159 |
| Actuarial losses | 410 | 2,075 |
| Pension costs in total comprehensive income | 410 | 2,075 |
| Changes to liabilities in the balance sheet | 2012 | 2011 |
| Liability of the ITP2 pension arrangement at the beginning of the accounting period *) | 7,252 | 4,920 |
| Pension costs in the profit and loss account and total comprehensive income | 597 | 2,234 |
| Exchange differences | 283 | 98 |
| At the end of the period | 8,132 | 7,252 |
| Actuarial assumptions used (%) | ||
| Discount rate | 3,50 | 3,84 |
| Inflation rate | 2,00 | 2,00 |
*) Before 2011, the liability to the FPG/PRI system in relation to the financing of the Swedish ITP2 pension arrangement was presented as a pension fund loan in long-term interest-bearing liabilities.
| 2012 | 2011 | |
|---|---|---|
| Trade payables | 94,153 | 101,822 |
| Advances received | 1,075 | 1,174 |
| Other liabilities | 30,200 | 26,531 |
| Derivative financial instruments – in hedge accounting | 317 | 1,763 |
| Derivative financial instruments – not in hedge accounting | 2,769 | 2,799 |
| Accruals and deferred income | 46,984 | 42,480 |
| Total | 175,498 | 176,569 |
Material items in accrued liabilities consist of personnel expenses and the amortisation of debt interests.
| Current liabilities consist of the following currencies: | 2012 | 2011 |
|---|---|---|
| EUR | 97,553 | 103,028 |
| SEK | 51,540 | 49,565 |
| RUR | 17,077 | 13,150 |
| DKK | 7,082 | 6,506 |
| USD | 878 | 3,013 |
| NOK | 555 | 445 |
| Other | 813 | 862 |
| Total | 175,498 | 176,569 |
The financing 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 Financing 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 in 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 financing 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 dealt with at the end of this section.
Interest rate risk is managed by dividing financing into instruments with variable 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 forecast by dividing the 12-month rolling operating margin by the forecast net interest rate expenses. The lower the operating margin in relation to net financing costs, the larger is the share of debt that must have a fixed interest rate. The Group's interest-bearing debt at the time of the financial statements was EUR 370.5 million (EUR 409.4 million), of which EUR 184.5 million (EUR 205.6 million) or 49.8% (50.2%) had fixed interest rates. The ratio of debt with fixed and variable interest rates is at the level defined by the Group's financing 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 four open interest rate swaps subject to hedge accounting.
The sensitivity analysis of net interest rate expenses is based on a 1% change in interest rates, which is considered to be 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 2012, variable-rate net liabilities amounted to EUR 179.4 million (EUR 197.1 million). At the end of 2012, a +/-1% change in interest rates corresponded to a change of EUR +/-1.8 million in the Group's annual interest rate expenses (EUR +/-2.0 million). The effect on equity would be EUR 4.1 million (EUR 5.0 million) with a +1% change and EUR -4.3 million (EUR -5.3 million) with a -1% change.
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. Among other things, transaction risks come from the euro-denominated meat raw material imports of Atria's Swedish operations and from the USD-denominated imports of its Russian companies. 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 currency-denominated loan receivables from the subsidiaries through currency loans and forward exchange agreements.
If, at the end of the accounting period, the euro had been 10% weaker/stronger than the Swedish krona (all other factors being equal), profit before taxes would have been EUR 0.9 million higher/lower due to the Swedish subsidiaries' euro-denominated accounts payable (EUR 0.9 million). The effect on equity would have been EUR 0.7 million (EUR 0.8 million). Sensitivity analyses also take into account the effects of currency derivatives, which offset the effects of change in exchange rates.
If, at the end of the accounting period, the USD had been 10% weaker/stronger than the Russian rouble (all other factors being equal), profit before taxes would have remained unchanged due to the Russian subsidiaries' USD-denominated accounts payable (EUR 0.3 million). The effect on equity would have been EUR 0.0 million (EUR 0.0 million).
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 distribution and by having sufficient committed credit limits with sufficiently long periods of validity at hand, by using many financial institutions and instruments to raise finance and by keeping a sufficient amount of cash funds. Atria uses commercial papers actively for short-term financing and liquidity management. There was EUR 153.0 million (EUR 152.5 million) in unutilised binding credit limits at the end of the year, and EUR 166.7 million (EUR 113.5 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 2 years 10 months (3 years 1 months).
The main covenant used in loan agreements is a minimum equity ratio covenant of 30%. The Group's equity ratio has been approx. 40% 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 Group management's view, 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 levies and revenue of derivative liabilities and assets are related to forward exchange agreements, and interest payments to interest rate swaps.
| EUR 1,000 | Maturity, 31 Dec 2011 | |||||
|---|---|---|---|---|---|---|
| < 1 years | 1–5 years | > 5 years | Total | |||
| Loans | Instalments | 110,919 | 236,985 | 58,628 | 406,532 | |
| Interest payments | 8,722 | 28,394 | 1,374 | 38,490 | ||
| Finance lease obligations | Instalments | 1,329 | 1,515 | 2,844 | ||
| Derivative liabilities and assets | Capital payments | 144,993 | 144,993 | |||
| Capital income | -141,879 | -141,879 | ||||
| Interest payments | 3,336 | 10,812 | 599 | 14,747 | ||
| Interest income | -2,948 | -7,305 | -740 | -10,993 | ||
| Other liabilities | Instalments | 11,744 | 14 | 11,758 | ||
| Trade payables | Payments | 101,822 | 101,822 | |||
| Accruals and deferred income | Payments | 42,480 | 8 | 42,488 | ||
| Total | Total payments | 425,345 | 277,728 | 60,601 | 763,674 | |
| Total income | -144,827 | -7,305 | -740 | -152,872 | ||
| Net payments | 280,518 | 270,423 | 59,861 | 610,802 |
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, i.e., the counterparty risk, is managed by selecting only well-established highly rated counterparties with good credit ratings as counterparties. 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 decreased by the fact that all payments made in relation to derivatives are net payments. Atria has only made derivatives with banks that are among Atria's main financiers.
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 caseby-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.
| Hedging level | Hedging level | |
|---|---|---|
| Period | minimum | 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 effective portion of changes in the value of derivatives has been recognised under equity, which amounts to EUR -0.7 million (EUR -2.2 million) and the ineffective portion, which amounts to EUR -0.8 million (EUR -0.4 million) has been recognised in the income statement.
If the market price of electricity derivatives changed by +/-10% from the level prevailing on 31 December 2012, the effect on equity would be EUR +/-1.5 million (EUR +/-1.3 million) on the assumption that all hedges are 100% 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%. 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 balance sheet total and, through that, 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.
During the 2012 accounting period, Atria Finland signed agreements concerning the sale of trade receivables. These agreements decreased the company's trade receivables by a total of EUR 61.2 million at the end of the accounting period.
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 | 31.12.2012 | 31.12.2011 |
|---|---|---|
| 41,5 % | 39,5 % |
| EUR 1,000 | Financial assets and liabilities recognised at fair value through |
Derivative financial instruments under hedge |
Loans and other |
Financial assets available for |
Financial | Total balance |
|---|---|---|---|---|---|---|
| 2012 balance sheet item | profit or loss | accounting | receivables | sale | liabilities | sheet value |
| Non-current assets | ||||||
| Trade receivables | 3,364 | 3,364 | ||||
| Other financial assets | 1,748 | 1,748 | ||||
| Loan receivables | 6,852 | 6,852 | ||||
| Other receivables *) | 1,298 | 1,298 | ||||
| Accrued credits and deferred charges *) | 21 | 21 | ||||
| Current assets | ||||||
| Trade receivables | 114,068 | 114,068 | ||||
| Loan receivables | 2,673 | 2,673 | ||||
| Other receivables *) | 5,860 | 5,860 | ||||
| Accrued credits and deferred charges *) | 10,123 | 10,123 | ||||
| Derivative financial instruments | 55 | 51 | 106 | |||
| Cash and cash equivalents | 6,556 | 6,556 | ||||
| Total financial assets | 55 | 51 | 150,815 | 1,748 | 0 | 152,669 |
| Non-current liabilities | ||||||
| Loans | 263,567 | 263,567 | ||||
| Finance lease obligations | 770 | 770 | ||||
| Other liabilities **) | 2 | 2 | ||||
| Accruals and deferred income **) | 8 | 8 | ||||
| Derivative financial instruments | 252 | 7,310 | 7,562 | |||
| Current liabilities | ||||||
| Loans | 105,142 | 105,142 | ||||
| Finance lease obligations | 1,000 | 1,000 | ||||
| Trade payables | 94,153 | 94,153 | ||||
| Other liabilities **) | 12,203 | 12,203 | ||||
| Accruals and deferred income **) | 46,984 | 46,984 | ||||
| Derivative financial instruments | 2,769 | 317 | 3,086 | |||
| Total financial liabilities | 3,021 | 7,627 | 0 | 0 | 523,829 | 534,477 |
*) Do not include VAT or income tax assets
**) Do not include VAT or income tax liabilities
| EUR 1,000 2011 balance sheet item |
Financial assets and liabilities recognised at fair value through profit or loss |
Derivative financial instruments under hedge accounting |
Loans and other receivables |
Financial assets available for sale |
Financial liabilities |
Total balance sheet value |
|---|---|---|---|---|---|---|
| Non-current assets | ||||||
| Trade receivables | 10,763 | 10,763 | ||||
| Other financial assets | 1,638 | 1,638 | ||||
| Loan receivables | 8,166 | 8,166 | ||||
| Other receivables *) | 794 | 794 | ||||
| Accrued credits and deferred charges *) | 21 | 21 | ||||
| Current assets | ||||||
| Trade receivables | 149,580 | 149,580 | ||||
| Loan receivables | 2,927 | 2,927 | ||||
| Other receivables *) | 5,868 | 5,868 | ||||
| Accrued credits and deferred charges *) | 9,369 | 9,369 | ||||
| Cash and cash equivalents | 6,618 | 6,618 | ||||
| Total financial assets | 0 | 0 | 194,106 | 1,638 | 0 | 195,744 |
| Non-current liabilities | ||||||
| Loans | 295,609 | 295,609 | ||||
| Finance lease obligations | 1,519 | 1,519 | ||||
| Other liabilities **) | 2 | 2 | ||||
| Accruals and deferred income **) | 8 | 8 | ||||
| Derivative financial instruments | 17 | 4,166 | 4,183 | |||
| Current liabilities | ||||||
| Loans | 108,626 | 108,626 | ||||
| Finance lease obligations | 3,622 | 3,622 | ||||
| Trade payables | 101,822 | 101,822 | ||||
| Other liabilities **) | 8,120 | 8,120 | ||||
| Accruals and deferred income **) | 42,480 | 42,480 | ||||
| Derivative financial instruments | 2,799 | 1,763 | 4,562 | |||
| Total financial liabilities | 2,816 | 5,929 | 0 | 0 | 561,808 | 570,553 |
*) 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 2012 | Level 1 | Level 2 | Level 3 |
| Non-current assets | ||||
| Financial assets available for sale | ||||
| - Listed shares | 182 | 182 | ||
| - Unlisted shares | 1,566 | 1,566 | ||
| Current assets | ||||
| Derivative financial instruments | 106 | 106 | ||
| Total | 1,854 | 182 | 106 | 1,566 |
| Non-current liabilities | ||||
| Derivative financial instruments | 7,562 | 7,562 | ||
| Current liabilities | ||||
| Derivative financial instruments | 3,086 | 3,086 | ||
| Total | 10,648 | 0 | 10,648 | 0 |
| Balance sheet item | 31 Dec 2011 | Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|
| Non-current assets | ||||
| Financial assets available for sale | ||||
| - Listed shares | 167 | 167 | ||
| - Unlisted shares | 1,471 | 1,471 | ||
| Total | 1,638 | 167 | 0 | 1,471 |
| Non-current liabilities | ||||
| Derivative financial instruments | 4,183 | 4,183 | ||
| Current liabilities | ||||
| Derivative financial instruments | 4,562 | 4,562 | ||
| Total | 8,745 | 0 | 8,745 | 0 |
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 surveillance 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.
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.
If one or more significant piece of input information is not based on observable market information, the instrument is classified on 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.
| Unlisted shares | 2012 | 2011 |
|---|---|---|
| Opening balance 1.1 Jan | 1,471 | 1,405 |
| Purchases | 99 | 167 |
| Decreases | -4 | -101 |
| Closing balance 31.12 Dec | 1,566 | 1,471 |
| Fair values of derivative financial instruments EUR 1,000 |
Derivative assets 31 Dec 2012 |
Derivative liabilities 31 Dec 2012 |
Net fair value 31 Dec 2012 |
Net fair value 31 Dec 2011 |
|---|---|---|---|---|
| Forward exchange agreements | ||||
| Cash flow hedges under IAS 39 hedge accounting | 51 | 47 | 4 | -229 |
| Other hedges | 55 | 1,979 | -1,924 | -2,618 |
| Interest rate swaps, due in more than one year | ||||
| Cash flow hedges under IAS 39 hedge accounting | 6,849 | -6,849 | -3,527 | |
| Electricity derivatives | ||||
| Cash flow hedges under IAS 39 hedge accounting | 1 773 | -1 773 | -2,173 | |
| Other hedges | -198 | |||
| Total | 106 | 10,648 | -10,542 | -8,745 |
| EUR 1,000 | 31 Dec 2012 | 31 Dec 2011 |
|---|---|---|
| Forward exchange agreements | ||
| Cash flow hedges under IAS 39 hedge accounting | 12,502 | 12,760 |
| Other hedges | 128,622 | 100,432 |
| Interest rate swaps | ||
| Cash flow hedges under IAS 39 hedge accounting | 133,113 | 131,517 |
| Electricity derivatives | ||
| Cash flow hedges under IAS 39 hedge accounting | 16,008 | 15,505 |
| Other hedges | 488 | 479 |
| Total | 290,733 | 260,693 |
| Group as lessee | 2012 | 2011 |
|---|---|---|
| Minimum lease payments based on non-cancellable leases | ||
| Within one year | 6,325 | 6,181 |
| Within more than one year and a maximum of five years | 12,122 | 11,263 |
| After more than five years | 10,132 | 8,861 |
| Total | 28,579 | 26,305 |
| Rents recognised as cost | 6,507 | 6,548 |
The terms and conditions of the leases vary. The Group companies rent properties, machinery and equipment.
| Debts with mortgages or other collateral given as security | 2012 | 2011 |
|---|---|---|
| Loans from financial institutions | 2,956 | 3,327 |
| Pension fund loans | 5,692 | 7,251 |
| Total | 8,648 | 10,578 |
| Mortgages and other securities given as comprehensive security | ||
| Real estate mortgages | 4,182 | 4,509 |
| Corporate mortgages | 1,398 | 1,346 |
| Total | 5,580 | 5,855 |
| Contingent liabilities not included in the balance sheet | ||
| Guarantees | 441 | 470 |
| Share of | |||
|---|---|---|---|
| Group companies by business area | Domestic | Holding (%) | votes (%) |
| Atria Finland: | |||
| Ab Botnia-Food 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 Nurmo Oy | Finland | 100.0 | 100.0 |
| A-Rehu Oy | Finland | 51.0 | 51.0 |
| A-Sikateurastamo Oy | Finland | 100.0 | 100.0 |
| Atria Concept Oy | Finland | 100.0 | 100.0 |
| Atria Plc | Finland | ||
| 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-Tekniikka Oy | Finland | 100.0 | 100.0 |
| Atria-Tuoreliha Oy | Finland | 100.0 | 100.0 |
| Atria-Valmisruoka Oy | Finland | 100.0 | 100.0 |
| A-Farmers Ltd | Finland | 97.9 | 99.0 |
| Best-In Oy | Finland | 100.0 | 100.0 |
| F-Logistiikka Oy | Finland | 100.0 | 100.0 |
| Itikka-Lihapolar 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 |
| Rokes Oy | Finland | 100.0 | 100.0 |
| Suomen Kalkkuna Oy | Finland | 100.0 | 100.0 |
| Atria Scandinavia: | |||
| 3-Stjernet A/S | Denmark | 100.0 | 100.0 |
| Atria Concept AB | Sweden | 100.0 | 100.0 |
| Atria Concept SP Z.o.o | Poland | 100.0 | 100.0 |
| Atria Denmark A/S | Denmark | 100.0 | 100.0 |
| Atria Foodservice AB | Sweden | 100.0 | 100.0 |
| Atria Retail AB | Sweden | 100.0 | 100.0 |
| Atria Scandinavia AB | Sweden | 100.0 | 100.0 |
| Atria Supply AB | Sweden | 100.0 | 100.0 |
| Falbygdens Ostnederlag AB | Sweden | 100.0 | 100.0 |
| KB Joddlaren | Sweden | 100.0 | 100.0 |
| Nordic Fastfood AB | Sweden | 51.0 | 51.0 |
| Nordic Fastfood Etablerings AB | Sweden | 51.0 | 51.0 |
| Ridderheims AS | Norway | 100.0 | 100.0 |
| Ridderheims Falbygdens AB | Sweden | 100.0 | 100.0 |
| Atria Russia: | |||
| Atria-Invest Oy | Finland | 100.0 | 100.0 |
| OOO CampoFerma | Russia | 100.0 | 100.0 |
| OOO MPZ CampoMos | Russia | 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 |
| UAB Vilniaus Mesa | Lithuania | 100.0 | 100.0 |
| Group joint ventures and associates and other related parties | Domestic | Holding (%) | Share of votes (%) |
|---|---|---|---|
| Group joint ventures: | |||
| Honkajoki Oy | Finland | 50.0 | 50.0 |
| Länsi-Kalkkuna Oy | Finland | 50.0 | 50.0 |
| Group and associates: | |||
| OOO Dan-Invest | Russia | 26.0 | 26.0 |
| Findest Protein Oy | Finland | 41.7 | 41.7 |
| Finnpig Oy | Finland | 50.0 | 50.0 |
| Foodwest Oy | Finland | 33.5 | 33.5 |
| Kiinteistö Oy Itikanmäen Teollisuustalo | Finland | 13.2 | 13.2 |
| Finnish Meat Research Institute, LTK Co-operative | Finland | 40.7 | 40.7 |
| Param Para AB | Sweden | 24.0 | 24.0 |
| Transbox Oy | Finland | 25.7 | 25.7 |
| Tuoretie Oy | Finland | 33.3 | 33.3 |
Members of the Board of Directors and Supervisory Board CEO, Deputy CEO and Group Management Team Itikka Co-operative Group Lihakunta Pohjanmaan Liha Co-operative Group
| Transactions with related parties and related-party assets and liabilities | Joint ventures and associates |
Other related parties |
Total |
|---|---|---|---|
| 1 Jan–31 Dec 2012 | |||
| Sale of goods | 2,240 | 8,352 | 10,592 |
| Sale of services | 644 | 90 | 734 |
| Rental income | 318 | 47 | 365 |
| Purchase of goods | 19,411 | 7,608 | 27,019 |
| Purchase of services | 48,753 | 204 | 48,957 |
| Rental costs | 10 | 2,659 | 2,669 |
| 31 Dec 2012 | |||
| Trade receivables | 259 | 451 | 710 |
| Other receivables | 105 | 14 | 119 |
| Trade payables | 3,567 | 4 | 3,571 |
| Other liabilities | 3,623 | 3,623 | |
| Transactions with related parties and related-party assets and liabilities | Joint ventures and associates |
Other related parties |
Total |
| 1 Jan–31 Dec 2011 | |||
| Sale of goods | 1,448 | 7,335 | 8,783 |
| Sale of services | 662 | 90 | 752 |
| Rental income | 320 | 320 | |
| Buildings sold | 1,443 | 1,443 | |
| Purchase of goods | 18,457 | 6,036 | 24,493 |
| Purchase of services | 47,730 | 181 | 47,911 |
| Rental costs | 7 | 3,240 | 3,247 |
| Shares purchased | 6,084 | 6,084 | |
| 31 Dec 2011 | |||
| Trade receivables | 299 | 557 | 856 |
| Other receivables | 17 | 102 | 119 |
| Trade payables | 4,048 | 19 | 4,067 |
| Other liabilities | 3,819 | 3,819 |
The sale of goods and services to related parties is based on the Group's valid price lists. The majority of services purchased were the logistics services of Tuoretie Oy. Debts to related parties are loans that can be called in immediately or as agreed; their interest rate is tied to the 3-month or 6-month Euribor rate.
| Employee benefits and fees of the Group's key managerial personnel (on an accrual basis) | 2012 | 2011 |
|---|---|---|
| Short-term employee benefits | 2,385 | 2,430 |
| Post-employment benefits (pension group benefit) | 317 | 346 |
| Benefits paid upon termination of employment | 737 | |
| Total | 2,702 | 3,513 |
The retirement age for the CEO is 63 years. However, the CEO has the right to retire at age 60. The amount of pension is based on the CEO's annual income during employment at Atria Group.
The pension group benefits for the management have been arranged for the members of Atria Group's Management Team who are within the scope of Finnish social security. The retirement age of 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.
Members of the Board of Directors and Supervisory Board CEO and Deputy CEO Members of the Group's Management Team
| Salaries, benefits and other employee benefits for the Supervisory Board, Board of Directors, | ||
|---|---|---|
| CEO and Deputy CEO (on a cash basis) | 2012 | 2011 |
| Members of the Supervisory Board: | ||
| Pirkola Ari, Chairman | 43 | 54 |
| Anttikoski Juho, Deputy Chairman as of May 2012 | 14 | |
| Paavola Seppo, Deputy Chairman until May 2012 | 12 | 31 |
| Other members of the Supervisory Board, total | 58 | 45 |
| Members of the Board of Directors: | ||
| Paavola Seppo, Chairman as of May 2012 | 45 | |
| Selin Martti, Chairman until May 2012 | 29 | 74 |
| Komulainen Timo, Deputy Chairman | 79 | 84 |
| Heikkilä Tuomo | 32 | 36 |
| Kaarto Esa | 54 | 55 |
| Paxal Kjel-Göran, member as of May 2012 | 28 | |
| Romanainen Maisa | 25 | 25 |
| Sivula Harri | 27 | 28 |
| Tikkakoski Matti, member of the Board and CEO until March 2011 | ||
| CEOs: | ||
| Gröhn Juha, as of 4 March 2011 | 606 | 482 |
| Tikkakoski Matti, until 3 March 2011 | 847 | |
| Deputy CEOs, total: | 338 | 299 |
| Ruohola Juha, as of 1 May 2011 | ||
| Gröhn Juha, until 3 March 2011 |
Atria Plc acquired HKScan Finland Oy's shares in pet food manufacturer Best-In Oy on 20 December 2012. Atria Plc and HKScan Finland Oy previously each held a 50 per cent interest in Best-In Oy, established in 2002. Following this acquisition, Atria Plc owns the entire share capital of Best-In Oy.
Best-In Oy is located in Kuopio, Finland and its net sales in 2012 were EUR 5.1 million. The company has 19 employees. Best-In Oy owns the Best-In, Hubert and CAT pet food brands.
Atria seeks to benefit from the growth of the pet food market. Best-In's well-known brands and market leadership in Finland offer Atria an excellent opportunity to expand the business. The operations are focused on the domestic market and especially on fresh dog food solutions, an area in which Best-In stands out as the market leader and productisation forerunner.
| Fair values | Book values | |
|---|---|---|
| used in the | before the | |
| Best-In Oy | acquisition | acquisition |
| Property, plant and equipment | 775 | 775 |
| Intangible assets | ||
| Brands | 2,500 | |
| Goodwill | 1,080 | |
| Inventories | 605 | 501 |
| Short-term receivables | 113 | 113 |
| Cash in hand and at bank | 172 | 172 |
| Total assets | 5,245 | 1,562 |
| Non-current liabilities | 104 | 104 |
| Deferred tax liabilities | 638 | |
| Current liabilities | 503 | 503 |
| Total liabilities | 1,245 | 607 |
| Net assets | 4,000 | 954 |
| Purchase price for 50% of the shares | 2,000 | |
| Effect of the acquisition on cash flow | 1,828 |
Best-In Oy, which used to be a joint venture of the Group, has been consolidated with the equity method. The acquisition generated a profit of EUR 1.5 million, which results from the valuation at fair value of the previous 50% holding. The profit in question is reported in the income statement after EBIT under "Income from joint ventures and associates". Best-In Oy's income for the 2012 accounting period has been consolidated using the equity method.
As part of the efficiency improvement programme for bovine slaughtering and cutting operations, Atria acquired the entire stock of Kauhajoen Teurastamokiinteistöt Oy from Itikka Co-operative, which is a related party of the company, on 21 June 2011. Kauhajoen Teurastamokiinteistöt Oy owns Atria's slaughterhouse and machinery in Kauhajoki. The acquisition made the ownership structure clearer.
Atria invested approximately EUR 26 million in the construction and renovation of the Kauhajoki bovine slaughterhouse and cutting plant. This investment is expected to be completed by the end of 2012. The annual cost savings from the bovine slaughtering efficiency improvement programme are estimated at EUR 6 million.
| Kauhajoen Teurastamokiinteistöt Oy | Fair values used in the acquisition |
Book values before the acquisition |
|---|---|---|
| Property, plant and equipment | 9,013 | 2,415 |
| Intangible assets | 69 | 69 |
| Short-term receivables | 211 | 211 |
| Cash in hand and at bank | 32 | 32 |
| Total assets | 9,324 | 2,726 |
| Long-term interest-bearing liabilities | 1,500 | 1,500 |
| Deferred tax liabilities | 1,715 | |
| Short-term interest-bearing liabilities | 25 | 25 |
| Total liabilities | 3,240 | 1,525 |
| Net assets | 6,084 | 1,202 |
| Purchase price | 6,084 | |
| Effect of the acquisition on cash flow | 6,052 |
The preliminary calculation made during the 2011 accounting period still applies.
The cost-efficiency improvement programme progressed during the 2011 accounting period in the Baltic countries. In addition, OÜ Puidukaupandus, a milk production company owned by Atria, was sold. Due to this transaction, Atria Baltic recorded a non-recurring sales gain of EUR 0.2 million during the 2011 accounting period. The transaction had no material impact on consolidated net sales, EBIT, assets or liabilities.
The following people were elected to Atria Plc's Nomination Committee, appointed by the General Meeting:
Esa Kaarto was elected Chairman of the Nomination Committee. Of the largest Series A shareholders, Mandatum Life Insurance Company and Varma Mutual Pension Insurance Company did not wish to appoint representatives to the Nomination Committee.
The Nomination Committee proposes to the General Meeting that the remuneration of the members of the Board of Directors be kept at the same level as in 2012. The Nomination Committee further proposes to the General Meeting that three members be appointed to the Board of Directors to replace members who have served a full term (Komulainen and Romanainen) and a resigning member (Heikkilä). The Nomination Committee proposes that Maisa Romanainen, who is due to resign, be re-elected to the Board of Directors. The remaining two candidates will be confirmed and a notification thereof will be given at a later stage.
Atria Finland launched a programme to improve the profitability of convenience food production. Atria is investigating options to transfer the production of convenience food from Karkkila to other Atria Finland production sites. Employer-employee negotiations concerning the reorganisation plans have been launched. The programme is expected to generate annual cost savings of EUR 1 million. The negotiations affect a total of 32 people at the Karkkila production plant.
| Note | 1 Jan–31 Dec 2012 |
1 Jan–31 Dec 2011 |
|
|---|---|---|---|
| NET SALES | 2.1 | 41,284 | 46,417 |
| Other operating income | 2.2 | 2,726 | 2,783 |
| Personnel expenses | 2.3 | -2,620 | -3,552 |
| Depreciation and impairment | 2.4 | ||
| Planned depreciation | -22,747 | -23,015 | |
| Other operating expenses | 2.5 | -5,973 | -5,531 |
| EBIT | 12,670 | 17,102 | |
| Financial income and expenses |
2.6 | 3,919 | 9,445 |
| PROFIT BEFORE | |||
| EXTRAORDINARY ITEMS | 16,589 | 26,547 | |
| Extraordinary items | 2.7 | 0 | -7,300 |
| PROFIT BEFORE | |||
| APPROPRIATIONS AND | |||
| TAXES | 16,589 | 19,247 | |
| Appropriations | 2.8 | -4,017 | -7,858 |
| Income taxes | 2.9 | -1,610 | -67 |
| PROFIT FOR THE PERIOD | 10,963 | 11,322 | |
| A s s e t s | Note | 31 Dec 2012 | 31 Dec 2011 |
|---|---|---|---|
| FIXED ASSETS | |||
| Intangible assets | 3.1 | ||
| Intangible rights | 25 | 35 | |
| Other long-term | |||
| expenditure | 4,280 | 3,923 | |
| Total intangible assets | 4,305 | 3,957 | |
| Tangible assets | 3.1 | 227,105 | 235,445 |
| Investments | 3.2 | ||
| Interests in Group | |||
| companies | 259,929 | 257,835 | |
| Interests in associates | 3,592 | 3,652 | |
| Other shares and interests | 1,580 | 1,479 | |
| Total investments | 265,100 | 262,966 | |
| TOTAL FIXED ASSETS | 496,510 | 502,368 | |
| CURRENT ASSETS | |||
| Long-term receivables | 3.3 | 321,448 | 316,381 |
| Short-term receivables | 3.3 | 106,694 | 80,836 |
| Cash in hand and at bank | 1,553 | 1,806 | |
| TOTAL CURRENT ASSETS | 429,695 | 399,024 | |
| T o t a l a s s e t s | 926,205 | 901,393 | |
| L i a b i l i t i e s | Note | 31 Dec 2012 | 31 Dec 2011 |
| EQUITY | 3.4 | ||
| Share capital | 48,055 | 48,055 | |
| Share premium | 138,502 | 138,502 | |
| Treasury shares | -1,277 | -1,277 | |
| Invested unrestricted equity | |||
| fund | 110,228 | 110,228 | |
| Retained earnings | 84,034 | 78,343 | |
| Profit for the period | 10,963 | 11,322 | |
| TOTAL EQUITY | 390,504 | 385,172 | |
| ACCRUED APPROPRIATIONS | 3.5 | ||
| Depreciation difference | 73,031 | 69,014 | |
| LIABILITIES | |||
| Non-current liabilities | 3.6 | 258,870 | 285,844 |
| Current liabilities | 3.7 | 203,800 | 161,362 |
| TOTAL LIABILITIES | 462,670 | 447,206 | |
| T o t a l l i a b i l i t i e s | 926,205 | 901,393 |
| 1 Jan–31 Dec 2012 |
1 Jan–31 Dec 2011 |
|
|---|---|---|
| CASH FLOW FROM OPERATING ACTIVITIES |
||
| Sales income | 41,101 | 45,619 |
| Other business revenue | 2,726 | 2,783 |
| Payments on operating expenses | -8,293 | -8,354 |
| Cash flow from operating activities before financial items and taxes |
35,534 | 40,048 |
| Net financial income and expenses | 4,444 | 5,924 |
| Tax paid | -2,665 | 5,578 |
| Cash flow from operating activities | 37,314 | 51,550 |
| CASH FLOW FROM INVESTMENTS | ||
| Investments in tangible and | ||
| intangible assets and investments | -16,888 | -26,679 |
| Change in Group receivables | -30,504 | -7,324 |
| Cash flow from investments | -47,392 | -34,003 |
| CASH FLOW FROM FINANCING | ||
| Loan payments | -31,015 | -1,358 |
| Change in Group liabilities | 53,771 | -19,662 |
| Dividends paid | -5,631 | -7,039 |
| Treasury shares | 0 | -6 |
| Group contribution | -7,300 | -1,422 |
| Cash flow from financing | 9,825 | -29,487 |
| CASH FLOW FROM OPERATING | ||
| ACTIVITIES | 37,314 | 51,550 |
| CASH FLOW FROM INVESTMENTS | -47,392 | -34,003 |
| CASH FLOW FROM FINANCING | 9,825 | -29,487 |
| TOTAL | -253 | -11,940 |
| Change in cash and cash equivalents |
||
| Cash and cash equivalents 1 Jan | -1,806 | -13,747 |
| Cash and cash equivalents 31 Dec | 1,553 | 1,806 |
| Change | -253 | -11,940 |
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 Plc, and its domicile is in Kuopio, Finland. Copies of Atria Plc's financial statements are available from the company's head office at Itikanmäentie 3, Seinäjoki, postal address: PO Box 900, FI-60060 ATRIA.
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.
| Depreciation | ||
|---|---|---|
| Depreciation periods | period | |
| Buildings | Nurmo | 40 years |
| other locations | 25 years | |
| Machinery and equipment | Nurmo | 10 years |
| other locations | 7 years | |
| Computer software | 5 years | |
| Other long-term items | 10 years | |
The publicly listed companies' shares in the company's fixed assets investments have been measured at acquisition cost. The book value of the shares on 31 December 2012 was EUR 29,326.86 and their fair value was EUR 113,156.11.
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.
The company enters into derivative agreements in order to control exchange differences and interest rate levels. The derivatives used are forward exchange agreements and interest rate swaps.
The derivatives hedge accounting is not applied to are measured at fair value. All profits and losses resulting from fair value recognition are presented under the financial items of the income statement. The positive fair value of the derivatives used for hedging is presented under receivables and the negative fair value under liabilities.
The derivatives hedge accounting is applied to are recognised in the proper item of the income statement on their expiration date.
The fair values of all derivatives are presented in Note 4.3.
1 Jan– 31 Dec 2012 1 Jan– 31 Dec 2011
Net sales 41,284 46,417
The company's rental income is presented as net sales because it corresponds to the present nature of the company's operations.
| Service charges to Group companies | 2,706 | 2,729 |
|---|---|---|
| Other | 19 | 54 |
| Total | 2,726 | 2,783 |
| Average number of personnel | ||
|---|---|---|
| Clerical personnel in Finland | 10 | 12 |
| Personnel expenses | ||
| Salaries: CEO, Deputy CEO and members of the Board of Directors |
1,189 | 1,873 |
| Members of the Supervisory Board | 110 | 112 |
| Other salaries | 535 | 803 |
| Total | 1,833 | 2,788 |
| Pension costs | 697 | 652 |
| Other personnel-related expenses | 90 | 112 |
| Total | 787 | 764 |
| Total personnel expenses | 2,620 | 3,552 |
Pension commitments of members of the Board and CEO: The company's statutory pensions are defined contribution plans and have been arranged through an insurance company. The company does not have pension commitments for the CEO and the members of the Board of Directors and the Supervisory Board.
| Depreciations of tangible and intangible assets |
22,747 | 23,015 | |
|---|---|---|---|
| ---------------------------------------------------- | -------- | -------- | -- |
Depreciation specification per balance sheet item included in section 3.1.
| Other operating expenses | 5,973 | 5,531 |
|---|---|---|
| Including administration, marketing, energy, cleaning, operational and other costs as well as fees paid to auditors. |
||
| Fees paid to auditors / Pricewaterhouse Coopers Oy |
||
|---|---|---|
| Auditing fees | 185 | 217 |
| Tax consulting | 2 | 8 |
| Other remunerations | 11 | 9 |
| Total | 197 | 234 |
The presented figures are based on invoicing.
| Return on long-term investments | ||
|---|---|---|
| Dividend yield | ||
| From Group companies | 5,443 | 10,631 |
| From other companies | 674 | 588 |
| Total | 6,117 | 11,219 |
| Other interest and financial income | ||
| From Group companies | 12,647 | 12,614 |
| From other companies | 7,618 | 8,822 |
| Total | 20,266 | 21,436 |
| Interest expenses and other financial expenses | ||
| To Group companies | 1,021 | 1,420 |
| To other companies | 21,443 | 21,790 |
| Total | 22,464 | 23,210 |
| Total financial income and expenses | 3,919 | 9,445 |
| Interest expenses and other financial expenses | ||
| include exchange rate losses (net) | 31 | 417 |
| Group contributions paid | 0 | 7,300 |
|---|---|---|
| Difference between planned depreciation and | ||
|---|---|---|
| depreciation implemented in taxation | -4,017 | -7,858 |
| Income taxes on operations | 1,610 | 67 |
|---|---|---|
| Intangible assets: | ||
|---|---|---|
| Intangible rights | ||
| Acquisition cost 1 Jan | 1 455 | 1 455 |
| Increases | 0 | 0 |
| Decreases | 0 | 0 |
| Acquisition cost 31 Dec | 1 455 | 1 455 |
| Accumulated depreciation 1 Jan | -1 420 | -1 394 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -10 | -26 |
| Accumulated depreciation 31 Dec | -1 430 | -1 420 |
| Book value 31 Dec | 25 | 35 |
| Other long-term expenditure | ||
| Acquisition cost 1 Jan | 17 318 | 16 386 |
| Increases | 1 658 | 936 |
| Decreases | -28 | -4 |
| Acquisition cost 31 Dec | 18 949 | 17 318 |
| Accumulated depreciation 1 Jan | -13 395 | -11 994 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -1 273 | -1 401 |
| Accumulated depreciation 31 Dec | -14 668 | -13 395 |
| Book value 31 Dec | 4 280 | 3 923 |
| Total intangible assets | 4 305 | 3 957 |
| Tangible assets: | ||
| Land and water | ||
| Acquisition cost 1 Jan | 1 233 | 1 469 |
| Decreases | 0 | -235 |
| Acquisition cost 31 Dec | 1 233 | 1 233 |
| Buildings and structures | ||
| Acquisition cost 1 Jan | 280 853 | 279 252 |
| Increases | 10 147 | 2 095 |
| Decreases | -361 | -494 |
| Acquisition cost 31 Dec | 290 639 | 280 853 |
| Accumulated depreciation 1 Jan | -129 792 | -123 066 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | ||
| -6 881 | -6 726 | |
| Accumulated depreciation 31 Dec | -136 673 | -129 792 |
| Book value 31 Dec | 153 965 | 151 061 |
| Machinery and equipment | ||
| Acquisition cost 1 Jan | 282 535 | 274 815 |
| Increases | 14 350 | 7 731 |
| Decreases | -502 | -12 |
| Acquisition cost 31 Dec | 296 383 | 282 535 |
| Accumulated depreciation 1 Jan | -213 790 | -199 061 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -14 448 | -14 730 |
| Accumulated depreciation 31 Dec | -228 238 | -213 790 |
| 31 Dec 2012 | 31 Dec 2011 | |
|---|---|---|
| Other tangible assets | ||
| Acquisition cost 1 Jan | 2,235 | 2,215 |
| Increases | 63 | 20 |
| Decreases | 0 | 0 |
| Acquisition cost 31 Dec | 2,298 | 2,235 |
| Accumulated depreciation 1 Jan | -1,022 | -890 |
| Depreciation on decreases | 0 | 0 |
| Depreciation for the accounting period | -135 | -132 |
| Accumulated depreciation 31 Dec | -1,157 | -1,022 |
| Book value 31 Dec | 1,141 | 1,213 |
| Advance payments and | ||
| acquisitions in progress | ||
| Acquisition cost 1 Jan | 13,192 | 9,034 |
| Changes +/- | -10,572 | 4,159 |
| Acquisition cost 31 Dec | 2,620 | 13,192 |
| Tangible assets total | 227,105 | 235,445 |
| Non-depreciated acquisition cost of | ||
| machinery and equipment | 68,145 | 68,745 |
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 | Parent | |
|---|---|---|
| company | company | |
| holding % | holding % | |
| 2012 | 2011 | |
| Group companies: | ||
| Ab Botnia-Food Oy, Seinäjoki | 100 | 100 |
| Atria Concept 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 | |
| Itikka-Lihapolar Oy, Seinäjoki | 100 | 100 |
| Kauhajoen Teurastamokiinteistöt Oy, | ||
| Kauhajoki | 100 | 100 |
| Kiinteistö Oy Tievapolku 3, Helsinki | 100 | 100 |
| Liha ja Säilyke Oy, Forssa | 63.2 | 63.2 |
| OÜ Atria, Tallinn, Estonia | 100 | 100 |
| Rokes Oy, Forssa | 100 | 100 |
| Suomen Kalkkuna Oy, Seinäjoki | 100 | 100 |
| UAB Vilniaus Mesa, Vilna, Lithuania | 100 | 100 |
| Joint ventures and associates: | ||
| Best-In Oy, Kuopio | 50.0 | |
| 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, LTK | ||
| Co-operative, Hämeenlinna | 40.7 | 40.7 |
| Länsi-Kalkkuna Oy, Säkylä | 50.0 | 50.0 |
| Transbox Oy, Helsinki | 18.6 | 15.7 |
| Tuoretie Oy, Helsinki | 33.3 | 33.3 |
| 3.3. RECEIVABLES, EUR 1,000 | 31 Dec 2012 | 31 Dec 2011 |
|---|---|---|
| Long-term receivables: | ||
| Receivables from Group companies: | ||
| Loan receivables | 321,448 | 316,381 |
| Short-term receivables: | ||
| Loan receivables | 132 | 221 |
| Trade receivables | 51 | 34 |
| Other receivables | 21 | 300 |
| Accrued credits and deferred charges | 1,239 | 128 |
| Receivables from Group companies: | ||
| Trade receivables | 1,789 | 1,623 |
| Other receivables | 100,290 | 74,485 |
| Accrued credits and deferred charges | 3,172 | 4,045 |
| Total current receivables | 106,694 | 80,836 |
| Material items included in the accrued | ||
| credits and deferred charges: | ||
| - amortised interests | 3,222 | 4,046 |
| - amortised taxes | 1,086 | 31 |
| - other | 103 | 96 |
| Total | 4,411 | 4,173 |
| 3.4. EQUITY, EUR 1,000 | 31 Dec 2012 | 31 Dec 2011 |
| Share capital 1 Jan | 48,055 | 48,055 |
| Share capital 31 Dec | 48,055 | 48,055 |
| Share premium 1 Jan | 138,502 | 138,502 |
| Share premium 31 Dec | 138,502 | 138,502 |
| Restricted equity total | 186,557 | 186,557 |
| Own shares 1 Jan | -1,277 | -1,271 |
| Acquisition of own shares | 0 | -6 |
| Own shares 31 Dec | -1,277 | -1,277 |
| Invested unrestricted equity fund 1 Jan | 110,228 | 110,228 |
| Invested unrestricted equity fund 31 Dec | 110,228 | 110,228 |
| Retained earnings 1 Jan | 89,665 | 85,383 |
| Distribution of dividends | -5,631 | -7,039 |
| Retained earnings 31 Dec | 84,034 | 78,343 |
| Profit for the period | 10,963 | 11,322 |
| Retained earnings 31 Dec | 94,996 | 89,665 |
| Unrestricted equity total | 203,946 | 198,615 |
At the end of the accounting period on 31 December 2012, the number of treasury shares held by the company was 111,312, which corresponds to 0.394% of the shares and 0.1% of the voting rights conferred by them. No changes occurred in the number of treasury shares during the accounting period.
| Calculation of funds appropriate for distribution as dividends: |
31 Dec 2012 |
31 Dec 2011 |
|---|---|---|
| Retained earnings | 84,034 | 78,343 |
| Profit for the period | 10,963 | 11,322 |
| Treasury shares | -1,277 | -1,277 |
| Total | 93,719 | 88,388 |
The breakdown of the share capital is as follows:
| 2012 | 2011 | ||||
|---|---|---|---|---|---|
| number | EUR 1,000 | number | EUR 1,000 | ||
| Series A shares (1 vote/share) |
19,063,747 | 32,408 | 19,063,747 | 32,408 | |
| Series KII shares (10 votes/share) |
9,203,981 | 15,647 | 9,203,981 | 15,647 | |
| Total | 28,267,728 | 48,055 | 28,267,728 | 48,055 |
| 3.5. ACCRUED APPROPRIATIONS, | ||
|---|---|---|
| EUR 1,000 | 31 Dec 2012 | 31 Dec 2011 |
| Depreciation difference | 73,031 | 69,014 |
| 3.6. NON-CURRENT LIABILITIES, | ||
| EUR 1,000 | 31 Dec 2012 | 31 Dec 2011 |
| Bonds | 40,000 | 80,000 |
| Loans from financial institutions | 177,106 | 161,623 |
| Pension fund loans | 26,277 | 25,946 |
| Total | 243,383 | 267,569 |
| Liabilities to Group companies: | ||
| Other non-current liabilities | 15,488 | 18,275 |
| Total non-current liabilities | 258,870 | 285,844 |
| Loans maturing later than in five years: | ||
| Loans from financial institutions | 50,000 | 51,250 |
| Pension fund loans | 10,513 | 1,025 |
| Other non-current liabilities | 4,338 | 7,125 |
| Total | 64,850 | 59,400 |
Atria Plc's bond issued in 2007 amounting to EUR 40 million matures in 2014 (interest rate 1.15%)
3.7. CURRENT LIABILITIES, EUR 1,000 31 Dec 2012 31 Dec 2011
| Bonds | 40,000 | 0 |
|---|---|---|
| Loans from financial institutions | 47,628 | 100,730 |
| Pension fund loans | 5,370 | 3,370 |
| Trade payables | 1,004 | 618 |
| Other liabilities | 7,281 | 3,117 |
| Accruals and deferred income | 3,921 | 4,224 |
| Liabilities to Group companies: | ||
| Other non-current liabilities | 2,788 | 2,788 |
| Trade payables | 444 | 369 |
| Other liabilities | 95,227 | 38,669 |
| Accruals and deferred income | 137 | 7,478 |
| Total current liabilities | 203,800 | 161,362 |
| Material items included in accruals and deferred income: |
||
|---|---|---|
| - accruals of salaries and social security | ||
| payments | 674 | 678 |
| - personnel fund | 6 | 0 |
| - interest accruals | 1,848 | 2,081 |
| - exchange rate difference of forward | ||
| contracts | 1,492 | 1,558 |
| - other | 37 | 7,385 |
| Total | 4,058 | 11,702 |
Atria Plc's bond issued in 2006 amounting to EUR 40 million matures in 2013 (interest rate 1.58%)
Contingent liabilities and other liabilities not included in the balance sheet
| Guarantees: | 31 Dec 2012 |
31 Dec 2011 |
|---|---|---|
| For Group companies | 70,734 | 71,112 |
| Total | 70,734 | 71,112 |
| Other leases | ||
| Minimum rents paid based on other leases | ||
| Within one year | 527 | 398 |
| Within more than one year and a maximum of | ||
| five years | 1,220 | 595 |
| After more than five years | 3,396 | 3,473 |
| Total | 5,143 | 4,466 |
The company has made the property investments referred to in the Value Added Tax Act. The remaining verification liability of these investments was assessed for each verification period on 31 December 2012. The company is obliged to verify reductions in VAT on property investments if the taxable use of the properties decreases during the verification period.
| Remaining amount of verification liability |
|||
|---|---|---|---|
| 31 Dec | 31 Dec | ||
| Year of completion of the investment | 2012 | 2011 | |
| 2008 | 0 | 866 | |
| 2009 | 826 | 963 | |
| 2010 | 251 | 286 | |
| 2011 | 1,418 | 1,595 | |
| 2012 | 2,526 | 0 | |
| Total | 2,494 | 3,711 | |
| Fair values of derivative financial instruments | Derivative liabilities 31 Dec 2012 |
Derivative liabilities 31 Dec 2011 |
|---|---|---|
| Forward exchange agreements: | ||
| Other hedges | 1,492 | 1,491 |
| Interest rate swaps, due in more than one year: | ||
| Cash flow hedges under hedge accounting | 6,849 | 3,527 |
| Total | 8,341 | 5,018 |
| Signatures and Auditor's Report | |||||
|---|---|---|---|---|---|
| -- | --------------------------------- | -- | -- | -- | -- |
Seinäjoki, 19 March 2013
Seppo Paavola Tuomo Heikkilä Chairman
Esa Kaarto Timo Komulainen
Kjell-Göran Paxal Maisa Romanainen
Harri Sivula Juha Gröhn
CEO
A report on the audit performed has been issued today.
Seinäjoki, 19 March 2013
PricewaterhouseCoopers Oy Authorised Public Accountants
Juha Wahlroos Authorised Public Accountant
We have audited the accounting records, the financial statements, the report of the Board of Directors and the administration of Atria Corporation for the year ended 31 December 2012. The financial statements comprise the consolidated statement of financial position, income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the 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, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Supervisory Board and Board of Directors of the parent company as well the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or whether they have violated the Limited Liability Companies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
We support that the financial statements and the consolidated financial statements should be adopted. The proposal by the Board of Directors regarding the use of the profit shown in the balance sheet is in compliance with the Limited Liability Companies Act. We support that the Members of the Supervisory Board and Board of Directors as well the Managing Director of the parent company should be discharged from liability for the financial period audited by us.
Seinäjoki 19 March 2013
PricewaterhouseCoopers Oy Authorised Public Accountants
Juha Wahlroos Authorised Public Accountant
| Corporate governance112 | |
|---|---|
| Corporate governance statement112 | |
| General Meeting113 | |
| Nomination Committee114 | |
| Supervisory Board114 | |
| Board of Directors 116 |
|
| Board committees |
121 |
| CEO | 123 |
| Management Team | 123 |
| Remuneration | 123 |
| Internal control, risk management and internal audit | 127 |
| Auditing |
129 |
| Insider policy | 129 |
| Communication | 130 |
| Remuneration statement | 131 |
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, Supervisory Board, Board of Directors and CEO.
Atria's decision-making and corporate governance are in compliance with the Finnish Limited Liability Companies Act, regulations applied to publicly listed companies, Atria Plc's Articles of Association, the rules of procedure for Atria's Board of Directors and committees, and NASDAQ OMX Helsinki Ltd's rules and guidelines. Atria follows the Finnish Corporate Governance Code ("Corporate Governance Code"). The full Corporate Governance Code may be viewed at www.cgfinland.fi. In accordance with the Comply or Explain principle, the company departs from the recommendations of the Code as follows:
Atria Plc has prepared a review of the corporate governance system in accordance with the recommendation of the Finnish Corporate Governance Code. The review is available on the company's website (www.atriagroup.com).
The Articles of Association and the pre-emptive purchase clause can be found in their entirety on the company's website at www.atriagroup.com/en/investors/Corporategovernance.
There is an agreement between two shareholders of Atria – Lihakunta and Itikka Co-operative – according to which they will jointly ensure that both parties are represented in the Supervisory Board in the proportion in which they own Series KII shares in the company. The parties will also ensure that the Chairman of the Supervisory Board and the Vice Chairman of the Board of Directors are nominated by one party and the Chairman of the Board of Directors and the Vice 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, there is an agreement between three shareholders of Atria – Lihakunta, Itikka Co-operative and Pohjanmaan Liha – according to which Pohjanmaan Liha will have one representative in 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.
The full corporate governance statement can be found on the company's website at www.atriagroup.com/ en/investors/Corporategovernance.
The General Meeting is Atria Plc's highest decision-making body. At the General Meeting, shareholders decide on the approval of the financial statements and the use of the profit shown on the balance sheet; discharging 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 auditing fees.
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 the matters to be handled by the Annual General Meeting in accordance with the Articles of Association and any other proposals. An Extraordinary General Meeting 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 Annual General Meeting by the date published, for example, on the company's website at www. atriagroup.com. The request, with accompanying justification or proposed resolution, must be sent in writing to Atria Plc, Group Legal Affairs, PO Box 900, FI-60060 ATRIA.
The General Meeting is convened by the Board of Directors. It 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 stock exchange release at the earliest three (3) months and at the latest three (3) weeks before the General Meeting, however, no later than nine (9) days prior to the record date of the General Meeting. In addition, the Board of Directors may decide to publish the notice, or delivery notification of the notice, in one or more national newspapers determined by the Board, or in some other manner it may decide.
To have the right to participate in a General Meeting, a shareholder must register with the company no later than on the day mentioned in the notice of meeting, which can be no earlier than ten (10) days before the meeting.
The CEO, the Chairman of the Board and the majority of the Board members shall be present at the General Meeting, and also auditors shall be present at the Annual General Meeting. A first-time candidate for the Supervisory Board or the Board of Directors shall be present at the General Meeting where the decision on his or her appointment is made, unless there is a weighty reason for his or her absence.
Atria Plc's General Meeting has appointed the Nomination Committee to prepare proposals concerning the election and remuneration of Board members 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 Committee in accordance with the situation in early November preceding the next General Meeting. The right to nominate a representative to the Nomination Committee is determined in accordance with the shareholder register maintained by Euroclear Finland Ltd in accordance with the situation on the first banking day of the November preceding the Annual General Meeting. The Chairman of the Board of Directors shall also be appointed to the Nomination Committee 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 as per the shareholder register who would not otherwise have the right to nominate a member. If a shareholder who is obligated to notify of certain changes in shareholding when necessary under the Finnish Securities Markets Act presents a written request to the company's Board of Directors by the end of October, the holdings of corporations or foundations controlled by such shareholder, or the shareholders' holdings in several funds or registers, are added up when calculating voting rights.
The Nomination Committee is convened by the Chairman of the Board of Directors and the Committee elects a Chairman from amongst its members. The Nomination Committee shall present its proposal to the Board of Directors by the first day of the February preceding the Annual General Meeting.
In accordance with Atria Plc's Articles of Association, the company has a Supervisory Board elected by the General Meeting. The Supervisory Board consists of a minimum of 18 and a maximum of 21 members, who are elected for terms of three years. A person aged sixty-five (65) or older cannot be elected to the Supervisory Board. The Supervisory Board elects a Chairman and a Vice Chairman from amongst its members for terms of one year. The Supervisory Board meets three 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 key duties of the Supervisory Board are as follows:
Shareholders of the company representing more than 50% of the votes have expressed their satisfaction with the current model based on the Supervisory Board because it brings a far-reaching perspective on the company's operations and decision-making.
• Ari Pirkola born 1959, Farmer, member since 2008
•Juho Anttikoski born 1970, Farmer, member since 2009
| • Mika Asunmaa |
born 1970, Farmer, member since 2005 |
|---|---|
| • Lassi-Antti Haarala |
born 1966, Agrologist, Farmer, member since 2002 |
| •Jussi Hantula | born 1955, Agrologist, Farmer, member since 2012 |
| •Juhani Herrala | born 1959, Farmer, member since 2002 |
| • Henrik Holm |
born 1966, Farmer, member since 2002 |
| •Veli Hyttinen | born 1973, Agrologist, Farmer, member since 2010 |
| • Pasi Ingalsuo |
born 1966, Agrologist, Farmer, member since 2004 |
| •Juha Kiviniemi | born 1972, MSc (Agric.), Farmer, member since 2010 |
| •Teuvo Mutanen | born 1965, Provincial Secretary, Agricultural Entrepreneur, member since 2007 |
| • Mika Niku |
born 1970, Farmer, member since 2009 |
| • Heikki Panula |
born 1955, MSc (Agric.), Farmer, member since 2005 |
| • Pekka Parikka |
born 1951, Farmer, member since 2008 |
| •Juho Partanen | born 1962, Farmer, member since 2011 |
| •Jari Puutio | born 1962, Farmer, member since 2012 |
| •Juho Tervonen | born 1950, Farmer, member since 2001 |
| •Tomi Toivanen | born 1954, Farmer, member since 2009 |
| •Timo Tuhkasaari | born 1965, Farmer, member since 2002. |
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 independent of the company and dependent on significant shareholders.
In 2012, Atria Plc's Supervisory Board met four (4) times, and the average attendance percentage of the members was 94.74.
The Supervisory Board's share ownership in the company is available on the company's website under Insider Register.
In accordance with the Articles of Association, Atria's Board of Directors has a minimum of five and a maximum of seven members. The term of office of a member of Atria's Board of Directors differs from the term of one year specified in recommendation 10. 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 long-term development of the company and have not seen the need to shorten the term from that specified in the Articles of Association.
Atria's Board of Directors shall ensure the appropriate organisation of the company's administration, operations, accounting and asset management supervision. To this end, the Board of Directors has adopted written rules of procedure concerning the duties of the Board, the matters to be dealt with, meeting practices and the decision-making procedure. According to these rules, the Board of Directors discusses and decides on significant matters related to the company's strategy, investments, organisation and financing. The rules of procedure lay down the following key duties for the Board of Directors:
The Board of Directors regularly assesses its operations and working methods through self-evaluation once a year.
| Name | Selin, Martti Ilmari Chairman until 3 May 2012 |
Paavola, Seppo Felix Chairman |
Komulainen, Timo Juhani Vice Chairman |
|---|---|---|---|
| Year of birth | 1946 | 1962 | 1953 |
| Education | Farming school | Agrologist (secondary school graduate) |
Agrologist |
| Main occupation |
Farmer, meat producer | Farmer | Farmer |
| Relevant work experience |
• Metal industry, Sweden • Positions of trust |
•Farm advisor at Rural Centre of Central Ostrobothnia 1991– 1996 •Agricultural entrepreneur 1996– |
• Positions of trust |
| Member of the Board since |
2005 | 2012 | 1993 |
| Current key positions of trust |
• Chairman of the Supervisory Board of Itikka Co-operative as of 31 Dec 2011, member of the Supervisory Board as of 1 Jan 2012 • Chairman of the Board of Directors of Itikan Maa- ja metsätilat Oy |
•Member of the Supervisory Board of Itikka Co-operative 2000– and Chairman of the Supervisory Board 2012– •Chairman of the Board of Directors of Kaustinen Co-operative Bank 2002– •Member of the Board of Directors of Pellervo Confederation of Finnish Co-operatives 2012– •Member of the Co-operative Advisory Committee 2012– |
•Member of the Board of Directors of Lihakunta 1988– and Chairman of the Board of Directors of Lihakunta 1996– •Vice Chairman of the Board of Directors of A-Farmers Ltd 2000–2003 and Chairman 2003– •Chairman of the Board of Directors of A-Rehu Oy 2004– •Member of the Board of Directors of Jukola Co-operative 1984– and Vice Chairman of the Board of Directors 1995– |
| Expired key positions of trust |
• Member of the Supervisory Board of Atria Plc 2006–2009 and Vice Chairman 2009–2012 |
•Member of the Supervisory Board of Atria Plc 2006–2009 and Vice Chairman 2009–2012 |
|
| Indepen dency |
Independent of the company and dependent on significant shareholders |
Independent of the company and dependent on significant shareholders |
Independent of the company and dependent on significant shareholders |
| Share ownership in the company |
The information is updated on Atria's website under Insider Register. |
The information is updated on Atria's website under Insider Register. |
|
| Share based rights in the company |
None | None |
| Name | Heikkilä, Tuomo Juhani | Kaarto, Esa Heikki Ilmari | Paxal, Kjell-Göran |
|---|---|---|---|
| Year of birth | 1948 | 1959 | 1967 |
| Education | Farm school | MSc (Agr.) | Agrologist |
| Main occupation |
Farmer | Farmer | Farmer, piglet and pork producer |
| Relevant work experience |
Positions of trust | Positions of trust | •Feed salesman at Foremix Oy 1990–1997 • Primary Production Manager at Pohjanmaan Liha Co-operative 1990–1997 |
| Member of the Board since |
1996 | 2009 | 2012 |
| Current key positions of trust |
•Member of the Board of Directors of Lihakunta 1996–2012 |
•Member of the Board of Directors of Itikka Co-operative 2002– and Chairman of the Board 2009– •Vice Chairman of the Board of Directors of A-Farmers Ltd 2009– and member of the Board 2004– •Vice Chairman of the Board of Directors of A-Rehu Oy 2009– •Member of the Board of Directors of Feedmix Oy 2009– •Member of the Board of Directors of Rehukanava Oy 2009– •Chairman of the Board of Directors of Suurusrehu Oy 2009– |
•Deputy member of the Board of Directors of the Central Union of Swedish-Speaking Agricultural Producers in Finland 1999–2001 •Board of Directors of Pohjanmaan Liha: deputy member 1999–2001, Vice Chairman 2002–2009 and Chairman 2010– •Board of Directors of A-Farmers Ltd: deputy member 2001–2002 and member 2003– •Board of Directors of Foremix Oy: member 2004– and Chairman 2010– •Member of the Board of Directors of A-Rehu Oy 2010– •Chairman of the Board of Directors of Ab WestFarm Oy 2010– |
| Expired key positions of trust |
•Vice member of the Board of Directors of the Central Union of Swedish-Speaking Agricultural Producers in Finland 1999–2001 |
||
| Indepen dency |
Independent of the company and dependent on significant shareholders |
Independent of the company and dependent on significant shareholders |
Independent of the company and dependent on significant shareholders |
| Share ownership in the company |
The information is updated on Atria's website under Insider Register. |
The information is updated on Atria's website under Insider Register. |
The information is updated on Atria's website under Insider Register. |
| Share based rights in the company |
None | None | None |
| Name | Romanainen, Maisa Annukka | Sivula, Harri Juhani |
|---|---|---|
| Year of birth | 1967 | 1962 |
| Education | MSc (Econ.) | MSc (Admin.) |
| Main | Department Store Group | CEO at Restel Group 2011– |
| occupation | Manager of Stockmann plc, | |
| Executive Vice President, 2008– | ||
| Relevant | •Product Manager, Purchasing | •Kesko Corporation, 1987–1999 |
| work | Manager, etc. at Brio Oy 1990– | - Sales Manager, Purchasing |
| experience | 1996 | Manager |
| •Stockmann plc: | - Division Manager, Sales | |
| - Purchasing Manager, 1996– | Director | |
| 1997 | - Director of Marketkesko | |
| - Department Store Manager, | - Director of Lähikesko | |
| Moscow, Russia, 1998–2000 | - Director, Retail Division | |
| - Department Store Manager, | •Kesko Corporation/Kesko | |
| Tallinn, Estonia, 2000–2005 | Food Ltd, 1999–2006 | |
| - Manager, Foreign | - Vice President | |
| Department Stores, 2005– | •Onninen Oy, 2006–2010 | |
| 2007 - Manager, Finnish and Baltic |
- CEO | |
| Department Stores, 1 Jan–5 | ||
| Nov 2008 | ||
| - Department Store Group | ||
| Manager, Executive Vice | ||
| President, 6 Nov 2008– | ||
| Member of | 2010 | 2009 |
| the Board | ||
| since | ||
| Current key | • Vice Member of the Board of | •Member of the Board of |
| positions of | Directors of the East Office of | Directors of Norpe Oy 2010– |
| trust | Finnish Industries 2008– | •Member of the Board of |
| •Member of the Board of | Directors of Leipurin Oy 2010– | |
| Directors of Tuko Logistics | •Chairman of the Board of | |
| Cooperative 2009– | Directors of Tokmanni Oy | |
| •Member of the Board of | 2011– | |
| Directors of the Finnish | •Member of the Supervisory | |
| Russian Chamber of | Board of Nets Oy 2011– | |
| Commerce (FRCC) 2012– | ||
| Expired key | • Member of the Board of | |
| positions of | Directors of Olvi Oyj 2007–2011 | |
| trust Indepen |
Independent of the company and | Independent of the company and |
| dency | significant shareholders | significant shareholders |
| Share | The information is updated on | The information is updated on |
| ownership | Atria's website under Insider | Atria's website under Insider |
| in the | Register. | Register. |
| company | ||
| Share | None | None |
| based | ||
| rights in the | ||
| company |
Atria Plc's Board of Directors from the left: Seppo Paavola (Chairman), Timo Komulainen (Vice Chairman), Tuomo Heikkilä, Esa Kaarto, Kjell-Göran Paxal, Maisa Romanainen and Harri Sivula.
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 2012, the Board of Directors met fifteen (15) times. The average meeting attendance percentage of the members of the Board of Directors was 96.2.
During the meetings of the Board of Directors, the CEO gives a review of the financial situation of the Group. The review also covers forecasts, investments and organisational changes, and all other important issues from the point of view of the Group.
The following reports are reviewed in each regular meeting:
The agenda of the meeting shall be delivered to the members of the Board of Directors no later than one week before the meeting. The meeting material shall be prepared by the CEO and the secretary of the Board of Directors according to the instructions provided by the Chairman. The meeting material shall be delivered to the members no later than three days before the meeting.
The members of the company's Board of Directors are independent of the company. Harri Sivula and Maisa Romanainen are independent of both the company and its significant shareholders. Seppo Paavola, Timo Komulainen, Tuomo Heikkilä, Esa Kaarto and Kjell-Göran Paxal are members of the administrative bodies of the company's principal owners – Lihakunta, Itikka Co-operative and Pohjanmaan Liha. The members of the Board of Directors are obligated to provide the Board with sufficient information to assess their skills and independency and to notify the Board of any changes to the information.
The Board of Directors may set up committees to handle the duties designated by the Board. The Board shall approve the rules of procedure for the committees. The committees of the Board of Directors are the Nomination Committee and the Remuneration Committee, whose members are elected by the Board from amongst its members according to the rules of procedure of the committee. The committees have no autonomous decision-making power. Decisions are made by the Board of Directors based on the committees' preparations. The committees shall report on their work to the Board of Directors, which also supervises their operations.
The Nomination Committee consists of the Chairman of the Board of Directors and two members of the Board of Directors elected by the Board itself. In accordance with recommendation 29 of the Corporate Governance Code, the company's CEO or the members of the Board of Directors who belong to the company's other management shall not be elected as members of the Nomination Committee.
According to the rules of procedure, the duties of the Nomination Committee are as follows:
The Chairman shall convene the Nomination Committee as needed. At the meetings, the matters belonging to the duties of the Nomination Committee are reviewed. The Nomination 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 Committee is Seppo Paavola and the other members are Maisa Romanainen and Timo Komulainen. All members of the Nomination Committee are independent of the company. Maisa Romanainen is also independent of significant shareholders. The Committee did not meet in 2012.
The Remuneration Committee consists of the Chairman, Vice Chairman and one member of the Board of Directors elected by the Board itself. In accordance with recommendation 32 of the Corporate Governance Code, the CEO or people belonging to the company's other management shall not be elected as members of the Remuneration Committee.
The aim of the Remuneration Committee is to 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 Remuneration Committee is also to ensure that the merit pay systems are connected with the company's strategy and the results obtained.
According to the rules of procedure, the duties of the Remuneration Committee are as follows:
The Chairman of the Remuneration Committee shall convene the Committee as needed, but no less than two times per year. At the meetings, the matters belonging to the duties of the Remuneration Committee are reviewed. The 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 Remuneration Committee is Seppo Paavola and the other members are Timo Komulainen and Harri Sivula. All members of the Remuneration Committee are independent of the company. Harri Sivula is also independent of significant shareholders. The Remuneration Committee met four times in 2012. All members of the Committee attended all meetings.
The company has a CEO in charge of managing the company's operations in accordance with the instructions and orders issued by the Board of Directors, as well as informing the Board of Directors of the development of the company's operations and financial performance. The CEO also sees to the organisation of the company's day-to-day administration and ensures reliable asset management. The CEO is appointed by the Board of Directors, which decides on the terms of his or her employment.
Atria Plc's CEO is Juha Gröhn, MSc (Food and Sc.). The full presentation of the CEO is available on the company's website under CEO and the CEO's ownership data under Insider Register.
Atria Group has a Management Team chaired by the CEO. The Management Team assists the CEO in business planning and 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.
The Management Team met eleven (11) times in 2012.
The presentations of the members of the Management Team are available on the company's website under Management Team and the ownership data of the Management Team under Insider Register.
Atria Plc has prepared a remuneration statement in accordance with recommendation 47 of the Finnish Corporate Governance Code. The statement is available on the company's website (www.atriagroup.com/ en/investors/Corporategovernance).
| Name Joined |
Juha Gröhn CEO, Atria Plc 1990 |
Juha Ruohola Group Vice President and Deputy CEO 1999 |
Mika Ala-Fossi Executive Vice President Atria Finland 2000 |
|---|---|---|---|
| Atria in | |||
| Year of birth | 1963 | 1965 | 1971 |
| Education | MSc (Food Sc.) | MSc (Agriculture and Forestry), eMBA |
Meat industry technician |
| Relevant work experience |
• Foreman, Lihapolar 1990– 1991 • R&D Manager, Itikka Lihapolar 1991–1993 • Director, Slaughterhouse Industry, Atria Ltd 1993–1998 • Director, Meat Product and Convenience Food Industries, Atria Ltd 1999–2003 • Director, Steering, Deputy CEO, Atria Ltd 2003–2004 • Director, Meat Industry, Deputy CEO, Atria Ltd 2004– 2006 • Executive Vice President, Atria Finland Ltd, Deputy CEO, Atria Plc 2006–2010 • Executive Vice President, Atria Scandinavia, Deputy CEO, Atria Plc 2010–2011 • CEO, Atria Plc 2011– |
• Agronomist, Central Union of Agricultural Producers and Forest Owners (MTK), Tampere Region 1990–1992 • Acting Executive Director, Central Union of Agricultural Producers and Forest Owners (MTK), Tampere Region 1992– 1994 • Purchasing Director LSO Foods Oy 1994–1997 • Managing Director, Lihakunta Co-operative 1997–1999 • Managing Director, Lithells AB 1999–2001 • Director, Convenience Food Industry, Atria Ltd 2001–2003 • Director, Meat Product and Convenience Food Industries, Atria Ltd 2003–2005 • Director, Meat Product Industry, Atria Ltd 2005–2006 • Director, Atria Russia 2006– 2011 • Deputy CEO, Atria Plc 2011– |
• Foreman, Liha-Saarioinen Oy 1997–2000 • Unit Manager, Atria Ltd 2000– 2003 • Production Manager, Atria Ltd 2003–2006 • Director, poultry operations, Atria Finland 2006–2007 • Director, Convenience Food and Meat Product Production 2007–2011 • Executive Vice President, Atria Finland, 2011– |
| Name | Tomas Back Executive Vice President Atria Scandinavia |
Jarmo Lindholm Executive Vice President Atria Russia |
Rauno Väisänen Executive Vice President Atria Baltic until 15 August 2012 |
|---|---|---|---|
| Joined Atria in |
2007 | 2002 | 1982 |
| Year of birth | 1964 | 1973 | 1958 |
| Education | MSc (Econ.) | MSc (Econ.) | Meat industry technician |
| Relevant work experience |
• Financial Manager, Huhtamäki Finance Oy, Lausanne 1990– 1995 • Financial Manager/CFO, Huhtamäki Oyj 1996–2002 • CFO, Huhtamäki Americas / Rigid Europe 2003–2007 • CFO, Atria Plc 2007–2011 • Director, Atria Baltic 2010– 2011 • Executive Vice President, Atria Scandinavia 2011– |
• Customer Service Manager & e-Business, Unilever Finland 1998–2000 • Account Manager, Marketing Manager, AC Nielsen 2000– 2002 • Marketing Manager, Atria Ltd 2002–2005 • Group Vice President, Product Group Management and Product Development, Commercial Director, Atria Finland Ltd 2005–2010 • Group Vice President, Product Leadership, Atria Plc 2010– 2011 • Director, Atria Russia 2011– |
• Foreman, Atria Ltd 1982–1993 • Unit Manager, Atria Finland Ltd 1993–2010 • Genaral Manager, Atria Eesti AS 2010–2012 • Executive Vice President, Atria Baltic 2011–2012 |
| Name | Olle Horm Executive Vice President Atria Baltic since 15 August 2012 |
Heikki Kyntäjä CFO |
|---|---|---|
| Joined Atria in |
2012 | 2009 |
| Year of birth | 1967 | 1952 |
| Education | Engineer | BSc (Econ.) |
| Relevant work experience |
• Managing and developing tasks, EK AS 1992-1998 • Head of transportation and equipment department, EMV AS 1998-1999 • Chairman of the Board, Rakvere Lihakombinaat AS 2000-2008 • Chairman of the Board, Skanska EMV AS 2008-2009 • Chairman of the Board, Maag Meat Industry 2009-2012 • Executive Vice President, Atria Baltic 2012– |
• Auditor, finance department, General Motors Finland 1976– 1978 • Financial Officer, Hackman Taloustavarat Oy 1978–1986 • Business Controller, Stromberg Inc., Cleveland, OH, USA 1986–1988 • Business Controller, ABB Motors Oy 1988–1990 • VP Finance & Control, ABB Strömberg Sähkönjakelu Oy 1991–1995 • VP Finance & Control, ABB Transmit Oy 1995–2000 • VP Finance & Control, ABB Oy, Low-voltage instruments 2001–2008 • VP Supply Management, ABB Oy, Low-voltage instruments 2008–2009 • Finance Director, Atria Finland Ltd 2009–2011 • CFO, Atria Plc 2011– |
Internal control and risk management are processes under the responsibility of the company's top management, aimed at ensuring the achievement of the company's goals. The operating principles of internal control are confirmed by the company's Board of Directors. Atria's internal control includes comprehensive risk management and independent internal audit. The purpose of internal control is to ensure that Atria's operations are efficient and in line with the company's strategy, all financial and operational reports are reliable, the Group's operations are legal and the company's internal principles and codes of conduct are complied with.
The purpose of risk management is to support the execution of Atria's strategy and the achievement of targets and to secure business continuity. Atria Group's risk management goals, principles, responsibilities and powers are specified in its Risk Management Policy, approved by the Board of Directors. The aim of the policy is to contribute to the identification and understanding of risks and to ensure that management receive relevant and sufficient information in support of business decisions.
Risk management is applied to identify, assess and manage factors that jeopardise the attainment of goals. In compliance with the policy, the Group has in place a uniform operating model for risk identification and reporting in all business areas. The model forms an integral part of annual strategic planning. Risks are managed in accordance with the specified approved principles in all business areas and Group operations. In risk assessment, an action plan is defined according to which the identified risks are managed.
Risks are defined as external or internal (within Atria Group) events that may have a positive or negative impact on the execution of the company's strategy, the achievement of its targets and the continuity of business.
Atria is subject to many different risks. For reporting purposes, Atria's risks are divided into four categories: business risks, financial risks, operational risks and accident risks.
Business risks are related, for example, to business decisions, resources allocation, the way in which changes in the business environment are responded or management systems in general.
Financial risks refer, for example, to the risk of insufficient financial resources in the short or medium term, the risk of the counterparties failing to meet their financial obligations or the risk of changes in market prices affecting the company.
Operational risks are defined as deficiencies or disruptions in processes or systems, risks related to people's actions and risks related to legislation or other regulations.
Accident risks refer to external or internal (within Atria) events or disruptions that cause damage or loss.
Atria Plc's Board of Directors approves the Risk Management Policy and supervises its implementation. The CEO is responsible for organising risk management.
Internal control and risk management are implemented by the entire organisation, including the Board of Directors, management and the entire personnel. However, the responsibility for internal control and risk management lies with the company's top management. Organising internal control and risk management is part of Group management. The company's management defines the operational procedures and codes of practice that enable the achievement of the company's goals.
The Group's Management Team and the management teams of the business areas are responsible for identifying and assessing risks and for implementing risk management in their respective areas of responsibility. Financial risk management is centralised in the Group's Treasury unit. The Group's CFO gathers the most significant risks identified and reports them to the Board of Directors at least once a year. The CFO is responsible for development, guidelines and support in risk management and reporting. External advisors are also used in the development work.
Risk management is discussed in more detail in the annual report under "Risk management".
Atria has an internal audit function that is independent of the rest of the organisation and supports Group administration and business area management in achieving their goals. A key task of internal audit is to review and assess the appropriateness, functionality and profitability of the company's risk management and internal control. Therefore, its aim is to contribute to the achievement of the organisation's goals. Within its duties, the function assesses the following areas:
The purpose of internal control is to ensure that all of the company's business areas comply with the Group's rules and guidelines and that the operations are managed effectively. The results of internal auditing are documented, and they are discussed with the management of the audited entity before the report and suggestions for improvement are presented to the CEO of the Group.
The entities to be audited are defined in co-operation with Group management. The audit plan is also based on annual Group-wide risk assessment. The company's Board of Directors approves the annual plan for internal audit. Internal audit also serves as an expert in development projects related to its task domain and carries out separate studies on the assignment of the Board of Directors or the Group's top management. The Internal Auditor reports to the CEO. A summary of the audit results is presented to the Board of Directors at least once a year.
In accordance with the Articles of Association, the company shall have at least one (1) and no more than four (4) auditors and at most as many deputy auditors. The auditors and deputy auditors shall be public accountants or firms of independent public accountants authorised by the Central Chamber of Commerce of Finland. The term of service of the auditors shall end at the conclusion of the Annual General Meeting following their election.
The auditor provides Atria's shareholders with the audit report required by the law in conjunction with the company's financial statements and regularly reports to the company's 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 auditing results is arranged.
In 2012, Atria Plc's Annual General Meeting elected PricewaterhouseCoopers Oy, a firm of authorised public accountants, as the company's auditor until the closing of the next AGM. According to the firm, the auditor in charge is Authorised Public Accountant Juha Wahlroos.
In 2012, the Group paid a total of 486,000 euros in auditor's remuneration. The whole Group paid a total of 71,000 euros for services not related to auditing.
Atria complies with NASDAQ OMX Helsinki Ltd's insider guidelines in force since 9 October 2009. Atria's Board of Directors has confirmed the insider guidelines for the company, which include instructions for permanent and project-specific insiders. The company's guidelines have been distributed to all insiders.
The insider registers are maintained in co-operation with Euroclear Finland Oy. The company's legal department and CFO monitor compliance with the insider guidelines. The company has limited insiders' right to trade in the company's shares in the 14 days preceding the publication of the company's interim reports and financial statements. In addition to the public insider register, there is a separate register of other permanent insiders, maintained by the legal department, and there are also project-specific registers wherein insider information is recorded by project.
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 relation communications that is three weeks prior to the publication of interim and annual reports. During this period, Atria gives no statements on its financial status.
Atria publishes financial information in real time on its website at www.atriagroup.com, where you can find annual reports, interim reports and press and stock exchange releases. The company's largest shareholders and insiders as well as their holdings are regularly updated 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.atriagroup.com/en/investors/disclosurepolicy.
This remuneration statement of Atria Plc ("Atria" or the "company") is the report referred to in recommendation 47 of the Finnish Corporate Governance Code.
The Annual General Meeting decides yearly on the remuneration to the members of the Supervisory Board. The remuneration paid to the Supervisory Board in 2012 is as follows:
The members of the Supervisory Board have no share incentive plans or share-based bonus schemes.
In 2012, the monthly and meeting fees paid to the members of the Supervisory Board for participating in the work of the Supervisory Board (including being a member of the Supervisory Board of another company belonging the same Group) were as follows:
| Remuneration (in euros) of the members | Work of the | Benefits from | |
|---|---|---|---|
| of the Supervisory Board in 2012 | Supervisory Board | Group companies | Total |
| Pirkola Ari, Chairman | 42,800 | 42,800 | |
| Anttikoski Juho, Vice Chairman since May 2012 | 13,500 | 13,500 | |
| Paavola Seppo, Vice Chairman until May 2012 | 12,000 | 12,000 | |
| Alaranta Juha-Matti, until May 2012 | 1,000 | 1,000 | |
| Asunmaa Mika | 2,750 | 2,750 | |
| Haarala Lassi Antti | 2,750 | 2,750 | |
| Hantula Jussi, since May 2012 | 1,000 | 1,000 | |
| Herrala Juhani | 2,750 | 2,750 | |
| Holm Henrik | 1,750 | 4,800 | 6,550 |
| Hyttinen Veli | 2,750 | 2,750 | |
| Ingalsuo Pasi | 2,750 | 5,700 | 8,450 |
| Kiviniemi Juha | 2,000 | 2,000 | |
| Mutanen Teuvo | 2,500 | 2,500 | |
| Niku Mika | 2,250 | 2,250 | |
| Panula Heikki | 2,250 | 2,250 | |
| Parikka Pekka | 3,250 | 3,250 | |
| Partanen Juha | 2,250 | 2,250 | |
| Puutio Jari, since May 2012 | 1,500 | 1,500 | |
| Tervonen Juho | 3,000 | 7,200 | 10,200 |
| Toivanen Tomi | 2,750 | 2,750 | |
| Tuhkasaari Timo | 2,250 | 2,250 | |
| Total | 109,800 | 17,700 | 127,500 |
The Annual General Meeting decides yearly on the remuneration to the members of Atria's Board of Directors. The remuneration to the members of the Board of Directors is paid as monetary compensation. The members have no share incentive plans or share-based bonus schemes. The principles governing the CEO's remuneration are set out in a different section.
The remuneration paid to the Board of Directors in 2012 is as follows:
In 2012, the monthly and meeting fees paid to the members of the Board of Directors for participating in the work of the Board of Directors (including being a member of the Board of Directors of another company belonging to the same Group) were as follows:
| Name | Position | Board of Directors and committee work |
Benefits from Group companies |
Total |
|---|---|---|---|---|
| Seppo Paavola | Chairman since May 2012 | 44,681 | 44,681 | |
| Martti Selin | Chairman until May 2012 | 28,503 | 28,503 | |
| Timo Komulainen | Vice Chairman | 42,600 | 36,000 | 78,600 |
| Tuomo Heikkilä | Member | 31,500 | 31,500 | |
| Esa Kaarto | Member | 30,900 | 23,100 | 54,000 |
| Kjell-Göran Paxal | Member since May 2012 | 19,600 | 8,400 | 28,000 |
| Maisa Romanainen | Member | 24,900 | 24,900 | |
| Harri Sivula | Member | 27,300 | 27,300 | |
| Total | 261,984 | 67,500 | 329,484 |
The bonus scheme for Atria Plc's management consists of a fixed monthly salary, merit pay and pension benefits. The company has no share incentive plan or option scheme in place.
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 director of a 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 merit pay systems for the management teams of business areas are approved by the Group's CEO.
The retirement age for the CEO is 63 years. However, the CEO has the right to retire at age 60. The amount of pension is based on the CEO's annual earnings at Atria Group as specified by the Board of Directors. In 2012, the group pension contributions of the CEO were 27% of annual earnings, which included monetary salary and fringe benefits without cash payments of incentive plans.
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 a severance pay, corresponding together to 18 months' salary. There are no terms and conditions for any other compensation based on termination of employment.
In February 2012, Atria Plc's Board of Directors decided to adopt a new long-term merit pay system for the Group's key personnel. The new system has three 12-month periods: 2012, 2013 and 2014. The earning period for the system ends on 31 December 2014. The compensation earned in an earning period is determined after the period is over based on progress against set targets. The system offers an opportunity to earn cash rewards for reaching targets established for the relevant earning period. Any profit from the system is based on the Group's earnings per share (EPS). Cash rewards payable under the system throughout the course of its earning period, between 2012 and 2014, are capped at EUR 4.5 million. The new system covers 40 of Atria Group's key personnel.
Atria Plc's Board of Directors has determined the management and key personnel's merit pay system for 2012. The maximum bonus payable to Atria Plc's CEO and Management Team is 35% to 50% of annual salary, depending on the performance impact and requirement level of each individual's role. The criteria in Atria Plc's merit pay system are the performance requirements and working capital at Group level and in the area of responsibility of the person concerned. In addition to the CEO, Vice President and Management Team, Atria Plc's merit pay system covers approximately 40 Group executives.
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 group pension insurance is 63 years for the members of the Management Team. The pension plan is payment-based, and the annual premium is based on the insured monthly salary (monetary salary and fringe benefits) as specified by the Board of Directors. Equivalent pension benefits have been separately arranged for the members of the Management Team who are not within the scope of Finnish social security.
Salaries, EUR Merit pay Fringe benefits Pension contributions 2012 Total CEO Juha Gröhn 457,411 0 18,359 130,706 606,476 Other members of the Management Team 1,234,775 10,783 79,003 186,524 1,511,085 TOTAL 1,692,186 10,783 97,362 317,230 2,117,561
The financial benefits paid to the CEO and Management Team in 2012 were as follows:
Atria Plc had a share incentive plan in place for key personnel in the Group with three earning periods, namely the calendar years of 2010, 2011 and 2012. At the beginning of 2012, the Board of Directors decided to discontinue the share-based plan, which, therefore, was no longer used in 2012.
Incentives based on the share incentive plan are paid partly in the form of Series A shares and partly in cash. The cash payments covered any taxes or similar costs associated with the incentives. The recipients were not allowed to transfer the shares for a period of two years from the end of the earning period. Profit from the programme for the 2010 and 2011 earning periods was linked to consolidated EBIT and return on total comprehensive income for the year. The cap on share incentives was set at 100,100 of Atria Plc's Series A shares a year for 2010 and 2011. However, no share incentives were awarded based on performance in 2010 and 2011.
In the earlier earning periods of the incentive plan in 2007–2009, incentives were paid partly in the form of Series A shares and partly in cash. The cash payments covered any taxes or similar costs associated with the incentives. The recipients were not allowed to transfer the shares for a period of two years from the end of the earning period. In the 2007–2009 earning periods, a total of 38,540 Series A shares held by the company were transferred at no cost to key personnel under the incentive plan (35,260 shares for 2007 and 3,280 shares for 2009). Of these shares, 4,750 have since returned to the company.
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 determined a silent period in its investor relation communication that is three weeks prior to the publication of interim and annual reports. During this period Atria gives no statements on its financial status.
Atria publishes financial information in real time on its web pages at www.atriagroup.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 17 company announcements in 2012. The releases can be found on the Atria Group website www. atriagroup.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 6 416 8763 e-mail: [email protected]
Carnegie Investment Bank AB Marie Nemlander Tel. +358 9 618 71 236 e-mail: firstname.lastname@ carnegie.fi
Evli Pankki Oyj Antti Kansanen Tel. +358 9 4766 9149 e-mail: firstname.lastname@ evli.com
Pohjola Pankki Oyj Niclas Catani Tel. +358 10 252 8780 e-mail: firstname.lastname@ pohjola.fi
Nordea Markets Rauli Juva Tel. +358 9 1655 9944 e-mail: firstname.lastname@ nordea.com
Handelsbanken Capital Markets Robin Santavirta Tel. +358 10 444 2483 e-mail: rosa09@ handelsbanken.se
Danske Markets Equities Kalle Karppinen Tel. +358 10 236 4794 e-mail: firstname.lastname@ danskebank.com
Inderes Oy Sauli Vilén Tel. +358 44 025 8908 e-mail: firstname.lastname@ inderes.com
Swedbank Pekka Rouhiainen Tel. +358 20 746 9152 e-mail: firstname.lastname@ swedbank.fi
Head Office: Itikanmäenkatu 3, Seinäjoki Finland Box 900, FI-60060 ATRIA Tel. +358 20 472 8111 Fax +358 6 416 8440
ATRIA FINLAND LTD Head office: Atriantie 1, Seinäjoki, Finland Box 900, FI-60060 ATRIA Tel. +358 20 472 8111 Fax +358 6 416 8440
Invoicing address: Box 1000 FI-60061 ATRIA
[email protected] [email protected] www.atria.fi
Financial administration: Itikanmäenkatu 3, Seinäjoki Finland Box 900, FI-60060 ATRIA Fax +358 6 416 8207
Customer service centre: Itikanmäenkatu 3, Seinäjoki, Finland Box 900, FI-60060 ATRIA Fax +358 6 416 8202
Commercial functions: Läkkisepäntie 23 FI-00620 Helsinki, Finland Fax +358 9 774 1035
Rahikkatie 95 FI-61850 Kauhajoki, Finland Fax +358 6 416 8416
Ankkuritie 2, Kuopio, Finland Box 147, FI-70101 Kuopio
Pusurinkatu 48 FI-30100 Forssa, Finland Tel. +358 3 41 541 Fax +358 3 415 4244
A-Logistics Ltd Atriantie 1, Seinäjoki, Finland Box 900, FI-60060 ATRIA Fax +358 6 416 8038
Atria-Tekniikka Oy Atriantie 1, Seinäjoki, Finland Box 900, FI-60060 ATRIA Fax +358 6 416 8118
Augustendalsvägen 19 SE-131 52 Nacka Strand Box 1229 SE-131 28 Nacka Strand Sweden Tel. +46 10 482 39 10 Fax +46 8 556 306 60
Sockenvägen 40 SE-697 80 Sköllersta, Sweden Tel. +46 10 482 30 00 Fax +46 19 23 08 28
Drottninggatan 14 SE-252 21 Helsingborg, Sweden Tel. +46 10 482 35 10 Fax +46 42 38 14 61 Fax 010 -482 3950
[email protected] www.atria.se
Other offices/plants: Skogholmsgatan 12 SE-213 76 Malmö Box 446 SE-201 24 Malmö, Sweden Tel. +46 10 482 35 00 Fax +46 40 224 273
Hjälmarydsvägen 2 SE-573 38 Tranås Box 1018 SE-573 28 Tranås, Sweden Tel. +46 10 482 37 00 Fax +46 140 573 97 Fax 010-482 3799
Maskingatan 1 SE-511 62 Skene, Sweden Tel. +46 10 482 38 00 Fax +46 320 20 58 10 Fax 010- 482 3830
Johannelundsgatan 44 SE-506 40 Borås Box 940 SE-501 10 Borås, Sweden Tel. +46 10 482 38 10 Fax +46 33 16 95 59 Fax 010 -482 3852
Östanåkravägen 2 SE-342 62 Moheda, Sweden Tel. +46 10 482 3710 Fax +46 472 726 61 Fax 010 -482 3727
ATRIA CONCEPT AB Office: Augustendalsvägen 19 SE-1331 52 Nacka Strand Box 1229 SE-131 28 Nacka Strand Sweden Tel. +46 10 482 3910 Fax +46 8 556 306 60
Service: Fordonsgatan 3 692 71 Kumla Tel. +46 19 57 18 78
ATRIA FOODSERVICE AB Office: Drottninggatan 14 SE-252 21 Helsingborg Sweden Tel. +46 10 482 3510 Fax +46 42 38 14 61 Fax 010 -482 3950
ATRIA RETAIL AB Office: Augustendalsvägen 19 SE-1331 52 Nacka Strand Box 1229 SE-131 28 Nacka Strand Sweden Tel. +46 10 482 3910 Fax +46 8 556 306 60
FALBYGDENS OST AB Göteborgsvägen 19 SE-521 30 Falköping, Sweden Tel. +46 10 482 32 00 Fax +46 515 77 66 80 Fax 010 -482 3280
Sales office: Ranhammarsvägen 4A 168 67 Bromma
Sales office: Ridderheims AS Per Kroghs vei 4C 1065 Oslo, Norge Tel: + 47 22 42 24 43 Fax: + 47 22 32 66 24 Fax: + 47 22 16 60 21
ATRIA DENMARK 3-Stjernet A/S Office/plant Langmarksvej 1 DK-8700 Horsens, Denmark Tel. +45 76 28 25 00 Fax +45 76 28 25 01
OOO Pit-Product Obukhovskoy Oborony pr. 70 RUS-192029 Saint-Petersburg, Russia Tel. +7 812 33 66 888 +7 812 412 88 22 Fax + 7 812 346 6176 [email protected] www.pitproduct.ru
Ryabinovaya street 32 RUS-121471 Moscow, Russia Tel. +7 495 448 67 04 +7 495 448 12 55 Fax +7 495 448 4503 [email protected] www.campomos.ru
ATRIA BALTIA Atria Eesti AS Metsa str. 19 EE-68206 Valga, Estonia Tel. +372 76 79 900 Fax +372 76 79 901
Põlva maakond EE-63601 Vastse-Kuuste Estonia Tel. +372 7970 216 Fax +372 7970 215
Other offices and plants: Atria Eesti As Järvevana tee 9 EE-11314, Tallinn, Estonia Fax +372 650 5471
[email protected] [email protected] www.atria.ee
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