Nutreco reports strong 2nd half year 2009, significantly ahead of 2008

• EBITA 2^nd half year EUR 133.6 million; 33.9% higher than last year

• All businesses reported above or in line with 2^nd half 2008

• Operating result 2009 of EUR 175.2 million; 3.8% lower than 2008

• Revenue 2009 EUR 4,511.7 million; impact lower volumes limited to 3.7%

• Strong cashflow by reduction of net working capital by EUR 98 million

• Dividend proposal of EUR 1.32 per share; pay-out ratio 45% 

Wout Dekker, Nutreco CEO: "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. "

Sound operational performance in challenging year

"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."

Acquisitions strengthen market positions

"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".

Doubling food production, while halving emissions

"Population numbers are increasing towards nine billion by 2050. On top of that, incomes of people are rising as economies develop. With higher income, people consume more protein as meat, fish, milk and eggs. The challenge is clear. We must produce more food sustainably - more from less. Efficiency is key; delivering more from limited resources and simultaneously reducing emissions. The potential to sustainably increase efficiency is there. Nutreco is determined and passionate to make a positive contribution. Operating at the critical junction between raw materials and animal protein production, we apply our long tradition of animal nutrition knowledge to upgrade raw materials into feeds. For the first time, we will incorporate sustainability targets in the remuneration package of our managers, including clear targets to reduce the CO2 emissions of our operations by half in 2015. Sustainability is becoming a more important part of our business model.

The many initiatives we are involved in, mean that Nutreco is heading into the future with confidence and inspiration. Our slogan 'Feeding the Future' shows our ambition to have a leading role in developing advanced feed solutions and to grow our business as we do so. I am confident we are well on track to fulfil that ambition."

Strategic agenda 2010 and outlook:

Nutreco will continue to focus on growth in animal nutrition and fish feed. In 2010 Nutreco 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

Although the economic environment continues to be uncertain, we believe that our business model and spread of activities provide stability in these challenging times. Barring unforeseen circumstances, Nutreco expects EBITA before exceptional items in the 1^st half year of 2010 to exceed EUR 50 million (2009: EUR 41.6 million). Nutreco 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. The capital expenditure in 2010 is therefore expected to be higher than depreciation level.

An outlook for the second half year 2010 will be provided at the interim results at 29 July, 2010. The majority of Nutreco's result is generated in the second half of the year.

Financial calendar 2010:

  1 April:           Annual General Meeting of Shareholders

29 April:           Trading update first quarter

29 July:            Publication of half-year results

28 October:     Trading update third quarter

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Nutreco
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 almost 9,900 people in 30 countries, with sales in 80 countries. Nutreco is listed on the Euronext stock exchange in Amsterdam and with annual revenues of EUR 4.5 billion in 2009.

For more information:

Jurgen Pullens, Director Investor Relations and Corporate Communications, Nutreco

Telephone:             +31 (0)33 422 6134

Mobile:                  +31 (0)6 5159 9483
E-mail:                   jurgen.pullens@nutreco.com 

The full press release is attached in the pdf below