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ENIGMATIG LTD-A(EGG) - 2025 H1 - Earnings Call Transcript
2025-08-27 14:02
Financial Data and Key Indicators Changes - The first half of 2025 marked the best operational performance in the company's history, with 59 million eggs sold, representing a 23% year-on-year growth [4] - Revenue surpassed €10 million, reflecting a 70% year-on-year growth [4] - Gross profit reached €4.3 million, showing a 183% increase [4] - EBITDA for the first half of the year was €3.5 million, indicating a 250% growth [5] - The net profit for the period was a record €1.7 million, a significant improvement from previous losses [25][26] Business Line Data and Key Indicators Changes - The company completed its investment phase, which included the inauguration of three new buildings, enhancing production capacity by 60% to produce up to 180 million eggs annually [9][10] - The new product line, VTech Squared, focused on premium egg white protein products, achieved a 32% repeat purchase rate, indicating strong market acceptance [12] Market Data and Key Indicators Changes - The total egg market in the Baltic states experienced growth, particularly in the bar and egg segment, with Lithuania leading at over 60% market share [15] - The company successfully reduced the share of industrial egg sales to 11%, aligning closely with natural production splits [18] - Export sales increased significantly, with income from exports rising almost three times compared to the previous period [22] Company Strategy and Development Direction - The company aims to strengthen its position as a market leader in cage-free production, with plans to become the first totally cage-free egg producer [33] - The strategy includes diversifying revenue streams, particularly through the VTech Squared product line, and expanding exports as a percentage of overall sales [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a revenue target of approximately €22.6 million for 2025, a 7% upward adjustment from previous guidance [28] - The completion of the investment phase is expected to support strong revenue growth in the second half of the year, with full operational capacity anticipated by September [30] - The shift towards cage-free production is seen as a tailwind for the company, with expectations of increased demand for higher welfare products [44] Other Important Information - The company has built its own solar park to help mitigate energy costs [39] - A shareholder loyalty program was approved, expected to launch around International Egg Day in early October [35][36] Q&A Session Summary Question: Will the shareholders' loyalty program include benefits for the FinTech Squared production? - Yes, the loyalty program was approved and will include attractive components for loyal customers, expected to launch within six to eight weeks [35] Question: What drove the 70% growth of the revenue in 2025? - The growth was driven by an increase in the number of eggs sold, higher market prices, and a shift in product mix towards retail clients [37] Question: Is gross profit margin improvement sustainable? - Yes, the gross margin improvement is expected to be sustainable due to the shift towards cage-free production and increased capacity [38] Question: How do you manage rising feed or energy costs? - Feed and energy costs are fixed for the maximum period possible, and the company has built a solar park to offset energy consumption [39] Question: Do you expect to raise any additional capital in 2025? - Current capacity expansion is fully funded, but additional capital may be raised for future development projects or acquisitions [41] Question: How do you see the cage-free transition affecting the APF? - The transition is viewed as a tailwind, with the company well-positioned to capture market share and premium pricing as cage-free becomes the industry standard [44] Question: What is your export strategy? - The strategy focuses on increasing exports as a percentage of overall sales, with significant growth in Lithuania and Estonia [45][46] Question: Are there any plans to distribute dividends in the future? - The dividend policy remains intact, with up to 50% of profits expected to be distributed based on the financial results of 2025 [59][60]