Full year results 2013 and strategy update Amsterdam, 6 February 2014
Disclaimer ● The information contained herein shall not constitute or form any part of any offer or invitation to subscribe for, underwrite or otherwise acquire, or any solicitation of any offer to purchase or subscribe for, securities including in the United States, Australia, Canada or Japan. ● The information contained herein is not for publication or distribution into the United States, Australia, Canada or Japan. Neither this announcement nor any copy of it may be taken or distributed or published, directly or indirectly, in the United States, Australia, Canada or Japan. ● The material set forth herein is for informational purposes only and is not intended, and should not be construed, as an offer of securities for sale into the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or an exemption from registration. The securities of the company described herein have not been and will not be so registered. There will be no public offer of securities in the United States, Australia, Canada or Japan. Version 5 February 2014 2
Agenda 1. Highlights 2. Driving sustainable growth strategy 3. Full year 2013 financial results 4. Strategic agenda 2014 3
Solid financial results in challenging markets - highlights Revenue € 3,867.1 million Full year EBITA € 215.7 million Focus on growth • Revenues increased by 1.2% • Total EBITA incl. discontinued • Company now fully focused on • Volumes declined by 1.1% operations € 256 million premix, feed specialties and fish feed • Animal Nutrition EBITA margin 6.1% • Acquisitions in Ecuador and Egypt • Fish Feed EBITA margin 6.4% • Nutreco global top 3 shrimp feed Discontinued operations Basic earnings per share continuing Dividend proposal € 1.00 operations € 1.85 • Compound feed and meat businesses • Decreased by 3.1% • Final dividend € 0.70 • Payout ratio 45% in Spain and Portugal classified as discontinued operations – entirely in line with strategy 4
Sustainability progress made in 2013 Top 300 suppliers Total vendor policies NutrECO-line • Sustainable vendor policy signed off • 550 suppliers signed vendor policies • Assessment of sustainable nutritional • 59 specific vendors supplying soy, by top 300 suppliers (76% of annual solutions programme’s methodology ingredients spend) palm and marine ingredients and process externally verified AgriVision KPIs in planning & control cycle African Agribusiness Academy • >350 delegates attended AgriVision • Integration of sustainability reporting, • Assisted in the establishment of the 2013 including KPIs, in regular planning & African Agribusiness Academy • Prof. Michael Porter reinforced shared control cycle value concept 5
Agenda 1. Highlights 2. Driving sustainable growth strategy 3. Full year 2013 financial results 4. Strategic agenda 2014 6
DOUBLING FOOD FEEDING 9 BILLION HALVING THE PRESSURE PRODUCTION PEOPLE IN 2050 ON THE PLANET 7
Living our values ● Innovation as core value will help us to fulfil our mission of Feeding the Future ● Focus of Nutreco’s people agenda on culture and capabilities ● By defining our values we help focus our strategy on the strengths of our people “ As our innovation creates high value products and solutions, we are now developing global capabilities to better take these to the market.” Nalin Miglani, Chief HR & Corporate Development Officer 8
Innovation ● Viggo Halseth new Chief Innovation Officer, 30 year’s experience in Nutreco ● Responsible for: − driving the innovation agenda − building strategic partnerships − improving strategic marketing ● More systematic approach and increased strategic execution “ Finding new ways to enable fish and animal protein producers to increase efficiency, performance and make the most of their resources is key to meeting the growing demand for animal protein and seafood.” Viggo Halseth, Chief Innovation Officer 9
Intended divestment of compound feed and meat businesses ● July 2013 - announcement strategic study − Rationale: increase focus on animal nutrition, fish feed and growth geographies − Activities fall outside Nutreco’s strategic focus ● Businesses are clear market leaders and ready to continue their growth ● Strong results in 2013 due to market leadership positions and operational excellence ● February 2014 - intention to divest announced − After careful consideration, a divestment provides best opportunity for all stakeholders − Nutreco will fully consider the interests of all stakeholders involved, including a valuation that recognises the market position and future potential of these businesses 10
New guidance ● Financial guidance of EBITA € 400 million in 2016 amended due to: − Intended divestment − Fewer large value-creative acquisitions than foreseen − Market developments in Norway ● Updated financial guidance − EBITA operating margin to increase in the range of 5.5-6.5% − EBITA operating margin Animal Nutrition 6-7% − EBITA operating margin Fish Feed 6-7% − Average organic volume growth Animal Nutrition 3% − Average organic volume growth Fish Feed 5% ● Existing value-creative acquisition strategy maintained 11
New organisational structure Executive Committee Executive Chief Executive Board Officer Knut Nesse Spain and Portugal Chief Financial compound feed Officer & meat activities Fish Feed Gosse Boon Animal Nutrition Global Salmon & Americas Asia EMEA Feed Additives Chief Innovation Chief HR & Fish Feed Southern Officer Corp. Dev. Officer Europe Hugues LeRuz To be announced Harm de Wildt Steven Rafferty Viggo Halseth Nalin Miglani Martijn Adorf Global leverage Regional scope Global scope 12
Higher value-added Growth geographies Premix, feed specialties portfolio of nutritional Latin America, Russia, and fish feed Sustainability solutions Asia & Africa Driving sustainable growth 13 13
Nutreco’s two segments ● Revenue in 2013 of € 3.9 billion ● Over 70 production plants in 30 countries ● Multinational workforce of approximately 7,500 employees Animal Nutrition Fish Feed Revenue € 1.8 billion € 2.0 billion EBITA* € 112 million € 131 million * Before exceptional items from continuing operations and excluding corporate costs 14
Nutreco’s presence Sales in more than 80 countries € 3.9 billion revenue >70 production locations 7,500 employees 10 R&D units in 7 countries Global brands: 15
The essential link Animal nutrition Raw material Farmers & fish feed markets producers Struggling supplies Surging demand 16
Animal Nutrition: ‘Driving sustainable growth’ Solid Go-to- EBITA Focus ASCs EBITA positions market margin Improve the Higher value-added Growth geographies, Link between R&D commercialisation 35% of EBITA from EBITA operating portfolio of secure mature and customer needs of our value growth geographies margin 6-7% nutritional solutions markets proposition 17
Key focus areas for innovation - Animal Nutrition LIFE HEALTH & FEED PRECISION START WELFARE EFFICIENCY FEEDING • • • • Feed additives for Young animal feed Supporting intestinal Services & models for production efficiency health quantitative nutrition • Young animal vitality and • • • Reducing emissions later life performance Nutritional solutions for Optimised feed value and transition periods predictable performance 18
Nutreco’s Animal Nutrition value proposition • • Premix Swine • • Feed specialties Poultry • • Feed additives Ruminant • Preventive animal YOUR health products LOGO • Young animal feeds • Quality assurance • Ingredient optimisation 19
A global portfolio of branded specialty products Feed additives Preventive Young animal animal health feeds products Clear product group portfolio with strong brands 20
Selko Feed Additives – added value Preventive animal Economic value Food safety health 21
Fish Feed: ‘Driving sustainable growth’ Volume Non- EBITA Maintain R&D growth salmonid margin leadership Grow salmonid feed Roll-out Grow non-salmonid volume in line with EBITA operating 5% volume growth MicroBalance to feed volume share the market margin 6-7% other species to 50% (5% CAGR) 22
Skretting – the global brand for fish feed Focus on Feed-to-food Innovation and sustainability safety R&D 23
Unique knowledge – Skretting’s passion for fish Nutrition Process technology Raw materials Our competence in research and application in daily feed production gives us a competitive advantage Goals Fish Fish health Feed quality Food safety Sustainability performance 24
Skin Gills Gut The immune system Cell regeneration Anti-oxidative Virus Parasites Bacteria 25
Optiline Premium Introduction of Optiline Premium across more countries and additional species Added metabolic activators which increase digestible energy and digestible protein levels Benefits of Optiline Premium: • Higher fillet yields • More omega-3 • Increased growth • Improved feed conversion ratios 26
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