Forfarmers Nv · EURONEXT:FFARM
Forfarmers Nv — H1 2021 Earnings Presentation
49 slides from Forfarmers Nv's earnings presentation, Aug 13, 2021
Slide 1: ForFarmers 1H 2021 Results Roadshow presentation
ForFarmers 1H 2021 Results Roadshow presentation
Slide 2: Notifications and disclaimer
Notifications and disclaimer Reporting standards Important dates Forward-looking statements The results in this presentation are 02-11-2021 Q3 2021 Trading update This presentation contains forward-looking statements, including those relating to derived from the ForFarmers interim ForFarmers legal o
Slide 3: Results 1H 2021
Results 1H 2021 3
Slide 4: Highlights 1H 2021
Highlights 1H 2021 Acquisitions could not offset like-for-like Prolonged Covid measures leading to Continued smooth delivery of feed to developments, incl. impact of prolonged some volume, but mainly margin pressure farmers Covid, nitrogen situation NL and contract due to spike in raw materials and
Slide 5: Market developments per country in 1H 2021
Market developments per country in 1H 2021 General The Netherlands Belgium General elections create greater uncertainty as to ASF free as of Q4 2020: future for farmers (Nitrogen debate) export ban on pig meat to non-EU countries lifted Pig herd smaller due to 'warm restructuring' Cattle farmers esp
Slide 6: Underlying EBITDA development
Underlying EBITDA development 1H 1H (in €m) Total % Fx M&A LFL1 Comments 2021 2020 Acquisition effect in cluster NL/BE ; LFL growth Total Feed volume (in mT) 4.9 4.8 1.9% - 2.4% -0.5% poultry UK and cluster DE/PL, but decline in NL/BE and pigs and ruminants in UK Acquisition effect; LFL growth in DE
Slide 7: Profit development
Profit development (in €m) 1H 2021 1H 2020 Comments Underlying EBIT1 22.4 31.2 Lower gross profit and higher operating expenses Underlying Net Finance result -1.3 -1.6 Lower outstanding debt Share of profit of equity-accounted investees 2.3 2.7 Fewer transhipment activities (HaBeMa) Underlying Incom
Slide 8: Profit ratios
Profit ratios 1H 2021 1H 2020 Comments Underlying profit (in €m) 17.9 24.4 The impact of the share buy back programme (finished in August 2020) Underlying earnings per share (in €) 0.17 0.25 was negligible Underlying effective tax rate 26.1% 25.9% Underlying EBITDA/Gross Profit 18.8% 22.0% ROACE1 18
Slide 9: Capital structure
Capital structure (in €m) 30-06-2021 31-12-2020 Comments Total Assets 872.1 816.7 A.o. due to acquisitions Due to addition of profit (€10.4m) minus dividend distribution (-€28.0m) plus OCI (€13.9m) Equity 358.7 362.5 comprising mainly remeasurement pension UK due to higher interest (€12.2m) and curr
Slide 10: Cash flow development
Cash flow development (in €m) 1H 2021 1H 2020 Comments Net cash flow from operating activities 9.1 14.2 Mainly due to lower results over the period Mainly due to the acquisitions and higher regular capex investments, Net cash flow from investing activities -36.5 -17.2 partly offset by gain on sales
Slide 11: 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 1H-2021 1H-2020 1H-2021 1H-20202 1H-2021 1H-20202 1H-2021 1H-2020 1H-2021 1H-20202 On EBITDAA - - 2.5 -0.2 -2.2 -0.6 -3.0
Slide 12: Results the Netherlands/Belgium
Results the Netherlands/Belgium 1H 1H (in €m) Comments 2021 2020 Effect acquisition De Hoop Mengvoeders + Mülhdorfer Pferdefutter; Total Feed volume (in kT) 2,560 2,516 LFL decline in all sectors due to Covid and warm restructuring pig sector NL; growth Reudink Revenue 705.3 615.5 Higher volumes and
Slide 13: Results Germany/Poland
Results Germany/Poland (in €m) 1H 2021 1H 2020 Comments Growth in all sectors; more DML volume in DE (due to high Total Feed volume (in kT) 1,092 1,057 RM prices); gradual recovery poultry market PL; incident of unfavourably priced contracts in DE Revenue 306.6 278.2 Higher RM prices Gross profit 34
Slide 14: Results United Kingdom
Results United Kingdom (in €m) 1H 2021 1H 2020 Comments Decline volume in dairy sector (high RM prices) and Total Feed volume (in kT) 1,233 1,220 in pig sector (loss of large customer) more than compensated by growth volumes in poultry sector Revenue 321.4 294.8 Higher RM prices Lower compound feed
Slide 15: Summary financial results 1H 2021
Summary financial results 1H 2020 Total Feed volume Gross profit Underlying EBITDA +1.9% at 4.9m Tonnes -0.9% at €217.5m -15.4% at €40.8m mainly due to Compound Feed margin pressure +2.2% at 3.5m Tonnes Underlying net profit Operating CF WC improvement: –26.6% at €17.9m (y-o-y) by €23.2m -35.9% at €
Slide 16: Results per cluster
Results per cluster (in €m) Netherlands/Belgium Germany/Poland United Kingdom Group/ Eliminations Consolidated 1H 2021 1H 20201 1H 2021 1H 20201 1H 2021 1H 20201 1H 2021 1H 2020 1H 2021 1H 20201 Total Feed Volume (k tonnes) 2,560 2,516 1,092 1,057 1,233 1,220 - - 4,885 4,793 Revenue 705.3 615.5 306.
Slide 17: Strategic Update
Strategic Update 17
Slide 18: Strategic update 1H 2021
Strategic update 1H 2021 Sustainability Ambition Partnership Operational Excellence • Roll-out activities strategy ‘Going Circular For the Employee engagement survey Entered into new Foot print, BPO and general Future of Farming’ Lead to Grow program partnerships; e.g regarding efficiency measures w
Slide 19: Sustainability examples 1H 2021
Sustainability examples 1H 2021 • Partnership ForFarmers UK and Sedamyl to increase DML offerings (SelcoPlus, SedaGold, Wheatfeed) • Progress EU-project regarding use of insects as alternative protein source (SUSINCHAIN) • EU commission to lift ban on use of processed animal protein (PAPs – meat and
Slide 20: Outlook & Guidance
Outlook & Guidance 20
Slide 21: Outlook per sector
Outlook per sector1 Ruminants Swine Poultry - European and global outlook positive - European consumption of pig meat - Consumption poultry products slowly declining continues to grow - European dairy- and meat consumption stabilising; consumption worldwide - Number of pigs likely to grow in UK - In
Slide 22: Financial objectives & Outlook ForFarmers
Financial objectives & Outlook ForFarmers Financial Objectives Build to Grow 2025 - Underlying EBITDA in 2025 of €125m-€135m2; through organic growth + acquisitions - Annual like-for-like growth underlying EBITDA: 0%-3% as of 2020 - Cost reduction of at least €10m (by 2025 versus normalised1 level 2
Slide 23: Ambition 2025: our integrated objectives
Ambition 2025: our integrated objectives Developing talent • LTI frequency rate < 0.5 for the Future of Farming • More diversity in management positions • Increase employee engagement score Sharing knowledge • Y-o-Y better FCR for the Future of Farming • Bespoke solutions for specific chains • Leadi
Slide 24: ForFarmers: business & strategy
ForFarmers: business & strategy 24
Slide 25: For the Future of Farming
Our mission For the Future of Farming We are confident about the future and the continuity of farming, 25 and hence contribute to a sustainable livestock industry for the long term; one that will continue to serve society for generations to come.
Slide 26: European leader in Total Feed solutions
Key facts ForFarmers European leader in Total Feed solutions #1 European Total Feed Total Feed1 volume 2020 Revenue: Servicing over Completed 15 acquisitions solutions provider approx. 10 mT2 €2.4b & underlying 26,000 farmers since 2014 EBITDA3: €96.2m Approximately 2,600 Listed on Euronext Founded
Slide 27: ForFarmers Executive Committee
ForFarmers Executive Committee¹ Yoram Knoop CEO [8/14] Roeland Tjebbes Control/Finance, CFO Information Technology (IT), [1/18] Legal Affairs, Risk Management, Pieter Wolleswinkel David Fousert Adrie van der Ven Steven Read Mergers & Acquisitions, COO COO COO COO Investor Relations [6/13] [4/15] [5/1
Slide 28: ForFarmers' products, clients and species
ForFarmers’ products, clients and species Compound feed Ruminant Specialties On-farm knowledge Total Feed exchange All farm sizes solution to improve Dry Moist returns Swine Liquid (DML) Forage Poultry 28
Slide 29: 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 egg packers Access to farm gate Iterative Compound Feed: For
Slide 30: History: from regional cooperative to listed Total Feed company
History from regional compound feed cooperative to leading European listed Total Feed company 1896 1901 2000 2003 2005 2006 2012 2014 2016 2018 2019 2020 2021 Foundation Expansion Back to International in the value chain the core expansion Listing on Organisation Euronext Launch of Amsterdam Several
Slide 31: ForFarmers' shareholders
ForFarmers’ shareholders Technical listing on Shareholder Capital interest Date & source Based on number of Euronext Amsterdam: issued shares 24 May 2016 APG Asset Mgt 9.98% 16 April 2020; AFM 106,261,040 3% 17% Kempen Capital Mgt 5.27% 8 February 2017; AFM 106,261,040 Included in Amsterdam Small Ca
Slide 32: Market trends
Market trends 32
Slide 33: Pace and impact are changing
Industry trends throughout the chain Pace and impact are changing Trend along all sectors: Environmental measures & regulation, Data & smart chains Raw materials suppliers Feed Suppliers Farmers Dairy processors, Retail Consumers Production, supply and application slaughterhouses of Total Feed solut
Slide 34: Animal diseases inherent part of sector
Animal diseases inherent part of sector – increasingly better controlled by industry • Hygiene controls in sector African Swine Fever High Pathogen Avian Influenza (Bird flu) have improved • Cannot prevent regional impact on animal numbers • Recovery animal numbers (after disease outbreak) dependent
Slide 35: Small base high growth
Trend — Pressure on animal protein consumption Small base high growth • High growth in plant-based protein and lab-meat (meatless) • In developed markets alt-meat <1% of animal protein, but significant public attention • Challenges alt-meat: taste, price, CO₂, health, legislation • Alt-meat adding t
Slide 36: EU compound feed demand expected to stagnate or decline
EU compound feed demand¹ expected to stagnate or even decline in case of more environmental regulations and ASF² outbreaks Forecast European compound feed demand EU Feed demand forecast1 [Compound feed, indexed 2017-2019 average = 100] Positive scenario - Fast recovering markets after COVID-19 - Fas
Slide 37: Outlook for market volumes positive in UK & PL
Outlook for market volumes positive in UK & PL but not so positive overall for swine Overview of country volume (compound feed) CAGRs¹) ‘20-'25 [% p.a.] 2019 Portfolio CF developments 2020-2025 Share sub-specie Ruminants Dairy Beef Swine Finishers Sows Piglets Poultry Layers Broilers ≤ -2.5% -2.5% -
Slide 38: Slide 38
Slide 39: Market Leader in 7 Countries
Market Leader in 7 Countries 39
Slide 40: Going Circular, For the Future of Farming
39 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 tota
Slide 41: Explicit ambitions and objectives
Sustainability — Going Circular Explicit ambitions and objectives Objectives 2025 Ambitions 2030 100% responsibly sourced palm oil and soy bean meal 100% responsible and transparent sourcing 85% suppliers signed Sedex code of conduct of all ingredients Take leadership position on reduction CO2 emiss
Slide 42: ForFarmers' positions
ForFarmers’ positions Market positions based on Total Feed volumes Netherlands #2 Agrifirm #1 #3 De Heus #4 Fuite Fragmented markets with many players United Kingdom #1 AB Nutrition #1 UK NL #3 2Agriculture #4 Mole Valley Partners PL c. 150 c. 75 Belgium Top 3 players Top 3 players #1 Arvesta c. 351
Slide 43: Accelerate consolidation in Europe...
M&A — Mapping plan Accelerate consolidation in Europe... Consolidation in (European) markets – looking for major synergies • Target with > 300kT volume (preferably) • Improving product offering and/or enlarging customer base • Providing supply chain optimisation opportunities • Pro-active approach i
Slide 44: ...and enter selected global growth markets
M&A — Mapping plan ...and enter selected global growth markets Enter selected global markets – balancing towards growth • Sizable animal population, preferably growing > 4% per year • Local business model/access on-farm • Non-integrated player with already strong market position • > €5 million EBITD
Slide 45: M&A financial metrics
M&A Financial metrics • Historic multiple paid: approximately 5-8 x (underlying) EBITDA, pre synergies • Leverage: up to 2.5x underlying EBITDA • Value accretion within one year after closing • ROACE after 2 years > 17% (based on underlying EBITDA) 45
Slide 46: Long-term value drivers
Long-term value drivers VALUE EXPANSION VALUE DELIVERY M&A Customer Excellence • Accelerate consolidation and deliver • Market share synergies in home markets • Volume development • Enter two selected new • Product mix development growth markets & cross selling • Global basis • Digitalisation and sa
Slide 47: ForFarmers investment profile
ForFarmers investment profile Resilience in challenging home countries, expansion to new markets • Operational excellence and commercial savviness • Unique access to farm gate as Total Feed solutions provider • Helping farmers cope with new reality with superior knowledge • Going Circular For the Fu
Slide 48: Contact
Contact Caroline Vogelzang Director Investor Relations M.+31 6 10 949 161 Caroline.Vogelzang@forfarmers.eu ForFarmers N.V. Kwinkweerd 12 7241 CW Lochem Nederland
Slide 49: For the Future of Farming