September 18, 2020

ForFarmers announces strategy for 2025           

On September 15, ForFarmers NV introduced its strategy "Build to Grow 2025" to analysts and investors during Capital Markets Day.

In the coming five years, the company will focus on further strengthening its market positions in existing home countries by delivering innovative feed concepts that help farmers improve their returns on-farm in a sustainable way. To this end, the digitalisation of business processes will be further enhanced, both on-farm and internally at ForFarmers.

In parallel, ForFarmers aims to grow by means of acquisitions in existing markets and in new growth markets, potentially outside of Europe. The objective is to be operational by 2025 in seven countries, and have a more balanced portfolio between developing and mature markets.

ForFarmers has determined the following financial ambitions for 2025, which are linked to the strategy:

- By 2025, an underlying EBITDA between €125 million (US$148.1 million) and €135 million (US$160 million), as a result of both like-for-like growth and acquisitions (2019: €88.5 million and H1 2020: €48.2 million);

- Annual growth (like-for-like, i.e. excluding acquisitions) of underlying EBITDA by 0%-3% (as of 2020) in the challenging home countries;

- Operational costs at least €10 million (US$11.8 million) lower in 2025 compared to 2020;

- A dividend policy, with a distribution of 40%-60% (was 40%-50%) of underlying net profit (after tax).

As the leading feed company in Europe, ForFarmers is an important link in the value chain that supplies food, including animal protein, to the growing global population.

However, with the exception of Poland, the agricultural sector is experiencing growing pressure in the European home markets of ForFarmers. For example, farmers are increasingly faced with extensive environmental measures to reduce phosphate and ammonia emissions by animals.

Growth expectations for the agricultural sector in northwest-Europe are consequentially very limited. On a global scale, the feed market continues to grow and remain very large and offers opportunities for strong and innovative players such as ForFarmers, both for organic growth and for further consolidation. ForFarmers is already the leading feed company in Europe and aims to retain and enhance this position, the company said.

With the strategy "Build to Grow 2025", ForFarmers emphasises its resilience in existing home countries and its ambition to expand to two carefully selected new growth markets, potentially outside of Europe.

By being customer-centric at the lowest possible cost, ForFarmers believes it will make the difference in its home markets. The key to this is its "Total Feed" approach, aimed at helping farmers to achieve an optimal return on-farm, particularly in times of increasing environmental measures. This approach combines feed with customised advice and is supported by monitoring tools.

Innovative feed concepts and data-analysis are also becoming more and more important in making the agricultural sector more sustainable, ForFarmers said. The company is committing significant effort and resources to several programmes aimed specifically towards this development. Efforts include using more co-products from the food industry in animal feed and improving feed conversion (less feed, more output).

Accordingly, ForFarmers is launching an ambitious sustainability policy as part of the strategy Build to Grow 2025, with the objective to reduce its carbon footprint of the production of feed and animal protein.

- ForFarmers