DLG reports revenue of DKK 80 billion – an all-time record

The DLG Group posted total revenue of DKK 80 billion compared to DKK 59 billion the year before. EBITDA increased to DKK 3 billion, up DKK 770 million. For the first time, profit after tax topped DKK 1 billion. Despite considerable market volatility, DLG improved its financial ratios through strict risk management and focus on capital consumption, delivering a satisfactory return on invested capital (ROCE). 

“We cannot but be satisfied with our results for the year. Our three business areas all serve fundamental needs in society, which creates a stable demand. This goes some way towards explaining why we successfully navigated 2022, which was a challenging year in many ways,” says Group CEO Kristian Hundebøll, and he continues:

“Like other companies, we’ve been faced with rising costs of energy and raw materials, requiring us to continuously adjust our costs. As is clear from our financial ratios, we have succeeded in further boosting the group’s robustness, making sure we’re geared to meeting any market challenges that may come our way.”

The German market, which is DLG’s main market, once again made a significant contribution to the results for the year. Revenue in Germany totalled DKK 53 billion, while EBITDA was up 51 per cent at DKK 1,7 billion. 

Based on these impressive results, DLG is distributing DKK 252 million to its Danish members. This represents a 46 per cent increase compared to 2021, equating to a 17 per cent return on contributed capital. 

Food: Growth despite volatile markets

Food, which comprises the group’s agribusiness as well as its vitamins and minerals business, is the group’s largest business area. With an increase in revenue to DKK 50 billion in 2022, Food accounted for 63 per cent of the total revenue. EBITDA was DKK 1.6 billion, representing an 18 per cent increase compared to 2021.

Our Agribusiness activities generated growth in all main markets in the Baltic Sea region, including Germany, but results were extraordinarily good in the Danish and Swedish markets as well as in the Baltics. The results are primarily ascribable to impressive exports of 4.1 tonnes of crops in the wake of a good harvest and a really good year for crop cultivation. The DLG Group is the largest supplier of plant-related products in Europe.

Sales of feed for cattle and poultry were at a satisfactory level, while sales of pig feed declined due to the difficult market conditions for pig producers. 

Vilofoss, the group’s vitamins and minerals business, delivers stable results that are on a par with 2021, which saw increasing sales in the USA, Eastern Europe and the Middle East. 

“Food is the strong backbone of our business, and is delivering really impressive results. Considering the tense geopolitical situation, and the resulting highly fluctuating and uncertain market conditions and supply situation seen during the year, we’re pleased to be reporting growth on all parameters,” says Kristian Hundebøll. 

Shortly after the Russian invasion of Ukraine, DLG decided to cease all commercial activities in Russia, which also meant a stop to imports of raw materials such as non-GM soybean meal, beet pulp pellets and sunflower meal, which used to form part of DLG’s feed mixtures. In addition to a write-down of DKK 87 million as a result of DLG’s withdrawal from AV Nutrismart in Russia, the decision brought increased costs for DLG due to the cancellation of contracts and having to procure raw materials from countries where prices are higher. 

“We’ve focused not only on making the right business decisions, but also on making decisions in line with our values. We do not want raw materials from Russia to end up in our feed mixtures, and we’re quite adamant about this,” says Kristian Hundebøll. 

Energy: An extraordinary year 

Our Energy business area has delivered a string of strong results in recent years, and 2022 was no exception. The business area posted revenue of DKK 23 billion compared to DKK 13 billion for 2021. EBITDA was DKK 964 million, which is more than double compared to 2021. 

The German energy division, Team Energie, accounts for most of the business area’s revenue and earnings. The impressive results are primarily explained by growth in the areas of heating oil and diesel, Tankpool24, electricity and gas. The increasing sales of heating oil are partly attributable to the German authorities’ decision to stop buying Russian gas, which increased demand for heating oil. At the same time, sales of diesel increased as the uncertain supply situation in the market caused many customers to stockpile. 

Throughout the year, Team Energie saw an increasing influx of orders, with customers choosing the company as their energy supplier due to its broad product portfolio and not least high security of supply and efficient logistics. 

“Energy’s very active sales force boosted sales considerably in 2022 and landed a number of major contracts with large private and public customers. This is the primary reason for the impressive improvement in performance. Growth in our energy business gives us the strength needed to invest in the green transition,” says Kristian Hundebøll. 

Housing: Stable results in uncertain year

The Housing business area was established as part of the DLG Group’s new strategy and covers the group’s activities within service and sales of building materials to businesses and private customers in the German market. The business area posted revenue of DKK 6.5 billion for 2022 compared to DKK 6 billion for 2021. EBITDA was DKK 463 billion, representing a 7 per cent decrease compared to 2021.

Team Bau is one of the largest players in Germany and one of the most profitable businesses in this segment. Even though the economic situation is beginning to affect the construction industry in Germany, resulting in lower levels of activity, Team Bau delivered stable results for 2022, and results on a par with 2021. Customer loyalty is high due to Team Bau’s high security of supply, broad product portfolio and quality advice. 

“Rising inflation and higher interest rates are causing a certain restraint in the market, and in this light the results delivered by this business area are very good indeed. Our market position is strong, and our long-term expectations for this part of our business remain high,” says Kristian Hundebøll. 

2023: Investing in sustainable transition

In May 2022, the DLG Group presented its new strategy, ‘Creating the Future 2030’, which sets the strategic direction for the group’s development towards a more sustainable future. Among other things, DKK 2 billion has been earmarked for investments in the sustainable transition within Food, Energy and Housing. In 2022, the first projects were launched with investments in, among other things, the insect protein company Enorm Biofactory and Green Fertilizer Denmark, a partnership formed to investigate the possibilities of establishing production of greener fertiliser for agriculture in Denmark based on excess wind power. 

“Over the past few years, we’ve created a solid financial foundation for the group, which the new strategy is going to build on. In our minds, the record results for 2022 are evidence that we have brought our business to a new level, although we expect results for 2023 to be lower than in 2022. Having said that, we’re paying close attention to the geopolitical situation and developments in the raw material markets as they may significantly impact our budget assumptions,” says Kristian Hundebøll.