April 28, 2014

 

Nutreco posts 26.6% growth in fish feed revenue in Q1

 

 

Global leader in animal nutrition and fish feed, Nutreco, posted revenue of €853.3 million (US$1.18 billion) in Q1 2014, an increase of 8.4% on-year, driven by a 26.6% increase in revenue for its fish feed segment to €414.5 million (US$573.05 million).

 

Revenue of fish feed was €327.5 million (US$452.77 million) in Q1 last year. The growth in Q1 this year is driven by a 24.3% increase in organic volumes and 11.1% growth from acquisitions, partly offset by 7.3% foreign exchange effects. The volume effect was mostly due to higher demand for salmon feed in Norway and fish feed for sea bass and sea bream in southern Europe partly offset by lower demand for non-salmonid feed, especially in China.

 

The increase in salmonid volumes was 35.9%, driven by higher water temperatures in Norway compared to exceptionally cold water temperatures in the same quarter last year and increased biomass. The price effect was -1.5% due to lower raw material prices. The acquisition of Gisis in Ecuador and Hendrix Misr in Egypt contributed 11.1%.

 

The volume share in revenues of fish feed for non-salmonid species is now 37% compared with 36% in the same quarter last year. The operating result in Q1 was clearly higher than the same quarter of 2013, mostly due to higher volumes in Norway, a better result in southern Europe and the contribution of operating companies in Ecuador and Egypt acquired in 2013.

 

However, revenue for the animal nutrition segment in Q1 fell 4.6% on-year, from 2013: €460.0 million (US$635.95 million) in Q1 of 2013 to €438.8 million (US$606.64 million). The volume effect was 1.0%, with higher sales in Canada and increased volumes in value-added nutritional solutions such as young animal feeds. The price effect was -1.9% caused by lower raw material prices.

 

The acquisition of the animal nutrition operations of Gisis in Ecuador and Hendrix Misr in Egypt contributed 1.6% of revenue from animal nutrition. The foreign exchange rate effect was -5.3% and operating result was slightly higher on-year.

 

Knut Nesse, CEO of Nutreco, said, "We are pleased with the higher results for the first quarter compared to last year driven by higher volumes in fish feed, mainly in Norway. Animal Nutrition results were slightly above last year with encouraging trends in margin development and volumes particularly in mature markets."

 

"Our new organisational structure has been effectively implemented. The structure brings us closer to the business which will provide better execution power and deliver increased focus to regions with more integrated Animal Nutrition and Fish Feed businesses," Nesse added.

 

Nutreco's Spanish and Portuguese compound feed and meat activities, which were planned for divestment, have had a good first quarter compared with last year benefiting from their market leadership positions and a recovery of the Spanish economy.

 

In July 2013, Nutreco announced the possible divestment of its Spanish and Portuguese compound feed and meat businesses, which fall outside Nutreco's core strategic focus. This is in order to increase focus on a higher value-added portfolio of nutritional solutions, growth segments Animal Nutrition and Fish Feed as well as growth geographies. However, the process is taking more time than earlier anticipated.

 

Based on current trading conditions, Nutreco expects EBITA before exceptional items for continuing operations for the first half of 2014 to be clearly higher than first half 2013 (€80.3 million or US$111.01 million). Operating result of its animal nutrition segment is expected to be slightly higher than last year's €56.9 million (US$78.66 million); while the operating resuts of its fish feed segment is expected to be clearly higher than last year's €35.1 million (US$48.53 million).

 

Nesse remarked, "Our long term growth drivers are a growing world population and increased demand for protein which remain the basis of our strategy. Organic growth will be achieved by investing in new production facilities such as the recently announced investments in Asia as well as value-accretive acquisitions in line with our strategy."

 

Nutreco's Agenda 2014 focuses on a higher value-added portfolio of nutritional solutions; driving operational excellence in mature markets; growth in geographies including Latin America, Russia, Asia and Africa; and sustainability.