With turnover of DKK 59.1 billion in 2013, the DLG Group realised its ambitious turnover target for the 2016 Strategy earlier than expected. The groundwork for DLG's business up until 2016 has thus been laid and the prime focus in H1 2014 onwards is to exploit synergies between the Group's business areas to ensure the necessary efficiency improvements.
An important element in these efforts is to ensure an ever-increasing degree of integration between the Group's farm-supply activities in Denmark, Germany and Sweden. Securing this integration is notably a main objective of the management changes implemented in HaGe and Svenska Foder in February 2014.
In H1 2014, DLG generated turnover of DKK 30.3 billion and a profit before tax of DKK 21.6 million. The level of activity in H1 2014 was on a par with forecasts. The turnover increase relative to H1 2013 is mainly due to Team AG being fully recognised in the Group turnover in H1 2014.
The loss after tax of DKK -70.4 million is satisfactory and better than budgeted. The performance is below that of the same period last year, mainly due to an expected and budgeted timing difference between H1 and H2 within grain and raw materials.
The Group balance sheet totalled DKK 21.9 billion at the end of H1 2014 and the solvency ratio was 21.5%, an improvement of 0.4 percentage points compared to the closing of H1 2013.
In H1, the DLG Group expanded its vitamin and mineral activities with the acquisition of a minority shareholding in the Chinese feed company PUAI Feed. The acquisition in China is not of material significance to the performance in H1 2014, but the investment sows the seeds for future growth and earnings for DLG on the Chinese market.
For the DLG Group's farm-supply activities, all three main markets (Denmark, Germany and Sweden) experienced satisfactory sales of and earnings on seed grain, plant protection and fertilizer, well supported by the mild spring weather that ensured an early start to the growing season.
Farm-supply activities in Denmark generally developed highly satisfactory in H1 2014. The important factors for this success include structural changes in the retail structure and the implemented efficiency improvements of transport, logistics and production which are now beginning to impact the bottom line. In addition, earnings in the grain area improved significantly compared to the same period last year.
The farm-supply activities in Germany failed to achieve the budgeted improvement in H1 2014. Intensified competition in the German market is a particular reason for the insufficient earnings for HaGe's feed and grain activities.
The Group's Swedish farm-supply activities performed to expectation in H1 and the existing earnings levels were maintained.
For the Vilofoss group, the Group's vitamin and mineral activities, H1 2014 developed satisfactorily in terms of production and sale of premixes and minerals. This is attributable, in part, to the ability in H1 2014 to maintain the growth of the Vilofoss group's activities on the German and Swedish markets seen in 2013.
In 2013, the DLG Group's Service & Energy activities were expanded with the share-capital increase in Team AG, the German energy and DIY company, making DLG the majority shareholder. Team AG finished H1 2014 with a satisfactory performance above the budgeted level. The first six months of the year went very well for DIY-store activities. A contributing factor to the satisfactory performance was the mild spring that gave an early start to the season with an ensuing high level of activity. On the other hand, the energy business was under pressure. Particularly the sale of heating oil failed to meet expectations, also due to the mild weather.
Kongskilde Industries, manufacturer of agricultural equipment and implements, went through difficult times in 2013. A turnaround process was consequently launched for the company. In H1 2014, Kongskilde satisfactorily followed the envisaged plan which will contribute to reversing the trend in the company. As part of the turnaround process, a number of investments will be made totalling DKK 73 million. The investments aim to support Kongskilde's growing sales on the North American market as well as to help ensure the necessary efficiency improvements of the European production.
Both DLG Food and GASA Bøg developed satisfactorily in H1 and improved their earnings compared to the same period last year.
For H2 2014, it is expected that the DLG Group will reach the budgeted earnings so that the forecast annual performance will be met and exceed the 2013 level.
Kristian Hundebøll | Lars Sørensen |
Group CEO | Deputy CEO/CFO |
INCOME STATEMENT
FOR THE PERIOD 1 JANUARY TO 30 JUNE 2014
(DKK. 1.000) | 1/1 - 30/6 2014 | 1/1 - 30/6 2013 | 1/1 - 31/12 2013 |
Net turnover | 30.265.673 | 24.739.961 | 59.103.398 |
Production costs | -28.146.673 | -22.717.771 | -54.306.707 |
Gross Profit | 2.119.000 | 2.022.190 | 4.796.691 |
Distribution costs | -1.571.637 | -1.501.496 | -3.302.969 |
Administrative costs | -441.827 | -366.229 | -844.528 |
Other operating income | 115.844 | 94.685 | 338.640 |
Other operating costs | -39.667 | -56.473 | -97.324 |
Operating profit | 181.713 | 192.677 | 890.510 |
Income from investments in associated companies | 4.242 | 47.959 | 25.190 |
Income from other investments and securities | 9.954 | 2.695 | 27.115 |
Net financial costs | -174.312 | -186.894 | -405.235 |
Profit before tax | 21.597 | 56.437 | 537.580 |
Tax on profit for the period | -57.433 | -38.887 | -106.336 |
Group profit | -35.836 | 17.550 | 431.244 |
Minority interests' share of the profit | -54.468 | -48.684 | -210.122 |
Minority interest' share of tax | 19.928 | 10.034 | 40.934 |
Net profit for the period | -70.376 | -21.100 | 262.056 |
BALANCE SHEET, ASSETS
AS AT 30 JUNE 2014
(DKK 1.000) | 1/1 - 30/6 2014 | 1/1 - 30/6 2013 | 1/1 - 31/12 2013 |
Completed development projects & Acquired intangible fixed assets | 466.446 | 424.083 | 483.666 |
Goodwill | 832.475 | 160.716 | 756.644 |
Development projects in progress | 132.055 | 136.375 | 119.888 |
Intangible fixed assets | 1.430.976 | 721.174 | 1.360.198 |
Land and buildings | 5.371.748 | 4.268.360 | 5.251.663 |
Plant and machinery | 1.905.603 | 1.628.779 | 1.918.094 |
Other plants, fixtures and operating material | 472.358 | 268.436 | 449.609 |
Property, plant and equipment in progress | 334.093 | 238.027 | 331.476 |
Property, plant and equipment | 8.083.802 | 6.403.602 | 7.950.842 |
Investments in associated companies | 995.978 | 1.569.042 | 770.525 |
Other securities and investments | 292.243 | 266.379 | 264.656 |
Other receivables | 178.135 | 160.931 | 202.540 |
Deferred tax assets | 170.535 | 155.410 | 158.764 |
Fixed asset investment | 1.636.891 | 2.151.762 | 1.396.485 |
Total fixed assets | 11.151.669 | 9.276.538 | 10.707.525 |
Raw materials and consumables | 1.336.217 | 1.548.466 | 1.264.503 |
Manufactured goods and goods for resale | 3.126.047 | 2.860.168 | 3.660.705 |
Total inventories | 4.462.264 | 4.408.634 | 4.925.208 |
Trade receivables | 5.303.782 | 4.749.412 | 3.394.733 |
Receivables from associated companies | 104.069 | 112.480 | 317.516 |
Other receivables | 661.604 | 367.005 | 672.570 |
Prepayments | 126.535 | 337.155 | 192.979 |
Total receivables | 6.195.990 | 5.566.052 | 4.577.798 |
Liquid assets | 116.760 | 86.928 | 97.730 |
Total current assets | 10.775.014 | 10.061.614 | 9.600.736 |
Total assets | 21.926.683 | 19.338.152 | 20.308.261 |
BALANCE SHEET, LIABILITIES
AS AT 30 JUNE 2014
(DKK 1.000) | 1/1 - 30/6 2014 | 1/1 - 30/6 2013 | 1/1 - 31/12 2013 |
Membership capital | 923.547 | 829.233 | 826.318 |
Revaluation reserve | 217.680 | 232.680 | 217.680 |
Reserves according to the bylaws & Fair value adjustment of hedging instruments | 1.779.301 | 1.771.711 | 1.857.143 |
Proposed dividend and profit shares | 28 | 0 | 121.500 |
Equity | 2.920.556 | 2.833.624 | 3.022.641 |
Minority interests | 1.788.349 | 1.241.006 | 1.812.847 |
Consolidated equity | 4.708.905 | 4.074.630 | 4.835.488 |
Deferred tax liabilities | 380.367 | 257.665 | 371.850 |
Other provisions | 454.955 | 237.656 | 372.670 |
Provisions | 835.322 | 495.321 | 744.520 |
Subordinate loan capital | 25.010 | 1.625 | 8.294 |
Payables to mortgage credit institutions | 2.216.979 | 2.197.080 | 2.510.327 |
Issued bonds | 1.000.000 | 993.750 | 993.894 |
Lease commitments | 100.201 | 117.604 | 101.158 |
Credit institutions, other | 778.598 | 475.132 | 420.135 |
Other payables | 36.151 | 80.108 | 64.201 |
Long-term debt | 4.131.929 | 3.863.674 | 4.089.715 |
Current maturities of long-term debt | 128.595 | 181.631 | 282.981 |
Credit institutions, other | 4.140.000 | 4.034.256 | 3.072.666 |
Prepayment from customers | 3.034.750 | 2.404.954 | 2.705.510 |
Trade payables | 2.797.553 | 2.237.650 | 2.622.432 |
Payables to associated companies | 109.843 | 142.568 | 140.035 |
Corporate tax | 89.489 | 43.860 | 92.748 |
Negative goodwill | 10.863 | 37.088 | 6.850 |
Other payables | 1.841.189 | 1.690.580 | 1.655.320 |
Deferred income | 73.235 | 130.315 | 51.702 |
Short-term debt | 12.225.517 | 10.902.902 | 10.630.244 |
Total debt | 16.357.446 | 14.766.576 | 14.719.959 |
Total equity and liabilities | 21.926.683 | 19.338.152 | 20.308.261 |
KEYFIGURES
AS AT 30 JUNE 2014
(DKK million) | 1/1 - 30/6 2014 | 1/1 - 30/6 2013 | 1/1 - 31/12 2013 |
Net turnover | 30.265,7 | 24.740,0 | 59.103,4 |
Earnings before interest, tax, depreciation and amortisation/EBITDA | 476,4 | 398,5 | 1.418,2 |
Operating profit/EBIT | 181,7 | 192,7 | 890,5 |
Profit before tax / EBT | 21,6 | 56,4 | 537,6 |
Group profit | -35,8 | 17,6 | 431,2 |
Net profit for the period / EAT | -70,4 | -21,1 | 262,1 |
Total assets | 21.926,7 | 19.338,1 | 20.308,3 |
Equity ratio | 21,5 | 21,1 | 23,8 |
Consolidated equity x 100 Total assets | |||
Tangible equity ratio | 16,0 | 18,0 | 18,3 |
(Consolidated equity - Intangible fixed assets) x 100 Total assets - Intangible fixed assets |
DLG
Telf + 45 33 68 30 00
information@dlg.dk
www.dlg.dk