AUGA group — Investor Presentation 2022

Dec 6, 2022

PRESENTATION ON THE FINANCIAL RESULTS FOR 9 MONTHS OF 2022

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PRESENTED BY

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Mindaugas Ambrasas

CFO

9M2022

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AUGA GROUP AT A GLANCE*

The largest vertically integrated organic food producer in Europe

4

business segments

71.7 million EUR

revenue

Founded in

2014

1,233

employees

70%

of sales is export

Listed on

Nasdaq

Vilnius

39.1 th. ha

of arable land

Products are sold in

38

countries

9M2022

*Audited financial results, 2021

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RESULTS

Financial data for 9 months tentatively reflect the result of 2022.

The group had rebounded from very difficult Y2021, the results are in line with Y2020 despite difficult environment.

Operating results had improved

EUR million	2022 9M	2021 9M	Variance	2020 9M
Revenue	57.71	54.90	+5%	62.38
Gross profit	13.14	1.70	+673%	11.88
Net profit	(0.62)	(10.43)	+94%	0.44
EBITDA	16.78	5.45	+208%	15.94

9M2022

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4

Results by segment

Crop growing

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CROP GROWING

Wheat and legumes account for 61% of cash crops' land plot.

Yields had improved, but overall results were lowered by poor yields of summer wheat and peas.

Overall costs has increased 18% YoY.

Significant growth of average selling price was affected not only by prices, but quality of the harvest as well.

Crop growing results had improved significantly YoY

Wheat	2021/2022	2020/2021	Variance
Area, ha	11,693	10,440	+12%
Yield, t/ha	3.41	3.29	+4%
Price, Eur/t	402	240	+68%
Cost, Eur/ha	991	762	+30%
Profit, Eur/ha	380	28	+1257%
Legumes	2021/2022	2020/2021	Variance
---	---	---	---
Area, ha	6,785	8,056	-16%
Yield, t/ha	2.32	1.10	+111%
Price, Eur/t	576	347	+66%
Cost, Eur/ha	830	829	0%
Profit, Eur/ha	506	(448)	n/a

Y Y Y
9M2022

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CROP GROWING

As for 30.11.2022, the group contracted 90% of forecasted 2022 harvest.

Harvest of 2022 is contracted with 48% higher prices than the harvest of 2021 (excluding long term agreements).

Organic feed crops are in high demand and support food crops' prices.

Market trends: prices were slightly decreasing lately, significant growth YoY

Organic vs. Conventional wheat price in Germany, EUR/t

Germany, the largest EU market, is a benchmark for major organic product prices.

9M2022

Source: www.ami-informiert.de, https://www.bmel-statistik.de/

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CROP GROWING

Negative developments in Q3 due to weather conditions mainly: cold, rainy weather and heavy winds had decreased the harvest.

Autumn sowing is successfully completed.

Q4 results will be mainly affected by forecasted gain (loss) of next year's harvest.

Q3 results have the highest volatility historically

Gain (loss) on initial recognition of biological asset at fair value, €'000

9M2022

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CROP GROWING

25% of the harvest sold in Q3 (44% in Q3Y2021).

Improvement in sales result due to lower write-offs, favorable market development.

2022 9M results

Significant improvement YoY

	2022 9M	2021 9M	Variance	2020 9M
Total cultivated land, ha	38,525	39,139	-2%	39,637
EUR million	2022 9M	2021 9M	Variance	2020 9M
Total gain (loss) on revaluation of biological assets (crops)	8.20	(1.35)	n/a	7.94
Gain (loss) on revaluation of biological assets (crops) recognized in previous period	2.33	2.02	+15%	1.45
Gain (loss) on revaluation of biological assets (crops) recognized in current period	5.86	(3.37)	n/a	6.49
Sales revenue	18.71	18.41	+2%	26.21
Cost of sales	(17.73)	(20.13)	-12%	(27.16)
Inventory write-offs	(0.95)	(2.38)	-60%	(0.98)
Result of internal transactions	(1.00)	-	n/a	-
Result of sales of agricultural produce	(0.96)	(4.10)	+77%	(1.93)
Subsidies	7.06	6.98	+1%	5.57
Gross profit	11.96	(0.50)	n/a	10.13

9M2022

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Results by segment

Dairy

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DAIRY

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In 9M of 2022 milk yields fell by 2% YoY. Decision by the group: due to poor last year's harvest, there was a lack of feed ingredients. Issue to be resolved after new harvest.

Average milk price has increased by 33% since the beginning of 2022.

Milk yield and price dynamics

9M2022

Source: www.ami-informiert.de, https://www.bmel-statistik.de/, https://ec.europa.eu/agriculture/market-observatory/milk

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9M2022

DAIRY

As for 30.09.2022 group's herd consists of 3,479 cows and 3,340 heifers and bulls, compared to 3,494 cows and 3,040 heifers and bulls a year before.

Improving profitability: average milk price grew by 26% while costs increased by 12% only.

2022 9M results

High prices are main driver for improving profitability.

	2022 9M	2021 9M	Variance	2020 9M
Total quantity of products sold, t	20,249	20,168	0%	20,387
Milk	19,305	19,112	+1%	19,307
Milk commodities	332	502	-34%	559
Cattle	612	554	+10%	521
EUR million	2022 9M	2021 9M	Variance	2020 9M
---	---	---	---	---
Revenue	12.32	10.16	+21%	9.87
Milk	10.01	7.89	+27%	7.63
Milk commodities	1.26	1.62	-22%	1.69
Cattle	1.04	0.65	+60%	0.55
Cost of sales	(11.02)	(9.87)	+12%	(9.45)
Milk	(8.76)	(7.72)	+13%	(7.25)
Milk commodities	(1.22)	(1.50)	-19%	(1.65)
Cattle	(1.04)	(0.65)	+60%	(0.55)
Revaluation of biological assets	(1.77)	(2.48)	-29%	(2.31)
Subsidies	2.14	2.36	-9%	1.97
Gross profit	1.67	0.17	882%	0.08

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Results by segment

Mushroom growing

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MUSHROOM GROWING

Soaring energy prices severely impacted result of the segment in Q3. Transportation costs grew by 24%, energy costs almost tripled.

Price of mushrooms excluding transport and packaging was 8% higher in Q3 compared to Q1.

Production volume not optimal due to saving energy resources and management of production challenges.

3 key drivers: costs, prices, production volume

Energy and transport costs, thous. EUR

Price of mushrooms (excl. transport and packaging), Eur/tonne

Mushrooms produced, tonnes

9M2022

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MUSHROOM GROWING

Short term solutions:

• Production volume should reach 1000 t/month;
• continuous negotiations for price review;
• energy consumption control (had decreases by 20-24% YoY);
• energy consumption is lower in colder seasons.

Long term solutions:

• investments into renewable energy production;
• biomethane production projects currently developed by the group.

2022 9M results

Negative result affected by growing energy costs.

	2022 9M	2021 9M	Variance	2020 9M
Sold mushrooms, t	8,834	9,072	-3%	9,652
Average price (Eur/t)	2,359	2,326	+1%	2,231
EUR million	2022 9M	2021 9M	Variance	2020 9M
---	---	---	---	---
Total revenue	21.17	21.46	-1%	22.94
Mushroom sales revenue	20.84	21.10	-1%	21.54
Compost sales revenue	0.33	0.36	-8%	1.40
Cost of sale	(22.68)	(20.90)	+9%	(21.55)
Cost of mushrooms sold	(22.35)	(20.71)	+8%	(20.30)
Cost of compost sold	(0.33)	(0.20)	+66%	(1.25)
Gross profit	(1.51)	0.56	n/a	1.38

9M2022

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Results by segment

Fast-moving consumer goods
(EMCG)

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FMCG

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Inflation and logistic disruptions create challenges for projects in export markets – growth of sales had stalled in H1.

The 3rd quarter as sales reached EUR 2.78 million (+21% YoY).

Profitability back on track due to:

• high utilization of production capacities;
• review of pricing.

2022 9M results

Positive tendencies in the 3rd quarter.

EUR million	2022 9M	2021 9M	Variance	2020 9M
Revenue	5.50	4.88	+13%	3.37
Cost of goods sold	(4.49)	(3.41)	+32%	(3.08)
Gross profit	1.01	1.47	-31%	0.29

9M2022

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RESULTS

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Main factors for EBITDA change

Crop growing and Dairy segments have the largest positive affect.

9M2022

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OTHER INFORMATION 3 projects to be implemented / further developed in 2022

Project	Plan	Status
Biomethane infrastructure	The group is planning to operate 3 facilities by Q4 2022.	Work on the infrastructure will be completed and biomethane production will start at the beginning of 2023.
Theoretical annual production volume of 3 facilities - 63 000 MWH of biomethane
Specialized feed technology	First prototype is already built and is in testing currently. Two main targets: a) improved milk yields, b) reduction of CO2 e emissions.
The group is planning to start scaling of technology in it’s farms if tests will be successful.	Testing phase. Further development of technology.
AUGA M1 tractor	The group is aiming to have up to 10 tractors working in group’s fields by Q4 2022. Agreement for assembling is already signed.	Production in progress.
First batch of 3 tractors should be completed in Q4.

9M2022

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OTHER INFORMATION Share price information

The share price decreased by 20% (from EUR 0.503 to EUR 0.401 per share) from the beginning of 2022 to 30th of November 2022. OMX Baltic Benchmark GI decreased by 14% during the same period.

The average monthly turnover was EUR 0.18 million.

AUGA group, AB share price on Nasdaq Vilnius, EUR

0.56*

0.61-0.71

0.70

Y Y Y

9M2022

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auga

More information:

• Nasdaq Vilnius, Baltic Main List: AUG1L
• Nasdaq Vilnius, 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
• News for investors subscription: http://cutt.ly/auga
• Investor relations:

Mindaugas Ambrasas, CFO
+370 620 67296
m.ambrasas@auga.lt

9M2022

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DISCLAIMER

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The information on this presentation may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Company and certain of the plans and objectives of the Company with respect to these items. We caution that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. For these reasons, our actual future results may differ materially from the plans, goals, and expectations set forth in such forward-looking statements.

Unless required by law, the Company assumes no obligation to update or revise any forward-looking statement after the disclosure of this presentation.

9M2022

22

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ORGANIC FOOD WITH NO COST TO NATURE