The Group’s revenue in 2019 was 6.7 bnEUR, an increase of 158 mEUR compared to 2018. EBITDA totalled 257 mEUR. Combined with an equity of more than DKK 6 billion and a significant reduction of the net interest-bearing debt (NIBD) DLG Group has historically strong financial key figures.
“At end-2019, we had boosted our revenue by 101 million in Germany and at the same time, we delivered a very satisfactory EBITDA. This is evidence of DLG’s robustness with solid underlying companies and a clear strategy,” says Kristian Hundebøll, Group CEO of DLG, continuing:
“The financial sector acknowledged this when we issued short-term German Schuldschein bonds in June worth DKK 1.9 billion, the largest issue in Northern Europe to date.”
Growth in Germany
The revenue of DLG's German companies amounted to 4.3 bnEUR (4.2 bnEUR in 2018) with an EBITDA of 131 mEUR (108 mEUR in 2018). Thus, DLG Group maintains its position as the Danish company with the largest revenue and earnings in Germany.
“We are pleased that despite challenges in some business areas we are able to grow our revenue in 2019 and at the same time deliver a record operating profit in Germany. Germany is our biggest market and we continue to regard it as a very important strategic growth market,” Kristian Hundebøll says.
Energy & Retail
Team AG Germany is posting record results again this year in both the energy and DIY store divisions. Revenue increased from 1.85 bnEUR to 2 bnEUR. The EBITDA improved by 33% compared to 2018.
“We are very pleased that Team AG year after year outperforms itself and delivers great results that emphasize how well we are able to utilize the opportunities in the market. In 2019 we have strengthened the energy division with new acquisitions and in the DIY store division we increased earnings in North Rhine-Westphalia. Team is a central and strategically important part of the group,” says Kristian Hundebøll.
“We are very pleased with Team outperforming itself year after year, delivering great results that emphasise our successful utilisation of market opportunities. In 2019, we strengthened the energy business with new acquisitions, and in the DIY store division, the Group’s higher earnings came from Nordrhein-Westfalen. Today, Team AG operates 195 gas stations and 77 construction markets and has 32 energy sales offices. Team is a pivotal and strategically important part of the Group,” says Kristian Hundebøll.
The Energy & Retail business area of the DLG Group had revenue of 2.1 bnEUR in 2019 and delivered an EBITDA of 107 mEUR.
After the drought in 2018, the 2019 harvest was back to normal in most areas, but eastern Germany and the Baltics were again hit by drought, affecting grain earnings in these markets. BREXIT and trade relations between China and the USA led to restraint in the agri-commodity markets.
2019 was a good year for the Group’s feed and commodity sales with solid sales growth in the three main markets; Denmark, Germany and Sweden. Sales totalled 7.6 million tonnes, corresponding to 7% growth, the highest sales ever. In addition, DLG was the first company in Europe to provide climate declarations for its compund feeds, making it easier for farmers to document their climate efforts.
The Group’s German agricultural company HaGe posted revenue of 2.1 bnEUR at end-2019, on a par with 2018. EBITDA improved by 16% compared to 2018. The sales of cattle feed saw the best earnings performance for many years. The drought in eastern Germany combined with a reluctant market made 2019 another challenging year for our German grain business.
In December 2019, BSL, a subsidiary of HaGe, concluded an agreement with the German competition authorities in a case concerning price coordination in the wholesale crop protection market. As part of the agreement, BSL has paid a fine of 29.25 mEUR.
“We are facing up to the fact that this case has a significant impact on our financial results this year. Our EBITDA is up 8%, but the fine hits our bottom line. It is frustrating, but now we want to focus our energy on generating growth and expanding HaGe’s strong position in the German agribusiness market,” says Henrik Madsen, CEO of HaGe.
In order to secure the investment opportunities after payment of the fine, HaGe initiated a capital increase in which DLG participated along with the other shareholders. DLG's share of the capital increase in 2019 was 16 mEUR.
In 2019, the business area Agribusiness generated revenue of 4.2 bnEUR and delivered an EBITDA of 130 mEUR.
Premix & Nutrition
A volatile commodity market characterized the vitamin and mineral industry broadly in 2019, leading to falling prices and increased international competition.
Despite earnings challenges in 2019, Vilofoss is strongly equipped for the future. Given its strategic investments in Spain, the largest European market for pig production, and new partnerships in France and in Belgium, Vilofoss has strengthened its market position in Europe in 2019, while gaining access to important new emerging markets in South and North America.
Premix & Nutrition is a business area with great potential, and Vilofoss plays an important role in DLG's strategy of further developing the collaboration with customers to support the production economy of livestock producers in Europe.
The Premix & Nutrition business area had revenue of 402 mEUR in 2019 and delivered an EBITDA of 21 mEUR, which is 3.6 mEUR less than in 2018, which was a historically good year.
Expectations for 2020
“In recent years, we have significantly strengthened the Group through a focused strategy, targeted acquisitions and investments, as well as group synergies, and we have a portfolio of healthy companies. In the coming years, we will also focus on how to make sustainable solutions a business opportunity and help meet the ambitious agricultural climate targets, continue our digitisation and strengthen our business in Denmark through strategic investments. This makes us well equipped to increase earnings by 2021,” says Kristian Hundebøll.