Nutreco trading update Q3 2009

Nutreco, parent company of Skretting, reports strong volume growth in fish feed in Norway, compensating for the decline in volumes in Chile
October 29, 2009

Nutreco trading update Q3 2009

  • Based on the 3rd quarter results Nutreco expects the 2nd half year EBITA to be 10% higher than the second half of 2008
  • Volumes increasing in Fish feed and Premix and feed specialties in Q3
  • Operational results Q3 Animal nutrition and Fish feed in line with our outlook
  • Meat Spain reported excellent results in 3rd quarter
  • Revenue Q3 2009 EUR 1,206.3 million; a decrease of 8.9% from Q3 2008 mainly due to lower raw material prices
  • Working capital balance will be reduced by approximately EUR 50-75 million at year-end compared with 2008
  • Decision competition authorities for acquisition of animal nutrition business from Cargill in Spain and Portugal expected in 4th quarter

 Wout Dekker, Nutreco CEO: We are pleased with the performance in the third quarter of this year. After a challenging start of the year we see that the results are now in a stronger mode and we have confidence this will continue in the remainder of the year. The overall demand for feed is increasing compared with the first half year which is encouraging. The performance is further based on costs savings.


We are optimistic that we have taken the right steps to prepare ourselves for the economic upturn and future animal nutrition challenges. Farmers everywhere in the world face the challenge of achieving greater productivity from limited resources while improving the health status of animals and reducing the impact on the environment. It is a major opportunity for Nutreco to address these challenges by accelerating the organic growth of its feed additives product portfolio.


We are also strengthening the compound feed business in Spain and Portugal, with the acquisition in those countries of the animal nutrition business from Cargill. Furthermore we continue our growth strategy to further strengthen our global market positions in feed specialties and fish feed.


Q3 revenues


(EUR x million)

Q3 2009

Q3 2008


Q3YTD  2009

Q3YTD 2008









Premix and feed specialties







Compound feed Europe







Animal Nutrition Canada







Fish feed







Meat & other







Total revenues Nutreco








Operational developments

The revenue in the 3rd quarter amounted to EUR 1,206.3, a decrease of 8.9% compared with Q3 2008. This decrease was for 80% due to price effects (-7.4%), mostly related to lower raw material prices in compound feed. The volume development in the 3rd quarter was slightly positive (0.1%) compared with the same period in 2008. The volume growth in Premix and feed specialties, Fish feed and Meat and other offset the lower volumes in Compound feed. The contribution of acquisitions was 0.5% and the foreign exchange effect was -2.2% mainly related to the US dollar. In comparison with the 1st half year we see a recovery of the volume with 2.4%; the Q3 year-to-date volume was -4.7% versus 2008 compared to -7.1% for the first half year in 2009.


Premix and feed specialties

Premix and feed specialties reported a 6.5% decrease in revenue compared with Q3 2008. The prices were on average 4.6% lower and the foreign exchange effect was -5.4%. This was partly offset by a positive volume development of 1.2% and the contribution of acquisitions of 2.3% .The operational results of Premix and feed specialties are in line with our outlook. The year-to-date revenues show a volume decrease of 6.9% versus last year, which was 10.5% in the first half of 2009.


Compound feed Europe

The revenue of Compound feed Europe was EUR 77.6 million lower than in Q3 2008 (-25.4%). Lower sales prices accounted for approximately 20.5% due to lower grain and soy prices compared with Q3 2008. Volumes decreased by 4.9% due to a lower demand for feed for dairy cows and pig feed mainly related to the low milk and pig prices. In the year we see a recovery in volumes in comparison with 2008 to -7.3% in Q3 year-to-date from -8.3% in the first half year. The operational results in Q3 are profitable and on track to compensate for the first-half year loss.


Animal Nutrition Canada

The revenue in Q3 2009 of Animal Nutrition Canada was EUR 95.4 million compared with EUR 101.2 million in Q3 2008 (-5.7%). The decline was mainly because of lower prices (-5.9%). The volumes were slightly higher than in Q3 2008. The operational results are in line with last year. We see some recovery of the volume development, year-to-date the volume is -3.3% versus last year. In June the volume was -5.2% versus last year.


Fish feed

The revenue in Fish feed of EUR 372.9 million equals the revenue in Q3 2008. The volume increase in the quarter was 3.5% and the price effect was 0.4%, this increase was offset by a -3.9% foreign exchange effect. A strong volume growth in Norway is compensating for the decline in volumes in Chile, where there is a reduced demand for fish feed as a consequence of the ISA virus. The year-to-date volume development in Q3 versus last year was -4.2% versus -9.3% for the first six months in 2009.


Meat and other

The revenue from 'Meat and other' was 6.1% lower, mainly related to 6.6% lower prices. The volumes were slightly above the ones of last year. Due to lower feed cost prices and good poultry prices the results in Q3 continued to be strong.


Outlook second half year 2009:

The following developments are expected for the second half year of 2009:

  • Premix and feed specialties: operational result in line with the 2nd half 2008 (excluding EUR 5 million benefit in 2008 related to favourable raw material positions)
  • Compound feed Europe: return to profitability which will lead to a marginal profit over the full year 2009. Decision about acquisition of animal nutrition business from Cargill expected in 4th quarter
  • Animal Nutrition Canada: slight improvement of the operational result compared with the 2nd half of 2008
  • Fish feed: strong growth in Norway in 3rd quarter confirms outlook for the year; EBITA slightly below last year. A higher biomass in Norway will largely compensate for the lower volumes in Chile as a result of the ISA virus
  • Meat and other: strong results in the 2nd half of 2009 due to good poultry prices and lower cost prices because of lower feed prices

Operating result second half year 2009:

In comparison with the 2nd half year of 2008, Nutreco expects a 10% higher EBITA before exceptional items in the 2nd half year of 2009. As a result of lower raw material prices and due to the company-wide programme to reduce the working capital balance Nutreco expects to reduce last year's the working capital balance of EUR 254 million by EUR 50-75 million at year-end.




Nutreco will continue to focus on growth in animal nutrition and fish feed and will:

  • Further strengthen its global market positions in feed specialties and fish feed
  • Focus on new geographic regions and markets with a perspective of structural profitable growth
  • Participate in the compound feed consolidation process in Canada, the Netherlands and Spain where Nutreco has leading local positions
  • Maintain a strong balance sheet and a  sound capital structure to support future growth

Nutreco will publish its full year results 2009 on 11 February 2010.