ForFarmers third quarter 2020 Trading Update

30 October 2020 - 07:04

Highlights third quarter 20201 :
•    Volume Total Feed2: down (-2.8%); smaller decline than in H1-2020; stable in cluster Germany/Poland, decline in clusters Netherlands/Belgium and the United Kingdom
•    Volume compound feed: down (-3.7%); also smaller decline than in H1-2020; almost stable volumes in cluster Germany/Poland, decline in clusters Netherlands/Belgium and the United Kingdom
•    Gross profit: down (-6.8%); specifically due to volume decline; margin pressure in Poland and due to temporary deterioration of product mix also in the United Kingdom
•    Underlying EBITDA: down (-9.4%); lower operating expenses could not compensate gross profit decline 

First phase efficiency plan 2021 & 2022:
•    €7 million cost savings, of which the full effect will be visible in 2023 (compared to normalised3 level of 2020)
•    Savings to be achieved through operational excellence programmes and business process optimisation

Yoram Knoop, CEO of ForFarmers: “Volumes in the third quarter were lower than in the same period last year, when there were no COVID-19 measures and the ‘stoppers arrangement’ for pig farmers in the Netherlands had, for instance, not yet been put into effect. However, compared to the second quarter, when the corona-virus impacted all, volumes increased somewhat. As of March it has certainly not been an easy time for farmers, who saw both their markets decline and prices for their products come under pressure. It remains to be seen how long COVID-19 will still lead to drastic measures. Farmers, consumers and companies remain cautious in their spending. In our recently presented strategy Build to Grow 2025 we indicated that we will definitely continue to invest in innovative concepts and solutions, which will help our customers achieve better returns especially in changing market circumstances. That is why cost efficiency and scale are essential. We are therefore making the next step in enhancing the efficiency of our organisation. Furthermore, I am of course tremendously pleased with the acquisition of De Hoop Mengvoeders, which we announced last week. We are creating a leading player in the Dutch poultry market, focusing on delivering the best feed and the best advice.”

1.    Results and developments of the third quarter 2020 are compared to those of the third quarter 2019, unless stated differently
2.    Total Feed covers the entire ForFarmers product portfolio and comprises compound feed, specialties, co-products (from the feed industry, referred to as DML products), seeds and other products (such as forage)
3 .     Normalised in this context means adjusted for one-off effects of COVID-19