Deoleo S A : Q3 2020 Results

Q3 2020

Results

Q3 2020

Results

Contents

1 Highlights

2 Outcome summary

3 Raw material and evolution of consumption

4 Profit and loss statement

5 Balance sheet

6		Cash generation

7 Conclusions

8 Annexes

2	The Olive Oil Company.

Q3 2020

Results

Highlights

• In the month of October, the new 2020-21 olive oil season will begin. According to the initial estimates of the EU,

production in the main European producer companies will increase by 17%. The forecast is that this increase in production will be generated by a harvest that is significantly larger than the previous harvest in Spain, offsetting the lower production levels forecasted in the remainder of European countries.

• In these initial EU estimates, it is also worth noting the 20% decrease in remaining stock levels compared to the previous

season, as a result of the significant increase in consumption during this corporate year.

• Prices of the raw material at the origin are currently increasing, mainly as a result of the current situation of the beginning of the harvest and the above-mentioned forecast of a reduction in remaining stocks. Nonetheless, according to Pool Red data, at the end of September, the average price for extra-virgin olive oil was 2% less than during the previous season.
• According to Nielsen and IRI, the consumption of olive oil on the retail channel during this third quarter of 2020 increased by 33% in the United States, 14% in Spain, and 9% in Italy.
• The EBITDA obtained during the third quarter of the corporate year increased to €18.5 million (178% greater than during the previous corporate year), with a total EBITDA over the first 9 months of the year of €62.2 million (€42.9 million more than in 2019).

 During the third quarter of 2020, we have once again turned a profit, earning, during the first nine months of the corporate year, a relative net profit (without including profits associated with the impact of the restructuring of the debt) of €26 million, compared to €22.5 million in losses during the same period of the previous corporate year. The total profit during the first 9 months of the year, including all accounting entries, was €260 million, €234.3 million of which are related to the impact of the signing of the refinancing agreement in June.

• During the third quarter of the year, the positive evolution of sales has continued, both in terms of increased household consumption associated with the current health crisis, as well as the positive impact of the rollout of our strategic business initiatives. As a result, our volumes during the first nine months of the corporate year increased by 28% compared to the previous corporate year, and our sales increased by 23%.
• During this third quarter, we generated €24.0 million in cash flows, obtaining a net financial debt level of €166.3 million as of September 30, 2020, compared to €557.3 million at the end of 2019. Furthermore, we are in a solid position in terms of cash, at €90.9 million

3	The Olive Oil Company.

Q3 2020

Results

Outcome summary

		30-sep-20	30-sep-19	YTD
		€/Tn	€/Tn	%
	Extra Virgin	2.187	2.225	(1,7%)
Raw
Virgen
Material	1.909	1.999	(4,5%)
	Lampante	1.896	1.954	(3,0%)

		30-sep-20	30-sep-19	YTD
		m€	m€	%
	Net Sales	508.203	412.908	23,1%
	EBITDA	62.176	19.322	221,8%
Profit and	Net Results
260.239	(22.477)	1257,8%
Loss
Attributable to:
	Equity holders of the
	parent	255.282	(22.477)	1235,7%
	Intereses minoritarios	4.957	-	0,0%

• During the third quarter of 2020, extra virgin olive oil prices increased by 8%, despite staying 2% below the prices of the previous corporate year.
• The 2019-20 season has been characterized by price stability, with prices at closing being slightly below those of the previous season.
• During this third quarter of 2020, the positive evolution of the business has been consolidated, with a 28% increase in volumes sold and a 23% growth compared to the previous corporate year.
• This positive evolution of sales has taken place across all of our Business Units, which also continue to grow in terms of EBITDA. Of particular note is the situation of the North America BU, where a 298% increase in EBITDA was recorded, and the Northern Europe BU, where a 422% increase was recorded. The Group's EBITDA is 222% greater than during the first 9 months of the previous corporate year.
• Relative net profit (without considering the results of the restructuring of the syndicated financial debt) was €26 million during these first 9 months of 2020.

		30-sep-20	31-dec-19	YTD
		m€	m€	%
Other	Net Financ. Debt
financial	166.323	557.300	(70,2%)
data
Working Capital
	70.531	77.686	(9,2%)

• Thanks to the positive results obtained, we generated €19 million in cash flows during these first 9 months.
• Our net financial debt has been reduced by 70%, from €557 million at the end of 2019 to €166 million as of September 30, 2020, primarily as a result of the refinancing process.

4	The Olive Oil Company.