During 2018, again progress was made in implementing the Horizon 2020 strategy. Based on its Total Feed-approach ForFarmers gained new customers, and in addition the Company extended the partnership agreement with Nutreco for five years. Furthermore, four acquisitions were made resulting in the Company nowadays having operations in five countries and obtaining a more balanced portfolio across the various species.

Underlying EBITDA in 2018 was slightly lower than in 2017. This was mainly caused by the warm and very dry summer months, which impacted both the inbound logistics costs and the prices of raw materials. These increases could only partly be passed on to customers.

Market circumstances in Europe are changing, with the impact of environmental measures on the agricultural sector growing. In the Netherlands, the dairy herd decreased in size as a result of regulations to reduce phosphate emissions caused by cows. In Germany, farmers in the swine sector were confronted with new measures aimed at reducing the environmental impact of phosphate and nitrate, which have led to a fall in the number of animals. Finally, there was concern in Belgium about the possible risks of the outbreak of African swine fever detected among wild boars in September 2018. The Supervisory Board (the 'Board') has evaluated these developments regularly and discussed the effects on the results with the Executive Board.

ForFarmers is in constant dialogue with its customers and other stakeholders to adapt its service to these changing market circumstances, and to innovate and enhance its sustainability. ForFarmers considers close cooperation with customers important and aims to assist farmers achieve better returns through higher efficiency and with healthy animals. ForFarmers accordingly also continues to focus on the further reduction of the use of antibiotics. In this context, the Board welcomes the steps ForFarmers has taken in the year under review with regard to sustainability. These are explained further in the sustainability section.

Horizon 2020 Strategy

During the year the Board spoke regularly with the Executive Board about the further development of the strategic direction Horizon 2020. A special strategy day was held in May, during which - among other things - acquisitions, various risk scenarios, cost control and talent development were examined. The Board has found the open discussion with the Executive Board to be very valuable.

With the acquisition of Tasomix, Poland becomes the fifth country in which ForFarmers is currently active. The Board has supported this step and has been kept informed regularly by the Executive Board of the progress of the integration. In addition, ForFarmers has further expanded its activities in the Netherlands and Belgium with three more acquisitions in 2018. These acquisitions fit in well with ForFarmers' strategy to further strengthen its regional position in the different countries.

With regard to Functional Excellence, the Board has discussed the One ForFarmers approach with the Executive Board. This discussion looked at the room required for taking initiatives at local level, under the motto ‘organise centrally what is possible, but execute locally, close to the customer'. The Board recognises the importance of the relationship between local advisor and customer. Furthermore, the Board sees the advantage of exploiting economies of scale by making use of centrally organised processes and knowledge pooling.

In June, the Board visited the United Kingdom where the transformation project was discussed with the local management team. During the visit to the new mill in Exeter, the Board was informed by the local management of the different steps in the construction process. The Board's report examines the working visit in more detail.

Reducing the number of LTIs (Lost Time Incidents) remains a point for attention and calls for patience. The Board agrees with the Executive Board that a broad change of mentality is needed to reduce the number of accidents significantly. The Board has discussed this thoroughly with the Executive Board. The Board has safety as its highest priority on the agenda.

Composition of the Supervisory Board and Executive Board

I can look back on an intensive and instructive period since I took office as chairman of the Board on 26 April 2018. I would particularly like to thank my predecessor, Jan Eggink, for the smooth transition. Teamwork within the Board is pleasant and professional. The Board forms a balanced and diverse team with adequate knowledge and experience, particularly with regard to agriculture. With the appointment of Roger Gerritzen as Board member, the knowledge and experience of the Board with regard to finance, agriculture and M&A has increased further.
 
Jan Potijk has indicated that he is not available for reappointment as a member of the Executive Board. His extensive experience and knowledge of the sector have been of great value to the entire Executive Committee. He has played a vital role in the implementation of ForFarmers’ strategy. For this the Board is extremely grateful to him and wishes him all the best for the future. The Board also compliments Jan Potijk on the work he has done to train his successors to director level.

Thank you

Finally, I would like to take this opportunity to express my thanks to all employees, partners, customers, shareholders and other stakeholders who have made it possible for ForFarmers to build further towards its future. The year 2019 shall provide new opportunities and challenges for ForFarmers. I am fully confident that the employees of ForFarmers shall once again take new steps with the further implementation of the Horizon 2020 strategy.

Cees de Jong
Chairman of the ForFarmers Supervisory Board