Nutreco Records Half-Year Revenue up 14 Per Cent

NETHERLANDS - Nutreco's revenue exceeded €2.57 billion for the first half of 2011, with especially storng performance in the fish feed sector.

28 July 2011

6 minute read

Europe

Nutreco has released its financial report for the first half of this year. The company says its robust business portfolio has delivered an EBITA of €86.4 million, 2.9 per cent higher than in the first half of 2010.

Revenues of €2,573.4 million were 14.3 per cent higher than the first half of 2010, and the company adds that excellent first half-year result in Fish feed compensated for slightly lower results in its other businesses. Total EBITA in Animal Nutrition and Fish feed was up 9.5 per cent.

Earnings per share increased 13.3 per cent and 2011 interim dividend of €0.50 in cash or shares

Wout Dekker, CEO of Nutreco, commented: "We are pleased to report good results for Nutreco in the first half of 2011. Fish feed is delivering excellent results. The growth is clearly back in salmon farming. There is a strong recovery in Chile from the ISA virus and a continuing good performance in Norway. Skretting Chile will reopen its Pargua fish feed plant in September 2011 to meet the growing demand. We also see exciting opportunities to further diversify in feed for other fish species and in new regions such as South-East Asia and South America.

"In our animal nutrition business, we see that farming will be increasingly professional. Growing demand, adverse weather conditions and historically low stocks have brought high and volatile raw material prices. Animal nutrition companies and farmers have to find solutions and innovation is more important than ever. To offer the farmers the feed solutions they need Nutreco R&D is focusing on finding alternatives for raw materials, raising farm productivity and the efficient transfer of the nutritional value from feed raw materials into easily digestible feed.

"Our results in Animal Nutrition provide a firm base for organic growth supported by acquisitions. We will strengthen our presence in China, Brazil and Russia and develop sustainable business in Western Europe and North America.

"I am confident that we will double our 2006 EBITA to €230 million this year; a target set in 2007. This performance demonstrates the robustness of our business portfolio. With our strong balance sheet and cash flow we are well placed to continue growing our business," said Mr Dekker.

This half year result comes at a time of transition in the Nutreco Executive Board. As announced earlier, Chief Financial Officer, Cees van Rijn, will retire and hand over to Gosse Boon at the end of September. Mr Boon who joined Nutreco in 2010 was appointed to the Executive Board at the Annual General Meeting in March 2011.

Strengthening global position in fish feed and in premix and feed specialties

In January 2011 Nutreco announced an investment of €20 million in a new factory in the Voronezh agricultural region in Russia. For many years, Nutreco has had a sales organisation in Russia of 140 employees. The new plant will produce young animal feed, concentrates and premixes for ruminants, pigs and poultry; products that are currently imported from Western Europe. The plant is scheduled to become operational in the first half of 2012 and will employ 50 people. The investment will strengthen Nutreco's market position in Russia. Taking production close to the market decreases the lead times and improves the cost position, providing a good opportunity for sustainable growth in one of the important agricultural countries in the world.

In February 2011, Nutreco announced the acquisition of Shihai Co Ltd., a reputable and profitable fish and shrimp feed company in China with €65 million revenue in 2010. This acquisition will provide Skretting, the Nutreco aquaculture feed business, an entry to the largest aquaculture feed market. The acquisition is fully in line with Nutreco's strategy to capitalise on leading fish feed positions and diversify by expanding in new regions and into feed for other fish species and shrimp. The purchase price was €40 million. The closing of the transaction is subject to approval from the authorities in China which is expected during the third quarter of 2011.

In April 2011 Nutreco announced an investment of €27 million to expand its fish feed plant in Averøy, Norway. The investment will enable Skretting Norway to meet future market demand for high quality feed for salmon and maintain its market leader position. The Norwegian fish feed market grew by an average of eight per cent a year from 2006 to 2010.

In September 2011, Skretting Chile will reopen its Pargua fish feed plant to meet the growing demand as aquaculture in Chile recovers from setbacks in 2008 and 2009. Chilean production of Atlantic salmon dropped sharply following outbreaks of the viral disease, infectious salmon anaemia (ISA). Skretting has three plants in Chile. The plant in Pargua was closed in September 2008. A series of measures implemented by the Chilean authorities and Chilean salmon farmers has led to a strong recovery of aquaculture with volumes heading back to pre ISA levels.

Stakeholder conference Agri Vision 2011

In June 2011, Nutreco organised Agri Vision, the sixth multi-stakeholder conference for the international agri-business community. Attended by 375 delegates from 37 countries, Agri Vision 2011 explored the enabling factors to feed the nine billion population of 2050 sustainably. They include sustainable intensification, supporting rural entrepreneurs, broad partnerships and greater investment in research. Agri Vision conferences alternate with AquaVision conferences for the aqua-business, organised by Nutreco in Norway. The conferences provide delegates with ideas, information and inspiration and are used by Nutreco as input in the process of strategy development.

Strategic agenda 2011

Nutreco's strategy remains unchanged and is to achieve further growth of its animal nutrition and fish feed businesses by:

Capitalising on leading fish feed positions and diversifying by expanding in new regions and into feed for other species and shrimp. This includes Asia and Latin America
Pursuing significant positions in agri focus markets China, Brazil and Russia
Developing sustainable businesses in agri home markets Western Europe and North America
Further development of feed additives activities by innovation and acquisitions.

In the fourth quarter of 2011, Nutreco will provide more details of our mid term strategic ambitions.

Outlook

The strong first half year results give confidence for the full year result in 2011, says Nutrco. The full year EBITA is expected to be around €230 million (2010: EBITA €222.5 million). In the second half year, the company expects excellent results in Fish feed and the total of our other activities to be in line with last year or slightly higher.