Nutreco: strong second half year 2009

Global animal nutrition company Nutreco, headquartered in Amersfoort, the Netherlands, reported a strong second half year of 2009.

The company's earnings before the deduction of interest (EBITA) in this period of time were €133.6 million, which was 33.9% higher than last year. All businesses reported above or in line with second half of 2008.

Operating result 2009 came down to €175.2 million; this was 3.8% lower than in 2008. Total revenue in 2009 was €4,511.7 million.

Pleased with performance
Wout Dekker, the company's CEO, commented: "We are pleased with the performance in 2009 despite the economic turmoil. Nutreco applied strong measures at the beginning of 2009 to withstand the recession. Our programmes to reduce working capital and operational costs paid off.

"After a challenging start, we ended the year in a much stronger mode and well positioned for 2010. The development of the overall demand for our products is encouraging. We achieved a strong increase of EBITA in the second half of 2009 compared with the same period in 2008."

Lower demand
Dekker continued, "In 2009, there was a lower demand for feed in some regions, mainly for dairy cows and pigs related to the low milk and pig prices. Farmers quickly adjust to such situations by cost-saving measures which led to a temporary reduction in animal feed purchases."

"Our premix and feed specialties business performed well. The fundamentals in the fish feed business are solid, showing strong growth in Norway. The growth in Norway largely compensated the decline in Chile. The demand for fish feed in Chile is reduced due to lower fish numbers as a consequence of the ISA disease in salmon farming.

"On a positive note measures being implemented by the leading fish farming companies and the Chilean authorities give us good reason to believe recovery is near. The compound feed business in the Netherlands suffered a major loss at the beginning of the year and measures were taken that restored profitability. In Spain, our poultry business returned to profitability due to good poultry prices and lower feed costs."

Dekker said, "In 2009 we have strengthened our compound feed business in Spain and Portugal with the acquisition of the animal nutrition business from Cargill. This acquisition brings together the number one and three in the Spanish market for animal nutrition. Combining these businesses will create cost savings due to optimisation of production and logistics and it will bring potential for plant specialisation."

"In November we announced the acquisition of a 51% shareholding in Fri-Ribe, a Brazilian animal nutrition and fish feed company, bringing Nutreco a platform to facilitate its further expansion in Brazil. The acquisition perfectly fits in our growth strategy to strengthen our global market positions in feed specialties and fish feed and brings substantial scope for selling Nutreco's feed specialties."

Strategic agenda
In 2010 the animal nutrition company will:

• Focus on new geographic regions and markets with perspective of structural profitable growth in countries like Brazil, China, Russia and Vietnam

• Participate in the industry consolidation process in markets where Nutreco has leading positions (Canada/North America, The Netherlands and Spain)

• Further strengthen its global market positions in feed specialties and fish feed by organic growth and acquisitions

• Execute Nutreco's science and innovation strategy and develop new sustainable products and feed solutions to add value to our customer's business and grow Nutreco's products portfolio to higher margin products

Barring unforeseen circumstances, the company expects EBITA before exceptional items in the 1st half year of 2010 to exceed €50 million (2009: €41.6 million). The animal nutrition company will also increase the investments in capacity expansion and plant optimisation related to volume growth and the acquisition of the compound feed plants that were acquired from Cargill in Spain and Portugal.

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