ForFarmers N.V. (FFARM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Good morning those of you that are here with us face to face in Amsterdam, and good morning to you all, those of you who are on the webcast. My name is Yoram Knoop. I'm the CEO of ForFarmers. And we have a special day today, and that is not because it's as the Dutch called Prinsjesdag day, where the government through the King reveals the plan for the spending of the government for this coming year. Now this is the day where ForFarmers will reveal its plans for the coming 5 years. Clearly, we have taken all of the precautionary measures relating to COVID. So what I would like to ask you, though, to really respect distance during the breaks as well to ensure that we can all return in a safe manner. Also, those of you that are here with us face to face, we will be able to provide you a handout at the end of the session as well. The title says what we would like to discuss with you, resilient in challenging home countries but also expansion over time to new markets. Let me take you through the plan for today. I'll start off with introducing, again, ForFarmers at a glance, as we say. Then I'll share with you the current position that we now have and some of the progress that we actually delivered as part of our previous strategy Horizon 2020. Then we will talk about the new reality that our industry is facing, followed by what that actually means if we transfer that to true expectations in terms of market evolution. We'll then have an opportunity to ask questions relating to that part of the presentation. Those that actually explicitly talk about the strategy that we will be following, I will ask you to wait with those questions until later on. After the break, we will talk about that strategy called Build to Grow. We'll take you after the strategies through the associated financials, and then we will wrap it up. The plan is to be done by about 12:45. And those of you who are with us here, we'll be able to serve you a short lunch as well. First of all, let me introduce my team here with you. The good thing is that there is a great deal of industry experience in this team. But on top of that, we have clearly a combination of some of our leaders that have been with us quite a long time as well as a few people who have recently been promoted. So it's, I believe, quite a decent mix between people that, again, have been with the company a long time, but also that have seen other industries and have recently joined us. An example of that is Roeland Tjebbes, our new CFO. Again, a long time with the industry being in a number of other feed companies and has now been with us about 6 months. I would say sufficient time to really make sure that he is an integral part of what we'll be presenting today. Stijn is -- Stijn, over here, is responsible for what we call strategy and organization, but it includes a number of key components as well that are actually pivotable part of our strategy, like digital as well as sustainability. Arthur joined us from AB InBev about 2 years ago when we really wanted to significantly strengthen our supply chain capabilities, and he is really responsible for the supply chain from start to finish, so including logistics, including procurement as well as formulation. Then moving on to Pieter, who is sitting here on the left-hand side, recently got promoted to lead our largest business in the Netherlands. Again, a long time with the industry as well and is actually the only vet in our team. So here, he certainly has quite some knowledge about how animals really behave. David has also been appointed since January to lead a number of our businesses, being Belgium recently added to that Germany. Our organic business Reudink as well as our specialty business where we sell a branded horse feed called Pavo. Adrie van der Ven, on the right-hand side, one of our statutory Board members responsible for our Poland activities, as well as now really freed up to spend even more time on driving our M&A agenda, which is M&A in the countries we operate in as well as the new regions that we're going to explore. And last but not least, the longest time with us, has been in different roles within ForFarmers in the past, was responsible for the supply chain and at our headquarters before he took on this responsibility, but he is the one now leading our U.K. business. And in these last years and also in the years to come, one thing hasn't changed an inch, and that is actually our commitment to ensure that our farming customers have a good future. That's what we aim for, and that's what we will be held accountable for. If you look at some of the key facts, that what we have achieved over the past years. There are a couple of elements which I would like to highlight. Obviously, we have become the #1 in the European space in terms of feed. But we've also done about 2 acquisitions per year on average. There have been years where we've done more. There have been years where we've done less, but that has been a constant pattern. An area that I feel we've done quite well is in actually combining our cooperative heritage with our listing. Initially, there was quite a concern amongst farmers that if we will become a listed company, the DNA of the company might change, and we would go for just short-term profits at the expense of the farmer. And what we have seen is that actually, we have maintained our customer base there very well. And I believe we have shown that we can really match a very good product at the right terms, and that is actually consistent with trying to deliver shareholder value over time. And last but not least, an area that I feel we're actually pretty proud about, maybe that not too many know yet, is that also at the end of last year, we received a AA rating from MSCI in terms of our sustainability progress. And the fact that we have now, as one of the few, really made our sustainability progress on the debt. So that's a good step in the right direction. If you look at the split over the various regions, clearly, in terms of volume, and this is volume of total feed, so it includes all products, Netherlands and Belgium combined is just over half, but Germany and Poland is obviously increasing year-by-year with the U.K. about 1/4 of our volume. And if you look at it by specie, you see that swine is the biggest one. Again, bear in mind that this is not a compound feed that some of you may look at it, but this is total feed, but closely followed by ruminants. And then next one, poultry, but poultry has been 1 over the past years, so that has shown an increase and getting closer to the other species. This is actually the picture of Europe. And this is the tons that are sold by some of our -- some of our most important competitors, but that's not the worldwide sales. That is the sales that they actually have with the destination being Europe. And what you can see is that whilst we are the biggest, if you look at the European site, we only have a market share of 6%. And if you look at even the top 10, the top 10 together, come to a share of 25%. And with an industry that will be facing quite a few challenges where profitability might be under pressure, we really feel that over time, this industry is destined to further consolidate. The type of products that we provide, obviously, our heritage is compound feed. But over time, we have strengthened our specialty approach, specialty provides the customer typically with a lot more value. Specific knowledge is required. And it is also -- provides for a much higher margin product for us. Dry moist and liquids. These are by-products of the food industry that our industry actually helps reuse those products and create value out of them. And then forage as a last component. Forage is critical for our ruminant customers. As you can imagine, a ruminant farmer uses various feeds, but the most important component of his diet is the forage that he produces himself. So there, again, we have a number of offerings from silent additives, from seeds and our advice encompasses the total solution to bring whatever is best for that farming needs to that farmer. So here, you see pretty much how the value chain operates. And the good part about our industry is that consultancy never stops because somehow, the quality of the raw materials varies all the time. The quality of the ingredients that the farmer uses varies. We're dealing with animals that have different stages of life and possibly and often different health aspects that need to be addressed. So this is a continuous evolution where all the time, our advisers are trying to get to an optimal in terms of growth, stability and cost. Over time, the profile of our team has been changed and actually changed to a positive. What we are seeing is that our age profile is year-by-year getting younger. We were quite concerned in the past that we did not have enough young people coming through. But thanks to the level of education and academies that we've created, what we've seen is that we've become quite a popular employer being able to attract. So over time, I believe we are getting to a healthier profile and a profile that is probably quite a bit healthier than for most of our competitors. So that is going in the right direction. In terms of the male/female equation, also progress has been made, but coming from a very low base. So there undoubtedly, we need to continue to sustain and make further progress over time. But clearly, the leadership academies and the technical academies that we've put in place and are able to afford given the size of our operation, it's becoming a real competitive advantage as it relates to talent attraction. Let me move on to the current position then. Most of you know our strategy thus far, Horizon 2020. 4 pillars that we have been focusing on in terms of creating changes at the end of the day, deliver value for our 3 stakeholders, for our people, our employees, our customers in terms of the best solutions and our shareholders in terms of the best financial results. Let me do the following. I would like to actually go through 7 specific challenges that we have created ourselves in terms of, on one hand, progress that has been achieved with the strategy, on the other hand, areas where we would say, well this and this element has not been achieved or needs attention to make further progress over time. In general, I believe we can say that we have been pleased in terms of qualitative progress that has been really created through Horizon 2020. If you look at attractive segments, again, a CRM, where every farmer is in a database where every visit gets reported. And we're really trying to put our focus on attractive segments has been an important part of our delivery. Also, the fact that in the past, we had different teams dealing with different products. And we now have a desk that is able to help with the total offering of all the solutions allows us to get to a higher level of cross-selling possibilities. On the other hand, an issue that we see is that the -- what we call transactional business areas that don't pay for the value but purely make that determination on the lowest cost per tonne of feed, not per performance but per tonne of feeds. There are segments in the market where that plays a role, where we need to be clear that we will not be able to convince all those customers that they have to look at value. So that's a recognition that where we will need a slightly different proposition. If we look at the partner and deliver the total feed solutions, again, I would say, really good results through our partnership with Nutreco. Our specialty part has increased over the various years, year by year. We are still not at the same market share in specialties that we have in compound feeds. So there's still room to grow. But clearly, we have a much stronger offering than before. However, we also have to be clear that the competition that we are often facing there are not the typical companies that we compete normally on feeds. Now they are often the specialty companies. And you really need to compete with providing truly the best solution. So this is a journey where we have to continuously educate our own people and, hence, product performance to ultimately be able to truly be able to sell the best solution to our farming customers. In terms of acquisitions, we've done 11. We've also done 5 divestitures. And clearly, we have built a #1 position now in the Netherlands and in the U.K. With the last acquisition, we're #2 in Belgium, and we are #4 in Germany and with the Tasomix joint venture also 4 in Poland. However, despite that progress, if anything, we would like to say, well the progress on M&A has to be accelerated. There is, again, ample opportunity if you look at the market, so somehow we need to speed up that activity and again, become even more aggressive on that part. If you look at functional excellence, so that is using the size of the group to leverage it from a cost point of view, but also from a knowledge point of view, overall, very good progress. Only recently, only last year, we closed 5 of our facilities. So that helped our cost base quite a lot. However, you could also say, whilst we have put companies together, our true processes have not been fully harmonized yet. So there is still opportunity to get more out of our size and being a large group. If we talk about the people part, again, I already mentioned the academies, really very effective. And the fact that 25% of our people have become shareholder over time. Every year, we have a voluntary program for people to participate, I would say, is helping the overall commitments of our organization. An element where we came from not the right place where, again, progress has been made is on safety that I would frankly say was not one of our values in the past, but we've really put -- we put our focus where it needs to be. And now year-by-year, we are making good progress. Again, the diversity element, especially in leadership, is an area that we still need to make further progress. When we go to the next part, the nutritional solutions, this is obviously at the heart of what we do. This is where we create value for our customers. And in all species, you could argue we have made really good progress. Our technical results are top-notch and providing very good returns for our farmers. However, in order to measure those returns and to get value from them, you have to measure performance. And that's actually where we would say we have a lot of work to do because we have to be honest that the data pick up of our farming customers, which is so incredibly high in the Netherlands, is still at a very low level in other countries. And it is really hard work, and it will take quite some time to get the other countries to anything close to that of what we've been used to so long in the Netherlands. And again, if you don't measure, it's very hard to get true value for the solutions that you provide. If we look at the last part, best-in-industry profits. Clearly, our EBITDA has grown. Our dividend has increased. But if you look at the ratio of what we call EBITDA as a percentage of gross margin, I would say our efficiency over those years has not really improved. So we feel that is still an area that requires more focus to get, again, the true benefit from one ForFarmers and leveraging our size, there's more work to be done. And that's also the reason why we really invested in enhancing our supply chain capabilities. Looking at the 11 M&A transactions, acquisitions that we've done. You can clearly see that they've been done for various reasons, but product strengthening what has been the case, for example, with Vleuten-Steijn, who were very good and especially at sow feeds. So they have actually when we acquired them, that was on the contribution to the ForFarmers' knowledge that we've been able to leverage in the rest of our organization. And in general, economies of scale play a pivotal role in driving acquisitions. However, the -- I would say the most important thing in M&A, from my point of view is from every deal that you do, you learn. And from every deal that you want to do but you don't succeed, you also learn. And if I start with the letter, you may be aware of there was a Polish company called GoldPass for sale just a few months ago. And we did not win that -- the acquisition of that company. So the question may be, well why are you guys interested? Yes, we were interested. We made an analysis, and we came to the conclusion that whilst this was not a must-have because there was quite an overlap in the supply chain, it would have been a nice add-on to our business in terms of Tasomix. So in this particular case, the company was owned by private equity. So they went through a process where they asked bidders and, obviously, were looking for the highest bidder. We put in what we felt the company was worth. And we were prepared, obviously, to make a deal at the right terms. Again, we did not consider this was a must-have that we needed to have at any type of price if that even exists. And apparently, so did our 2 large Dutch competitors. And guess what? The expectations of the private equity funds were a lot higher than any of the 3 bidders came forward with. So what happens? They withdrew the process. And so we better wait until a better moment. And then what happens? Then in the beginning of this year, bird flu emerged in Poland. And what happened more? We know COVID emerged. So whereas they were, first, with a view we'll wait and will go for an absolute top-notch price that none of these 3 were apparently ready to offer, they changed their mind, and they felt we need to sell. And rather than having another type of process with a somewhat tainted asset, we are better off in striking a deal just -- and continuing the discussions with one company. And that apparently, we were not chosen. So that's the situation. Again, learnings that we also take from that process, you have to continue to be very, very close to the customer and, again, be aggressive at the right time. But I'm pleased that we did not take on this business at any price because I'm convinced that would have been the wrong thing to do. In terms of lessons learned, from acquisitions we have made, I would say, in general, we are getting satisfactory results in terms of synergy achieved. So we make plans. And afterwards, we judge are we close to the realization of those plans. And in general, we are pretty decent in terms of achieving the synergies, for example, in procurement, in formulation, in logistics. They are quite predictable. Another part that over time has become clear, maybe not new to many of you, but small deals and large deals almost take the same amount of time. And from that point of view, you have -- you really cannot afford to give these smaller deals that require the same amount of time, less time because they can't afford it. No, you need to take that into consideration up-front and decide where some of these smaller deals are worth the effort they require. And especially on the small ones, from our point of view, the risk profile is often higher because culturally, these are family-owned companies where a person is not just a salesman, but it's also the purchasing person, the planning person. He gets involved or she, but most of the time he, in all kinds of operation -- parts of the operation. And then when a company like ForFarmers acquires them, obviously, we have a much stronger process and segregation of duty. And we can say we have more development opportunities for you, and we provide lots of training. But if that person has been with that organization 30 years, this is typically a change that for some of them doesn't -- they don't swallow all of them that well. So -- and we pay a lot of attention to retain the talent, but we have to be realistic. If there is a clear cultural mismatch, there is a chance that you lose some of the key staff. And then there's a subsequent risk. If you do so, there is typically a very strong connection between that sales staff and the customer. So a cultural assessment up-front and how to deal with the people that we believe are clearly the most vital one to retain or if they can be retained is now a standard part of our assessment in terms of making a deal or not. And last but not least, as I explained, also the small deals require a dedicated integration manager. It's always a cumbersome process to really make sure in a short period of time that, that business gets fully and properly integrated. Another part of where we put focus last few years is on sustainability. And not too often, do we show slides, which just show green. But in this case, again, very good progress has been made. On safety, by the way, initially, the number of accidents we had versus when we started to measure went up because what we discovered is because we put so much attention on wanting everything to be registered that we got a lot more notifications of accidents. So initially, that was part of the creating awareness. We went up. But now again, we are in a much healthier phase where year-by-year, the number of accidents is going down. If you look at sustainability and innovation, in effect, you can draw the conclusion, and I believe, rightfully so, that sustainability is really an intrinsic part of what we do in innovation. Virtually, all our progress that we're making on a year-by-year basis on virtually any project that we are involved within R&D has strong sustainability elements associated with it. As an example, Apollo, it's our name for the new poultry solution that we came up with about 2 years ago, has really been recognized by industry of providing a step-change in terms of feed conversion and sustainability as well. So this is typically what we're trying to do is develop new feed concepts that create value for the farmer and, again, help to preserve raw materials and all elements that relate to sustainability. So overall, where did we leave now with -- or where do we now feel we stand with Horizon 2020? Well first of all, let me take you through some of the weaknesses that we feel we still have. If you look at our portfolio, you could say that Poland and, probably in the future, the U.K. are our only growth markets. And a large part of our current portfolio is in mature markets. So the balance there is one of the areas that we would like to address. And similarly, even if you look in the various countries, we are not #1 and #2 that we wish to be in each of the regions that we play. So some regions really require to be strategically enhanced to be able to sustain value over time. And last but not least, the value proposition that we have, where we really want to create the best solution and through measurement and data, convince the farmer that has value for the farmer, it doesn't work everywhere. There are areas which require a pure transactional approach where trying to continue with that effort is not the right thing to do. So having a much more pragmatic view where to deploy what is probably a better solution. In terms of the strengths. Again, if you look at ForFarmers, where we are, I believe, still unique is our access to that farm gate, being able to deliver more than 26,000 farmers officially daily and having 450 advisers that have a very close connection, that's where we are unique. So there, we are trying to leverage that farm gate with the best solutions. And those best solutions can be because we created them or can be because we are the marketing arm and deliver them through strong partnerships. So all in all, we feel that is what we can build upon, and our strong balance sheet allows us to continue to grow and fuel that growth going forward with -- maybe I need to repeat that with still ongoing EUR 50 million of free cash flow year-by-year, and that is after having done CapEx. With that, I would like over to, again, I already mentioned the only vet we have in the team, Pieter Wolleswinkel.

Thank you, Yoram. I think what is this thing about being a vet? Well we'll get maybe through that in the break. Okay. The new reality. Yoram has expressed our experiences in the Horizon 2020 journey, and I will now zoom in the trends as we anticipate them in the coming 5 years. But before I start with that, I'd like to zoom in on 2 topics that come immediately to the top of our minds, being, first of all, COVID. We foresee no long-term impact for ForFarmers with regards to COVID. Obviously, we don't know everything yet. No one knows exactly what will happen in the coming months and years. But if we look to our business and also look back over the past 6 months, we feel we are in control. If we look to our overall processes, we really -- we're well able to deal with the challenges as we had them. We were able to supply the feed to the farmers in time in full. Also, if we look to our business, we have seen that impact is there, especially on the beef segment and the broiler segment. That is because the out-of-home segment, so restaurants is under pressure. Yet, we do anticipate that a recovery will take place. And if not, compensations will come, for example, from the retail channel. So all in all, despite the uncertainties that are definitely there, we see no impact on the longer term for ForFarmers with regards to COVID. The second topic, okay, as a vet, this one is close to my heart. Obviously, that is animal diseases. A big theme also for ForFarmers. We are looking very critical what's going on. Yoram expressed already bird flu in Poland. That is the picture that you see on the right side. So if we look we see several cases earlier this year of bird flu that has affected the business. We saw that herds needed to be removed. The good thing is that it has really speeding up the hygiene control also in a country like Poland. So we feel we're getting more and more in control with these type of diseases in all countries that we are active in. So that will definitely help us. And the good thing is that in Poland, we now see that the barns are filled up again with animals, and that means feed is supplied again. A big theme also, based on the news of last week, is African swine feed. That has really turned around the swine industry in the last 2 to 3 years. And if we look at this picture, you can see that it's -- well you can't see it, but it's moving from the east to the west. And we have seen 2 jumps, about a year ago to Western Poland, so from the east immediately to the west. And also in Belgium, we've seen several cases coming up. That immediately has strong trade impact. But in general, the commercial farms are still there. The animals are still there. So also the feed supply is still there. What has happened last week? We've seen a case just across the border in Eastern Germany. Immediately, a trade band coming from important markets, China, Japan, South Korea. So you see that for the farmers, it's a tough period because that means that the prices drop immediately. Yet for now, we followed the Rabobank report that came out immediately last week in which they anticipate that recovery should be seen next year, early next year. Yet, obviously, if the cases now fade away and if the trend towards the west and especially Western Germany, won't happen. So all in all, definitely a thing that we watch very closely. But for now, we still feel that we are in control with regards to our own business on these topics. Then if we look to the overall trend, we do see the pace and impact are changing. What do we mean with that? If we first zoom in on the impact, over the past 40 years, environmental topics have been high on the agenda of the agricultural sector, yet as of 12 months ago, is daily headlines in the Dutch media, and we were not used to that. So you really can see that much more people are involved in coming to solutions. And that's not always helping. I'll get back to that later. The second thing, and that's especially on the pace, are the data and the smart change. We see much more data being generated at the farms. And with that data, we can provide better feed solutions. So that will be very high on our agenda. In all the different parts of the value chain, you see trends coming up. And Stijn, my colleague will, later on, elaborate on these trends. But I still would like to zoom in on, as said, a very important topic, and that is the environment and especially the nitrogen discussion. The nitrogen discussion started last year. The Netherlands had a system that was called the PAS regulation, and that helped to deal with the excessive nitrogen emission in the Netherlands. That regulation was rejected by the Council of States. And immediately, as of that point in time, for example, the construction industry was coming in a standstill. So the impact was enormous for the whole Dutch economy. That has led to massive discussions. How can we deal with that? And to be honest, that discussion is not brought to an end yet, as some of you will have read also yesterday in the newspaper. Unfortunately, we were not able to deal with that, to my opinion, in a good way. And that has also led to many of the protests that you will see here. This was on the 1st of October last year. Many of you will be aware of what happened that day. And I understand that. I understand the emotion of the farmers. Over the past 10, 20 or even 30 years, as an industry, we've always been able to deal with the solution -- to deal with the problems and work on a solution. And now the agriculture industry often feels that they are seen as the problem rather than being part of the solution. And we believe that also looking in the coming 5 years that we will be able in a good way to work on the solutions also on the nitrogen dossier. So let's zoom in on that one. It's mainly a topic that affects the dairy cows. So if we have the time to define a coalition of the willing, so meaning the dairy processors, the feed industry, the farmers, that will truly help us to have a solution with a good interaction, and that is also getting the commitment from the dairy farmers. So we've been working on a plan that has 4 pillars. First pillar, most important, also especially for ForFarmers, and it's working on the animal feed. We can also work on the housing in the manure storage, the manure application on the fields and the meadow grazing. And by taking such a holistic approach, we truly feel that we can make step forwards. So what is always important in these type of cases is time. And we need time to implement it, to execute it. And with that, deliver the solution. But I think that the track record of the industry is impressive. 10 years ago, we had massive problems around welfare, especially in the broiler area that is solved with a slow-growing concept. 5 years ago, we had massive problems with phosphate that is solved by a really good coalition of the feed industry, farmers and the dairy processes again. So I'm convinced that also in the coming 5 years, we can work on these issues and work towards -- to a solution. And with that, make sure that we have a very strong animal -- farm animal population in Northwest Europe. And with that, I would like to hand over to Stijn. Unfortunately, he's not a vet. I need to disappoint you on that one, but I know that he has our mission for the future of farming very close to his heart. So here you go, Stijn.

Yes, thank you. What I'd like to do is where Pieter discussed one of the 2 main trends that impact the whole chain of the animal protein production, which is an environment, I'd like to cover as a first topic the other big trend, which is data or smart chains or digitalization, if you like. There's, of course, a lot of press about this and a lot of exposure. It doesn't get -- I want to demystify it a little bit and show you a little bit what is happening, what is not happening in terms of digitalization. And I can assure you, it is indeed a disruptive trend, but we believe in a very positive way for ForFarmers if we play it out well. It starts with the fact that more and more data is becoming available. That is because of sensors being applied, but also the more advanced application, for instance, of milking robots. So Internet of Things and those kind of developments all ensure that more and more data is becoming available at farm level and throughout the chain. Secondly, we see that also the demand for data is increasing tremendously, and environment is one of the big drivers of that because people want to know where their food is coming from, where the ingredients are coming from, and having a good data infrastructure is essential to make that happen. If we then look what happens and what the challenges are, there's basically 2 challenges to have -- to match that more supply of data and the demands for information, and that is connecting the data and analyzing it, making information out of the data. And if you look at the number of seminars and publications on smart farming, you would think that everything is already in place, but it certainly is not the case for livestock farming. So we see that there's a lot of start-ups and a lot of new companies and a lot of new initiatives, and we are very convinced it will create much more opportunities and disruption going forward, but we think we are still at the early stages of something that will prove to be disruptive to the industry. And as I said, we believe that we can play a very proactive role in that, and I'll cover that later on when we look at the essentials of our strategy. So how then does that data improve the industry? First of all, and basically, it's through 3 pillars. The first one is boosting productivity. So what we see already for many years, but that will only increase by the fact that more data is becoming available, is that productivity within the chain, whether it's in the feed conversion, for instance, is helped by the fact that more and more data is becoming available. And the analysis and management information coming from that data is helpful to drive productivity at farm level, but also throughout the chain. And the second one plays into the trend that Pieter just described, which is environment, you can imagine that managing the environmental challenge is only possible if we have the right amount of data and can measure what actually happens. And as Pieter described, for instance, with the phosphate issue that we -- that was managed, if we wouldn't have had the data to support the progress that we made, it would have been a nice story, but nobody would give it the support that we needed to move on with agriculture and the way we did. And then finally, supply chain management. Matching supply and demand of final products, for instance, but also of raw materials for our factories is of essential importance to make the supply chain efficient and have that data available and connected throughout the chain, is one of the things that has become impossible because of all those trends. Now we believe, as I said, this could be and will be for us a big opportunity because the companies with our size and our knowledge base are the parties that are able to be at the forefront of those developments and translate them into improved solutions for the entire chain, starting with farmers. Apart from those, I would say, chain-wide trends. There's a few trends that we'd like to highlight, which are specific for one of the links in the chain. And the first one is raw materials. And also, this is one that gets a lot of press coverage, of course, which is alternative proteins. And I'm talking about alternative proteins as feed inputs here. So not the ones that we would call alternative meat, which I will talk about a bit later. This is really about feed inputs. There's a lot of developments taking place there, which we all follow very closely, but there are 2, in particular, that we think are most promising, which are single-cell proteins and insect-based proteins. Both are alternatives for the current main sources of proteins in raw materials, which are, for instance, are fish meal and soy. And they -- over time, it is expected that they will replace part of it. Why are those 2 so important? Because both of them are being grown in a protected environment or controlled environment, where circularity of the raw materials that are being used to grow those raw materials are -- is guaranteed by the essence of them. So it's about single-cell protein and insect-based. Now insect-based is an interesting one for 2 reasons. Because we're exploring that as an opportunity as a new feed ingredients, but also those insects need to be fed. And as you could say, that could be a new specie, albeit at a very small scale today, but certainly, we expect, and that's what we already do that if that industry grows, that's going to be an interesting area for us to supply feed to in the end. It's mainly coproducts. So in that sense, also a circular way of supporting the industry. But these are important elements to change the way or the change of raw materials that we use to produce our feeds, starting with young animal feed, by the way, because of the price points that it still has today. You cannot expect that it will replace large amounts of other raw materials for the entire industry, but it will, for sure, have an impact and grow over time. The second part of the supply chain, I'd like to highlight is the feed suppliers. So let's say, our competitive field. We have analyzed our competitive field and put it in 4 different categories. 3 of which, on the left side, you already know, whereby, especially the second one, local players and cooperatives are an interesting one for us to highlight because those companies are usually the most interesting acquisition opportunities for us going forward. The fourth one here on the left side for you is a new -- sorry, on the right side for you, is a new competition and which is unbundled. But we see that small part still of the market is interested in a model whereby toll milling. So that means uncontracted feed producers producing the feed without any advice take place, and the advice and the analysis set come from different players. We still see and it's proven over time, again, that the bundled solution, whereby the advice, the management tool and the product delivers the best solution for the farmer, but there's always a part of the market that's looking for new solutions. And we follow this closely, of course. It's small, but we expect that it will have its place in the industry. And then the heart of our supply chain, farmers and processes. And when I say our supply chain, I mean the animal protein chain. What you see here is basically 2 words: professionalization and consolidation. This is a picture that needs some explanation, I guess. If let's first focus on the green lines. If you -- because it's 2 examples, one is in the U.K., which is on the left side, and the Netherlands shows the same picture or the same analysis on the right side. What it shows is what's happening in this case in the swine business. What you see on the green line is that the number of farmers, so the number of decision-makers is going down, both in the U.K. as well as in the Netherlands. So in that sense, consolidation is taking place. There's less decision-makers that control a bigger volume by themselves. But if you go one level deeper, you'll see that, let's say, the essence or the real components of that change might differ country by country, so different scenarios. So in the U.K., you see that the industry structure is pretty stable. It's the same number of farms -- sorry, the same number of farms. It's the same number of animals, and the percentage of feed that is being delivered by compound feed is pretty stable. So what you see there is a consolidation, mainly by processors that just take a bigger part of the pie, but the essence of the industry structure stays the same. That's different for the Netherlands. We see not only the number of decision-makers go down, number of farmers, but also the number of animals and also the percentage of feed, which is being delivered as being compound feed. So that has a different kind of nature. But all in all, it's also about consolidation. And in all scenarios, there's one common theme, and that is professionalization. So the support and the solutions that they require have a higher sophistication, higher level of sophistication. And that is something that, of course, plays into our strength, having the knowledge base and the skill base that we have. And then finally, on the right side, retail and consumers. We cannot deny the fact that this gets a lot of attention, of course, as well. And within that, let's say, the -- beyond meat and vegetarian mutual kind of initiatives, so alternatives for meat have the most prominent place. What we see here? In short summary, it's small. But it grows rapidly. That is -- those are the 2 messages. So today, in the western world, it's still very small, less than 1% of the protein consumption of humans today. And it has its own challenges. So it's not only good news, and we expect that, that will, over time, that will be -- get more publicity as well because in terms of quality, in terms of taste, in terms of health, human health, it has its own challenges, both lab meat solutions as well as plant-based solutions and also in terms of environment. I'll cover that a little bit later when we look at our sustainability approach. So it has its place, but it will also have its challenges over time we expect. And until today, based on also a Rabobank report, we see that the total consumption of animal protein coming from animals is not going down yet in the markets that we operate in. So this is coming on top of it. We shouldn't play too much down, we believe, because it will have its place in the industry as well but we also believe we should put it in the context of what we just said. And most importantly maybe, it's also not a natural place, we believe, to be in for a feed provider. Because if you're a feed provider, you deliver to farms and to the animal protein sector. This is a food business delivering to a completely different set of customers. It requires a completely different set of capabilities. So far, we believe that although the end product might be, let's say, interchangeable, the fact that it has a completely different place in the value chain and requires a completely different company setup makes it not a natural place for a company like us. So in summary, if we look at all those market trends, starting with Pieter's description of environment, we could say that consolidation of the market was there, is there and will remain to be there in the same way. But there's 3 key trends that really intensified and have a bigger impact on us than they had a few years ago. The first one is sustainability. I think we've covered that enough. The second one is digitalization, same thing. And the third one is strong competition, including new entrants, because let's not forget about that competition, that given the market volumes that Yoram will cover in a second that are stagnating in the most areas we operate in, that there's overcapacity in the market. So the intensity also of the traditional competition will increase. So in general, those are the market trends that we'd like to cover to you. And how that all translates into the numbers and into the market volumes, the developments there, is going to be covered by Yoram.

Thank you, Stijn. So let me take that further and indeed create some more realistic expectations, what this all means in terms of real outlook. In fact, what we have done is we have built 3 scenarios: a positive scenario, a negative scenario and a baseline, which is the start for our modeling. Obviously, we look at also the positive and the negative to see if one of those would occur, how would we adjust and take that into account as well. But a positive scenario is a clear, fast recovery after the COVID situation. And it is also that what we mentioned, self-sufficiency of meat in the U.K. is around 60%. 40% of meat in the U.K. gets imported from the continent. And with a Brexit coming up, looks like to be more harder and harder by the day. It will become trickier to export from the continent with import duties, with time lags. And therefore, the attractiveness for U.K. farmers to expand will be there. Will this be a question of a few months and the business will spike? Absolutely not, because the whole supply chain has to be invested in to be able to do that in the U.K. And clearly, right now, all of us are waiting for clear answers in which way it will go. But that is a scenario that we feel is still very realistic. In terms of the baseline that we've taken into account is the fact that there will be a regulation coming into play that will impact our ruminant business due to the nitrogen that Pieter was referring to. And also the fact that we foresee, and we have actually on numerous occasions indicated, that we believe that the Dutch -- especially the Dutch swine sector will likely retract. In fact, there is a government subsidy in place where they basically buy out farmers to -- and the expectation that we all had was that would lead to a 10% reduction in the number of animals. But as some of you may have read in the paper only yesterday, the offtake of that plan is far less than the government had expected. So the likelihood is that the impact of that is going to be less than we previously anticipated, at least short term. And then a negative scenario, this would be a widespread African swine fever at commercial farms in Germany and ongoing African -- avian flu outbreaks in, for example, Poland, but probably -- possibly also in other countries. So what we are looking at? The markets that we operate in today, so this is not entirely Europe, these are only the markets that we operate in, projected in terms of compound feeds. What will these various scenarios bring us? If we take the baseline scenario, we come to a 0.6% average compound growth rate in compound feeds. And again, certain markets will decline. Other markets, for example, Poland, we believe, will grow. The combination of that leads us to the 0.6%. But there is quite a spread. So if you look at the positive and the negative scenario over a 5-year period, you'll see there is plus or minus 10% in comparison to that baseline that we've been calculating with. And again, it varies very much by market. So what we've done here is giving you an overview in terms of our expectation. In red, we're talking about an average compounded growth rate of more than minus 2.5%; in orange, between 2.5% and 1%; in light green, between minus 1% and plus 1%; darker green, plus 1% and 2.5%; and very dark green, high growth rates of more than 2.5%. So if we go by country, again, because of the nitrogen, we see a contraction expected in terms of dairy in the Netherlands and a stronger contraction in swine. It may not be as much now with this latest information, but we also know policies of the government have a tendency that they can change over time. So I think it's probably better to right now assume still a more conservative outlook. If we look at the U.K., again, considering the protein deficit, we believe especially swine but also poultry will benefit from that. And if we would go to Poland, we are optimistic that all of the species that we are involved in will grow but especially broilers, we believe, is destined to over time benefit from ongoing growth in broilers once avian flu and obviously COVID are really behind us. The role that each of the products that we serve is different. And again, as you can recall, our role is to help the farmer become more profitable. And there are different solutions to be able to do so. And our adviser has always a perspective not to sell what is best for farmers. Now he has a perspective, "What do I need to do to help the farmer improve his return?" And if that means a lower return for farmers, so be it, right? Our role is to make the farmer more successful. And in doing so, again, we have 4 categories of solutions. Our heritage, where we come from, is compound feeds. In terms of profitability or margin to us, you could say that is, say, the average. When we are able to provide the specialties as well and specialties, you could look at young animal feed, the comparison I often make is look at baby foods for humans. If you were to calculate the cost per kilo compared to normal foods, you don't want to do that because you may not feed your baby anymore. But you still are because you want to invest in the health of the baby because over time, if he gets through the first phase, the baby, better chance of getting through the rest of his life in a decent shape. Well it works the same way with animals, right? So the first phase of the animal is investing in a good development so that afterwards, he can be stable, not have diseases and actually become a very efficient animal afterwards. The margin profile you make on young animal feed is a multiple, I would say, between -- probably between 5 to 50x more in terms of profitability per tonne than compound feed. However, the volume you sell these solutions is also a fraction in terms of the normal product. But once you have that relationship, again, for the farmer and your overall margin at that customer, it's a very important role. Concentrates is also one that I need to probably point out. When -- certain farmers, when they don't want to use a compound feed but want to blend it with some of the raw materials they use themselves, they go to a concentrate. And a concentrate is kind of the heart with all the vitamins and minerals mixed then with like the maise or the grains that the farmer can get from his own land. In fact, the concentrate allows you, again, to achieve a much higher margin than you would only be able on the complete feed. So even though your volume in certain cases might decrease when a the farmer changes their way of feeding, your overall margin profile may not change. Then a category that, again, is very important from a sustainability point of view and important for the farmer is what we call dry, moist and liquids, often by-products, waste products of the food industry that have normally no other home but can be reused in our industry. And about 30% of all of the products that we use are by-products from the food industry. And these products are very low-value products. So low-value products means there's virtually no margin for us, but they provide a real value for the farmer. So whilst there is little differentiation in the product itself in being able to offer that as part of the total solution, it's an important lock-in to provide the best solution to that farmer. So we use these products often to gain new customers. And then over time, we try to be able to market the rest of the product line to those farmers as well. And last but not least, when you talk about forage, so for ruminant farmers, seeds, fertilizers and, for example, silage additives, all our advice entails the total solution that is required to feed that animal in the optimal way, including the advice how to deal with forage. And we've seen over time, especially in the Netherlands, that we've built a -- quite a successful forage business, which really reinforces the rest of our business. So in concluding, clearly, the market has changed over the past few years. And we expect, going forward, market will continue to be more challenging than what we've seen in the past few years. However, we are absolutely convinced that this will remain a very large market with very significant opportunities for the right place if you have the capabilities of continuing to offer true value for your farming customers. And that is the reason that, actually, a key choice we have made is to further strengthen the position we have and do that by continuing to innovate but also look for acquisitions within our existing markets but, on top of that, to be able to balance our portfolio over time, also look for selected growth markets. So we believe that the strength we have fits what the customer needs in this particular case well. And we want to use that expertise, that knowledge and our market position to continue to build in further strengthening this position over time. And with that, we are actually at the first part of the Q&A. May I remind you that we would like to use this Q&A to only address those questions that don't relate to the future strategy but more to the market fundamentals as we have explained them so far. With that, I would like to open it up.

Can you please go to the mic? There's a mic there...

Yes. Good morning. I'm actually a little bit surprised that you say that COVID -- you believe COVID has a limited impact. Because if you look -- listen to other players also in the industry, then everybody is saying COVID is exactly accelerating the trend towards sustainability, to more health, et cetera. And I also, in the past few months, got more the impression that a lot of noise is made that actually meat was not so sustainable, it's not so healthy, et cetera. So actually, COVID seems to accelerate where you actually assume that it is only temporarily. So that's the first question. Then the second one, you are quite optimistic. Even it sounds a little bit that you are hoping for a hard Brexit because that would improve -- accelerate the growth in the U.K. But might that not only be a temporary effect that maybe after 1 year, 2 years when all dust has settled down, that's going to be a normal situation? And then maybe last but not least, I think, you said, "Okay, we are looking back also a little bit on the horizon, what we have achieved, et cetera." What you didn't achieve, in my view, is a lot of EBITDA growth. So could you comment a little bit more on that? What in your view has been the main factors behind that lagging EBITDA growth, where I think you failed in that respect? You say you have a better quality organization and you have better quality. But at the end of the day, the EBITDA is lagging.

Yes. So just that's -- then I start with the COVID question. In fact, what we are seeing today, and there have been various industry reports from Rabobank, amongst others, but also from ABN AMRO the other week, the total consumption of meat is down since the start of COVID. In fact, what we are seeing is that especially poultry is heavily consumed in the out-of-home segment. And as people stay more at home, the overall protein consumption has gone somewhat down. We're talking about -- in the Netherlands, they were saying 3%. And the industry -- European industry has talked about -- [indiscernible] came out with a report of an impact in Europe of 3% to 5% lower production and consumption due to COVID. Is that a long-term impact? We really don't think so. We -- if we look at the trends, there is really no indication, as Stijn was alluding to as well that protein consumption is going down other than COVID. So we believe, well if the restaurants open up again, there is no indication that people will not use the same habits that they had before and consume similar amounts of protein as in the past. What has also been an issue in terms of COVID is the fact that global supply chains, which are often needed to fully market the animal in terms of parts of the animal that are not consumed in Europe, are often broken. So the profitability levels, for example, in terms of poultry, but it can also be the case in ruminants, profitability has been under pressure. And therefore, especially in broilers, which have a very short-term cycle, where after a few weeks, every farmer can actually decide again, "Is there enough money to put in new birds in my stable or do I wait until profitability returns," there you see an impact that profitability has been suffering. And because of that, the total amount of birds that are set up has been reduced. But again, as soon as restaurants open up in Europe and in other parts of the world, we believe the business will restore to the old habits and the old volumes. Relating to Brexit, your question, is that a short-term impact or longer-term impact? Assuming there will be a hard Brexit, there will be import duties on meat, import duties on meat from the EU. And that means just by nature that the attractiveness of a U.K. consumer buying a British product, which they want in general to do anyway, will be significantly strengthened. And again, all of the custom controls will make it more complicated, a longer process than today. So from all angles, consumer costs and process, this will all lead to a higher level of use and production in the U.K. Do you hear me say that 60% will go to 100%? We really don't think so. The 60% will increase and the self-sufficiency -- and that will take a few years, but it will go up. But that effect, we believe, will be a permanent effect. Once the industry has invested, it will continue to leverage those assets. Last question on Horizon 2020. EBITDA has been lagging. We actually agree with that, especially because of the procurement incidents that we experienced last year. We actually went significantly down due to that. Furthermore, we see a number of markets have become more competitive. And that has been the reason that we put an additional cost program in place that we now are reaping the full benefits of. And if you -- again, if you take out the procurement part, we have seen significant growth in our EBITDA as well. But again, the markets in general have become more competitive.

I'm not as big as Fernand. So a question on M&A, past M&A. You've been pretty active in recent years. And you've indicated, too, that M&A has contributed, that you've generated synergies. Could you quantify that a bit more also in relation to the question of Fernand that EBITDA growth was limited, I think, even when adjusted for the raw material impact? And is that also -- I mean, when looking at recent M&A, those deals mainly involved smaller to mid-sized deals. And is that the reason that you also indicated in your presentation that you probably are looking for bigger M&A in the future?

Adrie, can I suggest you take that question?

Yes. Talking about past M&As, I think definitely, as far as synergies have been concerned in terms of functional areas like procurement formulation, we have seen the benefits of that. We cannot deny that in areas like when -- where smaller M&As are related, we lost in certain areas like Algoet. We lost some customers and also salespeople. I think that is also something that we have to be honest about. If it would mean that we, for the future, would go for bigger targets, I think looking at the learnings, a small deal is the same effort as a bigger deal. So from that respect, yes, preferably, we would. And we will also come back on that later on. Thank you.

I would like to add, if -- given the choice, we would always go for bigger ones, but we also have to be realistic. The number of bigger opportunities compared to the smaller opportunities is not the same, right? So there's really, I would say, a primary bit. So there's many more smaller opportunities than there is bigger opportunities.

This is a question from Guy Sips. He asks us, "For the trend professionalization and consolidation of farms and processes, you gave different scenarios per country, U.K. and NL. Where are the other countries, Belgium, Germany, Poland? Are they more like the U.K. or more like the Netherlands?"

Can I suggest, Stijn, you handle that question?

Yes. Thank you for the question. As I said, it's different scenarios. And you will also see that for different species, it has different scenarios. But if the question is asked, are most scenarios closer to the Dutch perspective or the U.K. one, we would say it's more close to the Dutch perspective. So it's not only the number of decision-makers or farmers that goes down but also the number of farms. So you see consolidation at the farm level as well. And overall, the percentage of compound feed, which we expect would slowly stagnate or slightly decline in general in most scenarios. There are certainly exceptions, and it's different for different countries and different species, as I said. But if the question is asked, in general, this would be the answer.

Actually, 2 questions. The first one is on the base case scenario. If I recall very well, it was 0.6% 5-years CAGR going forward. In my view, that suggests also a bit of slowing. If I look at the assumption in the annual report of 2019, I guess it was more or less 1.5%, 2%. That's also the basis, I assume, for your medium-term target of that EBITDA growth, 0% to 3%. But what if we are moving towards, yes, a slightly darker picture? What kind of maneuver do you have or room to maneuver? You talk about, of course, the nitrogen issues, other things. Yes, no one knows how that will develop. But what if we see the feed market declining by 10%, 20% in the next decade? The second question, I believe it was at the start of presentation, you also said, "Well we concluded that in certain areas, like, for example, the specialists." Yes, it's simply a different ball game. You are not competing with the local feed producer but with the larger guys, highly knowledge-driven. Yes, what did you learn from that conclusion? Do you feel that you lost some business? Or you believe you can still excel? Or what should you do to improve your position in that, let's say, the different ball game?

Okay. Just a question relating to -- we assume the base case, but what if we go to a more negative case? I suggest Roeland to answer that one.

Yes. Thank you. If the mic -- yes, the mic's on. Yes, thank you for the question. We did quite some analysis on this, and the 0.6% is indeed our base case scenario. And when we get to a more darker picture, and it's a little bit of a prelude into what we'll discuss when we talk about the strategy, and we have other, let's say, elements that we can -- which we can tackle. When we talk about operational excellence, when we talk about our customer experience, we want to -- we have plans in place to do that. And as you are aware, also in the last couple of years, we were looking at declining volumes in some of our countries. And then we can -- with the size and the skill we have, we can optimize our footprint. And we can optimize our flexible, let's say, buffer in our operations. So when there are more darker scenarios, these kind of elements come in play. And yes, like we will discuss later this morning, when we talk about operational excellence, we also see quite some elements where we can still improve.

Maybe in addition to that, that I would like to make is we've actually organized ourselves around flexibility. So in terms of our footprint, we are not producing all of the volume that we are selling ourselves. And we have made arrangements, and we are already outsourcing significant quantities of material. So in a darker scenario, we would reduce that to ensure still a high level of utilization in our own plants. To the question of competing with specialists, could I suggest -- Pieter is the one responsible for the Netherlands. How is it competing with the specialists?

Yes. It's playing Champions League. So we have really noticed over the past 5 years that you need to have everything in place to win that game, so the products, the advisers, the tools around it. We've worked hard on this via our partnerships and Nutreco being the most profound example that has helped us to beat other specialists. And we also see that, for example, with the investment plans on factories, training of the specialists, we've made progress to win that game. Looking at the results, as always, we've won some games and we've lost some games. But overall, we still feel that we have a decent position versus these players.

And if you look at our results over the past few years, although we don't disclose the exact percentage, you will read that every quarter and every year so far, we have further increased our specialty participation. And as a result of that, our mix has continued to improve.

We have another question from Michael Weeks, Edelweiss Investments. "The presentation mentioned the lack of a cultural fit as one variable keeping ForFarmers from concluding more acquisitions. What other barriers have prevented ForFarmers from concluding more acquisitions in the past? And how will you remove these barriers going forward?"

Adrie?

Yes. I don't think, so far, we have had that many barriers in terms of doing acquisitions. I think if I look at the deals we wanted to do, we could do going forward, and it will be explained later on. We will look at, let's say, new entries in new markets, but we come later on to that. But so far, to answer your question, no, I don't think we had major barriers to any business so far. So I could only say the business deals that we wanted to do, we were in the position to do so with the parameters we had.

Yes. Could you talk a little bit on how you see these markets consolidate? I'm pretty intrigued by the fact that there's obviously also asset-light models popping up, right, as you've seen in the human food business as well, where you see craft beers and all kinds of other initiatives, where actually producing the product gets a lower, lower margin. You can outsource that to contract manufacturers. So is there not maybe actually a possibility that this market will fragment, where a lot of new initiatives, maybe online advisory-based players who are just trying to get in front of that farmer as much as possible and just outsource everything else to the big or maybe even smaller producers? So could you talk a little bit about how you see this market consolidate? Are the bigger players going to be to buying the smaller ones or the smaller players buying each other? Actually, a good part of the value chain is fragment. And maybe do you also see different changes or different ways of consolidating across these geographies? Maybe the U.K. will consolidate differently than Holland or Germany or Poland.

Yes. If you look at -- the consolidation actually has started quite a while ago. But you see that in every country, the smaller players are being acquired by the bigger ones. In fact, the number of large players who play the consolidation game is actually quite limited. What is important to maybe point out, there are -- if you look at the whole fragmented landscape, there are a couple of identifiable players that are smaller or regional players with quite good returns. But the overriding majority has very low returns, has probably, in terms of percentage EBITDA, half of the return that ForFarmers typically generates. And obviously, once they've made an investment and have a depreciated asset, they can sustain that quite well. And therefore, also, we don't suddenly expect that, that whole group is going to disappear overnight. Having said that, the markets are becoming more challenging. So both from a technical point of view, in terms of being able to deal with the legislation, environmental requirements, in terms of capacity utilization, you may have a plant, but -- and if you have one plant, and in that particular case, they lose a customer or the market goes 5% or 10% down, and you don't have a healthy profit to start with, that becomes problematic. So they don't have the same leeway that a company like ForFarmers has. Another element in the equation is what they do have is typically very solid customer relationship. So locally, they know their marketplace, and they do -- without inferring the wrong thing, they do just about anything with that customer. It's like they're family. But do they get a lot of new talent to the organization? No. Typically, these are people that have been with the organization for a long period of time. And therefore, that model, over time, technically, relationship-wise, cost efficiency, becomes much more difficult. Can they keep going for a while? Yes, they can keep going for a while up until they need significant investments, which, from time to time, you do need. And this is the reason we're drinking lots of coffee and tea, trying to meet many players because at the end of the day, you have to visit sometimes a party 3 to 10 times, and you have to be there at the right point in time. Very proud people, family-owned businesses, don't look at just the amount of money they can get, no. It is making sure that, obviously, the heritage that they have created, they want to make sure that, if and when they sell, that it's in good hands. So many emotions come into that. But if you look at the expectation of the industry going forward, it can only mean one thing. The level of consolidation will further increase, and it's typically the healthier companies that are leading the acquisition game. So often, we are competing with our friends from the house because they are doing well. And they are ready, like we are, to invest in this business. And those companies that are not doing well, it's waiting to be -- to see how long they can sustain. But ultimately, they -- most of those don't have a future in 10 years from now.

I have a question with regard to -- if we look back, one of the pillars of ForFarmers was to be and to strive the #1 or 2 player in the operating markets. But can you elaborate a bit more on the rationale behind that? Because if we look back, and then I'm referring to more difficult, less efficient markets like Germany, U.K., also in terms of capital allocation, I think there -- it was kind of a disappointment maybe over the last 4 years. And yes, it also had something to do with the density of feed activities, et cetera. So -- but do you still -- are you -- is that strategy and tactic still in place for these 2 markets, for instance?

If you -- if one would look at the differences in terms of profitability between the different regions, it is very easy to see that both the Netherlands and actually also our Polish business are the most profitable ones. And in the Netherlands, it is simply a question of market share translated into a very efficient supply chain. And if you look on the flip side, for example, to Germany, where we are a fragmented #4, all of the benefits that we enjoy from a cost point of view, close to the customer, dedicated feed mills on a certain specie, on the water, are not in place in Germany. So the ability -- without acquiring the right company, which has not been proven easy in Germany, the ability to fundamentally enhance our profitability there is, at this point in time, rather limited. On the flip side, in the U.K., in the species where we operate in, in ruminants and in swine, we are the #1. And we were not as efficient as we should have been, and we are now taking -- and we have taken the steps to improve. But still, that position is, by far, not as strong as in the Netherlands. And as you mentioned, the distances, the density of farming is still much lower. So there, over time, with the right acquisitions, that would further boost our profitability. But the fundamentals, it is -- you want to be strong in the region. If we say #1 or #2 in the country, that's not really what it is about. It is being #1 or #2 in the region where you choose to play.

So we -- given the time and to give everybody some time to have a break and a cup of coffee, we'll go for the break at this moment and then be back at 10:45 according to the schedule.

Good. Thank you. [Break]

Ladies and gentlemen, welcome back. Let me now introduce our new strategy for 2025, Build to Grow. And what our strategy will entail is to become a market leader and move over time from the current 5 to 7 countries. And the way we would like to illustrate our new strategy is through this highly modern and sustainable barn. In fact, if you look at the foundation of Build to Grow, it's the foundation that we had in place with Horizon 2020. So our values do not change. They were with us with Horizon 2020, and they will be further reinforced. And that will be the foundation on which we will build. And that's why it's called Build to Grow. In fact, operational excellence in this business is crucial. We have made significant steps. We've been investing in supply chain, world-class supply chain capability. And that allows us, even in challenging markets, to continue to play in this industry. What will be new will be what we will call next-level innovation. And what we mean with next-level innovation is that on top of the work that we've been doing for so many years, looking at numerous nutritional advancements and improve efficiencies as our customers are accustomed to, we will have a few, what we will call, calculated bets to really be able to zoom in on a few potential new breakthroughs in our industry. And then ultimately, we obviously need our farmers to pay for what we provide, and they pay for that by mostly giving us their business. So one of the key elements in terms of our customer excellence is obviously strengthening our market position in the markets that we operate in. On top of those levels, on top of our values, you see 2 barns -- the 2 silos. And just as with any of our successful farming customers that grows, from time to time, you invest in expanding with a new silo. So the existing silo, a very important one, it is about further consolidating the existing markets that we operate in. This is where, again, Adrie explained where we achieve our synergies, where typically, the returns for making those deals can be quite attractive. And we see this as the clear answer to challenging market conditions, leading the way and further consolidating our position and over time getting to this #1 and #2 position by region. The second silo is a new one because on top of our position in the existing countries, we feel that our portfolio needs to be rebalanced with more emphasis than today on growing markets. And again, Adrie will explain where we will take that from there. And with that, I would actually like to hand over to Stijn, who will talk more about the actual steps that we are going to take to further reinforce these important values.

Thank you, Yoram. Am I -- yes. Thank you. Indeed, I will cover how we will, as we call it, activate the values to a higher level than we've done so far. And let me start with ambition. Ambition is all about our people. And it has been said before, but we cannot stress it enough, people make the difference in our industry. So we have factories. We have beautiful products. We have great innovation. But in the end, all those assets and all those ideas are driven by our people. And they make, indeed, a difference. So when we look to ambition being the people part of our strategy, how to translate that, and we've said, for instance, in terms of attracting the right talent, we have a new program which makes much more use of social media. But also, it relates much more and refers much stronger to our purpose for the future of farming, both elements that young talent find very important in attracting or choosing for a new employer. When it comes to development, the development programs are entirely focused on delivering the new strategy as we set out today. And the same goes, of course, for our performance management. So the objectives that we set and the way we manage them are all related to this new strategy. And finally, the point on the right, dialogue, it's true for all employees but certainly also for the new generation. Being in dialogue with the employer about how to improve the company in different ways is essential. So all in all, this people part is about bringing our talent to the next level in terms of focus and in the end, of course, in terms of delivery of our ambitions. The second part is sustainability. Now I think the word sustainability has never been used so much in a presentation of ours since a few years. And that has a reason, of course. We've seen the reason, the growing importance of it. And in the polarized environment that we live in, in many ways today, it's very important, we believe, to take a very clear position on where we are in terms of sustainability. And what we say is we will always be in the midst of our farmers. We will always stand side to side to our farmers. And what we bring to the party is not only the fact that we stand next to them, but also that our passion for the industry and our knowledge of the industry should contribute to a fact-based and better quality debate. But finally, we also have to anticipate the changing views of society. We cannot close our eyes for the fact that expectations and perceptions of society change. So we want to be at the forefront of this -- of our market, so stand next to our farmers but, at the same time, be at the forefront and look together with our farmers, how we can respond and how we can anticipate those views and translate them into better solutions. So that's, let's say, in terms of general approach where we want to be. Now how do we make that material? We believe we should embrace the concept of circularity. Here, this is a picture of the Wageningen University, which clearly states that if circularity is played in the right way, animals have a prominent place. In terms of environment, the environment is best served if approximately 1/3 of the human need for protein is produced by animals. So unlike some people might think that a fully plant-based diet would be best for the planet, as Wageningen University states, this is not true. Animals do have a prominent place, for instance, by translating low-value ingredients like co-products or grass, for that matter, into high-quality food, if it's being done, of course, in the right way. And the right way, that is the way we'd like to follow, of course, with our new approach in terms of sustainability. And it's called going circular. What's very important is to define clearly what we mean with circularity because many different definitions go around. So we have to be clear what our interpretation is. And the first one is, as I said, transforming low-value ingredients into high-quality food. The second one is no waste of resources, and the third one is 0 pollution. So we believe, if we play this well, we deliver a very solid contribution to sustainability. And the reason that we call it going circular is because we don't believe that within 1 or 2 years, we have achieved those 3 objectives at the right side to the full max. We believe it's a journey, and we can improve every year. And new knowledge, new innovation will improve every year. So this is a cycle that we put in motion rather than an end point that -- or a stake in the ground that we put in for a certain date. Then what does it mean? We approach going circular by 3 different elements, whereby, that needs to be clearly stated, we focus on our own direct impact. The first one is feed resources, so the raw materials we use. We want to use as much as possible raw materials that are not suitable for human consumption, which, of course, plays a pivotal role in being more circular. Secondly, when it comes to our own operations of production and logistics, we want to do that with a minimal adverse impact on the environment. And thirdly, in terms of feed solutions, we want to make sure we make a balanced use of resources, make more efficient use of resources and make sure that at farm gate, that the solutions that we provide take care of the environment the best possible way. One might think that's a nice approach, but how does that translate in terms of results for the environment? These are our new objectives for 2025 but also our ambitions for a bit longer term, so -- as we call, the ambitions for 2030. And what you see here is our total overview of new objectives when it comes to sustainability. We divide them into 3 different blocks that you just saw. So the raw materials, you can see them on the left side of the picture -- sorry, so raw -- starting with raw materials, our own production and logistics and feed solutions. And finally, of course, that's more in the broader context, the people and society in general. Let me pick out a few to give you a flavor of what we try to achieve. The first one is take a leadership position on reduction of CO2 emissions. We are, as far as we know, the only company that can provide any customer or any supply chain partner with the CO2 impact of all of our raw materials. We want to take a leadership position there and making that transparent, using data to do so. But that's not where it stops. This is something that we want to do over the next 5 years. But if we look a bit further down the road, we intend to reduce our -- the impact coming from those raw materials with 30%. And that's a huge impact in the end because you should know that about 80% to 90% of total animal protein production emissions come from raw material choices. So this is a huge promise, and we have to manage that carefully because, of course, this is a nice promise if one would not look at cost at all. But we have to do that in the right way to make sure our supply chain accepts and embraces this new approach. The second one I'd like to highlight is energy. What you see in our own operations, we want to aim for 50% renewable energy before 2025. Also, that is a huge step forward. But even more so, if we look a bit further down the road, in 2025, we want to have an overall 75% reduction of CO2 tonne per feed. By the way, scope 1 and 2 means our own operations, including logistics. And what I just covered is also mentioned in scope 3, which is the raw materials that we use. But focusing back on this, I think this is a huge promise. As far as we know, again, we're the only one in the industry that sets the bar at this high a level, being 75% reduction. Pieter covered the nitrogen efficiency part. That's another point. That's a very hard one to quantify, but what we certainly want to do and are already doing is take a very active role in providing the right information in the debate. And that doesn't always mean that the outcome is what we would like it to be. But at least we want to be at the table providing the information, as I said, with the passion that we have for the industry and the knowledge that we have of it. So that's also a very explicit statement over here. And then finally, something that Roeland in a minute will cover in more detail, when we look at safety. Because also, the overall well-being of our people and the planet, when it comes to feed safety, is of eminent importance, of course. But if you look to the safety of our own people, we made huge steps over the past 2 years. And we expect and we plan to do even better. But as said, Roeland will cover that a little bit later. So these are the things that people can hold us accountable to when it comes to sustainability over the next years. Partnerships. What we see is that more and more cooperation in the chain is taking place, and that is a logical consequence of a few other trends. The trend for sustainability but also consolidation, the availability and the use of data, they all drive more cooperation in the chain to get to a more efficient and more sustainable chain. We believe we have to play an active role in that. So whenever possible, and that's, in many cases, a much wider spread than it has been until a few years ago, we sit at the table with supply chain partners, from raw material suppliers all the way down to retailers, to make sure that we improve the value chain together because that's what we believe in. So we invest more and more in cooperation throughout chain to leverage on that because we have the skills and the knowledge to provide the solutions that those supply chains and those partnerships are looking for. And it's also kind of a move that we have to do because if supply chain cooperation takes place, you will see that part of that market will become captive. In other words, not approachable for people who are not part of those exclusive contracts or agreements. So that's also, let's say, a commercial reason to make sure we are part of those discussions and part of those agreements. This is just an example. We are at the moment in 5 animal welfare concepts, which are not taking place only in our factory with the farm but have a far -- broader reach in terms of vets being involved, hatcheries being involved, ourselves and the farmers, of course, being involved to make sure that we produce broilers in a more sustainable way when it comes to animal health when it comes to emissions. This can only be done if you work together with those kind of parties, and this we see more and more. With that, I'd like to -- I've covered the part of the activation of the values, as I call it. And I'd like to hand over to my new colleague, Roeland, who is new to ForFarmers relatively, but as Yoram said, has an ample experience in our industry of about 17 years and also a lot of experience in operational excellence, which is what he's going to cover right now.

Thank you, Stijn. Am I on? Yes. Thank you. Yes, operational excellence. And I think that one of the important items is already on this first slide because it says strengthening base, and we already have a strong base in place. And we have been looking at our own operations, and we saw opportunities, value pockets we can embrace in order to strengthen the base even more. So let's say, it's operational excellence from good to great. And if we look on the second slide, how are we going to do that? And maybe it's important to start with the headline, customer-centric at lowest cost possible. Those elements are very important because we do it always with the customer in the back of our minds, the end in mind, and we want to improve the quality of feed. We want to prove the operational excellence in order to have better advice at farm. So that's always in the back of our minds, and we want to improve our operations throughout our organization when it comes to footprint, when it comes to optimization of our processes. So making our processes more efficient. And that will lead, in the end, to lowest cost. And I think that's for us, as any company, but especially in production, lowest cost is always very important. Now how are we going to achieve that is, one, business process optimization, and I will tell you a little bit in the next slide what we mean with that; it's about supply chain excellence, and we have some slides about that as well; and we have our overall cost efficiency approach, which is leading into, indeed, lowest cost possible. Now first, the first cluster, let's say, is the business process optimization, and this is -- yes, this is, of course, not new in the world of production. But it's very important because what we do, what we intend to do is look at our processes end-to-end. And if you look at this graph, you see the more functional view which people have. If you run your own department of marketing, operations, supply chain, finance, you have the vertical view and you want to -- in our business process optimization, we want to have a horizontal view that will look end-to-end. For example, when you procure -- had raw materials, which we use in our plants, it hits, of course, the procurement department. It hits the operations department. It hits finance because it has to pay the bill, and we look at it end-to-end. And we do that cross-function. So across, all the partners are involved. We do that cross-business because we see opportunities, share our best practices within all our operations and all our clusters around Europe. And why do we do that? Well, we want to avoid duplication because you don't want to have all kinds of reconciliation issues between departments. You don't want to have all kinds of alignment issues. You want to be first time right, doing the right things right the first time. It sounds so obvious, but it's hard work to get that done. And in the end, this will lead to, let's say, less failure cost and will lead to operational excellence. And in the end, it is also, at the customer insight, we will be able to perform better on-farm for our customers. Now the second part is about supply chain excellence, and we have 5 different elements here. You can see it for yourself, and I will touch upon all of them in the next slides. And the first one is health and safety, and Stijn already alluded about that. And also Yoram discussed it when we were looking back at the last 5 years, and you can also see it in this graph. Our LTI, that's the, let's say, kind of a ratio, a rate which is determining the number of incidents per 100 FTE. It's coming down since 2018, and we have the ambition by the end of this year to be below 1.1. And our other ambition for the next 5 years is to be below 0.5. So health and safety is in the hearts of our operation. And it's a culture thing. It's a behavioral thing. It's -- let's say, a hygiene factor. It's like a nonnegotiable item. We want people to be -- have this top of mind in all our operations. And if you visit our plants and our factories but also our offices, you will see these kinds of leaflets. We -- in order to keep it top of mind, this is hanging on the wall. We have certificates to show that we applaud for good behavior. And we have KPI sheets to track and trace what's happening on LTIs. And these KPIs are not only discussed in the plants or in the factories, now it's also discussed on management level because we think what we monitor gets done. So we can track our performance, and we can track our ability to go to this 0 lost time incident culture. The second part of supply chain excellence is about the quality of feed. And if you ask our customers, the first thing they're all going to say, well, what's most important about feed, of course, is price. But they also want to have good quality feed, a constant good quality feed. And that's hard work, obviously, but we are -- we have the ability to do that in a very good and nice way because we have a nutritional department. We have a formulation department. We have the raw material perspective and all -- and with our Nutritional Innovation Centre, we are able to be a differentiator there. If you compare us to others, we have the ability to be best-in-class. And what's important about quality of feed is about the nutritional values, the level of carbohydrates, the vitamins, the minerals, the protein levels. And that should be spot on even -- especially for us as industry leaders. But also the physical part is important, the physical product quality. So that's about taste. It's about smell. It's also about the structure and the texture of the product because animals are like humans. They want to have a nice, decent feed. And that's what we are aiming for with our quality. And if you -- we have 2 focus areas there. On the left-hand side is more or less what we have done in the past, delivering already on nutritional and physical product quality. And on the right-hand side, we see opportunities to grow, to do even better because there are -- a lot of technologies will make our operations better or the texture of the product better or the nutritional values of the product better. And we have these new technologies inside, working on that, and we will deliver on higher-quality even more going forward. Now the third cluster is about managing risk. And some of you or most of you or all of you will remember that we have in 2019 an unfavorable position on raw materials, which we did not pass on to our clients. And that made us aware to look again at our policies when it comes to raw materials. Now first, let me address what are the main risks, and there are a couple and I will take out 2. The first one is forward sales at a fixed price. So we have a client, he has a contract with us, wants to buy his feeds in the next 3 months. Now what we do, go into the market, buy the raw material almost instantly and we hedge that for, let's say, 85%. So it's limited risk. The bigger issue is when you have a forecasted sales. There is no contract, but we think we will do sales in the next couple of months, then we work from a position. And that's harder because then, of course, you are exposed to raw material volatility going up and down. And then the policy comes in place. And what we do and what we have is that we have, let's say, authority levels per purchaser and we have levels, boundaries, so to say, as a percentage of sales of the forecasted sales per business unit. And we govern it in the governance board. We have a purchase risk board where, what is it, 4 to 5 executive committee team members are there when we take big decisions. So we want to be involved. We want to understand what the risks are. And whether we want to take that risk, we take it as a group decision, and that's different when we compare that policy to, let's say, before 2019. So what has really changed? Well, first, the authority levels, and we want to also be a little bit closer to home. So the purchase position is a little bit shorter cover. And we look at the value at risk, and that's metrics in order to manage the risk and we tighten that also. And all of that is discussed in the purchase risk board in order to have a good grip of this important risk. Supply chain excellence is also about continuous improvement. It's about finding opportunities in the operations. And if you look at the operations, there are 2 clusters, logistics and production, where we see ample opportunities to improve, to be even better than where we are. And well, it was discussed this morning. There was a question on consolidation of the industry, how do we deal with that. Well, for example, we look at logistic asset light. Asset light was a question also this morning. We want to look at a flexible buffer in our operations. We already have that in certain countries, but we want to increase it even more. That we can scale up and down together with the volume volatility and deliver on, yes, lowest cost again because that will have an impact on our cost base. The good thing about this flexing is also that it's helping out on our sustainability goals because of the fuel consumption program that will go down. There will be less empty miles. The fill rates will be better. That has also a, let's say, value-enhancing element when it gets to sustainability. Do we have projects in place? The answer, as you can see on the right-hand side, we do. We have about 47 projects, not all started yet. There's a lot to do also going forward in the next 5 years. Some have been started. Some will be started in the next 5 years. And you can see that we have different categories on all the different elements of production and logistics. And like I said also when we talked about quality, how we think we can enhance, we can do better when it gets to production, and you see it on the left-hand side, invest in new capabilities when it comes to heat treatment and stuff like the structure of the meal, which is important for our clients and where we can make the difference. The last cluster of supply chain excellence is about the footprint, and it's important there also in this consolidation of the industry. And a question was raised this morning about the dark scenario, then we can be flexible with our footprint. And we have been showing the last year, we closed 5 plants. And that, of course, helps out with being able to balance the supply and demand. We can scale up and down with closing of plants. But it's also about toll milling. And like Yoram already said, we have a lot of toll milling arrangements already in place, and that's helpful there when markets get even darker. We can close those contracts and shift volume to our own plants. But also when we go to new markets, it could very well be that we start off with a toll milling process. And maybe for the people who are not familiar with this, toll milling is that you ask somebody else to make the product and [ they do for yourself ] buy and sell the product. So the operation, the physical building of the product is done somewhere else. That's about toll milling. Now we discussed business process optimization, we discussed supply chain excellence and the last cluster is about our overall cost efficiency program. So this is capturing a little bit what we discussed this morning. It's about the footprint optimization. It's about continuous improvement. There, we see the opportunities in our processes, in our plants when it comes to logistics, when it comes to production. But it's also about that we smoothen our operations in order to deliver on reducing costs, but also making our work easier to deal with and being able to get good advice to our customers. Now the last item on this slide we did not discuss is about sales efficiency. We think it's very important for all our salespeople to be on-site, to be on the farm site. There is where we make the difference. It's -- the total feeds solution is where we can add value. But we also see that given COVID, that it's -- yes, when it comes to working from home, being more agile, we can also do that. So we want to strike the balance between working from home and working on site. So we see productivity improvements which are possible because of the way we work. And it's not only with working from home. We have the tools in place like Agroscoop, some of you are familiar with that, where we can track and trace on-farm what our feed does to the animals. We have e-marketing, e-business platforms in place. Stijn already talked about we see digital solutions when it comes to on-farm and how we can deal with that, and that will increase our sales efficiency. So operational excellence, 3 different clusters: business process optimization supply chain excellence and our total cost efficiency approach. And with that, I believe we go to the next layer in our organization. So after operational excellence, it's the next level innovation, and that will be dealt with by Stijn.

Yes. Thanks, Roeland. Indeed, and as it says at the right side of this picture, this is all about value creation, and after which, Pieter will then explain how we will actually deliver that and capture that value once we've created it. Now if you look at innovation, we really want to bring that to a next level. There's a part of innovation which is being dealt with by our Nutritional Innovation Centre, NIC. For the ones that know our company a bit well, they know that has been there for a long time, and I can assure you that will remain to be there. But on top of that, we see an increased investment and opportunity in terms of digitalization. And also, we want to cover next-level innovation, and I'll cover in a few minutes what that's all about. But starting with the NIC, our nutritional innovations. It's good to realize that every year, feed conversion improves in the markets we operate in with approximately 1%. Now that sounds like a small percentage. But over the years, that creates a huge benefit in terms of costs, of course, but also in terms of sustainability. Now that doesn't come automatically. There's also not one innovation per year that achieves this. This is a series of small incremental nutritional innovations, which all have to do with understanding nutrition, understanding ingredients. It's being dealt with, with our -- by our team with close cooperation with our network partners. And in our case, we believe that we should be a front-runner in doing this. So we're not a follower here. We want to be a front-runner to make sure that our solutions are superior to our customers, but also that we are the preferred partner for all the other partners in the chain. So we continue to do so. And to give you an idea, this is about 60 innovations projects per year. They were there, they are there and they will be there in the future. This is a good example for -- that this actually creates value, in this case, for customers. What we saw last year, this is an industry monitor publishing this, is that, again, we were the front-runners in milk production, so improving milk yield for our dairy customers. And if you make the calculation, this is about EUR 67 of benefit per cow per year, which equals about 15% more income for an average dairy farmer coming from feed. So this includes the price of the feed as well as the effectiveness of it. So this is not a result of one innovation. Again, this is a series of innovation that has continuous flow to improve our solutions. As I said, digital is the other big trend where we think innovation takes place. So accelerating our agenda on digital is something we want to do and we need to do to maintain our leadership position. We've installed a specific team that looks after all the opportunities and all the themes that are relevant throughout the value chain. By essence, innovation in terms of digital is often taking place with our partners, so not solely in our own operations, but with our partners. And one very clear example of that is, of course, traceability. So the opportunities to have more traceable supply chain is very important from a sustainability and credibility standpoint from the industry, but also in terms of cost, of course. But also data solutions, for instance, for cost-efficient processing and planning are taking much more room in our innovation portfolio. So the dedicated team looks after which are the big themes and which are then the projects we need to start, and this gives you an idea about those projects. So you see on top here the big building blocks of our strategy. And here, you see the examples of projects that we run. And let me start at the bottom here because what we see here is data availability. We used to be dependent on a few big providers of data, and we put that and we drew the data from their data systems. This year, we installed our own data lake, which is, let's say, not a revolutionary step maybe for an outsider. But an insider knows that if you have your own data available, the algorithms you can run and later on the artificial intelligence you can use to work with that data is going to provide tremendous opportunities. So it's a small step in terms of technology, but it will provide big opportunity. And as I said, this year, we installed that. Another project that's worth mentioning is our e-business platform. I will say a bit more about later on. But this provides not only ease of ordering for customers, but also, of course, opportunities to spot where customers could make more use of our products by cross-selling. And also there, you can start to manage, together with the customers, supply and demand in a much better way. That also goes for demand smoothing, a tool that we see more and more being used in our own operations to make sure that the peaks, as Roeland explained a little bit, and the troughs in demand are being managed in a more efficient way. So you could basically say that all the innovations and all the improvements that we see today and in the future have a data component to it. So this is a very important second pillar of innovation. Next to the nutritional innovation, you could say it's data innovation or digitalization. And then next-level innovation. As I said, most of our innovations when it comes from the nutritional side are incremental. You cannot do without, but they will not set you apart on the longer run from competition. It's just needed to keep up to pace with competition. We believe we should more -- do more than that. If we want to distinguish ourselves from competition, we should also have a different level of innovation that's harder to copy. And we believe these kind of innovations take place at the intersection of processes, so manufacturing processes, data and nutrition. Those are, quite often, quite complicated, and it's also why it's asking leadership companies in our industry with the knowledge base that we have to be able to perform them. We call them our calculated bets. So it's a very limited number of projects. We have a dedicated team managing those projects, which are completely freed up to work only on 1 or 2 of those projects. And then we have the system in which we say, okay, either it's going to deliver on its promise or we stop it if we don't think it's going to deliver and a new one is being generated. So a very focused way of getting to those more complex innovations. A good example is what we call weight predictor. We are the first company that combines different data in the swine industry coming from different sources into one database to be able to predict the weight of a pig. You might wonder why is that important. Well, anyone who knows anything about the slaughtering business, knowing exactly which weight a pig has at a certain date is very important to have an efficient supply chain. And not only we can predict it, but of course, we can also manage it by being much more active in deciding when to swap from one feeding program to the next, not dependent on the average growth of a pig, but really looking at the individual pig and switching feeding patterns at exactly the right moment, which is good for sustainability because you don't use raw materials that are not being translated into growth, but it's also good for cost, of course. This is something which is patent pending. Not -- there's not a lot of patents in our industry at the moment. But more and more, we see that these kind of innovations offer us the opportunity to create patents and in that way, create a sustainable, competitive advantage. With that, as said, this was about value creation. So if you look back at the bar and we've been talking about the base and how we strengthen that and how we create new value, but of course, it needs to be delivered as well. And that's why Pieter will take care of that.

That's right, Stijn, because creating is nice, but it's all about making sure we deliver it to make sure we will make progress. We've made steps over the past 5 years. We already saw in the markets that we are active in that, as an example, in the specialty business, we were gaining momentum and growing the business. But there are more opportunities to come. We've taken a very dedicated approach, a very regional-oriented approach, to capture the opportunities as we see them. We still see regions in those 5 countries where there's an opportunity to grow. Example one, the broiler business in the south of the Netherlands. Over the past years, we've grown our position in the north of the Netherlands and just across the border in Germany, and we're now expanding our sales team in the south, also building on the success of the Apollo Broiler feed program, which helps us also to grow towards the south of the Netherlands. So a good example how we capture the opportunities. Other differentiating parts are, for example, the advisers. If we look to the bio business, it has grown strongly over the past 5 years. But still, there's more growth to come. We have a dedicated swine team that's really using the experiences of the past years also to continue the growth in the biological swine industry. Another example how we can capture the value that we've created and will create it also over the coming years. Another good example, milk robot farms. More and more farmers milk their dairy cows with an automatic milking system. That is a complex system that provides and generates a lot of data. Earlier this morning, we discussed the transactional farmers, farmers that are only interested in feed cost. We see more and more also in difficult countries, for example, the U.K., for example, Germany, that with a dedicated team really zooming on, on these milk robots and -- that we can make the difference. We have a dedicated team working on specific products that we can deliver. We have a software tool that helps us to really make an easy-to-use plan to work forward. And an example for this one, I visited a new customer 4 weeks ago. He just started to work with ForFarmers a month before I came to the farm. I always visit the farms when they are very satisfied. That makes the coffee taste much better. And he expressed it very nicely to me. He said, "Only as when I started to work with ForFarmers, I'm now really using the full capacity of the robot that I installed 5 years ago." And this is exactly where, as ForFarmers, we want to stand for. So we've defined our commercial priorities. Where do we want to grow? Where do we want to maintain? But also very important, where do we want to defocus on? For our growth initiatives, we define activations plan that we're now starting up in all the countries that we are active in. And by this, we really want to deliver with a very regional approach the success as we aspire it to be. That is also supported from a central point of view by a toolkit. We've defined 4 pillars that will help the local business to grow. Two have most potential, as you can see. So there's more green than -- in the other regions, and I want to emphasize on those. First one, our CRM system. A small anecdote. When I joined ForFarmers 6 years ago as a Business Unit Director in Germany at that point in time, on my first day, I asked to the dairy sales team, "Why do you use CRM?" They said, "Well, because the Managing Director asked us to do it." So I said, okay, we have a journey to make in this country, and we've invested. We've invested in a new CRM system. That was launched 2 years ago, and we really see also with our -- the market share that we have and the amount of data and the intelligence from the market is really supporting our advisers to give the best solution to the farmers. So you see, from a push, we're moving to a pull with our CRM system, and that's really starting to make the difference also to support us in the commercial activities. And the second example is the integrated work -- way of working across sales channels. 2, 3 years ago, we started to set up, as we call it, our Total Feed support. So we moved from a customer service center with a very much order entry orientation towards a really business partnering perspective, both for the customers as well as for our sales force. And we're now expanding that with an e-business platform. Probably difficult for you to read what this is all about, but this is how we look forward and want to design it further, that the advices that our specialists are giving to the farmer are immediately uploaded in the ordering system for the farmers. They can order with our Total Feed approach nearly all products of ForFarmers. So we're really making their life much more easy. And we believe that with this approach, we can bundle the advice as we give it to the farmers really also with the easy way of working for a farmer and that will really keep our business model together. So more and more, we're moving in this way forward. And as said, I'm convinced that this will help our customers and also help ForFarmers. And with that, I'd like to hand over to Adrie van der Ven, who will cover the M&A part. Adrie was leading the Tasomix mix deal, the Algoet deal. So with that, the floor is yours.

Thank you very much, Pieter. Good. Good afternoon. I will explain the M&A strategy for the coming period for ForFarmers. And before doing that, I would like to give you an overview of our value chain, a value chain which probably most of you know, but just in case, I will explain a bit. If you look on the top from the left to the right, this is basically a value chain. Here you see the players who are active. So basically, it goes from raw materials, could be macro raw materials, which is soy, wheat; and also micros, which is vitamins, amino acids, minerals. That goes to the right to additive producers, which is basically a production of a single ingredient. They just produce, for example, a mycotoxin vitamin. Then you go into premix where basically, that's the core of our feed. So vitamins, minerals, additives, put that together. And then compound feed production, that's where we are. That is our position, delivering feed on-farm, which they deliver their animals to the processors. So that's the value chain. On the left-hand side, you see the different positions. And what we have seen in recent years is that the players are starting to move in the value chain. To give you an example, partnerships. Nutreco is working together with ForFarmers to have access on farm. We see Alltech, who was an additive producer, moving into compound feed in North America with [ Ridley ]. We see our friends of Agrifirm and their hose moving backwards in feed additives and premix. And recently, we also saw DSM, who was already active in feed additives, expanding its portfolio with Erber Group, which was basically, in this case, Biomin and Romer Labs. They are mycotoxin management, gut health and food and feed safety diagnostic analysis. And if you look at the full chain on the bottom, like for Cargill and ADM, Cargill is controlling the food chain. They do everything. They bought fish feed recently -- not recently, 2015, with EWOS. They bought Diamond V yeast. They bought Provimi, giving them feed additives and premix, controlling everything from commodity to end user. And one step that was particularly remarkable, I would say, was ADM. It was basically a compound feed company, also sometimes of amino acids. But they moved from compound feed in 2 countries, U.S., China, into being a global player in compound feed, premix, additives, pet food and fish feed with the Neovia deal. So if you see this happening around you, I would say it would beg the question, should we also move in the value chain. And I think we had a hard look at that. So ForFarmers looked at 6 strategic options that we could employ. We could go back in the value chain. So basically going into raw materials, feed additives or premix. We could say, nay, we stay in the same core, but we're going to differentiate, so go to different markets with different products. Or we go forward, basically, into processing or animal farming. Contrary to that, we could also say, listen, guys, we're going to take a bigger market share, add a few more products and we go to other countries. This process, and I emphasize that, we have put a lot of time in that. We basically said let's look at all possibilities for products. Let's look at new business models that you refer to. For example, should we be unbundled? Should we be asset light? And should we go to new geographies? That we all put in a long list, and we evaluated that against certain deliveries that we feel that should be met. Like, is this giving us profitable growth? Is it diversifying our profitability in terms of profile? Is it meeting our strengths like nutritional knowledge and farm access? And is it committing ourselves still to the agricultural chain? That long list, we brought back to a short list where we basically said, okay, guys, is it attractive for us and does it fit ForFarmers? And after that evaluation, we came to the conclusion that the focus on the core position and goal for geographic expansion is the most value-creating option for ForFarmers. We still feel that our position in the value chain with nutritional knowledge, farm access is enough for us to leverage in our core markets, like we see with the current strategy, and also moving forward. So that was the conclusion of that process. So take that further, and here on the right-hand side is the overview of where we are. And I think it has been addressed already a few times here. This picture shows you our position in the market, so for example, #1 in the Netherlands; what is the market share of the top 3; and how many players are present in that market. So for example, in Germany, it states #3. That's wishful thinking we're #4, by the way. But anyway, close to that. Top 3 has 30%, and we have 300 players, 300 market players who are active in that market. And I have to say, I did a few acquisitions with ForFarmers before as well, consolidation drives value. And Algoet is a good example of that. And some of you might say, yes, nice, Algoet, but you lost a lot of customers. You lost salespeople. Yes, true. But if I look at the asset optimization, the portfolio reduction and harmonization, purchasing, pricing, formulation, it drives enormous value. For example, we could close Zulte, their mill, and bring all the volumes into Izegem and Ingelmunster. That is really what we want to do going forward. So where does it take us in our own markets? We will accelerate consolidation in our home markets, preferably, targets above 300,000, yes. And we will be proactive in Germany and Poland to get economies of scale and functional excellence. We need that. Some of you call it, I heard the word, density. Yes, we need density. If we don't have density and cannot optimize, we will not create the value we're looking for. We will not be proactive in mature European markets, only opportunistically. If we have the opportunity to be a key player in the end game, we want to be in a leading position going forward. Next step. This is what we want to do in our home market. So we want to be an active consolidator, and we put our efforts to that. And we will enter 2 new growth markets. And the criteria for that, I've listed here, a few of them, not all, because we don't want to give everything on the plate here, but at least a few. And I reflect on that, looking at Tasomix in Poland, how did we do it? Because those criteria will also apply going forward. First of all, we're looking for a sizable animal population. And in Poland, that's the case. Not so much in ruminants and swine, but in poultry, a sizable population who's growing with 5% to 10% year-after-year. So that's the basis. You need to have the animals. You need to have the growth in protein. Otherwise, you don't have anything to look for. The second thing we're looking for, that the business model, where we just explained about adding value on-farm, being the trusted adviser, that business model has to be in place or we have to develop to that. In Poland, that is the case. The business model, if you talk about poultry, is even more advanced than the Netherlands. You will see a supply chain where you see feed mills being built the last 5 years. You see slaughter houses being newly built. You see farm houses bigger than I've seen in many other countries. That is where we want to go. It has to be also a nonintegrated market. Nonintegrated means not that the full supply chain is covered, we have still a position to play at farm. And for Poland, we feel that we're 50% integrated, 50% nonintegrated. We feel that will also be the case -- we think that will also be the case going forward. Other point is talking about size of acquisitions, minimum EUR 5 million EBITDA. Small deals take the same effort than big deals. So go for the big deals. Tasomix, a clear example, is well over that figure, close to EUR 8 million, EUR 9 million. And we mentioned Golpas, but I still believe that even without Golpas, we can be a #1 player in Poland. Yes, it was nice to have, but still, it is a platform for growth in going to a #1 or #2 position. Acceptable governance principles. I did the due diligence there and didn't find a lot of failures there. So you can't resell. I would say country risk is acceptable. It might not be the case for the other countries that qualify that easy that we're looking for. But at least, it has to be a check. Joint venture, yes, Tasomix was a joint venture. Reason why? Basically, we didn't know the country, and we didn't have a team ready to step in. But we would consider joint ventures also going forward, yes. So this will be the criteria that we will apply. And some of you might ask the question, so why only 2 new countries? Reason is if we want to do it properly and meet this criteria, we can only do 2 properly in 5 years, 2 countries, I'm saying, not companies, countries. So that brings us to the financials, not unimportant. The financials or the metrics that we apply will be the same as we have done in the recent acquisitions, the 11 in the last 5 years. So multiples, 5 to 8, leverage up to 2.5 as far as EBITDA, value addition after 1 year. And ROACE 70% after 2 years. We have applied this, and we will see what the lessons are to learn. Question as always, are we yet ready? Can we do it? And that has been a question that probably a lot of you asked. I would say, yes, we can do it for 4 reasons: capacity, organizational readiness, finance and connection. I will explain. Capacity means for the team is in place. We have the new M&A team on board, M&A Director. The team, internal team, learned from the 11 deals. We took the lessons on board. And I will spend most of my time going forward in M&A. Second thing is the organization ready? We had a lot of time to spend on the integration, Algoet, Tasomix, Van Gorp, Maatman, Vleuten-Steijn. These are behind us. So the organization can focus and look outside. Also internal changes like talking about processing, but the management teams that changed in the U.K., changes in the Netherlands where the new team came in place. Also in Germany, we had some discussions on their strategic footprint. They're all clear now. We know what to do. We can move. So the readiness is there. Financial strength, Roeland will allude to that later on. But healthy balance sheet, free cash flow, and we can leverage that. Last but not at least, not unimportant, is the network. How do we enter those global new markets? You need to have a connection. We have a network of suppliers who can help us, but at the same time, also internally, we have a decent network where we can tap on that. So the overall question would be, if you would rate ourselves for preparedness, I would say, 70% to 75% we're there. We're not there totally, I have to be honest. I mean we still have some steps to make, but we're well on track to achieve that. So to conclude, our M&A agenda. We will concentrate on our core position in the supply chain -- or sorry, in the value chain in existing and new markets. So we will not move in premix or feed additives or into slaughtering or farming. We will drive the consolidation in European markets, focus on Germany and Poland, in particular. And we take the lessons on board. Yes, yes, yes, we will. We learn. We learn as we go, but we have to learn quickly because people are not waiting for us. And last but not least, is we enter 2 new markets by 2025. And the enablers, we're on our way, we're not yet there. But if we continue on this path, we will be ready to reach 7 market positions, prime market positions in 7 countries by 2025. So thank you very much for your attention. And I would like to hand over to my esteemed colleague, Roeland, who will present the financial implications of this plan. Thank you very much.

Yes. Finally, financials, I mean, that's at least what my work is all about and it makes my clock tick. So good that we dive into that. And what I will do is explain, first, a little bit the performance over the last 5 years as a kind of, let's say, appetizer into the financial metrics for the next 5 years. Yes, and this is an important slide. This is our cash generation. And as all of you are aware, cash is the most important when it gets to finance. Cash is king. And that's stating a little bit maybe the obvious. So let's take some time for this slide. What do we see? We have 2 graphs. The upper one is the free cash flow generation. And the other one is where we use the cash for. And the cash -- the free cash flow generation is 2 items: it's the cash from operations; and it's the changes in working capital, that's the blue part. And what you see is that, on average, about EUR 50 million to EUR 60 million of free cash flow was generated over these last 5 years. And what's important to mention that this is the net cash flow. So we've taken out already capital expenditures, interest and tax. So this is really free cash flow, cash we can use for the activities we see in the graph below. So where do we -- where did it go? We use it for different distribution. That's the green big bar you see continuously in all years where -- and we paid out the dividend. We also spent it on share buyback, our share repurchasing program. And we bought back for an amount of EUR 90 million the last 3 years shares, and that's what you see in the gray bar. The blue bar is the acquisitions, which we took out. So what Adrie has already talked about and also Yoram said it this morning, had the 11 different acquisitions. You see a big chunk in 2018. That's the Tasomix investment, the Algoet investment, Van Gorp and Maatman. So those were the bigger parts in the last 5 years where we spent the money on acquisitions. Now and this morning, the question was also asked about our EBITDA performance. And yes, what you see over here, we started off '14, '15, '16, there was growth, and it plateaued, let's say, in 2018. And important to mention, like we discussed, we had an unfavorable position in 2019, which was impacting our first half results. And if -- that's why we included also the 2 bars on the right-hand side, that's the half year figures. You see that we, let's say, recuperated, we managed that again. And we are, let's say, back on track, that we don't have this loss because of the unfavorable position in 2020. Now and if you look at the earnings per share, it follows more or less the same pattern as our EBITDA. Now dividend. It's important for our shareholders, obviously. And you see that we have been growing in the first years of our programs there, our history where we deliver the Horizon 2020 strategy. And what you see in the last 2 years is a little gray bar in 2018 and a bigger one in 2019, that's about the special dividend that we paid out. Our policy is that we pay 40% to 50% for dividend and you see in the last years, we paid a little bit more because of our healthy balance sheet, because of the cash generation, which we had. And also important to stipulate that the dividend, which was generated, let's say, of us -- through -- was -- of the result for 2019 was paid out in 2020. We've seen a lot of listed companies which did not pay out the dividend, whereas we were able to pay it out in 2020 because of our healthy balance sheet. Now solvency in any book, you would say, above 50% or around 50% is a healthy balance sheet. And that's what we have. And you see it's a bit going down after 2017 or 2016, and that has to do with the share buyback program, which was impacting that. So remember, attractive dividend and a healthy balance sheet. Now where did we -- where did the money go? Capital expenditures is, of course, very important in our operations. And here, you see 2 circles. On the left-hand side is the capital -- the CapEx allocation of the last 5 years. And on the right-hand side, you see our financial modeling, so to say, where we want to spend the CapEx on in the next 5 years. And maybe some items to point out. If you look at the replacement CapEx there as a percentage of the total, it used to be 73% over the last 5 years. And now we think it will go lower to 65% because we -- of course, the footprint optimization, and we took out 5 plants, and that will go to lower replacements. Another important element is that we are investing more in sustainability, we are -- in the customer sustainability, innovation, product and IT capacity. These are all, let's say, value-enhancing projects. It's only -- not only on euros, but also on the sustainability elements. And it doubled -- more than doubled. It was 9% in the last 5 years and it's now 19% in our projections going forward. So these are forward-looking, return-generating investments. And also on our efficiency programs, although small, but it doubled from 2% to 5% in the next 5 years. So again, forward-looking capital expenditures. Now and if you look at the bottom bullet of this slide there, it would lead to lower capital expenditures going forward. Of course, it's still projections, but we think we will be around, let's say, EUR 30 million, EUR 35 million in CapEx going forward. Capital allocation. And maybe to start this -- the capital allocation slide, maybe start off with our financial policy. That was already in the presentation of Adrie on the leverage ratio. Our net debt to EBITDA, we have a comfort level internally of 2.5. And that's generating a headroom of more than EUR 200 million, EUR 250 million of headroom. So that's money we can distribute or spend on capital expenditures. So this is a comfort level. The banks allow us to go to 3 and even with spikes to 3.5. And we think that if the acquisition is there and that there's a strategic premium to be paid or -- and of course, after ample risk analysis that we need to go to 3, we will do that as long as we have a good, let's say, opportunity to capture free cash flow again in the years thereafter and then it will go down again. But our comfort level is on 2.5. Now and if you then look at the historical performance, you see that we were cash-rich in the first years, 2015, '16 and '17, no net debt. And the last 2 years, we were hovering a little bit around the 0 line. And there you see also this leverage ratio, obviously, also on the low end, 0.25, 0.5 in the last couple of years and negative in the first years of the former strategy. Then where do we spend it on? It's on the left-hand side, it's -- of course, we want to do capital expenditures. What I just discussed there, we want to do these value-enhancing projects on innovation, on sustainability, on IT, but also replacement. And we want to spend it on M&A. And that's, well, what Adrie just told us that we want to grow to 2 more countries, and there we'll -- that's where we will invest for M&A. Now dividend, we want to raise the bar and we have the ability to do so. Our former policy was 40% to 50%, and now it will be 40% to 60% of the net profit. Now if there are years where we don't have big acquisitions and there's ample excess cash, then, of course, we can always look at doing a super dividend or do a share buyback program as we did the last 3 years. Yes. This is all leading up to this picture, which is the financial metrics for 2025. So yes, you've seen it this morning in your -- in the press releases on your tables. We want to grow our EBITDA 2025, including acquisitions, to 125 -- to the range of EUR 125 million, EUR 135 million. And we think we can do so by: one, an underlying EBITDA growth, excluding acquisitions, of 0% to 3% per year. So as we saw this morning the compound feed volume projection, which Yoram showed, was 0.6%. We think on EBITDA, we can grow to 0% to 3%. So that's included, of course, in the line above that EBITDA for 2025 in that range. Also included in that range is that we have operational excellence plans. And when I was discussing this morning on supply chain excellence, business process optimization and our cost efficiency programs, that will deliver at least EUR 10 million in the next 5 years. And in October, when we will do our Q3 update, we will guide you a little bit more what we want to get out in the next 2 years already. So the EUR 10 million is included in the EUR 125 million, EUR 135 million range. Yes. And like it's not a real financial metric, but important where we -- where the money will go, yes, we want to grow to 2 more countries, and we think we have attractive dividend for our shareholders when we go from 40% to 60% of net profit to be distributed as dividend. So do we have the plans in place? Yes, we do. If you look at the barn again, there we have a strong foundation when it comes to our values. And we built on that. And it's -- no, I will not repeat it all, but you can see it for yourself. It's about value enhancing, expansion. When it comes to M&A, the 2 silos on the left-hand of the barn, it's about value creation, digital tools being on farm, helping out the farmer with better solutions when it comes to the processing and nutrition. It's about value delivery and market share development, volume development. We have it in place. We've talked about customer excellence. [ And we want -- we'll ] strengthen the base when it comes to cost and it comes to, for example, Shared Service Centers and optimizing our processes in the next 5 years. So also the ability to go up and down the volume volatility with the toll milling and other activities we can take up. So we have the long-term value drivers in place. And it all adds up to an attractive investment profile for our investors. It's, of course, resilience in our home markets. We discussed that. But we see sparks on the horizon when it comes to expansion to new markets. We will -- we have the ability and the plans in place to help out. Sustainability, it's a big important element of our profile that go in circular for the future of farming. We have unique access to the farm gate when it comes to our total feed solution. We have that already, and we will build it even stronger when it comes to digital tools. We will grow with 2 more countries on M&A. And then, of course, the question is: Do you have the financial profile for that? And the answer is yes, we do. Yes, we have a strong balance sheet, just discussed with a solvency of about 50%, and we have a free cash flow of more than EUR 50 million. That, all in all, with a nice return, substantial dividend distribution of 40% to 60% makes ForFarmers an attractive investment profile. And with that, I would like to hand it over to Yoram, who will do the wrap-up of the total morning.

Thank you, Roeland. So let me indeed try to put all of the components you've heard so far together in a comprehensive way. I believe our strategy and our sustainable barn has been explained. But it is, again, building on the foundation that we created with Horizon 2020 but strengthening a few areas. Operational excellence, you'll see a much sharper cost focus in our Build to Grow that will deliver value. We are investing in new technologies, again, calculated bets. Hopefully, they come out, they may not, but we are really striving to create a higher level of differentiation through next-level innovation. And as it relates to customer excellence. Although you may not automatically really relate to that, there are still white spots where we are able to grow market share. And in this challenging market, we still plan to further enhance our position. And as I and Adrie explained as well, M&A was an important part of our strategy, it will even be more important, both in consolidating core markets that we operate in today as well as 2 new growth markets over time. And again, what we have done is really taken on the learning. There are elements that we feel we cannot change. There will be segments that will be transactionally oriented where it doesn't serve a purpose to try to convince those to become value-added because it won't work. So there, we have adjusted our approach. And in certain segments, we might actually, in those cases, where it fits us, play that transactional model as well. As it relates to competing with specialists, this is an ongoing journey. We have improved our capabilities. We're investing in our own capabilities. We are investing in technologies and supply chain capabilities to create offerings that we weren't able to do before. And we really believe that we want to continue to be this gate to the farmer and leverage these partnerships as we have done over the last few years as well. In terms of M&A, it's simple, it sounds simple, accelerate what we've been doing, again, both in core and 2 new selected countries. Overall, our cost focus, I repeat it again, in light of the challenging markets will be significantly strengthened. And the investments that we have made over the last few years in terms of organizational capability in supply chain will start paying off in the next few years to come. Data is going to be of pivotal importance in our plans going forward. Data is also the part that helps us to get to high level of sustainability. And we believe that, that can really become a competitive advantage with some of the leading retail players that are looking for solutions where they create offerings that enhance sustainability. I think we are well placed to take advantage of those. Clearly, the scope of our competitors continues to evolve. But for each of these groups, I believe we have a response. Typically, those local players are the competitors that we overrun into. And if we compare how we continue to add value there, it's 2 things: again, it's leverage size, leverage knowledge. And that leverage knowledge should yield better return on farm. When it comes to unbundled competition, small, but potentially disruptive, it is, again, playing the game regionally, where we have to be aggressive locally, and it fits our supply chain capability, we will do so. We will not shy away from that. On the other hand, how we really differentiate from these companies is obviously by leveraging our knowledge and our size. So we feel that Build to Grow is really the appropriate strategy related to the markets that we face as well as the key trends that are emerging. Environmental measures and regulations will only become more important. I firmly believe we are well placed to help our farmers get through this period. When it comes to differentiation in e-commerce, again, I feel we have been investing in a truly customer-friendly platform, and we'll continue to do so. That's not something that all of our competitors are able to afford. When it comes to the overcapacity that is definitely there now in North and Western Europe, there are 2 things that we're doing. Clearly, we are looking for balancing our portfolio and making sure we are stronger represented in growing markets, but at the same point in time, we want to be at the forefront of consolidation and helping that unused capacity either become ours or be used in a more efficient way. So digital, it's basically in our -- becoming in our nerves, both at a customer level as well as in our own operations. And when it comes to the pressure on animal protein and the consumption in Western Europe, again, I think you are seeing with this strategy, we will be at the forefront of sustainability and making this business a more circular business going forward. So what I would like to end with is we are continuing to look at making our business a much more integrated business. Not just look at the financial measures that -- and objectives that run ForFarmers, but we're looking at it over all of the angles of our business. So we're looking at the people part, where, again, we talked about the fact that we'll get to world-class levels of safety, we'll get to more diversity in our leadership and we are conducting plans for 2 years an employee survey where the objective is clearly to be best-in-class there and really engage our organization. In terms of sharing knowledge, it's raising the bar all the time. We are there to serve our farmers. Our farmers are not having a very easy task over the last few years. It is our objective to help them achieve higher level of performance. That can be done with unique solutions, where, again, especially the sustainability aspects come into play, and we can become a partner for, for example, either slaughter houses or retailers. And these tools that we invest in should be one of the key elements of our uniqueness. In terms of sustainability and going circular. I believe you've heard today that we are really there to make very strong commitments that I believe show that we are there with our farmers, but we are really helping to improve society and be at the leading edge there. And last but not least, yes, clearly, we want to transfer this into shareholder value as well. And I believe if we deliver these metrics, not only do we show that, I believe, we can run an efficient business in challenging markets, but we can also really show that we are, at the same point in time, a growth-oriented company as well. So with that, I would like to indeed wrap it up, but not until we have the opportunity of one more time sharing some of the key messages in a short movie. [Presentation]

With that, we will be ready to now open it up to any questions you may have. And I guess that applies also for the people that are attending the webinar.

A question on your M&A strategy. Could you explain why you're so -- you have such a desire to expand into 2 new countries, taking into account that, well, there's still a lot of work to do in your existing markets that you will probably have to pay a higher multiple to enter into growth markets and also doing a deal in an existing market that generates -- or provides integration benefits probably generates better returns for you?

Adrie.

Yes. For us, it's a combination, yes. Of course, where we had the preference to consolidate in home markets, and that is a sure way. We would do that. But it is not only focusing on home markets, but also moving to new markets because our growth profile in terms of profitability has to be more balanced. So for us, the focus has to be, yes, full swing consolidation in home markets. But at the same time, looking forward, we have to look also at the growth profile. And that balance has to be stricken by doing both. So to answer your question, preferably, yes. If it's going to be home markets, you normally have straightaway synergies. But at the same time, having synergies and ultimately becoming a company who is only in home markets is not a perspective for this company. So we need to do both. So new markets give us perspective, give us a more diverse growth profile, and that is required. So we have to put ourselves the target to break out of the current comfort zone and go into new markets. That's the answer to your question.

I have a couple of questions. Maybe to come back on the basis for the growth. You say in the press release as from -- so 2020 is the basis for the EBITDA growth of the home countries. So if it is EUR 100 million, you start with that. If it is EUR 95 million, that -- to EUR 95 million -- if you achieve EUR 95 million. So is then correct to assume that, let's say, for your acquisitions, you're targeting around EUR 15 million to EUR 20 million EBITDA contribution in 2025?

Yes. It's, of course, depending on the scenarios which we have and taking into -- the different markets we are looking at and looking at inflation and depending where we are on the 0% or the 3% growth rate. But indeed, there is a substantial amount of EBITDA to be captured with M&A. Correct.

But to be sure, then, if you say, depending on the growth rate, if it means that, for instance, you have -- you are at the lower end, 0%, are you then going to spend more on M&A to get at the EUR 135 million to EUR 145 million?

EUR 125 million...

On the EUR 125 million to EUR 135 million. This is growing by the minute. No, but you're right. But as long, of course, we will be prudent. It's not that we will just buy any company just to hit the target. We have also other elements in play, it's not only on the growth rates, which we see in our different countries. It's also to do with our operational excellence programs and with our value-enhancing and new -- the next-level innovation programs, which will also be value expansion and value delivery. So that will also tip into the EBITDA growth.

But that's included in...

That's included. Yes, yes. I was thinking that you were discussing the 0.6% rate, which we discussed on the compound feed development.

You also said that you, in the past few years, you paid 5 to 8x EV/EBITDA, and that going forward also by the multiple. But at some point in your presentation, you said we could also pay a strategic premium. Is that then above 8x?

No, it's depending of the markets, of course, where we are in. And depending on the timing of when we do the acquisition, then we, of course, we will see what is the -- a relevant benchmark and what is the eventually a strategic premium to be paid. But I only wanted to stipulate in that part of the presentation that when we see big opportunities that we are able to leverage the balance sheet a bit more upwards from 2.5 to 3.

And every transaction, we obviously make a this year forecast, which includes synergies. So clearly, at the end of the day, that is also what is our driving force. So we can look at historical multiples, but at the end of the day, we want to create value. So if the synergies are very strong, clearly, you will be ready for the right acquisition to pay a slightly higher price. And also for growth markets like [ Patrick ] was already alluding to. If you have a very strong business in growth markets, you might be paying a higher multiple than the ones we have seen historically. I think each case, we look at the merits, and we consider it like that.

And if you say value creation, you mean higher return on invested capital? Or do you mean actually creating shareholder value by simply getting the share price up?

It's about, hopefully both, to be honest. No. But when we talk internally about value creation, it's by delivering on EBITDA performance.

And ROACE.