ForFarmers 2022 first-half results

Increase underlying EBITDA due to positive results in countries outside of the Netherlands

Financial highlights for first-half of 2022¹:

• Total Feed² volume: -7.4% to 4.5 million tonnes; due to like-for-like decline in all clusters
  of which compound feed: -7.9% to 3.2 million tonnes; decline in all clusters 
• Gross profit: +18.3% to €257.3 million; higher raw material and energy prices largely
  passed on in Q2; 1H 2021 depressed by German incident 
• Underlying EBITDA:+5.6% to €43.1 million; higher gross profit and efficiency measures
• Underlying net profit³: -4.5% to €17.1 million; mainly due to increased interest expenses and
  higher effective tax rate 
• Working capital: increase of €21.7 million (year-on-year) to €75.0 million due to sharp increase in raw material prices

Commenting on the 2022 first-half results ForFarmers CEO Chris Deen said:  
“While still in my induction period at ForFarmers it is my privilege to present these better-than-originally-expected first-half results, mainly due to the second quarter results. This is a great achievement by the team amid challenging market conditions due to the war in Ukraine and the consequential further increase in raw material and energy prices. Our total volumes fell, mainly due to a decline in the pig sector in Netherlands/Belgium and the United Kingdom, whereas poultry volumes in Poland grew. The cost increases could only be passed on in the chain in the course of the second quarter. This explains the result improvement versus the first quarter.  Finally, the absolute rise in gross profit in the first half-year was higher than the absolute increase in operating expenses. Underlying EBITDA consequently was higher than originally expected.

In the Netherlands, the approach taken in handling the nitrogen crisis is leading to a polarised public debate as well as widespread unrest among livestock farmers. We call on politicians to be more open to a meeting in which everything is open for discussion. Cooperation and innovation are more effective and better than just restructuring. Moreover, prospects are prerequisites for sustainable business practices, in any sector. The agricultural sector has always proven itself in terms of innovation and solution-based thinking. Our cooperation with customers and other partners in the chain is invaluable. In all the conversations I have held in the past few months I have experienced the huge knowledge and pride in the sector in general and this great company in particular. 

The tightening of the strategy in light of all the aforementioned developments is in full swing and underpins our confidence in the future. We will make further announcements about this in the fourth quarter. 

We are also pleased about the recently announced joint venture between ForFarmers UK and the poultry feed company 2Agriculture in the United Kingdom. The proposed joint venture is subject to regulatory approval in the United Kingdom.

Looking ahead, there are still many uncertainties at present, especially due to the war in Ukraine. In addition, we need to consider a possible new Covid wave and the low water levels in the rivers in the Netherlands. In view of this we consider it unwise to provide any guidance about the expected development of the results in the second half of 2022 or a possible resumption of the share buy-back programme.”

^{1.Results are always compared year-on-year
2.Total Feed: the entire ForFarmers product portfolio consisting of compound feed, specialties, co-products (including DML products), seed and other products (such as forage)
3.Net profit: in this context is defined as profit attributable to shareholders of the Company}