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2016-11-23

ForFarmers N.V.: Trading Update third quarter 2016

ForFarmers Trading Update third quarter 2016

Highlights third quarter 2016:

* Volume Total Feed decreased slightly
* Gross profit: - small growth at constant currencies - ultimately a decrease
due to devaluation of Pound sterling
* EBITDA growth in line with the improvement in the first half year 2016

ForFarmers has had a strong third quarter (Q3) 2016, with an EBITDA growth in
line with the improvement as reported in the first half year 2016. The volume
Total Feed that was sold in Q3 (like-for-like) decreased slightly. Revenue
decreased due to lower raw material prices, which are passed on to customers,
and the translation of the devaluated Pound sterling. Gross profit showed a
small increase at constant currencies, but ultimately a decrease was reported
due to the currency effect.
"Due to a strong focus on cost control and further implementation of the One
ForFarmers program we are on schedule with the realisation of our Horizon
2020 strategy and the earlier disclosed target with respect to an average
EBITDA growth of in the mid single digits at constant currencies", states
Yoram Knoop, CEO of ForFarmers.

In line with one of the pillars of the strategy, the acquisition of
Vleuten-Steijn Voeders was announced in Q3. This acquisition was completed at
the beginning of October and has led to a stronger market position in the sow
and piglet sector in the south east of the Netherlands and in Germany. The
integration has started immediately.

Developments per cluster

The Netherlands

ForFarmers the Netherlands has sold more volume of Total Feed in Q3 than in
the comparative period last year, particularly in the ruminant sector. More
volume was also sold in the poultry sector: a combination of a significant
volume growth for layers but less volume for broilers as the demand for
welfare concepts (fewer animals in the same housing area) continues to grow.
In swine, although import demand from China had a positive impact on the
price for pig meat this has as yet not led to a structural improvement in
this sector which still suffers from a reduction in the number of animals.
Accordingly, in line with the first half year, less volume was sold to pig
farmers in Q3.
Reudink (organic feed) again reported strong volume growth in Q3.

In September, the trade journal V-focus announced that ForFarmers delivers the
best advice to farmers. This was the outcome of a survey that was conducted
with Dutch ruminant farmers.

It was announced last week that an agreement had been reached between parties
concerned to reduce phosphate production in the Netherlands. The agreement
comprises three pillars: giving premiums to farmers who reduce the number of
cows, introducing a penalty discount for delivering surplus milk and
diminishing the phosphate levels in compound feed. ForFarmers understands and
supports these measures in light of retaining the derogation. The manner in
which the agreed upon measures will be implemented remains to be seen, but
will lead to some reduction in the volume sold to Dutch dairy farmers in the
coming year according to ForFarmers.

Germany / Belgium
This cluster reported a growth in sold volume of Total Feed in Q3,
particularly in the poultry and ruminant sector. More volume was also sold in
the swine sector in Germany, mainly as a result of adding a new dealer.

United Kingdom
On a like-for-like basis, less volume Total Feed was sold in Q3. The
structural reduction in the dairy herd accelerated, due to the difficult
market circumstances. This resulted in a larger decrease of volume in the
quarter than in the first half year. The volume sold in the swine sector also
dropped due to the reduced number of animals. This reduction started at the
beginning of the year as a reaction to the low meat prices. In the mean time
the price for pork meat has substantially increased in comparison with the
situation in the first half year. The production of the British swine sector
currently meets 60% of local demand. Therefore, some 40% of the required pork
meat needs to be imported. Given the fact that this has become more expensive
following the devaluation of the Pound sterling, a growth in the swine sector
could be expected in the medium term. Besides the market challenges in
general and the cautiousness of farmers pending the outcome of the Brexit on
the agricultural sector specifically, the devaluation of the Pound sterling
has had a negative impact on the contribution of the United Kingdom to the
consolidated results of ForFarmers.

The reorganisation process in the United Kingdom, which was announced and
provided for in the first half year results, has started. Furthermore, plans
are currently being finalised in order to optimise the supply chain. The
positive effects of the reorganisation and the process changes will
contribute to the results as of 2018.

One ForFarmers

Progress has been made during Q3 with One ForFarmers projects such as, among
other things, the implementation of the SAP-CRM (customer relationship
management) system in the United Kingdom to support the sales organisation.
This system will also be rolled out in the other clusters in 2017.
Furthermore, a start was made with the Total Feed Support project, which will
move the sales organisation to a way of working focussed on the whole
business of the customer (total feed) rather than the current product focus.
This project will take approximately two years to be completed. The other
clusters are also preparing to start with this project. The One ForFarmers
efficiency programs, particularly with respect to logistics and non-feed
related procurement, contributed to the reduction of costs.

Sustainability and innovation

ForFarmers aims to help improve returns on farm by providing advice that will
lead to healthier livestock and greater efficiency, and a focus on
sustainability. In this light progress has been made in Q3 with various
innovative concepts, such as those that reduce the production of phosphate.
This is particularly relevant in the Netherlands. To help farmers with a
better method to quantify, measure and reduce phosphate production,
ForFarmers also introduced the parameter "true phosphor" as part of the
Feed2Milk program.

In addition, efforts are continuously being made to improve feed conversion.
An example is the introduction of a fermentation feed concept, Ferm4Farm for
the swine sector, that reduces the annual feed cost, enhances gut health of
the animal and uses less antibiotics.

Note to the editor / For additional information:

Caroline Vogelzang, Director Investor Relations and Communications
T: 0031 573 288 194 M: 0031 6 10 94 91 61

E:caroline.vogelzang@forfarmers.eu

Company profile

ForFarmers (Lochem, the Netherlands) is an internationally operating feed
company that offers total feed solutions for conventional and organic
livestock farming. ForFarmers gives its very best"For the Future of Farming"
: for the continuity of farming and for a financially secure sector that will
continue to serve society for generations to come in a sustainable way. By
working side-by-side with farmers ForFarmers delivers real benefits: better
returns, healthier livestock and greater efficiency. This is achieved by
offering tailored and Total Feed solutions and a targeted approach with
specialist and expert support.

With sales of approximately 9.1 million tons of feed annually, ForFarmers is
market leader in Europe. ForFarmers has 2,370 employees and production
facilities in the Netherlands, Belgium, Germany and the United Kingdom. In
2015, the turnover arrived at € 2.2 billion.

ForFarmers N.V., Postbus 91, 7240 AB Lochem, T: +31 (0)573 28 88 00, F: +31
(0)573 28 88 99,info@forfarmers.eu,www.forfarmersgroup.eu.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, including those
relating to ForFarmers legal obligations in terms of capital and liquidity
positions in certain specified scenarios. In addition, forward-looking
statements, without limitation, may include such phrases as "intends to",
"expects", "takes into account", "is aimed at", ''plans to", "estimated" and
words with a similar meaning. These statements pertain to or may affect
matters in the future, such as ForFarmers future financial results, business
plans and current strategies. Forward-looking statements are subject to a
number of risks and uncertainties, which may mean that there could be
material differences between actual results and performance and expected
future results or performances that are implicitly or explicitly included in
the forward-looking statements. Factors that may result in variations on the
current expectations or may contribute to the same include but are not
limited to: developments in legislation, technology, jurisprudence and
regulations, share price fluctuations, legal procedures, investigations by
regulatory bodies, the competitive landscape and general economic conditions.
These and other factors, risks and uncertainties that may affect any
forward-looking statements or the actual results of ForFarmers, are discussed
in the last published annual report. The forward-looking statements in this
press release are only statements as of the date of this document and
ForFarmers accepts no obligation or responsibility with respect to any
changes made to the forward-looking statements contained in this document,
regardless of whether these pertain to new information, future events or
otherwise, unless ForFarmers is legally obliged to do so.

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This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: ForFarmers N.V. via Globenewswire

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