LHV Institutional additional Baltic Insight, June 2nd, 2020
Please find attached today's EXTRA edition of the Baltic Insight, with a focus on AUGA group (AUG1L LH)* AUGA Group (‘Auga’ or the ‘Group’) published a strong set of first-quarter results last Friday. The Group’s revenues increased by 14.5% y-o-y to EUR 17.0m, which was 3.3% higher than the top end of our estimated revenue range. The revenues were supported by growth across all segments, particularly the crop growing and mushroom segments, which increased from EUR 5.1m and EUR 6.6m in Q1 2019 to EUR 6.1m and EUR 7.3m in Q1 2020, respectively. The Group showed significant improvements in the consolidated gross and operating profits. The gross profit improved by 26.7% y-o-y to EUR 3.7m, and the operating profit rose by 43.9% y-o-y to EUR 1.6m.
* As a supplement to its Q1 2020 results publication, the Group presented more detailed information in terms of the planned efficiency gains that could be created by 2023 as a result of recently-announced strategy. On an EBITDA level, it is expected that the strategy (which includes an investment into efficiency improvements and reinvestment of EUR 35.5m) could result in efficiency gains worth EUR 21.3m, taking EBITDA to EUR 45.5m in 2023.
* The Company's “Sustainable Organic Food Architecture†(SOFA) strategy ties in with the EU’s latest Farm to Fork strategy that was announced in May 2020. This strategy forms the base of the EU Green Deal, which aims to make Europe the first carbon neutral continent by 2050. Our fair value range for the Group is EUR 0.45-0.55 (closing price as of 1st June 2020 was EUR 0.368 per share).
Auga Group AB. Auga Group AB, formerly Agrowill Group AB, is a Lithuania-based company engaged in the agriculture sector. The Company's activities are structured mainly into three divisions, namely Mushroom-growing, Plant production and Livestock production. The Company offers white, brown, portabella, eryngii, pleurotus and shiitake mushrooms. It specializes in organic wheat and other crops, including organic vegetables and organic feed for livestock in its farms. The Company supplies potatoes, beetroots, onions, carrots, marinated champignons, marinated beetroots, among others. The Company operates own trademark AUGA. In addition, the Company is involved in own farms management. The Company has numerous subsidiaries, including UAB Arginta Engineering, UAB AVG Investment and UAB Agro GIS, among others. It operates domestically on the Lithuania territory.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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