Earnings Release • May 31, 2020
Earnings Release
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AUGA group, AB
Kęstutis Juščius CEO Majority shareholder Mindaugas Ambrasas CFO
Eimantas Gudonis Head of Finance Department
Vision - a synonym for sustainable food and lifestyle Mission - deliver organic food with no cost to nature
In 2015, the strategic decision to switch to organic farming and produce organic products was made.
In 2020, the company is taking a new step and developing a new standard for sustainable organic food in the food value chain, focused on the environmental and long-term sustainability for the AUGA community.
| CONSUMERS | FARMERS | PRIVATE AND INSTITUTIONAL LENDERS |
SHAREHOLDERS |
|---|---|---|---|
| a more sustainable way to eat |
a more sustainable way to work |
a more sustainable way to invest |
a more sustainable way to receive financial returns |
AUGA Strategy 2025, published in April 2020 (document and presentation at http://auga.lt/en/for-auga-investors/) corresponds to the proposed sustainable food production practices established by the Farm to Fork Strategy that was announced in May 2020 (read more at https://ec.europa.eu/food/farm2fork_en).
While sales to wholesalers working with HoReCa have been negatively affected, this has been offset by an increase ih retail sdles. 2020 Q1
Sources: 1https://www.ami-informiert.de/2 Nielsen ScanTrack HMSM3 Nielsen COVID-19 Baltics Reports
AUGA group's revenue, profit and EBITDA increased $\bullet$
The group improved results in all business segments.
| 2020 Q1 | 2019 Q1 | Variance | FY2019 | |
|---|---|---|---|---|
| Revenue, EUR million | 17.04 | 14.89 | $+14%$ | 71.13 |
| Gross profit, EUR million | 3.74 | 2.95 | $+27%$ | 9.85 |
| Net profit, EUR million | 0.18 | 0.17 | $+6\%$ | (3.22) |
| EBITDA (including IFRS16 effect), EUR million |
4.95 | 4.58 | $+8\%$ | 17.12 |
Organic grain prices are not linked to conventional grain $\bullet$ prices and demand
Organic vs Conventional wheat price in Germany, EUR/t
Germany, the largest EU market, is a benchmark for major organic product prices.
In 2020 Q1, AUGA average wheat sales price was 8% lower vs. the same period last year. This was caused by a decline in market prices.
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au
In 2020 the area of cultivated land increased by around 1 thous. ha.
Positively affected by weather conditions the total fair value gain on crops from sowing till 31 March 2020 was EUR 1.38 million higher than at the same period in 2019.
Revenue increase 18% mainly impacted by the sales of rapeseed (EUR 0.71 million), which was not present in 2019 Q1.
Group has reclassified the subsidies related to grasslands and pastures from agricultural to dairy segment to have a better representation of the segments' results.
The group maintains its forecasts for this year's harvest and has a positive outlook on the harvest potential.
| 2020 Q1 | 2019 Q1 | Variance | FY2019 | |
|---|---|---|---|---|
| Total cultivated land, ha | 39,772 | 38,564 | $+3%$ | 38,564 |
| Total fair value of harvest, EUR million |
18.76 | 20.04 | $-6%$ | 38.26 |
| Total production cost, EUR million | 16.03 | 18.70 | $-14%$ | 34.43 |
| Gain (loss) on revaluation of biological assets (crops) recognized in reporting period, EUR million |
1.27 | 1.34 | $-5%$ | 5.28 |
| Total fair value gain (loss) on revaluation of biological assets, EUR million |
2.72 | 1.34 | $+103%$ | 5.28 |
| Sales revenue, EUR million | 6.07 | 5.13 | $+18%$ | 29.49 |
| Cost of sales, EUR million | 6.02 | 5.13 | $+17%$ | 30.45 |
| Inventory write-offs, EUR million | 0.24 | 0.25 | $-2\%$ | 1.54 |
| Result of sales of agricultural produce, EUR million |
(0.19) | (0.25) | $+23%$ | (2.50) |
| Subsidies, EUR million | 1.89 | 1.76 | $+8%$ | 6.46 |
| Gross profit, EUR million | 2.98 | 2.85 | $+4%$ | 9.24 |
S.
R
DAIRY
While conventional milk price decreased, organic milk price remained stable.
The share of AUGA milk sold at the prices of organic milk consistently increased and in April already reached 100%.
In April 2020, the group receive China organic certificate for commodity and packaged milk products was received.
2020 Q1
The segment became profitable $\bullet$
In 2020 Q1, the share of milk sold at organic prices reached 86% (in 2019 Q1, it was 54%).
Yield of milk increased by 5%.
Results were also positively impacted by the reduced costs and reclassified subsidies.
The company expects to maintain the high share of milk sold at organic prices, further improve yield and efficiency of dairy operations.
| 2020 Q1 | 2019 Q1 | Variance | FY2019 | |
|---|---|---|---|---|
| Total quantity of products sold, t | 6,730 | 6,413 | $+5%$ | 25,224 |
| Milk, t | 6,549 | 6,219 | $+5%$ | 24,492 |
| Cattle, t | 181 | 194 | $-7\%$ | 732 |
| Revenue, EUR million | 2.78 | 2.62 | $+6%$ | 10.14 |
| Milk, EUR million | 2.60 | 2.41 | $+8%$ | 9.42 |
| Cattle, EUR million | 0.18 | 0.21 | $-14%$ | 0.72 |
| Cost of sales, EUR million | 2.49 | 2,64 | $-6%$ | 10.64 |
| Milk, EUR million | 2.31 | 2.44 | $-5%$ | 9.93 |
| Cattle, EUR million | 0.18 | 0.21 | $-14%$ | 0.72 |
| Revaluation of biological assets, EUR million |
(0.70) | (0.76) | $-8%$ | 2.20 |
| Subsidies, EUR million | 0.50 | 0.56 | $-11%$ | 0.77 |
| Gross profit, EUR million | 0.08 | (0.23) | $+401%$ | (1.93) |
Mushroom growing
Sales volume, revenue and gross profit increased $\bullet$
| 2020 Q1 | 2019 Q1 | Variance | FY2019 | ||
|---|---|---|---|---|---|
| ıst | Sold mushrooms, t | 3,288 | 2,877 | $+14%$ | 12,256 |
| m | Average price (Eur/t) | 2,043 | 2,075 | $-2%$ | 2,147 |
| ed | Total revenue, mln. Eur | 7.28 | 6.64 | $+10%$ | 28.71 |
| าes. million million |
Mushroom sales revenue, EUR | 6.72 | 5.97 | $+13%$ | 26.32 |
| Compost sales revenue, EUR | 0.56 | 0.67 | $-15%$ | 2.39 | |
| 6). million |
Bendrosios sgnaudos, EUR | 6.66 | 6.35 | $+5%$ | 26.22 |
| Ÿ million |
Cost of mushrooms sold, EUR | 6.17 | 5.72 | $+8%$ | 2.49 |
| ily | Cost of compost sold, EUR million | 0.49 | 0.63 | $-22%$ | 23.73 |
| Gros profit, EUR million | 0.62 | 0.29 | $+117%$ | 2.49 |
Higher harvest compared to la year.
Due to the increased mushroo harvest, the cost of cultivated mushrooms relatively decrease for the same production volum
Cost of production decreased more (6%) than the average selling price of mushrooms (2%
Compost sales were negatively impacted by COVID-19 virus customers in Russia temporari stopped the operations.
The company does not foresee any material changes in the results of the segment in the near future
End-Consumer Products (FMCG)
Sales grew in all markets, with the largest impact coming from increased sales in the U.S.
The main product group remains unchanged - preserved mushrooms, vegetables and SOUPS.
The company expects that the segment will continue to be the fastest growing.
| 2020 Q1 | 2019 Q1 | Variance | FY2019 | |
|---|---|---|---|---|
| Revenue, EUR million | 0.91 | 0.51 | $+79%$ | 2.79 |
| Cost of goods sold, EUR million | 0.85 | 0.47 | $+82%$ | 2.75 |
| Gross profit, EUR million | 0.06 | 0.04 | $+36%$ | 0.05 |
AUGA products appeard on the shelves of Wholefoods market USA, the largest specialized
FMCG
retailer of natural and organic products.
Successfully continued export to UAE. AUGA soups had high demand during Ramadan laikotarpiu.
At the end of May 2020, the companies controlled by AUGA group acquired 100% control of KB "Grybai LT", the producer of AUGA preserved products.
Wholefoods Market, JAV (Kalifornija)
NOVA
Waitrose, JAE (Dubajus)
2019 results were negatively affected by the unusual weather conditions (the company estimates that 2019 EBITDA was lower by EUR 7.1 million). Current weather conditions enables us to expect the average yields of a standard year.
The detailed newest and historical financial data in MS Excel format is available here http://auga.lt/en/for-augainvestors/
| 2020 Q1 | ||
|---|---|---|
| 31 Mar 2020 | 31 Dec 2019 | Variance | |
|---|---|---|---|
| Equity, EUR million | 90.31 | 90.07 | |
| Total assets, EUR million | 209.08 | 206.72 | $+1\%$ |
| Equity Ratio, % | 43% | 44% | $-2%$ |
| Net debt, EUR million (after IFRS16) |
95.66 | 93.99 | $+2\%$ |
| Net debt (before IFRS16) - adjusted working capital*, EUR million |
14.78 | 18,93 | $-22%$ |
| 2020 Q1 | 2019 Q1 | Variance | |
| EBITDA, EUR million (after IFRS16) | 4.95 | 4.58 | $+8%$ |
*Adjusted working capital = Current biological assets + Trade receivables, advance payments and other receivables + Inventory - Trade payables - Other payables and current liabilities. The adjusted working capital formula eliminates cash and financing elements allowing the reader to see how the short-term assets and liabilities directly related to operations of the Group are being utilized.
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Aug 2 12 Sep 4 12
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The turnover of AUGA group, AB shares has grown every year.
In 2019, the company's shares were in fifth place according to the trading turnover on the Baltic Main List * of the Nasdag Vilnius stock exchange.
The company's large number of shareholders and number of freely traded shares ensures liquidity.
During the four months of 2020 the number of sharholders increased by 15.6% and reached $1541**$
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ab
* In 2016 and 2017 the company's shares were listed on Baltic Secondary List. Since 2018, the shares are listed on Baltic Main List. ** Number of shareholders and foreign intermediaries on whose behalf the shares managed by their clients are accounted for in 2020. April 23 20
2020 Q1
Mindaugas Ambrasas, CFO +370 620 67296 [email protected]
90
da
More information: www.auga.lt
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