LHV Institutional 'AUGA group annual review, December 24th, 2021'
* AUGA group AB (AUG1L LH; hereafter referred to as “AUGA” or the “Group”), based in Lithuania, is one of the largest organic food companies in Europe, managing over 39,000ha of arable land. The Group operates a unique vertically integrated business model, enabling it to control the full value chain, providing full guarantees to customers that its products may be traced. The Group’s product range includes commodities such as wheat, pulses, sugar beets, milk, and packaged consumer goods: ready-to-eat soups, oatmeals, preserved vegetables and mushrooms, eggs, bottled milk and other products. With the exception of some mushrooms, all AUGA-branded products are presently certified as organic. The Group follows all requirements attributable to organic farming, like eliminating all synthetic pesticides and fertilisers use which is restricted, an absolute prohibition on the use of genetically modified organisms and adopting wide crop rotation practices. After reviewing AUGA’s 9M 2021 results, we have updated our view on the Group.* In valuing AUGA group, we have used the weighted average of the values derived from the DCF and the three peer group multiples, applying different weights to each method. As the companies of the peer group are considerably larger than AUGA, the DCF method is seen as more applicable and thus is given a weight of 50%. The P/Book, P/E, and EV/EBITDA each share a weight of 16.7%. Based on these weights to the applicable values, we maintain a fair value range for AUGA at EUR 0.61-0.71 per share. The share price as of 17th December 2021 was EUR 0.50 per share.
* This report contains a full set of financial forecasts and is useful for gaining an initial insight into the company. Please also refer to the tables and charts in the attachment.
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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