Atria: Strong Q3 with recovering foodservice market, cost inflation started to materialise at the end of Q3 - Nordea

After a guidance upgrade on 18 October, Atria reported a strong Q3 adjusted EBIT of EUR 19.7m, +16% / +18% versus Refinitiv consensus and Nordea, respectively. Q3 net sales of EUR 388m were up 1% y/y (+4% organic growth) and came 1% above consensus (+3% versus Nordea). 16% EBIT beat in Q3 was mainly attributable to Finland, where retail sales have continued at a last year level, while foodservice sales have started to recover. Exports to China have decreased and profitability of exports deteriorated due to current low price level in Chinese pork market. Atria reiterated its upgraded (18 October) EUR 47-54m adjusted EBIT guidance for 2021 (EUR 40.5m in 2020). Guidance mid-point indicates EUR 11.6m adjusted EBIT for Q4, while consensus is currently expecting EUR 13.6m EBIT for Q4 (Nordea EUR 11.8m). Despite strong Q3, we expect limited consensus revisions for 2022E-23E and note uncertainty due to volatile exports t o China and cost inflation that became material for Atria in the latter part of Q3. We currently model EUR 50m adjusted EBIT for 2022E, while Atria’s 2021 adjusted EBIT guidance mid-point is EUR 50.5m.