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Nutreco: Strong second half of 2009

Global animal nutrition company Nutreco, headquartered in the Netherlands, reported a strong second half year of 2009.

Nutreco's earnings before the deduction of interest (EBITA) were €133.6 mln, which was 33.9% higher than the previous year. All businesses reported above or in line with second half of 2008.

Operating result 2009 came down to €175.2 mln; this was 3.8% lower than in 2008. Total revenue in 2009 was €4,511.7 mln.

"We are pleased with the performance in 2009 despite the economic turmoil. Nutreco applied strong measures at the beginning of 2009 to withstand the recession. Our programmes to reduce working capital and operational costs paid off,” said CEO Wout Dekker.

"After a challenging start, we ended the year in a much stronger mode and well positioned for 2010. The development of the overall demand for our products is encouraging. We achieved a strong increase of EBITA in the second half of 2009 compared with the same period in 2008."

Low demand for feed

In 2009, there was a lower demand for feed, according to Dekker. "The compound feed business in the Netherlands suffered a major loss at the beginning of the year and measures were taken that restored profitability. In Spain, our poultry business returned to profitability due to good poultry prices and lower feed costs."

Acquisitions

"In 2009 we have strengthened our compound feed business in Spain and Portugal with the acquisition of the animal nutrition business from Cargill. This acquisition brings together the number one and three in the Spanish market for animal nutrition. Combining these businesses will create cost savings due to optimisation of production and logistics and it will bring potential for plant specialisation," said Dekker.

"In November we announced the acquisition of a 51% shareholding in Fri-Ribe, a Brazilian animal nutrition and fish feed company, bringing Nutreco a platform to facilitate its further expansion in Brazil. The acquisition perfectly fits in our growth strategy to strengthen our global market positions in feed specialties and fish feed and brings substantial scope for selling Nutreco's feed specialties," he added.

Strategic agenda

In 2010 the animal nutrition company will:
- Focus on new geographic regions and markets with perspective of structural profitable growth in countries like Brazil, China, Russia and Vietnam
- Participate in the industry consolidation process in markets where Nutreco has leading positions (Canada/North America, The Netherlands and Spain)
- Further strengthen its global market positions in feed specialties and fish feed by organic growth and acquisitions
- Execute Nutreco's science and innovation strategy and develop new sustainable products and feed solutions to add value to our customer's business and grow Nutreco's products portfolio to higher margin products

Barring unforeseen circumstances, the company expects EBITA before exceptional items in the 1st half year of 2010 to exceed €50 mln (2009: €41.6 mln). The animal nutrition company will also increase the investments in capacity expansion and plant optimisation related to volume growth and the acquisition of the compound feed plants that were acquired from Cargill in Spain and Portugal.

Natalie Berkhout

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