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

Good morning. Welcome to the ForFarmers Strategy 2025 Update. My name is [indiscernible]. I will be your host for the morning. With me, we have from ForFarmers, Roeland Tjebbes, the CFO, Pieter Wolleswinkel, the COO over there; Rob Kiers, Director, M&A and Integration and led the strategy project. And there you have Nick Major who is the Corporate Affairs Director and is the lead for ESG projects from the group. First, we will have an introduction around the table, asking questions and giving some insights into the strategy update for you. And in the second section, we will open the floor to you for any questions that you may have. What I would like to start off with is Strategy Update 2025. However, before we go into that revised strategy, maybe a short reflection on the absence of Chris Deen, the CEO. How is he doing?

He's recovering. So that is good news. And obviously, it's unfortunate how it has developed, but we're happy that he's working and can work on this recovery.

Yes. That's good to hear. And yesterday, I think the day before yesterday, we saw an announcement of a new CEO joining Theo -- Theo Spierings.

Yes. So yes, we are glad, obviously, that this speeds that the announcement of Theo came with. And so he will -- he's nominated to be CEO, we need extraordinary shareholders meeting probably in January, where probably hopefully will be appointed as CEO. And yes, we are very glad that he's coming. You've probably seen in the press release, he has big experience in the agri sector at large, but especially, of course, in the dairy industry at Friesland Foods and Fonterra. And of course, with this current company also understands the dynamics of the agricultural world. So yes, we're very glad that he is coming.

But does it mean we're going to get an update of the updated strategy?

No, no, no. The -- he has, of course, seen highlights of the strategy. He embrace that. He understands the way forward and his start is to execute the strategy. So he will not come with new insights or whatsoever. And maybe to add to that, that don't forget that also Kiers, of course, at that time was already in the midst of helping out on the strategy and also, he embraces the strategy as we have it today because part of it, of course, was also discussed with him and he put in between into it.

Yes. And I think it's also good to add to that, that we have been working also already in the past month on the parts of the project that we will explain today. As an example, we are planning a joint venture in the U.K. with 2Agriculture. And -- so we have been able to make progress already in the past months.

On progress over the past months, you decided to review the strategy, strategy not even halfway down the road. So why was this necessary? And I know you've explained it before, but please reiterate why it was absolutely necessary to do this now?

We recognized end of last year, that several trends partly already recognized, but others did come together with that were more pronounced and more intensive than we anticipated. So if you look at the sustainability agenda, it was quite clear to us that the demand for an improvement of the sustainability of the agricultural sector was at a higher -- going at a higher pace. We also saw a consolidation of farmers at a higher pace than anticipated. We did see a tightening of the labor market. We did not foresee that in our Build to Grow strategy, but we recognize that having the people on board is such a vital part in the coming period. So we emphasized also on that one. And lastly, but definitely not least, was also the volatility -- the hyperinflation and the volatility of the raw material markets. So these points may just come to the decision that it was time for a revision of the strategy.

Does this mean that when you presented this -- your previous -- the original strategy of 2020 that you couldn't foresee these trends? Were they not visible at that point in time?

I don't forget this was in COVID times. So the launch of the Strategy was in September 2020. And I remember it was in the room next door. And I hear myself talking and we said, well, we think that COVID would end by the end of December. And we were based on OECD figures and other figures, Rabobank and other figures that there will be growth in compound feed going forward in the markets we're in. This was before the whole acceleration of the Green Deal ever. Pieter was saying on hyperinflation, which is now happening, but also the energy price, we had the impact of African swine fever in Europe, which led to, let's say, closure of China. Yes, that was not to be foreseen at that time in our strategy and also not in our financials. And I think maybe to point out as well, I know that some of the analysts picked it up that it was hard for us to reach the -- our own set target at that moment because of all these externalities happening and our way to deal with it, we're not making our own inflicted target, so to say. And that's also the reason to say, okay, the assumptions have changed. Let's renew or revitalize our how do you say it yes, renew our strategy. So...

So And you announced this 1 year ago. So why did it take the time it took 1 year later?

Yes. We said at the start already, we wanted the new CEO to be part of it and to embrace it and to deal with it. So Yoram left in April and then already, we started with the strategy, and we consulted in. And of course, we already started working. If we wanted to go faster, it could have gone faster. But then we said, no, we need Chris onboard, we need Chris to help out. Then Chris went sick, we had kind of a vacuum, okay, what will happen? And yes, that's why it took longer than expected. And -- but then again, yes, we'll be here now. So...

Any business -- and parts of the business that demonstrated resilience in these significant times?

Yes, definitely. I can give you 2 examples on that. The first example for me would be dairy in the Netherlands. We have been very successful over the past years, we're able to maintain our volumes, and it's quite and maybe a surprising 1 because if you read the newspapers and all the discussions about nitrogen you might have the impression that there's no cow left in the Netherlands. So that's clearly not the case. I'm very pleased with the team and the performance that they've showed. The second example is a business unit that we don't mention every day. It's powerful, our equine business, where we outperformed a market that is still growing. So very big complements to the colleagues of that business unit. I can give you several examples where we did show a very resilient results. But still, we need to look forward and what will happen.

Hope can I ask you to give some clear insights into some of the review reasons?

Yes, you can. Yes. So basically, what we've just heard, we summarized these trends into 4 main buckets. And during this morning, we will get back to what each bucket means for our strategic choices. As it is with trends, they can be -- have a positive influence and, but they can also have put some pressure on certain elements of the business. So we said 4 main trends. The first one I think it's very clear if you read the newspapers every day, that agriculture at large is becoming -- getting more and more focus to increase sustainability. We see this in numerous aspects, one of them being the Green Deal, getting more and more clear on what that means to the market and to our company. But secondly, also, let's say, changing consumer patterns, animal protein, next to vegetable protein. This provides, of course, this is a trend that impacts our business in multiple ways, but also provides opportunities. The second trend we clearly see, which has been ongoing for a longer time is increased raw material prices and increased energy prices not only the increase in the absolute amount of the price increases is relevant, but especially also the volatility, which influenced the market and our business. The Ukraine crisis has, of course, put extra focus on this and it has even accelerated this trend. The effect on us is for farmers, but also the effect on the industry is that it's becoming more difficult, let's say, to pass on these increases to the market. The third trend, which has been something, which is not new. This has been ongoing for many, many years in most of the markets that we're at is less farmers, but bigger farmers. So consolidation, but also vertical integration, and so more working into the chain has accelerated over the years, and we do expect that, that will accelerate going forward, which also means that, let's say, working together in the chain is becoming more and more important. I think the animal welfare concepts now adopted for chickens in the Netherlands are a clear example how something like that can accelerate and how that provides, let's say, opportunities for us but also has impact. The last trend, which sort of started when COVID was around when there was a major reshuffle of labor, this, let's say, sort of continued afterwards with labor shortages, labor price increases, which, of course, has an effect on us. We had clear examples where it was difficult for us to get drivers, but this also has a clear effect on the sector, right? So less and less labor available to do the work, which provides opportunities for digitalization, robot milking, et cetera, et cetera. I think overall, all these 4 trends focus have an impact on agriculture at large, and therefore, also on for farmers. Most of our markets because of this are not growing anymore, which also led to overcapacity and in the end, led to pressure on our results, like Roeland explained a minute ago.

Doesn't -- from looking at these 4 key trends, isn't the really crucial one agriculture sector needs to become more sustainable. Isn't that what it's all about, Roeland?

Yes, it's all about. I think it's an important -- it's a prominent one, I would say. I don't know whether it's the only one, but I understand what you're saying. But let's face it. We, as a company, have a mission, it's called for the future of farming. And I think that we want to fuel that even more than we've done in the past. Sustainability or ESG at large, was part of our Build to Grow strategy, efforts in the heart of our values. And I think going forward, we want to fuel it a bit more. I think because -- given these trends, we got to learn that, yes, as always, for the future of farming, we play an essential role in that whole value chain is -- and we give our customers, our clients give a purpose to animal proteins by use of stuff as a human cannot digest and -- probably today, we also hear from Nick that has a role for us to play over there. And in essence, if you talk about sustainability and a future of farming, it's all about putting food on the table, and that's also part of a sustainable business. And -- the way we look at it, I would say that sustainability and ESG are for the future of farming, it's not only about ecologies well. And so it's not only about the ecology, but it's also about the economics. It's also have a decent return for ourselves, but also for our farmers that for the future, farmers is only -- is bigger than those two.

Yes. I think that's very clear. The sustainable solutions, that is a vital part, and we want to bring that to the next level, but there's more. We will choose for a more local orientation, from group orientation to a local orientation. We will explicitly look how we can differentiate in the markets and the segments that are active in. We will also look at really make sure that in such a dynamic period, we supply for a very competitive prices -- price in the markets that we serve and also in addition to what Rob said, we see that moving towards an integrated approach is also an opportunity for us to play that role and to make sure we enhance that establishment of supply chain integration. So those things will be high on our agenda for the coming period.

Okay. And this applies to all the different markets. I mean what you see is required in the Netherlands. Does it also apply to Poland or the U.K., how do you play that out?

Yes, especially if we say we move to a local orientation that by itself already said, we look very specific in all the markets that we are in, how we can differentiate but there are some overarching themes. So really make sure -- we are competitive is one really make sure that the sustainable solutions are brought to the next level is one. So by this approach, we mind our group know-how, our group competencies with really make sure we have a specific approach in the countries that we serve.

Rob, could you please elaborate on the strategic principles of ForFarmers?

Yes. So we have selected 5 strategic principles, which are the base of our strategy. Each one of them, I will explain briefly, but also later today, we will elaborate more on what this exactly means. And the first one, like I already said, is closer to the farmer. So what does that mean, right? Over and over, we see that the trends we impact before our business impacted in different ways, in different countries and in different species, right? So ruminants in the Netherlands behaves in a different way than ruminants in the U.K. It is, therefore, extremely important that we have the accountability and the local approach in the countries. And that's why we say local is in the lead in executing the strategy. And so more ownership, more accountability at the countries, but also at our specific companies like Pavo, like Herring. That also entails, let's say, a shift more from group to local. However, we still believe for farmers as a group has a lot to offer, right, where we can achieve synergies, for instance, in procurement, we will, of course, still leverage those. Where we see we have the need to have governance or policies in place, of course, we will still do that. And last but not least, we are still 1 company, and we believe that with good, strong values and good, strong way of working, we can even achieve better results. But overall, it will mean more shift and more accountability to the local teams that we have compared to today. The second one is related to that, right? Because if you have local more in the leads, that also acknowledges that markets behave in a different way, some species are growing in certain countries. Some have more focus on sustainability, others have more focus on price at a certain moment. So we see that we need differentiated approaches in all our markets. And is, let's say, closer to the farmer allows us to give that space and to make sure that we have differentiated product offerings, let's say, in different markets, which accommodate the market needs at a certain time. So not 1 size fits all but tailored to what's happening in a local market more and more. The other one mentioned quite a lot, and we'll spend some more attention on that today with Nick as well is the sustainable solution. I mean, like I said, one of the major trends is that more and more focus will be on sustainable agriculture, both from an economy way. So we still believe farmers need to make money, we need to make money that is extremely important, but also, of course, to do that in a more sustainable way from an ecological perspective, very important pillar of our new strategy. Can we do that alone? No, that we need to work together in the value chain. Where before, let's say, predominantly, of course, we are a feed company, focusing on the farmers. We do believe there is a role to play, let's say, in the value chain, and we have very good examples of that. For instance, in the Netherlands, but also our anticipated merger with 2Agriculture is providing this, let's say, route to market to a more integrated view on the supply chain. That's very important. The last pillar, not unimportant. It is our base is to provide good feed at a competitive price. And we don't take that lightly. In the end, to be competitive. We need to make sure that we enhance what we're already doing. We have very good feed. We have very good advice. We are very good at providing performance, but that has to come with a competitive price. And that will -- is and that will remain the base of ForFarmers.

So the name of the company is ForFarmers. So which of these strategic pillars fits best with the needs of farmers?

I think they all 5 do, but if you make me choose, I can pick out. Yes, you did I noticed that you. So if I can pick out too, especially that local approach, the agility that is necessary in the coming period. That is what our farmers ask. If prices move, milk price, meat prices, we need to adjust our feeding concepts in line with their needs. So I think we -- by taking this direction in the 5 countries that we currently serve, this is the right approach to make progress. And I also would like to pick out because also personally proud on what we achieved take out the part on the enhancement of the supply chain integration. In the past 2 years, we've seen a rapid change of the broiler industry in the Netherlands. We were able to do the acquisition of De Hoop we were able to connect very well with the 2 large slaughter houses in the Netherlands. And by that, we could make sure that our farmers were able to supply the broilers in the chain that I believe good for them to work with a particular slaughterhouse but to also work with ForFarmers. So 2 examples that for me stand out in that what Rob just explained.

For me, the differentiation stands out. Could you give some insights in what is -- what should we understand of the scope of kinds of offers that you have to have in place to demonstrate the differences between on the one side and the other side of the spectra of farming needs?

Let's take the example what Rob already indicated, if you look at dairy as an example. In the Netherlands, we are very well able to with our total feed approach to supply what they need to connect, for example, also with FrieslandCampina on the sustainability agenda that they have on the agenda. So a very specific approach for the Netherlands. If you look at the U.K. market, different type of markets, very price sensitive then you should adjust your offering, the know-how that we have on a group level is broad. So in both concepts, you can use the know-how as you have it, to have a specific approach in the countries. So as an example on this one, this is how we believe we can differentiate and win in the markets that we are active.

Roeland, for you, what would be key to these 5 principles. You will probably say all 5, nevertheless.

All 5, [ Yuren ]? I think like I said, like we are saying they are, of course, all important. But -- what stands out for me is also that we can use and leverage our innovative power, and we have I would say, as being the 1 of the farm runners in Europe when it comes to -- be the market leader more. So we have the capability to scale also to -- we have the R&D department with our NIC and the Ingredient Center to pull it off. So I would say, coming up with new innovative sustainable solutions for our farmers is in the heart of these principles.

Yes. We have you to elaborate on some of these concepts.

Yes. Thank you, [ Yuren ]. Yes, I think, yes, as we've already heard, really, I think it's very clear towards the sort of societal pressures and concerns here to stay. I mean, not only in the policy piece that Roeland has already mentioned, but for us, we increasingly get questions and requests from value chain partners, from processors and retailers given where we are in the supply chain. So we intend to build on our existing going circular approach, which has served us well, I think, over the last 2 or 3 years. We're going to be proactive in responding to these issues. I think address them head on, where we have a role to play. And again, as we mentioned, really work with our value chain partners, the processes, the retailers. I think crucially, we have to -- given our mission stand side by side with our farmers and help them and make this transition to more sustainable farming practices. And again, trying to ensure that we create value for everyone up and down the supply chain. And I think -- to that degree, I think this is also about commercialization of ESG or sustainability that's an inherent part of what we're doing. The issues that we've mentioned, they tend to break down into 2 key ones really. The first are reducing -- the first is reducing the environmental impact of livestock production and the second is animal welfare. And of course, we have a role to play in both. We've listed a number of them here, reducing carbon footprint is always on the list. I'll come back to that moment, deforestation free is a big issue given our use of soya and particularly as a key feed material using nonhuman edible raw materials or sourcing regional or local reals are the sorts of issues that tend to come up when we're talking to processes and retail.

[indiscernible] nonhuman edible?

Yes. Yes, absolutely. So we -- as an industry, we -- I mean, in a way, we're founded on the basis of using byproducts and coproducts from the human food, drinks distillery industry. So I mean, wheat flower or distillers grains or even sunflower meal or rare seed meal. I mean, no one grows rate oilseed rare produce to meal. They use it to grow to produce oil. And then we are the user of the byproduct. That doesn't go into the food chain that goes into the feed chain. And -- yes, and I think this is sort of where livestock farming in the feed industry and fits into sustainable food systems by using these coproducts and byproducts, former food stuff is another one. On the carbon footprint, it's worth pointing out that on average, nearly half of the carbon footprint of livestock production is involved in -- comes from the feed. If you're producing broader chickens, 80% of the environmental footprint is from the feed. So I think as nutritionist, we have both the means and the obligation to meet these challenges. So in supporting our farmers, as we mentioned, we're going to take some further steps. So in addition to the concepts that I've already mentioned, we'll look to invest an increase in the use of alternative raw materials. The main pressure on us is finding alternative protein sources, alternatives to reduce our reliance on soy. And these obviously range from the novel, I mean, everybody likes to talk about insects and algae, but obviously it also extends to more mainline raw material. And a good example of where that's already started really is the use of processed animal protein, which was reauthorized for use within the EU last year, and we're already using that in poultry diets in the Netherlands and Germany, a classic circular, nonhuman edible feed material. Another example is to build on our already strong position in co-products and residual flows, [ Yuren ] as you've already mentioned, that focus on nonhuman. So effectively, we're not competing for land that should be growing food for human consumption rather than growing materials for livestock. And we report on this. We've been quite transparent on this in our annual report. You've seen over the last 2 or 3 years, we've reported on the percentage of nonhuman edibles that we include -- edible raw materials that we include in our in our diet. Last year, we don't include Poland for technical reasons at the moment, but at group level, it's 64%. So we're running at that sort of number. And that's using a definition from the FAO. So a reasonably robust definition. And then finally, I think to ensure that we do really give focus to this area. We're going to set up a dedicated organization, which will include a number of existing activities as well as the new ones that I've mentioned. So I hope that provides a sort of flavor of the next steps that we're going to take. I'm sure there'll be further examples and discussion of this as we go throughout the presentation. Thank you.

So 5 principles, strategy update. How did you go about this? Did you start with a completely blank sheet? It was only 2 years ago that you had the previous strategy presented.

No. No, no, we did not. We said the assumptions of our strategy were wrong, and that's why we need to revitalize that. Look at it again. This is a strategic review and not a complete strategy, but that, by definition, tells that there are a lot of stuff that remain. And because there are a lot of goodies in our strategy, we want to -- everyone keep and to leverage. And will not pick all of them on this slide. For example, M&A, we will talk about later. But for example, our focus on growth. There are a lot of value pockets, so to say, which are growing. We have our holding business as an example, which is growing. And as an answer to the answer -- an answer to the questions raised by the EU when it comes to the green deal. Pavo, already talked about by Pieter on the equine business, which is stable, growing as well. We announced the merger, it's still to be approved, but the merger with in England -- in the U.K., sorry, to be announced. So there are pockets of growth where we can still focus on and that's here to stay. Another one, maybe nutritional innovation. We have an obligation being the, like I said, one of the biggest in Europe to come up with new applications for our customers to improve their feed conversion ratio, to improve the quality of [indiscernible] to have better [indiscernible]. All of it will come out of our nutritional power. So nutritional innovation is here to stay, going forward, we will -- bless you. We will talk about our R&D perspective for what will change, but the nutritional innovation is here to stay. And going circular, I think Nick showed it on the previous slide. So with the graph on there is here to stay. The use of byproducts, the use of coproducts is one of the elements in the current strategy, which will stay for sure.

Okay. So what is changing? What is -- what did you do differently?

Yes, there are quite a lot. Let's start with the first one. I think that we touched upon it briefly. And back to basic, that means, for example, more of the local business, but it's also about simplicity and focus. And simplicity when it comes to dealing with our operations and looking at processes, looking at the way we work together, it also has to do going forward with what do you do central? What do you do locally? We want to make it more simple, more clear to everybody, but we also want to focus and focus as an example, innovation, like I said, on nutritional part will be there, but we want to focus our new innovation power more on the sustainability items which we just discussed and just what Nick pointed out. We also want to focus our digital power in, let's say, in the build to grow, we were more or less boiling the ocean too much. We want to focus. We want to have a more simple want to use and we want to look at the ease of use for our customers when it comes to ordering, when it comes to applications, which we can use, for example, to monitor the performance of our feed and that's why we will focus on. So yes, the -- and also the closer to the customer, I think that what we try to tell this morning and I think -- it's not only on the total feed. We also -- when people are like in the swine industry nowadays, whether it's more stress in the world, then you want to come with a more simpler, more straightforward product instead of a full-blown product. So that will help in local and the lead as well. They understand the need and the urge of the declines much more than from a central perspective. Yes, the...

Can I -- looking at these a couple of things I noticed. One is back to basics and simple is right at the top. Is that intentional? Is it just coincidence because it starts with the B? Why is it -- why did it put on [indiscernible]

I think it's vital. We are -- let's not go around. It's in a low margin business, and that makes us force to really stick to the basics and really look where we can make the difference with and I think especially in Build to Grow, you call it boiling the ocean to really a high-tech technology. And that is the question, is that the role for farmers. And to really go back to the basic process, the core of what we do will increase our success and ability to win. So it's not a coincidence, and it -- it does not have a what have to do with the alphabet.

No, no. And the bullet further streamline and adjust organization. Is this a euphemism for downsizing? What do you mean with further streamlining the organization?

Yes, I think it's not about downsizing. It's more rightsizing the company and putting our departments in the right direction. If we are talking about going more local, then, of course, something that happened to some of the central functions. And because some work might be gone more locally. So that will impact some of our departments for sure. But I think it's more rightsizing, making sure that everybody does what he should be doing. And so it's not downsizing by definition you would know.

And then local in the lead is an important part of the update that you're giving. You started there last year. How is it working in practice? And how will it continue to work in practice? And that's a question for you, Pieter.

Is it working? Yes, it is working. As an example, we appointed a German Managing Director after years of a COO that took care of multiple countries. And you see that this gives a much better connection with the local organization, with the farmers, with the network. So yes, it is working and that is confirmed by these type of examples. How will it work? I once again want to emphasize local in the lead, but it is about the connection with the group for farmers as is the umbrella, and we will emphasize on that flexibility as Roeland indicated, the nutritional innovation. It is a vital role to roll out across the countries, but give it a local orientation. So we will work also together the executive team on this to make sure we are going to make progress.

Yes. Can you take us through the different operations country by country?

Yes, sure, I can. First, the Netherlands, obviously, very important for the company, and we see that there's a lot going on Netherlands and also in the coming years, there will be a lot going on. But we also recognize clear chances. Somewhere we already mentioned in a different perspective when you think about Reudink, our organic business, especially also the coproducts mentioned several times, and again, that is not coincidence, take the swine industry, a lot of discussions. We see a decline of the herd. Nevertheless, at the home mixing farms. They use a lot of the coproducts explained by Nick. And we have a lot of know-how on this topic. And we also have a business so we can combine know-how with business, and that is how we like it. Poultry, I already explained that we are strengthening our position in the transition towards the welfare broilers and dairy. We have a strong total feed approach that especially in the coming years with the nitrogen discussion, we feel very comfortable to play a vital role at a farmer's level, but also in the national discussion. And we are in close contact with the farmers organization together also with some of our competitors to really make sure we look at the overarching team, our mission for the future of farming. So with that, feel comfortable about the approach we are taking in the Netherlands.

So do you feel that -- because in the Netherlands, there's quite some concerns, both regarding farming and from farmers themselves? Do you feel that you're offering a perspective for the farmers here? What is happening? What are you offering to them?

Definitely, definitely. It's on an everyday, making sure the farmer makes improvement on the economic side, but also on the ecological side, we have the know-how to make the transition will happen in this sector, yes. So I feel very confident about that.

Is what we see in the Netherlands. Is this similar or different from some of the upper operations? Belgium, our southern neighbors?

Several teams are the same. We see in Belgium also the nitrogen discussion is playing a role. We see a decline of the pig industry. We foresee also a smaller decline in the dairy industry. So the similarities are there, but that also offers an opportunity to use the know-how in the Netherlands for example, also in the dairy industry in Belgium. And with that, we are able to increase our market share. But there are definitely several overarching teams.

Okay. Germany, huge market, it?

Yes. You can almost say Germany does not exist. If you see the size of the countries and the regional differences. As example, the east of Germany, we have a strong position at the large dairy farms with the robot milking, the home mixing. So a region where the know-how we have can be used very well to increase our position in the north of Germany, we're focusing strongly on the layer industry. We have a differentiating offering. We are supporting the farmers with their ag contracts and that helps them to connect better with us as a company, but also in the chain they are active in. In the west of Germany, we have our joint venture with the family [indiscernible] very much focused on dairy. And again, the know-how as we have it, can be used increase our market share in that region. So again, even on a country level, we already say we take that local approach. But even in such a country, you need to take an even deeper level on a regional level to make sure you are successful.

As you have mentioned that, for instance, German management strengthened Local in the Lead. Any suggestions and directions already coming from Germany in their Local in the Lead role where to invest or where to focus on?

Several examples already given, but I think especially Germany is a market where you need to respond quickly. I had the pleasure to work 3.5 years in the north of Germany myself. From week to week, from month to month, you really need to make sure, yes, you look what are the market prices doing, what is the feed offering that is needed in such a situation and we're making steps on that one.

So one country to the East?

Yes. Quite a difference. We're strongly focusing on the broiler industry, growing segment over the past years and we still see much opportunities for growth, both organically, but it's still a relatively fragmented market. So also further consolidation is expected in that country, and we want to play a role in that. It always takes two to tango. We are very aware of that. So the focus on the organic growth will be very strongly as well over the coming years. And this is also, especially in the broiler industry, our European know-how nutritionally in the chain will support us very much in Poland as well.

Okay. On the concept of tango in the U.K., a tango has been announced. you're -- any update on the JV -- the announced JV.

Yes. We announced it there. So we will join forces with 2 agriculture, and we are now still waiting for approval. So hopefully, by the end of this year, we get approvals in. But we are very, let's say, enthusiastic about this joint venture with 2 agriculture. You might know that the owner of 2Agriculture is also the owner of 2 Sisters Food Group, which is a large food processor in the U.K. and close to our principles. They're working together in the value chain, obviously, will happen in the U.K. with that matter. From that part, if you look at the principles Local in the Lead with differentiation, it's also on the slide, where we will have in the ruminant sector, different perspectives on how to deal with our clients, making sure we will differentiate within a robot milking or with large hearts versus small hearts. So differentiation is happening value chain integration is happening. And what's also important, what we see in the U.K. is that sustainability, which is big in the Netherlands and big in let's say, Continental Europe has also become the agenda in the U.K. So especially from the retailer side, the push on getting sustainable products, sustainable solutions into the supermarkets is quite high. And that's why for us, it's great that we can leverage our knowledge and work together with 2Agriculture to pull it off. So looking forward to the CMA and the authority sellers that we can push on.

Yes. This means that we're also venturing into the topic of M&A. Rob, in a minute, will give some more background to it. But you mentioned before, 2 additional countries that has now been dropped. So what has been some of the argumentation behind it? And what will you continue to look.

Yes. Now so we will continue to do M&A, I would say that if you ask me, it will be threefold. We are in 5 home countries, and we want to be part of the mergers, which are happening or the consolidation, which is happening as an example, joining forces with 2Agriculture, but also the investment of De Hoop we did 2 years ago, and we will be part of it. So in some of our home markets, and it's not a secret we want to grow in Poland. We are #4 in Poland. Poland is also a market where we will -- we want to do M&A. And like I said, it's not a big secret. So part of what's happening in our 5 countries, that is part of our strategy going forward. But we also want to diversify and look at opportunities outside of our 5 home countries, and it could very well be that we grow with 2 countries, but it's not a strategic pillar anymore. If it happens, it will happen, but it's not the direction from a strategic perspective. And we want to grow as a company and it could very well be outside of the 5 countries, we're in. And the last pillar, I would say, there are 3. So the last one is that we want to diversify into other product offerings. So maybe could -- we discussed a bit on Pavo, which is a nice opportunity to invest in or look at alternative raw materials. So it's a bit broader than only the compound feed angle. So that's our view on M&A going forward.

Rob, can you add to it?

Yes, I think, Roeland, already did a very good introduction of the M&A strategy. But it is about indeed a couple of important pillars, right? So the first reason to do M&A in our home countries is to capture synergies, which is then largely about consolidating and increasing market share, let's say, in the markets that we're currently in. Is that a goal per se to just increase market share? No, it's not, right? It should fit just buying and buying just for the sake of being last man standing, that's not a principle we believe in. So there needs to be a good reason and a good fit from a cultural perspective between the companies that we would buy. But let's say, creating synergies in our home countries is still an important market. It's still an important goal from an M&A perspective. The second thing is about close to our strategic principle is to differentiate in local product market combinations. If we are able to find companies or products, which would help us to strengthen a certain offering to the market, we would be very open and very keen to do that. An example is an acquisition we did 2 years ago in Germany with Mühldorf offer for our Pavo business, and this was a very specific product offering, which we did not have before, that strengthened our Pavo business. And so this could go beyond feed as well to just see, okay, what do we need in order to serve the needs of our farmers or our customers? And could we buy something which will enhance that product offering in a certain market. And the last reason to do M&A is to diversify, right? Because we are, as we explained before, largely in markets which are not growing today, which means we have to and we will diversify ourselves. And diversification can go into many different directions. One is geographically, like Roeland already explained, that could be a 6th or a 7th country, but it's not a goal per se. But diversification from a regional perspective could very well fit, but it could also be indeed to diversify in product offerings or in different segments like the coal products we mentioned before are other alternative raw material pillars. So synergies, diversification and, let's say, enhancing our offering to the market would be the 3 main goals we could reach by doing M&As. So what do we learn in the last couple of years when doing M&A is that buying for simply the sake of buying is not working, right? And I think that's a common known theme, not only ForFarmers, but I think for many companies and for many industries. And we capture that with a phrase cultural fit. So what do we mean? It means that we will make a very good assessment that the company we're buying with or we're merging with does fit the ForFarmers DNA. In the end, it needs to be 1 plus 1 is 3. If that's not the case, we're probably destroying value. A good example is De Hoop, a family company, but a very professional family company which there, the 1 and 1 was really 3 and that worked very well. So -- but cultural fit both from a company perspective, does this company really add to ForFarmers and do we really add value to them. But also if we would enter a new company from a country perspective that goes with risk appetite, risk awareness, and for instance, can we leverage the capabilities, values and know-how that we have and can we apply that into a new country that we will enter.

Pieter, what can farmers expect in terms of benefits for them from these M&A agenda?

Yes. I think, Roeland, sorry -- Rob already indicated the De Hoop acquisition we did early 2021. ForFarmers had a lot of nutritional know-how, De Hoop had a lot of nutritional know-how, bringing that together gave us convinced of that, the best offering for farmers, the best technical results. So as an example, but again, going back to what I said earlier, also, our position in the chain strengthened. And our farmers can go in that flow in the chain. So 2 examples what farmers can benefit out of these -- our acquisitions.

Okay. So moving from the harder side of M&A to maybe the softer side of values, you mentioned in your press release the proud values that you put forward. Could be considered something more for internal rather than in the press release. Nevertheless, you decided to specifically enter this into your press release. Please elaborate why this is so important?

Yes. I think -- well, the -- if you look at the left-hand side and on top of that, you can hardly see, but now it says proud to be ForFarmers. We always had this logo #ProudtobeForFarmers. Now it's proud to be ForFarmers because what we learned over the -- during the strategy process that our values are very important for people to work with. And don't forget that -- and it's not to be taken lightly, I would say that a lot of the people we work with are very passionate about farming and are passionate about for the future of farmer -- farming, but also passionate to be at ForFarmers. And those values will lead the way, I would say, in order to execute our strategy because it's a bit -- we discussed it last week and it's a kind of a slogan, which is quite known edited that culture is a strategy for breakfast. And we -- I truly believe in that. If we want to change the company only with the strategy and forget about our values and forget about our culture, we will not deliver. So from our side, I would say this is important for our people to live up to and to understand what we want from each other. And that's why we stipulate it much more. And that's why we make it more important as well in our press release that people are proud to be at ForFarmers.

Yes. Pieter, why for you?

Absolutely. This -- it's all about why do people work for our beautiful company. They have passion to work in this industry, to work with their colleagues and specially to work with farmers, responsible -- and have a journey to make, and we want to express together with our employees that we can play a vital role in that journey, and we are responsible for that open-minded. We think -- need to think broad to come to the best solution. We do it together, united, but also to deliver. We stand for a promise, and that needs to come out there. But also as a company, we have a lot of potential in the chain that we are active in, and we want to deliver on that part. So proud brings it together -- and we see a lot of enthusiasm coming at our people for this word, and it's definitely more than just a word, and that's why we want to have your values for.

Well, let's look at the D of deliver. Ultimately, you aim for a ROCE on underlying EBIT of at least 10% by 2025.

Yes.

So do you think that's attractive enough? How did you get there? And what does this tell us?

Yes. I would say it's, of course, attractive otherwise, we wouldn't put it in our strategy and maybe to highlight, we came off this, let's say, more long-term vision and refrain from EBITDA targets at the short term. It's -- like we said, I believe at the beginning of this meeting, if you look at geopolitics, if you look at macroeconomics, there's a lot of stuff happening. There was volatility and the unpredictability of what's happening around us is just so huge that it's for us, it's hard to put a number to it. And we think it's more prudent and maybe even irresponsible to put out the target for the next month or the next quarter or the next year if you take this all into account. Even yesterday, and I believe today it was in the financial papers Rabobank came with the report that volatility is here to stay also next year. They also point out that there will be more geopolitical elements in for next year. So that's why we refrain from the EBITDA target. But we truly believe that this at least 10% in 3 years' time is a target, which is, of course, reasonable. And don't forget, we have a lot of figures in -- when building this strategy. It's -- there's a lot of ambition in our strategy as well. But the question is, do we foresee all the uncertainties going forward? And the answer to that is, of course, no. And also maybe good to highlight our policy, our dividend policy, is still here. So 40% to 60% of our underlying net profit is to be paid, at least that's the policy to pay out to shareholders.

So no guidance anymore on any other elements, except for ROCE?

Yes, because like I said, we think it's irresponsible and more prudent to stick to these targets.

And hopefully, pace will come in 2023 or sooner. Does it mean that I think that the fog will become more clear and you're able to give more guidance in the future?

Let's say, the cost average where we can tell you. I mean, it's -- we don't know what's happening in this challenging world. And it's not only geopolitics, it's also about macroeconomics. It's about climate, it's about animal diseases. So we because of it when we get to, I would say.

Ambitious enough, not ambitious enough. I mean the 10% is a figure that you do give, what's your perception there?

No, it's -- like I said, at least 10%. We are -- if you look at the half year figures, we are at 8.5%, 8.4% on ROCE on EBIT. So there is a step-up. And well, we talked about challenging markets, declining volumes here and there in some of our home markets. So it's good enough ambition target, I would say, going forward.

Pieter, more definition of success that you want to put forward.

Yes, I'm still extremely confident on also to go with Roeland on delivering this. But this goes further as just the financials. It is also towards customers to really make sure we deliver that what we promised on farm for our employees. We talked already about the proud to really make sure they believe in our mission for the future of farming but also that they see us as the company where they can develop themselves and we see we are attractive as a company for that for people to join, the environment, lower the carbon footprint, increase our position further in organic farmer next to the financial promises that we are making today.

So we come to the end of this first section with a final question. Three numbers tend to stand out around the sector and the business that's the number 2025, that's a date really the date 2030 and even 2050. And so looking at 2050, will farming still exist? And if so, well, ForFarmers still exist and have a role to play, looking at the long run?

30 years is a lot -- a long period to think ahead. But I'd like to take a different direction to your question. If I go back 30 years, it was 1992, if I'm correct. I was 15 years old. I was working at the farm with my parents. If I see the progress that we have made since as an industry on welfare, on the quality, look at the quality of free food nowadays, the technical performance that is the change, that we are in, that is the dynamics, the power of the chain that we are in. So if I think back 30 years and then think forward 30 years I'm extremely confident that we are in the right place as ForFarmers for our farmers to really make sure that in 30 years, there are still farmers in the Netherlands that do what they have been doing so greatly over the past 100 years.

Roeland, 2050, it's a long way.

Yes, I don't dare to say no because there are farmers in the room. But now for sure, I think that in essence, we discussed it a bit today. We need to put food on the table -- and I think our farmers at large, have the willingness and the eagerness to do that. And animal protein, like discussed by Nick as well, there is a place for animal protein besides, let's say, the more plant-based proteins. But if you want to have a sustainable future, you need farming, and farming is there to stay. So completely agree with the Yoram and Pieter that farming the will be there for the future for sure.

Thank you very much. Any final remarks from you?

I think that if you're trying to boil it down, what the essence of our strategy, it's about local in the lead -- it's about differentiation of our product market combinations or species country combinations. ESG at the heart. M&A is here to stay, and we believe in the future of farming and proud to be ForFarmers.

Thank you very much. [Operator Instructions]

My name is Eric Wilmer, ABN AMRO-ODDO. I had a few questions, and I'll ask them one by one. First, you mentioned that your local teams will be leading I was wondering how you basically look at this in the context of the previous procurement issues you've seen in the past in the Netherlands and in Germany and how you basically cater for this?

Good point. Local in the lead, but it's all within bounds. So we have policies in place. We have [indiscernible] policy -- guidelines in place -- so that will not change. We have learned from our mistakes in the past, we changed our policy on raw materials. But what we want to try to achieve is not locally they decide by the cells, but they feel accountable and are accountable. So there's also a, let's say, joining of forces between what's happening on Central, happening on the local level. There are some hygiene factors like parts of the procurement, parts of finance, like the you have to do a [ VAT ] anyway. So it's not -- you cannot decide that by yourself. So hygiene factors will be there to stay and procurement for sure, when it comes to the boundaries when it comes to the use of derivatives or whatsoever, that will be still be a central thing.

Okay. That's clear. Then a question on -- I mean, I think recently, there was an announcement that basically at COP27, there was an announcement that methane emissions will be monitored on a global business -- on a global basis. Obviously, I think the ruminant sector is a big contributor to that as well. You mentioned in the past, technology as being a solution for these issues. And this is a general question. I mean, I haven't seen it today in the presentation. Could you talk a little bit about technology being a solution as a response to and what we've seen in terms of this headline?

Yes, I understand your question. I think the unique position that ForFarmers has is that we supply 25,000 farmers every day, and that is where we can differentiate with also due to the size, we can connect very well with large technology-driven companies. If you go to your example of methane, it's a topic with Cargill, DSM are focusing strongly on the innovative solutions, additives that will support reducing it -- and it is our role to make sure we apply it in the right way at a farmers level. And that -- this is how we look at our role. So still within frame of the basic -- back to basic, but to connect very well with these type of companies to make the progress that we achieve. I don't see ourselves as the company to develop a new product to reduce methane. So this is how we see our position in the chain.

Okay. That's very clear. Then I had a question on the Netherlands specifically. I mean, obviously, this -- at least that's my understanding, this is a cash-generative market for you with also quite some ruminant exposure. We're heading into a recession and me is typically the sector that will basically get a hit. And I guess the favor then goes to poultry. But still talking about the Netherlands and ruminants, how do you -- how would this impact your margins? I know this is a little bit of topic perhaps, but they think about it when I saw the Netherlands.

Yes. Now at this point in time, the milk prices and the two dairy farmers in the room. So if I now talk to a dairy farmer and ask how are things going, they say, all right, -- so we have a very good milk price, and that is good. That gives us the space to invest also with nutritional concepts that can change over time, especially in a period of hyperinflation. But we've seen over the past 10, 20, 30 years that the Dutch dairy farmers were always very good to play that role at the world market price. So on that, I don't foresee a strong effect of the hyperinflation on the size of the milk production and the herd size in the Netherlands, which is quite clear that legislation to war in the coming years to my opinion, will play a more pronounced role in this.

Okay. Perfect. And then basically sticking to the profitability topic. I mean, as mentioned, the EBITDA target is basically, let's say, dropped. Does it imply that the announced plans that you had to take common cost. So basically that you don't want to -- I mean, obviously, you mentioned the macroeconomic environment and animal disease and et cetera. But is also the read-through from this that the plans that you have presented that they come -- that they basically come at a cost.

No. That's not what we want to point out. It's fully to do with macroeconomics and well the stuff we discussed animal diseases and geopolitics, it's not that we have other reasons to not give guidance on EBITDA. Don't forget, there are EBITDA targets, but we don't give guidance on it. But internally, we have a lot of KPIs, which we keep on tracking and we will not only look at EBITDA or EBIT or ROCE. Of course, there are -- when you talk about, let's say, a new organizational design, and transformation of the company, there could be some of the tenancy costs, obviously, but it's not the reason for us to refrain from an EBITDA guidance.

Okay. And then I had a question on the decentralization that you mentioned. Is this something that you feel pressured by your competition in maybe because you've lost market share in certain markets? And that's for that reason that you feel that you have to decentralize from what you're currently doing?

Yes, that is not an easy question. Obviously, we look to our competition, and we look to where we stand and the aspired market shares. We just noticed ourselves that taking such a local approach led to more success. So don't asked me for an example, I gave an example on that, for example, in Germany, where we do see that by taking that approach, we are more successful are better able to be agile in a dynamic environment. So it's also proven by ourselves that this direction is at this point in time, the right thing to do.

Okay. Then moving on to my last question, and I have more, but I'll leave room for others. On the alternative raw materials, how are your competitors looking at this? And is this something that you can basically team up as a sector or -- or what are they doing?

Combining the ecologic and the economic part also is for us relevant. So partly, we look at this from a business perspective where we see it is an opportunity to differentiate. There's an opportunity to earn money with on the other side, especially from a developing point of view, we team up with game partners, but even with competitors in some innovative projects. to make sure we are making progress as a change. So we look at it from two directions, but let's be very clear, and I want to express that also today that we see sustainability also as a chance to earn more money as a company.

So good morning. My name is [indiscernible]. Thank you for the presentations. So a couple of questions. First, maybe the financial one. In your assumption to get better to -- working to above 10%. What is the -- are the major drivers behind that? Because you can reduce your capital employed, but if you are going to make acquisitions, which you are still looking for that's going to be up again? And also most of them quite dilutive. So -- could you give a little bit more idea about that? The second thing in this is pretax. In your calculations, what is at this moment, your own WACC because at the end of the day, I think 10% for your company is still on the very low side, what you should do, given the current WACC calculations? In my assumptions, that's one thing. The second one is on management. You previously announced the appointment of Theo for one year. Is there a chance that he stays longer? And what I'm still posed about, you work with the COO. Today, you're now -- is not aware of it, maybe I missed it, but that you appointed a country manager for Germany. So why do you need a kind of -- yes, operating officer, COO, why not become the CEO, maybe that's more for the Supervisory Board, not so directly to you, but it's a question why, why not appoint one of you as CEO, instead of going again, often going again by into? So that's -- and then you made a remark about the future of farming. And that you actually said we have made in 30 years a very so much progress. So we are there to stay. But in my I'm now 57, I have never seen so much pressure on farming, social, from governments, from all kinds of things as before. So maybe you need much more drastic actions than what we see here today from going actually from my view from global [ of local ] yet to local? Yes, and I think that's about it at the moment.

Let's start with a ROCE. So the 10% ROCE target, of course, it's -- yes, it's based on two things at EBIT and the capital employed. But the main driver for this will be EBITDA and our EBIT in that matter. So of course, we can -- depending on the raw materials going forward here, we can see what's happening to our working capital levels as we are aware this year, it increased last year as well because of higher raw materials. So working capital is there, but -- the main driver in our strategy going forward is not that we look at capital employed. Of course, we will, like always, but the main drivers should be and will be EBITDA and EBIT. So from a margin perspective. Yes, I have multiple discussions with our so-called WACC team because there are -- as you are aware, a lot of reasons and methods to look at your weighted average cost of capital. But I would say ours is now between around 7%, 7.5% which we calculate with. And of course, depending on what interest will do and what markets will do, of course, that will change. I don't have to explain to you. So that's the answer on that. Yes, on Theo, I think that -- and like you said yourself, it's maybe more a question also for our Supervisory Board. But I know that the Supervisory Board had a profile, which they came up with, of course, after they learned that Chris would not return and they had the willingness to have a fast successor to Chris. And I think Theo made both of these elements. So profile and speed. And I believe he has [indiscernible] company. So he also wants to go back to that, I believe so. Yes, the ability and the willingness and the ambition to stay for here. And the question on the CEO or COO, yes, I cannot just at indeed. I think it's -- the way we have been working as a company over the last couple of years was always with the statutory Board with the CEO, COO and a CFO. And I think that worked out perfectly. And so I can imagine that also our Supervisory Board is speaking that, that is a good way forward that CEO, COO focusing on the biggest operation and there I say, well, you always need the CFO.

That you are now moving back to country management.

Yes, because we want to report...

We have to have that on recording.

But you are now moving back to a structure of more local country managers by even actually set us splitting up Germany and different regions?

Yes. So before there were multiple COOs, out of which one was part of the supervisory, other supervisors, the statutory Board. So at this point in time, that's me. So I have a double role. I'm also the Managing Director of the Netherlands and of the affiliated companies like Reudink and Pavo. I also see my role in connecting the stakeholders as we have it. We have, as a company, quite some stakeholders. So bringing that all together is what I see as my role at this point in time, it's also about making sure on a commercial approach, making sure the innovation agenda is brought forward to the countries. That is where I zoom in on. And to my opinion, that is working quite well towards the future as well.

Okay. Maybe then one other question.

Can we still answer the question that you on -- on the 2050, the question you -- you raised should it entail more because pressures are so high.

Yes. The pressure is high, but there always has been a lot of pressure on the industry. If you look at the broiler industry as an example, where we had the discussion on plofkip 10 years ago, everybody faced a lot of pressure, this the industry, the sector came up with a solution and is now shining. So it's always been there in the current environment, the visibility is stronger than ever before. Your question was always also, are we then doing enough -- it's a journey that all players have a responsibility to play in. We, as a company, the farmers, all the chain partners, the government and bringing that together is a journey where the pace is quite difficult to anticipate -- for us, it's vital that we can go with all the speeds that can happen. So if we go from left to right tomorrow, we should be ready with our factories, with the raw materials as we have it with the advice that we give it, but we need the consumer to go with it. We need the government with clear policies, but our role is to be adaptive in this environment, and that also comes out in this strategy.

Okay. One final question for you. Yes, then okay, to -- maybe on the question of Nick, did I understand correctly that you're going to have a kind of dedicated sustainability team.

That's right. For us, it's vital to show, show to our employees, show to customers show to the world that sustainability is not a threat for us, but it's a chance. And that's why we want to bring our sustainability activities together. So that's organic farming. That's our business unit focusing on the coal products. that's also the activity to focus more on chain initiatives, so to work with processes to work with retailers on innovative, sustainable concepts. So that's why we want to bring that together. And over the coming months, we'll communicate further how that will look. But it's vital to show we have focus on that also in our investments.

Okay. Because previous time, I remember you had dedicated teams for marketing. I believe, for innovation. They are still there.

They are still there.

I know you also have a dedicated team [indiscernible]

Yes.

Daan Arends from Kepler Cheuvreux. I guess maybe firstly on sustainability. Something I've issue with conceptualizing or your role in the value chain, it's very hard to make sustainability efforts because on the one hand, you have the sourcing part, which is out of your hands to a certain degree. And then all emissions happen on a farm level. So I'm kind of struggling to see where you really make the biggest trials because I don't hear that you got soy as a sourcing material. So does that mean we're mainly talking about growing the biological concepts or increased use of coal products because this is already at quite a high level. And where specifically is the farmers' demand when we talk about sustainability. Can you give a bit more light on that as well?

Do you want to kick off that one, Nick?

Yes. I think I go back to some sort of underlying numbers. So as I mentioned earlier on. So when you look at the emissions from the environmental footprint of livestock production, on -- just on average, just under half comes from the feed that the animals consume. So I'll come back to that in a moment when it's broad as its 80%. So there's no way that you can reduce the environmental impact of broader production without involving us as feed producers. So I think that's the key, if you like, that's the key issue for us. We come back about how we do that in up and down the value chain. When you look at the environmental footprint of delivering feed to a farmer, 90% of our environmental footprint is the raw materials we use. So with that classic scope 3 90-plus percent, our own scope 1 and scope 2 is the rest by 5% or 6%. So actually, yes, I would emphasize the role that we have in our raw material chain. So I wouldn't agree that we have no responsibility there or control there. I mean, ultimately, we are the purchaser of the raw materials. And so when it does come to things like deforestation, for example, there's a whole load on the social pillar as well. But on the environmental pillar, yes, we do ask more and more questions. We have a deeper dive with our raw material suppliers about where the raw materials are coming from because in order to understand the environmental footprint, the deforestation risk, we need to know which country they come from, it's from the U.S., then no problem, if it's from Argentina or Brazil, Okay. Well, whereabouts in Argentina or Brazil because there may not be a problem either, but in some areas, clearly, there are. And I think when it comes to the farmer element, as we've mentioned all along, actually, as far as the farmer is concerned, most of those pressures are coming through the contracts and relationships they have, first of all, with the processor which is really where we see our -- we have acquired a good relationship and then obviously for the retailer and then on to the consumer because the retailers are interpreting the legislate policy pool and the consumer pool, NGOs, et cetera, and that ends up with a farmer being asked, "Can you find out where your soy comes from your feed supplier." So I think if you take all of those things, and if you take something like deforestation, you mentioned soya, I mean, we haven't said that we're taking soya out may be one option. So if you talk about deforestation free as a concept, there are 3 or 4 different ways of achieving that. I mean there are certification schemes, which are quite common. You can move up the chain of custody model, towards sort of mass balance type or physical flow systems. So there's a certification scheme. You can decide to source your soya from areas which are deforestation-free. So there's no risk. Or you can formulate diets with low amounts of soy or no soy at all. And so one of the things that we have been doing as part of putting these concepts together is on a formulation basis, yes, we can formulate diets without soya. So the point about raising those 3 or 4 different ways of achieving, say, deforestation-free is that processor A, may have their own -- their definition of what deforestation-free means as far as they are concerned, what claims do they want to make. Processor B might have a different approach and might want to tackle it in a site a different way. So I think our role is to be flexible to listen to the requirements of the processor and retailer. And then as nutritionists, then, yes, do our bit and work out which of those levers we can pull.

Yes. So how do we bring that then in the chain? And what is our role in the chain? And a good example is this week, Albert Heijn came out with a press release where they also indicated on the food and that comes from animal feed and options, options like co-products, options like deforestration and that is our position in the chain to start up these discussions to participate in these discussions and to say, just like Nick said, option A, B, C or D, what shall we do to strengthen on one side from a carbon footprint point of view, this chain, but also to make sure it is economical viable towards the future. That's how we see our role in that.

Okay. It was very clear in extensions. Then maybe secondly, maybe can we get a little bit more granularity on the sort of responsibilities you'll be transferring over to the localized teams? So I understand that sourcing is one element that stays central at least within very clear set boundaries. But I'm assuming that they will be in charge of pricing, or was it already the case? And the product offering will also be determined at the local level, right?

Yes. At this point in time, we are in a project to further define that the example that you give indeed to make sure that the offering -- sort of how innovation is applied in a country that has moved already in a local orientation. Over the coming months, we will finalize that and also start to execute that within the company, how we will transfer the responsibilities.

[indiscernible] Capital. You present here today more modest financial expectations, shareholders have faced material losses, maybe equally important, the farmers are facing very difficult market circumstances. And my question is has the Supervisory Board also reflected these circumstances in the total salary offering they made to the incoming CEO? And I also ask that because I think that -- if you look at the salary offers they made in the past, that was already quite sizable, in my view, for a company where the corporation still has a very important role to play? And additionally, you today present here a strategy where the local management team will be into the lead?

Yes. Thank you for your question, and I have a very straightforward answer. I don't know. So these are indeed important questions which we can raise to the Supervisory Board, but I don't know about the package. I don't -- and it will be published going forward, the package when we organize the extraordinary meeting. And yes, so there is a remuneration policy, which you talked about the salary of the previous CEO. I think there's a remuneration policy, which is in place that has been approved by the shareholders all of the time. So yes, I cannot -- your perception -- I cannot comment on that. I think we are within the boundaries of the remuneration policy. And I think that the Supervisory Board is using that. So going forward, with the extraordinary meeting of shareholders and which we will organize for the appointment of Theo, of course, the remuneration will be published. But I must not part of that.

Other questions from the room? Yes. So go ahead.

[indiscernible] When addressing all the markets, more or less every market, there was an overcapacity of the feed production. At the same time, you say that you want to do M&A which should have a [ filter kit fit ]. Should we more or less conclude that your intention stated in 2020 maybe to make acquisitions outside Europe is from the table? And shouldn't you just be focusing on the countries you're active in at this moment because what I just mentioned, there are sufficient problems to deal with now?

Yes. Yes and no, because you heard our M&A strategy. In the -- some of the countries we are already a market leader. And for example, take the Netherlands, we are a market leader, and we only will be part of a certain part of the consolidation like we've done with the hope and there are value pockets or areas which we want to grow and can grow. But by definition, it will not be that the consolidator by ourselves, others like you are aware, also consolidating the Dutch industry. And there are like I said, also in Poland, where we are doing a hopeful to do acquisitions or the U.K. where we have joined forces with agriculture. So that is not first and foremost, but it's one of the pillars. But given our headroom, given also the ability to do M&A, we also learned over the last couple of years that it's -- you talked about tango you talked about tango, it takes two to tango. And sometimes we have the willingness and the headroom to do an acquisition, but the others don't, and then we don't come to a deal. So that's why we also want to grow outside of the countries we're in. and be looking at other countries than only the [indiscernible].

Just come back quickly. Regarding outside Europe because...

That's about 5 countries.

Yes. Okay. Then secondly, merger has been introduced in this new press release. We have seen the announced merger in the U.K. with two agricultural. When we talk about merger, are you just talking about merger on a business level or country level? Or could this also imply on a group level?

To start with you -- merger is not for the first time in press. We always talk about M&A. And I think the first time we wrote it out now with mergers and acquisitions but M&A is always in the heart of the company. And when we talk about M&A, we mean M&A., and so that's mergers at large. So -- and acquisitions at large. And that's about it. There's -- as always, we refrain from countries or specifics, which we -- and targets we have on M&A. So it's -- M&A was there and will be there.

But it could also be group level.

We have all kinds of opportunities. So that could be at a group level, it could be at a local level. But you have seen the strategy and we want to be part of the, let's say, the mergers and acquisitions into countries we're in, what we just discussed. So that's the strategy going forward.

You also mentioned that you want to bring more focus into the company, pockets of growth, et cetera. Are there also activities or businesses which have felt out of focus, i.e., could potentially be divested?

We see in all the country plans opportunities to strengthen our position, and that is where we will focus on this point in time, that is our focus, and we believe that can bring us forward.

Okay. And then lastly, you will refrain from providing guidance on an annual basis. What then still gives you the confidence to provide an economy standard with all the geopolitical situation, raw material price, energy, et cetera, et cetera. What gives you the confidence to provide guidance for 2025?

Yes. It's -- I mean, it's to do with ambition and to do with showing that there is a long-term target, which we are focusing on. And we have the confidence that there's at least two sides of the equation on as you said it [indiscernible] capital employed and on ROCE. And of course, actually EBIT. And of course, when disaster happens, we will maybe might not make it. But we have the ambition and also when we look at our projections internally we think that we are comfortable with the growth we are foreseeing, and that's why we put a target out there for the next three years. Yes.

Thank you -- any other questions that we should have in this room. If not, I would like to thank each and everyone here. and we will now end this meeting. Thank you very much.

Thank you.

Thank you.