Strategic goals

The overall strategy of the Group is to grow profitably and sustainably, develop all key activities, and achieve synergies between business areas. The main numerical goals for achieving the above objectives are:

By carrying out activities in each of the five main operating segments, the Group sets separate targets to achieve the objectives applicable to respective segments.

Grain, Oilseed and Feed

The Group’s management aims to sustainably export grain from the Baltic States to achieve higher profitability in this activity. When assessing achievements in the segment, the following is considered: the ratio of the volume of grain purchased in the Group’s elevators to the volume of harvest in the region (target: >/= 7 percent), the segment’s operating profit margin (target: >/= 1.5 percent), etc.

Products and Services for Farming

The key task in this segment is to grow profitably while ensuring acceptable earnings for the farmer. Also, to look for and offer to the market solutions that help plants adapt to changing climatic conditions. To have one of the best agricultural machinery servicing networks in the Baltic States. To develop the investment in GeoFace and offer modern solutions to farmers with intelligent technologies. When assessing achievements in the segment, the following is considered: the market share of new tractors and combines (target: TOP 3 position in each country of operation), segment’s operating profit margin (target: >/= 5 percent), etc.

Agricultural Production

The area of managed land limits the development of this area of activity, therefore, the respective strategic objectives of the Group are further to increase the productivity of crop and dairy farms and to expand the volume of raw milk production through the modernization of production processes and cow herd expansion. When assessing achievements in the segment, the following is taken into account: milk yield (target: >/=12 thousand kg of milk per year per cow), yields of various bowls of cereal (winter wheat average yield target: >/=7.2 tons per hectare of the crop, EBITDA gained per one hectare planted (target: >/= EUR 300), etc.

Food products

The objective of the management of the Group is the efficient management of the companies in the segment and further development of poultry farming capacities through the modernization and automation of packaging, refrigeration, and logistics solutions, as well as the reduction of gas consumption in poultry farming facilities. When assessing achievements in the segment, the following is taken into account: brand awareness regarding the brands represented (target: to remain No. 1 in the Latvian market), poultry farming without the usage of antibiotics (target: 100% raised antibiotic-free), operating profit margin (target: >/= 3.5 percent), etc.

Other Activities

The businesses in this segment are not significant in the context of the Group, and consequently, due to their small size, their profitability is often lower than that of competitors. The Group’s management’s objective is to find a competitive advantage (e.g., expanding production of higher margin premium products, increasing brand awareness, maintaining and expanding supplier representation contracts, and achieving the correct scale, ensuring an efficient result from the activities.