AI Terminal
AUGA group
Investor Presentation • Mar 6, 2024
2259_iss_2024-03-06_dde9b46e-d7d7-41f8-b123-cf0f17a01618.pdf
Investor Presentation
Open in ViewerOpens in native device viewer
Presentation on the financial results for the 12 months of 2023
Presented by
Kęstutis Juščius
Chair of the Board of AUGA group, AB
Content
-
- Financial results for the 12 months of 2023 and corresponding overview by segment.
-
- Outlook for 2024.
-
- Developments in the strategy implementation and Tech projects.
Results for the 12 months of 2023
| EUR million | 2023 12M |
2022 12M |
Variance | 2021 12M |
|---|---|---|---|---|
| Revenue | 81.41 | 80.09 | +2% | 71.72 |
| Gross profit | (0.62) | 15.27 | n/a | 3.95 |
| Net profit | (17.96) | (5.35) | -236% | (15.44) |
| EBITDA | 1.48 | 19.58 | -92% | 9.10 |
The decline in organic food consumption has driven down the prices of organic commodities and had a major impact on our financial results.
In view of this trend, the Group has already decided in the middle of 2023 to cultivate half of cash crops through regenerative conventional agriculture.
Although 2023 was a challenging year, all of the Group's segments turned profitable in the last quarter of the year.
In 2023, the division Grybai LT was sold. The result of the sale transaction does not fall under the Group's EBITDA.
4
Main factors for the EBITDA 2023 change
Results by segment: crop growing
Revaluation of biological assets
The result of the current harvest season decreased by EUR 1.1 million per Q4, mainly due to a lower yield of soya (EUR -0.5 million) and annual cost calculation (EUR -0.6 million).
The result of the current season in Q4 reached the highest level, while gain from the following season was the lowest compared to previous years.
Gain (loss) on initial recognition of biological asset at fair value per quarter, EUR '000
Financial results
Decreased commodity prices had a major negative impact.
Sale results decreased by EUR 3.5 million due to crops being sold at prices lower than previously accounted for.
The Group received EUR 0.9 million less in subsidies after conversion of its 1/2 cash crops to conventional as a one-off sanction for 2023. It has been offset by the higher subsidies per ha in the new agricultural programme.
| 2023 12M |
2022 12M |
Variance | 2021 12M |
|
|---|---|---|---|---|
| Total cultivated land, ha | 38,190 | 38,525 | -1% | 39,139 |
| EUR million | 2023 12M |
2022 12M |
Variance | 2021 12M |
| Total gain (loss) on revaluation of biological assets (crops) |
(7.21) | 2.83 | n/a | (5.51) |
| Gain (loss) on revaluation of biological assets (crops) recognized for following period |
1.49 | 1.97 | -24% | 2.33 |
| Gain (loss) on revaluation of biological assets (crops) recognized in current period |
(5.73) | 4.80 | n/a | (3.18) |
| Sales revenue | 30.00 | 27.58 | +9% | 23.56 |
| Cost of sales | (33.47) | (27.71) | +21% | (25.15) |
| Inventory write-offs | (0.45) | (1.26) | -64% | (4.05) |
| Result of internal transactions |
(2.70) | (0.68) | +297% | - |
| Result of sales of agricultural produce |
(6.62) | (2.07) | +220% | (5.64) |
| Subsidies | 9.12 | 9.70 | -6% | 9.69 |
| Gross profit | (3.23) | 12.43 | n/a | (0.89) |
Commodity price trends
One of the lowest prices for majority of crops in recent years.
402 260 100 150 200 250 300 350 400 450 500 550 600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan2021 2022 2023 2024 Organic wheat (food) Organic wheat (feed) Conventional wheat (food) Conventional wheat (feed) AUGA wheat
Organic vs. Conventional wheat price in Germany*, EUR/t
*Germany, the largest EU market, is a benchmark for major organic product prices.
Overview of winter crops
The area of winter crops, which are less sensitive to weather conditions, has increased from 17 to 22.2 thous. ha (+31%).
Favourable conditions in autumn enabled the Group to complete all necessary land tillage work and the mild winter that followed should not have an adverse effect on the upcoming harvest.
Winter cash crops area (ha) and share of total area, %
Efficiency agenda
Land consolidation and efficiency improvement programme:
Review of efficiency rates on a land plot and hectare levels.
If the review brings to the conclusion that certain operations fall outside Group averages, these land plots might no longer be cultivated so as to reduce the demand for the working capital and machinery.
Results by segment: dairy
Yield and price dynamics
Milk yield per cow was 5% higher in 2023 vs. 2022 and remained high at the beginning of 2024.
At the end of 2023, prices rose and stabilised at the highest level for the entire year.
The low demand for organic milk has driven down the price premium in 2023 to the level of conventional. Therefore, it was essential to change the pre-contracting approach for 2024 and secure premium for organic milk in advance, while the remainder of produce (27%) is expected to be converted to conventional reduce the cost of production in Q2.
13 Source: www.ami-informiert.de , https://www.bmel-statistik.de/ , https://ec.europa.eu/agriculture/market-observatory/milk,https://www.vic.lt/zumpris/statistine-informacija/pieno-sektoriaus-vidaus-rinka
Dairy
Financial results
Total volume of milk produced increased by 2% YoY. The registered sales volume here was 3% lower, as part of the milk was used for the production of AUGA's dairy products, reflected in the FMCG results.
An 18% decrease in the prices of raw milk resulted in a gross loss.
Gross result is planned to grow in 2024 due to partial dairy conversion to conventional farming. Therefore, the price for organic milk will be higher, while the cost for conventional - lower.
| 2023 12M |
2022 12M |
Variance | 2021 12M |
|
|---|---|---|---|---|
| Sales volume*, t |
25,720 | 26,594 | -3% | 27,053 |
| Milk | 23,766 | 25,334 | -6% | 25,685 |
| Milk commodities | 1,077 | 457 | +136% | 624 |
| Cattle | 877 | 803 | +9% | 743 |
| EUR million | 2023 12M |
2022 12M |
Variance | 2021 12M |
| Sales revenue | 14.74 | 16.50 | -11% | 13.61 |
| Milk | 10.38 | 13.48 | -23% | 10.69 |
| Milk commodities | 3.09 | 1.71 | +81% | 2.02 |
| Cattle | 1.27 | 1.31 | -3% | 0.90 |
| Cost of sales | (14.97) | (14.91) | 0% | (13.15) |
| Milk | (10.66) | (11.94) | -11% | (10.36) |
| Milk commodities | (3.04) | (1.66) | +83% | (1.89) |
| Cattle | (1.27) | (1.31) | -3% | (0.90) |
| Revaluation of biological assets | (3.00) | (2.09) | +44% | (2.77) |
| Subsidies | 2.83 | 3.07 | -8% | 3.17 |
| Gross profit | (0.40) | 2.57 | n/a | 0.85 |
* Excluding the milk used for the production of AUGA's FMCG products
Results by segment: mushroom growing
Mushroom growing
Price and production volume dynamics
Price of mushrooms excluding transport and packaging was 12% higher YoY and continues to increase – in January 2024 price reached over 2,500 EUR/t.
Production volume is stable and in Q4 was highest compared with Q4 of previous years.
Price of mushrooms (excl. transport and packaging), EUR/t
Mushrooms produced, t
Mushroom growing
Financial results
Higher sales prices, contained production costs and lower energy prices have led to the improvement of financial results.
Gross profit in Q4 was highest of all quarters in 2023.
At the beginning of 2024, the segment demonstrates stability.
The market environment is favorable, allowing for the realization of the forecasted gross profit in 2024.
| 2023 12M | 2022 12M | Variance | 2021 12M |
|
|---|---|---|---|---|
| Mushrooms sales volume, t | 11,510 | 11,552 | 0% | 12,002 |
| Average price (EUR/t) | 2,633 | 2,384 | +10% | 2,323 |
| EUR million | 2023 12M |
2022 12M |
Variance | 2021 12M |
| Total sales revenue | 30.73 | 27.90 | +10% | 28.36 |
| Mushrooms sales revenue | 30.31 | 27.54 | +10% | 27.89 |
| Compost sales revenue | 0.42 | 0.36 | +17% | 0.47 |
| Cost of sales |
(29.00) | (29.30) | -1% | (27.69) |
| Cost of mushrooms sold | (28.58) | (28.94) | -1% | (27.45) |
| Cost of compost sold | (0.42) | (0.36) | +17% | (0.24) |
| Gross profit | 1.72 | (1.40) | n/a | 0.67 |
Results by segment: FMCG
FMCG
Change in revenue structure
In July 2023, AUGA group sold its subsidiary Grybai LT, producer of ready-to-eat soups and preserved products, hence the annual segment result decreased.
The new FMCG product line was introduced in April and in Q4 its sales revenue was almost 2 times higher compared to Q3.
Group aims to expand the range of products and to broaden the sales network. 500 1 000
At the end of March 2024, flavored yogurts will be introduced.
| EUR million | 2023 12M |
2022 12M |
Variance | 2021 12M |
|---|---|---|---|---|
| Sales revenue | 5.94 | 8.12 | -27% | 6.19 |
| Cost of goods sold | (4.65) | (6.38) | -27% | (4.66) |
| Gross profit | 1.29 | 1.74 | -26% | 1.54 |
FMCG revenue structure, EUR thousands
Outlook for 2024
Outlook for 2024
To the best of Company's estimate, we remain committed to the EBITDA forecast for 2024, due to the fact that the key assumptions for the published projection remain within the allowed 10% range.
21
Strategy implementation and Tech projects
Green infrastructure
Biomethane
3 biomethane units have already been installed.
The biomethane system is set commence delivery to the natural gas system this very month.
Tech development
AUGA M1 and other sustainably powered machinery
The progress is being made in the tractor technology development in line with the results, generated in fieldtests.
The unique structure of the AUGA M1 has obtained a patent in strategic global markets: the USA, Eurasian Patent Convention member states, and Australia, that is paving the way for commercialisation.
Half-size of M1 electric multi-functional prototype tractor, able to cover the remainder of the farming needs, will be presented soon.
Specialized feed technology
The results of the feed technology testing were confirmed by LSMU VA - 32% lower methane emissions per litre of raw milk and 13% increased milk yield with no impact on the milk's quality.
Bringing sustainable farming technologies to the market
2024 Q2 is expected to be a watershed moment for the above outlined technologies (fossil fuel free technologies and sustainable feeding systems). The way of the technologies to the market will be announced in line with the planned financial set-up, which above all but not exclusively includes the applications to the EUR 1 billion EU Green Deal Industrialisation Plan schemes. Such an approach will determine the valuation for the TECH arm and its inherent value to the Group at large.
Share price information
The share price decreased by 24% (from EUR 0.390 to EUR 0.297 per share) from the beginning of 2023 to 29th of February 2024.
The average monthly turnover was EUR 0.22 million.
AUGA group, AB share price on Nasdaq Vilnius, EUR
0.40* 0.49
More information
- Nasdaq Vilnius, Baltic Main List, AUGA group, AB shares: AUG1L
- Nasdaq Vilnius, Baltic Bond List, AUGA group, AB green bonds: AUGB060024A
- Information for investors:http://auga.lt/en/for-auga-investors
- Analyst reports, data in MS Excel format: https://auga.lt/en/investors/reports-and-presentations
- Subscription to investor newsletter:http://cutt.ly/auga
- Investor relations contact:
Kristupas Baranauskas, Chief Financial Officer of AUGA group, AB +370 652 994 44 [email protected]
IMPORTANT NOTICE
This presentation has been prepared by AUGA group, AB (AUGA group) solely for informational purposes and must not be relied upon, disclosed or published, or used in part for any other purpose.
The presentation should not be treated as investment advice or provide basis for valuation of AUGA group securities and should not be considered as a recommendation to buy, hold, or dispose of any of its securities, or any of the businesses or assets referenced in the presentation.
The information in this presentation may comprise information which is neither audited nor reviewed by independent third parties and should be considered as preliminary and potentially subject to change.
Certain information set forth in this presentation contains "forward-looking information", including "future-oriented financial information", "forecast" and "financial outlook", under applicable securities laws (collectively referred to herein as forward-looking statements). Except for statements of historical fact, the information contained herein constitutes forward-looking statements and includes, but is not limited to, the (i) projected financial performance of the Company; (ii) the expected development of the Company's business, projects, and joint ventures; (iii) execution of the Company's vision and growth strategy; (iv) sources and availability of thirdparty financing for the Company's projects; (v) completion of the Company's projects that are currently underway, in development or otherwise under consideration; (vi) renewal of the Company's current customer, supplier and other material agreements; and (vii) future liquidity, working capital, and capital requirements. Forwardlooking statements are provided to allow potential investors the opportunity to understand management's beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment.
These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements.
Although forward-looking statements contained in this presentation are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Certain financial and statistical information presented in this presentation is subject to rounding adjustments. Accordingly, any discrepancies between the listed totals and the sums of the amounts are due to rounding.
Certain financial information and operating data relating to AUGA group presented in this presentation has not been audited and, in some cases, is based on the management's information and estimates, and is subject to change. This presentation may also include certain non-IFRS measures which have not been subjected to a financial audit for any period.
No responsibility or liability will be accepted by AUGA group, its affiliates, officers, employees, or agents for any loss or damage resulting from the use of forwardlooking statements in this presentation. Unless required by the applicable law, AUGA group is under no duty and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
