DLG increases revenue and earnings in a solid first half year

In the first six months of 2020, the DLG Group had a revenue of 3.4 billion EUR. This is an increase of 121 million EUR compared to the first half of 2019. EBITDA was 89 million EUR, which is an increase of 9 million EUR compared to the same period last year. DLG shows good financial ratios with an equity of 823 million EUR compared to 755 million EUR at the half year results last year.  

“We came out of the first half of the year with revenue growth, which is primarily driven by our Agribusiness activities as well as our large German energy and retail business, Team AG. At the same time, we have delivered an increase in earnings on our operating profit (EBITDA) of 11% compared with 2019. We also see a positive development within Premix & Nutrition after a challenging 2019 for that particular business area. All in all, we are quite satisfied with the half year results, where the width of our business model has once again shown its strength in an otherwise challenging first half year,” says Kristian Hundebøll, CEO of DLG, referring to the Covid-19 pandemic.  

"Despite the fluctuations we saw in the world market as a result of the pandemic, the underlying demand for the goods and products we deal with as a supplier of processed raw materials to the agricultural and food sector, sales and distribution of energy products and materials for the construction industry in Germany, has been largely constant. In our DIY store division, we have experienced increasing demand during the period, and the same applies to our digital sales channels,” the CEO explains. 

Since the beginning of the pandemic, the group management has ensured that all necessary precautions were taken to protect the employees and operations of the group. This meant, among other things, that a large part of administrative staff worked from home for a period, while production staff at strategically important locations agreed to be accommodated away from their families for a period of time to minimize the risk of infection. 

Kristian Hundebøll highlights the employees' efforts as an important factor in the group navigating successfully through the first months of the Covid-19 pandemic. 

“It has been crucial that we have managed to maintain our normal cadence in production, logistics and customer service thanks to an exceptional performance from our many skilled and dedicated employees at home and abroad. They have made an extraordinarily great effort in an extraordinary time,” says Kristian Hundebøll. 

Agribusiness   
In the first half of the year, the DLG Group's Agribusiness companies in Northern Europe realized a turnover of 2.2 billion EUR against 2.1 billion EUR last year. The revenue growth is based on good sales of the Group's broad portfolio of agribusiness related products. Total sales in the first half of the year show an increase of 13% compared to 2019. 

“We have managed to maintain our high level of sales of compound feed and raw materials, which we increased significantly in 2019, and at the same time we have increased sales of seeds, fertilizers and plant protection products. The grain business has also had a satisfactory first half of the year despite a notable decline in demand for malting barley due to declining beer sales following the Covid-19 lockdown. Among other things, the execution of a large export program of over half a million tonnes of feed barley and bread wheat out of our ports in Denmark, Sweden and northern Germany is contributing positively,” says Kristian Hundebøll. 

Premix & Nutrition (Vilofoss) 
After a challenging 2019, the business area for production and sales of vitamins and minerals has had a satisfactory first half year with a positive development. The overall volume increase for the Vilofoss Group is 5% in the first half of the year compared to the same period last year. 

"Especially in Vilofoss' large international markets, Germany and France, sales have increased, and we are also seeing a positive development in our joint venture in Russia, which we own together with the American company Alltech. Our exports, especially to the South and North American markets, has been negatively affected by the economic downturn caused by the Covid-19 pandemic, while the sales development in Denmark and Sweden is on a par with 2019,” says Kristian Hundebøll. 

Energy & Retail 
German Team AG had a very good first half year, with a revenue of 1 billion EUR which is an increase of 4% compared to 2019. The increase in revenue is based on a significant sales development within both business areas, the energy division and the DIY store division. There is no doubt that two external circumstances - the historically low energy price and the closure of large parts of Germany in connection with the Covid-19 pandemic - have had an impact in the form of increased demand in parts of the energy segment and in the DIY stores. 

"In general, the Energy & Retail business area has had a very good first half year, where the Danish energy business, which is built around a collaboration between DLG Energi and DCC Energi, has also delivered a satisfactory result," says Kristian Hundebøll. 

Expectations for the full year 
The harvest is, as always, the most important time of the year in DLG. This year, crops are generally looking good, and although it is too early to predict the final outcome, there is the prospect of a good harvest, at least in northern Europe. 

"In relation to the harvest, it looks positive in Denmark, Sweden and Germany. This also applies to the eastern part of Germany, which has been hit hard by drought and low yields for the past two years. At the same time, the effect of the Covid-19 pandemic will continue to be an unknown factor. Despite this, we maintain earnings expectations for 2020 with an operating profit (excluding depreciation) on a par with last year,” says Kristian Hundebøll.