Forfarmers Nv · EURONEXT:FFARM
Forfarmers Nv — H1 2019 Earnings Presentation
51 slides from Forfarmers Nv's earnings presentation, Aug 15, 2019
Slide 1: ForFarmers Roadshow Presentation 1H 2019
ForFarmers Roadshow Presentation 1H 2019
Slide 2: Notifications and disclaimer
Notifications and disclaimer Reporting standards Important dates Forward-looking statements The results in this presentation are 15-08-2019 2019 half-year results This presentation contains forward-looking statements, including those relating to derived from the ForFarmers 2019 ForFarmers legal obli
Slide 3: Financial results first half of 2019
Financial results first half of 2019 3
Slide 4: Market and sector developments per cluster in 2019
Market and sector developments per cluster in 2019 General the Netherlands Belgium • Growing political and public pressure on • Smaller dairy herd in first quarter (-2%) due to • African swine fever among wild boars seems to agricultural sector in Europe to achieve phosphate measures; phosphate prod
Slide 5: General price developments
General price developments European milk prices fell slightly in 1H19; in 2Q19 higher than last year and 5-year average 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 las
Slide 6: Highlights first-half of 2019
Highlights first-half of 2019 Operational results ForFarmers Distribution compound feed-volume first-half of 2019 Total Feed volume: +5.2% tot 5.1mT Other • Acquisitions: +6.8% Poultry Swine • Like-for-like1: -1.6% (decline in NL, BE, UK) • Ruminants: decline, in NL/BE and UK; effect smaller herd NL
Slide 7: Key financials first-half of 2019
Key financials first-half of 2019 Total Feed-volume Gross profit Underlying2 EBITDA Underlying Profit +5.2% to 5.1mT -1.7% to €214.1m -31.5% to €35.8m 6.8% growth through -61.5% to €11.9m (+6.6%) acquisitions, positive contribution acquisitions, 1.6% like-for-like (-8.6%) like-for-like1 acquisitions
Slide 8: Underlying EBITDA development
Underlying EBITDA development (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 A.o. fewer animals in NL, mild winter in UK, Of which: Compound feed volume (in mT) 3.6 3.3 7.2% 9.8% -2.6% new customers in GE
Slide 9: Profit development
Profit development (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): recov
Slide 10: Healthy capital structure
Healthy capital structure (in €m) 30-06-2019 31-12-2018 Comments Total Assets 899.8 873.7 Net effect: profit (€9.2m) minus dividend distribution (-€30.1m), SBB1 Equity 414.2 440.8 (-€2.3m), OCI4 in equity related to re-measurement defined benefits UK (€-3.7m) and currency translation effect (€0.8m)
Slide 11: Cash flow development
Cash flow development 30-06- 30-06- (in €m) Comments 2019 2018 Decrease in result over the period (-€18.2m) besides increase Net cash flow from operating activities 4.8 40.1 in working capital (€17.8m) Net cash flow from investing activities - 14.1 -6.3 In 1H18: gain sale of arable activities NL (€5
Slide 12: Alternative Performance Measures (incidental items)
Alternative Performance Measures1 (incidental items) (in €m) adjustments on different Business combinations Impairments Restructuring Other Total APM items levels and Divestments 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
Slide 13: Results Netherlands/Belgium
Results Netherlands/Belgium (in €m) 1H2019 1H20181 Comments Contribution acquisitions (Van Gorp Biologische Voeders, Maatman & Voeders Algoet); Total Feed volume (in kT) 2,586 2,560 effect smaller dairy and pig herd; more sales TF in pig sector, less in ruminant and poultry sector Revenue 657.3 629.
Slide 14: Results Germany/Poland
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 Effect acquisition Tasomix (Poland), volume growth, Underlying operati
Slide 15: Results United Kingdom
Results United Kingdom (in €m) 1H2019 1H2018 Comments Decline in ruminants (sheep) due to mild winter, decline Total Feed volume (in kT) 1,390 1,448 in pigs, growth in poultry Revenue 338.7 321.6 Effect unfavourable purchasing position besides margin Gross Profit 60.9 63.7 improvement in pig sector
Slide 16: Horizon 2020 – Activities update
Horizon 2020 – Activities update Focus on Partner and deliver Acquisitions One ForFarmers: attractive the Total Feed (& divestments) functional excellence segments Business portfolio & leverage scale • Further growth • Focus on enhancing the • Integration Tasomix (Poland) • Decline number LTI’s1 by
Slide 17: Horizon 2020 – deliverables update
Horizon 2020 – deliverables update Employee Total nutrition Results development solutions first –half of 2019 • Internal training • (Re)new(ed) sustainable • Total Feed volume academies across species product concepts: +5.2% to 5.1m tonnes and functions fully • Ultra : lower phosphate operational em
Slide 18: Outlook per specie
Outlook per specie Ruminants Swine Poultry Global outlook positive, European Global demand growing, Consumption of poultry products continues consumption stabilising, public and political European consumption gradually declining, to grow, more demand from Asia as debate in NL and GE on environmental
Slide 19: Outlook markets
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 pou
Slide 20: Outlook results
Outlook results 2019 Guidance Horizon 2020 Efficiency plans 2019 – 2020 Underlying EBITDA, underlying EBIT, for the medium term an average annual increase Total cost savings of €10m (in 2021 versus underlying profit expected to be in underlying EBITDA in the mid single digits 2018); lower in 2019 th
Slide 21: Summary 2019 half-year results
Summary 2019 half-year results Total Feed volume: Gross profit - 1.7% Underlying EBITDA +5.2% – 31.5% (LFL -1.6%) LFL: -8.6% due to due to a.o. higher unfavourable production and (third Compound feed purchasing party) transport volume: +7.2% position 1H19 costs (LFL -2.6%) Efficiency plans Higher wo
Slide 22: Results per cluster
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
Slide 23: ForFarmers in focus
ForFarmers in focus 23
Slide 24: ForFarmers: European leader in Total Feed solutions
ForFarmers European 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 Euronex
Slide 25: ForFarmers' products, clients and species
ForFarmers’ products, clients and species Compound feed On-farm advisory and Ruminant support Specialties Total Feed All farm sizes solution Dry Moist Swine Liquid (DML) with c. 450 on-site advisors Crop Poultry 25
Slide 26: Central position in value chain to farmers
Central position in value chain to farmers ForFarmers’ approach: From Feed To Farm Dairy processors, Retail & Raw materials ForFarmers: Production, supply and Farmers slaughterhouses & Consumers suppliers application of Total Feed solutions egg packers Access to farm gate Iterative innovation proces
Slide 27: ForFarmers' core markets
ForFarmers’ core markets 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 1. Locations include production and blending mills as at March 2019; 27 taking into account the announced closing of mills in UK and NL Source:
Slide 28: ForFarmers Executive Committee
ForFarmers Executive Committee Yoram Knoop CEO [6/12] Control/Finance, Information Pieter David Adrie van der Steven Arnout Traas Wolleswinkel Fousert Ven Read CFO Technology (IT), Legal Affairs, Risk Management, Mergers & COO COO COO COO [8/18] Acquisitions, Investor Relations [5/12] [3/14] [4/10]
Slide 29: Vision, mission, ambition and core values
ForFarmers addresses increasing need for sustainable food production We aim to be the leading livestock nutrition company in Europe by supplying economic and sustainable Vision Total Feed solutions on farm For the Future of Farming is our promise to farmers: Mission we work side-by-side with our cus
Slide 30: Sustainability KPIs 2018
Sustainability KPIs 2018 Theme Material, focus area KPI Performance 1. Limit phosphate pollution 1. Phosphate efficiency percentage on-farm in NL (dairy SDG 12 and swine farmers) + 2. Limit greenhouse gas emissions 2. GHG emissions in metric tonnes of CO2 equivalent and Environment SDG 12 & 13 & 17
Slide 31: Sustainability key issue in innovation
Sustainability key issue in innovation Balancing the sustainability themes in innovative concepts Environment People Welfare Apollo Producing meat efficiently with reduced carbon footprint and lower land use (broilers) Biologisch Organic Broiler Production (broilers) Gildehoen Slow Growing Concept i
Slide 32: History
History from regional compound feed cooperative to leading European listed Total Feed company 1896 1901 2000 2003 2005 2006 2012 2014 2016 2018 2019 Foundation Expansion Back to International in the value chain the core expansion Organisation Start efficiency plans Several cooperative mergers, Launc
Slide 33: ForFarmers shareholders
ForFarmers shareholders1 JP Morgan AM Technical listing on Holdings Inc Euronext Amsterdam: Coöperatie FromFarmers 24 May 2016 U.A. - direct Other institutional 3% investors 17% Included in Amsterdam Small Cap Index (AscX) 23% 19 September 2016 Average daily traded 6% ForFarmers N.V. 28% volume in 2
Slide 34: Key investment highlights
Key investment highlights 1 European leader providing Total Feed solutions to farmers 2 Resilient markets with selective growth opportunities 3 Access to farm gate 4 Focussed strategy Horizon 2020 5 Proven M&A strategy to drive further expansion 6 Sustainability vital element in business model 7 Str
Slide 35: (Underlying) EBITDA development
(Underlying) EBITDA development EBITDA (in €m) 120 102 104 100 94 90 101 100 88 86 90 94 81 80 82 69 60 40 34 30 20 0 2010 2011 2012 2013 2014 2014 2015 2016 2017 2018 EBITDA Underlying EBITDA Source: ForFarmers; Note: 2014 underlying EBITDA as disclosed in the Annual Report 2018 is corrected for co
Slide 36: Horizon 2020 in practice
Horizon Horizon2020 2020 in inde praktijk practice 36 Bron: ForFarmers
Slide 37: Strategy Horizon 2020: further enhance & expand business in Europe+
Strategy Horizon 2020: further enhance & expand business in Europe+ Suppliers One ForFarmers Customers Focus on attractive segments People development Partner and deliver The Total Feed Business portfolio 2020 Total nutrition solutions Acquisitions • Preferred partner for customers One ForFarmers: •
Slide 38: Leading positions in core countries
Leading positions in core countries Netherlands Total Feed Germany Total Feed Company CF1 production (mT) Company CF production (mT) #1 #1 Agravis 4,1 #4 #2 DTC 2,8 #2 Agrifirm 2,5 #3 Bröring 1,8 #3 De Heus 2,0 #4 Fuite 0,7 United Kingdom Total Feed Poland Total Feed Company CF production (mT) Compa
Slide 39: Value creation within changing market circumstances
Value creation within changing market circumstances Market developments in the chain More interest in Increase of More interest in Increase of More interest in • Local sourcing • Consolidatie and • Animal health and • Animal welfare concepts, • Provenance of food • Circular / residual flows cooperat
Slide 40: ForFarmers in the value chain
ForFarmers in the value chain: Focussed on feed solutions delivered on farm Focused position ForFarmers in the value chain with a number of advantages: • Direct access to the farm • Integrated solution provider to the farmers • No channel conflicts
Slide 41: Complete portfolio to support our trusted advisor role
Complete portfolio to support our trusted advisor role Product Description Application Examples Value add • Compound feed Compound Mix from various raw materials Finished products to be fed as (e.g. Feed2Milk, NOVA, Apollo, ULTRA) Feed and premix and additives a complete feed to animals • Blends
Slide 42: Swine Strategy: More with Less
Swine Strategy: More with Less Delivering customer value to become the preferred feed partner € added value Complete life stage portfolio design on common nutrition concepts in all markets = Products Sow Piglet Piglet Outstanding litter performance Healthy piglet development Optimal growth and feed
Slide 43: ULTRA: Input to sustainable output thinking
ULTRA: Input to sustainable output thinking Market needs are more ULTRA: unieke ULTRA: complex and specific unique concept proposition – Growth and More • Aligned to farmers, abattoir and ForFarmers identified 6 core retail needs needs at pig farms and • Class leading technical in supply chains: per
Slide 44: Clear and proven M&A strategy
Clear and proven M&A strategy to drive further expansion and profitability Fine-tune NL & BE Strengthen UK/ GE/ PL Europe+ Ongoing initiative to further build Ongoing initiative to increase Tap into fast growing, large & on strong existing positions market access, volumes & efficiency attractive mar
Slide 45: Strengthen positions UK, Germany & Poland
Strengthen positions UK, Germany & Poland Strong market shares drive economies of scale Lower levels of consolidation may provide opportunities Underlying EBITDA/ Gross Profit 1H 2019 and ROACE1 Underlying EBITDA/Gross profit ROACE 35,4% UK NL PL c. 150 c. 80 Top 3 players Top 3 players 23,6% c. 35²
Slide 46: ForFarmers' acquisitions in 2018
ForFarmers’ acquisitions in 2018 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) Se
Slide 47: Acquisitions / divestments as of 2014
Acquisitions / divestments as of 2014 Acquisition Volume Total Feed1 Company Year Acquisition/Disinvestment Sector Country amount1 (x1.000 ton) ( €m) Van Gorp Biologische Voeders 2018 Acquisition All (organic) Netherlands 67 9,1 Maatman 2018 Acquisition Poultry, ruminant Netherlands 105 8,3 Voeders
Slide 48: ForFarmers' team
ForFarmers’ team Profile • 2,654 FTE’s1 • c. 650 commercial functions • c. 450 on-farm advisors Male/Female Age structure Number of employees per country 18-25 Belgium 95 5,6% (86) Netherlands 991 (7,1%) 55+ (945) Germany 351 26-35 29,1% (328) 20,7% (25%) (18,5%) Poland 248 Male Female 36-45 46-55 (
Slide 49: SWOT-analysis
SWOT-analysis Strengths (Internal/positive) Weaknesses (Internal/negative) Full focus on Total Feed approach on-farm Total Feed portfolio not yet complete in all countries Leveraging scale, internal academies, Market position in Germany and Poland still sub-optimal in-house Nutrition Innovation Cent
Slide 50: Contact
Contact Caroline Vogelzang Director Investor Relations Mobiel: +31 6 10 949 161 Vast nummer: +31 573 288 194 Caroline.Vogelzang@forfarmers.eu ForFarmers N.V. Kwinkweerd 12 7241 CW Lochem The Netherlands 50
Slide 51: For the future of farming
FOR THE FUTURE OF FARMING