ForFarmers posts 2019 first half-year results

Highlights for first-half 2019¹:

• Total Feed² volume: +5.2% to 5.1 million tonnes; 6.8% growth through acquisitions (made in second half of 2018 in Poland, the Netherlands and Belgium), 1.6% like-for-like³ decline (in the Netherlands, Belgium and the United Kingdom);
• Compound feed volume (part of Total Feed): +7.2% to 3.6 million tonnes; 9.8% growth through acquisitions, 2.6% like-for-like decline (in the Netherlands, Belgium and the United Kingdom);
• Gross profit: -1.7% to €214.1 million; 6.6% growth through acquisitions, 8.6% like-for-like decline (especially due to unfavourable purchasing positions in the Netherlands, Belgium and the United Kingdom);
• Underlying EBITDA⁴ : -31.5% to €35.8 million; 8.2% growth through acquisitions, 39.9% like-for-like decline (in all countries) and including IFRS 16 effect of +€2.8 million;
• Underlying profit: -61.5% to €11.9 million.

 1. Results for the first half of 2019 are compared to the results for the same period of 2018; there was virtually no impact from currency translation in the first half of 2019, the percentages are disclosed in the table on the consolidated key figures
2. ‘Total Feed’ covers the entire ForFarmers product portfolio and comprises compound feed, specialties, co-products (including DML products), seeds and other products (such as forage)
3. Explanatory notes on like-for-like developments are exclusive of the contribution of Tasomix and therefore Poland, as Tasomix was acquired on 2 July 2018
4. Underlying means excluding incidental items, see Note 12 of the interim financial statements on Alternative Performance Measures

Other developments:

• Size of animal herd under pressure particularly due to various environmental measures (in the Netherlands and Germany);
• Efficiency plans 2019-2020 for cost savings of €10 million in 2021 on track with announced plans to close 4 mills (involving a total 91 FTE’s ) by end of this year;
• Investment plan for 2019 adjusted from €50 million to €40 million;
• Underlying EBITDA, underlying EBIT and underlying profit expected to be lower in 2019 than in 2018.

Commenting on the first-half 2019 results ForFarmers CEO Yoram Knoop said:

“The results for the first-half of 2019 were disappointing, but in line with our expectations as disclosed in the first- quarter trading update. The acquisitions, which we made in the second-half of 2018, made a positive contribution but this was not enough to offset the negative effects of the volume decline and the unfavourable purchasing position which we experienced in the first half of the year. We have reviewed and tightened up our purchasing procedures including having shortened the permitted purchasing coverage lengths for important raw materials. 

Since announcing our efficiency plans in March, we have revealed plans to close four mills this year. These plans will contribute to the targeted structural cost savings of €10 million by 2021.

In more and more countries the agricultural sector is, amongst others, being faced with government measures to reduce the environmental impact of the sector. We will take into account the speed and intensity with which such measures are being introduced in the strategy for the period 2020 up to 2025. This strategy will be finalised in the first-half of 2020. As ForFarmers has strong positions in countries where the production of animal proteins is very carbon-efficient, we are able to continue to play a sustainable role for the future of farming and consequently in the chain that supplies the growing world population with animal proteins.”