Auga Group Ab · OMXVSE:AUG1L
Auga Group Ab — Investor Presentation (May 2020)
34 slides from Auga Group Ab's investor presentation, May 2020
Slide 1: Strategy Presentation for Investors
aU ga Yeroup STRATEGY PRESENTATION FOR INVESTORS AUGA group, AB May, 2020
Slide 2: List of Contents
LIST OF CONTENTS This presentation covers the 2020-2025 strategy of AUGA group, AB. YY Y STRATEGY 2025 ABOUT THE COMPANY ORGANIC MARKET TRENDS SHORT-TERM STRATEGY THE FUTURE OF AUGA ANNEXES
Slide 3: About the Company
ABOUT THE COMPANY AUGA group is the largest vertically integrated organic food producer in Europe providing sustainably grown food from field to shelf. The Company's competitive advantages: * Economy of scale * Vertical integration ° Full traceability ° Synergies among different branches of agricult
Slide 4: About the Company: Transformation milestones
ABOUT THE COMPANY In five years, AUGA's group of companies has transformed itself from a conventional agricultural operation to a technology-based (AGTECH) organic food production business with a strategic focus on sustainability. YY Y STRATEGY 2025 Transformation milestones 2015 2016 2017 2018 2019
Slide 5: Sustainable business model
ABOUT THE COMPANY The Company is developing a closed-loop organic farming model which aims to achieve synergies among different branches of agriculture and the re-use of organic waste. A vertically integrated production chain ensures that production is fully traceable, which is extremely important i
Slide 6: Team
ABOUT THE Team aU COMPANY ga * The Company's team of specialists and engineers* has almost 1000 years of experience * High job satisfaction rate (4/5 employees are satisfied AUGA group's team of 1200 with their job) employees brings together agricultural professionals and technical engineers with ma
Slide 7: Management team
ABOUT THE COMPANY The Company's visionary and majority shareholder Kestutis JuScius formed a new management team during the transformation of the Company, implementing a set of ambitious goals. YY Y STRATEGY 2025 Management team Kestutis JuScius, CEO Mindaugas Ambrasas, CFO Gediminas Judzentas, Mark
Slide 8: Governance
Governance Independent Board - a unique case in Lithuania The Board consists of well-known professionals Sustainability Reports and good governance practices As of 2018, the Company began publishing Sustainability Reports. The independent Board, formed in 2019, is actively engaged in the implementat
Slide 9: Shareholders
ABOUT THE COMPANY The Company's shares are listed on the Nasdaq Baltic Main List. Largest Shareholders: ° Baltic Champs Group (100% shares belong to Kestutis Juscius), ° European bank for reconstruction and development (EBRD), ° ME investicija- one of the largest institutional investors in the Balti
Slide 10: EU Strategy: The Farm to Fork strategy
EU STRATEGY The Farm to Fork strategy is a new comprehensive approach to how Europeans value food sustainability. YY Y STRATEGY 2025 The Farm to Fork strategy of the EU In May 2020, the European Commission announced the Farm to Fork strategy which is aimed at the tackling the key challenges of susta
Slide 11: Farm to Fork goals for organic and sustainable
EU STRATEGY All food chain actors are expected to adhere to sustainability by making the best use of nature-based, technological, digital and space-based solutions to deliver better climate and environmental results, increase climate resilience and reduce and optimise the use of inputs. Sustainabili
Slide 12: Sustainable food production practices
EU STRATEGY AUGA Strategy 2025, published in April 2020 corresponds to the proposed sustainable food production practices established by the Farm to Fork Strategy that was announced in May 2020. YY Y STRATEGY 2025 Sustainable food production practices aU ga aU ga Teroup Farm to Fork strategy, AUGA s
Slide 13: Organic Market Trends
ORGANIC y a2 MARKET are | hoa hee, aR TRENDS
Slide 14: Organic products markets
ORGANIC MARKET TRENDS In 2018, global organic sales reached EUR 92 bn. In 10 years, consumers have more than tripled their consumption of organic products, and demand continues to Cou Germany 12.0 France 97 Italy 4.2 UK 2.8 Switzerland 27 Denmark 1.8 Organic products markets aU Market size, Growth E
Slide 15: Organic farmland area
ORGANIC MARKET TRENDS After lagging behind for a long time, in 2018 the EU's organic farmland area grew at a similar pace as the retail market for organic products - 7.5%. The EU long-term strategy and member states programs aim to stimulate the further growth of organic farming over the next decade
Slide 16: Price dynamics
ORGANIC MARKET TRENDS Germany, the largest EU market, is a benchmark for major organic product prices. Organic grain prices are not linked to conventional grain prices and demand. Organic milk prices are higher and less volatile compared to conventional milk prices. YY Y STRATEGY 2025 Price dynamics
Slide 17: COVID impact
ORGANIC COVID - 19 impact aU MARKET . . ga * According to market research conducted in Germany! TRENDS and France? in 2020, the consumption of organic products grew faster than conventional consumption in many categories Consumers prefer home- y 9 cooked food, so they not only * There are two main f
Slide 18: Short-Term Strategy (2020-2023)
SHORT-TERM STRATEGY (2020-2023)
Slide 19: Efficiency agenda
SHORT-TERM Efficiency agenda au STRATEGY ga Crop growing Dairy * Alignment of organic wheat and * Improvement of animal welfare pulse yield levels with the * Introduction of customised animal The main goal of the Short- geographic conventional average care programmes from milking to t trategy is to
Slide 20: Organic vs conventional wheat and legumes yields
Organic wheat Conventional wheat AUGA Organic legumes and protein crops Conventional legumes and protein crops AUGA
Slide 21: EBITDA potential
SHORT-TERM EBITDA potential Group EBITDA potential, EUR million 45.5 STRATEGY 45 40 35 The latest results do not 30 represent the full potential of 4s the Company: 2017 — first year of fully 20 certified organic farming. 2017-2019 - new technologies were developed and implemented. 5 2018-2019 - resu
Slide 22: Financing and dividend policy
SHORT-TERM Financing and dividend policy aU STRATEGY ga ° The use of a wide range of financial instruments * Long term financing ° Free cash flow will be used for dividend We will seek to utilize the payments or share buybacks potential of both the bond market (especially green bonds) DSCR and our c
Slide 23: The Future of AUGA (2020-2025)
THE FUTURE OF AUGA (2020-2025)
Slide 24: The Company's new vision and mission
THE FUTURE OF AUGA In 2015, the strategic decision to switch to organic farming and produce organic products was made. In 2020, the Company is taking a new step and developing a new standard for sustainable organic food in the food value chain. This is focused on building environmental and long-term
Slide 25: Consumers demand sustainability
THE FUTURE Consumers demand sustainability OF AUGA 90% say that the climate crisis makes them feel insecure about the future’ 75% of 21-34-year olds say they would change their consumption habits to reduce their Consumers, especially youn . : resp y young environmental impact? people, are worried ab
Slide 26: Current challenges in the food value chain
THE FUTURE Current challenges in the food value au OF AUGA chain ge Globally, agriculture accounts for about 23% of total GHG emissions (from farming activities and deforestation due to agricultural development). farming farming G9 model Organic farms, meanwhile, face Mzsbildiilo nigh Lo infin the e
Slide 27: Why AUGA?
THE FUTURE Why AUGA? au OF AUGA ga * The scope of activities will ensure an immediate impact (39 thousand ha of operated farmland) The food value chain has been . . . . fragmented due to various * Vertically-integrated operations will allow changes to interests and the diverging outlook be implement
Slide 28: Sustainable organic food architecture (SOFA)
THE FUTURE OF AUGA The AUGA Innovation Agenda (2020-2025) will facilitate essential technological connections within the SOFA model to deliver organic food with no cost to nature: 1) Biogas cycle infrastructure and vehicles, 2) Specialised feed technology, 3) Regenerative crop- rotation. YY Y STRATE
Slide 29: CO2 and equivalent emission reduction targets
THE FUTURE CO, and equivalent emission reduction aU OF AUGA targets ga 50% less emissions from fossil fuel use on farms OO 50% less emissions per one tonne of cow's milk The use of fossil fuels in agricultural operations is being 30% less emissions from agricultural dry matter yield per replaced by
Slide 30: Sustainable financing through institutional and private lenders
THE FUTURE Sustainable financing through aU OF AUGA institutional and private lenders ga * Agriculture is currently unable to access green financing * Lenders will have the opportunity to invest in SOFA sustainable food chain goals In 2019, the green financing market (bonds and loans) * Both AUGA gr
Slide 31: Benefits to shareholders
THE FUTURE Benefits to shareholders au OF AUGA ga * Threefold increase in the value of the company during the implementation of the strategy, and growth prospects following it. This will ensure an TO . asset-light business model and a return on capital AUGA will have the opportunity > 9 to multiplic
Slide 32: AUGA community
THE FUTURE OF AUGA The company seeks to implement its business model by uniting its ambitious and motivated team with members of the AUGA community who will express their preference for a more sustainable life via their consumption, and their active engagement in the food value chain. YY Y STRATEGY
Slide 33: We invite you to join the community!
THE FUTURE We invite you to join the community! au OF AUGA ga You will always have a place in the AUGA community We invite you to contribute with: Although AUGA has set itself * know-how very ambitious goals to achieve . . . . within 5 years, it is nevertheless * financial resources you would like t
Slide 34: Annex: Investment opportunities
ANNEX | The turnover of AUGA group, AB shares has grown every year. In 2019, the Company's shares were in fifth place according to the trading turnover on the Baltic Main List* of the Nasdaq Vilnius stock exchange. Investment opportunities aU rs) Nasdaq Vilnius, Baltic Main List: AUGIL g Nasdaq Viln