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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● The information contained herein is not for publication or distribution into the United States, Australia, Canada or Japan.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
3
1. Highlights
2. Driving sustainable growth strategy
3. Half year 2014 financial results
4. Strategic agenda 2014
Higher first half results - highlights
4
Revenue €2,460.0 million
• Revenues increased by 2.6% • Volumes increased by 5.2%
Additional share buy-back
• € 100 million share buy-back to optimise balance sheet
Half year EBITA €108.2 million
• Animal Nutrition EBITA margin 6.7% • Fish Feed EBITA increased 23.9% to
€ 43.5 million
Basic earnings per share €0.82
• Increased by 5.1%
Focus on growth
•Organic growth; investment in 3 Asian premix plants
• African expansion; Nigeria fish feed joint venture
Interim dividend €0.30
• To be paid in shares (or cash at option of shareholder)
10th 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
6
1. Highlights
2. Driving sustainable growth strategy
3. Half year 2014 financial results
4. Strategic agenda 2014
Nutreco’s three segments Revenue 2013: € 5.2 billion EBITA* 2013: € 256 million
€ 1.8 billion € 112 million
€ 131 million € 2.0 billion
Over 100
production plants in 30 countries
10 R&D units in 7 countries
Multi national
workforce of 10,000 employees
€ 1.4 billion € 41 million
Fish Feed Animal Nutrition
Compound Feed & Meat Iberia
*Including corporate costs
Our strategy – Driving sustainable growth
Higher
value-added
portfolio of
nutritional solutions
Premix, feed
specialties and fish feed
Growth
geographies
Latin America,
Russia, Asia and Africa
Sustainability
throughout
the feed-to- food chain
Animal Nutrition strategy
9
Focus
Solid positions
ASCs
Go-to-market
Revenue
Higher value-added portfolio of nutritional solutions
Growth geographies, secure mature markets
Link between R&D and customer needs
Improve the commercialisation of our value
proposition
35% of EBITA from growth geographies
EBITA margin EBITA operating margin 6-7%
Key focus areas for innovation - Animal Nutrition
10
• Young animal feed
• Young animal vitality and later life performance
Young animal nutrition
• Supporting intestinal health
• Nutritional solutions for transition periods
Health & welfare
• Feed additives for production efficiency
• Reducing emissions
Feed efficiency
• Precision feeding
• Services & models for quantitative nutrition
• Optimised feed value and predictable performance
Application solutions
A global portfolio of branded specialty products
11
Clear product group portfolio with strong brands
Feed additives
Preventive
animal health products
Young animal feeds
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
14
Volume growth
R&D
Non-salmonid
Maintain leadership
EBITA margin
5% volume growth
Roll-out MicroBalance
and Protec to other species
Grow non-salmonid feed
volume share to 50%
Grow salmonid feed volume in
line with the market (5% CAGR)
EBITA operating margin 6-7%
Oceans of opportunities
Source: FAO Fish to 2030 Prospects for Fisheries and Aquaculture, 2013
0
20
40
60
80
100
120
140
160
Million tonnes
2030
6.9bn
Est. 8.3bn
2010
Aquaculture
Wild capture for human consumption
Population growth
Increased incomes
Health
BRAZIL
EGYPT
CHINA
HONDURAS
ECUADOR JAPAN
TURKEY VIETNAM
Aquaculture growth factors
Unique knowledge – Skretting’s passion for fish
Nutrition Process technology
Our competence in research and application in daily feed production gives us a competitive advantage
Raw materials
Goals
Fish health Fish
performance Feed quality Food safety Sustainability
16
17
Nutrition Health promotion Farming practices
Salmon farming in Norway Catfish farming in Nigeria
Technology & knowledge
116
119
123
85.8
86.1
86.3
85.4
85.6
85.8
86
86.2
86.4
112
114
116
118
120
122
124
Relative Growth Index Slaughter Yield (%)
More fish from limited resources
18
More production sites More production in existing sites
Faster growth
Higher densities
More filet
7% higher with
Optiline Premium
0.6% higher with
Optiline Premium
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
Ibadan
Joint venture in Nigeria
New joint venture will be a leading fish feed company
• JV with Durante, leading Nigerian fish feed supplier and existing distribution partner
• JV to invest in local production of extruded fish feed for Nigeria and wider 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
21
2013
Revenue € 9 million
Volumes 5,500
Mkt. share (extruded feed)
15%
Compound Feed & Meat Iberia Business Unit
22
● 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
Agenda
23
1. Highlights
2. Driving sustainable growth strategy
3. Half year 2014 financial results
4. Strategic agenda 2014
Revenue development half year 2014
H1 2013 H1 2014
Organic growth +3.6%
Acquisitions +3.1%
Volume +5.2%
2,398.7 2,460.0
Price -1.6%
Currency -4.1%
(€ 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
24
Nutreco
25
€ x million 2013 2012 Delta %
Revenue 3.867,1 3.821,5 +1,2
EBITDA 251,1 253,7 -1,1
EBITA 215,7 225,4 -4,3
EBITA/Revenue 5,6% 5,9%
Avg. capital employed 1.207,9 1.027,7 +17,5
ROACE (EBITA/ACE) 17,9% 21,9%
€ x million H1 2014 H1 2013 Delta %
Revenue 2,460.0 2,398.7 +2.6
EBITDA* 138.4 123.6 +12.0
EBITA* 108.2 94.1 +15.0
EBITA/Revenue 4.4% 3.9%
Avg. capital employed 1,426.0 1,346.2 +5.9
ROACE (EBITA/ACE) 19.0% 18.8%
Volume effect
Price effect
Acquisitions
FX effect
+5.2%
-1.6%
+3.1%
-4.1%
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
Animal Nutrition
26
€ x million 2013 2012 Delta %
Revenue 3.867,1 3.821,5 +1,2
EBITDA 251,1 253,7 -1,1
EBITA 215,7 225,4 -4,3
EBITA/Revenue 5,6% 5,9%
Avg. capital employed 1.207,9 1.027,7 +17,5
ROACE (EBITA/ACE) 17,9% 21,9%
€ x million H1 2014 H1 2013 Delta %
Revenue 884.3 907.0 -2.5
EBITDA 67.4 64.8 +4.0
EBITA 59.6 56.9 +4.7
EBITA/Revenue 6.7% 6.3%
Avg. capital employed 660.4 662.5 -0.3
ROACE (EBITA/ACE) 17.3% 17.6%
Volume effect
Price effect
Acquisitions
FX effect
+1.3%
+0.4%
+1.2%
-5.4%
Operational highlights
• Operating margin increased to 6.7%
• Better performances in mature markets in Europe and North America and young animal feed
Fish Feed
27
€ x million 2013 2012 Delta %
Revenue 3.867,1 3.821,5 +1,2
EBITDA 251,1 253,7 -1,1
EBITA 215,7 225,4 -4,3
EBITA/Revenue 5,6% 5,9%
Avg. capital employed 1.207,9 1.027,7 +17,5
ROACE (EBITA/ACE) 17,9% 21,9%
€ x million H1 2014 H1 2013 Delta %
Revenue 928.3 770.9 +20.4
EBITDA 56.9 47.3 +20.3
EBITA 43.5 35.1 +23.9
EBITA/Revenue 4.7% 4.6%
Avg. capital employed 599.4 507.8 +18.0
ROACE (EBITA/ACE) 23.2% 26.2%
Volume effect
Price effect
Acquisitions
FX effect
+21.0%
-2.3%
+8.3%
-6.6%
Operational highlights
• Volume effect of 21.0% mainly driven by higher demand for salmon feed in Norway due to the exceptional market circumstances
• New acquisitions in Ecuador and Egypt performing well
Compound Feed & Meat Iberia
28
€ x million 2013 2012 Delta %
Revenue 3.867,1 3.821,5 +1,2
EBITDA 251,1 253,7 -1,1
EBITA 215,7 225,4 -4,3
EBITA/Revenue 5,6% 5,9%
Avg. capital employed 1.207,9 1.027,7 +17,5
ROACE (EBITA/ACE) 17,9% 21,9%
€ x million H1 2014 H1 2013 Delta %
Revenue 647.4 720.8 -10.2
EBITDA 26.5 22.9 +15.7
EBITA 18.1 13.8 +31.2
EBITA/Revenue 2.8% 1.9%
Avg. capital employed 172.4 169.1 +2.0
ROACE (EBITA/ACE) 26.1% 17.8%
Volume effect
Price effect
Acquisitions
FX effect
-6.7%
-3.5%
-
-
Operational highlights
• EBITA increased to € 18.1 million mainly due to lower raw materials prices and good chicken and pork meat markets
• The meat business substantially compensated for 25% y.o.y. lower sales to Mercadona by increasing sales to other customers
Operating result (EBITA)
€ million H1 2014 H1 2013 Delta abs. Delta %
Animal Nutrition 59.6 56.9 +2.7 +4.7
Fish Feed 43.5 35.1 +8.4 +23.9
Compound Feed & Meat Iberia 18.1 13.8 +4.3 +31.2
Corporate -13.0 -11.7 -1.3
EBITA from continuing operations before exceptional items 108.2 94.1 +14.1 +15.0
Restructuring
(Reversal of) impairment charges
Acquisition/divestment-related costs
Other
-0.6 -1.7
-2.9 0.0
-3.0 -2.9
-2.1 0.0
Total exceptional items -8.6 -4.6 -4.0
EBITA from continuing operations 99.6 89.5 +10.1 +11.3
29
€ million H1 2014 H1 2013 Delta abs. Delta %
EBITDA* 129.8 119.0 +10.8 +9.1
Depreciation -30.2 -29.5 -0.7 +2.4
EBITA* 99.6 89.5 +10.1 +11.3
Amortisation -6.2 -7.6 +1.4 -18.4
EBIT from continuing operations 93.4 81.9 +11.5 +14.0
Net financing costs -15.5 -13.9 -1.6 +11.5
Share in results of associates 0.4 3.3 -2.9 -87.9
Income tax expense -20.7 -17.8 -2.9 +16.3
Income tax rate 26.4% 25.0%
Total result for the period 57.6 53.5 +4.1 +7.7
Basic EPS (€) 0.82 0.78 0.04 +5.1
Net result and EPS
30 *Including exceptional items
Balance sheet Assets (€ million) 30.06.14 31.12.13*
Fixed assets 625.9 635.9
Intangible assets 431.4 429.7
Other non-current assets 95.7 93.7
Inventories 556.5 476.4
Trade receivables 819.2 808.8
Other current assets 17.7 22.8
Cash and cash equivalents 79.0 152.0
Total 2,625.4 2,619.3
Equity and liabilities (€ million) 30.06.14 31.12.13*
Equity 981.2 961.8
Interest bearing debt 484.4 500.9
Provisions 3.4 4.1
Trade payables 1,032.6 1,010.0
Other liabilities 123.8 142.5
Total 2,625.4 2,619.3
30.06.14 31.12.13* 30.06.13
Net working capital
343.1 275.2 365.0
Net debt -405.4 -348.9 -552.0
31 *Differs from full year 2013 presentation because of reclassification in accordance with IFRS 5
Cash flow from continuing operations
€ million H1 2014 H1 2013 Delta abs.
EBIT 93.4 81.9 +11.5
Depreciation and amortisation 36.4 37.1 -0.7
EBITDA 129.8 119.0 +10.8
Working capital movement -62.2 -87.7 +25.5
Capital expenditure -32.4 -50.4 +18.0
Other movements -7.8 +10.4 -18.2
Free cash flow 27.4 -8.7 +36.1
Acquisitions and divestments 0.0 -77.9 +77.9
32
Financial guidance
33
Organic volume growth guidance per segment
Animal Nutrition 3%
Fish Feed 5%
EBITA margin guidance per segment
Animal Nutrition 6-7%
Fish Feed 6-7%
Compound Feed & Meat Iberia 2-3%
Nutreco total 5-6%
Key ratios guidance
ROACE >15%
Net debt / EBITDA <3.0
Interest coverage >5.0
Net debt / Equity <1.0
Key ratios H1 2014 H1 2013 Full year guidance
EBITA / Revenue 4.4% 3.9% 5-6%
Return on average capital employed (ROACE) 19.0% 18.8% >15%
Net debt / EBITDA 1.2 1.9 <3.0
Interest coverage 8.4 8.6 >5.0
Net debt / Equity 0.42 0.61 <1.0
Basic EPS continuing operations (€) 0.82 0.78
+5.1%
Dividend per share (€) 0.30 0.30
34
Additional share buy-back
35
● Nutreco is a cash generative company and we will use our financial strength to support organic growth and make selective acquisitions
● We continue to expect to make one or two strategic acquisitions a year
● Currently we have ample financial room to achieve our growth objectives
● In order to optimise the efficiency of our balance sheet and enhance
future earnings per share, we will undertake an additional share buy-back
programme of € 100 million in the second half of the year
Agenda
36
1. Highlights
2. Driving sustainable growth strategy
3. Half year 2014 financial results
4. Strategic agenda 2014
Outlook for full year 2014
• Based on current trading conditions and barring any unforeseen circumstances
Nutreco expects EBITA before exceptional items from continuing operations for the full year 2014 to be at least equal to 2013 (FY 2013: € 256.3 million)
37
Summary
Strategic
• Strong contribution from shrimp and tilapia feed companies in Ecuador and Egypt acquired in 2013
• Investment in 3 Asian premix plants
• Fish feed joint venture in Nigeria
Operational
• Animal Nutrition EBITA increased by 4.7% to € 59.6 million
• Margin improvement Animal Nutrition 6.7% (H1 2013: 6.3%)
• Fish Feed EBITA increased by 23.9% to € 43.5 million
Execute roadmap
• Focus on premix, feed specialties and fish feed
• Operational excellence in mature markets
• Growth geographies Latin America, Russia, Asia & Africa
Financial
• Interim dividend of € 0.30
• € 100 million share buy-back
38
Thank you
Appendix
40
Our challenge
Doubling the food production
Halving the pressure on the planet
Feeding 9 billion people
in 2050
Struggling supplies
42
Adverse weather
Biofuel production
Low stocks Price speculations
Surging demand
43
Growing middle class 3 billion more by 2030
+
5 0 %
+
7 0 %
Urbanisation 50% to 70% by 2050
Converging diets
Globally 37 to 50 kg meat, 83 to 99 kg dairy by 2050
+
Growing population 7 to 9 billion by 2050
The essential link
Animal nutrition & fish feed producers
Struggling supplies
Raw material markets
Surging demand
Farmers
Where we come from
45
1994 2004 1975 1997 2011
Family businesses
Since 1899 Since 1954
Since 1931 Since 1937
Since 1968
Formation Rebalancing for growth
Part of BP Nutrition
Closer to the consumer Initial public offering
Driving sustainable growth
Private equity
Start
Executive Committee
Regional scope Global scope Global leverage
Executive Board
Chief Executive
Officer
Knut Nesse
Chief Financial Officer
Gosse Boon
Compound Feed & Meat Iberia
Americas
Hugues LeRuz
Asia
T.B.A.
EMEA
Harm de Wildt
Feed Additives
Martijn Adorf
Global Salmon & Fish Feed Southern Europe
Steven Rafferty
Chief Innovation
Officer
Viggo Halseth
Chief HR & Corp. Dev.
Officer
Nalin Miglani
Fish Feed Animal Nutrition
Javier Rodriguez Ceballos
Our employees
47
Employees in R&D and innovation of which 22% PhDs
26.0% Women working at Nutreco 2013
Employees in growth geographies
2,589
Number of employees in FTE at year end
2012
9,717 2013
10,231
Part-time employees
Temporary contracts
2013 7.3% 2012 7.6%
2013 12.6% 2012 12.6%
Employees per segment
3,876
3,357
3,553
€ 5.2 billion revenue
10,000 employees
>100 production locations
Sales in more than 80 countries
11 R&D units in 7 countries
Nutreco’s presence
Global brands:
48
Segment revenue by region in 2013 (€ 5,237.2 million)
49
644
144
North America
Western Europe
Latin America
Middle East & Africa
Norway
Central & Eastern Europe
Asia-Pacific
11
792
550
233
229
87
135
242
78
74
154
450
Fish Feed
Note: Turkey is included in Africa and Middle East, Oceania is included in Asia-Pacific, Mexico is included in Latin America
Compound Feed & Meat Iberia
1,414
Spain & Portugal
EBITA development since IPO
50 Note: EBITA before exceptionals after corporate costs
59 60 73
85
119 117
92 98
112 117
159
182 175
210
232
262 256
H1 108
0
50
100
150
200
250
300
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014
(€ x
mill
ion
)
TSR > 600% and beta reduced to 0.6 AEX Nutreco (€)
51
0
5
10
15
20
25
30
35
40
45
0
200
400
600
800
1,000
1,200
Sustainability progress made in 2013
52
Top 300 suppliers
• Sustainable vendor policy signed off by top 300 suppliers (76% of annual ingredients spend)
AgriVision
• >350 delegates attended AgriVision 2013
• Prof. Michael Porter reinforced shared value concept
Total vendor policies
• 550 suppliers signed vendor policies • 59 specific vendors supplying soy,
palm and marine ingredients
KPIs in planning & control cycle
• Integration of sustainability reporting, including KPIs, in regular planning & control cycle
NutrECO-line
• Assessment of sustainable nutritional solutions programme’s methodology and process externally verified
African Agribusiness Academy
• Assisted in the establishment of the African Agribusiness Academy
Animal Nutrition Nutreco’s subsidiaries Trouw Nutrition, Sloten, Selko, Shur-Gain and Landmark Feeds produce and market premixes, compound feed, farm minerals, young animal feeds, preventive animal health products and feed additives.
Market position
• Trouw is no. 2 global premix producer with an estimated market share of 12%
• Main competitors are DSM, Cargill (Provimi) and InVivo/Evialis
• Shur-Gain/Landmark are #1 in Canada with 23% market share
Presence
• 15 production facilities in Europe, 31 plants in the Americas and 3 plants in Asia
• JVs in Venezuela and Ukraine
Customers
• Feed compounders, integrators, distributors, farmers, companion animal industry and home mixers
Suppliers
• Producers of grains, vegetable proteins, land animal products, amino acids, trace elements & minerals, vitamins, dairy products, preventive animal health products, organic acids among others
53
54
Nutreco’s Animal Nutrition value proposition
Models Products
Services
• Swine
• Poultry
• Ruminant
• Quality assurance
• Ingredient optimisation
• Premix
• Feed specialties
• Feed additives
• Preventive animal health products
• Young animal feeds
Products with different margins
Volume
High concentrate premix
Margin
1% 5% 10% 100%
3%
4%
6%
10% Global
Local
Premix/farm minerals
Concentrates
Complete feed
Pure/blended feed additives
0.1-0.3%*
1-5%*
5-10%*
100%*
Energy e.g. grain
Protein e.g. soya
Macro-minerals e.g. feed phosphates
Basic feed additives e.g. amino acids
Feed additives e.g. preventive animal health products
* Inclusion rate: percentage of inclusion in final product
55
The innovation cycle Application Solution Centres (ASCs) are the interface between local marketplaces and Nutreco’s global marketing and innovation teams
ASC R&D Customers
Needs Business input Nutritional and technical
know-how
Interface
Operating companies
56
Synergy between Animal Nutrition & Aquaculture
57
Feed additives
& ingredients
Science & technology
R&D methodology
ASC ̶ geographical reach
More than 1,200 experts in local technical and sales teams serving our customers
ASC ̶ North America (27 experts) ASC ̶ Europe (33 experts) More than 100 R&D experts
Future growth ASC – Latin America
Future growth ASC – Asia
Application and Solution Centres
Research Centres
Nutreco presence
58
Nutreco science strategy
Quantitative
Nutrition
Functional
Nutrition Focus areas
Optimise feed value
Predictable performance Animal modeling
Higher performance and efficiency
Sustainable production Reduce footprint
Feed evaluation and least cost formulation
Efficiency additives
OUTCOME SOLUTION
Young animal vitality and performance Young animal feeds
Better and more stable gut health
Gut health ingredients/ programs
Reduce transition problems Transition feeds and programs
Reduce human health risks
Zoonoses and toxin control
OUTCOME SOLUTION
59
Animal Nutrition research centres More than 100 qualified experts working in 6 research centres in 3 countries
Expertise
• Ruminant RC (NL)
• Swine RC (NL)
• Ingredient RC (NL)
• Agresearch (CA)
• Poultry RC (ES)
• Food RC (ES)
Certifications
• ISO 9001
• GMP+
• HACCP
Qualified experts
• Animal nutrition
• Veterinarian
• Immunology
• Molecular biology
• Biochemistry
• Feed technology
• Food technology
• Food microbiology
60
Animal feed volumes (million tonnes) and average annual growth 2006-2011
185
225 207 210
143 150
69
89
33 40
4.1% 0.3%
0.9%
5.2%
3.9%
Asia Pacific
North America
EU-27 Latin America
Other Europe & Russia
Sources: Feed International, 2012 | OECD-FAO Agricultural Outlook 2014-2023
FAO forecasts – long term growth
• Global meat production CAGR to 2022 is forecast at 1.6%
• Global dairy production CAGR to 2022 is forecast at 1.9%
Consistent growth globally in animal feed
61
' Weighted average growth rate approximately 2.5%'
Selko Feed Additives – added value
Food safety Preventive animal
health Economic value
62
Selko markets: throughout feed-to-food value chain
63
Presan: maximum return on investment
Presan development - A collaborative effort
Poultry Research Centre, ES
Ingredients Research Centre, NL
Swine Research Centre, NL
AgResearch, CA
Complete dossier built on in-vivo measurements and results from more than 20 trials 65
Presan improves animal performance
And the performance of our customer
Customer return on investment (ROI) with Presan:
• Reduced use of antibiotics & zinc oxide
• Similar or better performance for lower price:
• Increased weight
• Increased value
• Better life
• Improved feed conversion
• Up to € 5 ROI for every € 1 invested in Presan*
* Clinical data on file
66
Africa: growth market for animal nutrition and fish feed
Animal Nutrition
Largest markets are:
• Egypt: poultry
• Nigeria: poultry
• East Africa: poultry and ruminants
• South Africa: poultry and ruminants
Most professional markets in North & South Africa
Fish Feed
Largest markets are:
• Nigeria: Cat fish and Tilapia
• Egypt: Tilapia
• Uganda: Tilapia
Total feed market around 1.3 million tonnes
67
Nutreco in Africa
Export & growth
• Export to more than 20 countries in Africa
• Year on year growth of >25%
• Growth in number of countries and size of the countries in recent years with dedicated sales
Egyptian market
• Active for over 10 years in Egypt with local joint venture Hendrix Misr., market leader in extruded fish feed (mainly tilapia) which is sold under the trade name Skretting
• Took full control in June 2013
• Joint venture in Nigeria for extruded fish feed (mainly catfish) in 2014
Strategy
• Focused Nutreco strategy for Africa to expand business with possible local ventures
• Business Unit Africa established to increase focus
68
Compound Feed & Meat Iberia
• Poultry products, pig farming and trading and feed solutions primarily for poultry, pigs and ruminants in Spain and Portugal
Market position
• Nanta is the leading feed producer in Iberia with an estimated market share of 13%
• Sada is the largest poultry producer in Spain, estimated market share 27%
Presence
• Nanta has a nationwide presence in Spain and Portugal with 20 compound feed plants
• Sada has a nation-wide presence in Spain with 10 poultry processing facilities
Customers
• Nanta services livestock farmers including Sada and Inga Food
• Retail, wholesale, food industry and food service (Sada); pig meat processors (Inga Food)
Suppliers
• Nanta sources from producers of grains, vegetable proteins, land animals products, vegetable oils
• Sada and Inga Food source from Nanta and others
69
Fish Feed
• Nutreco’s subsidiary Skretting produces and delivers high-quality feeds from hatching to harvest for more than 60 species of farmed fish and shrimp
Market position
• Skretting is a leading global salmon feed producer with an estimated market share of 33%
• Main competitors of salmon feed are EWOS and BioMar
• Global no. 3 shrimp feed producer with an estimated market share of 6%
Presence
• Skretting has production facilities in 17 countries for sales in over 40 countries
• JVs in Egypt and Honduras
Customers
• Fish and shrimp farmers
Suppliers
• Producers of marine products, vegetable proteins, vegetable oils among others
70
Skretting – the global brand for fish feed
Feed-to-food safety
Innovation and R&D
Focus on sustainability
71
More than salmon: over 60 species
Atlantic salmon Largemouth bass Tambaqui
European sea bass Snakehead Trout
Giant tiger shrimp Yellowtail kingfish Pangasius Red sea bream
Japanese amberjack North Atlantic tuna
Turbot
Vannamei shrimp Barramundi
Tilapia
72
Skretting ARC – world class fish feed R&D
• 20 nationalities
• >40 with university degree
Nationalities
• Specialists in fish nutrition, health and feed technology
Specialists
• Collaborations with over 40 research institutions worldwide
Collaborations
Optiline Premium
Important innovations
73
Feed for all purposes
Broodstock feeds Larval feeds Juvenile feeds Transfer diets (e.g. freshwater to saltwater)
Grower diets Harvest diets Anti-stress diets Organic feeds
Speciality feeds Customer- specific feeds Certified products (e.g. for supermarket chains)
Medicated feeds
74
Skretting Aquaculture Research Centre units
ARC Norway
ARC Asia
ARC Mediterranean
ARC Lab Feed Technology Plant Lerang
Salmon | Trout | Cod | Halibut
China and Japan
Italy and Spain
Trout | Sea bass | Sea bream | Sole | Turbot Shrimp | Asian sea bass | Tilapia
Yellowtail | Red sea bream 75
Maintain leadership position in feed for salmonids Thanks to MicroBalance Norwegian salmon producers became net fish protein producers in 2010
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1990 1995 2000 2005 2008 2009 2010 Potential
Kg fish protein used in feed versus Kg fish protein produced
Source: Skretting ARC
2011 2012
76
World’s largest and most modern fish feed factory - Averøy
Nutreco’s largest ever capex project
Additional capacity of 190,000 MT
Total investment of € 74 million
Upgrade fully completed in 2013
Total capacity now 430,000 MT
77
Guayaquil
Acquisitions in Ecuador and Egypt
Acquisitions of leading shrimp and tilapia feed companies
•Gisis has a leading position in shrimp and tilapia feed in Ecuador and positions in Peru, Honduras and Venezuela (consolidated 1 June 2013)
• The acquisition of Gisis has moved Nutreco into global top three shrimp feed producer
•Hendrix Misr is the market leader in extruded tilapia feed in Egypt and leading in poultry feed concentrates (consolidated 1 May 2013)
78
Belbeis
Salmonid
Sum geography
Annual growth volume**
Europe
Estimated volume (million metric tonnes)
America Asia*** Africa Sum species
Turnover
Shrimp
White fish
5%
5%
>5%
>5%
1.9
2.8
0.9
1.4
0.7
2.7
0.6
0.1
2.4
11.9
9.4
2.1
2.1
3.4
3.1
19.5
13.0
€ 3.8 B
€ 3.2 B
€ 13.3 B
€ 6.3 B
World fish and shrimp feed market 2013*
Note: * Defined in addressable market turnover, (€ billions) and volumes (million metric tonnes) ex. carp. Fresh water trout are included in white fish ** Annual long-term growth rate *** Australia has been included in Asia
79
The potential of Norwegian aquaculture
1999 2010 2030 2050
Economic value €1.5 billion
Economic value €4.3 billion
Economic value €15 billion
Economic value €30 billion
Volume 0.5 mill. tonnes
Volume 1 mill. tonnes
Volume 3 mill. tonnes
Volume 5 mill. tonnes
Salmonid value chain
10% CAGR
Source: Value created from productive oceans in 2050, SINTEF, 2012
6.5% CAGR
3.5% CAGR
6.5% CAGR
5.6% CAGR
2.6% CAGR
80
Steady growth of global salmon farming industry
0
500
1,000
1,500
2,000
2,500
kTonnes
Other
Faroes
Canada
UK
Chile
Norway
1992 2015e 2000 2005 2010
CAGR 9%
Sources: Kontali, ABG Sundal Collier, companies
81
Fish meal reduction in salmon (2010)
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
Growth (SGR, %/day)
Fishmeal 30% Fishmeal 15% + Fishmeal 15% + MicroBalance
Equal growth with MicroBalance
82
CUSTOMER FISH SOCIETY SHAREHOLDER
MicroBalance
83
‘11 ‘12 ‘13 ‘14 ‘11 ‘12 ‘13 ‘14 ‘11 ‘12 ‘13 ‘14 ‘11 ‘12 ‘13 ‘14
A long term growing market
Sources: Kontali feed consumption report, June 2014 | OECD-FAO Agricultural Outlook 2014-2023
FAO aquaculture forecasts
• 35% production growth over the period 2014-2022
• By 2015 50% of human fish consumption will be provided by aquaculture
• By 2023 China will comprise 63% of world aquaculture production
Salmonid feed consumption 2010-2014F (million tonnes, % change per year)
Norway Chile Other countries Total
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Kontali 2014 feed consumption estimates
Worldwide increase of 5% forecast in 2014;
• Strong growth forecast for Norway in 2014 of 7%
• Chile forecast to be flat at 0% for 2014
4.0
12% 11%
-2% 7%
43% 21% -5% 0%
4% 3% 1% 7%
18%
12% -2% 5%
84
The blue revolution towards 2020 Global production of seafood 1950-2020
250,000
200,000
150,000
100,000
50,000
0
8
6
4
2
0
7
5
3
1
9
1950 1960 1970 1980 1990 2000 2010 2020E
Wild catch
Tonnes (x 1000) Billion
Aquaculture
Sources: FAO State of World Fisheries and Aquaculture 2013 | OECD-FAO Agricultural Outlook 2014-2023
85
H1 results IR presentation index 1. Half year results 2014 2. Disclaimer 3. Agenda 4. Higher first half results - highlights 5. AquaVision 2014 conference 6. Agenda 7. Nutreco’s three segments 8. Our strategy – Driving sustainable growth 9. Animal Nutrition strategy 10. Key focus areas for innovation - Animal Nutrition 11. A global portfolio of branded specialty products 12. Young animal feed – calf milk replacers 13. Asia – investment in new premix plants 14. Fish Feed strategy 15. Oceans of opportunities 16. Unique knowledge – Skretting’s passion for fish 17. Technology & knowledge 18. More fish from limited resources 19. Proactive nutrition in fish feed 20. MicroBalance for shrimp feed 21. Joint venture in Nigeria 22. Compound Feed & Meat Iberia BU 23. Agenda 24. Revenue development half year 2014 25. Nutreco 26. Animal Nutrition 27. Fish Feed 28. Compound Feed & Meat Iberia 29. Operating result (EBITA) 30. Net result and EPS 31. Balance sheet
32. Cash flow from continuing operations 33. Financial guidance 34. Key ratios 35. Additional share buy-back 36. Agenda 37. Outlook for full year 2014 38. Summary 39. Thank you 40. Appendix 41. Our challenge 42. Struggling supplies 43. Surging demand 44. The essential link 45. Where we come from 46. Executive Committee 47. Our employees 48. Nutreco’s presence 49. Segment revenue by region in 2013 (€ 5,237.2 million) 50. EBITA development since IPO 51. TSR > 600% and beta reduced to 0.65 52. Sustainability progress made in 2013 53. Animal Nutrition 54. Nutreco’s Animal Nutrition value proposition 55. Products with different margins 56. The innovation cycle 57. Synergy between Animal Nutrition & Aquaculture 58. ASC ̶ geographical reach 59. Nutreco science strategy 60. Animal Nutrition research centres 61. Consistent growth globally in animal feed 62. Selko Feed Additives – added value
63. Selko markets: throughout feed-to-food value chain
64. Presan: maximum return on investment 65. Presan development - A collaborative effort 66. Presan improves animal performance 67. Africa: growth market for animal nutrition and fish
feed 68. Nutreco in Africa 69. Compound Feed & Meat Iberia 70. Fish Feed 71. Skretting – the global brand for fish feed 72. More than salmon: over 60 species 73. Skretting ARC – world class fish feed R&D 74. Feed for all purposes 75. Skretting Aquaculture Research Centre units 76. Maintain leadership position in feed for salmonids 77. World’s largest and most modern fish feed factory -
Averøy 78. Acquisitions in Ecuador and Egypt 79. World fish and shrimp feed market 2013* 80. The potential of Norwegian aquaculture 81. Steady growth of global salmon farming industry 82. Fish meal reduction in salmon (2010) 83. MicroBalance 84. A long term growing market 85. The blue revolution towards 2020
86
