Feed and Seed - How to Grow Value and Loyalty... ForFarmers Reinier Steen, former CFO ForFarmers (NL)

Feed and Seed - How to Grow Value and Loyalty in Non-Listed Organizations
A ForFarmers Case Study
SPEAKERS
Reinier Steen, former CFO ForFarmers (NL)
Paul Arens, CEO MonIdee Group (NL)
the total feed business
ForFarmers Multilateral trading facility
Powered by Monidee
Dutch
http://www.youtube.com/watch?v=8tQJ5_D7Ihg
Deutsch
http://www.youtube.com/watch?v=bCtPulkYkgs
Contents
•
Introduction ForFarmers
•
Equity on name – registered capital
•
Multilateral trading facility inclusive software
` by Monidee
ForFarmers: site Lochem (NL)
ForFarmers Group B.V. Summary of data 2012
Pro forma turnover
€ 2.6 billion
Total assets
€ 817 million
Group equity
€ 327 million
Return on normalized equity
20.6%
Employees
2,194 FTE
Sales compound feed (tonnes)
6.250.000
2.370.000
2.222.000
2.377.000
2.480.000
2008
2009
2010
2011
2012 Pro forma
ForFarmers Group B.V.
Equity per share (in €)
3.50
3.07
3.00
2.51
2.50
2.22
1.83
2.00
1.50
2.62
1.60
1.37
1.00
0.50
0.00
2006
2007
2008
2009
2010
2011
2012
Capital on Name - Introduction
Objectives Capital on Name
• A transaction-driven cooperative to a results-driven company for further growth
• Investing for customers / non-members
Effects Capital on Name
• Company to will be legally lowered as an entity in ForFarmers Group BV
• Foundation only holds the shares and will award certificates to participants (initially
only to the cooperative FromFarmers)
• In ten years (2007 - 2016) chance from collective capital (Cooperative FromFarmers)
to Capital on Name
• Annually 10% allowance on participation accounts of individual participants (based on
utilization of feed equivalents)
• Enter Equivalents granted in 2007 on the basis of average consumption 2001-2006
• Employee Participation
Summary registered capital
Purchases 20012006
Feed equivalents (V€)
Utilization V€ 20072016
Multilateral trading
platform
Participationaccounts
Conversion
Certificates ForFarmers
Cooperative: until 2006
Customers
Owners
• Nearly all customers = owners = members
• Reward owners via transactions
• Collective equity
• Limited liability
Cooperative: 2007 - 2010
Customers
Owners
Employees
Members
• Reward owners via return on equity
• Registered capital
• Employees are allowed to participate in equity
Cooperative: as of November 2010
Owners
Employees and third
parties
Customers
Members
• Besides the employees, third parties can participate in equity
Equity on Name – A timeline
Every year on the basis of the utilization
of feed equivalent to 10% will be placed
in Equity on Name
Purchase products
determines award
‘Feed Equivalents "
Members can convert Equity on name to
certificates ForFarmers Group BV
2006
2000
November 2005:
Decision EON;
96,7% of the
members voted in
approval
*
2007
2008
2009
Start implementation through a
grant of 1,280,396 feed
equivalents to members
2010
2011
2012 *
2016
rading Platform operational since
November 2010, members can trade
feed equivalents, accounts and
participation certificates between each
other but also to sell them
At the end of 2010, Cooperative FromFarmers 92% holds of the certificates. Employees and third parties holding the rest
Equity on Name - Structure
Since November 2010, members can convert their Equity
in Name to certificates issued in the name ForFarmers
Group BV and become certificate holder / owner
C
C C C C C
Since November 2010 certificate holders can
sell their certificates via the trading platform to
external parties who then become also
certificate holders of ForFarmers Group B.V.
L
L
L
L
L
10% of the power is
annually distributed
among the members in
their name(through
participation account)
based on the feed
utilization equivalents
AK
L = Member
C = Certificatholder
AK: Foundation
Equity on Name – Voting Rights
Participation account members
C C C C
P P P P
Voting rights on Participation accounts
Voting rights on Certificates
Foundation ForFarmers
All not reqeusted
votes (unlimited)
• Foundation ForFarmers
(Unlimited)
Coöperation
(via the memberboard)
Not dor members reqeussted
votes (unlimited)
• Coöperation FromFarmers U.A.
(unlimited)
Requested votes (max 5%)
• Owners of participations account
at Coöperatie FromFarmers U.A.
(max 5%)
ForFarmers Group B.V.
Requested votes (max 5%)
• Certificat holders (max. 5%)
Equity on Name – Trading Platform
Starting Point
• Optimalisation of the valuation of all securities
• No new issue of certificate and/or feed
Practical Solution
• Duty of making a Prospectus only once a year "following 10% on name
statement
• Exploitation via “Van Lanschot Bankiers”
• Trading orders 24/7/365
• Orders are being settled following normal stock exchange opening
hours
• Liquidity is extended and possible repurchase of certificates via A’Dam
Trading Bank on behalf and responsibility and risk of ForFarmers
Tradeable securities (December 2013)
Securities
From
V€: 1,280,396
Members
Members
Participation accounts
Originally 60 million certificates
(60% of 100 million)
Members
Members
Certificates, after conversion participation
accounts, maximal 60 million
Members Members and third
parties
Certificates ForFarmers owned by
employees 6 million
Employees
To
Members,
employees and
third parties
ForFarmers demands for trading facility
•
•
•
•
•
•
•
External participants possible
AFM-proof (Dutch Authority for financial markets)
Internet-based, worldwide accessible
Foreign participants & multilingual
Registering and trade of 3 securities plus bank account
Can pay out dividends and other profit distributions
Can deliver tax statements
ForFarmers demands for trading facility (II)
•
•
•
•
•
•
•
•
Accessability and ordering 24/7
Continuous trading and execution orders during working
days from 9 am – 5 pm
Instant updating after transactions
Liquidity provider
Share purchase program ForFarmers possible
Conversion and re-coversion participation accountscertificates
New additions to tradeable securities
Employee participation scheme
ForFarmers demands for trading facility (III)
•
•
•
•
•
•
Broad functionality compliance officers
Stable system, stable hosting
Over the counter transfers possible
Handling of pledged securities (i.e. temporarily blocked for
trading)
Recognizable as ForFarmers platform (logo etc.)
Acceptable costs
ForFarmers search for solution
•
•
•
•
Amsterdam Exchange not yet possible
All Dutch banks
Cooperatives
Other solutions
•
MonIdee combined with Van Lanschot
Examples of the tailor made ordering system
•
•
•
•
•
•
•
•
•
Only orders with price limits
Warning for deviations > 10% of price latest transaction
No maximal ordersize
Validity: minimal one day, maximal until end of next month
Sell and purchase orders at same time possible
Execution in partial orders possible
Conversion and re-ceonversion participation accounts
Cancellation possible
Information about orders and orderbook
Practical Experience
•
•
•
Facilities up and running since 8 November 2010
No failures, no downtime
Flexibility: some new items have been added
and/or changed
Challenges
• Legal department bank
Current Standing
Monidee’s Internal Exchange Platform
for Cooperative organizations, public and privately held companies.
Copyright © Monidee 1999 - 2013
Monidee’s Internal Exchange Platform
Monidee’s new Internal Exchange Platform, called tOption, provides a flexible and secure solution that manages the internal trading of certificates and other listed or non‐listed securities for Cooperative organizations as well as public or privately held companies. A familiar issue with these types of organizations is the restriction of trade opportunities. Liquidity and volumes are too low and investors or members have no ability to exit a part or the whole of their investment. Our Internal Exchange Platform is specifically designed to address these concerns,
27
Benefits for the Organisation
Organization’s benefits of the Internal Exchange Platform
•
•
•
•
•
•
•
•
•
•
Encourages members loyalty and investment in Cooperative
Creates liquidity
Transactions are transparent
Trading only occurs between authorized members
Organization may invite non‐member investors to join an exchange program
The price of the security can be driven on supply and demand or fixed
Customizable standards and policies set up by the organization
Member’s information and details are stored on a fully secured and dedicated website
Real‐time communications with participants
Payments are processed directly to and from a participant’s bank
28
Benefits for the Member
Member’s benefits of the Internal Exchange Platform
•
•
•
•
•
•
•
•
•
The availability of sufficient liquidity
Ability to cash out or trade with other members in an auction format
24/7 online access to account within trading hours
Possibility to buy as well as sell securities
Transactions in the Internal Exchange are anonymous
Auto‐calculates all transactions net value including fees
Creates feeling of belonging to a community of members with same interests
Displays real‐time overview of positions available for trading
Historical data is available on all previously traded transactions
Member’s position overview
The different tabs in the menu enbales the navigation and access to different pieces of information: transactions, reports, personal data, messages stored in the inbox, etc.
Unnecessary fuctions can be hidden for the user : we show only what is the user’s need.
Internal Exchange
Here the participant is having access to an overview of her / his position in the vehicule she / he invested in or the organisation / company she / he is member of. Participants can be investor / member of a cooperative / Owner of parts of a fund (i.e. in real estate). The position can be viewed in any currency. Asset(s) can be a Certificate, a share, a fund, etc. This web site is available 13 different languages.
30
Member’s order screen
Internal Exchange
Here the user / participant enters the
number of assets she / he wants to buy or
sell ; the limit price (if applicable) ; and the
expiration date of the order.
Once the elements are correct the user
can submit her / his order.
Oustanding orders
in the order book
History of
executed orders
31
Trade Confirmation
Internal Exchange
32
Flexible module settings
Internal Exchange
Here are defined
the settings of the
nature of the
exchange and its
parameters.
33
An example of a Cooperative with internal certificate trading
Thank you
for your attention
Reinier Steen | [email protected]
Paul Arens | [email protected]