Axzon A/S: Goodvalley generated historically strong results in 2017

Goodvalley grew income and earnings significantly in 2017, recording the Group's best ever financial performance. Developments were based on higher pig prices and continued strong operational performance across segments.

HIGHLIGTS

Financials

• Revenue grew by 15% to DKK 1,620 million driven by higher market prices on live pigs and selling prices per kilo pork supplemented by positive developments in the Arable and Energy segments, while the Food segment's contribution to revenue was slightly down.
• Goodvalley reported its best ever EBITDA of DKK 426 million, yielding an EBITDA margin¹ of 26.3% vs. 24.7% in 2016². Adjusted EBITDA³ was DKK 431 million.
• The completion of a 4-year senior secured bonds issue of EUR 135 million allowed Goodvalley to refinance almost all existing debt. The bonds, sold under high demand, were listed at Nasdaq Copenhagen.

Operations

• Goodvalley improved efficiency in terms of sold pigs per sow from 30.4 in 2016 to 30.6, significantly exceeding EU and USA averages of 26 pigs and 23 pigs, respectively.
• The whole herd feed conversion ratio was stable at 2.8 kilo feed per kilo pork, resulting from the Group's ongoing focus on sustainability and efficiency.
• Stocks of quality crops for the feeding season were harvested from the Group's approximately 28,000 hectares of land. The average crop yield was 5.8 tonnes per hectare, up from 5.1 tonnes in 2016.

Outlook

• Goodvalley expects to generate revenue of DKK 1,550- 1,700 million and an Adjusted EBITDA of 340-425 million driven by continued high production efficiency and a good stock of quality crops for the feeding season, but adversely impacted by lower prices on live pigs compared to the 2017 level.

"Operational performance was strong in 2017 as we maintained our market-leading efficiency level in the Pig segment, recorded a strong crop yield despite challenging weather conditions in Poland during the year and successfully obtained the recognised Global Good Agricultural Practice certification. Simultaneously, we generated 15% growth and improved profitability further to an EBITDA margin of 26.3% as we reported the Group's best operating profit ever with an EBITDA of DKK 426 million," says CEO Tom Axelgaard.

Conference call

On 1 March 2018 at 9.00 (CET), Goodvalley will host a conference call at which CEO Tom Axelgaard and CFO Hans Henrik Pedersen will provide comments on financial and operational performance in 2017, the outlook for 2018 and answer questions. Registration is not required.
The conference call will be conducted in English and can be followed live here:
https://edge.media-server.com/m6/p/k2g7brye
Participants should dial the numbers provided below and state conference code 7131776

Denmark:	[phone]
Norway:	[phone]
Sweden:	[phone]
United Kingdom:	[phone]
United States:	[phone]

Further information

CFO, Hans Henrik Pedersen
+ 45 76 52 20 01
[e-mail]

1) Margins are calculated based on revenue compared to previously announced margins, which were calculated based on total income. Following this change in presentation, the Group's EBITDA of DKK 426 million corresponds to an EBITDA margin of 26.3% in 2017 (2016: 24.7%) against 25.8% (2016: 21.9%) as most recently reported in company announcement 2/2018 on 8 February 2018.
2) 21.9% in 2016 before restating of effect of discontinued operations, cf note 5.6 to the financial statements, and change in calculation method as described above.
3) In the annual report, Adjusted EBITDA refers to EBITDA before non-recurring items adjusted for herd price changes, cf. page 8.

Goodvalley at a glance
Goodvalley is an international producer of high quality pork products operating in Poland, Ukraine and Russia based on Danish production standards. The company is to a large extent self-sufficient and masters the whole production chain from field to fork, from growing crops for feed, breeding and slaughtering pigs including using the manure in biogas facilities to produce electricity and organic fertilizer for the fields. In Poland, Goodvalley is certified as CO₂ neutral in the entire production chain by German TÜV and operates according to the highest standards in terms of animal welfare, transparency in the production and sustainable production methods.

Goodvalley Annual Report 2017