Summarizing 2020 by Yuval Sovinsky

Greetings,

We are fortunate to be part the dairy industry that is considered essential industry around the globe. At the end of the first quarter of 2020, when COVID hit the main markets, we realized we must plan for the worst, yet we hoped for the better. We cut our expenses to improve the company resilience, yet we avoided a deep cut in order retain all resources needed for growth. We reduced the sales targets to prepare for a downturn of the market, yet we kept realistically aggressive targets for the sales teams with the objective of keeping 2020 results not lower than 2019.  

It is interesting to note the significantly different market situation in 2020 in various regions:

• China, after putting the pandemic under tight control, resumed massive expansion of the dairy industry by big number of new farm projects, from mid-size parallel parlors to big rotary parlors in mega farms.  
• Europe, following steep decline in business activity in March-April, returned quickly to normal operation that allowed Afimilk to continue our growth through tighter collaboration with our distribution network.
• The dairy farmers in North America suffered more than in other regions, milk prices were cut below break-even level and investment in new projects has been reduced significantly. Farmers dumping their milk to the sewage became viral videos in social media.
• Russia suffered from devaluation of the Ruble. The dairy sector enjoyed many projects that were all signed with approved bank backing already during 2019, but we experienced low level of initiation of new projects for next year. Despite her inability to travel to her territory, Victoria managed to finish a record year.

 The strict travel restrictions created a new reality for our customer facing teams.  Since the COVID breakout in Q1 only few of us managed to travel outside our home countries. Despite wide adoption of video call, with the resulted higher efficiency, we learned how difficult it is to sell without meeting the customers and the dealers in person.  

I am happy to tell that despite all the hurdles we managed to finish 2020 with better results than we expected – revenue continue to grow and profitability is exceptional. This achievement has been achieved thank to tremendous work of our customer facing teams, and not less important, thank to the incredible work of Afimilk Operation teams that managed to deliver all orders on-time despite huge difficulties with supply chain resources, shortage of components and significant transportation limitations.

2020 was a good year for building our stand-alone cow monitoring activity. We launched AfiCollar and started to sell it in many countries and we recruited new strong distributers that focus on selling stand-alone cow monitoring systems in the US, New Zealand and South Korea. I am confident that once we build good cooperation with these distributers, AfiCollar sales will grow steeply.

We launched several initiatives that are going to keep us busy in 2021:

• Customer onboarding program that was prepared by the A-Team, led by Amir Ben Yehoshua, with strong involvement of most application support people in the regions and at HQ. We intend to start in the first quarter to implement that program with every new AfiFarm installation.
• We are going to build our customer data base. This is expected to be a long challenging effort since many of our dealers are not sharing this data with us.
• We are starting to use digital marketing as a strong tool for improving awareness to our brand and products, generate leads and communicate with our existing customers.
• We plan to start the first phase of CRM implementation. The main goals are to provide a powerful tool for our salespeople to better manage their customers as well as new business opportunities and for our technical support teams to improve the service to our customers.

It is not yet guaranteed that the pandemic will be defeated in 2021, but being an optimistic person I hope the new vaccines will allow life to return quickly to normal and our business life to return to normal patterns in the 2^nd quarter of the year.

Please join me in wishing for ourselves a happy and better new year !