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 | reinier.steen@monidee.com Paul Arens | paul@monidee.com