Half year results 2014 Amsterdam, 24 July 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 ● The information contained herein is not for publication or distribution into the United States, Australia, Canada or Japan.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 23 July 2014 14.00 2
Agenda 1. Highlights 2. Driving sustainable growth strategy 3. Half year 2014 financial results 4. Strategic agenda 2014 3
Higher first half results - highlights Revenue € 2,460.0 million Half year EBITA € 108.2 million Focus on growth • Revenues increased by 2.6% • Animal Nutrition EBITA margin 6.7% • Organic growth; investment in 3 Asian • Volumes increased by 5.2% • Fish Feed EBITA increased 23.9% to premix plants • African expansion; Nigeria fish feed € 43.5 million joint venture Additional share buy-back Basic earnings per share € 0.82 Interim dividend € 0.30 • € 100 million share buy-back to • Increased by 5.1% • To be paid in shares (or cash at option optimise balance sheet of shareholder) 4
10 th AquaVision 2014 conference in Stavanger, Norway “The problem with aquaculture is that we simply cannot get enough from it. The challenge is to do it sustainably. ” - Sir Bob Geldof, keynote speaker • >400 delegates from +45 countries • Key messages: • continue sustainable geographic expansion innovate to increase yields • control use of raw materials • 5
Agenda 1. Highlights 2. Driving sustainable growth strategy 3. Half year 2014 financial results 4. Strategic agenda 2014 6
Nutreco’s three segments Revenue 2013: € 5.2 billion EBITA* 2013: € 256 million € 1.8 billion € 112 million Animal Nutrition € 131 million € 2.0 billion Fish Feed Compound Feed & Meat Iberia € 1.4 billion € 41 million Over 100 10 R&D units Multi national production plants in 7 countries workforce of in 30 countries 10,000 employees *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
Animal Nutrition strategy Focus Higher value-added portfolio of nutritional solutions Solid positions Growth geographies, secure mature markets ASCs Link between R&D and customer needs Improve the commercialisation of our value Go-to-market proposition Revenue 35% of EBITA from growth geographies EBITA margin EBITA operating margin 6-7% 9
Key focus areas for innovation - Animal Nutrition Application Young animal Health & Feed solutions nutrition welfare efficiency • Young animal feed • Supporting intestinal • Feed additives for • Precision feeding health production • Young animal vitality • Services & models for efficiency • Nutritional solutions for and later life quantitative nutrition • Reducing emissions performance transition periods • Optimised feed value and predictable performance 10
A global portfolio of branded specialty products Young Feed Preventive animal feeds additives animal health products Clear product group portfolio with strong brands 11
Young animal feed – aims of the LifeStart programme 12
Asia – investment in new premix plants • Vietnam (Ho Chi Minh City area): will produce premix, farm minerals and young animal feed concentrates • Indonesia (East Java): will produce premix and farm minerals • China (Xiangtan, Hunan): plant to be remodeled to produce premix, farm minerals, piglet feed and feed additives • Total of € 15 million investment 13
Fish Feed strategy Volume growth 5% volume growth Roll-out MicroBalance R&D and Protec to other species Grow non-salmonid feed Non-salmonid volume share to 50% Grow salmonid feed volume in Maintain leadership line with the market (5% CAGR) EBITA margin EBITA operating margin 6-7% 14
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 Prospects for Fisheries and Aquaculture, 2013
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 16
Technology & knowledge Nutrition Health promotion Farming practices Salmon farming in Norway Catfish farming in Nigeria 17
More fish from limited resources More production in More production sites existing sites 124 86.4 More filet 123 86.3 122 86.2 120 86.1 Higher densities 86 119 118 85.8 85.8 116 Faster growth 116 85.6 0.6% 114 7% higher with higher with Optiline Premium Optiline Premium 112 85.4 Relative Growth Index Slaughter Yield (%) 18
Proactive nutrition in fish feed
MicroBalance for shrimp feed • Aim to apply MicroBalance concept to shrimp to allow for flexible feed formulations and lower the use of expensive fishmeal • Trials have been undertaken in Chinese research station • Preliminary results indicate that fish meal levels can be reduced in shrimp diets (from 25-30% down to 15%) • Commercial product likely by end of year 20
Joint venture in Nigeria 2013 New joint venture will be a leading fish feed company Revenue € 9 million • JV with Durante, leading Nigerian fish feed supplier and existing distribution Volumes 5,500 partner Mkt. share • JV to invest in local production of extruded fish feed for Nigeria and wider 15% (extruded feed) West African region • Nigeria is Africa’s largest economy and its second largest fish producer after Egypt • Nigeria produces >200,000 tonnes fish feed p.a., (mostly for catfish), and aquaculture production is growing by 5 to 10% per year • Transaction close is expected within 3 months Ibadan 21
Compound Feed & Meat Iberia Business Unit ● Decision to halt divestment process announced (11 June 2014) as no fair valuation could be reached ● Businesses are well-managed, combine market leadership with operational excellence and are cash generative ● BU now fully focused on implementing agreed strategic projects ● Operating companies include Nanta (compound feed), Sada (poultry processing) and Inga (pig trading) with approx. 3,500 employees and revenues of € 1,414 million in 2013 22
Agenda 1. Highlights 2. Driving sustainable growth strategy 3. Half year 2014 financial results 4. Strategic agenda 2014 23
Revenue development half year 2014 Currency Acquisitions -4.1% Organic growth +3.1% +3.6% 2,460.0 Price 2,398.7 -1.6% Volume +5.2% % ( € x million) H1 2014 H1 2013 Animal Nutrition 884.3 907.0 -2.5 Fish Feed 928.3 770.9 +20.4 Compound Feed & Meat Iberia 647.4 720.8 -10.2 Total revenue 2,460.0 2,398.7 +2.6 H1 2013 H1 2014 24
Nutreco € x million € x million H1 2014 2013 H1 2013 2012 Delta % Delta % +5.2% Revenue Revenue 3.867,1 2,460.0 2,398.7 3.821,5 +1,2 +2.6 Volume effect EBITDA* EBITDA 138.4 251,1 253,7 123.6 +12.0 -1,1 Price effect -1.6% EBITA* EBITA 108.2 215,7 225,4 94.1 +15.0 -4,3 Acquisitions +3.1% EBITA/Revenue EBITA/Revenue 5,6% 4.4% 5,9% 3.9% -4.1% FX effect Avg. capital employed Avg. capital employed 1.207,9 1,426.0 1,346.2 1.027,7 +17,5 +5.9 ROACE (EBITA/ACE) ROACE (EBITA/ACE) 19.0% 17,9% 21,9% 18.8% Operational highlights • Volume effect was +5.2% mainly driven by higher Fish Feed volumes • EBITA Animal Nutrition up 4.7% to € 59.6 million • EBITA Fish Feed up 23.9% to € 43.5 million *Before exceptional items 25
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