Annual Report 2013

Annual Report 2013

Annual report 2013 Helping you grow Company announcement no. 2/2014 | March 6, 2014 | CVR no. 34 62 92 18 MANAGEMENT’S REVIEW Auriga Industries A/S in brief 3 Shareholder letter 4 Financial highlights and key figures Auriga Industries A/S is the listed parent of Cheminova A/S, which is the wholly owned operating company domiciled in Denmark. 5 Highlights 6 Objectives and strategy Cheminova is a global business developing, producing and marketing 8 Financial results crop protection products. All activities are carried out with due con- 10 Market and sales sideration for the environment and in compliance with ever higher 12 Risk management sustainability standards. 14 Corporate social responsibility Cheminova posts revenue of approx. DKK 6.6 billion a year and has 16 Corporate governance more than 2,200 employees, of whom just under 850 work in Den- 19 Investor relations mark. The group has subsidiaries in 24 countries and is selling crop 22 Board of Directors protection products in more than 100 countries worldwide. More 24 Global Executive Committee than 98% of total revenue is generated outside Denmark. It is the overall strategic objective of Auriga to ensure long-term value creation for the benefit of the company’s stakeholders. It is the inten- STATEMENTS tion to further develop Cheminova aiming at remaining a competitive business generating attractive earnings. 25 Management’s statement 26 Independent auditor’s report HELPING YOU GROW ACCOUNTS AND NOTES HELPING YOU GROW is Cheminova’s slogan meaning that we help growers by supplying new and innovative solutions that protect crops 28 Notes overview against insect pests, weeds and fungal diseases. Our products are 29 Income statement improving yields and quality of crops which are used, for example, for foods, animal feed and biofuels. This is our contribution to solve the 29 Statement of comprehensive income world’s food challenge. 30 Cash flow statement 31 Balance sheet HELPING YOU GROW is also reflecting that we consistently aim at 33 Statement of changes in equity creating value for all stakeholders, both financially, professionally and 34 Notes humanly. The most important stakeholders are customers, sharehold- ers, employees and society in general. To be able to create long-term value for all stakeholders, Cheminova must maintain close stakehold- er relations and continuously work on becoming a better and more efficient supplier of crop protection products. ABOUT THE ANNUAL REPORTING Auriga’s annual report includes the financial results of the fiscal Moreover, Auriga’s annual reporting comprises the group’s com- year in addition to the progress on the overall strategic objectives, pliance on the recommendations of corporate governance which while Cheminova’s CSR report provides an insight into the com- are included in “the statutory report on corporate governance”. pany’s initiatives within corporate social responsibility and sustain- Furthermore, a compliance report has been prepared summarizing ability. Cheminova’s CSR report forms a part of the total annual re- the main elements of the internal control and risk management porting and constitutes the group’s “Communication on Progress” systems in connection with the annual financial reporting concern- (COP) under the UN Global Compact. ing the fiscal year 2013. Auriga has opted to apply the option stipulated in section 99a of The Annual Report will not be published in a printed version, but the Danish Financial Statements Act concerning the duty of large will be available on www.auriga-industries.com > Investor, where companies to prepare a corporate social responsibility report by the supplementary reports can be found as well. The Annual Re- referring to Cheminova’s CSR report. This reporting meets the in- port has been prepared and released in Danish and English. In ternational guidelines from the Global Reporting Initiative (GRI). cases of misunderstandings arising out of the English translation, the Danish version is prevailing. 2 / Management´s review AURIGA Industries A/S Continous improvements and satisfactory performance Strong organic growth and a satisfactory increase in earnings are creating a solid basis for the continued positive development of the Auriga group in the coming years. The market for crop protection products Our ambition is to safeguard a capital struc- UN’s Food and Agriculture Organization again developed positively in 2013. For ture which takes into account the competi- (FAO), in 2050 producing 70% more food Auriga, 2013 was also a good year with tive financing of future growth and a further than at present will be necessary – and on improved financial results as well as growth strengthening of the group’s business posi- about the same land area as is farmed in all regions. Moreover, the company did tion. The Board of Directors has therefore today. Crop yields must rise significantly well in many other areas as described in proposed not to pay dividend for 2013. just to keep pace with the growing popula- Cheminova’s CSR report 2013, which out- tion and the increasing need for food. This lines the environmental and social results. New Executive Board maintains strategy places considerable demands on the effi- At the end of 2013, we presented a new ciency and sustainability of the agricultural 2013 – a year of tailwinds and headwinds Executive Board comprising two members sector and thus on our products. 2013 was characterized by tailwinds, but to replace the former one-man executive also by obstacles along the way. On the board. The new management team com- The need for crop protection has never one hand, both revenue and profitability bines skills such as management experi- been bigger, and we have come a long way increased and improvements could be seen ence from global groups with considerable in creating a global group which is more in all the strategic key figures. On the other insights into the needs of our customers in capable than ever of meeting this need. hand, we experienced declines in key cur- addition to an understanding of the group’s rencies, which negatively impacted the re- core values and commercial approach. ported revenue and results. The section on Jens Due Olsen pages 12-13 describes the significant risks A focused management team with clearly Chairman of the Board of Directors faced by the group. defined areas of responsibility and close contact with the Board of Directors makes On track of strategic objectives the company better positioned to imple- In recent years, the company has under- ment the strategic plan which will lead to gone radical changes designed to ensure continued improvements in profitability and that the group remains a competitive value creation. business with attractive earnings. We are on the right track of fulfilling the two long- We are maintaining our focus on striking term strategic objectives of increased earn- the right balance between continued profit- ings and value creation in the period after able growth in combination with improved 2013. At this point by the beginning of efficiency for relatively lower costs and re- 2014, we have realistic expectations of en- duced working capital and debt. The Board tering the low end of the EBITDA range of of Directors is fully confident that the new 13-18% at the end of the year. With a ROIC Executive Board will continue the positive of 12.0%, we are now generating a satisfac- developments. tory return on assets. Even though further improvements are expected on ROIC, we Foundation in place do not expect to achieve approx. 15% by Overall, the implemented measures have normalized tax rate in 2014. successfully prepared us for the future. The The foundation is in place for im- foundation is in place for improved posi- The lower debt levels combined with higher tioning in key markets and fully realizing proved positioning in key markets ”and fully realizing our vision: We earnings have reduced the debt burden to our vision: We must match the best among just under two times EBITDA. However, we peers in the crop protection industry. must match the best among peers still need to focus strongly on maintaining a in the crop protection industry. low debt, gearing and financial risk tailored To realize our vision becomes increasingly to the market conditions in the industry. necessary. According to estimates by the 3 / Management´s review / Continous improvements and satisfactory performance AURIGA Industries A/S FinancialFinancial highlights highlightsand key figures and key DKKm EURm 2013 2012 2011 2010 2009 2013 2012 Income statement: Revenue 6,598 6,263 5,723 5,604 5,437 885 841 figuresGross profit 1,976 1,853 1,549 1,403 1,185 265 249 EBITDA (before special items)* 821 672 495 409 197 110 90 EBITDA 821 577 495 409 197 110 77 EBIT (before special items)* 637 502 318 215 11 85 67 EBIT 637 407 318 215 11 85 55 Net financials (218) (215) (240) (172) (125) (29) (29) Profit/(loss) before tax 417 174 79 58 (107) 56 23 Profit/(loss) after tax and minority interests 290 122 (15) 38 (68) 39 16 Balance sheet: Balance sheet total 6,341 6,381 6,048 5,961 5,638 850 855 Share capital 255 255 255 255 255 34 34 Equity 2,255 2,044 1,914 2,138 2,075 302 274 Net working capital 2,005 2,226 2,346 2,498 2,486 269 298 Net assets 3,972 4,138 4,190 4,223 3,976 532 555 Interest-bearing debt 1,965 2,388 2,470 2,285 2,149 263 320 Interest-bearing receivables 49 102 14 14 0 7 14 Net interest-bearing debt 1,578 1,883 2,186 2,005 1,909 211 252 Cash flows: Cash flows from operating activities 574 513 207 336 299 77 69 Cash flows

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