Reveals five new principles
In order to better respond to rapidly changing market conditions, ForFarmers has re-examined the principles of the strategy for 2025. This has resulted in five sharpened strategic principles with an emphasis on an even more local market approach, differentiation and sustainability-oriented innovation of feed concepts. ForFarmers aims for a consolidated return on average invested capital (at the level of the underlying operating result (EBIT)) of at least 10% by 2025.
Since the launch of the strategy in 2020, the emphasis on making the agricultural sector more sustainable has increased, including through measures that have been proposed or implemented more quickly as part of the EU Green Deal. The prices of raw materials and energy have also become even more volatile and higher, partly as a result of the war in Ukraine. This has made it more difficult to pass on raw material price fluctuations. At the same time, market conditions call for more consolidation and cooperation in the chain, from feed producer to retailer.
Five tightened strategic principles
ForFarmers has the knowledge, skills and resources to strengthen its position in the changing market conditions. The mission, For the Future of Farming, remains the guiding principle. The company is therefore fully committed to sustainable livestock farming, both ecologically and economically. In anticipation of the recalibration of the strategy, ForFarmers adjusted its working method last year; more responsibility was shifted to the local management teams.
This forms the basis for meeting the first principle of the revised strategy: the local teams are leading so that we can work even closer to the customer. They are supported by the central departments and make use of the knowledge and experience available within the group, such as in the field of innovation. We will adapt the organization to the aforementioned working method.
Second: In the current market conditions, ForFarmers is the ideal party to distinguish itself per market and per segment in order to offer a differentiated range, prompted by the local situation per sector. The range can vary from total solutions aimed at optimum returns, to the supply of specific products that are most suitable for the livestock farmer in challenging market conditions.
Thirdly, ForFarmers is focusing more emphatically on sustainable solutions that meet social themes, such as the use of alternative raw materials, circularity and the further reduction of (nitrogen) emissions. In doing so, ForFarmers is even more actively committed to cooperation between the chain parties in the various markets. This is important both ecologically and economically and forms the fourth principle.
Finally, ForFarmers remains faithful to the fifth principle, namely supplying good feed at competitive prices, which contributes to profitable business operations for ForFarmers and its customers. To this end, the company continues to focus on optimally efficient and effective business processes.
Mergers and acquisitions: strengthening and broadening
In order to strengthen or broaden selective positions in home markets and also enter new markets with additional growth opportunities, ForFarmers looks for possibilities for mergers with or acquisitions of candidates that are a good cultural fit (in terms of country and company).
Transition to further sustainability
Livestock farming is faced with the challenge of feeding an ever-increasing number of people while at the same time reducing the impact of the production of animal proteins on climate and nature. Therefore, in line with the third and fourth strategic principles, ForFarmers is giving the Going Circular in Strategy 2025 sustainability agenda an extra boost. To provide even more focus, we are setting up a new organization, including the activities of Reudink (organic feed) and the co-products, to develop and market concepts that meet social themes such as climate, animal welfare and food waste. This is where we start in the Netherlands. Examples include concepts in which alternative raw materials are used, or in which more moisture-rich co-products and residual flows from the food industry are processed. Such concepts are an essential aspect in establishing partnerships in the chain, from feed company to retailer. Such concepts are also crucial for livestock farmers and other stakeholders in the current trend towards ‘net-zero’.
As part of the reassessment of the strategy, the core values have been adjusted. The success of the strategy largely depends on the involvement of employees and management. Our values Passionate , Responsible, Open – minded, United and Delivering are more than just words for ForFarmers. They offer a concrete guideline in day-to-day doings to customers, chain partners, stakeholders and to each other.
With this revised strategy, ForFarmers aims for a consolidated return on average invested capital (at the level of the underlying operating result (EBIT)) of at least 10% in 2025, excluding unexpected events. The company refrains from stating (annual) targets for the development of the underlying EBITDA, given the changing markets, in which important policy decisions are still pending and the ongoing geopolitical and macroeconomic uncertainties. The dividend policy remains the same and aims to pay a cash dividend of between 40% and 60% of underlying profit after tax.
Explanation of Strategy 2025
ForFarmers is explaining the revised Strategy 2025 to invited guests, including analysts. The relevant presentation can be found on the site ( www.forfarmersgroup.eu) from 10:00 am. The audio recording of the explanation will also be posted on the site later today.