ForFarmers N.V.: ForFarmers first quarter 2017 Trading Update
(Thomson Reuters ONE) -
Lochem, 11 May 2017
ForFarmers first quarter 2017 Trading Update
Highlights first quarter 2017*:
· Volume Total Feed: growth in the clusters the Netherlands and
Germany/Belgium is higher than the decline in the United Kingdom
· Gross profit: marginal growth (including significant negative currency
translation impact Pound sterling)
· EBITDA: marked growth
· Market circumstances in the United Kingdom remain challenging in the
short term
The volume Total Feed has increased in the clusters the Netherlands and
Germany/Belgium. The volume growth includes like-for-like growth and the
contribution of the swine feed company Vleuten-Steijn which was acquired on 1
October 2016. Volumes declined in the United Kingdom, particularly in the
ruminant sector. Moreover, the volume decline can be explained by the
divestment, in the second quarter of 2016, of the non core activities Wheyfeed
transport and Leafield.
The total volume of compound feed has increased in the first quarter of 2017.
Vleuten-Steijn has also contributed positively to this growth. Revenue has
increased on higher volumes and higher raw material prices which are passed on
to customers. The reported gross profit has increased somewhat, including a
significant negative currency translation impact of the devaluated Pound
sterling.
"We are satisfied with the further roll out of our Horizon 2020 strategy which
has resulted in a growing Total Feed volume and cost control. We continue to
focus on selling more Total Feed to existing and new customers. We do this with
innovative and sustainable solutions that help our customers improve their
returns. Generally, our customers are in a better financial position than a year
ago. The effects of the phosphate regulation in the Netherlands will, however,
impact on us particularly in the second half of this year. The market
circumstances in the United Kingdom remain challenging in the short term. The
uncertainty with respect to the consequences of the Brexit for our customers in
the United Kingdom makes them cautious in making longer term decisions. The
first quarter results make us feel confident that we are on course with the
realisation of our Horizon 2020 strategy and the earlier disclosed target with
respect to an average EBITDA growth of mid single digits at constant
currencies", states Yoram Knoop, CEO of ForFarmers.
(*) Results and developments of the first quarter 2017 are compared to the first
quarter 2016, unless stated differently
Developments per cluster
The Netherlands
ForFarmers has sold more volume of Total Feed in the first quarter of this year.
This is due to both like-for-like and acquired growth (Vleuten-Steijn). Volume
in the ruminant sector has increased somewhat. However, as of 1 March 2017
phosphate-reducing measures have been imposed on dairy farmers in order for the
sector to comply with the phosphate ceiling, as set by the EU, by the end of
this year. It is expected that the measures will lead to a reduction in the
number of animals in 2017 and consequently to a limited decline of the feed
volume to the dairy sector. The volume in the slightly shrinking swine sector
has increased significantly. This is fully attributable to the acquisition of
Vleuten-Steijn. Swine farmers have seen the prices for pig meat improve lately
due to the continuing strong export to China. In order to achieve a permanent
improvement of the sector, ForFarmers supports the Coalition Vitalisation Swine
farming that is aiming for more demand-driven production. Some more volume has
been sold both to layer farmers and broiler farmers. Broiler farmers continue to
be faced with competition out of Eastern Europe, especially in the field of
conventional broiler farming. Reudink (organic feed) has continued the
increasing volume trend of the past years in the first quarter of 2017.
Germany / Belgium
Total Feed volume has increased in all sectors in the first quarter of 2017 due
to sales to new customers in both countries. The volume growth in the ruminant
sector is attributable to, among other things, attracting a number of new,
larger, dealers in Germany dedicated specifically to the ForFarmers assortment.
In the swine sector, the volume increase is mainly due to a larger customer
base. As in the Netherlands swine farmers benefit from the higher pig meat
prices. Swine farmers in Germany are, however, increasingly faced with new
sustainability and environmental regulations which can limit their expansion
possibilities and increase their business costs. More volume has been sold in
the poultry sector, both to broiler farmers as to new customers in the layer
sector.
United Kingdom
In the first quarter 2017 less volume Total Feed has been sold. Farmers are
uncertain about the (financial) consequences of the Brexit for the agricultural
sector. They are therefore cautious in taking investment decisions with respect
to possibly increasing of their herd size or expanding or improving their farm
businesses. As a result of the very low milk prices in the first half of 2016,
dairy farmers started to reduce their herds. Milk prices have improved as of the
second half of last year. Recovery of the herd size is taking longer than
expected. The smaller dairy herd and increased competition in this sector have
resulted in clearly lower volumes in the ruminant sector in the first quarter of
2017. Based on the volume development to swine farmers in the first quarter of
this year, it appears that prolonged volume decline has been brought to an end.
An increase of the pig herd is, however, not yet evident. The impact of the
strongly devaluated Pound sterling (first quarter 2017 compared to first quarter
2016) has led to a translation loss in ForFarmers' consolidated result (in
euro).
The initiated reorganisation in the United Kingdom in the second half of 2016
has already led to a decrease in operational costs in the first quarter of
2017, albeit that these are not sufficient to compensate the decline in margin.
The new central office in Bury St. Edmunds, where several administrative
departments have been brought together to improve operational efficiency, has
recently been opened. The supply chain optimisation plans in the United Kingdom,
as announced in the annual results release, are currently being finalised in
detail and various projects have started. The benefits of this are planned to be
evident in the results as of 2018.
One ForFarmers
The CRM (customer relationship management) system supporting the commercial
organisation is currently operational in all clusters. The objective is to
deliver optimal service in the most efficient manner. The One ForFarmers
programmes and projects with respect to logistics and non-feed related
procurement, contributed to cost control.
Sustainability and innovation
ForFarmers aims to help improve returns on farm by providing advice and
nutritional solutions that lead to healthier livestock and greater efficiency,
and enhanced sustainability. ForFarmers' Innovation programme is at the core of
this objective. In the first quarter of 2017 a lot of emphasis has been put on
feed solutions, advice and tools for dairy farmers, but also for pig farmers, to
help them monitor and reduce phosphate production. This topic is currently
particularly relevant in the Netherlands. ForFarmers is also proactive in
reducing in-feed medication, particularly in the United Kingdom where this
approach is still commonplace. Accordingly, a number of AMR* conferences have
been organised by ForFarmers in the past quarter to discuss this topic with UK
pig farmers, veterinarians, processors and retailers. Recently, a concept to
support gut health has been launched as part of the VIDA piglet feed range that
is offered to all ForFarmers customers. This concept has been developed in-house
by the Nutrition Innovation Centre and contributes to a better intestinal gut
health for weaner piglets. Aside from a further improvement of the feed
conversion, this concept leads to greater piglets vitality and higher growth
rates.
This press release contains information which qualifies as inside information
within the meaning of article 7, paragraph 1 of the EU Market Abuse Regulation.
(*) AMR means Anti Microbial Resistance
Note to the editor / For additional information:
Caroline Vogelzang, Director Investor Relations and Communications
T: 0031 573 288 194 M: 0031 6 10 94 91 61
E: caroline.vogelzang(at)forfarmers.eu
Company profile
ForFarmers N.V. ('ForFarmers', Lochem, the Netherlands) is an internationally
operating feed company that offers total feed solutions for conventional and
organic livestock farming. ForFarmers gives its very best "For the Future of
Farming": for the continuity of farming and for a financially secure sector that
will continue to serve society for generations to come in a sustainable way. By
working side-by-side with farmers ForFarmers delivers real benefits: better
returns, healthier livestock and greater efficiency. This is achieved by
offering tailored and Total Feed solutions and a targeted approach with
specialist and expert support.
With sales of approximately 9.3 million tons of feed annually, ForFarmers is
market leader in Europe. ForFarmers has 2,273 employees and production
facilities in the Netherlands, Belgium, Germany and the United Kingdom. In
2016, revenues amounted to over ?2.1 billion.
ForFarmers N.V., Postbus 91, 7240 AB Lochem, T: +31 (0)573 28 88 00, F: +31
(0)573 28 88 99
info(at)forfarmers.eu, www.forfarmersgroup.eu.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including those relating
to ForFarmers legal obligations in terms of capital and liquidity positions in
certain specified scenarios. In addition, forward-looking statements, without
limitation, may include such phrases as "intends to", "expects", "takes into
account", "is aimed at", ''plans to", "estimated" and words with a similar
meaning. These statements pertain to or may affect matters in the future, such
as ForFarmers future financial results, business plans and current strategies.
Forward-looking statements are subject to a number of risks and uncertainties,
which may mean that there could be material differences between actual results
and performance and expected future results or performances that are implicitly
or explicitly included in the forward-looking statements. Factors that may
result in variations on the current expectations or may contribute to the same
include but are not limited to: developments in legislation, technology,
jurisprudence and regulations, share price fluctuations, legal procedures,
investigations by regulatory bodies, the competitive landscape and general
economic conditions. These and other factors, risks and uncertainties that may
affect any forward-looking statements or the actual results of ForFarmers, are
discussed in the last published annual report. The forward-looking statements in
this press release are only statements as of the date of this document and
ForFarmers accepts no obligation or responsibility with respect to any changes
made to the forward-looking statements contained in this document, regardless of
whether these pertain to new information, future events or otherwise, unless
ForFarmers is legally obliged to do so.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: ForFarmers N.V. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 11.05.2017 - 07:13 Uhr
Sprache: Deutsch
News-ID 541730
Anzahl Zeichen: 12959
contact information:
Town:
Lochem
Kategorie:
Business News
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