Minutes of the Annual General Meeting of Agri Invest Tuesday, 23 May 2023 at 10.30
In Tårnsalen at Agri Nord, Hobrovej 437, DK-9200 Aalborg SV.

Power Point Agri Invest - Shareholder meeting 23.05.2023

1:  Election of the meeting chairperson. The Board proposes Jens Bigum.

Jens Bigum was elected and noted that the AGM was legally convened via email on 8 May 2023.

Connie Sudergaard and Lene Kjær from Agri Nord elected as vote counters.
Birthe Dencker is the minute taker.

Items 2 and 3 shall be dealt with under one.

2:  Report from the Board of Directors on the activities of the Company over the past year by Chairman Preben Hansen

Welcomed everyone in the room and those following on Teams.

Last year, AI presented the best result in its history with a profit after tax of DKK 43 million.
This year, the result is even better – DKK 48 million after tax. Christian Brasholt/BDO will explain more in the review of the accounts.

The results from the field were reviewed at the shareholder meeting in December, so just a short update today with the things related to the accounts.

Highlights and KPIs – see PP page:
The column on the left shows the figures from 2022. We still have the figures from the worse years to remind us that we must always perform at our best to avoid getting into a bad situation again.

PP equity – see PP page:
The increase in value is a combination of profit and increase in value, which we feel very clearly when we buy up land. As you can see, just over DKK 19 million was paid out last year. If our proposal is later adopted, we will distribute a dividend of around DKK 24 million this year.

Price development – see PP page:
For the first time, we have the same price = 150.25 at the start and end of the year, which we have never done before.

Field plan 2022 + budget 2023 – see PP page:
The otherwise steady development jumps by 1,900 hectares from 2022 to 2023. Distributed with 650 hectares in Amaru and 1250 hectares on the new property in Vanatorii, located near Videle.

Production volume budgeted/realised – see PP page:
A little less wheat, corn and soya but a little more sunflower and rapeseed. All in all, close to the budgeted volume.

Realised yields – see PP page:
We are somewhat favoured by the fact that we work in multiple locations with different weather conditions. 2016 to 2022 + budget 2023.

Sales prices – see PP page:
Realised sales prices with a + deviation. We have maintained our strategy of selling throughout most of the year. However, we have sold out earlier than we have in the past – already in December, when we achieved the best prices. We are delighted with that – a lot of people have full stocks and the price is low now.

Summary of the key points – see PP page:
Everything pulled in a positive direction when the accounts had to be closed, extra sales at high prices in December, adjustment in the hectare subsidy compared to previous years, drought relief, etc., have been the reason why the good result was even better than our estimate from the shareholder meeting.

Valuation of agricultural land – see PP page:
The increase in value of agricultural land is around 16% over 2 years and all adjustments that we have previously made in Denmark are now included in Romania.
There is a slight difference in the areas, which also determines the price it is valued at.

Cadastre – see PP page:
The percentages are not moving as fast now that we are approaching the target – expected loss of 150 hectares remains unchanged.

In 2017, we created a 3-year plan to reach 85%. Steen was hired in 2017 and was instrumental in creating and implementing the plan, which has now been realised. The last few hectares are difficult to get right, but we still believe it can be done.

Oaklins – see PP page:
Last year, Oaklins was introduced at the AGM to help us start the sales process. The work was to last until 1 September 2022, after which it would be evaluated by the Board.

Thoroughly prepared Oaklins for the task, which included a presentation in Romania and introductions to Danish and Romanian employees.

They presented a valuation/possible sales price that was too low, so a unanimous Board decided to put the sale on hold as we did not think a final price would be accepted by the shareholders.

One of the things that dragged down the pricing is something we are in the process of addressing ourselves, which will be presented a little later today.

FirstFarms A/S – see PP page:
When we at the general meeting last year discussed the sales process, we in the Board of Directors had no idea that FirstFarms A/S could want to buy shares. In June, I was contacted by CEO Anders Nørgaard on how we viewed their desire to buy shares. Everyone has the right to buy shares, but since FirstFarms is listed on the stock exchange, it was therefore something in company law that had to be in place with a duty to report ownership.

As you know, in June 2022, we received an offer from FirstFarms, as they wanted to buy between 1 and 5% of AI shares, from the end of June until the response deadline on 11 July 2022, where an agreement was made to buy 1.7% shares. Since then, acquisitions have been made on an ongoing basis to a current ownership share of 10.2%.

At no time have there been any requests/demands from FF, so when we later today propose Anders Nørgaard for a Board position, it is a wish from AI to draw a great knowledge of agricultural operations into the Board.

The organisation in Romania – see PP page:
As previously shown, getting our land registered has gone well in recent years. Now it’s time to get the right of use realised with a map and land registration in hand. For this, we have hired two ground staff – a man in Videle – Andree – and a woman in Amaru – Lonela – and it’s going according to plan.

It is an extremely important task to get the land we own into the operation or get rental income for the area. It works and we expect it to go a long way in the next 2-3 years.

Putting the sales process on hold has had a positive impact on the entire organisation. It’s a challenge to optimise operations and development while doing sales work. We have expanded our land area and strengthened and modernised our organisation. In April, Nicoleta Cosma was hired as controller/office manager with the aim of smarter and more digital workflows, better service to the farm sites and better and faster reporting to Denmark.

Focus points for land holdings – see PP page:
We buy small plots of land in our cultivation area and have noticed that the price has increased significantly over the last few years. From EUR 3,500 to 5,000/hectare and if it’s larger plots, it’s significantly more and up to EUR 6-8,000.

Right now, we are in the process of making a total deal in Oravita of 80 hectares, which is a small piece in our cultivation area, so we are very keen to succeed.

A few months ago, we were outbid on 67 hectares – a price of EUR 5,000 Euro/hectare.

Ongoing energy projects, see PP page:
Work is continuing with the 33 wind turbines in Oravita in the west and we are currently trying to install 340 hectares of solar panels.

In the east, there is more momentum in solar panels, which has been ongoing for the past 2 years, with contracts/agreements in process for 770 hectares with 4 different companies. In total, development agreements have been entered into for around 1100 hectares.

How much ends up being realised is exciting, but since it’s spread across different companies, we expect some of it to be successful.

We will obtain quotes for solar panels on the farms in the next few months. Self-provisioning/selling is more straightforward.

Startup in Vanatorii – just north of Videle – see PP page:
An independently operating organisation where Steen is responsible for operations and all the practicalities.

New areas in operation, see PP page:
In the autumn of 2022, we were offered a lease of 700 hectares + a small farm site with electricity and water, owned by some Italians, which is located together with our own 900 hectares in the Cilibia area, 40-50 km from the farm in Amaru.

On 1 February, the company took over SMI, about 40 km from Videle, with 1250 hectares of leased land on 6-8-year contracts at an attractive price. The farm site, machinery and own organisation, which is now under Steen’s management and interlinked operation with Videle.

Slightly older machines that are replaced with some of the ones we have on the other sites where we buy new ones.

They are used to doing what they do best – the operations manager is quite good and the office girl who registered contracts for 1250 hectares does good and accurate work.

Storage and silo capacity – see PP page:

In the Videle area, we have the smallest farm site and the smallest silo capacity and have managed to buy some land adjacent to the site for expansion. At the same time, we are also looking at the possibility of purchasing existing facilities, some of which are located along the railway line. A solution must be found before harvest 2024 so we can store more crops.

Budget 2023/Christian Brasholt – see PP page:

Budget 2023 shows a result of DKK 20.5 million before tax. Budget 2023 is characterised by high “input prices” for fertilisers, chemicals and energy in particular – and for budget 2023, there is currently a great deal of uncertainty about future crop prices, which will naturally have a major impact on results.

Strategy meeting – see PP page:
Since 2017, the Board has held a strategy meeting in January with Jan and Steen in attendance. After a few years of doing it on our own, this year we decided to hire in help for the entire process.
The choice fell on Hald and Lie Business Development.

We started with phone interviews with the Board, Jan, Steen and Christian to see how we each experience the organisation.

Not a revolution, but good ideas for adjustments and updates to what we do, while improving and following up on the ongoing work makes a lot of sense. Created an annual cycle of work and clearly outlined schedules.

We initiated the preparation of an ESG report, the first version of which is now ready and can be customised on an ongoing basis in the future based on our own wishes and any external requirements. Look at it once a year and include anything that could be of value.

Result for the year – see PP page:
It is with great pleasure for the Board of Directors that we are once again able to present the best result in AI’s history of DKK 48.4 million after tax. All employees are important, but we often remind the office in Bucharest that they should consider the people on the farms as their customers and serve them in the best possible way. Without optimised production, there is no profit.

We shouldn’t get ahead of ourselves, but there’s no doubt that 2023 will be a challenging year as it stands.

However, that shouldn’t spoil the joy of this year’s result. As last year, the Board of Directors will maintain its wish to distribute half of the result and will therefore later today propose a dividend payment of DKK 3,750 per share.

A big thank you to all our great employees and especially Jan and Steen who once again this year have performed at the top level, sometimes under difficult circumstances. Thank you to all our business partners and shareholders for your support.

Thank you for the great collaboration on the Board, which is highly appreciated, and a big thank you to Jørgen for always being ready to help when needed in a busy workday. Thank you to Birthe for your incredible helpfulness. Many thanks to Christian/BDO for once again this year tirelessly ensuring that no Romanians get through with numbers that don’t add up.

3. Presentation of the audited Annual Report and management’s review

     for approval – see PP.

Christian Brasholt, BDO, presented the Annual Report for 2022, which shows a profit of DKK 56.6 million before tax/DKK 48.4 million after tax.

 

Unlike previously, the auditors’ report for 2022 is without reservations or emphasis of reservations. Christian Brasholt explained the basis for this.

 

After value adjustment of the company’s unharvested crops, distribution of dividends for the 2021 financial year and the profit for the year, the company’s equity totalled DKK 570.3 million, corresponding to an equity value of DKK 177.9 million.

 

Debate:

No.

No comments, so both the report and the Annual Report were approved without a written vote.

4:  Decision on the use of profits or covering of losses according to the approved Annual Report. The Board proposes that DKK 3,750 per share be distributed, corresponding to a total distribution of approximately DKK 24 million, which will be approximately half of the year’s profit.

 

Vagn Klitgaard: Last year money was spent to pay off debt – is there a plan for the remaining £24 million of the profit?
Preben: We still want ongoing operations/development and to ensure we don’t become vulnerable. 30% in either plus or minus can mean a lot. That is why we don’t pay it all out.

Bo Nielsen: The ambition is to sell the company at some point – do you have a timeframe?
Preben: 2-3 years in process before we put money into a sales process again. It has brought a lot of calm to the organisation that it has been put on standby, and we still have things to sort out. If we get a good offer, we will present it to the shareholders. The things we know need to be addressed, we are constantly working to improve.

Ejnar Lyngby: How much does FirstFarms plan to buy up – has it been much during the spring?

Preben: We have communicated what we have bought and sold on an ongoing basis. After the sales process stopped, they had acquired 2.5% and have now acquired the remainder. It is regularly reported to the Danish Business Authority, so there has always been openness. We don’t know how much they want to buy. I’m not aware of a specific target, so there is definitely room for others to buy. We have always had the sales list on the website – maybe we should also post a list of those who want to buy? It was the first time we tried to get a price to send out to all shareholders.

Ole Nielsen: How about a merger with FirstFarms? Then we could end up with a listed company. Both have a reasonable net asset value.
Preben: Sales can be full or partial – everything is open and we take it to the next level.

Jens Bigum noted that the distribution of DKK 3,750 per share was approved without a written vote.

5:  Authorisation for the company to purchase its own shares.

The Board of Directors recommends that it be authorised to purchase own shares. The Board has no interest in it as such, and it is only an emergency solution in the event of death or similar, where people need to sell their shares quickly.
The lawyer has helped with the articles of association last year, and there should be no restrictions.

Jens Bigum noted that it was approved by the AGM without a written vote.

 

6:  Elections to the Board.

Up for election: Jørgen Stougaard, Bjarne Møller, Søren Jensen and Bent Blindkilde Jeppesen.

The Board of Directors proposed re-election of all 4 and new election of Anders H. Nørgaard, CEO of FirstFarms, to take over from Jens Bigum. Jens Bigum wished to resign from the Board 1 year before the term of office expires.

 

All 5 were proposed and elected – Anders Nørgaard only for 1 year instead of Jens Bigum.

7:  Appointment of the auditor. The Board proposes the re-election of BDO.

BDO re-elected with no other proposals.

 

8:  Any proposals from the Board or shareholders.

No proposals received.

 

9:  AOB

Presentation of a new Board member, Anders Nørgaard from FirstFarms.

Jens Jørn Andersen: The crops – what does it look like for water, etc.
Feel free to add more images to the website.
Preben: It fluctuates a lot and rains a lot in Oravita. More than 1 year of rainfall from August to now. Extremely difficult to sow in the spring. In the east, the last few years have been really dry. It’s very challenging and employees are on it all the time and have to operate in very different types of weather.
We will post more images on the website soon.

Henrik Grøntved: Study trip – is it something you are thinking about?
Preben: So far, there hasn’t been much interest. Would love to show it off to shareholders, and June would probably be best.

Kjeld Larsen: Been there before – really interesting and very efficient employees there. Highly recommend shareholders to go.

 

Preben thanked Birthe, who solved a huge task with last year’s dividend payment, which went really well and without any major challenges. At the same time, Birthe was presented with a gift and wine in honour of her 60th birthday last week.

Birthe encouraged all shareholders to inform her if they have new account numbers, added shares to pension deposits or made other changes that affect the dividend payment since the last distribution. It’s crucial that it’s completely up to date and reported correctly.

Jens Bigum retired – has been on the board for 11 exciting years.
The resignation is entirely undramatic, and he is happy to invite Anders to join the Board with the wealth of knowledge he can contribute.

Also thanked for a good AGM.

Preben congratulated the new board members and thanked Jens Bigum for his honest, professional and constructive work on the Board.

Preben Hansen

Chairman of the Board