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FirstFarms Interim / Quarterly Report 2021

Aug 25, 2021

3433_rns_2021-08-25_b93a90ac-e070-406a-ae8d-0bfaf13914d6.pdf

Interim / Quarterly Report

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FirstFarms

Company announcement no. 15/2021

25 August 2021

Interim financial report for 1 January – 30 June 2021 for FirstFarms A/S

High prices on crops and upward adjustment

FirstFarms A/S has in the first half year of 2021 realised the highest prices on crops in history but has also experienced significantly lower pig prices compared to first half year 2020. As FirstFarms is not dependent on individual branches of operation, the company can still present a satisfactory result for first half year of 2021 and adjust the expectations upwards.

The Board of Directors and Management of FirstFarms A/S have today reviewed and adopted the unaudited interim financial accounts for the period 1 January – 30 June 2021.

FirstFarms has in the accounting period realised:

  • A turnover of 143 mDKK
  • An EBITDA of 57 mDKK
  • An EBIT of 36 mDKK
  • A pre-tax result of 25 mDKK

The high crop prices have had a knock-on effect on the sale of crops from the 2020 harvest, as well as on the value adjustment of inventories from the 2021 harvest. Overall, there is as of 30 June 2021 a value adjustment on inventories of 18 mDKK against 9 mDKK in 2020.

However, a lower EBITDA was realised compared to the same period last year (56.9 mDKK against 65.3 mDKK in 2020). The most significant reasons are revenue recognition of a negative goodwill of 19.7 mDKK in 2020 when acquiring an agricultural company in Northwest Romania and significantly lower pig prices in first half year of 2021 compared to first half year of 2020.

The turnover on pigs is 22 mDKK lower compared to first half year 2020, production and efficiency is however at the same level as previous period. The value adjustment on pigs is positive with 5.5 mDKK against a negative value adjustment in first half year 2020 of 8.5 mDKK, which can be attributed to the fact that the value at the end of 2020 was very low.

Thus, the net effect on the pig production on turnover and value adjustment is negative with 8 mDKK compared the first half year 2020.

"As part of our strategy of risk diversification, FirstFarms' turnover and earnings are divided on four branches of operation; crops, milk, pigs and land development. We are therefore not dependent on individual branches of operation, which is crucial for us to be able present a satisfactory result for first half year 2021," says CEO Anders H. Nørgaard and continues:

"Our business model is robust and stable in a market that has been very volatile over the past 18 months. Thus, the very low pig prices in first half year 2021 are set off by high crop prices and stable yield. In 2020, we experienced very high pig prices in first half year, while experiencing drought in individual areas. This way, stable results emerge as the individual business areas are not directly coherent".

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Branches of operations

  • The milk price has been on par with the budget, while the efficiency and production have been better than both expected and same period last year.
  • The prices for piglets and slaughter pigs have increased during first half year from a historically low level. The herd is adjusted with 5.5 mDKK against -8.5 mDKK in the same period last year.
  • Overall, the harvest of the autumn crops has been better than budgeted and significantly above 2020. The spring crops are satisfactory at this stage.

Overall a satisfactory half year, and an expected sale of activities in Romania the next 4-8 months and an expectation of slightly higher prices for pigs, means that FirstFarms adjusts the expectations upwards for 2021:

  • An EBITDA in the level of 100-120 mDKK
  • An EBIT of 50-70 mDKK

In 2020, an EBITDA of 100 mDKK and an EBIT of 54 mDKK was realised, which was historically good. If the expectations for this year are met, 2021 will be better than the result for 2020.

"FirstFarms' journey of growth continues. We continue to develop and operate agriculture with respect for the surrounding communities, and we will continue to deliver products of the highest quality, which are primarily sold and consumed locally. Last but not least, we continue to develop towards more sustainable agriculture while executing on new opportunities that also create value for the consumers and our investors," says Anders H. Nørgaard.

Best regards,

FirstFarms A/S

For further information:

Please visit our website www.firstfarms.com or contact CEO Anders H. Nørgaard on telephone +45 75 86 87 87.

About FirstFarms:

FirstFarms is a Danish stock exchange listed company. We operate FirstFarms with responsibility for the surrounding communities, and we deliver highest quality which is primarily sold locally. We act on new opportunities, that create value for our investors and for the surroundings. Every day, we work on creating a more sustainable company.

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majemarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Main and key ratios

The Group Q1+Q2 The Group Q1+Q2 The Group Q2 The Group Q2 The Group
tDKK 2021 2020 2021 2020 2020

Main figures

Turnover 143,384 151,845 67,186 69,282 312,616
Gross profit/loss 45,716 31,029 10,652 11,192 24,916
Result before depreciations (EBITDA) 56,854 65,422 33,469 42,037 100,204
Profit/loss of primary operations (EBIT) 35,911 39,759 19,788 25,602 54,240
Net financial items -10,597 -10,926 -5,047 -5,452 -22,838
Pre-tax result 25,314 28,833 14,741 20,150 31,402
Net profit 18,788 25,892 11,044 19,006 24,794
Non-current assets 948,503 961,835 948,503 961,835 954,069
--- --- --- --- --- ---
Current assets 233,163 235,436 233,163 235,436 187,886
Total assets 1,181,666 1,197,271 1,181,666 1,197,271 1,141,955
Share capital 76,540 75,167 76,540 75,167 75,666
Equity 503,906 482,566 503,906 482,566 483,477
Non-current liabilities 463,553 491,099 463,553 491,099 461,134
Current liabilities 214,207 223,606 214,207 223,606 197,344
Cash flow from primary operations 13,168 47,298 -12,149 -25,317 79,572
--- --- --- --- --- ---
Cash flow from operations 1,434 32,129 -18,111 -19,545 47,172
Cash flow for investment, net -10,399 -28,435 -1,708 8,691 -13,217
Of which for investment in tangible assets -15,343 32,779 -3,064 12,279 -93,561
Cash flow from financing 4,996 216 9,875 4,879 -29,259
Total cash flow -3,968 3,910 -9,943 -5,975 4,696

Key figures

Gross margin 31.9 20.4 15.9 16.2 7.9
EBITDA margin 39.7 43.1 49.8 60.7 32.1
Operating margin 25.0 26.2 29.5 37.0 17.4
Solvency ratio 42.6 40.3 42.6 40.3 42.0
Earnings per share, DKK 2.5 3.4 1.4 2.5 3.6
Diluted earnings per share, DKK 2.2 2.9 1.3 2.1 3.4
Return on shareholders' equity 7.6 11.8 8.9 17.4 5.7
Average number of employees 310 318 312 318 334
--- --- --- --- --- ---

EBITDA = EBIT added depreciations of the period.

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Management report for the period 1 January – 30 June 2021

FirstFarms has in the accounting period realised a turnover of 143 mDKK, an EBITDA of 57 mDKK, an EBIT of 36 mDKK and pre-tax result of 25 mDKK.

EBITDA and EBIT have decreased with 9 mDKK and 4 mDKK, respectively, compared to the same period last year. This is mainly due to the income in first half year 2020 of 20 mDKK on the acquisition of a West Romanian land company.

In the first half year, the equity has increased by 20.5 mDKK, due to early conversion of bonds for 5.0 mDKK, a result of 18.8 mDKK, an exchange rate adjustment of 1.3 mDKK, adjustment of hedging instrument of 1.0 mDKK and payment of dividends of 5.6 mDKK.

In the first half year, the milk price has been on par with the budgeted, whereas the efficiency and production has been better than expected.

The prices on piglets and slaughter pigs have in average been lower than budgeted in the first half year but ended at budgeted level. The prices have afterwards decreased a little, but FirstFarms expects an increase again in the coming months.

The harvest of autumn crops is finished. In total, the result has been higher than budgeted, contemporary with the prices being very beneficial. Currently, the spring crops look satisfactory, there is however large differences due to the geographical spread. In the places, where the crops are less satisfactory are due to large periods without rain.

The sale of activities in Romania runs as planned and is expected to be carried out over the next 4-8 months.

The operation and sales have to a minor extent been affected by consequences of COVID-19 or restrictions hereof.

Risk assessment

FirstFarms has in the annual report for 2020 described the most essential risks for the company, and it is the management's opinion that this description is still adequate. The annual report and the risk assessment can be found on the company's website www.firstfarms.com.

Accounting policies

The interim financial report is prepared in accordance with IAS 34 "Presentation of interim financial reports" as adopted by the EU and Danish disclosure requirements for listed companies.

Accounting policies are unchanged compared to the consolidated financial statement and annual report for 2020, to which is referred.

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Expectations for 2021

FirstFarms adjusts upward the announced expectations to 2021, to an EBITDA in the level of 100-120 mDKK and an EBIT of 50-70 mDKK.

Announced expectations 2021

mDKK EBITDA EBIT
25 August 2021 (company announcement no. 15) 100-120 50-70
26 May 2021 (company announcement no. 11) 95-115 45-65
25 March 2021 (company announcement no. 4) 85-115 35-65

Financial calendar for 2021

24 November 2021 Interim financial report 1 January – 30 September 2021

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Management statement

The Management and Board of Directors of FirstFarms have today discussed and approved the interim financial report of FirstFarms A/S for the period 1 January – 30 June 2021.

The interim financial accounts, which has not been audited or reviewed by the independent auditors of the Company, has been prepared in accordance with IAS 34 – “Interim Financial Reporting” as adopted by the EU and additional Danish disclosure requirements for interim reports of listed companies.

In our opinion the interim financial accounts give a true and fair view of the Group’s assets, liabilities and financial position at 30 June 2021 and of the results of the Group’s operations and cash flows for the period 1 January – 30 June 2021.

Further, in our opinion the Management’s review gives a true and fair overview of the development in the Group’s operations and financial matters, the results of the Group’s operations and the Group’s financial position as a whole.

Billund, 25 August 2021

Management

Anders H. Nørgaard
CEO

Board of directors

Henrik Hougaard
Chairman

Asbjørn Børsting
Vice Chairman

Jens Bolding Jensen

Karina Boldsen

Bendt Wedell

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Income statement

tDKK The Group The Group The Group The Group The Group
Q1+Q2 Q1+Q2
2021 2020 Q2 2021 Q2 2020 2020
Turnover 143,384 151,845 67,186 69,282 312,616
Value adjustment of biological assets 23,659 1,851 10,652 -906 -25,186
Production costs -148,091 -144,906 -67,293 -67,856 -315,792
Grants 26,764 22,239 14,575 10,672 52,981
Gross profit/loss 45,716 31,029 25,120 11,192 24,619
Other operating income 2,132 20,235 804 20,233 54,857
Administration costs -11,937 -11,505 -6,136 -5,823 -25,236
EBIT result 35,911 39,759 19,788 25,602 54,240
Financial income 379 126 204 108 939
Financial costs -10,976 -11,052 -5,251 -5,560 -23,777
Pre-tax result 25,314 28,833 14,741 20,150 31,402
Tax on net profit -6,526 -2,941 -3,697 -1,144 -6,608
Net profit 18,788 25,892 11,044 19,006 24,794
Earnings per share, DKK 2.45 3.44 1.44 2.53 3.57
Diluted earnings per share, DKK 2.19 2.91 1.26 2.06 3.36

Total income statement

The Group The Group The Group The Group The Group
Q1+Q2 Q1+Q2 Q2 Q2
tDKK 2021 2020 Q2 2021 Q2 2020 2020
Net profit 18.788 25.892 11.044 19.006 24.794
Other total income
Items, which can be re-classified to the income statement:
- Exchange rate adjustments by conversion of foreign units 1,298 -8,540 3,176 7 -9,112
Hedging instruments
- Value adjustment of the year 1,531 -386 445 -111 -2,175
- Value adjustment re-classified to financial items -243 -487 3 -304 900
- Tax of other total income -270 184 -94 88 267
Other total income after tax 2,316 -9,229 3.530 -320 -10,120
Total income 21,104 16,663 14,574 18,686 14,674

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Balance

The Group The Group The Group
tDKK Q1+Q2 2021 Q1+Q2 2020 2020
ASSETS
Non-current assets
Intangible assets
Goodwill 16,083 16,047 16,083
Total intangible assets 16,083 16,047 16,083
Tangible assets
Land 528,546 526,918 536,744
Buildings 233,225 228,291 227,371
Plant and machinery 90,140 105,240 95,996
Fixtures and fittings, tools and equipment 5,301 5,020 5,682
Fixed assets under construction 27,107 28,506 27,061
Total tangible assets 884,319 893,975 892,854
Biological assets
Basic herd 42,705 42,028 39,734
Total biological assets 42,705 42,028 39,734
Other non-current assets
Deferred tax asset 5,396 9,785 5,398
Total other non-current assets 5,396 9,785 5,398
Total non-currents assets 948,503 961,835 954,069
Current assets
Inventories 39,212 34,962 76,404
Biological assets - breeding and crops 137,937 137,200 64,593
Receivables 18,900 26,833 18,770
Other receivables 31,103 26,949 18,125
Accruals and deferred expenses 2,226 2,678 2,241
Cash at bank and in hand 3,785 6,814 7,753
Total current assets 233,163 235,436 187,886
TOTAL ASSETS 1,181,666 1,197,271 1,141,955

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

The Group The Group The Group
tDKK Q1+Q2 2021 Q1+Q2 2020 2020
EQUITY AND LIABILITIES
Equity
Share capital 76,540 75,167 75,666
Reserve for exchange rate adjustment -36,171 -36,897 -37,469
Transferred result 463,537 444,296 439,605
Proposed dividend 0 0 5,675
Total equity 503,906 482,566 483,477
Liabilities
Non-current liabilities
Deferred tax 49,055 49,594 43,618
Credit institutions 257,114 250,934 251,967
Convertible bonds 107,941 118,988 112,946
Other non-current debt 49,443 71,583 52,603
Total non-current assets 463,553 491,099 461,134
Current liabilities
Credit institutions 111,376 118,075 105,852
Convertible bonds 6,350 3,229 6,350
Trade payables and other payables 82,060 83,111 70,300
Corporation tax 223 0 0
Accruals and deferred income 14,198 19,191 14,842
Total current liabilities 214,207 223,606 197,344
Total liabilities 677,760 714,705 658,478
TOTAL EQUITY AND LIABILITIES 1,181,666 1,197,271 1,141,955

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Equity statement (Condensed)

tDKK The Group The Group
Q1+Q2 2021 Q1+Q2 2020
EQUITY STATEMENT
Equity 1 January 483,477 392,315
Result of the period 18,788 25,892
Other total income 2,316 -9,229
Conversion of bonds and issuance of shares 5,000 73,588
Dividend -5,675 0
Total income for the period 20,429 90,251
Equity 30 June 503,906 482,566

Cash flow statement

tDKK The Group The Group
Q1+Q2 2021 Q1+Q2 2020
Pre-tax result 25,314 28,833
Adjustment of non-cash items 7,201 5,927
Change in working capital -19,347 12,538
Cash flow from primary activities 13,168 47,298
Cash from ordinary operations and paid taxes -11,734 -15,169
Cash flow from operating activities 1,434 32,129
Cash flow from investing activities -10,399 -28,435
Cash flow from financing activities 4,996 216
Cash flow in the period -3,968 3,910
Available, at the beginning 7,753 3,057
Exchange rate adjustment of available 0 -153
Available at closing 3,785 6,814

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Segment information

| Q1+Q2 2021
tDKK | Romanian activities | Slovakian activities | Hungarian activities | Czech activities | Total report compulsory segments |
| --- | --- | --- | --- | --- | --- |
| Total segment turnover | 10.255 | 83.615 | 19.331 | 36.395 | 149.596 |
| Grants | 5.257 | 16.553 | 976 | 3.978 | 26.764 |
| Value adjustment of biological assets | 10.000 | 10.028 | 2.712 | 919 | 23.659 |
| Financial income | 29 | 1.762 | 24 | 36 | 1.851 |
| Financial costs | -399 | -4.712 | -587 | -622 | -6.320 |
| Depreciations | -2.486 | -14.903 | -1.349 | -2.205 | -20.943 |
| Segment result before tax | 9.407 | 17.971 | 3.452 | 4.935 | 35.765 |
| Segment assets | 332.111 | 665.468 | 87.834 | 163.931 | 1.249.344 |
| Plant investments *) | 859 | 8.428 | 5.863 | 193 | 15.343 |
| Segment liabilities | 172.584 | 428.059 | 64.292 | 68.935 | 733.870 |

*) Plant investments are investments in machinery, land and buildings.

| Q1+Q2 2020
tDKK | Romanian activities | Slovakian activities | Hungarian activities | Czech activities | Total report compulsory segments |
| --- | --- | --- | --- | --- | --- |
| Total segment turnover | 9,380 | 83,079 | 28,637 | 41,191 | 162,287 |
| Grants | 6,099 | 13,878 | 1,026 | 1236 | 22,239 |
| Value adjustment of biological assets | -4,400 | 7,883 | -2,437 | 805 | 1,851 |
| Financial income | 10 | 73 | 11 | 32 | 126 |
| Financial costs | -2,758 | -3,867 | -1,461 | -794 | -8,880 |
| Depreciations | -7,136 | -15,178 | -1,417 | -1,909 | -25,640 |
| Segment result before tax | 11,002 | 16,845 | 6,573 | 1,154 | 35,574 |
| Segment assets | 362,318 | 601,282 | 93,991 | 144,287 | 1201,878 |
| Plant investments *) | 12,279 | 17,799 | 1,761 | 940 | 32,779 |
| Segment liabilities | 234,636 | 367,250 | 66,471 | 57,046 | 725,403 |

*) Plant investments are investments in machinery, land and buildings.

Reconciliation of report compulsory segments result
tDKK Q1+Q2 2021 Q1+Q2 2020
Segment result before tax for report compulsory segments 35,765 35,574
Non-allocated result, Group function -10,451 -6,741
Result of continued operations before tax, cp. income statement 25,314 28,833

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund


FirstFarms

Turnover

tDKK Q1+Q2 Q1+Q2
2021 2020
Sale of milk 37,166 32,652
Sale of cows and calves 1,915 2,596
Sales of piglets and slaughter pigs 66,314 88,293
Sale of corn etc. 30,574 24,382
Other turnover 7,416 3,922
Total 143,384 151,845

Company announcement no. 15/2021 for FirstFarms A/S

FirstFarms A/S

Majsmarken 1 – 7190 Billund – Danmark – Tel.: +45 7586 8787

www.firstfarms.dk – www.firstfarms.com – [email protected]

CVR no.: 28312504 – Registered office: Billund