Best result so far in Danish Agro group
The Danish Agro group achieved its best profits to date and an even stronger financial position in 2014.
The group maintained constant focus on creating the best conditions for profitability and value growth for its customers and owners, with the building of a healthy financial base for the group as top priority. These objectives were achieved in 2014.
The Danish Agro group realised pre-tax profits of EUR 74 million for 2014, the best result to date, and EUR 6 million higher than 2013, an improvement of 9.5%. Pre-tax profit gave a return on the group's equity at the beginning of the year of 19.6%.
Turnover in 2014 comprised EUR 3.2 billion, compared to EUR 3.4 billion in 2013, a decrease of 4%. The fall can be attributed solely to a drop in the price of the commodities the group deals in. The total market is estimated to have fallen by between 8 and 10%. After tax, Danish Agro realised a surplus of EUR 60 million, which increases the group's equity at the beginning of the year by 16%. Consolidated equity rose by EUR 49 million from EUR 376 million to EUR 425 million. The consolidated solvency ratio now comprises 30% compared to 28.6% the previous year.
Danish Agro's CEO, Christian Junker, is extremely satisfied with the year:
- I am delighted to be able to report that we have achieved all the structural and financial targets we set ourselves in 2014. Our financial position in particular has been strengthened. A strong balance sheet combined with healthy earnings puts us in an excellent financial position, he stated.
According to Junker, these are vital parameters to remain a competitive partner for Danish farmers.
- A strong financial basis is the cornerstone of our growth strategy, for which our declared target is 10% growth per year. That's what is needed to remain the best possible partner for the agricultural industry with competitively priced products. The fall in turnover clearly indicates that the market as a whole will decline if we don't do something. We reflect the industry's health. Group growth will come in steps and 2015 will see a significant improvement, when our German acquisitions become part of our business, says Junker.
Stronger international collaboration
2014 was primarily defined by strengthened market positions on the group's expanded home market - Scandinavia and the Baltic Region, The Danish Agro group is one of the two biggest agribusiness companies in the region.
The activities of DAVA Agravis International Holding A/S - a joint venture between Danish Agro, Vestjyllands Andel and German agribusiness group Agravis were considerably extended. The partners entered into an agreement to acquire Getreide AG's retail agribusiness activities in Germany in October 2014. The joint venture now consists of agribusiness and machinery sales in German, the Baltic States, Poland, the Czech Republic and Hungary, and will reach turnover of around EUR 1.5 billion in 2015.
The Vilomix group also enjoyed a good year with its best ever result. The group bolstered its international sales, and Vilomix Finland, Vilomix Baltic and Hatting, which all joined the group in 2013, have been well integrated.
The group's food activities have also shown growth. DAVA Foods Holding A/S has gained a firm foothold on the Finnish and Estonian markets through acquisitions, and sales of 1.4 billion eggs make it the market leader in the Nordic Region. Hatcheries group DanHatch A/S presented its best set of accounts to date, and was strengthened in 2014 by the acquisition of HKScan's Finnish hatcheries.
Danish Agro's Chairman of the Board, Jørgen H. Mikkelsen, is very satisfied with the objectives the Danish Agro group achieved in 2014:
- The supervisory board of Danish Agro and I are highly satisfied with the way the group has managed to become an even stronger partner for Danish farmers in 2014. Our results speak for themselves, thanks in no small part to the ability of the management and employees to turn actions into results. The fact that we have once again been able to cut costs and increase earnings potential confirms the necessity of our strategy of investing internationally to be able to stay competitive towards the Danish farmers, states Mikkelsen. He continued:
- I am also delighted that we can once again reward our members in the form of dividends this year thanks to a good result. Being able to do so is goal in itself when the right economic circumstances are present, given that we are a cooperative.
Expectations for 2015
The group expects turnover of around EUR 4.2 billion in 2015, corresponding to growth of just under 30%. The group is aiming for pre-tax profit of around EUR 76 million after depreciation and amortisation of around EUR 56 million. The group's balance sheet is expected to improve by around EUR 1.8 – 1.9 billion. Equity will be increased to the level of EUR 550 million, corresponding to a solvency ratio of 30%.
The group will focus on integration of its new acquisitions, deriving maximum synergy from its highly varied activities.