Atria: Strong Q1 driven by Finland - Nordea

Atria reported Q1 EBIT of EUR 10.9m, 244% (EUR 7.7m) above Refinitiv consensus and 142% above our estimate. Q1 net sales of EUR 428m were up 14% y/y and came 7% above consensus and 6% above our estimate. Q1 EBIT beat was fully driven by Finland, while other segments came below our estimates.

Atria’s market position has improved clearly in Finland and Estonia. Producer prices have remained above last year level. Q1 EBIT included EUR 1.3m additional costs related to transfer of production in Sweden. Q1 operating cash flow was EUR -13m (EUR -35m a year ago), supported by lower working capital.

Despite strong Q1, Atria’s maintains its outlook intact and expects adjusted EBIT to decline from 2023 (after EUR 49m in 2022) while we have modelled EUR 48.5m or 1% decline (Refinitiv consensus EUR 47m, or 4% decline). We note that Atria issued a similar guidance for 2022 and ended up EUR 0.2m below 2021 level in 2022. During 2023, the company will commission a major expansion at its Sköllersta plant in Sweden, and the phased start-up and testing of the new poultry plant in Nurmo will begin. These measures will result in additional costs in 2023. Mathematically, Q1 beat translates into 13-16% upward pressure on consensus EBIT estimates, while we believe revisions to be more muted due to unchanged guidance (Q1 EBIT EUR 8.6m above Q1 2022).

We have a fair value range of EUR 12.4-15.1 per Atria share.

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