Annual Report 2018 CONFERENCE CALL CONFERENCE CALL 29 28 FEBRUARY - - PowerPoint PPT Presentation

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Annual Report 2018 CONFERENCE CALL CONFERENCE CALL 29 28 FEBRUARY - - PowerPoint PPT Presentation

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Annual Report 2018 CONFERENCE CALL CONFERENCE CALL 29 28 FEBRUARY 2019 FEBRUARY 2019 Agenda SPEAKERS GROUP HIGHLIGHTS MARKETS SEGMENTS GROUP FINANCIALS OUTLOOK 2018 STRATEGY Q&A SESSION TOM AXELGAARD HANS HENRIK PEDERSEN CEO

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CONFERENCE CALL

28 FEBRUARY 2019

Annual Report 2018

CONFERENCE CALL 29 FEBRUARY 2019

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FULL-YEAR 2017 CONFERENCE CALL

Agenda

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DISCLAIMER This presentation contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond Goodvalley A/S’ control, may cause actual developments and results to differ materially from the expectations contained in the presentation.

GROUP HIGHLIGHTS MARKETS SEGMENTS GROUP FINANCIALS OUTLOOK 2018 STRATEGY Q&A SESSION

SPEAKERS

TOM AXELGAARD CEO

Founded Goodvalley in 1994

HANS HENRIK PEDERSEN CFO

Goodvalley since 2016

FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Group highlights

STRONG OPERATIONAL PERFORMANCE POSITION GOODVALLEY FOR FUTURE GROWTH

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11) In the report, Adjusted EBITDA refers to EBITDA before non-recurring items adjusted for herd price changes, cf. page 8.

SOLID FINANCIALS STRONG EFFICIENCY IN SHAPE FOR THE FUTURE

DKK 1,473m

Revenue declined by 9% to DKK 1,473 million driven by lower pig and pork prices and volumes

DKK 222m

Goodvalley realised a solid Adjusted EBITDA despite lower pig and pork prices and harsh weather conditions

31.6 pigs per sow

Goodvalley improved efficiency in terms

  • f sold pigs per sow from 30.6 in 2017

to 31.6 in 2018, being among the leading manufacturers relative to both the average in EU and North America

2.75 kilo

Continued focus on effecient and sustianable production allowed for a stable and attractive whole herd feed conversion ratio

Stable upgrades

The Group completed a series of stable Upgrades enabling higher production capacity and efficiency as well as animal welfare improvements

Branded products

Goodvalley launched its first range of Goodvalley branded products in stores across Poland, offering a premium selection

  • f climate friendly GMO-free products

from pigs raised without antibiotics.

Climate

Goodvalley obtained verification of CO2 neutrality at Group level in 2018 after having been verified as CO2 neutral in Poland since 2013

2019

Goodvalley expects revenue in the range

  • f DKK [1,400-1,550] and Adjusted EBITDA
  • f DKK [220-280]

36,500 hectares

The landbank increased by an additional 6,500 hectares in Ukraine and 2,000 hectares in Russia increasing the Group’s total land bank by 30% amounting to a total

  • f approximately 36,500 hectares.

FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Market developments

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1 EU average based on EU (weighted average) market prices for pig carcass grade E in the E.U. (European Commission)

Source: Company information and World Bank (Global Economy Prospects, January 2018). Real growth based on constant 2010 U.S. dollar GDP weights

5 10 15 20 25

Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017

2014-2017 PIG PRICES DKK/KG (CARCASS WEIGHT )

Goodvalley (Ukraine) Goodvalley (Poland) Goodvalley (Russia)

POLAND

  • Solid market
  • Introducing premium branded

products

REVENUE UKRAINE

  • New renovations and upgrades
  • Increasing consumption of pork

REVENUE RUSSIA

  • Improved operational performance
  • Lower feed prices

REVENUE

52%

  • f total
  • 12%

growth

27%

  • f total
  • 2%

growth

12%

  • f total

5%

growth

EU average1

FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Pig segment

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The average price decreased slightly with 1.1% to DKK 10.68 per kilo.

  • Revenue declined 6.1% to DKK 247 million
  • Slaughter pigs volume declined due to reduced capacity

Earnings driven by higher efficiency and lower feed consumption

  • Adjusted EBITDA declined 22% to DKK 57 million
  • Stable feed price ensured attractive meat to feed ratio of 7.1

DKK million 2018 2017 Q4 2018 Q4 2017 External revenue 605 701 130 155 Internal revenue 420 434 131 99 REVENUE 1,025 1,135 261 254 EBITDA 200 368 1 27 ADJUSTED EBITDA 210 374 30 83 ADJUSTED EBITDA MARGIN 20.5% 33.0% 11.5% 32.7% PIGS SOLD PER SOW PER YEAR, HEADS FEED CONVERSION RATIO, KG (WHOLE HERD) PIG PRICE, DKK/KG AND MEAT TO FEED RATIO

20 25 30 35 2017 2015 29.6 30.4 2013 2014 26.8 2016 30.6 26.1 2.7 2.8 2.6 2.9 2.5 2017 2.8 2014 2.8 2013 2.9 2016 2.8 2015 2.9 5 10 15 11.9 2016 10.0 2015 7.5 7.2 11.2 2014 12.8 2013 14.2 6.3 6.5 7.5 2017 FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Food segment

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Increased volume in tonnes sold

  • Revenue increased 4% to 189 million
  • The product mix remained stable

Earnings impacted by lower input prices

  • EBITDA increased due to lower input prices
  • Improved earnings in spite of increased sales weight

DKK million 2018 2017 Q4 2018 Q4 2017 REVENUE 733 767 177 184 EBITDA (17) (9) (11) (5) EBITDA MARGIN (2.3%) (1.2%) (6.2%) (2.7%) SALE OF PORK, THOUSAND TONNES SALES SPLIT, %

50 55 51 46 42 20 30 40 50 60 2016 2015 2017 2014 2013 57% Deboned 24% Processed 19% MAP FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Arable and Energy segments

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Arable revenue increased

  • Revenue grew to DKK 8 million
  • EBITDA was stable at DKK 5 million
  • Expansion of land bank with 6,500 hectares to 34,500 hectares total

Stable performance in Energy from high output

  • Revenue was largely unchanged at DKK 19 million
  • Market price developments caused slight decline in EBITDA to DKK 6

million

DKK million 2018 2017 Q4 2018 Q4 2017 External revenue 38 54 15 1 Internal revenue 140 121 50 54 REVENUE 178 175 65 55 EBITDA 7 39 5 8 EBITDA MARGIN 3.9% 22.3% 7.7% 14.5% GRAIN YIELD, AVG. TONNES PER HECTARE PRODUCED ELECTRICITY, GWH

2 4 6 2017 5.8 2016 5.1 2015 4.9 2014 5.3 2013 4.1 63 58 62 55 53 20 40 60 80 2017 2016 2015 2014 2013

DKK million 2018 2017 Q4 2018 Q4 2017 External revenue 58 61 17 19 Internal revenue 23 24 5 12 REVENUE 81 85 22 31 EBITDA 14 17 3 4 EBITDA MARGIN 17.3% 20.0% 13.6% 12.9%

FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Group financials

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Solid revenue driven by Pig, Arable and Energy

  • Revenue declined 4% to DKK 351 million
  • Strong operational performance

Increased profitability

  • Adjusted EBITDA came to DKK 73 million
  • Net profit increased slightly to DKK 58 million

Solid cash flow development

  • Operating cash flows amounted to DKK 43 million

DKK million 2018 2017 Q4 2018 Q4 2017 REVENUE 1,473 1,620 371 388 EBITDA 212 426 2 44 Herd price adjustment 10 6 30 55 ADJUSTED EBITDA 222 431 32 99 ADJUSTED EBITDA MARGIN 15.1% 26.6% 8.6% 25.5% EBITDA margin 14.4% 26.3% 0.5% 11.3% REVENUE, DKK MILLION EBITDA MARGIN, % OPERATING CASH FLOW, DKK MILLION

1,000 1,500 500 2,000 1,620 2016 1,405 2015 1,275 2014 1,209 2013 1,270 2017 10 20 30 2017 2016 24.7% 2015 22.3% 2014 29.9% 2013 21.0% 26.3% 274 227 162 211 242 100 200 300 2014 2013 2017 2016 2015 FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Outlook 2019

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DKK million 2019 outlook 2018 actuals Revenue 1,400-1,550 1,473 Adjusted EBITDA 220-280 222

Reported EBITDA 2018

  • 212

FINANCIAL OUTLOOK COMMENTS AND ASSUMPTIONS

The earnings outlook is presented at fixed herd price in terms of Adjusted EBITDA to reduce fluctuations in guidance and provide optimum conditions for assessing Goodvalley’s operational efficiency and performance specifically and in isolation from changes in market prices for live pigs, potentially entailing material fair value adjustments of the Group’s biological assets on the balance sheet date. The outlook for 2018 is based on an average market price for live pigs of DKK 11.2 per kilo and current exchange rates as well as the prevailing economic situation in Goodvalley’s markets. The outlook represents our current expectations for the development in the Group’s revenue and Adjusted EBITDA, and Goodvalley’s reported EBITDA may thus deviate significantly from this outlook.

Goodvalley expects strong revenue and earnings in 2019

  • Revenue of DKK 1,400-1,550 million
  • Adjusted EBITDA of DKK 220-280 million

Performance is expected to be impacted by

  • Continued high production efficiency
  • Increased volumes due to increased capacity
  • High crop and feed prices due to bad weather conditions in

2018

FULL-YEAR 2018 CONFERENCE CALL

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Questions

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FULL-YEAR 2017 CONFERENCE CALL

Contact information

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FINANCIAL CALENDAR 2019

TOM AXELGAARD CEO HANS HENRIK PEDERSEN CFO

27 May Q1 interim report 27 August Q2 interim report GOODVALLEY A/S

Vesterbrogade 4A DK-1620 Copenhagen Tel.: +45 76 52 20 01 Mail: investor@goodvalley.com Web: www.goodvalley.com

FULL-YEAR 2018 CONFERENCE CALL

27 November Q3 interim report

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Appendix

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Key figures and financial ratios

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Note: Years 2013-2016 have been restated in accordance with new accounting principles

DKK million 2017 2016 2015 2014 2013 Income statement Revenue 1,620 1,405 1,275 1,209 1,270 Total income 1,653 1,485 1,370 1,414 1,315 Gross profit 511 411 465 520 410 EBITDA 426 347 284 362 267 Adjusted EBITDA 431 299

  • EBIT

304 244 193 260 167 Financial items, net (135) (70) (118) (226) (44) Profit/(loss) for the period 169 174 41 47 123 Cash flow Operating activity 274 227 162 211 242 Investing activity (143) (139) (254) (260) (360) Free cash flow 131 88 (92) (49) (119) Financing activity 28 (71) 66 (121) (111) Balance sheet Non current assets 1,833 1,825 1,832 1,827 2,102 Net working capital 532 491 438 445 474 Invested capital 2,365 2,343 2,269 2,272 2,576 Total assets 2,751 2,655 2,557 2,542 2,843 Equity 1,265 1,232 1,105 1,256 1,532 Net interest-bearing debt 1,100 1,185 1,250 1,151 1,117 DKK million 2017 2016 2015 2014 2013 Key financials Gross margin 31.5% 29.3% 36.5% 43.0% 32.3% EBITDA margin 26.3% 24.7% 22.3% 29.9% 21.0% Adjusted EBITDA margin 26.6% 21.3%

  • EBIT margin

18.8% 17.4% 15.1% 21.5% 13.1% Free cash flow / Revenue 8.1% 6.3% (7.2%) (4.1%) (9.4%) Cash conversion 43.1% 36.1% (56.5%) (18.9%) (71.0%) Investments in property, plant and equipment 141 76 107 76 130 NIBD/Adjusted EBITDA LTM 2.6x 4.0x

  • Equity ratio

46.0% 46.4% 43.2% 49.4% 53.9% ROIC 12.9% 10.6% 8.4% 10.2% 7.2% FTE year end 2,232 2,350 2,423 2,205 2,073 Share ratios Earnings per share, DKK 3.1 3.3 0.8 0.9 2.3

FULL-YEAR 2018 CONFERENCE CALL

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FULL-YEAR 2017 CONFERENCE CALL

Goodvalley Bond Obligor Group1

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1Bond Obligor Group consists of: Goodvalley A/S, Finansax ApS, Poldanor SA, Prime Food SA and Danosha ltd

DKK million 2017 Goodvalley Bond Obligor Group Revenue 1,460 Total Income 1,495 EBITDA 375 Adjusted EBITDA 374 Net interest-bearing debt 1,081 Adjusted EBITDA LTM 374 NIBD/Adjusted EBITDA LTM 2.9

FULL-YEAR 2018 CONFERENCE CALL