Full year results 2014 Amsterdam, 5 February 2015
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 ● The information contained herein is not for publication or distribution into the United States, Australia, Canada or Japan.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 4 February 2015 – 08.30hrs 2
Agenda 1. Highlights 5. Summary 2. Driving sustainable growth strategy 3. Full year 2014 financial results 4. SHV offer 3
Full year results in line with outlook - highlights Revenue € 5,253.0 million EBITA € 266.4 million; up 3.9% Focus on growth • Revenues increased by 0.3% • Animal Nutrition EBITA margin 6.8% • Two Brazilian acquisitions complete • Organic growth volumes increased by (2013: 6.2%) country and species coverage • Fish Feed EBITA increased 2.8% to • Capital investments in Asia and Africa 2.2% • Joint venture in Nigeria € 134.3 million Innovation agenda Basic earnings per share € 2.21 Final dividend € 0.75 • Progress made on young animal feed, • Increased by 1.4% • To be paid in cash • SHV offer of € 45.25 includes final feed additives and shrimp feed • Strategic partnerships more important dividend of € 0.75 • Total dividend € 1.05 (2013: € 1.00) 4
Agenda 1. Highlights 5. Summary 2. Driving sustainable growth strategy 3. Full year 2014 financial results 4. SHV offer 5
Nutreco’s three segments Revenue 2014: € 5.3 billion EBITA* 2014: € 266 million € 1.8 billion € 125 million Animal Nutrition € 134 million € 2.1 billion Fish Feed Compound Feed & Meat Iberia € 1.3 billion € 35 million Over 100 11 R&D units Multi national production plants in 7 countries workforce of in 35 countries 11,000 employees 6 *Including corporate costs
Our strategy – Driving sustainable growth Higher Premix, feed Growth Sustainability value-added specialties geographies throughout and fish feed portfolio of Latin America, the feed-to- food chain nutritional Russia, Asia solutions and Africa 7
Global portfolio of branded specialty products LifeStart Health Efficiency 8
Animal Nutrition strategy Focus Higher value-added portfolio of nutritional solutions Solid positions Growth geographies, secure mature markets Global Marketing Link between R&D and customer needs Growth geographies 35% of EBITA from growth geographies EBITA margin EBITA operating margin 6-7% 9
Feed additives: significant growth potential ● Significant growth potential as large part of market still does not use feed additives to drive efficiency, health and antibiotic reduction ● Clear structure and responsibilities put in place to increase focus: five hubs in EMEA, US, Brazil, Southeast Asia and China ● Investing in feed additive sales specialists (~30 new positions in 2014) will help autonomous growth ● Strategic partnerships and acquisitions will accelerate autonomous growth path and increase critical mass 10
Strategic partnerships more important ● Nutreco aims to develop additional strategic partnerships in areas such as ingredient sourcing, product development and knowledge in order to deliver the right benefits to customers ● Renewed strategic partnership with ForFarmers : − Purchase of premixes, feed additives and feed specialities − Cooperation on research, innovation and the marketing of high quality nutritional solutions e.g. for the young animal feed sector 11
Brazilian acquisitions: Fatec and BRNova • Acquisitions are good strategic fit; completes Fatec BRNova geographic, species and product coverage Established 1966 2012 • Fatec produces premixes and animal health products Revenue € 50 € 25 million million for broilers, layers, swine and dairy cows Employees 240 100 • BRNova supplies premixes and feed specialties, mainly Volumes (mT) 20,000 15,000 for poultry and swine • Total pro forma annualised 2014 revenues of Nutreco Brazil approx. € 185 million (prev. € 110 million) 12
Fish Feed strategy Volume growth 5% volume growth Roll-out MicroBalance R&D and Protec to other species Grow non-salmonid feed volume share Non-salmonid to 50% of total Fish Feed volumes Grow salmonid feed volume in Maintain leadership line with the market (5% CAGR) EBITA margin EBITA operating margin 6-7% 13
Oceans of opportunities Est. 8.3bn Million tonnes 160 6.9bn 140 BRAZIL CHINA ECUADOR JAPAN 120 Aquaculture 100 EGYPT HONDURAS TURKEY VIETNAM 80 60 40 Wild capture for human consumption 20 Population Increased Health growth incomes 0 2010 2030 Aquaculture growth factors Source: FAO Fish to 2030 14 Prospects for Fisheries and Aquaculture, 2013
A long term growing market Salmonid feed consumption 2012-2015F FAO aquaculture forecasts (million tonnes, % change per year) 2% • 35% production growth over the period 2014-2022 4.0 -2% 7% 12% • From 2014 onwards >50% of human fish 3.5 consumption will be provided by aquaculture • By 2023 China will comprise 63% of world 3.0 aquaculture production 2.5 2.0 1% -2% 8% 11% Kontali 2015 feed consumption estimates 1.5 21% 2% -4% 7% Worldwide increase of 2% forecast in 2015; 5% 3% 0% 9% • Norway growth forecast of 1% 1.0 • Chile growth forecast of 2% 0.5 0.0 ‘ 12 ‘ 13 ‘ 14 ‘ 15 ‘ 12 ‘ 13 ‘ 14 ‘ 15 ‘ 12 ‘ 13 ‘ 14 ‘ 15 ‘ 12 ‘ 13 ‘ 14 ‘ 15 Norway Chile Other countries Total 15 Sources: Kontali feed consumption report, January 2015 | OECD-FAO Agricultural Outlook 2014-2023
MicroBalance for shrimp feed • MicroBalance concept applied to shrimp to allow for flexible feed formulations and lower the use of expensive fishmeal • Results from field trials in Ecuador, Vietnam and Brazil show significant success in reducing fishmeal inclusion rates from 25-30% down to 15% • A commercial launch plan is being developed and will be undertaken in 2015 16
Joint venture in Nigeria 2013 New joint venture is a leading fish feed company Established 1999 • JV with Durante, leading Nigerian fish feed supplier and existing distribution Revenue € 9 million partner to invest in local production of extruded fish feed for Nigeria and Volumes 5,500 wider West African region Employees 30 • Nigeria is Africa’s second largest fish producer after Egypt with >200,000 tonnes fish feed p.a., (mostly for catfish). Mkt. share 15% (extruded feed) • Production is growing by 5 to 10% per year • Transaction closed September 2014 Ibadan 17
Agenda 1. Highlights 5. Summary 2. Driving sustainable growth strategy 3. Full year 2014 financial results 4. SHV offer 18
Revenue development full year 2014 ( € x million) FX Acquisitions -2.5% +1.6% Organic growth +1.2% 5,253.0 5,237.2 Price Volume -1.0% +2.2% % € x million 2014 2013 Animal Nutrition 1,835.5 1,800.6 +1.9 Fish Feed 2,116.3 2,022.3 +4.6 Compound Feed & Meat Iberia 1,301.2 1,414.3 -8.0 Total revenue 5,253.0 5,237.2 +0.3 2013 2014 19
Nutreco € x million € x million 2013 2014 2012 2013 Delta % Delta % +2.2% Revenue Revenue 3.867,1 5,253.0 5,237.2 3.821,5 +1,2 +0.3 Volume effect EBITDA EBITDA* 327.0 251,1 316.1 253,7 +3.4 -1,1 Price effect -1.0% EBITA* EBITA 266.4 215,7 256.3 225,4 +3.9 -4,3 Acquisitions +1.6% EBITA/Revenue EBITA/Revenue 5,6% 5.1% 5,9% 4.9% -2.5% FX effect 1,354.5 1,277.1 +6.1 Avg. capital employed Avg. capital employed 1.207,9 1.027,7 +17,5 ROACE (EBITA/ACE) ROACE (EBITA/ACE) 19.7% 17,9% 21,9% 20.1% Operational highlights • Volume effect was +2.2% driven by Fish Feed and Animal Nutrition • EBITA Animal Nutrition up 12.0% to € 125.0 million • EBITA Fish Feed up 2.8% to € 134.3 million *Before exceptional items 20
Animal Nutrition € x million € x million 2013 2014 2012 2013 Delta % Delta % +2.7% Revenue Revenue 3.867,1 1,835.5 1,800.6 3.821,5 +1,2 +1.9 Volume effect EBITDA* EBITDA 140.8 251,1 253,7 127.5 +10.4 -1,1 Price effect +1.2% EBITA* EBITA 125.0 215,7 225,4 111.6 +12.0 -4,3 Acquisitions +0.9% EBITA/Revenue EBITA/Revenue 5,6% 6.8% 5,9% 6.2% -2.9% FX effect Avg. capital employed Avg. capital employed 1.207,9 653.2 1.027,7 643.2 +17,5 +1.6 ROACE (EBITA/ACE) ROACE (EBITA/ACE) 19.1% 17,9% 21,9% 17.4% Operational highlights • Operating margin increased to 6.8% (2013: 6.2%) • Increase in EBITA mainly due to better performances in Europe driven by young animal feed and feed additives • Higher volumes and EBITA in Canada *Before exceptional items 21
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