Results and developments 2015 per cluster

1.4.2.1

The results and developments including the comparative figures are explained below by cluster.

2015

€ 1,000

  The Netherlands Germany / Belgium United Kingdom Group / eliminations Consolidated
 
Total Feed volume (in tons) 4,102,723 1,924,380 3,066,529 - 9,093,632
 
Segment revenue 1,001,866 529,585 771,508 -58,489 2,244,470
 
Gross profit 190,131 66,045 166,904 1,124 424,204
 
Depreciation, amortisation and impairment -8,167 - 3,609 -11,754 -2,508 -26,038
Operating profit 53,541 7,981 17,392 -14,864 64,050
 
Gain on sale of investments and assets held for sale - - -1,378 - -1,378
Restructuring costs / Impairment non-current assets - - 1,281 - 1,281
IFRS effect on employee benefits in The Netherlands 400 - - - 400
Incidental items 400 - -97 - 303
 
Operating profit excluding incidental items 53,941 7,981 17,295 -14,864 64,353

2014

€ 1,000

  The Netherlands Germany / Belgium United Kingdom Group / eliminations Consolidated
 
Total Feed volume (in tons) 3,944,672 1,936,906 2,883,205 - 8,764,783
 
Segment revenue 993,679 549,254 748,639 -70,291 2,221,281
 
Gross profit 182,904 65,362 145,464 - 393,730
 
Depreciation, amortisation and impairment -9,032 -3,493 -8,019 -3,244 -23,788
Operating profit 48,866 8,011 18,196 -12,509 62,564
 
Gain on sale of investments and assets held for sale -200 - -1,861 - -2,061
Restructuring costs / Impairment non-current assets 2,100 - - - 2,100
IFRS effect on employee benefits in The Netherlands -3,000 -   - -3,000
Incidental items -1,100 - -1,861 - -2,961
 
Operating profit excluding incidental items 47,766 8,011 16,335 -12,509 59,603

1.4.2.2

The Netherlands

€ 1,000

     
  2015 2014
 
Total Feed volume (in tons) 4,102,723 3,944,672
 
Segment revenue 1,001,866 993,679
 
Gross profit 190,131 182,904
 
Depreciation, amortisation and impairment -8,167 -9,032
Operating profit 53,541 48,866
 
Gain on sale of investments and assets held for sale - -200
Restructuring costs / Impairment non-current assets - 2,100
IFRS effect on employee benefits in The Netherlands 400 -3,000
Incidental items 400 -1,100
 
Operating profit excluding incidental items 53,941 47,766

1.4.2.3

Total Feed volume

Total Feed volume for the Netherlands cluster increased by 4.0% to 4.1 million tons. In the ruminant sector the increase of the volume amounted to 5.4%, mostly as a result of the abolition of the milk quotum resulting in more cows being kept on farm. In addition more compound feed and concentrates per animal were fed in this segment, which resulted in higher milk production. The volume was also higher in the poultry sector (+4.9%). In the swine sector there was a general declining trend+(-1.5%) due to low sales prices of pig meat.

The sale of organic feed increased in volume by more than 40% compared to 2014. This increase was partly the result of the cooperation with Agrifirm (full year 2015 compared to 4 months in 2014). In addition to this, ForFarmers realised a significant growth in the number of customers who bought organic feed in 2015.


Revenue

In 2015 revenue increased by € 8.2 million to € 1,001.9 million (+0.8%). The sales per tonne of feed dropped compared to 2014 as a result of lower raw material prices that were passed on to customers.

Gross profit

In the Netherlands ForFarmers realised a gross profit of € 190.1 million, an increase of € 7.2 million (+4.0%). The increase was mainly caused by the increase in volume. The increase in Total Feed was higher than in compound feed. The increase of the gross profit was also caused by the enhanced application of nutritional knowledge, a better product mix and higher sales in specialties. The gross profit of the Pavo (horse feed) business unit increased as a result of the launch of a number of new products. The strong volume growth in the organic segment (Reudink) and the strategic partnerships also contributed to the increase.

Operating expenses

Operating expenses, excluding incidental items, were almost the same as the previous year and amounted to € 138.5 million. In 2015 a higher amount was added to the allowance for bad debts compared to 2014 due to the difficult economic climate for customers, especially pig farmers. These additional expenses were compensated by lower energy costs and operational savings. In addition, both in 2015 and in 2014, additional costs were incurred as a result of bird flu (€ 0.3 million in 2015 and € 1.0 million in 2014).

Operating profit excluding incidental items

The operating profit excluding incidental items amounted to € 53.9 million compared to € 47.8 million in 2014. This improvement of € 6.1 million is the result of volume growth (4.0%) and consequently higher gross profit of € 7.2 million net of higher expenses (€ 1.3 million) and further improvement of operational efficiencies.

1.4.2.4

Germany / Belgium

€ 1,000

     
  2015 2014
 
Total Feed volume (in tons) 1,924,380 1,936,906
 
Segment revenue 529,585 549,254
 
Gross profit 66,045 65,362
 
Depreciation, amortisation and impairment -3,609 -3,493
Operating profit 7,981 8,011
 
Incidental items - -
 
Operating profit excluding incidental items 7,981 8,011

1.4.2.5

Total Feed volume

The volume in the Germany/Belgium cluster in 2015 was 1.9 million tons which was slightly lower than in 2014. Volume in both the swine and the ruminant sector declined.
Sales in the ruminant sector decreased compared to last year due to the low milk prices resulting in less use of compound feed. The sales in the swine sector declined as a result of the low swine prices and the resulting pressure on our customers’ margins. In the poultry sector volume grew, particularly in products for the laying hen sector (>20%), due to the acquisition of new customers. Volume in the broilers segment in Germany/Belgium was lower in 2015.

Revenue

In 2015 revenue declined with € 19.7 million to € 529.6 million (2014: € 549.3 million). The sales per tonne feed declined compared to 2014 due to lower raw material costs that were passed on to customers.

Gross profit

Gross profit was slightly higher (€ 66.0 million in 2015 compared to € 65.4 million in 2014), despite the negative volume effect and the pressure on prices in the ruminant and swine sectors. This can be attributed to the improved product mix with more specialties (Total Feed) and the strategic partnerships.

Operating expenses

In 2015 total operating expenses remained the same at € 58.6 million. Investments in the strengthening of the organisation, the higher pension charges (mainly due to low interest rates) and an additional charge to the allowance for bad debts neutralised the realised savings on energy and the operational expenses.

Operating profit excluding incidental items

The operating profit remained the same at € 8.0 million. This stable operating profit was driven by an underlying improvement of the result which was offset by an additional charge to the allowance for bad debts.

1.4.2.6

United Kingdom

€ 1,000

     
  2015 2014
 
Total Feed volume (in tons) 3,066,529 2,883,205
 
Segment revenue 771,508 748,639
 
Gross profit 166,904 145,464
 
Depreciation, amortisation and impairment -11,754 -8,019
Operating profit 17,392 18,196
 
Gain on sale of investments and assets held for sale -1,378 -1,861
Restructuring costs / Impairment non-current assets 1,281 -
Incidental items -97 -1,861
 
Operating profit excluding incidental items 17,295 16,335

1.4.2.7

Total Feed volume

Total Feed volume in the United Kingdom cluster increased by 6.4% to a total volume of 3.1 million tons. This increase is the result of the acquisitions of Countrywide Farmers (2015), Wheyfeed (2014) and HST (2014). On a like-for-like basis the volume decreased slightly by 1.0%. Amongst the factors contributing to this were a decline in the volume in compound feed in the ruminant sector by almost 4% as a result of lower demand. The reason for this was lower milk prices and the abundant fodder available due to mild temperatures. This decline in volume of compound feed was partly compensated by an increasing demand for single feed (+2.5%) from dairy farmers. The volumes in the swine sector remained almost the same. In the poultry sector a like-for like growth of 2.0% was realised due to the acquisition of new customers.

Revenue

In 2015 revenue increased by € 22.9 million to € 771.5 million (+3.1%). Excluding the acquisition effects (€ 43.7 million; +5.8%) and the currency effects (€ 72.5 million; +9.7%) the like-for-like decline amounted to € 93.4 million (-12.5%). Revenue decreased due to lower raw material prices that were passed on to the customers. In addition the market in the United Kingdom had to deal with declining sales in, particularly, the liquid part of the DML segment.

Gross profit

Gross profit increased by € 21.4 million (+14.7%). This increase was entirely driven by acquisitions (net effect of € 7.7 million; +5.3%) and the favourable exchange rate of the British Pound (+€ 15.9 million; +10.9%). On a like-for-like basis the gross profit declined slightly by € 2.1 million (-1.4%). This decline was caused by the lower gross profit in the DML segment. Both the ruminant and the swine/poultry business units showed an increasing gross profit due to the improved product mix including more specialties (Total Feed).

Operating expenses

A strong currency and acquisition effect can also be noted in the total operating expenses. The increase of the total expenses by € 21.4 million (+16.6%) is caused in full by the currency effect of the British Pound (€ 14.2 million; +11.0%) and increasing expenses as a result of acquisitions (€ 7.5 million; +5.8%). On a like-for-like basis the operating expenses dropped by € 0.3 million mainly as a result of lower energy prices and introduction of efficiency measures

Operating profit excluding incidental items

The operating profit in the United Kingdom increased by 6.1% to € 17.3 million. The positive currency effect of € 1.7 million (+10.4%) and the net acquisition contribution of € 0.1 million (+0.8%) were offset due the reduction in DML. The operating profit of the DML business unit decreased by € 0.5 million and the expenses increased as a result of the strengthening of the organisation.

1.4.2.8

Central and support expenses

€ 1,000

     
  2015 2014
 
Gross profit 1,124 -
 
Depreciation, amortisation and impairment -2,508 -3,244
Operating profit -14,864 -12,509
 
Incidental items - -
 
Operating profit excluding incidental items -14,864 -12,509

1.4.2.9

The central and support expenses increased as a result of investments in the further professionalization of the organisation.


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