WINFARM : First-Half 2023 Results
PRESS RELEASE
Loudéac, 05 October 2023
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
WINFARM (ISIN: FR0014000P11 - ticker:
ALWF), the No. 1 French distance-seller for the farming
industry, announced its consolidated results today for the
first half of 2023.
On 5 October 2023, the Board of Directors
approved the consolidated financial statements for the financial
year ended 30 June 2023. These accounts have undergone a limited
review by the statutory auditors. The certification reports are
currently being drawn up.
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 |
WINFARM generated consolidated revenue of €71.4m
in H1 2023, up 16.1% compared with H1 2022 and stable on a
like-for-like basis. The widespread decline in sales prices
concerns both animal nutrition and hygiene products and, to a
lesser extent, fencing and wear parts. After increases ranging from
10% to 20% for all these families since 2021, accounting overall
for a third of the Company’s revenue, prices fell by 15% to 20% in
H1 2023.
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 Kabelis Group companies, the business
activity of which has been consolidated in the Group’s scope since
August 2022. The performances of BTN de Haas, acquired in the
Netherlands in July 2021, also contributed significantly to
business in the first half, reflecting both the relevance of the
acquisitions made by WINFARM in recent years and the Group’s
ability to successfully integrate the companies acquired.
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
(Pakistan, Bangladesh and Egypt), which limited their ability to
place orders. The situation is now returning to normal and order
intakes have resumed. 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 April 2023. Currently in the ramp-up
phase, this extension to the existing plant will enable the Group
to boost its price-volume competitiveness in segments where it
already enjoys a strong reputation.
“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
end-June 2023 compared with €20.4m a year earlier, up 11.9% year
for year. The gross margin at end-June 2023 was identical to that
for the full financial year 2022 (31.9%). This performance
illustrates the Group’s ability to effectively manage price
developments in the current environment. As a reminder, at the end
of June 2022, the gross margin was 33.2%. It included the benefit
of price adjustments made by the Group in reponse to a significant
increase in purchasing costs.
EBITDA at 30 June 2023 came out at €1.6m
compared with €2.5m at 30 June 2022, adversely affected by the
increase in external expenses (+€1.2m) and salaries (+€2.1m)
following the integration of Kabelis Group companies and the
necessary adjustments to rising inflation. The EBITDA ratio
represented 2.3% of half-yearly revenue in 2023 compared with 4.1%
in the first six months of 2022.
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
30 June 2023
At 30 June 2023, Group shareholders’ equity
stood at €22.4m, compared with €23.1m at 31 December 2022.
The trend in the WCR over the quarter resulted
from:
-
a higher level of inventories at 30 June 2023 than at 31 December
2022, owing to the extension of product ranges in the 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 in August 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 30 June 2023, the Group’s cash position stood
at €121k, compared with €14.1m at 31 December 2022. This one-off
trend can be attributed to the investments made by the Group to
enhance infrastructure (extension of the plant, extension of
administrative buildings, ERP, new trucks, and construction of the
processing plant) and to the repayment of part of its financial
debt having come to maturity.
At 31 December 2023, cash flow is expected to
return to a normal level of around €10m, close to 2022 levels,
benefiting from new financing already obtained from banking
partners for €3.6m and ongoing discussions with the banking pool to
refinance the aforementioned investments.
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 April 2023.
Currently in the ramp-up phase, this extension to the existing
plant will enable the Group to boost its price-volume
competitiveness in segments where it already enjoys a strong
reputation. However, the contribution to H2 revenue will remain
marginal.
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, WINFARM will continue to
implement its business strategy with four key focuses:
-
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. WINFARM will also be able
to rely on the expected economies of scale with the companies of
the Kabelis Group, favouring a gradual improvement in
EBITDA starting in H2 2023.
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 October 2023 is the result of over three years of
research, studies and tests, thanks to which the Group is now able
to bring a network of member farmers a turnkey economic model for
processing and marketing milk.
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, 9 November 2023, end of
trading.
About WINFARM
Founded in Loudéac, in the heart of Brittany, at
the beginning of the 1990s, the Winfarm group is today the leading
French player offering the agricultural, livestock, horse-breeding
and landscape markets a range of consultancy, service and distance
selling products and global, unique and integrated solutions to
help them meet the new technological, economic, environmental and
social challenges of the new generation of agriculture.
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, WINFARM
has more than 45,000 customers in France, Belgium and the
Netherlands.
By 2025, WINFARM aims to achieve revenue of
around €200m and an EBITDA margin of about 6.5%.
For more information about the company:
www.winfarm-group.com
Contacts:
WINFARMinvestisseurs@winfarm-group.com |
|
ACTIFIN, Financial CommunicationsBenjamin
Lehari+33 (0) 1 56 88 11 11winfarm@actifin.fr |
ACTIFIN, Financial Press RelationsJennifer
Jullia+33 (0)1 56 88 11 19jjullia@actifin.fr |
1 See the 18 September press release.
- WINFARM_PR_HY_2023_EN_vdef
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