increase in Gross Profits by 0.4 per cent to €207.3 million including negative currency translation effects. Operating expenses had fallen by 4.0 per cent to €169.1 million, including currency effect, net provision for bad debts and depreciation on property, plant and equipment. The profit attributable to the owners had risen by 21.6 per cent to €30.4 million. Yoram Knoop, ForFarmers CEO, commenting on what the group
described as ‘solid results’ for the first six months of 2017, said that the group’s Total Feed approach was gaining ‘more and more momentum’. The approach, in combining the group’s feed together with advice and the necessary tools to put the package together led to an alignment which pointed to a better return on livestock farms’ returns. He went on to observe that the group’s customers, especially in the
Netherlands and Germany/Belgium, were currently in better financial shape than a year ago, when milk and pig prices were under pressure. As a result, they were once more buying more high-quality feeds to increase their production. However, there was what Mr Knoop described as ‘large uncertainty’ in the United Kingdom about the consequences of Brexit for the agricultural sector. Mr Knoop added that farmers in the UK were therefore more hesitant as regards increasing the size of their herds which were reduced last year. Despite this, the market in the United Kingdom appears to be slowly recovering. In the first six months of 2017, Mr Knoop said that the group had
realised what he described as ‘positive results’ on all pillars of the group’s Horizon 2020 strategy. Like-for-like gross profit improved due to the focus on volume growth and enhancement of the product mix in combination with further formulation optimisation. The group’s position
in the Dutch pig sector had strengthened due to a recent strategic acquisition providing specific knowledge which was benefitting the whole group. The strong growth of EBITDA (for the non-financial amongst us – Earnings before interest, tax, depreciation and amortization) was the result of ‘both operational improvements and One ForFarmers cost saving projects’. The percentage of overdue receivables has further decreased due to both the group’s efforts and to improved market circumstances. In addition, the group had further reduced working capital while the supply chain optimisation project, to improve the processes of sourcing inputs to production and logistics in the United Kingdom, was on target. Mr Knoop said that the group expected that percentage growth in
the second half of 2017 would be lower than what he described as the ‘solid increase’ recorded in the first six months of the year. Amongst the reasons for this more pessimistic assessment of prospects for the second half of 2017 was the fact that the acquisition, made in the last quarter of 2016 would, as it were, drop out of the equation. Mr Knoop also expected the volume impact of the phosphate measures, introduced in the Netherlands as of 1 March 2017, to be higher and also that the group’s recovery in the United Kingdom was taking longer than expected. The Fipronil case in the poultry sector could lead to what he called ‘large consequences’ for individual layer farmers not just in the Netherlands but also in Belgium. Mr Knoop said that while it was expected that volume sales to this sector will be impacted, the effects would be limited on group level. Nevertheless, he said that the group was on course, with the previously delivered guidance for the group’s performance in the medium term, of an average annual increase of underlying EBITDA in the middle-single digits at constant currencies, ‘barring other unforeseen circumstances’. Mr Knoop reported that, of a total of 4.72 million tonnes production
of compounds, blends and concentrates, 31.2 per cent originated in the UK. The group’s press release is a valuable input in terms of understanding this new and very active presence in the UK market for compound feed; I suspect that the domestic British feed manufacturers will do well to keep a close weather eye on what ForFarmers is up to.
FAMILY FOOD TRENDS The publication, earlier this year in Family Food, the lineal successor of the National Food Survey, of food consumption data for 2015, reveals a variety of facts about consumers’ reactions to ‘austerity’. These data are of concern to the feed industry in that they illustrate developments in the food industry which incorporate a substantial input from the livestock feed industry Looking at the data for household consumption of livestock
The world’s top feed producers rely on Maxi-Mil feed milling aids to reduce process loss, improve pellet quality and increase mill throughput.
products, there are some interesting conclusions to be drawn. One would normally regard food as being ‘demand inelastic’, meaning that changes in food prices would have relatively little effect on the amount purchased; after all, we all have to eat to live. In fact, such is the variety of available food products that we all have a substantial range of alternative food choices at our disposal. Nevertheless, there have been changes. It is unwise to seize upon
PAGE 14 SEPTEMBER/OCTOBER 2017 FEED COMPOUNDER
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