forfarmers roadshow presentation 1h 2019 · 2019. 12. 4. · underlying net finance costs -1.3 -1.2...

ForFarmers Roadshow Presentation 1H 2019

Notifications and disclaimer

Important dates

15-08-2019 2019 half-year results

31-10-2019 Q3 2019 Trading Update

12-03-2020 2019 Annual Results and 2019 Annual Report

24-04-2020 General Meeting of Shareholders


13-08-2020 2020 half-year results


Forward-looking statements

This presentation contains forward-looking statements, including those relating to ForFarmers legal obligations in terms of capital and liquidity positions in certain specified scenarios. In addition, forward-looking statements, without limitation, may include such phrases as “intends to”, "expects“, “takes into account”, "is aimed at“, ''plans to”, "estimated" and words with a similar meaning. These statements pertain to or may affect matters in the future, such as ForFarmers future financial results, business plans and current strategies. Forward-looking statements are subject to a number of risks and uncertainties, which may mean that there could be material differences between actual results and performance and expected future results or performances that are implicitly or explicitly included in the forward-looking statements. Factors that may result in variations on the current expectations or may contribute to the same include but are not limited to: developments in legislation, technology, jurisprudence and regulations, share price fluctuations, legal procedures, investigations by regulatory bodies, the competitive landscape and general economic conditions. These and other factors, risks and uncertainties that may affect any forward-looking statements or the actual results of ForFarmers, are discussed in the last published annual report. The forward-looking statements in this presentation are only statements as of the date of this document and ForFarmers accepts no obligation or responsibility with respect to any changes made to the forward-looking statements contained in this document, regardless of whether these pertain to new information, future events or otherwise, unless ForFarmers is legally obliged to do so.

Reporting standards

The results in this presentation are derived from the ForFarmers 2019 interim financial statements which have not been audited by the external auditor and have been drawn up in accordance with the International Financial Reporting Standards as adopted by the EU (IFRS).

General remark: presented percentages are calculated on the rounded amounts in million euro with one decimal.

Supervision

In view of the fact that shares are freely traded on EURONEXT Amsterdam, ForFarmers operates under the supervision of the Financial Markets Authority (AFM) and the company acts in accordance with the prevailing regulations for share-issuing companies.

2

Financial resultsfirst half of 2019

3

Market and sector developments per cluster in 2019

1. Non-GMO means without genetically modified organisms,

General

• Growing political and public pressure on agricultural sector in Europe to achieve environmental targets (especially in NL and GE)

• Consumption of poultry products continues to grow

the Netherlands

• Smaller dairy herd in first quarter (-2%) due to phosphate measures; phosphate production currently below phosphate ceiling

• Vision report Agriculture, Nature & Food quality published: aimed at circular agriculture

• Restructuring pig sector leads to smaller herds

Germany

• Growing pressure on pig farmers to reduce environmental impact of phosphate and nitrogen

• Increasing interest in animal welfare and environmentally friendly measures

• Demand for non-GMO1 feed continues to grow

Belgium

• African swine fever among wild boars seems to be under control

• Bird flu detected; hygiene protocols in place

• Growing pressure on agricultural sector to reduce environmental impact

Poland

• Broiler sector continues to grow as more slaughter capacity becomes available to leverage export possibilities

• Ruminant sector growing substantially

• African swine fever appear to be spreading

United Kingdom

• Decline in number of dairy farmers, but dairy herd relatively stable

• More forage available due to mild winter; less demand for compound feed in ruminant sector

• Effects of possible outcome Brexit remain uncertain

4

General price developments

Dairy herd in NL smaller (2%) due to phosphate reduction measures

European pig prices steep increase in 2Q19 due to ASF1

(China); decline in global pig herd; prices higher than last year and 5-year average

Broiler prices volatile, approx. on 5-year average; increasing in 2Q19, end-June higher than last year

European milk prices fell slightly in 1H19; in 2Q19 higher than last year and 5-year average

Egg prices declining in 1H19; currently approx. same level as last year and 5-year average

Source:ForFarmers, LTO Nederland, [email protected]; 1) ASF means African Swine Fever

5

mailto:[email protected]

Highlights first-half of 2019

Operational results ForFarmers

Total Feed volume: +5.2% tot 5.1mT

• Acquisitions: +6.8%

• Like-for-like1: -1.6% (decline in NL, BE, UK)

• Ruminants: decline, in NL/BE and UK; effect smaller herd NL

• Swine: increase; in all clusters except UK

• Poultry: increase, in GE/PL (mainly acquisition Tasomix) and UK

Compound feed volume: +7.2% to 3.6mT

• Acquisitions: +9.8%

• Like-for-like: -2.6% (decline in NL, BE, UK)

1. Like-for-like (LFL) is the movement excluding the effect from acquisitions/divestments

Swine

Ruminants

Poultry

Other

Distribution compound feed-volume first-half of 2019

6

Key financials first-half of 2019

General: there was virtually no impact from currency translation in 1H19; 1. Like-for-like (LFL) is the movement excluding the effect from currency translation and acquisitions/divestments; 2. ‘Underlying’ means excluding incidental items, see Note 12 interim financial statements 2019 regarding Alternative Performance Measures (APMs)

Gross profit

-1.7% to €214.1m(+6.6%) acquisitions, (-8.6%) like-for-like1

due to effect unfavourable purchasing position 1H19

Underlying2 EBITDA

-31.5% to €35.8m positive contribution acquisitions (8.2%); like-for-like decline (-39.9%)

Underlying Profit

-61.5% to €11.9m

Total Feed-volume+5.2% to 5.1mT6.8% growth through acquisitions, 1.6% like-for-like decline in NL/BE and UK

Compound feed volume+7.2% to 3.6mT9.8% growth through acquisitions, 2.6% like-for-like decline in NL/BE and UK

Underlying EBITDA/gross profit

16.7% (1H18: 24.0%)

Net debt position

30 June 19: €60.8m (31 Dec 18: €17.1m)

Net cash flowfrom operating activities

€4.8m (1H18: €40.1m)

Working capital

+ €15.1m; a.o. higher accounts receivable in NL

7

Underlying EBITDA development

Presented percentages have been calculated on the rounded amounts in million euro with one decimal and additions may lead to small differences due to rounding; 1) LFL stands for Like-For-Like

(in €m) 1H19 1H18 Total % FX M&A LFL1 Comments

Total Feed volume (in mT) 5.1 4.8 5.2% 6.8% -1.6% A.o. smaller dairy and pig herd in NL and GE

Of which: Compound feed volume (in mT) 3.6 3.3 7.2% 9.8% -2.6%A.o. fewer animals in NL, mild winter in UK, new customers in GE

Gross profit 214.1 217.7 -1.7% 0.3% 6.6% -8.6%Unfavourable purchasing position (NL, BE and UK)

Underlying operating expenses -198.4 -178.1 11.4% 0.4% 7.9% 3.1%A.o. higher diesel and energy prices and more (third party) transport costs

Underlying EBIT 16.0 39.7 -59.9% 0.1% 1.6% -61.6%

Underlying depreciation and amortisation 19.8 12.6 58.1% 0.5% 29.4% 28.2% Effect IFRS 16 effect (€2.5m)

Underlying EBITDA 35.8 52.3 -31.5% 0.2% 8.2% -39.9%

Translation-effect -0.1

Underlying EBITDA at constant currencies 35.7 52.3 -31.7%

8

Profit development

1. ROACE defined as underlying EBITDA/average capital employed over 12 months rolling average, based on underlying EBIT it decreased from 20.0% in 1H18 naar 8.9% in 1H19

(in €m) 1H19 1H18 Comments

Underlying EBIT 16.0 39.7 Gross profit decline and increase underlying operating expenses

Underlying net finance costs -1.3 -1.2 Financing acquisitions and lower interest rates

Share of profit of equity-accounted investees 1.7 1.1 HaBeMa (Germany): recovery in trade volumes

Incidental items -4.3 5.4 Explanation on slide Alternative Performance Measures

Income tax expense -2.8 -9.8

Profit for the period 9.2 35.1

Non-controlling interests -0.2 -0.3

Profit (attributable to owners of the company) 9.0 34.8

Underlying profit 11.9 30.8

Underlying earnings per share (in €) 0.12 0.31

Underlying effective tax rate 25.6% 20.3%Non deductible costs in 2019; 2018 included one-off positive adjustments

ROACE1 15.6% 26.3%Lower gross profit, increase capital employed due to acquisitions, utilisation Pionki mill (Poland) circa 30%

9

Healthy capital structure

(in €m) 30-06-2019 31-12-2018 Comments

Total Assets 899.8 873.7

Equity 414.2 440.8Net effect: profit (€9.2m) minus dividend distribution (-€30.1m), SBB1

(-€2.3m), OCI4 in equity related to re-measurement defined benefits UK (€-3.7m) and currency translation effect (€0.8m)

Solvency ratio 46.0% 50.4%

Net working capital- Current assets2

- Current liabilities3

91.4351.6266.9

76.3350.6277.2

Increase mainly due to higher accounts receivable in NL

Overdue receivables 17.9% 18.7%

Net Debt / (Cash) 60.8 17.1 Lower operating cash flow, investment programme, dividend distribution and SBB1

1. SBB means share buy back programme (started in May 2019); 2. current assets excluding cash and cash equivalents; 3. current liabilities excluding bank overdrafts. 4. OCI stands for Other Comprehensive Income, see interim financial statements; General remark: additions may lead to small differences due to rounding

10

Cash flow development

(in €m)30-06-2019

30-06-2018

Comments

Net cash flow from operating activities 4.8 40.1Decrease in result over the period (-€18.2m) besides increase in working capital (€17.8m)

Net cash flow from investing activities - 14.1 -6.3 In 1H18: gain sale of arable activities NL (€5.6m)

Net cash flow from financing activities -40.2 -41.3

Net increase/decrease in cash and cash equivalents

-49.4 -7.6

Cash and cash equivalents (1 January) 38.4 111.6

Currency translation effect 0.7 -1.9

Cash and cash equivalents (30 June) -10.3 102.2

11

Alternative Performance Measures1 (incidental items)

1. Underlying performance measures are alternative performance measures that are not defined by IFRS. For further informationsee Note 12 of the interim financial statements 2019; (A,B,C): reference note in the comment section;

(in €m) adjustments on differentlevels

ImpairmentsBusiness combinations and Divestments

Restructuring Other Total APM items

For the six months ending on 30 June 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

On EBITDAA - - 0.9 4.9 -2.6 - -0.5 - -2.3 4.9

On EBITB -4.7 0.5 0.9 4.9 -2.6 - -0.5 - -7.0 5.4

On Net-financing resultC 2.6 -0.05 - - - - 2.6 -0.05

On Tax 0.9 -0.1 -0.2 -1.2 0.6 - 0.2 - 1.5 -1.3

Comment

2019: closing mills (NL + UK) re. Efficiency plans, ceasing of construction of mill (GE) (B); 2018: reopening Deventer (non-GMO) mill (B)

2019: gain on sale real estate in NL (A+B), accrual put option liability and contingent (gain) earn-outs (C); 2018: gain sale arable activities NL (A+B) and accrual earn-outs (C)

2019: closing mills (UK + NL) and projects re. Efficiency plans (A+B);

2019: Ceasing construction new mill (GE) (A+B)

12

Results Netherlands/Belgium

Presented figures are calculated on the rounded amounts in € million with one decimal and additions may lead to small differences due to roundings; 1) The 2018 figures have been restated to compare

(in €m) 1H2019 1H20181 Comments

Total Feed volume (in kT) 2,586 2,560

Contribution acquisitions (Van Gorp BiologischeVoeders, Maatman & Voeders Algoet); effect smaller dairy and pig herd; more sales TF in pig sector, less in ruminant and poultry sector

Revenue 657.3 629.4

Gross Profit 116.8 126.9Effect unfavourable purchasing position first-half of 2019

Underlying operating expenses

-95.7 -88.8Higher energy costs, third party transport costs and integration costs, lower overhead cost allocation

Underlying EBITDA 27.5 42.1

Underlying EBIT 21.2 38.3

Underlying EBITDA/Gross profit

23.6% 33.2%

ROACE (on underlying EBITDA)

35.4% 52.9%

13

Results Germany/Poland(in €m) 1H2019 1H20181 Comments

Total Feed volume (in kT) 1,103 817.4 Due to acquisition Tasomix and LFL growth in all species

Revenue 298.8 210.8

Gross Profit 36.1 27.1 Due to volume growth and acquisition


-34.8 -22.9

Effect acquisition Tasomix (Poland), volume growth, more third party transport activities, higher diesel and toll milling costs, integration costs, more overhead cost allocation




16.3% 20.6%


8.0% 22.7%Increase capital employed due to acquisition and start up mill in Pionki (PL), lower results in GE

TASOMIX

• Volume growth Tasomix: over 20% to 285kT (1H19 compared to 1H18);• 1Q19: volume development slower as poultry farmers waited for higher broiler prices; in 2Q19 prices rose with positive

effect for Tasomix; end of June approx. 30% utilisation Pionki;• Professionalisation and integration costs not yet fully compensated by volume growth and synergy effects

1) The 2018 figures have been restated for comparison reasons14

Results United Kingdom(in €m) 1H2019 1H2018 Comments

Total Feed volume (in kT) 1,390 1,448Decline in ruminants (sheep) due to mild winter, decline in pigs, growth in poultry

Revenue 338.7 321.6

Gross Profit 60.9 63.7Effect unfavourable purchasing position besides margin improvement in pig sector


-59.5 -58.5Higher energy prices besides decline in employee benefit expenses, more overhead costs charged




14.5% 17.4%


10.8% 11.1%

15

Horizon 2020 – Activities update

1. LTI’s means Lost Time Incidents; 2) TFS means Total Feed Support

• Further growth share of specialties

• Substantial increase demand for non GMO feed

Focus on attractive segments

• Focus on enhancing the Agroscoop platform (use of data) in all countries

• Investments in customer friendly digitisation through TFS2

• Expansion network strategic partners (production & transport)

Partner and deliver the Total Feed Business portfolio

• Integration Tasomix (Poland) and Voeders Algoet(Belgium) on schedule

• Integration Van GorpBiologische Voeders and Maatman (Netherlands) both completed

Acquisitions (& divestments)

• Decline number LTI’s1 by 44%; focus remains

• Efficiency plans 2019-2020 (cost saving €10m in 2021): announced closing 4 mills (2 in UK, 2 in NL) by end of 2019

• New credit facility of €300m signed (5 - 7 years)

• Tightening up of purchasing procedure; permitted coverage lengths shortened

One ForFarmers: functional excellence & leverage scale

16

Horizon 2020 – deliverables update

1) SBB betekent share buy-back programme

• Total Feed volume+5.2% to 5.1m tonnes

• Underlying EBITDA-31.5% to €35.8m

• Underlying profit -61.5% to €11.9m

• Underlying EBITDA/gross profit 16.7% (1H18: 24.0%)

Resultsfirst –half of 2019

• (Re)new(ed) sustainable product concepts:

• Ultra : lower phosphate emissions by, better health for and better performance from finishers (pigs)

• Terra+: more milk from forage

• Apollo poultry concept also launched in Belgium

Total nutrition solutions

• Internal training academies across species and functions fully operational

• Training programme enhanced with practical training sessions (i.e. Time Management)

Employee development

17

Outlook per specie

1) ASF means African Swine Fever

Ruminants

Global outlook positive, European consumption stabilising, public and political debate in NL and GE on environmental impact agricultural sector could affect growth potential

Swine

Global demand growing, European consumption gradually declining, pig herd shrinking (mainly in NL and GE), export to China could grow due to trade conflicts and ASF1 (in China/Asia)

Poultry

Consumption of poultry products continues to grow, more demand from Asia as replacement for pig meat, more process capacity becoming available in Poland, leading to growth potential compound feed

18

Outlook markets

Continuation volatility raw material prices & currency markets; geopolitical trade developments

Environmental impact agricultural sector subject on political agenda; size livestock herd can be affected particularly in NL and GE

Brexit can lead to production growth British pig and poultry farmers (self sufficiency rate currently ca. 60%)

19

Outlook results

Efficiency plans 2019 – 2020

Total cost savings of €10m (in 2021 versus 2018); progress optimisation and rationalisation mill locations and efficiency projects;

Intended capex and working capital 2019

Capex adjusted from €50m to €40m in 2019, due to decision to cease construction new mill in Germany;Focus on optimisation working capital and leveraging strategic suppliers

Strategy 2025

Process started strategic update 2020 -2025;finalisation 1H2020

IFRS 16

Applied as of 1 January2019; effects on results

Underlying EBITDA, underlying EBIT, underlying profit expected to be lower in 2019 than in 2018

Guidance Horizon 2020

for the medium term an average annual increasein underlying EBITDA in the mid single digits at constant currencies, excluding impact of significant acquisitions and barring unforeseen circumstances

2019

20

Gross profit - 1.7%

LFL: -8.6% due to unfavourable purchasing position 1H19

Underlying EBITDA– 31.5%due to a.o. higher production and (third party) transport costs

Summary 2019 half-year results

Higher working capital

Strong balance sheet

Efficiency plans 2019-2020

Closing 4 mills in 2019; efficiency project on course

Total Feed volume: +5.2%(LFL -1.6%)

Compound feed volume: +7.2%(LFL -2.6%)

Integration of acquisitions on schedule

21

https://connect.forfarmers.eu/sites/cil/Originals/Beelitz_LKW_Ruminant.jpg

Results per cluster

(in €m) Netherlands/Belgium Germany/Poland United Kingdom Group/ Eliminations Consolidated

1H2019 1H20181 1H2019 1H20181 1H2019 1H2018 1H2019 1H2018 1H2019 1H2018

Total Feed Volume (k tonnes) 2,586 2,560 1,103 817.4 1,390 1,.448 - - 5,079 4,825

Revenue 657.3 629.4 298.8 210.8 338.7 321.6 -20.5 -20.3 1,274 1,142

Gross profit 116.8 126.9 36.1 27.1 60.9 63.7 0.3 -0.04 214.1 217.7

Underlying operating expenses -95.7 -88.8 -34.8 -22.9 -59.5 -58.5 -8.4 -7.9 -198.4 -178.1

Underlying EBIT 21.2 38.3 1.4 4.2 1.4 5.1 -8.0 -7.9 16.0 39.7

Underlying depreciation & amortisation

-6.3 -3.8 -4.5 -1.3 -7.4 -5.9 -1.6 -1.6 -19.8 -12.6

Underlying EBITDA 27.5 42.1 5.9 5.6 8.8 11.1 -6.4 -6.5 35.8 52.3

Underlying EBITDA at constant currencies

27.5 42.1 5.9 5.6 8.7 11.1 -6.4 -6.5 35.7 52.3

Ratios

EBITDA/Gross profit 23.6% 33.2% 16.3% 20.6% 14.5% 17.4% 16.7% 24.0%

ROACE2 35.4% 52.9% 8.0% 22.7% 10.8% 11.1% 15.6% 26.3%

ROACE3 8.9% 20.0%

22

Additions may lead to slight differences due to rounding; 1) 2018 comparative data adjusted for new clusters; 2) ROACE means underlying EBITDA/average capital employed on 12 months rolling average; 3) ROACE based on underlying EBIT

ForFarmersin focus

23

ForFarmersEuropean leader in Total Feed solutions

#1 European Total Feed solutions provider

Total Feed volume of 10 mT¹

2018 Revenue: €2.4 billion underlying EBITDA2: €100 million

Servicing over 27,000 farmers

Completed 10 acquisitions since 2014

2,700 employees in 2018

Listed since 2016 on Euronext Amsterdam

Founded in 1896 as a cooperative

Based in the Netherlands (head office), Belgium,

Germany, Poland and the United Kingdom

1. Total Feed volume 2018 in million metric tonnes (mT);2. earnings before interest, tax, depreciation and amortisation;

24

ForFarmers’ products, clients and species

Compound feed

Specialties

Dry MoistLiquid (DML)

Crop

On-farm advisory

and support

with c. 450 on-site

advisors

Total Feed solution

All farm sizes

Ruminant

Swine

Poultry

25

Central position in value chain to farmers

Raw materialssuppliers

ForFarmers: Production, supply and application of Total Feed solutions

FarmersDairy processors,

slaughterhouses & egg packers

Retail & Consumers

ForFarmers’ approach: From Feed To Farm

On-farm feed solution advisory

Formulation, Nutrition & Procurement

Feed milling Logistics & delivery

Iterative innovation process

Access to farm gate

26

ForFarmers’ core markets

1. Locations include production and blending mills as at March 2019; taking into account the announced closing of mills in UK and NLSource: ForFarmers august 2019

Countries # Locations1 Volume

The Netherlands² 9 4,5 mT

Germany/Belgium/Poland 14 2,6 mT

United Kingdom³ 13 2,9 mT

Total 36 10,0 mT

27

ForFarmers Executive Committee

Yoram KnoopCEO

[6/12]

Arnout TraasCFO

[8/18]

Stijn SteendijkDir. Strategie & Organisatie

[5/10]

Arthur van OchDir. Supply Chain

[1/1]

Control/Finance, Information Technology (IT), Legal Affairs, Risk Management, Mergers &Acquisitions, Investor Relations

Human Resources, Nutrition & Innovation Centre (NIC), Marketing, Communication, Sustainability, Corporate Affairs, Commercial Excellence, Digital Innovation

Purchasing, Formulation & Quality, Production & Logistics, Operational Excellence, Engineering Projects, Health & Safety

PieterWolleswinkelCOO

[5/12]

Adrie van der VenCOO

[4/10]

StevenReadCOO

[33/33]

DavidFousertCOO

[3/14]

ForFarmersNetherlands

ForFarmersBelgiumReudinkPavo

ForFarmersGermanyPolandNew regions

ForFarmersUnited Kingdom

[X/X] Years with the company or predecessors/Years active in the industry28

ForFarmersaddresses increasing need for sustainable food production

Core values

For the Future of Farming is our promise to farmers: we work side-by-side with our customers for the long-term good of their farms and of the sector as a whole.

Mission

We aim to be the leading livestock nutrition company in Europe by supplying economic and sustainable Total Feed solutions on farmVision

AmbitionWe drive for next

level results

SustainabilityWe are here

to stay

PartnershipWe believein win-win

29

Theme Material, focus area KPI Performance

Environment

1. Limit phosphate pollutionSDG 12

1. Phosphate efficiency percentage on-farm in NL (dairyand swine farmers) +

2. Limit greenhouse gas emissionsSDG 12 & 13 & 17

2. GHG emissions in metric tonnes of CO2 equivalent andin Kg of CO2 per tone

+/-

3. Minimise the use of land, water and energySDG 12 & 15 & 17

3. Percentage of sustainable soy bean meal and palm oil

People & society

4. Ensure safe and fair working conditionsSDG 3 & 17

4. Number of Lost Time Incidents (LTIs) -

5. Improve feed safetySDG 3 & 17

5. Total number of feed safety incidents due to non-compliance with regulations and voluntary codes +

Animal health & welfare6. Improve animal health andwelfareSDG 3 & 15 & 17

Improving animal heath & welfare is deemed an integralpart of Total Feed solutions for which no specific KPI has been developed

No specificKPI

Sustainability KPIs 2018

30

Apollo(broilers)

Producing meat efficiently with reduced carbon footprint and lower land use

Biologisch(broilers)

Organic Broiler Production

Gildehoen(broilers)

Slow Growing Concept in collaboration with retailers in the Netherlands

ULTRA(swine finisher)

Better feed efficiently and growth, without increasing phosphate and nitrate excretion, better gut health, lower aggression, reduced mortality, simpler feed programmes for easier management

NOVA(swine sow)

Improved technical performance, lower GHG emissions. Better sow productivity, reduce preweaning

Feed2Milk(dairy)

Efficient milk production with healthy (longevity) cows

Translac(dairy)

Optimally managing the transition period (drying off – calving) of dairy cows

Sustainability key issue in innovation

The darker the colour green, the more relevantSource: ForFarmers

Environment People Welfare

Balancing the sustainability themes in innovative concepts

31

Historyfrom regional compound feed cooperative to leading European listed Total Feed company

Source: ForFarmers

Bu

sin

ess

1896

Foundation

Feed volume sold to members

Listing onEuronext

Amsterdam

Separation cooperative and business operations; new name ‘ForFarmers’

Nutreco partnership in Specialties and Micros; extended 5 yrs in 2018

Org

anis

atio

n

Incorporationof cooperative

Several cooperative mergers, including the merger of

ABC and CTA into ABCTA

100%

Purchaseand sales

organisation

Launch of the ‘Equity on Name’ (VON) initiative

85% 15%

Focus on Total Feed solutions

International expansion

in BE, GE and UKVarious acquisitions

and divestments

2016

Expansion in the value chain

International expansion

Back tothe core

20061901 20032000 2005 20142012 2018

11%

Species academies full running

Non-GMO mill NL

Expansion in PO, BE. NL

2019

Start efficiency plans

Announcementclosing of

locations UK/NL

32

ForFarmers shareholders1

Dd. Augustu 2019; The stakes presented in Blue letters (Kempen, APG and J P Morgan) are based on rounded capital interests as last registered at AFM (on issued ordinary shares ForFarmers) and the stakes presented in White letter are the positions as presented in the Annual Report 2018 as at 31 December 2018; * Indirect holding of FromFarmers relates to the holdings of the individual members of the cooperative

Coöperatie FromFarmers U.A. - direct

Coöperatie FromFarmers U.A.-indirect*

APG AM N.V.

Kempen CM N.V.

St.Beheer- en Administratieknt. ForFarmers

ForFarmers N.V.

Other institutional investors

JP Morgan AM Holdings IncTechnical listing on

Euronext Amsterdam: 24 May 2016

Average daily traded volume in 2018: approx. 110.000

17%3%

23%

6%

7%

5%10%

28%

Included in Amsterdam Small Cap Index (AscX) 19 September 2016

33

Key investment highlights

European leader providing Total Feed solutions to farmers1

Resilient markets with selective growth opportunities2

Access to farm gate3

Focussed strategy Horizon 20204

Proven M&A strategy to drive further expansion5

Sustainability vital element in business model6

Strong balance sheet7

34

(Underlying) EBITDA development

Source: ForFarmers; Note: 2014 underlying EBITDA as disclosed in the Annual Report 2018 is corrected for comparative reasonsAmounts are in € millions

3034

81

69

88 8690

94

102 104

82

90 94

101 100

0

20

40

60

80

100

120

2010 2011 2012 2013 2014 2014 2015 2016 2017 2018

EBITDA (in €m)

EBITDA Underlying EBITDA

35

Horizon 2020 in de praktijk

Bron: ForFarmers

Horizon 2020 in practice

36

Strategy Horizon 2020: further enhance & expand business in Europe+

Focus on attractive segments

Partner and deliver The Total Feed Business portfolio

Acquisitions

One ForFarmers:functional excellence & leverage scale

Suppliers One ForFarmers Customers

People development

Total nutrition solutions

Best in industry profits

• Preferred partner for customers• Increase share of livestock’s stomach• Closer partnerships with suppliers• Nr 1 or 2 position in > 4 key countries

2020

Leading positions in core countries

1) CF is Compound Feed; ForFarmers’ management best estimates; ForFarmers’ compound feed comprises compound feed, blends, concentrates and young animal feed. Source: ForFarmers, WattAgNet based on 2017 results

Netherlands

Company CF1 production (mT)

#2 Agrifirm 2,5

#3 De Heus 2,0

#4 Fuite 0,7

Total Feed

#1

United Kingdom

Company CF production (mT)

#1 AB Nutrition 2,2

#3 2Agriculture 0,9

#4Mole Valley Partners 0,8

Total Feed

#1

Belgium


#1 Aveve 1,3

#3VandenAvenne

0,6

#4 Quartes 0,4

Total Feed

#2

Germany


#1 Agravis 4,1

#2 DTC 2,8

#3 Bröring 1,8

Total Feed

#4

Poland


#1 Cargill 1,3

#2 De Heus 1,0

#3 Wipasz 0,6

Total Feed

#4

38

Value creation within changing market circumstances

Market developments in the chain

More interest in

• Local sourcing

• Circular / residual flows

• Sustainable production

Increase of

• Consolidatie andcooperation in the chain

• Innovation

• Sustainability

More interest in

• Animal health andanimale welfare

• Concepts such as organicand non-GMO feed

• Use of data

Increase of

• Animal welfare concepts, e.g. ‘Chicken of Tomorrow’

• Sustainable products

• Cooperation

More interest in

• Provenance of food

• Animal welfare

• Carbon footprint

Suppliers raw materials Farmers Processing industry and retail Consumers

• Greater efficiency

• Better returns

• Healthier livestockPerformanceTargeted planning and analysis

TeamSpecialist & Expert Support

ProductsTailor made and Total Feed solutions

FOR THE FUTURE OF FARMING

Value creation in the chain

39

ForFarmers in the value chain:Focussed on feed solutions delivered on farm

Focused position ForFarmers in the value chain with a numberof advantages:

• Direct access to the farm• Integrated solution provider

to the farmers• No channel conflicts

Product Description Application Examples Value add

Compound Feed

Mix from various raw materials and premix and additives

Finished products to be fed as a complete feed to animals

• Compound feed (e.g. Feed2Milk, NOVA, Apollo, ULTRA)

• Blends

Specialty feed additives

Specific (complex) nutrientsSpecially designed for home mixing, young animals and animals in transition

• Premixes and minerals• Additives (e.g. Selko, Milkpower)• Transition feeds (Translac) • Piglet feed (VIDA)• Calf milk replacers (e.g. VITAMILK)• Concentrates (e.g. MIXX, Blendix)• Fermentation (Ferm4Farm)• Prestart Neonatal

DMLDry, Moist and Liquid (DML) co-products

Supplemental to rations

• Rapeseed meal (D)• Feedmix RV (D)• Beet pulp (M)• Corngold® (M)• Citrocell (M)• DGS Protiwanze® (L)

CropBroad product portfolio to support crop producti

Nutrient planning, cultivationtechniques, crop protection, rotations, variety choice, etc.

• Seeds (Topgrass) • Silage additives (SiloSolve©FC)• Crop protection• Fertilisers (e.g. Gro Grass, Gro Mais)

Complete portfolio to support our trusted advisor role

41

Swine Strategy: More with Less

Delivering customer value to become the preferred feed partner

Complete life stage portfolio design on common nutrition concepts in all markets

Harmonised nutritional approach simplifying and standardising Raw Material ingredients Standardised manufacturing processes enhancing product quality Leveraging nutritional innovation capacity & investment through strategic partnerships Optimising product portfolio architecture to deliver local market needs

Decomplexing products, production and supply chains

to realise efficiencies

Sow

Outstanding litter performance and lactational excellence

Piglet

Healthy piglet development and growth

Piglet

Optimal growth and feed efficiency to maximise carcass

value sustainably

Demonstrating Added Value: animal feed profit & performance analysis

On-farm advisory and support is delivered by advisor

€ added value

€ efficiencies

=

=

Products

Performance

Expert Team

42

ULTRA: Input to sustainable output thinking

Market needs are more complex and specific

ForFarmers identified 6 core needs at pig farms and in supply chains:

• Growth rates

• Feed efficiency

• Reducing medication needs

• Reduced aggression

• Environmentally friendly

• Simpler management

ULTRA: unieke ULTRA: unique concept proposition – Growth and More

• Aligned to farmers, abattoir and retail needs

• Class leading technical performance with less environmental impact

• Tested in 4 countries at over 50 farms

Evidence based concept

• Tools and applications to deliver Plan-Do-Check-Act advice plans

• Commercial calculations to demonstrate added value

43

Leverage overhead and R&D functions

Segments (e.g.): Sow, piglets, poultry, dairy

Clear and proven M&A strategy to drive further expansion and profitability

Rationale for leading market share Characteristics….

Optimise production capacity with dedicated

plants by species

Capabilities e.g.: DML, crop, specialties

Leverage sales force and organise it by species

Add capabilities / segments to portfolio

Direct access to the farmer with mills located near by

High regional market share to optimise logistics

Scale

Portfolio

Regionalmarket share

Cross leveraging ForFarmers capabilities

Synergy potential

Regional leadership potential

Risk assessment (i.e. management, geographical)

Fine-tune NL & BE

Ongoing initiative to further build on strong existing positions

Strengthen UK/ GE/ PL

Ongoing initiative to increase market access, volumes & efficiency

Europe+

Tap into fast growing, large & attractive markets in Europe+

44

Strengthen positions UK, Germany & PolandStrong market shares drive economies of scale

1) ROACE defined as underlying EBITDA / average capital employed over 12 months rolling average; 2. with a capacity of over 30kT ; Sources: Feed production volumes : FEFAC, NL, BE and PL: ForFarmers’ estimates, GE: Deutscher Verband Tiernahrung data, UK: AG Industries estimate. Includes feed for poultry, cattle and pig categories, as defined by FEFAC (pet food not included)

Top 3c. 150 players

UK

Top 3c. 35² players

PL

Top 3c. 80 players

NL

Top 3c. 50 players

BE

Top 3c. 300 players

GE

Lower levels of consolidation may provide opportunities Underlying EBITDA/ Gross Profit 1H 2019 and ROACE1

23

,6%

16

,3%

14

,5%

16

,7%

35

,4%

8,0

% 10

,8% 1

5,6

%

NL/BE GE/PL UK TOTAL

Underlying EBITDA/Gross profit ROACE

45

ForFarmers’ acquisitions in 2018

* Volumes (2017) as disclosed in relating press releasesSource: ForFarmers

Maatman (NL)

Sector Poultry & Ruminants

Volume* 114 kT

Location Wolvega (FR)

Van Gorp Biologische Voeders (NL)

Sector Organic (all)

Volume* 67 kT

Location Schalkwijk (UT)

Voeders Algoet (BE)

Sector Swine & Ruminants

Volume* 150 kT

Location Zulte

Tasomix (60%) (PL)

Sector Poultry, Ruminant & Swine

Volume* 395 kT

Location Pionki, Biskupice, Kaboro

46

Acquisitions / divestments as of 2014

1) Volumes and Purchase considerations as presented in financial statements 2018, or the relating press release, 2) First payment, €57.2 m in July 2018, second payment (earn-out) to follow in 2021; For exact dates of closing of transactions, reference is made to the relevant press releases; Source: ForFarmers

Company Year Acquisition/Disinvestment Sector CountryVolume Total Feed1

(x1.000 ton)

Acquisitionamount1

( €m)

Van Gorp Biologische Voeders 2018 Acquisition All (organic) Netherlands 67 9,1

Maatman 2018 Acquisition Poultry, ruminant Netherlands 105 8,3

Voeders Algoet 2018 Acquisition Swine, ruminant Belgium 150 15,5

Tasomix (60%) 2018 Acquisition Poultry, Ruminant and Swine Poland 402 92,02

Akkerbouw klantenportefeuille (FF NL) 2018 Divestment Crop / Arable Netherlands (5,7)

DML activiteiten (FF NL) 2018 Partnership DML Netherlands 160

Wilde Agriculture Ltd. 2017 Acquisition All United Kingdom 2,0

Transport activiteiten Wheyfeed 2016 Divestment Transport United Kingdom

Leafield Feeds Ltd. 2016 Divestment Other United Kingdom (1,3)

VleutenSteijnVoeders B.V. 2016 Acquisition Swine Netherlands 295 30,5

Countrywide Farmers 2015 Acquisition All United Kingdom 400 14,0

Exportactiviteiten BOCM PAULS 50% 2014 Divestment All United Kingdom

Subli 2014 Divestment Horses Netherlands

De Peel Consultancy & Voeders B.V. 2014 Acquisition All Netherlands 1,2

Wheyfeed Ltd. 2014 Acquisition Liquid additives United Kingdom 200 5,4

HST Feed Ltd. 2014 Acquisition Ruminant, Poultry United Kingdom 140 16,2

47

ForFarmers’ teamProfile

• 2,654 FTE’s1

• c. 650 commercial functions

• c. 450 on-farm advisors

Focus on talent development & leadership

• Management programmes (e.g. Masterclass Senior Management, Potential Program)

• Logistics Academy, Sales Academy and Sector Academies (Ruminants, Swine, Poultry)

1. As at 31-12-2018, equalling 2,761 employeesSource: ForFarmers

Male/Female

Male

81%(82%)

Female

19%(18%)

Age structure

55+29,1%

46-5524,6%

36-4519,8%

26-3520,7%

18-255,6%

(25%)

(30,6%)(18,8%)

(18,5%)

(7,1%)

Number of employees per country

Netherlands 991

United Kingdom 1076

Poland 248

Germany 351

Belgium 95

(1.075)

(945)

(-)

(328)

(86)

48

SWOT-analysis

S W

O T

Strengths (Internal/positive)

Full focus on Total Feed approach on-farm

Leveraging scale, internal academies, in-house Nutrition Innovation Centre

Solid financial position

Weaknesses (Internal/negative)

Total Feed portfolio not yet complete in all countries

Market position in Germany and Poland still sub-optimal

Imbalance in the contributions from the various clusters

Opportunities (External/positive)

In consolidating markets: growing demand for customer-specific data-driven / supportive solutions,

further acquisitions and further use of big data

Increase in environmental and other legislation requires innovative feed solutions

Growing interest in food quality and provenan

Increasing global demand for animal proteins

Threats (External/negative)

Animal diseases

Increase in legislation concerning environmental impact

Growing attention for alternatives to animal proteins for human consumption

The use of algorithm solutions for feed advice

49

ContactCaroline Vogelzang

Director Investor Relations

Mobiel: +31 6 10 949 161

Vast nummer: +31 573 288 194

[email protected]

ForFarmers N.V.

Kwinkweerd 12

7241 CW Lochem

The Netherlands

50

FOR THE FUTURE OF FARMING

forfarmers roadshow presentation 1h 2019 · 2019. 12. 4. · underlying net finance costs -1.3 -1.2...

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