Nutreco Posts Highest net profit in 12-year history, plans to expand feed business in ‘06

‘Rebalancing for Growth’ strategic action plan shows results
February 25, 2006

Nutreco posted the highest net profit in its 12-year history in 2005, a year which also saw major steps in Nutreco’s transformation, following the implementation of  its ‘Rebalancing for Growth’ strategic action plan. Nutreco businesses generating around EUR 1 billion in meat and fish sales have been disposed of or demerged.


“Following the approval of the Marine Harvest joint venture by the international competition authorities in April 2005, we have taken an active approach towards the integration of Stolt Sea Farm and Marine Harvest”, Nutreco’s CEO Wout Dekker  said.


“High salmon prices and an increased interest from investors have led to a positive sentiment which made it possible to announce the reduction of Nutreco’s shareholding in Marine Harvest earlier than planned. This planned reduction was approved unanimously by Nutreco’s Extraordinary General Meeting in December 2005. Now, in 2006, it’s important that we focus all our attention on the second phase of ‘Rebalancing for Growth’: growing Nutreco’s core activities of animal nutrition and fish feed.  Nutreco is well placed for further growth, having already taken a number of steps in growth markets in the past twelve months, including small acquisitions in Japan, Mexico, Canada and Russia.”


Dekker listed the following steps in the completed first phase of the ‘Rebalancing for Growth’ project, which Nutreco announced in February 2005:


• Legal and organizational demerger of Marine Harvest from Nutreco (29 April 2005)


• Finalisation of the joint venture between Marine Harvest and Stolt Sea Farm (29 April 2005)


• Refinancing of Nutreco and the Marine Harvest joint venture (1 April 2005, next step

13 February 2006)


• Improving the market position of Nutreco’s poultry and breeding businesses (sale of Pingo Poultry on 10 October 2005; sale of Nutreco’s interest in Hendrix Poultry Breeders on 14 June 2005; buy-out of joint venture partner in swine genetics company Hypor on 10 February 2006)


• Advancing the current positions in animal feed and fish feed in existing and new markets (acquisition of Kirin Feed in Japan on 4 April 2005, purchase of 51% interest in Mexican speciality feed company Tenusa on 16 September 2005, branch of Selko opened in Brazil on 10 July 2005, joint venture set up in Russia on 10  February 2006.


• Aligning Nutreco’s organization with the new strategy (this process to be completed in 2006).


Financial position

Nutreco further strengthened its financial position in 2005, reducing the net debt position from EUR 376.1 million to EUR 355.2 million. Total equity as at 31 December 2005 amounted to 40.0% of the balance sheet total (year-end 2004: 29.5%). The ratio of net debt to total equity was 49.9% (2004: 69.4%). On 13 February 2006, Nutreco received EUR 155 million by way of repayment in full of the shareholder’s loan to Marine Harvest. Prior to the reduction of Nutreco’s shareholding in the company, Marine Harvest will distribute EUR 60 million dividend to its two shareholders. Nutreco’s dividend will amount to EUR 45 million.

Nutreco intends to earmark some of its financial resources for purchasing own shares totaling up to around 6% of the shares in issue, to be used for existing stock option plans and stock dividend.


Agenda for 2006

Nutreco is planning to take a number of further steps in 2006 in pursuit of its ‘Rebalancing for Growth’ strategy:


• the reduction of Nutreco’s interest in Marine Harvest in the first half of 2006


• the optimization of the capital structure and purchase of own shares


• acquisitions to strengthen Nutreco’s position in growth markets for animal feed and fish feed in Asia, Latin America and Eastern Europe


• further optimization of the animal nutrition and fish feed supply chain in Western Europe, with the aim of advancing Nutreco’s competitive position


• strengthening Nutreco’s leading meat-processing operations Sada in Spain, through product innovation and close cooperation with retail


• next steps in the feed-to-food quality and safety programme (Nutrace)


• further changes to Nutreco’s corporate organization.