Full year results 2014 Amsterdam, 5 February 2015 Disclaimer The - - PowerPoint PPT Presentation

Full year results 2014

Amsterdam, 5 February 2015

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• The information contained herein is not for publication or distribution into the United States, Australia,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 4 February 2015 – 08.30hrs 2

Agenda

3

• 1. Highlights
• 2. Driving sustainable growth strategy
• 3. Full year 2014 financial results
• 4. SHV offer
• 5. Summary

Full year results in line with outlook - highlights

4

Revenue € 5,253.0 million

• Revenues increased by 0.3%
• Organic growth volumes increased by

2.2% Innovation agenda

• Progress made on young animal feed,

feed additives and shrimp feed

• Strategic partnerships more important

EBITA € 266.4 million; up 3.9%

• Animal Nutrition EBITA margin 6.8%

(2013: 6.2%)

• Fish Feed EBITA increased 2.8% to

€ 134.3 million Basic earnings per share € 2.21

• Increased by 1.4%

Focus on growth

• Two Brazilian acquisitions complete

country and species coverage

• Capital investments in Asia and Africa
• Joint venture in Nigeria

Final dividend € 0.75

• To be paid in cash
• SHV offer of € 45.25 includes final

dividend of € 0.75

• Total dividend € 1.05 (2013: € 1.00)

Agenda

5

• 1. Highlights
• 2. Driving sustainable growth strategy
• 3. Full year 2014 financial results
• 4. SHV offer
• 5. Summary

Nutreco’s three segments

Revenue 2014: € 5.3 billion EBITA* 2014: € 266 million € 1.8 billion € 125 million € 134 million € 2.1 billion

Over 100 production plants in 35 countries 11 R&D units in 7 countries Multi national workforce of 11,000 employees

€ 1.3 billion € 35 million

Fish Feed Animal Nutrition Compound Feed & Meat Iberia

*Including corporate costs 6

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

7

Global portfolio of branded specialty products

LifeStart Health Efficiency

8

Animal Nutrition strategy

9

Focus Solid positions Global Marketing Growth geographies EBITA margin

Higher value-added portfolio of nutritional solutions Growth geographies, secure mature markets Link between R&D and customer needs 35% of EBITA from growth geographies EBITA operating margin 6-7%

Feed additives: significant growth potential

10

• Significant growth potential as large part of market still does not use feed

additives to drive efficiency, health and antibiotic reduction

• Clear structure and responsibilities put in place to increase focus: five

hubs in EMEA, US, Brazil, Southeast Asia and China

• Investing in feed additive sales specialists (~30 new positions in 2014) will

help autonomous growth

• Strategic partnerships and acquisitions will accelerate autonomous

growth path and increase critical mass

Strategic partnerships more important

11

• Nutreco aims to develop additional strategic partnerships in areas such as

ingredient sourcing, product development and knowledge in order to deliver the right benefits to customers

• Renewed strategic partnership with ForFarmers :

− Purchase of premixes, feed additives and feed specialities − Cooperation on research, innovation and the marketing of high quality nutritional solutions e.g. for the young animal feed sector

Brazilian acquisitions: Fatec and BRNova

• Acquisitions are good strategic fit; completes

geographic, species and product coverage

• Fatec produces premixes and animal health products

for broilers, layers, swine and dairy cows

• BRNova supplies premixes and feed specialties, mainly

for poultry and swine

• Total pro forma annualised 2014 revenues of Nutreco

Brazil approx. € 185 million (prev. €110 million)

12

Fatec BRNova Established 1966 2012 Revenue € 50 million € 25 million Employees 240 100 Volumes (mT) 20,000 15,000

Fish Feed strategy

13

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% of total Fish Feed volumes 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

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

14

‘12 ‘13 ‘14 ‘15 ‘12 ‘13 ‘14 ‘15 ‘12 ‘13 ‘14 ‘15 ‘12 ‘13 ‘14 ‘15

A long term growing market

Sources: Kontali feed consumption report, January 2015 | OECD-FAO Agricultural Outlook 2014-2023

FAO aquaculture forecasts

• 35% production growth over the period 2014-2022
• From 2014 onwards >50% of human fish

consumption will be provided by aquaculture

• By 2023 China will comprise 63% of world

aquaculture production

Salmonid feed consumption 2012-2015F (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 2015 feed consumption estimates

Worldwide increase of 2% forecast in 2015;

• Norway growth forecast of 1%
• Chile growth forecast of 2%

4.0

1% 11%

• 2% 8%

2% 21%

• 4% 7%

3% 0% 9% 12%

• 2% 7%

15

2% 5%

MicroBalance for shrimp feed

• MicroBalance concept applied to shrimp to allow for

flexible feed formulations and lower the use of expensive fishmeal

• Results from field trials in Ecuador, Vietnam and Brazil

show significant success in reducing fishmeal inclusion rates from 25-30% down to 15%

• A commercial launch plan is being developed and will be

undertaken in 2015

16

Ibadan

Joint venture in Nigeria

New joint venture is a leading fish feed company

• JV with Durante, leading Nigerian fish feed supplier and existing distribution

partner to invest in local production of extruded fish feed for Nigeria and wider West African region

• Nigeria is Africa’s second largest fish producer after Egypt with >200,000

tonnes fish feed p.a., (mostly for catfish).

• Production is growing by 5 to 10% per year
• Transaction closed September 2014

17

2013 Established 1999 Revenue

€ 9 million

Volumes 5,500 Employees 30

• Mkt. share

(extruded feed) 15%

Agenda

18

• 1. Highlights
• 2. Driving sustainable growth strategy
• 3. Full year 2014 financial results
• 4. SHV offer
• 5. Summary

Revenue development full year 2014 (€ x million)

2013 2014 Organic growth +1.2% Acquisitions +1.6% Volume +2.2%

5,237.2 5,253.0

Price

• 1.0%

FX

• 2.5%

€ x million 2014 2013 % Animal Nutrition 1,835.5 1,800.6 +1.9 Fish Feed 2,116.3 2,022.3 +4.6 Compound Feed & Meat Iberia 1,301.2 1,414.3

• 8.0

Total revenue 5,253.0 5,237.2 +0.3

19

Nutreco

20

€ 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 2014 2013 Delta % Revenue 5,253.0 5,237.2 +0.3 EBITDA*

327.0 316.1 +3.4

EBITA*

266.4 256.3 +3.9

EBITA/Revenue 5.1% 4.9%

• Avg. capital employed

1,354.5 1,277.1 +6.1

ROACE (EBITA/ACE) 19.7% 20.1% Volume effect Price effect Acquisitions FX effect +2.2%

• 1.0%

+1.6%

• 2.5%

Operational highlights

• Volume effect was +2.2% driven by Fish Feed and Animal

Nutrition

• EBITA Animal Nutrition up 12.0% to € 125.0 million
• EBITA Fish Feed up 2.8% to € 134.3 million

*Before exceptional items

Animal Nutrition

21

€ 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 2014 2013 Delta % Revenue 1,835.5 1,800.6 +1.9 EBITDA* 140.8 127.5 +10.4 EBITA* 125.0 111.6 +12.0 EBITA/Revenue 6.8% 6.2%

• Avg. capital employed

653.2 643.2 +1.6 ROACE (EBITA/ACE) 19.1% 17.4% Volume effect Price effect Acquisitions FX effect +2.7% +1.2% +0.9%

• 2.9%

Operational highlights

• Operating margin increased to 6.8% (2013: 6.2%)
• Increase in EBITA mainly due to better performances in

Europe driven by young animal feed and feed additives

• Higher volumes and EBITA in Canada

*Before exceptional items

Fish Feed

22

€ 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 2014 2013 Delta % Revenue 2,116.3 2,022.3 +4.6 EBITDA* 162.3 155.6 +4.3 EBITA* 134.3 130.6 +2.8 EBITA/Revenue 6.3% 6.5%

• Avg. capital employed

558.1 495.7 +12.6 ROACE (EBITA/ACE) 24.1% 26.3% Volume effect Price effect Acquisitions FX effect +4.5% +0.6% +3.3%

• 3.8%

Operational highlights

• Total fish feed volume (incl. acq.) was +10.2% to 2.0 mio mT
• Volume share of non-salmonid feed in tonnes was 41%

(2013: 38%)

• Salmonid feed sales volume effect was +4.5% driven by

strong first half year performance

*Before exceptional items

Compound Feed & Meat Iberia

23

€ 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 2014 2013 Delta % Revenue 1,301.2 1,414.3

• 8.0

EBITDA* 50.7 58.2

• 12.9

EBITA* 34.9 40.6

• 14.0

EBITA/Revenue 2.7% 2.9%

• Avg. capital employed

148.9 147.2 +1.1 ROACE (EBITA/ACE) 23.4% 27.6% Volume effect Price effect Acquisitions FX effect

• 1.9%
• 6.1%
• Operational highlights
• EBITA decreased to € 34.9 million mainly due to lower meat

prices

• The meat business succesfully replaced 75% of the lower

sales to Mercadona by increased sales to other customers

*Before exceptional items

Operating result (EBITA)

€ million 2014 2013 Delta abs. Delta % Animal Nutrition 125.0 111.6 +13.4 +12.0 Fish Feed 134.3 130.6 +3.7 +2.8 Compound Feed & Meat Iberia 34.9 40.6

• 5.7
• 14.0

Corporate

• 27.8
• 26.5
• 1.3

EBITA from continuing operations before exceptional items 266.4 256.3 +10.1 +3.9 Restructuring (Reversal of) impairment charges Transaction related costs Income arising from terms of delivery and alliances Other

• 3.5
• 7.0
• 3.7

0.0

• 8.3
• 5.1

0.3 0.5

• 1.3
• 1.4

Total exceptional items

• 16.5
• 13.0
• 3.5

EBITA from continuing operations 249.9 243.3 +6.6 +2.7

24

€ million 2014 2013 Delta abs. Delta % EBITDA* 310.5 303.1 +7.4 +2.4 Depreciation

• 60.6
• 59.8
• 0.8

+1.3 EBITA* 249.9 243.3 +6.6 +2.7 Amortisation

• 14.1
• 14.0
• 0.1

+0.7 EBIT from continuing operations 235.8 229.3 +6.5 +2.8 Net financing costs

• 29.9
• 31.9

+2.0 Share in results of associates 0.9 3.5

• 2.6

Income tax expense

• 53.0
• 50.1
• 2.9

Income tax rate 25.6% 24.9% Total result for the period 153.8 150.8 +3.0 +2.0 Basic EPS (€) 2.21 2.18 +0.03

Net result and EPS

25

*Including exceptional items

Balance sheet

Assets € million 31.12.14 31.12.13 Fixed assets 649.2 635.9 Intangible assets 507.2 429.7 Other non-current assets 95.5 93.7 Inventories 557.4 476.4 Trade receivables 851.3 808.8 Other current assets 10.3 22.8 Cash and cash equivalents 136.2 152.0 Total 2,807.1 2,619.3 Equity and liabilities € million 31.12.14 31.12.13 Equity 983.4 961.8 Interest bearing debt 551.0 500.9 Provisions 2.9 4.1 Trade payables 1,146.2 1,031.3 Other liabilities 123.6 121.2 Total 2,807.1 2,619.3 31.12.14 30.06.14 31.12.13 Net working capital 300.8 343.1 275.2 Net debt

• 414.8
• 405.4
• 348.9

26

Cash flow from continuing operations

€ million 2014 2013 Delta abs. EBIT 235.8 229.3 +6.5 Depreciation and amortisation 74.7 73.8 +0.9 EBITDA 310.5 303.1 +7.4 Working capital movement

• 4.5
• 73.5

+69.0 Capital expenditure

• 92.3
• 111.0

+18.7 Other movements 14.1 53.8

• 39.7

Free cash flow 227.8 172.4 +55.4 Cash conversion ratio (free cash flow/EBITDA) 73.4% 56.9% Acquisitions

• 55.2
• 78.6

27

Business performance vs. guidance

2014 2013 Full year guidance

Organic volume growth per segment Animal Nutrition 2.7%

• 0.8%

3% Fish Feed 4.5%

• 1.4%

5% EBITA margin per segment Animal Nutrition 6.8% 6.2% 6-7% Fish Feed 6.3% 6.5% 6-7% Compound Feed & Meat Iberia 2.7% 2.9% 2-3% EBITA / Revenue 5.1% 4.9% 5-6% Return on average capital employed (ROACE) 19.7% 20.1% >15% Net debt / EBITDA 1.3 1.1 <3.0 Interest coverage 10.9 9.9 >5.0 Net debt / Equity 0.42 0.36 <1.0 Basic EPS continuing operations (€) 2.21 2.18 +1.4% Dividend per share (€) 1.05 1.00

28

Agenda

29

• 1. Highlights
• 2. Driving sustainable growth strategy
• 3. Full year 2014 financial results
• 4. SHV offer
• 5. Summary

Attractive offer

30

• Full cash offer by SHV of € 45.25 per share (cum dividend)
• Attractive premium of 60% to closing price of 17 Oct. (last trading day before first offer)
• Values 100% of the ordinary shares1 at € 3,038 million
• Implied LTM EV/EBITDA multiple of 10.8x as per 30 Sep. 2014
• SHV supports Nutreco’s growth strategy
• Offer in best interests of all stakeholders
• Acceptance threshold: at least 66⅔% of outstanding ordinary shares
• Deal certainty as SHV finances the transaction with cash from own available resources
• Full support and unanimous recommendation from Supervisory and Executive Board
• 1. Based on number of outstanding shares as per 20 October 2014

Process going forward

31

9 February: EGM Settlement Date: No later than 5 business days after the Closing Date Post-Closing Acceptance Period: Two weeks from Unconditional Date Settlement of tenders in the Post-Closing Acceptance Period: No later than 5 business days after the end of the Post-Closing Acceptance Period Unconditional Date: No later than 3 business days after the Closing Date Closing Date at 17 February: Close of tender period at 17.40h CET

Total shareholders return since IPO in 1997

32

TSR of 885% at a price of €45.25/share1

10 20 30 40 50 200 400 600 800 1,000 1,200 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

AEX Nutreco (€)

2015

• 1. As per 30 January 2015

Agenda

33

• 1. Highlights
• 2. Driving sustainable growth strategy
• 3. Full year 2014 financial results
• 4. SHV offer
• 5. Summary

Summary

Strategic

• Innovation agenda progress

made on young animal feed, animal health, feed additives and shrimp feed

• Two Brazilian acquisitions

completes species, product and geographic coverage

Operational

• Animal Nutrition EBITA

increased by 12.0% to € 125.0 million

• Margin improvement Animal

Nutrition 6.8% (2013: 6.2%)

• Fish Feed EBITA increased by

2.8% to € 134.3 million

Execute roadmap

• Focus on premix, feed

specialties and fish feed

• Operational excellence in

mature markets

• Growth geographies Latin

America, Russia, Asia & Africa

Financial

• Final dividend of € 0.75
• EGM to discuss SHV offer

to be held on 9 February

• SHV offer of € 45.25 to

include final dividend

34

Thank you

35

FY results IR presentation index

1. Full year results 2014 2. Disclaimer 3. Agenda 4. Full year results in line with outlook - highlights 5. Agenda 6. Nutreco’s three segments 7. Our strategy – Driving sustainable growth 8. Global portfolio of branded specialty products 9. Animal Nutrition strategy

• 10. Feed additives: significant growth

potential

• 11. Strategic partnerships more important
• 12. Brazilian acquisitions: Fatec and

BRNova

• 13. Fish Feed strategy
• 14. Oceans of opportunities
• 15. A long term growing market
• 16. MicroBalance for shrimp feed
• 17. Joint venture in Nigeria
• 18. Agenda
• 19. Revenue development full year 2014
• 20. Nutreco
• 21. Animal Nutrition
• 22. Fish Feed
• 23. Compound Feed & Meat Iberia
• 24. Operating result (EBITA)
• 25. Net result and EPS
• 26. Balance sheet
• 27. Cash flow from continuing operations
• 28. Business performance vs. guidance
• 29. Agenda
• 30. Attractive offer
• 31. Process going forward
• 32. Total shareholders return since IPO in

1997

• 33. Agenda
• 34. Summary
• 35. Thank you
• 36. FY results IR presentation index

36