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AUGA group
Investor Presentation • Sep 5, 2024
2259_rns_2024-09-05_f3495a1a-1e8e-46a5-ac97-5f3ba173fd6e.pdf
Investor Presentation
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Presentation on the financial results for the 6 months of 2024
Presented by
Kęstutis Juščius
Chair of the Board of AUGA group, AB
Content
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- Financial results for the 6 months of 2024 and corresponding overview by segment.
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- Strategy implementation and Tech projects.
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- Correction to the EBITDA guidance for 2024.
Results for the 6 months of 2024
| EUR million | 2024 6M |
2023 6M* |
Variance | 2022 6M |
|---|---|---|---|---|
| Revenue | 34.67 | 37.28 | -7% | 33.99 |
| Gross profit | 3.45 | 1.80 | +92% | 12.43 |
| Net profit (loss) | (6.87) | (9.14) | +25% | 3.65 |
| EBITDA | 6.43 | 3.57 | +80% | 15.05 |
*The results comprise continuing operations (excl. Grybai LT)
Revenue has decreased due to lower sales of crop growing segment.
Gross profit has increased by 92%, mostly due to growth in dairy segment.
Higher net result has also been influenced by a reduction of EUR 1.0 million in selling and administrative expenses, despite a EUR 0.8 million rise in finance costs.
OPEX breakdown by type
Selling and administrative expenses
In the first half of 2024, marketing and salary expenses were lower compared to the same period in 2023.
Also, the Group is evaluating other cost components.
Results by segment: crop growing
Comparing July 2024 to July 2023, the price of organic food wheat has remained similar while the price of feed wheat is slightly lower.
One of the lowest conventional wheat MATIF prices in recent years.
Rapeseed MATIF price increased (from EUR 444 to EUR 470 per tonne) from the beginning of 2024 to 31st of August 2024.
Revaluation of biological assets
The results of Q2 are worse compared to the Q1 due to lower forecasted yields and prices.
In the third quarter, lower results are also expected due to:
- a decrease in actual rapeseed and legumes yields.
- the partial transition to conventional farming entailed higher costs.
Gain (loss) on initial recognition of biological asset at fair value per quarter, EUR '000
Financial results
The decline in sales revenue during the first half of 2024 resulted from lower quantity and prices of goods sold compared to the same period 2023.
The Group accounted less in subsidies compared to the same period last year due to partial transition to conventional farming, as this was not yet foreseen in the first half of 2023. Despite this, the Group plans to receive a similar amount of subsidies throughout the year when compared to 2023.
| 2024 6M |
2023 6M |
Variance | 2022 6M |
|
|---|---|---|---|---|
| Total cultivated land, ha | 37,758 | 38,190 | -1% | 38,525 |
| EUR million | 2024 6M |
2023 6M |
Variance | 2022 6M |
| Total gain (loss) on revaluation of biological assets (crops) |
1.89 | 1.56 | +19% | 9.62 |
| Gain (loss) on revaluation of biological assets (crops) recognized in previous period |
1.29 | 1.97 | -35% | 2.33 |
| Gain (loss) on revaluation of biological assets (crops) recognized in current period |
0.56 | (0.40) | n/a | 7.29 |
| Sales revenue | 9.42 | 13.74 | -31% | 8.85 |
| Cost of sales | (11.08) | (15.61) | -29% | (8.08) |
| Inventory write-offs | (0.55) | (0.05) | +988% | (0.76) |
| Result of internal transactions |
(1.10) | (1.46) | -24% | (0.71) |
| Result of sales of agricultural produce |
(3.31) | (3.38) | -2% | (0.70) |
| Subsidies | 4.28 | 5.03 | -15% | 4.70 |
| Gross profit | 1.52 | 1.25 | +22% | 11.29 |
Land consolidation and efficiency improvement
After assessing the long-term performance of farms and the efficiency of the land under cultivation, the Group decided to discontinue its operations on unproductive land areas:
- 3300 ha in the Mažeikiai region;
- 432 ha across various locations in Lithuania.
Result: the smaller area of land will not only improve overall results but will also reduce the need for working capital.
Results by segment: dairy
Yield and price dynamics
Milk yield per cow was 11% higher in 2024 Q2 vs. 2023 Q2 and was the highest in the last three years.
The Group's average milk price of 2024 Q2 was affected by the conversion of two farms to conventional farming.
Milk prices have also slightly decreased in 2024 Q2 due to seasonality, but recovery can be seen in July.
12 Source: www.ami-informiert.de , https://www.bmel-statistik.de/ , https://ec.europa.eu/agriculture/market-observatory/milk,https://zudc.lt/statistika/2024-m-pieno-sektoriaus-vidaus-rinka/
Dairy
Financial results
The 5% increase in the prices of raw milk resulted in a gross profit.
Despite the increased quantity sold, the cost of milk decreased, leading to a lower cost per tonne. Comparing the first half of 2024 with the first half of 2023, there was an 16% decrease.
In the second half of the year, a further reduction in costs is planned, as grass feed will be produced from the conventional harvest.
| 2024 6M |
2023 6M |
Variance | 2022 6M |
|
|---|---|---|---|---|
| Sales volume*, t |
14,649 | 13,459 | +9% | 13,924 |
| Milk | 13,759 | 12,421 | +11% | 13,278 |
| Milk commodities | 318 | 632 | -50% | 235 |
| Cattle | 572 | 406 | +41% | 411 |
| EUR million | 2024 6M |
2023 6M |
Variance | 2022 6M |
| Sales revenue | 8.33 | 7.77 | +7% | 8.14 |
| Milk | 6.33 | 5.42 | +17% | 6.60 |
| Milk commodities | 1.02 | 1.76 | -42% | 0.81 |
| Cattle | 0.98 | 0.59 | +66% | 0.73 |
| Cost of sales | (7.27) | (8.02) | -9% | (7.18) |
| Milk | (5.30) | (5.71) | -7% | (5.66) |
| Milk commodities | (0.99) | (1.72) | -43% | (0.79) |
| Cattle | (0.98) | (0.59) | +66% | (0.73) |
| Revaluation of biological assets | (1.53) | (1.45) | +5% | (1.09) |
| Subsidies | 1.33 | 1.56 | -15% | 1.43 |
| Gross profit | 0.86 | (0.14) | n/a | 1.29 |
Results by segment: mushroom growing
Mushroom growing
Price and production volume dynamics
Price of mushrooms excluding transport and packaging continues to remain higher YoY.
Even though production volume is slightly lower, it did not affect result negatively, as mushrooms produced were more profitable.
Price of mushrooms (excl. transport and packaging), EUR/t
Mushroom growing
Financial results
Financial result in H1 2024 is similar to H1 2023. Even though costs slightly increased, it was compensated by rising sale prices.
Gross profit in H1 2024 was a bit lower compared to H1 2023 - it was mostly affected by lower sales of the secondary product (compost).
| 2024 6M |
2023 6M | Variance | 2022 6M |
|
|---|---|---|---|---|
| Mushrooms sales volume, t | 5,541 | 5,830 | -5% | 6,109 |
| Average price (EUR/t) | 2,767 | 2,569 | +8% | 2,297 |
| EUR million | 2024 6M |
2023 6M |
Variance | 2022 6M |
| Total sales revenue | 15.49 | 15.28 | +1% | 14.28 |
| Mushrooms sales revenue |
15.33 | 14.98 | +2% | 14.03 |
| Compost sales revenue |
0.16 | 0.30 | -47% | 0.25 |
| Cost of sales |
(14.55) | (14.28) | +2% | (14.62) |
| Gross profit | 0.94 | 1.00 | -6% | (0.33) |
Results by segment: FMCG
FMCG
Growing segment
The new line of dairy products was launched in 2023Q2. Dairy products sales have continuously increased almost each quarter.
In 2024Q2 yoghurts, which have higher profitability, were introduced.
| EUR million | 2024 6M | 2023 6M* | Variance |
|---|---|---|---|
| Sales revenue | 1.42 | 0.49 | +190% |
| Cost of goods sold | (1.30) | (0.78) | +67% |
| Gross profit | 0.12 | (0.29) | n/a |
*Segment results comprise continuing operations (excl. Grybai LT)
The new FMCG product line revenue structure, EUR thousands
Outlook for 2024, Strategy and Tech Update
Technology update: enlisting partners for tech portfolio growth
In the second quarter of 2024, the Group unveiled its Mission no cost to nature portfolio and announced that AUGA Tech, UAB is enlisting external financial and industry partners to bring these technologies to market:
AUGA M1 AUGA E1 Cattle Tech
Correction to the EBITDA guidance for 2024
Share price information
The share price decreased by 36% (from EUR 0.300 to EUR 0.193 per share) from the beginning of 2024 to 31st of August 2024.
The average monthly turnover was EUR 0.19 million.
AUGA group, AB share price on Nasdaq Vilnius, EUR
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.
