DLG ANNUAL REPORT 04 10 18 MANAGEMENT VISION AND FINANCIAL REPORT STRATEGY REPORT Business areas ........................................... 4 Strategy ................................................... 10 Financial overview ...................................... 18 Chairman’s report ....................................... 6 Important events ........................................ 14 Financial highlights ..................................... 22 Group CEO’s report .................................... 8 Agribusiness ............................................. 24 Premix & Nutrition ...................................... 32 Energy & Retail .......................................... 38 CONTENTS 44 60 CORPORATE CONSOLIDATED GOVERNANCE FINANCIAL STATEMENTS Management structure ................................ 44 Consolidated Financial Statements ............... 60 DLG’s Board of Directors .............................. 48 Parent company Financial Statements ............ 122 Executive Management ............................... 50 Financial Statements .............................. 150 Risk management ...................................... 52 Independent auditor’s report ..................... 152 When COVID-19 became part of our lives............ 54 CSR ........................................................ 56 This is a translation of the original Danish document. In case of discrepancy, the Danish version shall prevail. DLG’S BUSINESS AREAS 04 MANAGEMENT REPORT G T L E O K BAL MAR Business areas Chairman’s report C R Group CEO’s report O N O P TI PRODUC VISION AND STRATEGY V S E FINANCIAL REPORT P G O E R T A C CORPORATE B & EN Y LE E GOVERNANCE ERG PRODUC CONSOLIDATED FINANCIAL A N N IM IO STATEMENTS A IT L NUTR P R S O C D I T U IS CT G ION & LO 4 DLG ANNUAL REPORT 2020 BUSINESS AREAS SHARE OF REVENUE STRATEGIC EXPECTATIONS AND EMPLOYEES AGRIBUSINESS In 2021, Agribusiness will continue to grow through efficiency increases, cost management and optimisation of Our Agribusiness covers crops, crop production and animal both logistics and production, as well as by rethinking our nutrition, including our egg and poultry activities. Besides business model, including new investments in digitalisation. Denmark, DLG has activities in Germany, Sweden, Poland, 62% Growth is also expected to be achieved through strategic France, Finland and the Baltic countries. investments in Denmark and abroad. DLG buys and sells crops such as grain, rapeseed, soy and maize. Our crop cultivation activities cover everything from plant breeding, seed grain and fertilisers, to crop protection and agricultural lime for the fields. Within animal nutrition, DLG sells and produces compund feed and feed 43% supplements for pigs, cattle and poultry. PREMIX & NUTRITION As part of Strategy 2021, DLG plans to expand production capacity in the Premix & Nutrition area and invest in relevant DLG markets its Premix & Nutrition activities under the business partnerships abroad. The plan also includes organic brand of Vilofoss, which is one of Europe’s largest producers 6% growth based on increased sales, primarily in the European of vitamins and minerals for livestock, with 18 factories in market. At the same time, we want to strengthen the countries that include Denmark, Germany, France, Spain, business through greater group synergies. Belgium, Sweden, China, the UK and Russia. DLG has focused on Premix & Nutrition for a number of 8% years and gained significant know-how across companies and national borders. ENERGY & RETAIL The ambition is to maintain and strengthen Energy & Retail’s market-leading position. This will be achieved through Energy & Retail covers DLG’s activities within energy, 32% increasing sales and strategic investments, particularly in DIY stores, Land & Fritid farming, home and garden supplies Germany. stores, and insurance. The subsidiary Team SE operates 194 filling stations and 80 DIY stores in Germany. In Denmark, DLG operates the Danish energy business in partnership with DCC Energi. The Land & Fritid chain has 65 stores in 49% Denmark, Sweden and Germany. Management report – Vision and strategy – Financial report – Corporate governance – Consolidated Financial Statements DLG ANNUAL REPORT 2020 5 HEADING FOR A GREENER FUTURE NIELS DENGSØ JENSEN, CHAIRMAN OF THE BOARD OF DIRECTORS As farmers, we are accustomed to operating in an ever- changing world and having to constantly adapt to new conditions. This year was no exception, with the COVID-19 pandemic in particular leaving a clear stamp not just on our everyday lives, but on the entire global community. Danish agriculture has generally succeeded in overcoming the challenges brought about by the COVID-19 pandemic, and at DLG we kept the wheels turning throughout the year, despite lockdowns, restrictions and other impediments. This was only possible thanks to our extremely skilled and dedicated employees and their exceptional readiness to embrace change in what was indeed a challenging year, in so many ways. As an owner of DLG, it makes me proud, and on behalf of the Board of Directors and the Board of Representatives, I would like to express my gratitude. 6 DLG ANNUAL REPORT 2020 The Board of Directors and the Board of Representatives management of our company. The election marked for our objectives and also to document that we are have been involved in initiating the transformation of a new era for DLG, and also fulfilled our ambition delivering on our objectives. our Danish agribusiness activities, and the first results of increasing the diversity of both the Board of began to appear during the past year. With the aim of Representatives and the Board of Directors in terms There is no doubt that, in the coming years, we as establishing closer ties between customers and DLG, the of gender composition, background and expertise. farmers will face new demands and requirements as transformation project shows how DLG as a business and regards the ways we manage our farms, and it is vital DLG’s owners are working towards the shared goal of For the first time, we now have external members of our that tools and solutions are devised that will enable creating the best solutions for the modern farmer. We are Board of Directors, and we have succeeded in bringing in us to meet these new demands and requirements, well under way with this, and we will continue on that path strong and competent professionals who will contribute while at the same time fulfilling our own ambitions when we develop the group’s business with the customer expertise, experience and know-how from some of and objectives. DLG will play a key role in creating at the centre across the value chain of our cooperative. Denmark’s largest companies. They will be involved in the solutions that make it easier for our customers to work of the Board of Directors on an equal footing with the make sustainable or environmentally sound choices. This year’s results have brought us one step closer to Board members elected by our owners and employees, fulfilling the goals set out in our five-year group strategy and will contribute to setting DLG’s course for the future. This agenda is firmly embedded in the DLG Group’s ‘DLG Leading the Way 2021’ back in 2017. In recent three business areas, and we have succeeded in years, we have developed from a conglomerate into a For DLG, diversity brings strength, and it was therefore creating solutions from which our customers are already focused group that rests proudly on three strong pleasing to see how several women were elected this benefitting. Several specific initiatives will be launched strategic pillars. It has proved to be the right strategy year. In the agricultural world, fewer than one farmer in in the coming years, and we will continue our broadly for DLG to focus on our core business, which generates ten is a woman, while the 12 women elected to DLG’s based cooperation with other agricultural operators. In value for us as customers and members. With a dry Board of Representatives account for 15 per cent of the past year, our cooperation has included discussions harvest of good quality and a fine year overall for our the owner-elected members of the Board of with other cooperatives, think-tanks and NGOs of how Agribusiness, a nice profit increase in Premix & Nutrition Representatives. Three out of 13 members of our we can help to fulfil the sustainability ambitions of the and another year of strong results in Energy & Retail, Board of Directors are women, of whom one is elected agricultural sector, while on the business side we have the group overall deliver a very satisfactory results. by the owners, while two are external members. established important collaborative partnerships. Based on the results for the year, DLG can declare a It has taken a concerted effort to achieve this, and Sustainability is naturally part and parcel of DLG’s profit of DKK 135 million for our owners. In total, we the work is by no means done. In the coming years, future, because we believe that it will provide us with have distributed nearly DKK 600 million to our owners we will continue to work to increase the diversity of the best starting point for creating value for our in the past five years. This proves that our strategy is our owner-elected bodies, as well as our business in customers, our owners and the world around us. right, and that DLG is a sound business. general, to make us even stronger in the future. It will therefore be an integrated element of our next group strategy, which we will start working