Atria: Strong Q2 profitability driven by all divisions - Nordea

Atria reported Q2 adjusted EBIT of EUR 18.4m, 47% (EUR 5.9m) above LSEG Data & Analytics consensus. Q2 net sales of EUR 454m were down 1% y/y and came 1% above consensus. Q2 EBIT beat to our estimates came from Finland and Sweden while Denmark & Estonia was largely in line. In Finland, sales declined due to lower feed sales and foodservice sales, while Q2 benefited from sales shift of export sales from Q1. Sweden profitability continued to improve, driven by centralization of production last year and streamlining of organizational structure. Fierce price competition in Denmark has continue while Estonia sales increased and profitability improved. Operating cash flow was EUR 47m (EUR 45m a year ago). Atria raised its guidance on 12 July and now expects 2024 adjusted EBITA to increase from EUR 49.6m in 2023 (earlier: “to decline”). Consensus has modelled EUR 52.7m, or 6% decline. The company notes risks related to potential increase in tariffs for food exports to China. Initially, driven by strong performance in Q2, we expect consensus to raise 2024 EBIT estimates by some 5-10% with slightly more muted revisions for 2025E-26E.