ForFarmers N.V.: ForFarmers 2023 first-half results
Lochem, 10 August 2023
ForFarmers 2023 first-half results
Results highlight importance of revised strategy and cost savings
Commenting on the 2023 first-half results ForFarmers CEO Pieter Wolleswinkel said:
“The sharp decline in the result in the first six months of 2023 underlines the importance of the revised strategy, which is decisively being implemented during this transitional year. Price competition increased amid volatile market conditions, putting further pressure on our volumes and thus also on our gross profit. The answer to this challenge lies in implementing the strategy, in which local responsibility with commercial flexibility and a differentiated approach is key. The reorganisation that this requires is being implemented this year. The outcome is a given: fewer management positions and short lines to the customer. Feed quality is paramount in our offering to customers. We use our knowledge of nutrition and are enforcing cost saving programmes to offer competitive selling prices in our local markets. This approach must lead to improved volume and thus gross profit development. We are convinced that in our markets we can contribute to a strong agricultural chain in which sustainability and returns go hand in hand. We are making progress in ESG; we are increasingly working with farmers and chain partners to further reduce our carbon footprint by, for example, using more residual flows and by providing specific advice. Geographically, choices have been made.We expect to finalise the announced sale of the activities in Belgium by the end of the third quarter. An associated impairment charge has already been included in these results. The choices we have made in the Germany/Poland cluster are encouraging, as evidenced by the results, as is our choice for a differentiated approach to the ruminant sector in the United Kingdom. This underpins our confidence that the second half-year will be better than the first half-year, barring unforeseen circumstances. With our strategy and committed employees, we can make a constructive contribution to a sound, sustainable future for our sector and our stakeholders. The recently announced acquisition of Piast in Poland, which expands our position in this growth market, is an example to this end.”
| Consolidated key figures | |||||
| For the six months ended 30 June | |||||
| In millions of euro (unless indicated otherwise) | |||||
| 2023 | 2022 | Total change in % | Note | ||
| Total volume (incl. co-products & others; x 1.000 tonnes) | 4,310 | 4,526 | -4.8% | Relatively smaller decline in co-products & other than in compound feed volumes | |
| Of which compound feed (x 1.000 tonnes) | 2,995 | 3,187 | -6.0% | Decline in swine sector (price competition); decline in broilers (welfare concepts in NL and avian flu in UK, but growth in PL); increase in ruminant sector (success in UK) | |
| Revenue | 1,606.5 | 1,597.3 | 0.6% | Due to the use of differentiation | |
| Gross profit | 234.8 | 257.3 | -8.7% | Due to price competition resulting in lower volumes, price volatility in raw materials and fertilizer (mainly in NL/BE) | |
| Operating expenses | (241.3) | (238.3) | 1.3% | Wage indexation higher than effect decline FTEs, lower production costs (drop in volume and lower energy prices), release from the provision for bad debts | |
| Underlying operating expenses | (226.7) | (233.4) | -2.9% | Excl. incidental losses such as impairment of Belgian activities and restructuring costs (factory closures, reorganisation) | |
| EBITDA | 20.4 | 42.3 | -51.8% | Including €6.1 million in incidental losses (see note 12, pages 21, 22) | |
| Underlying (1) EBITDA | 26.5 | 43.1 | -38.5% | Decline in gross profit greater than reduction in underlying business expenses | |
| EBIT | (6.0) | 19.1 | -131.4% | Including €14.6 million in incidental losses, of which €10.5 million for transition year (see note 12) | |
| Underlying EBIT | 8.6 | 24.1 | -64.3% | Relatively smaller decline in co-products & other than in compound feed volumes | |
| Profit attributable to shareholders of the Company | (14.4) | 11.1 | -229.7% | ||
| Underlying profit | 4.4 | 17.1 | -74.3% | ||
| Net cash from operating activities | 20.9 | (8.8) | 337.5% | ||
| Underlying EBITDA / Gross profit | 11.3% | 16.8% | -32.7% | ||
| ROACE (2) on underlying EBIT | 4.8% | 8.5% | |||
| ROACE (2) on underlying EBITDA | 12.2% | 16.2% | |||
| Underlying earnings per share (x €1) | 0.05 | 0.19 | -73.7% | ||
(1) Underlying means excluding non-recurring items (see note 12 of the interim report regarding the Alternative Performance Measures (APMs))
(2) ROACE is defined as underlying EBITDA/EBIT divided by 12-month average capital employed
General note: percentages are presented based on rounded amounts in millions of euros. This may result in slight differences when numbers are added.
Read the full press release on our website or download the pdf at the bottom of this post.
Note to the editor / For additional information:
Caroline Vogelzang, Director Investor Relations
T: 0031 573 288 194 M: 0031 6 10 94 91 61
E: caroline.vogelzang@forfarmers.eu
About ForFarmers N.V.
ForFarmers N.V. is an international organisation that provides complete and innovative feed solutions to the livestock farming industry. With its ‘For the Future of Farming’ mission, ForFarmers underpins its commitment both to the continuity of farming and to further increasing the sustainability of the agricultural sector.
ForFarmers is a prominent player in Europe with annual sales of approximately 9 million tons of animal feed and is active in the Netherlands, Belgium, Germany, Poland and the United Kingdom. ForFarmers has around 2,500 employees. In 2022, the turnover amounted to approximately €3.3 billion. ForFarmers N.V. is listed on Euronext Amsterdam.
ForFarmers N.V., P.O. Box 91, 7240 AB Lochem, T: +31 (0)573 28 88 00, F: +31 (0)573 28 88 99, info@forfarmers.eu, www.forfarmersgroup.eu
FORWARD-LOOKING STATEMENTS
This press release 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 press release 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.
Attachment
