Nutreco trading update Q1 2011

Wout Dekker, Nutreco CEO: "The animal nutrition and fish feed producers are faced with strongly increased raw material prices, which was the main driver for the 15.5% increase in revenue compared to the same period in 2010. The operational results showed a strong performance in Fish Feed and a moderate start in Premix and Feed Specialties. The result in the segment Meat and Other was below last year's due to the higher input prices, while Compound Feed Europe and Animal Nutrition Canada performed on balance in line with last year, reports www.megafishnet.com with reference to Nutreco.

During the quarter under review we announced some changes in our organisation. We merged our two agricultural activities into a new global Animal Nutrition Division, to increase knowledge and experience sharing and make use of potential synergies. A Nutreco Business Unit for Asia has been formed and the marketing function within Nutreco will be strengthened. These organisational changes, combined with the results achieved and the strong balance sheet, position us well to further execute our strategy."(EUR x million)      Q1 2011                     Q1 2010                     D%

Revenues                                                          

 Premix and Feed Specialties  265.1               246.9               7.4%

 Fish Feed        261.8               222.0               17.9%

 Compound Feed Europe        351.4               284.8               23.3%

 Animal Nutrition Canada       107.7               91.1                 18.3%

 Meat and Other           253.2               227.8               11.2%

Total revenues Nutreco           1,239.2                       1,072.6                       15.5%

N.B.  Revenues of Q1 2010 have, in conformity with the Annual Report 2010, been adjusted so that the compound feed revenues included in Meat and Other and in Premix and Feed Specialties are presented in Compound Feed Europe and fish feed revenues included in Premix and Feed Specialties are presented in Fish Feed.

Operational developments

The revenue in the 1st quarter amounted to EUR 1,239.2 million, an increase of 15.5% compared to Q1 2010. Volumes accounted for 1.0%, while the price effects were 12.3%, mainly related to passing on higher raw material prices. The contribution of acquisitions was 0.4% related to the acquisition of the fish feed activities in Vietnam. The foreign exchange effect was 1.8%. 

Premix and Feed Specialties

The revenue in Premix and Feed Specialties increased by 7.4% to EUR 265.1 million (Q1 2010: EUR 246.9 million). The volumes in Premix and Feed Specialties were 5.1% higher. The sales prices were on average 0.5% higher. The foreign currency effect was 1.8%. The operational result was below the excellent result of Q1 2010, due to a moderate start in January with an improvement in the following months.

Fish Feed

The revenue in Fish Feed was 17.9% higher than in the 1st quarter of 2010 at EUR 261.8 million. The volume was stable, with an increase in feed for non-salmonid species. The price effect was 12.5% and the foreign exchange impact 3.6%. The contribution of acquisitions was 2.0% relating to the acquisition of the fish feed activities in Vietnam, of which the integration proceeds according to plan. The operating result in Q1 was up from the same quarter of 2010. The Q1 result normally makes up approximately 10% of the annual result due to the low consumption of salmon feed in this quarter. The majority of the result in Fish Feed is traditionally made in the 2nd half of the year.

Compound Feed Europe

The revenue of Compound Feed Europe increased with EUR 66.5 million to EUR 351.4 million compared to Q1 2010 (23.3%). Higher raw materials prices had a price-effect of 27.6%. Volumes decreased with 4.3% compared to the same period in 2010, mainly due to the economic situation in Spain. The operational result in Q1 was below that of the 1st quarter of 2010.

Animal Nutrition Canada

The revenue in Q1 2011 of Animal Nutrition Canada was EUR 107.7 million compared to EUR 91.1 million in Q1 2010, an increase of 18.3%. The increase was mainly because of 9.4% higher prices, due to higher raw material prices, and 2.7% higher volumes. The foreign exchange impact was 6.0%. The operational result was higher than in the same period last year. 

Outlook first half year 2011

The following developments are expected for the first half year of 2011:

Premix and Feed Specialties: operational result of the first half year slightly below the record result of first half 2010, which was EUR 42.4 million;

Fish Feed: We expect a significantly higher operational result for the first half of 2011 than the EUR 19.1 million in the first half of 2010;

Compound Feed Europe: operational result first half 2011 will be close to that of the first half 2010, which was EUR 10.2 million;

Operating result first half year 2011

Based on current trading conditions, Nutreco expects the EBITA before exceptional items for the 1st half of 2011 to be in line with the first half year of 2010, which was EUR 84.0 million.

Strategic agenda 2011

Nutreco's strategy 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;

Proactively 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.