Nutreco's H1 profit after tax up 11.1% to €44.9M, revenue up 14.3% to €2.57B driven by fish feed segment; company to reopen Chilean fish feed plant in September to meet growing demand
July 28, 2011
– * Revenues of EUR 2,573.4 million; an increase of 14.3% compared with the first half of 2010
* Excellent first half year result in Fish feed compensated for slightly lower results in other businesses
* Total EBITA Animal Nutrition and Fish feed up 9.5%
* Earnings per share increase 13.3%
* 2011 interim dividend of EUR 0.50 in cash or shares
Wout Dekker, CEO Nutreco:
"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 professionalised. 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 EUR 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."
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 handover to Gosse Boon at the end of September. Gosse 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 EUR 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 EUR 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 EUR 40 million. The closing of the transaction is subject to approval from the authorities in China which is expected during the 3rd quarter of 2011.
In April 2011 Nutreco announced an investment of EUR 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 8% 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
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 4th quarter of 2011 we will provide more details of our mid term strategic ambitions.
The strong first half year results give confidence for the full year result in 2011. The full year EBITA is expected to be around EUR 230 million (2010: EBITA EUR 222.5 million). In the second half year we expect excellent results in Fish feed and the total of our other activities to be in line with last year or slightly higher.
* Nutreco will publish a trading update on the third quarter on 20 October 2011
Nutreco is a global leader in animal nutrition and fish feed. Our advanced feed solutions are at the origin of food for millions of consumers worldwide. Quality, innovation and sustainability are guiding principles, embedded in the Nutreco culture from research and raw material procurement to products and services for agriculture and aquaculture. Experience across 100 years brings Nutreco a rich heritage of knowledge and experience for building its future. Nutreco employs over 10,000 people in 30 countries, with sales in 80 countries. Nutreco is listed on the NYSE Euronext stock exchange in Amsterdam and with annual revenues of EUR 4.9 billion in 2010.
Robust business portfolio delivers EBITA of EUR 86.4 million