Financial Statements

Period from January 1, 2020 to December 31, 2020

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Message From Our CFO

 

2020 was intense year for LDC. The Covid-19 pandemic and uncertain crop size prospects disrupted food supply-chains, creating uncertainty in agri-commodities markets, resulting in declining prices for most products in the first semester followed by a strong recovery, particularly close to year-end.

LDC leveraged its global and diversified footprint and risk management expertise to keep essential supply chains moving and profitably navigate this uncertain context, while achieving significant milestones for the future of the Group.

Both our segments contributed to improved financial performance compared to 2019, delivering Segment Operating Results of c. US$1.6 billion in 2020 and EBITDA of c. US$1.3 billion, respectively up 63.1% and 58.4% year-on-year.

Most platforms successfully overcame the challenges posed by uncertain market conditions, running our businesses profitably thanks to our presence at both origin and destination, close relationships with customers and efficient risk management.

Our improved operational performance drove an 8.0% return on equity for 2020, despite the adverse P&L impacts of our investment in Luckin Coffee shares and the depreciation of Latin American currencies in the tax line of our income statement.

In parallel to improved financial performance, the Group continued to link its financing model with its efforts to embed sustainability across its value chains. In January 2020, we signed a new loan agreement with the European Bank for Reconstruction and Development to support sustainable expansion of LDC’s activities in Europe, Middle East & Africa.

Access to liquidity also remained a point of focus. The Group’s funding needs evolved rapidly to serve business needs in a fast-moving environment, as reflected in the US$1.7 billion increase in working capital year-on-year, and access to bank lines provided the necessary flexibility to support the business growth.

As part of our continual effort to diversify funding sources, the Group secured its first-ever public investment grade credit rating of BBB- with a positive outlook, assigned by S&P Global Ratings, in order to widen its investor base and enhance already strong access to liquidity, particularly on debt capital markets. The Group also doubled the size of its short-term European commercial paper program to €1 billion and issued a €600 million five-year bond in November 2020.

Available liquidity remained strong throughout 2020 and stood at US$11.1 billion at the end of the year, resulting in a stable liquidity coverage of 1.8x current portion of debt.

In November 2020, the Louis-Dreyfus Group signed an agreement to sell an indirect 45% equity stake in LDC to ADQ. Upon completion of the transaction, expected mid-2021, a minimum of US$800 million from the proceeds will be used to partially reimburse the shareholder loan granted in 2018 by LDC to its parent company Louis Dreyfus Company Netherlands Holding B.V. This will further strengthen our balance sheet and investment potential, supporting the pursuit of LDC’s ambitions for the future.

Considering the impact of this expected inflow, our adjusted leverage ratio improved to 1.8x at the end of 2020, compared to 3.1x one year ago.

Our strong operational and financial performance in 2020, our adaptation to tightening liquidity access, and the upcoming completion of the transaction with ADQ, collectively reinforce LDC’s balance sheet and position to deliver on its strategy and business plan.

Patrick Treuer
Chief Financial Officer

Management Discussion & Analysis

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Financial Highlights

More financial information, key figures and performance indicators are available here and in our 2020 Financial Report.

Net Sales

US$33.6
billion

stable versus 2019

Segment
Operating Results

US$1,559
million

↑ 63.1% versus 2019

EBITDA from
Continuing Operations

US$1,324
million

↑ 58.4% versus 2019

Income Before Tax –
Continuing Operations

US$620
million

↑ 110.2% versus 2019

Adjusted
Leverage Ratio

1.8x

↓ from 3.1x in 2019

Net Income,

Group Share

US$382
million

↑ 66.1% versus 2019

Return On Equity,
Group Share

8.0%

↑ from 4.6% in 2019

Liquidity Coverage

1.8x

current portion of debt

↑ 58.4% versus 2019

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