Year-End Report 2020 - lantmannen.com

Year-End Report 2020

2020 in Short –Important Events


2020 in Short

• Lantmännen’s highest result ever

• The coronavirus pandemic has had a clear impact on the group’s businesses – with a net result impact of about 325 MSEK

• Strategically important investments to strengthen the position in the grain value chain

• Lantmännen is stable, with a strong financial position and good cash flow

• Fulfilled climate target: 40 percent emission reduction 2015-2020

Coronavirus / Covid-19

Our employees in all sectors and business areas have acted quickly and decisively to handle the effects of the corona outbreak.

Our broad business portfolio once again proves a strength in troubled times.

Great challenges ahead – we don’t know how long the pandemic will go on, or what the

overall consequences will be.

Our priorities remain: protecting our people, protecting our businesses – and taking our

social responsibility.


Strong Development in the Agriculture Sector

• Good quality harvest

• Grain prices have developed strongly during the autumn

• One of the largest autumn sowing acreages ever

• Favorable prices for input goods

• Stronger profitability calculations for most crops going into 2021

• Positive underlying development in Lantmännen Maskin


Continued Investments in the Grain Value Chain

• Grain infrastructure – for example in Hargshamn, Hammenhög, and Kumla

• Decision on larger investment in gluten production in Norrköping

• Heat-treated oats in Kimstad

• The coronavirus pandemic has highlighted the issue of food supply and self-sufficiency


Strong Development in the Ethanol Business in 2020

• Production record in the Norrköping facility in 2020

• Extremely volatile ethanol price during the year has affected the result

• Future development is largely dependent on political decisions and the commodity price developments

350

450

550

650

750

850

Jan, 2017 Jan, 2018 Jan, 2019 Jan, 2020 Jan, 2021

Ethanol price (€ / 1 000 litres)

Ethanol price Yearly average

All-time-lowMarch 24: 350


All-time-highAugust 20: 811

The Pandemic Has Impacted the Food Sector

• Foodservice has been hit hard

• Increased demand for staple goods and fresh bread in food retail

• Underlying good development in all businesses

• Trend break due to the pandemic: more people eat more at home

• Continued strong trend for green and healthy food


Continued Investments for Profitable Growth in Unibake

• New production line in Nowa Sól, Poland

• Modern bakery in Avedøre, Denmark

• Acquisition of bakery business in Lier, Norway

Nowa Sól

Avedøre

Lier


Continued Stable Market for Construction

Machinery in 2020

• Underlying high activity in several of Swecon’s customer segments –however, lower sales of new machines than in 2019

• Growing aftermarket focused on proactive service

• Volvo has launched its first electrified compact machines


Our Financial Targets


2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Target – Return on Equity

8,0%

Result 2020

10,2%

Target – Equity Ratio

40%

Result 2020

45,8%

Target – Net Debt/EBITDA

< 3

Result 2020

1,6

8,0%

40%

3

• The board’s dividend proposal:

• Refunds and supplementary payment 305 MSEK (208)

• Contribution dividend 291 MSEK (237)

• Contribution issue 306 MSEK (288)

• The total dividend proposal amounts to 902 MSEK (733)

The Highest Dividend Ever

MSEK 2017 2018 2019 2020

Refund and supplementary payment 245 157 208 305

Extra dividend 133 - - -

Contribution dividend 222 213 237 291

Contribution issue 100 250 288 306

Total 700 620 733 902

Dividend on subordinated debentures 6% 5,25% 6,5% 7,25%

0

200

400

600

800

1000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total dividend (MSEK)


The Development inOur Businesses



MSEK

440329

787721

0%

2%

4%

6%

8%

10%

0

200

400

600

800

1 000

T3 2017 T3 2018 T3 2019 T3 2020

Result Operating margin

106

188

336

237

75100

150

282243

74

0

100

200

300

400

AgricultureSector

Energy Sector Food Sector Swecon BusinessArea

Real EstateBusiness Area(excl. capital

gains)T3 2019 T3 2020

Lantmännen’s result, after net financial items and adjusted for items affecting comparability

MSEKOperating profit, adjusted for items

affecting comparability

Strong Third-Period ResultDespite Second Waveand Lower Ethanol Price

Net sales decreased by 8 percent, of which 3 percent

currency effects

Energy and Food weaker, but Swecon at record levels


MSEK 2019 2020

Reported result 1 983 2 223

Items affecting comparability 104 -

Net financial items -210 -182

Result after net financial items, adjusted for items affecting comparability

1 877 2 041

Taxes paid -222 -244

Net result 1 652 1 797

MSEK

1 5521 387

1 8772 041

0

500

1 000

1 500

2 000

2 500

2017 2018 2019 2020

210355

1018

514

223

439530

786

505

223

0

200

400

600

800

1 000

1 200

AgricultureSector

Energy Sector Food Sector Swecon BusinessArea

Real EstateBusiness Area(excl. capital

gains)2019 2020

Lantmännen’s result, after net financial items and adjusted for items affecting comparability

MSEKOperating profit, adjusted for items affecting

comparability

This Year’s Result IsThe Highest Ever


48 500

46 000

30 000

35 000

40 000

45 000

50 000

2014 2015 2016 2017 2018 2019 2020

Net sales for the full year decreased by 2,5 billion SEK, of

which 500 MSEK currency effects

Unibake and Swecon clearly impacted – improvement in

Swecon at the end of the year

Notch in the Growth Curve in2020 Due to the Pandemic

-5 000

0

5 000

10 000

15 000

20 000

25 000

AgricultureSector

Energy Sector Food Sector SweconBusiness Area

Other, incl.Eliminations

2019 2020

Net Sales per Business

MSEK

MSEK

Lantmännen’s Net Sales

-350

+200

-1 850

-750

+250

* The change is due to lower external sales due to the coronavirus pandemic, which hasled to decreased group-internal sales (eliminated) sales

Improved Margin and Return on Capital


4,8%

0%

2%

4%

6%

0

1 000

2 000

3 000

2015 2016 2017 2018 2019 2020

Operating Margin

EBIT adjusted for items affecting comparability

Operating margin

8,1%

0%

3%

6%

9%

0

10 000

20 000

30 000

2015 2016 2017 2018 2019 2020

Return on Operating Capital

Operating capital Return on operating capital

10,2%

0%

3%

6%

9%

12%

0

5 000

10 000

15 000

20 000

2015 2016 2017 2018 2019 2020

Return on Equity

Equity Return on equity

• The strong result has improved cash flow from operating activities

• Also, restraint in investments and acquisitions

Strengthened Cash Flow in 2020


4 504

-1 000

0

1 000

2 000

3 000

4 000

5 000

-500

0

500

1 000

1 500

2 000

2 500

T1 2018 T2 T3 T1 2019 T2 T3 T1 2020 T2 T3

Cash flow per three-month period Cash flow rolling 12 months

IFRS16Per tertial R12

Cash flow from operating activities

IFRS16

IFRS16

30%

35%

40%

45%

50%

Equity Ratio

Solid Financial Key Figures


1

2

3

4

5

Net Debt / EBITDA *

45,8%(incl. IFRS 16)

1,6(excl. IFRS 16)

* Bank definition

48,4%(excl. IFRS 16)

1,9(incl. IFRS 16)

IFRS16

5 691(excl. IFRS 16)

7 844(incl. IFRS 16)

4 000

6 000

8 000

10 000

12 000

14 000

Net Debt *

• Good development in 2020

• Effects of the 2018 drought have now passed

• Limited impact from the pandemic

• Lower Finnish harvest due to unfavorable weather

• The international holding in the Baltics is developing well – the German operations less well than expected

Agriculture Sector


337

197 210

439

0%

3%

6%

9%

12%

15%

0

100

200

300

400

500

2017 2018 2019 2020

Agriculture Sector

EBIT Operating margin Return on operating capital

MSEK

• Very intensive harvest – historically high volumes and generally good grain quality

• One of the largest autumn sowing acreages ever

• Grain prices have developed strongly during the autumn

• Continued high sales of feed

Lantmännen Lantbruk Sweden


226

104 109

261

0%

3%

6%

9%

0

100

200

300

2017 2018 2019 2020

Lantmännen Lantbruk Sweden


MSEK

• Slightly lower net sales than the previous year

• Weak demand at the start of the year –stronger market during the autumn

• Stable demand for service and spare parts

• Inventory writedowns have impacted the result negatively

• Positive underlying development: continued improvements and reduced costs

• New management team and new organization

Lantmännen Maskin Sweden


-3

1

9

-7 -1%

0%

1%

-10

-5

0

5

10

2017 2018 2019 2020

Lantmännen Maskin Sweden


MSEK

• The highest result ever

• Agroetanol set a new production record in 2020

• Reppe’s result is stable, despite low demand for starch for the paper industry

• Strong sales development and record result in Aspen

• Lantmännen Oats has improved production efficiency and increased sales

Energy Sector


296

200

355

530

0%

15%

30%

45%

0

200

400

600

2017 2018 2019 2020

Energy Sector


MSEK

• The coronavirus pandemic has had a large negative impact on sales to Foodservice customers

• Increased demand for staple goods and fresh bread

• Unibake has carried out intensive work with cost savings and adapting operations to the new situation

• Cerealia has continued to stabilize operations and improve efficiency, and has significantly improved its result

• Good development in Viking Malt

Food Sector


708787

1 018

786

0%

4%

8%

12%

0

400

800

1200

2017 2018 2019 2020

Food Sector


MSEK

• The sescond-highest result ever, despite considerable impact from the pandemic

• Decreasing total market in the first six months of 2020 – strengthened market in the second half of the year

• Early initiated work with cost savings has been successfully carried out

• The aftermarket is developing generally positively

• High underlying activity in several customer segments

Swecon Business Area


MSEK

372440

514 505

0%1%2%3%4%5%6%7%

0100200300400500600700

2017 2018 2019 2020

Swecon Business Area

EBIT Operating margin

• Focus on day-to-day management during the first half of the year, with few property deals being made

• Larger projects continuing according to plan: including construction of a new office, housing, and retirement homes in Malmö

• The review of strategically important properties continues

• Agrovärme’s result is lower than the previous year, due to the warm climate

Real Estate Business Area


204 213 223 223

98 52 295

0%

3%

6%

9%

12%

0

100

200

300

400

2017 2018 2019 2020

Real Estate Business Area

EBIT Capital gains Return on operating capital

MSEK

302 265 252 228


Towards World-Class 2030!

• Our plans are aimed at driving continued profitable growth in Swedish agriculture and the grain value chain as a whole

• Focus on a secure food supply and increased self-sufficiency for food

• Farming of the Future: climate-neutral Swedish agriculture by 2050

• ”Medlem 2030”: Follow-up on the Owners’ Dialogue – how does Lantmännen contribute to profitability on our members farms?

Together we take responsibility from field to forklantmannen.com

Thank You!

Documents

Year-End Report 2020 - lantmannen.com