PRESS RELEASE
Loudéac,
FIRST-HALF 2023 RESULTS
- Revenue up 16% despite pressure on sales prices
- Measures implemented to maintain order intake momentum and operating margins
Outlook
- Margins expected to improve in H2 2023
On
Consolidated data, French accounting standards, Unaudited, in €k | H1 2023 | H1 2022 |
Revenue | 71,383 | 61,458 |
Gross margin | 22,788 | 20,383 |
As a % of revenue | 31.9% | 33.2% |
EBITDA | 1,631 | 2,520 |
As a % of revenue | 2.3% | 4.1% |
Depreciation, amortisation and provisions | (2,140) | (1,612) |
Operating result | (488) | 900 |
Net financial income | (141) | (64) |
Non-recurring profit/loss | 28 | (171) |
Corporate tax | (78) | (159) |
Net income (Group share) | (689) | 572 |
The Farming Supplies business (92% of H1 revenue), whose products are marketed under the Vital Concept brand, posted revenue of €65.6m, up 18.8% (+0.3% like-for-like). The business benefited over the period from the contribution of €10.0m from
Revenue from the Farming Production business (7% of half-year revenue), marketed under the Alphatech brand, amounted to €4.7m, down 14.4%. After a sharp increase in sales in 2022, stemming in particular from the recovery in sales for export (30% of Farming Production sales), business was hindered in the first half of the year by the unavailability of currencies in euros in certain countries (
“Other activities”, comprising Farming Advisory (marketed under the Agritech brand) and Farming Innovation (marketed by the Bel-Orient pilot farm), a technological showcase and demonstration of the Group’s agricultural expertise, posted a 40% increase in sales.
With prices having trended sharply downwards in the first few months of the year, the Group responded proactively by immediately initiating measures to safeguard its margins. These included:
- Optimising inventories by favouring the selection of products with a high turnover rate;
- Highlighting loss leaders and products making the largest contribution to margins.
Despite the decrease in sales prices, these initial measures resulted in a favourable volume effect, reflecting an increase in the number of orders and the acquisition of new market share.
Solid gross margin; operating expenses weigh on profitability
The Group’s gross margin stood at €22.8m at
EBITDA at
After taking into account depreciation, amortisation and provisions, operating income came out at -€0.5m compared with €0.9m in H1 2022. Net income, Group share, came to -€0.7m, versus €0.6m in H1 2022.
Analysis of the financial structure at
At
The trend in the WCR over the quarter resulted from:
- a higher level of inventories at
30 June 2023 than at31 December 2022 , owing to the extension of product ranges inthe Netherlands with BTN and necessarily substantial inventories at Kabelis, given the seasonality of sales as well as a change in their valuation method stemming from the implementation of a new ERP for Vital Concept. - an increase in trade receivables, resulting primarily from the integration of
Kabelis Group companies inAugust 2022 .
However, the decline in the WCR was mitigated by the favourable trend in terms of suppliers. Together with a gross cash flow of €1.4 million, this served to generate a positive cash flow from the business.
At
At
Margins expected to improve in 2023
Negatively impacted by exports, the business activity of Alphatech (Farming Production) is expected to gradually improve in the second half of the year. The Company will also be able to count on the increase in its production level bolstered by the commissioning of its new production line in
Regarding business activity in the second half, the Company considers that the largest part of the decline in prices has already been recorded. A few product families may be subject to a further decline, but this should be more limited overall.
To maintain order intake momentum, operating margins and its market-leading position,
- Offer competitive prices on loss leaders (healthcare, seeds and harvest products);
- Continue to increase the average basket by offering complementary products, particularly own-brand, which have stronger margins;
- Increase order volumes, in particular by encouraging customers who make occasional orders to make more frequent orders;
- Continue to enhance purchasing by selectively favouring the marketing of higher-contribution products.
The launch of the new Vital Concept website focusing on the user experience and offering a more customised response to the Group’s farming customers should also serve to attract new customers.
Similarly, the integration of the new ERP will reinforce the Group’s key strengths by:
- Enabling the more precise management of sales prices;
- Reducing the volume of product inventories with longer turnaround times;
- Limiting supply disruptions;
- Cutting end-customer delivery times through the full integration of logistics.
In addition, purchasing costs also continued to fall in the second half, bringing the Group greater flexibility on setting prices by limiting margin erosion.
As a result, the gross margin rate and EBITDA in H2 2023 are expected to be higher than in H1 2023.
The financial discipline initiated by the Group in the first half of the year to limit the increase in operating expenses will be pursued in the coming months. For example, the Group will be limiting recruitment numbers by avoiding the replacement of voluntary departures.
BTN de Haas is expected to continue performing strongly in the second half of the year.
2025 targets confirmed
In addition to the one-off price adjustment and its mechanical effect on revenue for the period, the Group in the long term is reasserting its 2025 target of annual revenue of around €200 million and an EBITDA margin of around 6.5%. The Group is confident that the strength of its model and the quality of its fundamentals will ensure that it becomes a long-term partner for farmers and breeders by helping them to meet the many challenges of the agricultural world.
Launch of Au Pré!
In addition to its long-standing business, on 18 September Winfarm announced 1the launch of a new brand, “Au Pré!”, an innovative concept to enhance dairy production for a network of independent farmers. The new concept was first discussed during the Group’s IPO in 2020. The new value-creating solution diversifies the Group’s business and is expected to drive fresh growth. The launch of Au Pré! in
The aim with the new model is to rally processor-farmers around a concept combining an industrial production unit, a range of dairy products, marketing and delivery support services, and a national brand.
Targeting dairy farms producing 1,300 tonnes to 1,500 tonnes of milk, the specifications of Au Pré! are based on four key focuses that prefigure the farming of the future and were developed at the Bel-Orient pilot farm.
- Animal welfare,
- Optimised working time,
- The use of data on farms,
- Product tests for our subsidiaries.
The Company is aiming for 20 member farms in the next ten years.
Next release:
Q3 2023 revenue,
About
Founded in Loudéac, in the heart of Brittany, at the beginning of the 1990s, the
With a vast catalogue of more than 35,000 product references (seeds, phytosanitary, harvesting products, etc.), two-thirds of which are marketed under own brands,
By 2025,
For more information about the company: www.winfarm-group.com
Contacts:
investisseurs@winfarm-group.com | |
ACTIFIN, +33 (0) 1 56 88 11 11 winfarm@actifin.fr | ACTIFIN, Financial Press Relations Jennifer Jullia +33 (0)1 56 88 11 19 jjullia@actifin.fr |
1 See the 18 September press release.
Attachment
- WINFARM_PR_HY_2023_EN_vdef
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