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

Hello, and welcome to the presentation ForFarmers' First Half Year 2023 Results Call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Caroline Vogelzang, to begin today's conference. Thank you.

Thank you, Laura, and good morning all. Welcome to our audio webcast in which we will present the first half year 2023 results of ForFarmers. And I'm joined here today with our CEO, Pieter Wolleswinkel, whom you all know; and Roeland Tjebbes, our CFO, who you also all know. They will lead you through the presentation, which we posted this morning on our corporate site just after we published the press release. The audio webcast, because you know that this webcast will be take, and we will post the audio webcast on our corporate site afterwards for all of those who want to relisten to what is being said this morning. And before we start, I would like to draw your attention again to the disclaimer statement in which we state that all forward-looking statements are done based on the knowledge that we have today, and we know that what we know today could very well be very different tomorrow. So with that, let me pass the floor to Pieter, please.

Yes. Thanks, Caroline. I will first talk about the key events of the first 6 months, give a deeper dive on the market development before we move to the financials that Roeland will present, and after that, I'll zoom in further on our Strategy 2025 execution. Let me start with the good thing that there's now stability in the Executive Board. We've had changes from a CEO leadership, as you are all aware of, and it's good that there's now stability in the team, especially given our importance to execute strategy that we announced in November last year. The first 6 months of this year, we worked hard on the reorganization we addressed last year, that we believe in strong local ownership in the business that we are in, and we have organized ourselves in such a way that we strengthened the local teams, and also reduce the number of management positions to make sure our agility is increasing. We've also said in our strategy, it's time to make choices. We cannot do everything anymore, and therefore, time to make choices. Unfortunately, the joint venture in the U.K. is canceled, and we look now at our Plan B, that I will elaborate further on later on in this presentation. We've sold our Belgium compound feed activities, and we are very pleased that, in July, last month, we could announce the acquisition of Piast in Poland. So choices are being made and that is a very good development. If we look at our customers, sustainability and the sustainability transition is high on their agenda. We are very pleased to see, despite the fact that the politics don't always come with a solution that the market is developing, and we see many farmers that are making progress in their carbon footprint. But we've also seen relatively high prices for meat and eggs, so that is good for our farmers, despite the fact that compound feed is still relatively expensive. The dairy price has been more under pressure and has been sliding somewhat away. We then zoom in on market circumstances, it also directly affect ForFarmers. I would like to mention 3. The first is that, we've seen a steep decline of the commodities, raw materials, energies and fertilizer, and that has affected our business. We've also seen the hyperinflation, and that hyperinflation has led to a change of consumer behavior. So their consumption of animal protein has changed. But for example, also we have seen a change from organic feed to conventional feed, and that is a trend that we have not seen over the past 10 years. We've also seen that, especially given the reduction of herd size, especially in the big industry, more price competition, and that affects us quite obviously and has played a big role in the reduction of volume that we see and also given, therefore, margin pressure. Also, 2023 has brought quite a lot of incidental cost. We see this year as a transition year with the execution of the strategy and also much more cost focus will lead to additional costs in this year and I will zoom in later on that. So what does that mean if we quantify, we compare ourselves with the first 6 months of 2022, and we know that, that was a relatively strong period, especially the second quarter, and we see a decline of our total volume with approximately 4.8% towards 4.3 million tons of feed. We've seen a decline of our EBITDA to EUR 26.5 million, and we've seen an incidental cost of approximately EUR 10 million, and Roeland will later on zoom in on those costs. If we then zoom in further on the market developments. Nitrogen is still quite clear on the agenda, especially in the Netherlands and Belgium, both countries. We don't see solution coming from the [ politics ] and have not seen too much progress, so still uncertainty. That means that the market needs to develop also partly by themselves. We see, for example, seen in the first 6 months that there's now the full transition to the better welfare conditions of the broilers in the Netherlands towards the retailers. And I think that's good. Despite the fact that it affects our volumes negatively, we believe that these type of steps for a longer term ensure a solid poultry industry in the Netherlands, and that has taken place. All in all, if we look to the big industry in the Netherlands, Belgium, Germany and the U.K., we see a decline. And obviously, that is concerning us. On the other hand, we have seen, also driven by the lower animal numbers, quite steep increase of the pig meat prices, and that helps us as well to ensure we get the bills paid in time, and progress has been made on that one. If we zoom in on Germany, we see that, especially the poultry industry, is developing good. There's a good consumer demand for meat and egg, and that helps us to compensate for the decline in the pig industry. So we're shifting more, especially 2 layers. We have a very nice, we call it hotel farming, full service model that strengthens our position, and that supports the German business. If we go further to the east, and we see Poland had an extraordinary 2022, given the Ukraine crisis, the refugees coming to Poland and also the poultry industry basically disappearing in the Ukraine, obviously, boosted Poland. So we were quite, yes, looking with some kind of concerns how that would develop in 2023. But we're very positive on that one. And given the strong performance of ForFarmers Tasomix, we really see that the volumes are at a high level. If we go fully to the west, to the U.K., we see that the dairy industry had a stable year and we were able to strengthen our position. So that is, for us, very promising also towards the future. On the other side, if we look at the poultry and the pig industry, we have concerns. We see that on one side, there's a decline, especially in the pig industry, but also more movement towards integration model, so where the slaughterhouse produces their own feeds. And we aim for the free market, as we call it. So that means that free market is declining, so that is giving concerns. Later on, I'll zoom in on that one. So all in all, if we look at our key events as well as the market development, we are confident that our second half of the year will be better than the first half of the year. We're working on the right things and the execution of the strategy gives us the confidence to come with that comment. And with that, I would like to hand over to Roeland to deep dive on the first 6 months.

Yes. Thank you, Pieter. And good morning, everyone, also from my side. I would like to discuss the financial results over the first half of 2023, and I will do so in comparing with the first half of last year. And on the first slide, I will focus on the underlying EBITDA development on the underlying results. This is excluding our incidental items. And as always, we have a separate slide for those incidental items. A main driver, of course, for our result is the volume. And you can see that the volume of compound feed in the first half of this year declined to 6%. And like Pieter already discussed a bit, the biggest deviation is in the pig sector and also in the layer sector. The pig sector, and we see so different elements there, one is being that we see less sales in the U.K. and less sales, of course, to West Flanders pigs. And so the whole pig industry is suffering for that. And also we are, when it comes to volume in the U.K., and in other countries like the Netherlands and Belgium, we see people stopping their business which also has a big impact on the volume. That also leads to some fierce competition for volume and that leads to margin pressure, as you will see later. The broiler sector itself is doing fantastically in Poland, what Pieter already discussed, after the Ukraine crisis, is still very profitable volumes over there, which is helping our results. The Dutch operation is impacted by -- impacted lower volumes because of the welfare concepts, which are increasing in the supermarkets of the Netherlands. And in the U.K., we saw that the Avian influenza had a big impact on the total volume to be produced in the U.K. The ruminant sector is quite stable, and we see a good success with growing market share in the U.K. As you can see, the total volumes are less in decline than the compound feed volumes that has to do with the good perform -- relatively good performance of the coproducts, which are on lower decline than the compound feed. Lower volumes also lead to lower gross profit, and that's what you see as well, 8.7% down to last year, which is about EUR 22.5 million. The majority of the decline has to do, obviously, with the volume but we also saw the margin pressure and what we already discussed in several countries, which we -- given that we are in competition for volume. But we also saw a sharp decline in the fertilizer prices earlier this year, which had to do with industry picking up again after lower gas prices. And this impacted the fertilizer prices as well, and that impacted our gross profit. The underlying operating expenses are down with almost 3% -- 2.9%, and the decline of these costs has to do, of course, with lower volumes. We also saw lower production costs and especially on the energy side, so lower energy costs. We were also able to lower costs when it comes to number of FTEs. So lower FTE, there were 87 people are FTE full-time equivalent lower than the end of the year. But on the other hand, we saw a higher cost because of the wage inflation in several of all countries, we see that wages came up. In the Netherlands, for example, 7% to 8%, U.K. -- sorry, Belgium even 11%. Now if you put it all together, you see that our EBITDA declined to EUR 26.5 million, which is about 38% decline. The next slide, I will dive into the profit development, some elements out of our P&L. I will mention the underlying net finance results came down because of the higher early board. So we had to pay more rent than comparing to last year first half. Our result of HaBeMa, that's the profit of equity accounted investees, HaBeMa is our 50-50 joint venture in Germany, which is focusing on 2 lines of business. One is the -- selling feed and producing feed, the other one is the transshipment activities and especially the latter made this good result. So that's why you see the EUR 2.5 million on this line. The tax expenses are lower because of the lower results. And if we then look at the underlying profit, you see that it's EUR 4.4 million, which is EUR 12.7 million lower than the year before. Like I said, we have incidental items of EUR 18.8 million. I will explain later. But maybe good to highlight here already that the majority of these incidental items have to do with the cost for this transition year, and we want to be prepared for the future, and that's why we had to take some additional costs this year, which we see as an incidental item. On the next slide, some of the profit ratios we are looking at, our ROACE is 4.8%. It's obviously came down because of the lower underlying -- sorry, lower profit, the lower EBIT, and that's why it's below our internal targets, which we set for ourselves for 2025, which is 10%. As you are aware, A, you can also see that the underlying tax rate, 30.7%, which is in line with last year. The next slide is about the capital structure. Total assets obviously came down because of the lower prices for raw materials, so lower receivables and lower inventories. Equity is down with EUR 35 million. It has to do, of course, with the negative results. We have to take 5.8, which lowers our equity. And we also paid out EUR 18 million of dividend last year -- over last year, and we paid it out this year, of course. And that's what you see that equity is down with that amount. Working capital, as stated, lower than the year before and also lower than the end of the year of last year. The overdue receivables are well balanced at 10.1%, even in these difficult markets which we are seeing, and we saw in the past still compared to where we came from since 2018, a good ratio. Net debt came down -- came up, excuse me, towards EUR 86.9 million, which is higher than the year before. And on the next slide you will see that lower than last year. And of course, what you will see is that the less EBITDA contribution, which impacts the net debt, and of course, we paid out the dividend, we had our regular CapEx that we invest in our factories, in our plants, which is about EUR 14 million, and of course, the lower working capital also helps in lowering the net debt. Speaking of which, on this slide, the cash flow statement, the cash flow development, on the bottom end, you see that last year was EUR 95 million. So better than last year. That for the majority has to do with the cash from operating activities, lower contribution from EBITDA with higher contribution from the working capital coming in. And last year, we had a cash out and this year a cash in. Our net cash in investing activities is the regular CapEx, the EUR 14 million I discussed. And we also had a delayed payment, the second payment of our acquisition of De Hoop, which we've done 2.5 years ago. The net cash used in the financial activities is obviously -- the majority is about the dividend distribution, which we did based on the dividend of last year. The alternative performance measures, the incidental items. Like I said, it's much higher than the year before, especially because we take these costs in the position year. The first one is the impairment, EUR 4.7 million on EBIT. We announced the sale of our Belgian operation. And when comparing the sales price to the book value, we had to take an impairment and it's EUR 4.7 million. And if you look at the column restructuring, you will see that there is EUR 5.8 million on EBITDA on cost, that those are the cost of paying off people which we have to say goodbye to, also the restructuring of the organization and closing, for example, of the Ingelmunster plant in Belgium, all led to this amount. We take these costs this year in order to be prepared for the future. And it also has to do with the lower FTE, which we were -- which we have seen. And the other column with big items is the business combinations and divestments. Basically, the regular items, which we always see, it has to do with the amortization on previously acquired intangibles and the clients we have to evaluate when you buy a company, and [ amortizing ] that amount. And the net financing result of EUR 5.2 million has to do with the revaluation of the option of Poland. And as you might be aware, that it's because of the higher results, we also had to take a higher option. And that's why you see the EUR 5.2 million is a bit higher than last year. Now maybe some words about the 3 different clusters, we're having, the Netherlands-Belgium is the first one, and then we also see Germany-Poland, and the last of course is the U.K. A bit of the repetition there because also here we see in the Netherlands that there is a decline in volume, 6.3%. We discussed that there is less pigs in the Netherlands and Belgium because of stoppers, people who stopped their business. There was some competition, as we said, which led to volume pressure, and that's what you see in this cluster. And also the welfare concepts when it comes to the poultry sector, big impact on the lower volume for this cluster. And we are happy with the balanced Ruminant sector, predominantly cows, where we see stable volumes. Lower volume, as always, will lead to lower gross profit. And in this cluster, especially in this cluster, we saw the impact like I already alluded a bit about the sharp decline in the fertilizer prices, which led to lower gross profit for this cluster. The operating expenditures are also lower. So that's a positive effect. But we don't forget also here, we had to take inflation into account, wage inflation which is impacting, of course, the cost for ourselves. And that is much higher than the mitigating lower cost because of lower FTE. In total, you will see that the EBITDA is EUR 12.7 million, which is about EUR 17 million lower than last year. The results of Germany and Poland, a bit of a mixed bag when looking at volume. There's a very positive contribution out of the Polish operation with new customers and good volumes in Poland. We saw a big decline in the pig sector in Germany, of course, a market effect there, less animals in Germany on the pig sector. Those are some deliberate choices that focus on margin and less on volume in order to have a good differentiation of our strategies over there. And that helped out there because, looking at gross profit, you will see that the gross profit is higher than the year before because of this focus on market and, of course, because of the good volumes which we saw in Poland. In total, the EBITDA for this cluster is up with EUR 1.5 million to EUR 12.5 million. And as you can see on the bottom end, the ROACE for this cluster increased quite a lot and is above the target of 10%. The last cluster is the U.K. When looking at volume, you will see that this is the smallest decline or it's 1.5% down compared to last year, and we see good performance in the Ruminant sector where we are increasing our market share, as we see a sharp decline in both pig and poultry. The pig sector is down because of the less animals, I already discussed a bit, 40% less sales, leading to 10% less pigs in this year, which is, of course, impacting the markets. And we saw in the poultry sector that the Avian influenza had a big impact. But also there, we see that because of high prices for poultry meat that the consumers are also eating less poultry meat, and that also impacted the total volume for this cluster. The gross profit because of these effects, especially on the lower volumes, came down. And as you can see that the total EBITDA for this cluster is EUR 4.5 million, which is lower than last year, and the ROACE is not where we want it to be. And that in a nutshell or in fast track is the results over the first half, and I would like to give it back to Pieter, who will dive into the update of our strategy 2025.

Yes. Thanks, Roeland. Indeed, November last year, we announced our revised strategy 2025 given the market development, given the market volatility. And we also indicated at that point in time that it's crucial to move quickly in an execution mode and that is what we have been doing over the past 6 months. If we look at, what we said, the 5 strategic principles, I'd like to start with even closer to the farmers, even closer to the customers. It is vital to be agile in the environment that we are in. We see that the development market prices, herd size, et cetera, are moving quickly, and we believe in local ownership to quickly respond to that, and we have organized ourselves in such a way that we can provide an answer as quick as possible. So that lead to stronger local teams, a leaner group function, less management positions. We could reduce approximately 30 management roles and overall and overall reduction of personnel of approximately 100 FTE that we have nearly achieved already. If we then look at differentiating, obviously, day-to-day, we want to make a difference at the farmers level. But also strategically, we've looked critical what is, for us, the area of growth towards the future, where do we need to improve, but also where do we see that we cannot make sufficient difference. As an example, Belgium, we see that in the Belgium market, consolidation is vital, but we are not a party to consolidate. And based on that, we've come to the decision to divest our Belgium compound feed activities. And we hope for a quick response from the competition authorities to ensure we can close the deal. If we look to Poland, we're very happy as we see it as a growth market and -- the announcement of the acquisition of Piast, I'll zoom in on that on the next slide. But I also would like to elaborate on the U.K. Early this year, we needed to announce that we would cancel the joint venture that we intended to start with 2Agriculture. So that meant for us, and that's also what we addressed, we need to work towards a Plan B. What does that mean? We see that the dairy industry is developing in a solid way and there is an opportunity for us with the way we serve our customers, the broad product portfolio that we have, we can make the difference. And also in the first 6 months, we have strengthened our position. We need to be realistic on the poultry and the swine industry that is moving more and more towards an integration model, as I just described. So it's vital for us to adjust our service model and really work with a lean team. So we've made steps on that one. And also, we look, especially also in this field, how we can, via cooperations, improve our situation. On that last point, it's too early to further elaborate what that means, but we are working hard on the structural improvement of the U.K. results. In the middle, you will read good feed at a competitive price, and it's not by coincidence in the middle because it's the heart of our daily business and especially also if we now look at the Dutch situation, we want to improve, we want to strengthen, and we want to have a better volume development than what we've seen over the past 6 months. So we use our expertise, and also by improving our cost position, to ensure we can have sharp feed prices as we call it and be better than our competition. And that is clearly our ambition in the Dutch market. We are the leading company and we want to remain the leading company. If we then look at the sustainability transition, high on the agenda, ForFarmers want to be part of the solution in the transition that is ahead of us in the agricultural environment. If we then look to the -- on the farm, the solutions that we can provide, we see very nice examples. I'd like to mention 2. First is on the use of co-products, co-products coming from the food industry that are not usable anymore for human consumption. We pick them up, we use some either in our feeds or deliver them directly on farm, and that's a great way to reduce the carbon footprint of feed and with that of animal protein. So we're making progress. We will now brand it under circular to express further our importance in this field. We started in the Dutch -- for the Dutch Dairy Farmers and Innovation Fund. That means that farmers can use vouchers at our consultancy firm FarmConsult. So that's part of the ForFarmers Group. They support farmers with, for example, permits, but also with advising on how to use the manure disposal on farm in a better way to ensure that on, one side, the sustainability is improved on that, but also that money can be made out of that. And that helps the situation at the dairy farm. So also this, we want to support our farmers on debt. We also clearly expressed in November that we cannot do it on our own. If you look at our margins, they are low. That is quite clear, and that means that there's not so much room to invest in our feeds to improve. So we need to pick it up in the chain. Obviously, with farmers, but also with the processes. And step-by-step, we see that steps are being made. Especially in the research environment, we started a great project together with, for example, Nestle to reduce the carbon footprint of milk in 2030 by 50%. And we are confident that these type of cooperations offer a solution towards the future. So by taking a chain approach, and we've also seen that, for example, in the poultry industry and the way we cooperate with slaughterhouses, that helps tremendously to make progress. So all in all, if I look back, and I also speak on behalf of Roeland, from the past 6 months with regards to the execution of our strategy, we are very pleased to see that we are really in an execution mode at this point in time. And that also gives us the confidence to speak out that we expect a better second half than first half. Then coming to an end, I first would like to provide some more information on our acquisition of Piast in Poland. The financials will be disclosed at the moment of closing. But already to give you a bit more impression on the steps that we intend to take. If we first look at the right, on the slide, you will see Poland. In [indiscernible] you see the 3 current factories that ForFarmers Tasomix has, so 2 in the middle and on the new factory in the East. And if we look at red, those are the locations part of Piast, family-owned company, strongly focused at poultry feeds. So that is matching exactly what we also do with ForFarmers Tasomix, approximately 400,000 tons with 200 employees. And we -- especially also if we look at the factory, we see that on one side, we can specialize further, especially if we look to Lewkowiec that is close to our plant, and Biskupice in the middle of Poland, but also with 3 locations more towards the north that provides geographical opportunity to, on one side, work more efficient, but also clearly supports us in our growth ambition. So we expect that closing can take place in -- before the end of the year after approval of the Polish Competition Authority. So it's a very important part in our strategy 2025 to strengthen our position in Poland. And therefore, once again, pleased that we could announce this step. And with that, I would like to hand over to you, Caroline.

Thank you, Pieter. And Laura, could you please open up the Q&A?

[Operator Instructions] We'll take our first question from Guy Sips at KBC Securities.

First question is on the stability in the Executive Board. Can you give us a little bit more color on the impact on the timing of the strategy on the difference in the focus? And the second question is on Germany. You mentioned the model of hotel farming in Germany. Can you elaborate a little bit on that? And can you expand that to other countries? And in the P&L, you mentioned noncontrolling interest of minus [ EUR 1.6 million ] related to ForFarmers Thesing in Germany. Can you give some more insights on that? And on the overdue receivables, 10.1% on average, is there a difference between countries and can -- can you see some evolutions in there? And then on the transition costs of EUR 10.5 million, is there something that we can expect in the second half of this year or already for next year? And on the EUR 4.7 million on the impairment of the goodwill on the Belgian compound feed activities, is that a stable number? Or can that still go up or down in the coming months? And then last question on Plan B in the U.K., what is the difference with Plan A, from a financial point of view? And you mentioned that ROACE in the U.K. is not where you want it to be. So can you -- or give us some number what you expect in the mid- to longer time? And if you then give some numbers, can you also give your targets for other markets on the ROACE for the next coming years?

Many questions. Maybe I can start with especially the first 2 on the development of the strategic plan and the second question on the hotel farming. We look at the first one. We recognized somewhere in 2021 that there were so many developments, for example, the volatility in the market, that was even before the Ukraine crisis, we recognized that the development of the herd size was going in a decline in a harder pace than expected. The sustainability journey was accelerating. So based on that, end of 2021, we decided at that point in time to revise our strategy. Two, in the Board, are still in the Board, so we're involved from the beginning to the end. But it's quite obviously that the changes in CEOs have affected the process and have led to some delay. And that's also why it's so vital that we are now really in the execution mode as of earlier this year. The good thing is also, for example, in the cooperation with [ De Hoop, ] there was definitely no discussion on the direction of the strategy. So many of the preparations were already taken last year. So that is to give some background on the time table. Your second question was about the hotel farming concept where we really take ownership for the acquisition of the selling of the eggs and the providing of the feed prices. So it's a full service model that makes sure that the farmer can really zoom in on taking care of the animals. So it's a great model. It fits quite well in the German market where many farmers also have other activities, especially edible farmer. So it's not a concept that fits in every country or in every region, but indeed, we do look, can we use this also in other countries or other regions? But it's a great way, and it's good to see that also in Germany, it really supports our position in the laying industry. So with that, I think the other questions are higher on Roeland's list.

Yes. Thank you for the question, Guy. Let's start with the noncontrolling interest. And what you see is that we consolidate 100% of our joint ventures on which we have control. For example, in the Thesing and -- in this case, 40% of the result is not ours, so that's Thesing. So that's why we need to take these minority shares into account. The second question, I didn't, because I was writing down the first one, on receivables, I don't know exactly the question, but...

Whether there's a difference per country.

Yes. No, what you see is that it's basically all over. It's to do with the lower raw material prices, so that led to lower receivables. Of course, there are differences per country. If you look, for example, at our receivables, so days sales outstanding, which are different per country, Poland, for example, given the Polish industry is different than, for example, in the Netherlands, so there are longer payment terms in the Netherlands when compared to Poland, have longer payment terms, especially for example, in the turkey industry. But the main driver for the lower receivables is raw materials. And we see, for example, in Netherlands and Belgium, to pick one out, is that the pig sector health has more liquidity for the pig farmers so they can pay in time. And that's also leading to some lower receivables for that matter. But basically, like I said, working capital levels down because of lower raw materials. We talked about the transition cost, which is, let's say, a little bit of more than EUR 10 million. Indeed, Belgium should be a stable number because we negotiated the price with the sales party. And we know what our book value is, so it cannot deviate anymore. So the 4.7 is fixed. It will not change. And your other question was on the other part of the restructuring -- the restructuring cost, the other part of the EUR 10.5 million. That is, of course, the cost we have taken so far, there could be some in the remainder of the year, but I don't expect it to be at the same level -- or as high as in the first half. The majority has been taken, there could be still some steps to take, and that could lead to some cost for transaction -- for restructuring costs in the second half. Your question on Plan A, B and what have we, yes, we will not provide any guidance on what the numbers are and should have been when comparing A to B. Plan A was that we wanted to do a joint venture with 2Agriculture, and that unfortunately did not materialize. So that's why we are looking at other options. For sure, it's known in the market that we want all our operating companies to be at a ROACE, return on average capital employed, above, up and around 10%, a little bit depending on the country, and the weighted average cost per country, but let's say, 10%. Now they're obviously not there. So we need to get our act together there in order that we reach 10%. So we have guidance for 10%, which is by the end of 2025, not for now because also when we started the strategy, we're below that target of 10%. So we are working hard to grow towards this 10% by 2025. Yes, and per country, like I said, it differs depending on risk and the weighted average cost of capital. And I think that answers the 6 questions you had there, Guy.

[Operator Instructions] We'll now move on to our next question from Fernand de Boer at Degroof Petercam.

First of all, maybe I missed it, but could you give the amount of the release of the bad debt provision? That's the first question. And then on your EBITDA, I think last year there was a big difference in EBITDA per quarter. Has this now been more, let's say, the pacing of this EBITDA more similar. So similar EBITDA in Q1 as in Q2? And then if you look at your guidance, you're saying, okay, we are expecting a higher EBITDA in the second half than in the first half. But if I look at consensus numbers and also my own estimate, and we are looking at some EUR 40 million, and I know you normally don't give any guidance. But looking at what's going on in the first half, the price pressure, could you give any idea if you feel comfortable with a EUR 40 million EBITDA provided by the, let's say, of the analyst consensus? And then coming back on the U.K., maybe I didn't understand it correctly, but you say, okay, we make progress in the Ruminant sector where we gained some contracts and the market is also moving positively in that direction. But in pigs and in poultry, the market is more moving towards an integrated model. You're, of course, not an integrated model. So did I understand correctly that actually your way out is maybe to get out of those poultry and pig sector in the U.K.?

Yes, thank you for your questions, Fernand. I'll start with the release of bad debt. It's not a big amount. It's about EUR 0.5 million. When comparing to last year, the deviation is a bit bigger because last year we had to take an extra provision on bad debt, was about EUR 2 million, so that's why we mentioned in the press release. So the release by itself is not that much, but compared to the last year, was a cost, and now it's a benefit. That's why we mentioned it. And it all has to do with the liquidity in the pig sector, which is increasing given the increased pricing of the farmers -- for the farmers, and that's helping so they can pay off their bill. So that's one. Your second question was about the EBITDA per quarter. Yes, it's, yes, how to say, it's not balanced anymore. Last year, in Q2, we had a very strong quarter because at that moment, we were able to pass on raw materials to our customers even more than that. So that was -- there was exceptional from that matter, and Q1 last year was relatively lower compared to previous quarters. And given the markets we're in and given the circumstances we have to deal with, it's hard to point out what nowadays are stable quarter. So on that matter, if you compare it quarter-to-quarter, the second quarter for last year was far more better than the second quarter of this year. That's for sure.

But could you say that Q2 this year was below Q1 this year?

It was up to the -- if you look -- it's a bit up to Q1. Yes.

Sorry, say that again? It's -- okay.

Then your question on can we quantify. We deliberately stay away from a true guidance. We feel confident that the second half will be better than the first year, that is based, if we look at our current activities that is based also that, for example, the fertilizer effect is mainly taking place in the first half. So based on that, we come to that conclusion. On the other side, let's be realistic that there's still a lot going on in the world, macroeconomical, geopolitics. So based on that, we want to refrain from a true guidance. So to answer your question, I have to say no comment, to be honest. Then your second question to me was around the pig and poultry situation in the U.K. We look at several options. We still see that we're not the only party that is suffering in the pig and the poultry industry. So that make -- by definition, means that there will be opportunities that are out of cooperations, progress can be made. For me, it's too early now to comment what that cooperation would mean, in what form, in what region. But that is indeed high on the table to make sure we also make progress on that because -- to achieve the ROACE target that's just been indicated by Roeland, steps need to be taken. So that is on the table.

Okay. Maybe one last question on Poland, because both, Tasomix and Piast have a strong position in poultry. So could you share us a little bit the combined market share of those 2? You didn't disclose any details on profitability of Piast, price paid, et cetera. So yes, in tons, it's quite a big acquisition, but could you give us any idea?

On the financial side, we will disclose at closing. So it's too early to elaborate on that one. If we look to the market share, it's a good step forward. And you can make an indication what that means. So it's a significant step-up in our market share. On the other side, the Polish information is also not such that we can truly quantify that, especially given the dynamics that the country is in also around the Ukraine situation. So we won't quantify that further at this point in time.

We have no further questions in queue currently. [Operator Instructions] I see no further questions in queue. Yes. Handing it back over to you, Caroline. Thank you.

Thank you, Laura. Yes. I also saw that there are no further questions, but I know that you all know how to find us and so please do reach out if you have any additional questions. Thank you all very much for joining, and hope to speak to you later.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Continue to stay safe. You may now disconnect.