Forfarmers Nv · EURONEXT:FFARM
Forfarmers Nv — H1 2022 Earnings Presentation
40 slides from Forfarmers Nv's earnings presentation, Aug 11, 2022
Slide 1: ForFarmers Roadshow Presentation First half-year 2022
ForFarmers Roadshow Presentation First half-year 2022
Slide 2: Notifications and disclaimer
Notifications and disclaimer Reporting standards Important dates Forward-looking statements The results in this presentation are 01-11-2022 Q3 2022 Trading update This presentation contains forward-looking statements, including those derived from the ForFarmers interim relating to ForFarmers legal o
Slide 3: Results 1H 2022
Results 1H 2022
Slide 4: For the Future of Farming quote
“The first half-year 2022 was again challenging, due to the dreadful Russian invasion in Ukraine “Our sector has always proven to and the nitrogen debate in the Netherlands” be innovative and result oriented” # For the Future of Farming
Slide 5: Highlights 1H 2022
Highlights 1H 2022 1H 2022 Dreadful war in Ukraine: accessibility of raw Higher raw material, energy and fuel costs Total Feed Volumes fell by -7.9% materials and gas in jeopardy, leading to spikes could only be largely passed on in Q2 2022 - weak performance in pig sector (NL,UK and in raw material
Slide 6: Developments in markets
Developments in markets in 1H 2022 The Netherlands Belgium Nitrogen debate Plans to buy out farmers to reduce nitrogen Further shrinking of pig herd emissions – in line with NL AI2 outbreaks lead to forced culling of chickens Reudink (cluster NL/BE) : participated in obtaining EU derogation to use 5
Slide 7: Underlying EBITDA development
Underlying EBITDA development (in €m) 1H 2022 1H 2021 Total % Fx M&A LFL1 Comments Total Feed volume (in mT) 4.5 4.9 -7.4% - 0.4% -7.8% Down in all clusters Of which: Compound Feed 3.2 3.5 -7.9% - 0.6% -8.4% Mainly decline in pig sector (NL and UK), whilst poultry in PL grew, ruminants in NL fairly
Slide 8: Profit development
Profit development 1H 1H (in €m) 2022 2021 Comments Underlying EBIT 24.1 22.4 Higher gross profit sufficient to cover higher operating expenses Higher interest charges due to higher debt position on increased working Underlying Net Finance result -2.2 -1.3 capital, dividend distribution and SBB prog
Slide 9: Profit ratios
Profit ratios 1H 2022 1H 2021 Comments Underlying profit (in €m) 17.1 17.9 Underlying earnings per share (in €) 0.19 0.19 Lower net profit in combination with fewer shares (Impact SBB2) Underlying effective tax rate 30.8% 26.1% Mainly due to higher ETR UK (adjustments prior years ) Underlying EBITDA
Slide 10: Capital structure
Capital structure (in €m) 30-06-2022 31-12-2021 Comments Higher due to higher working capital as a result of the increased raw Total Assets 1,001.7 943.4 material prices Due to addition of profit (€11.0m) minus dividend distribution Equity 348.8 366.3 (-€26.3m) and SBB (-€15.5m) plus OCI (€13.3m) co
Slide 11: Cash flow development
Cash flow development (in €m) 1H 2022 1H 2021 Comments Due to higher WC following the spike in raw material prices and Net cash flow from operating activities -8.8 9.1 higher trade and other receivables No acquisitions, whereas in 2021 De Hoop and Mühldorfer Net cash flow from investing activities -
Slide 12: Alternative Performance Measures (incidental items)
Alternative Performance Measures1 (incidental items) Business combinations (in €m) adjustments on different levels Impairments and divestments Restructuring Other Total APM items 1H-2022 1H-2021 1H-2022 1H-2021 1H-2022 1H-2021 1H-2022 1H-2021 1H-2022 1H-2021 On EBITDAA - - 0.1 2.5 -0.7 -2.2 - -3.0 -
Slide 13: Results: The Netherlands/Belgium
Results The Netherlands/Belgium (in €m) 1H 2022 1H 2021 Comments Dairy: less milk production, slightly lower volumes; Shrinking Pig herd and slight customer Total Feed Volume (k tonnes) 2,344 2,560 loss; Poultry: impact welfare concepts and avian influenza Reudink and PAVO volumes rose Revenue 846.5
Slide 14: Results: Germany/Poland
Results Germany/Poland (in €m) 1H 2022 1H 2021 Comments Dairy: down in DE under pressure due to shrinking herd; Many Pig farmers quitting in DE due to Total Feed Volume (k tonnes) 1,004 1,092 financial stress, whereas NOVA and ULTRA feeds in PL succesful; Strong rise Poultry in PL due to more demand
Slide 15: Results: United Kingdom
Results United Kingdom (in €m) 1H 2022 1H 2021 Comments Ruminant: down, difficulties in passing on higher imput costs led to some customer loss; Total Feed Volume (k tonnes) 1,177 1,233 Pigs: down, impact of discontinuation large customer contract in 1H 21 Poultry: down, small growth broilers and de
Slide 16: Results per cluster
Results per cluster (in €m) Netherlands/Belgium Germany/Poland United Kingdom Group/Eliminations Consolidated 1H 1H 1H 2022 1H 2021 1H 2022 1H 2022 1H 2021 1H 2021 1H 2022 1H 2021 2021 2022 Total Feed Volume (k tonnes) 2,344 2,560 1,004 1,092 1,177 1,233 - - 4,526 4,885 Revenue 846.5 705.3 397.5 306
Slide 17: Recent developments & Outlook
Recent developments & Outlook
Slide 18: Creating a strong combination, ready to face changing market requirements
& Creating a strong combination, ready to face changing market requirements
Slide 19: Introduction: joint venture ForFarmers UK and 2Agriculture
Introduction: joint venture ForFarmers UK and 2Agriculture • 2Agriculture’s expertise in poultry sector and ForFarmers UK’s complementary expertise in ruminant and pig sector • Joint venture meets each of the partner’s strategic objectives: > ForFarmers UK: stronger position in promising poultry sec
Slide 20: Who is 2Agriculture?
Who is 2Agriculture? • Feed supplier to poultry industry for over 50 years • Aims to be the UK’s most efficient producer of consistent, high-quality feed and to support farming partners achieve best cost production • Extensive experience in producing consistent, high quality poultry feed supporting
Slide 21: Who is 2Agriculture
Who is 2Agriculture • 5 mills (Scotland, East Anglia and North Wales) • Including one dedicated mill in East Anglia for Turkey feed • Extrusion plant in Cambridgeshire • Together, these mills produce some 1.2 million tonnes feed • Total number of employees: 250 • Fleet of over 50 vehicles 20 20
Slide 22: General market outlook
General market outlook • Raw material and energy prices expected to remain volatile and relatively high, as well as wage and transport costs • War in Ukraine to cause uncertainty about macroeconomy, consumer confidence and disposable income • Pressure on sector to become more sustainable, such as th
Slide 23: ForFarmers: In brief
ForFarmers: In brief
Slide 24: For the Future of Farming: Our mission
Our mission For the Future of Farming We are confident about the future and the continuity of farming, and hence contribute to a sustainable livestock industry for the long term; one that will continue to serve society for generations to come.
Slide 25: European leader in Total Feed solutions
Key facts ForFarmers European leader in Total Feed solutions #1 10 mT 35 26,000 2,500 #1 European Total Feed Total Feed volume Production locations Servicing over Approximately 2,500 solutions provider around 10 mT 26,000 farmers employees in 2021 1896 EU 15 AEX AA Founded as a Based in the Netherla
Slide 26: Executive Team (situation August 2022)
ForFarmers Executive Team (situation August 2022) Chris Deen CEO Roeland Pieter Steven Ernst Pawel Arthur Eveline Tjebbes Wolleswinkel Read Friedlaender Swierkula van Och Paternotte CFO COO NL and BE Director Director Director Director Director HR United Germany Poland Supply Chain Kingdom Rob Kiers
Slide 27: ForFarmers' products, clients and species
ForFarmers’ products, clients and species (Compound) Tailor the solution to the customer’s needs feed Solutions for all types of feeding systems (milk robot, home mixing, liquid/dry feeding, welfare concepts) Specialties Total Feed approach: For the Future of Farming Offer solutions for every stage
Slide 28: Central position in value chain to farmers
ForFarmers’ approach: From Feed To Farm Central position in value chain to farmers Raw materials ForFarmers Farmers Dairy processors, Retail & suppliers Production, supply and application slaughterhouses Consumers of Total Feed solutions and egg packers Access to farm gate On-farm feed Compound feed
Slide 29: ForFarmers' positions
ForFarmers’ positions Market positions based on Total Feed volumes Netherlands #1 ForFarmers #2 Agrifirm Fragmented markets with many players #3 De Heus #4 Fuite United Kingdom #1 AB Nutrition c. 150 Top 3 c. 75 Top 3 c. 351 Top 3 #2 ForFarmers players players players #3 2Agriculture #4 Mole Valley
Slide 30: ForFarmers investment profile
ForFarmers investment profile Good positions in mature home markets, ambition to expand to new markets with growth potential • • • • • • • • Financial profile • • • 29
Slide 31: ForFarmers' shareholders
ForFarmers’ shareholders Shareholder Capital interest Date & source Technical listing on Cooperative FromFarmers (direct) 19.4% 31 December 2021; ForFarmers Euronext Amsterdam: 24 May 2016 Cooperative FromFarmers (indirect) 27.0% 31 December 2021; ForFarmers Included in Amsterdam Stichting Beheer Fo
Slide 32: SWOT
SWOT Strengths Weaknesses • Unique position on-farm: strong relationships and expertise; • Imbalance in portfolio between mature markets and growth Internal Total Feed portfolio markets • Substantial business (approx. 10mT volume, €2.7 billion • Position not yet strong enough in all markets to lever
Slide 33: Going Circular, For the Future of Farming
Sustainability ForFarmers' pro-active approach: Going Circular, For the Future of Farming Feed resources Feed production Source responsibly Produce and supply with and maximise use of minimal adverse impact non-food materials on the environment Feed solutions Balanced use of resources in the total a
Slide 34: Explicit ambitions and objectives
Sustainability — Going Circular Explicit ambitions and objectives 33 1. Baseline 2019 2. Baseline 2017 Feed safety = External audit gaps, control authority warnings or fines
Slide 35: Physical supply chain soy
Physical supply chain soy Farmers grow soya Soya beans are purchased and mixed at several stages, and processed Livestock farmers purchase feed from feed beans and sell into soya meal [feed] and oil (food). Traders match supply with demand. producers to produce meat, dairy and eggs certificates for
Slide 36: Nitrogen deposition
Nitrogen deposition 35 35
Slide 37: Impact climate changes
Impact climate changes Impact of ForFarmers on climate - Carbon footprint of production and transport of feed - GHG emissions of raw materials and related land use - Impact of feed on carbon dioxide, phosphate and nitrogen emissions on farm Climate-related opportunities and risks for ForFarmers Oppo
Slide 38: Going Circular: In feed materials
Going Circular In feed materials 37
Slide 39: Contact
Contact Caroline Vogelzang Director Investor Relations M. +31 6 10 949 161 Caroline.Vogelzang@forfarmers.eu ForFarmers N.V. Kwinkweerd 12 Lochem, the Netherlands
Slide 40: For the Future of Farming