FULL-YEAR RESULTS 2017 Agenda Founded Goodvalley in 1994 - PowerPoint PPT Presentation

FULL-YEAR RESULTS 2017

Agenda Founded Goodvalley in 1994 Goodvalley since 2016 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. 2

Welcome to Goodvalley ● Vertically integrated food producer Russia ● Pig farming Platform in place ● Slaughtering and meat processing Denmark Copenhagen ● Arable and feed mills Headquarters ● Biogas production ● Danish pig farming principles ● Strong market drivers and fundamentals Poland ● Profitable growth since 1994 #2 pig producer Revenue by geography Revenue by segment Ukraine 2% 11% 3% #3 pig producer 4% 10% 44% 54% 25% 47% Poland Pig Ukraine Food Russia Arable Pig Food Arable Energy Rest of World Energy Other 3

Group highlights 15% 30.6 pigs per sow Global GAP Revenue grew 15% to DKK 1,620 million Efficiency improved and outperformed Efforts to promote food safety driven by higher market prices EU and USA averages recognised with Global GAP certification DKK 426m 2.8 kilo RWA Record EBITDA of DKK 426 million, Stable and low feed conversion ratio of Goodvalley grew sales of the new yielding an EBITDA margin of 26.3% 1 2.8 kilo feed per kilo pork RWA and GMO-free products EUR 135m 5.8 tonnes 2018 Solid capital structure in place The average crop yield per hectare We expect strong earnings in 2018 with following successful bonds issue increased to 5.8 tonnes from 5.1 tonnes Adjusted EBITDA of DKK 340-425 million 1 Margins are calculated based on revenue compared to previously announced margins, which were calculated based on total income. F ollowing this change in presentation, the Group’s EBITDA of DKK 426 million corresponds to an EBITDA margin of 26.3% in 2017 (2016: 24.7%) against 25.8% (2016: 21.9%) as most recently reported in company announcement 2/2018 on 8 February 2018. 4

Market drivers $ Growing demand and preference for pork meat High quality land at affordable prices $ Net importers of pork meat Relatively low labour costs Potential for increasing local consumption Local supply of crops for feed Increasing disposable income Efficiency gains from Danish farming knowhow 5

Market developments Maturing market High growth potential Economic and political support • • • Consumption in line with EU-28 Low consumption on the rise Consumption expected to increase • • • Great consolidation potential GDP growth drives normalisation Producers focus less on efficiency • • • 54% 25% 10% of total of total of total 4% 46% 9% growth growth growth Goodvalley (Poland) Goodvalley (Ukraine) Goodvalley (Russia) EU average 1 25 % 2015 2016 2017E 2018F 2019F 20 Poland 3.8 2.9 4.5 4.0 3.5 15 Ukraine (9.8) 2.3 2.0 3.5 4.0 10 Russia (2.8) (0.2) 1.7 1.7 1.8 5 Euro area 2.1 1.8 2.4 2.1 1.7 0 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 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 6

Pig segment 19% higher average price on slaughter pigs boosted revenue • Revenue grew 18% to DKK 1,135 million 35 30.6 30.4 29.6 • Reduced intake of slaughter pigs in Food segment due to high 30 26.8 26.1 price 25 20 2013 2014 2015 2016 2017 Earnings driven by efficiency and positive market conditions • Adjusted EBITDA grew 54% to DKK 374 million 2.9 2.9 2.9 • Stable feed price ensured attractive meat to feed ratio of 7.5 2.8 2.8 2.8 2.8 2.7 2.6 2.5 2013 2014 2015 2016 2017 DKK million 2017 2016 Q4 2017 Q4 2016 External revenue 701 552 155 153 Internal revenue 434 408 99 101 14.2 15 12.8 11.9 11.2 10.0 1,135 959 254 254 7.5 7.5 10 7.2 6.5 6.3 368 289 27 48 5 374 243 83 73 0 2013 2014 2015 2016 2017 33.0% 25.3% 32.7% 28.7% 7

Food segment Reduced intake of slaughter pigs due to high prices • Revenue slightly down with an unchanged product split 60 55 51 50 50 46 • Activity shifted to Pig segment to optimise Group profitability 42 40 30 20 Earnings impacted by higher input prices and reduced activity 2013 2014 2015 2016 2017 • EBITDA declined due to high input prices • Ready to re-balance activity to Food segment at lower prices MAP 19% 57% Deboned 24% Processed DKK million 2017 2016 Q4 2017 Q4 2016 767 774 184 182 (9) 25 (5) 0 (1.2%) 3.2% (2.7%) 0.2% 8

Arable and Energy segments High yield in Ukraine and Russia lifted Arable revenue 5.8 • Revenue grew 22% as the average yield per hectare increased to 5.8 5.3 6 5.1 4.9 4.1 • EBITDA grew 45% despite adverse weather conditions in Poland 4 2 0 Strong performance in Energy from high output and prices 2013 2014 2015 2016 2017 • Revenue up 55% on back of new support schemes in Poland • Higher output and efficiency contributed to strong EBITDA growth 80 62 63 58 55 60 53 40 20 0 2013 2014 2015 2016 2017 DKK million 2017 2016 Q4 2017 Q4 2016 DKK million 2017 2016 Q4 2017 Q4 2016 External revenue 54 37 1 - External revenue 61 40 19 19 Internal revenue 121 106 54 41 Internal revenue 24 15 12 3 175 143 55 41 85 55 31 22 39 27 8 7 17 7 4 7 22.3% 18.9% 14.5% 17.1% 20.0% 12.7% 12.9% 31.8% 9

Group financials Strong revenue growth driven by Pig, Arable and Energy • Revenue grew 15% to DKK 1,620 million 2,000 1,620 1,405 1,270 1,275 1,500 1,209 • High pig prices entailed best-ever performance 1,000 500 0 Record profitability based on revenue growth and high efficiency 2013 2014 2015 2016 2017 • EBITDA increased 22% to DKK 426 million • Strengthened operational performance and efficiency 29.9% 26.3% 30 24.7% 22.3% 21.0% 20 Solid cash flow development 10 • Operating cash flows grew 21% and free cash flows by 49% 0 2013 2014 2015 2016 2017 DKK million 2017 2016 Q4 2017 Q4 2016 1,620 1,405 388 363 426 347 44 57 300 274 242 227 211 6 (49) 55 25 200 162 431 299 99 82 100 26.6% 21.3% 25.5% 22.6% 0 2013 2014 2015 2016 2017 26.3% 24.7% 11.3% 15.7% 10

Outlook 2018 Goodvalley expects strong revenue and earnings in 2018 DKK million 2018 outlook 2017 actuals • Revenue of DKK 1,550-1,700 million Revenue 1,550-1,700 1,620 • Adjusted EBITDA of DKK 340-425 million Adjusted EBITDA 340-425 431 Reported EBITDA 2017 - 426 Performance is expected to be impacted by • Continued high production efficiency • Good stock of quality crops harvested • Adverse impact of lower pig prices 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. 11

Strategy New geographies Strengthen consumer focus  Expansion into selected Capacity expansion new markets  Branded premium products  Acquisitions or greenfield Optimisation tailored to specific markets  Clear selection criteria  Increase pig production  Margin expansion and reduced exposure to bulk market  Feed, land base and green energy  Sustainability and Danish  Capitalising on sustainability  New slaughterhouse in Ukraine knowhow and environmental protection and expansion in Poland  Superior efficiency standards  Outperforming peers on KPIs    12

Strategy Slaughtering, Meat Feed Crop growing Pig production cutting and processing and production deboning marketing Bioenergy production Poland Fully integrated production Ukraine Partly integrated production From 2019 Russia Partly integrated production       13

Questions 14

Contact information 10 April Annual General Meeting 29 May Q1 interim report 29 August Q2 interim report 29 November Q3 interim report 15

Appendix 16