Not so long ago, ForFarmers made the news almost every week with many sensational events that almost started to resemble a soap opera. With new management and cautiously better results, peace seems to have returned for the time being, although this is not yet reflected in the stock price, which is still just above the low point.
2023 would be a transition year at ForFarmers, or so they described it in Lochem itself. Looking back, this was also the case with a series of notable events that occurred this year. This started in January with the appointment of Theo Spierings, who as CEO had to get the ship back in line, which had been in difficult waters in the previous years. However, the high-profile appointment of the experienced and flamboyant CEO resulted in an anticlimax. Shortly after taking office, he was forced to resign due to illness. A formal public performance never materialized.
Wolleswinkel at the helm
The Supervisory Board appointed Pieter Wolleswinkel from its own ranks as successor. In terms of profile, almost an opposite of Spierings. Less flamboyant, but knowledgeable. Also less experience as a driver, but as a graduated veterinarian, Wolleswinkel has a lot of knowledge of livestock (feed). In that respect, his appointment was not a wild gamble. With the coming into office of Wolleswinkel as CEO In April, the administrative chaos gradually faded into the background, although CFO Roeland Tjebbes subsequently announced his intention to retire early. A successor is still being sought for him and an interim has been appointed for the time being. Yet peace seems to have returned with Wolleswinkel. Positive stories about him come out from within the organization and he also looks good externally.
Strategic steps
Under Wolleswinkel's early leadership, the necessary drastic strategic steps have already been taken to make ForFarmers future-proof again. Like this the animal feed group left Belgium by selling its activities to Arvesta. With the sale, 420.000 tons of animal feed disappeared from the portfolio, for which €25 million was collected. The sale can be seen as a groundbreaking step in the history of the company, which has always been focused on growth. Due to a lack of margin and perspective, this drastic step was taken.
In growth market Poland, on the other hand, ForFarmers scaled up this year. With the takeover of broiler feed producer Piast, a long-cherished wish came true. ForFarmers has been considering expansion plans in Poland for some time, which is seen as an interesting growth market. An interesting detail about the takeover is that, with the 410.000 tons that will be acquired, ForFarmers will acquire almost the same volume that was sold in Belgium. Nevertheless, 2023 will be all about volume loss, as the quarterly reports make clear for the time being.
It was also a difficult year financially. Partly due to incidental expenses, ForFarmers incurred a loss of €12,8 million in the first half of this year. Although profits have diminished considerably in recent years, a negative result has never occurred before. However, the red figures appear to be an incident, because Ebitda rose by more than 30% in the third quarter to a positive result. How the results will turn out for the whole of 2023 will only become apparent early next year when the annual figures are performed.
Regain trust
Investor confidence does not appear to have been regained for the time being. Just before Christmas, the value had fallen to an almost historic low of €2,32. Five years ago the company was worth almost five times as much on the stock exchange. Although the nitrogen crisis has affected the value of ForFarmers, this does outline the potential of the company. It may be possible to work on a price recovery in 2024 if overall stock market sentiment and results are favorable. In addition, investors are probably also waiting for further strategic moves, preferably in growth markets.