Good afternoon, dear listeners. Welcome to AUGA Investor Relations Conference. I'm Emilia from Nasdaq Vilnius, and I'll be moderating today's event. We will start with the presentation from the management, which will be followed by the Q&A session. Please be informed that this webinar is being recorded and will be available on the Nasdaq Baltic YouTube channel. I encourage everyone to submit questions in the Q&A section at the bottom of the screen. With that said, I'm pleased to introduce today's presenter, the Chair of the Board, Kęstutis Juščiaus. Please, the floor is yours. Thank you, Emilia, for your introduction. Good afternoon, everyone, and I appreciate you appearing today. I'm Kęstutis Juščiaus, the Chair of the Board of AUGA Group, and one of large shareholders in the company indirectly. So today I will present in webinar the unaudited financial results of our group for the six months of 2024. During the webinar, I will cover the financial performance for the six months of 2024, the overall results, as well as those of each segment individually. I will also share the updated 2024 EBITDA guidance and explain it, and provide the status of AUGA Group tech projects. First of all, I would like to discuss the overall financial performance of the group. As you can see from the slide, the revenue decreased due to lower sales. Despite a EUR 0.8 million rise in financial costs. The group implements efficiency and cost reduction program, which allows to successfully reduce operating costs. In the first half of 2024, the group's operating costs decreased by 16% compared to the same period last year. The most significant change in 2024 is due to decreased marketing and salary expenditures. The group will continue to review other components of operating costs and expect additional savings by the end of 2024. Crop growing segment. Global conventional Wheat MATIF, which is index for the wheat in Europe prices have dropped to the lowest level in recent years. As a result, we had to sell the harvest at the lower prices than we predicted and we planned. Regarding organic food wheat, prices are similar to those of the last year. We are observing slightly lower prices for organic feed wheat in the market, due to the larger quantity of organic feed wheat producing in Europe and lack of good quality wheat, which the prices are going up. As we announced today in the correction of our 2024 EBITDA guidance, we expect a lower yields this year than initially planned. We are already seeing lower-than-expected results for conventional reseed, and the yield for legumes is also expected to be lower. Final results for legumes and other crops will be known in the Q3. At the end of the Q3. The group incurred bigger production costs than planned. They were higher mainly due to transition to conventional farming activities, which required more intensive soil cultivation, like subsoilers. Due to these reasons, we are reducing the forecasted yield results, and more details will be provided in the next slides. In the first half of 2024, the segment's revenue was lower due to lower quantity and prices of goods sold compared to the same period of 2023. It's important to note that the group increased the area in which it undertakes conventional farming to 17.9 thousand hectares in 2024, 2.5 thousand hectares more than was planted in 2023, which resulted lower subsidies compared to the same period of last year. Despite this, the group plans to receive a similar amount of subsidies through the year when comparing to full subsidies amount of year 2023. As announced already at the start of 2024, that with the aim of improving overall financial results, the group will conduct a review of economic units of the agricultural operations. After assessing the long-term performance of farms and the efficiency of the land under cultivation, the group decided, as of thirtieth September 2024, to discontinue operations in one of our regions, in Mažeikiai region, where 3.3 thousand hectares of farmland were cultivated. In 2024, this farmland generated a loss amounted to about EUR 2 million, which decreased our gross profit in this season. In certain regions, we have also reduced our operation on unproductive land areas, which accounts for an additional 420 hectares across various our company locations. As a result, the smaller area of land under cultivation will not only improve overall results in future but that will also reduce the need of working capital, which also, with high interest rates, plays a significant role in the end result, financial result of the group. Dairy segment. Let's now turn our attention to one of the group, pivotal segments, dairy. As it was announced at the end, the group began implementing the segment efficiency agenda, and since the Q2 of 2024, a third of our dairy herd started operating conventionally. Two farms that experienced a greater drop in milk yield due to grazing in fields and heat stress on cattle during the summer periods before were transferred to conventional farming system. These farms are now showing significantly better results compared to previous years. The improving milk yields suggest that potential for even better performance in upcoming quarters. The second graph also shows that milk prices have slightly decreased in Q3 of 2024. The average price of conventional milk has fallen due to seasonality, which is always happening in this period of the time. However, looking at the following months of Q3 and next coming months, we can see that the prices of milk is rising up back. It's important to mention that the price for mixture of conventional and organic is already reach the level which is was for organic milk with a premium. In second half of the year, we will have much better financial results also coming from cost savings, which I'll explain next slide. In the first half of the year, the dairy segment significantly improved its financial results due to necessary production decisions made earlier, such as herd management strategies, which we done it one, two years before. These decisions, along with the partial transition from organic to conventional dairy farming, led to higher milk yields, which not only generated increased revenue, but also reduced the cost per ton of raw milk by offsetting fixed costs, which they're not changing when the productivity goes up. According to the data, the cost of production will decrease from the end of the Q3, as conventional dairy farms will use feed from the new harvest with a lower cost than the previous feed we used it in the first half of the year. As you can see from the slide, average milk yields rose 7% in the reporting period compared to a year earlier, while the cost per ton of raw milk production decreased by 16%. Total sales revenue grew 7% in the first half of the year, which shows good, good trend for segment, also looking for future next part of the year. Mushroom growing segment. Another significant and integral part of the group business is its mushroom growing segment. During the reporting period, product prices were 8% higher, while production volumes fluctuated between 5% of each compared to the same period of the last year. It's important to note that when we're making operation decisions, the group focuses on the gross margin generated by the products being grown, rather than the quantity we produce. But in general, this is the segment shows comparable results with previous years, and we look positively on the second part of the year, and we believe that we can reach planned EBITDA for 2024, which was forecasted in at the end of 2023. The overall financial results of the mushroom growing segment for the first half of 2024 are similar to those of the same period of last year. The main trend that's worth to mention is that the increased cost due to inflation and rising employee salaries are being offset by higher sales prices. So we are able to transfer growing part of the cost to the consumers, and by doing an excellent job in distribution, delivery, and customer service. FMCG segment. Now, let's shift our focus to another segment, the FMCG. As it was announced previously, in the Q2 of 2023, the group introduced a new product line to the market, which included dairy products, vegetables, own products, and eggs. In Q2 2024, new products under the AUGA brand yogurts were launched, which are expected to generate high profitability for the segment in comparison with existing milk products. As can be seen from the data in the table, during the first six months of 2024, segment sales and gross profit have increased. Product sales have continuously increased in each quarter by quarter, and the group continues its plans to expand the distribution network in order to reach a wider consumer base, and to reach also the forecasted gross margin of EUR 500,000 by end of the year. Strategy and technology update. In the Q2 of 2024, the group introduced a technology portfolio, which includes AUGA M1 biomethane-electric-powered tractor, AUGA E1 multimodal electric-powered agriculture platform, and sustainable feed production and feeding technology. We are currently enlisting external financial industry partners to accelerate the technology to the market. Regarding the status of technology, AUGA tractors have now been tested under real farming conditions for a second season. Initial testing of AUGA E-One began in 2024, and Cattle Tech is currently patent-pending procedure. EBITDA. Correction to the EBITDA guidance for 2024. I would like to take the opportunity and comment on the correction to the EBITDA guidance for 2024 that has just been announced today. In the slide, the EBITDA guidance for dairy, mushroom growing, and the FMCG segments published on seventh September 2023 remains up to date and unchanged. The group remains confident with its ability to reach the forecast results in one of long-standing segments of operations by the end of 2024. The biggest discrepancy in the guidance of the EBITDA arises from the crop growing segment that have been caused by a set of unbearable internal and external factors. Namely, one of the reasons is a smaller-than-expected harvest. The group data shows that the yield in 2024 will be lower than was forecasted in initial EBITDA guidance, with an impact of about minus EUR 4 million. The biggest negative factor was the smaller-than-expected conventional rapeseed harvest, which fell from a level of 3.5 tons per hectare planned in 2023 to revised 22.4 tons per hectare. That alone has brought a negative impact of approx only this crop EUR 2.2 million out of 4 million reduction by yield. I would like to say that we will go back to the yields and explain all the harvest structure in the Q3, and we will be more precise and details regarding all the crops and cost structure. All the harvest will be finished, and our presentation will be published after Q3 results. The wheat yield in 2024 is close to projected figure, which we published at the end of 2023, but the yields of other crops will be clearer by the end of the Q3 of 2024, when the full harvest will be complete. Second reason for guidance reduction is higher production cost. The group incurred bigger production costs than planned. Production costs were higher, mainly in the conventional farming activities, due to specifics of the transition to conventional operations, which we've done last year, and we've done the first time after eight years by being in organic operations, which required much more intensive soil cultivation versus planned. The planned production schemes were changed because of reason to make more soil cultivation for previously being organic soils to transfer to best performance in future for conventional farming schemes. The real impact on the segment's gross profit from increased cost amounted to a negative up to EUR 4 million, which doesn't mean that in future we will have so high costs related with operations. Third, the crop growing results suffered from the lower commodity product prices. In 2024, raw products have been sold and prices have been contractually set through all the year. Lower than expected raw product prices in 2024 will have a negative approximately negative EUR 1.6 million impact on crop growing segments results. In 2024, the group received lower subsidies than expected in 2022 due to increase in the area of land switch to commercial farming, which actually have no organic subsidies, and a 15% capping on organic schemes payments introduced by Lithuanian government in April 2024. The current rate of subsidies plan stand at EUR 11.2 million for 2024, while the guidance was based on EUR 13.4 million level were forecasted in the seventh of December 2023. That were calculated on the then announced subsidy payment conditions, which were known by publicly available sources. As previously mentioned, we have reviewed it also and discontinued operation in loss-making agricultural lands, land plots. In 2024, the group conducted a review of economic units in its agricultural operations. As a result, the group decided, as of 30 September 2024, to discontinue operations in the Mažeikiai region, where 3.3 thousand hectares were cultivated. The losses we produced here, it was EUR 2 million. Then normally, it. In normal operations, we have approximately EUR 1.5 million of gross margin need to be produced. So in general, not all the farms are also includes historically generated the same amount of margins. Some of them were generating losses, some are generating profits. So we would love to, in future, to exclude from our operations every piece of soil, a plot of the soil, which is not will generating and don't have chances to generating gross margin during closest coming years. Additionally, the group new activity in the biomethane production has faced challenges due to uncertainty in the green certificate market in Germany. What happens is that our biomethane production, what we're producing, we're injecting in the grid here in Lithuania. And our customers in Germany, they use this biomethane for transport sector and to generate emission quota saving documents and the quotas, which could be also generated from different sources, not only from biomethane. For example, HVO fuel, which is imported from another sources, also from other regions. In Germany, it was a scandal because of fake provided green oil or HVO provided to Germany, which has substantially reduced the amount of consumption for green certificates. But the Lithuanian and German government found this fake situation, and they put. European Commission will put an anti-dumping tariffs on this third parties or third countries, especially from China, HVO fuel. And also important to note that these fake certificates were also postponed and not allowed to provide to the market. And because of this reason, the situation in nearest future need to recover, and the prices for green certificates need to come back, which actually, during last year, they fell down by half. So as... However, as of today, we do already see a positive development in this biomethane market, and that's makes us likely to increase the production capacity to first in the Q4 in 2024, and while group's cash flow from this activity remains positive. The gross profit forecast for 2024 has been reduced to zero, pending clarification of the situation in the market. We are expecting positive gross margin in Q4, but we don't wanna wanna to put a conservative figure before we don't have situation clear in fully. In 2023, OPEX on the group level amounted to EUR 30.3 million. In this context, the group has set out of to decrease the OPEX to EUR 12 million for 2024. However, the current rate of optimization sets the expectation an even lower level of EUR 10.4 million. Consequently, due to the successful implementation of efficiency and cost reduction programs, the group operating costs are expected to be cut down by an additional EUR 1.6 million more than planned. The group is determined to improve even further the overall financial results that fall between controllable scope of factors, primarily in the dairy, fast-moving consumer goods, and mushroom growing operations. In the meantime, the crop growing segment has undergone a major transformation the season 2023 to 2024, that brought a level of uncertainty and a set of operational challenges. Nevertheless, it's important to underscore an external factor to the crop growing segment that played even a more tangible role in the... Undermining the sector's performance, which is the commodity market situation staying at a multi-year low. To frame it in the wider context, the crop growing results are a reflection of the overall industry performance, translated from farming to commodity pricing, to agriculture machinery, and respectively, availability of investment in the segment. With the opportunity to recover the growth in the market relatively soon, there is a full potential to improve the segment performance in nearest coming seasons. Yeah, thank you very much for your attention, and I'm very pleased to hear your questions and answer your questions. Thank you for the presentation. We will now proceed with the questions, and before that, I would like to remind everyone you can submit your questions in the Q&A section at the bottom of the screen. The first question we received is: How has the company managed the working capital? Is it sustainable to be working capital positive? In previous years, previous seasons, working capital was increased due to higher growing cost of the production, and especially when we have very long production period. And we have one year to invest in the crops, and extra half a year at least to sell the crops. So we have very high amount of working capital needed for the operations... Recently, this inflation is already not anymore grows up, and even the prices we expected will be even little bit corrected. And also we are not increasing any more production, so we are even reducing our operations, especially the Mažeikiai region and other regions where we wanted to cut operations on unfavorable. So, and here, we by decreasing operationals, we also can get extra space for the working capital, which is not will be needed for new coming crop production. Thank you. What is the expected CapEx for 2024 and 2025 of the group? CapEx for 2025 of the group, it's not yet set, and this is not yet confirmed, and I don't want to speculate on this. But the CapEx for 2024 could reach up to EUR 3.5-4 million by end of the year 2024. Thank you. And you cut your 2024 expected EBITDA guidance by 51% due to various factors that impacted the crop segment. Now, part of the land is conventional. Do you expect that this should ensure more stability in the forecast of the results? And what is the expectation of the gross profit margin in the conventional crops? What is my margin on the conventional crops? Okay, so it's actually the... You know, so it's the difference between farming systems, which farming system is better, more stable, we can evaluate at the end of the year, because part of the crops which is coming harvest in Q1, we don't know yet, and we can't know all the costs related with every farming system. So we don't know which farming system performs better at the moment. But it's important to mention that the prices also in commodities markets, they are not always coming together. For example, organic prices in this year are staying on the same level, when the conventional prices fell down by 15%, for example, for wheat. So in this and this is but a mixture of the prices from different areas that we play in both areas. It can lead for us a future, more stability. What is the last question was? What is the expectation of the gross profit margin on the conventional crops? Okay. So this is like I said before, so it's the gross margin for the conventional crops. So we will know conventional or organic only when we fully will harvest all the crops, which yet we are not finished yet, and we don't know final financial results for coming for these crops. After Q3, we know more in detail. Thank you. And would government subsidies have any impact on this? Government subsidies, there are no any at the moment known ongoing discussions relating changing the existing subsidies schemes. So probably the subsidies scheme will be as it's set on today for next coming two, three years, till the organic program will be finished of twenty till twenty twenty-seven included. And conventional subsidies, they are not so high like organic, but like I said before, also in our previously mentioned that subsidies were reduced by 15% for organic and organic schemes. And where 15% subsidy reduction was because of capping on the farm level. Thank you. The following questions are regarding the bond refinancing. Could you give us some details about the placement of the new bond, maturity, coupon payments, interest, and do you plan to continue issuance in Mintos? So first of all, we... I can't tell you precise numbers. That bond need to be refinanced by end of, in middle of, December. But, what I would-- what I can only guide, that this will be not so long, how to say? Not, not will be five years like it was previously. This will be a little bit shorter, in relation with today's market's situation, and that because the high prices, especially in the fixed, instruments markets, are not favorable, to fix it for longer period of the time. And we can't tell you exact numbers, so what will be coupon, how will be paid, before we will not finish the prospectus, and we will not check the investors' needs to be financed by our proposal. So it come later, and probably we will publish it also on a separately with public announcement, which is the main terms of bond issuing. It will be published on the website. So at the moment, if you ask me, does we wanna to use the Mintos, we say that we have agreement with Šiaulių bankas, who is arranger, and he need to arrange all the needed dealers, inc- any dealer who who wanna to-... to work with our bonds, you need to get exception and to get approval and be arranged by Šiaulių bankas. Thank you. And, do you think you will need to go for more extra financing? Is there still some room for banks to give you additional loans, or do you think of going, to the market for SPO? You know, with this amount of loans which we have in our company, it's just EUR 80 million loans of financial debts. We constantly, there is certain constantly recurring process of new repayment of existing loans and raising new loans. It is, for example, our financial debt previous years and this year is very, very similar. This is a few hundred thousand euros difference. This is only EUR 0.3 million difference year on year if you compare six months of 2023 to 2024. But it doesn't mean that the loans are very fixed. They not change the. Part of old loans are repaid and new banks are coming in the new areas, in working capital areas. And also, we use also new bond issuing programs if needed for short-term financing, like we done it in Q2 a bit partially, which was bought by Mintos platform you just mentioned, and so on. Thank you. And, the following question is regarding Mažeikiai lands. You mentioned that exit from Mažeikiai lands will get working capital needs decreased. And in general, having the updated EBITDA forecast, do you plan to have a positive working capital effect or vice versa? Do you think you will need additional financing for working capital needs? Like I said before, so it's working capital, we constantly financing working capital. We have I don't know how many different credit lines which is in operations. We can use the credit lines and limits. And also regarding the money which we keep in our accounts, we don't keep too much cash because we have a lot of working capital which we can lower and not to pay interest, which are at the moment quite high because of high interest rates on the euro Euribor, and so on. Working capital needs every time is calculated in relations with production program, that repayment schedules for old banks' long-term loans and availability of short-term financing, also from trade financing, which could be also used for working capital financing. Thank you. It looks like we've covered most of the questions so far, so if you have any more questions, please submit them now, and the following question is: What is the situation with the EUR 60 million grant application to INVEGA under the program Billion to Business? When do you expect the decision to be released, and how would it affect the company's business prospects? This project is at the moment under review, so INVEGA is works with the project at the moment. We're answering questions which raised during this reviewing process. At the same time, we're looking for investors who will together with they will follow on this investment project, and we would love to finance the future of this project, not from our company own cash flow, because especially with lower results coming also for this season, we don't have enough liquidity and working capital to put short-term money to long-term or future how it's called on long-term investments, to use a short-term money, so which we look for and list investors for this purpose. Exact date that it will be, how to say, accepted or reviewed or could be also results, not sixty, could be also another number coming. It will be known, probably next coming two, three months is what I guess. Thank you, and as all questions have been answered, on behalf of AUGA and Nasdaq Vilnius, thank you, everyone. It was a pleasure being with you today. The recording of the presentation will be available on the Nasdaq Baltic YouTube channel, and thank you for a very informative conference. Thank you very much for the attention. Have a nice evening.