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

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

Feb 03, 2024 550 likes •754 views

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

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SLIDE 1

FULL-YEAR RESULTS 2017

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SLIDE 2

Agenda

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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.

Founded Goodvalley in 1994 Goodvalley since 2016

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SLIDE 3

Welcome to Goodvalley

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Denmark

Copenhagen Headquarters

Poland

#2 pig producer

Ukraine

#3 pig producer

Russia

Platform in place

Revenue by geography Revenue by segment 25% 10% 11% 54% 2% 4% 47% 3% 44%

  • Vertically integrated food producer
  • Pig farming
  • Slaughtering and meat processing
  • Arable and feed mills
  • Biogas production
  • Danish pig farming principles
  • Strong market drivers and fundamentals
  • Profitable growth since 1994

Food Pig Energy Ukraine Russia Poland Rest of World Other Energy Arable Food Pig Arable

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SLIDE 4

Group highlights

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1Margins are calculated based on revenue compared to previously announced margins, which were calculated based on total income. Following 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.

15%

Revenue grew 15% to DKK 1,620 million driven by higher market prices

DKK 426m

Record EBITDA of DKK 426 million, yielding an EBITDA margin of 26.3%1

EUR 135m

Solid capital structure in place following successful bonds issue

30.6 pigs per sow

Efficiency improved and outperformed EU and USA averages

2.8 kilo

Stable and low feed conversion ratio of 2.8 kilo feed per kilo pork

5.8 tonnes

The average crop yield per hectare increased to 5.8 tonnes from 5.1 tonnes

Global GAP

Efforts to promote food safety recognised with Global GAP certification

RWA

Goodvalley grew sales of the new RWA and GMO-free products

2018

We expect strong earnings in 2018 with Adjusted EBITDA of DKK 340-425 million

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SLIDE 5

Market drivers

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

$ $

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SLIDE 6

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

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

% 2015 2016 2017E 2018F 2019F Poland 3.8 2.9 4.5 4.0 3.5 Ukraine (9.8) 2.3 2.0 3.5 4.0 Russia (2.8) (0.2) 1.7 1.7 1.8 Euro area 2.1 1.8 2.4 2.1 1.7

  • Maturing market
  • Consumption in line with EU-28
  • Great consolidation potential
  • High growth potential
  • Low consumption on the rise
  • GDP growth drives normalisation
  • Economic and political support
  • Consumption expected to increase
  • Producers focus less on efficiency

54%

  • f total

4%

growth

25%

  • f total

46%

growth

10%

  • f total

9%

growth

EU average1

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SLIDE 7

Pig segment

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19% higher average price on slaughter pigs boosted revenue

  • Revenue grew 18% to DKK 1,135 million
  • Reduced intake of slaughter pigs in Food segment due to high

price

Earnings driven by efficiency and positive market conditions

  • Adjusted EBITDA grew 54% to DKK 374 million
  • Stable feed price ensured attractive meat to feed ratio of 7.5

DKK million 2017 2016 Q4 2017 Q4 2016 External revenue 701 552 155 153 Internal revenue 434 408 99 101 1,135 959 254 254 368 289 27 48 374 243 83 73 33.0% 25.3% 32.7% 28.7%

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

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SLIDE 8

Food segment

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Reduced intake of slaughter pigs due to high prices

  • Revenue slightly down with an unchanged product split
  • Activity shifted to Pig segment to optimise Group profitability

Earnings impacted by higher input prices and reduced activity

  • EBITDA declined due to high input prices
  • Ready to re-balance activity to Food segment at lower prices

DKK million 2017 2016 Q4 2017 Q4 2016 767 774 184 182 (9) 25 (5) (1.2%) 3.2% (2.7%) 0.2%

50 55 51 46 42 20 30 40 50 60 2016 2015 2017 2014 2013 57% Deboned 24% Processed 19% MAP

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SLIDE 9

Arable and Energy segments

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High yield in Ukraine and Russia lifted Arable revenue

  • Revenue grew 22% as the average yield per hectare increased to 5.8
  • EBITDA grew 45% despite adverse weather conditions in Poland

Strong performance in Energy from high output and prices

  • Revenue up 55% on back of new support schemes in Poland
  • Higher output and efficiency contributed to strong EBITDA growth

DKK million 2017 2016 Q4 2017 Q4 2016 External revenue 54 37 1

  • Internal revenue

121 106 54 41 175 143 55 41 39 27 8 7 22.3% 18.9% 14.5% 17.1%

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 2017 2016 Q4 2017 Q4 2016 External revenue 61 40 19 19 Internal revenue 24 15 12 3 85 55 31 22 17 7 4 7 20.0% 12.7% 12.9% 31.8%

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SLIDE 10

Group financials

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Strong revenue growth driven by Pig, Arable and Energy

  • Revenue grew 15% to DKK 1,620 million
  • High pig prices entailed best-ever performance

Record profitability based on revenue growth and high efficiency

  • EBITDA increased 22% to DKK 426 million
  • Strengthened operational performance and efficiency

Solid cash flow development

  • Operating cash flows grew 21% and free cash flows by 49%

DKK million 2017 2016 Q4 2017 Q4 2016 1,620 1,405 388 363 426 347 44 57 6 (49) 55 25 431 299 99 82 26.6% 21.3% 25.5% 22.6% 26.3% 24.7% 11.3% 15.7%

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

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SLIDE 11

Outlook 2018

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DKK million 2018 outlook 2017 actuals Revenue 1,550-1,700 1,620 Adjusted EBITDA 340-425 431

Reported EBITDA 2017

  • 426

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 2018

  • Revenue of DKK 1,550-1,700 million
  • Adjusted EBITDA of DKK 340-425 million

Performance is expected to be impacted by

  • Continued high production efficiency
  • Good stock of quality crops harvested
  • Adverse impact of lower pig prices
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SLIDE 12

Strategy

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Optimisation Capacity expansion Strengthen consumer focus New geographies

 Sustainability and Danish

knowhow

 Superior efficiency standards  Outperforming peers on KPIs  Increase pig production  Feed, land base and green energy  New slaughterhouse in Ukraine

and expansion in Poland

 Branded premium products

tailored to specific markets

 Margin expansion and reduced

exposure to bulk market

 Capitalising on sustainability

and environmental protection

 Expansion into selected

new markets

 Acquisitions or greenfield  Clear selection criteria

  

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SLIDE 13

Ukraine Russia Poland From 2019

Strategy

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Crop growing Feed production Pig production Slaughtering, cutting and deboning Meat processing and marketing Fully integrated production Partly integrated production Partly integrated production

     

Bioenergy production

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SLIDE 14

Questions

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Contact information

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

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SLIDE 16

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

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SLIDE 18

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