Nutreco reports higher full year results

• Revenue of € 5,253.0 million; an increase of 0.3% compared to 2013. Organic volume growth was 2.2%

• EBITA before exceptional items of € 266.4 million, 3.9% higher than last year (2013: € 256.3 million)

• Animal Nutrition EBITA increased by 12.0% to € 125.0 million (2013: € 111.6 million) mainly as a result of good performances in mature markets and our continued focus on higher value-added nutritional solutions. The EBITA margin improved to 6.8% (2013: 6.2%)

• Fish Feed EBITA increased by 2.8% to € 134.3 million (2013: € 130.6 million) mainly driven by the contribution of the operating companies in Ecuador and Egypt which were acquired in 2013. The EBITA margin decreased slightly to 6.3% (2013: 6.5%)

• Compound Feed & Meat Iberia EBITA of € 34.9 million was 14.0% lower than last year (2013: € 40.6 million) mainly due to lower meat prices in the second half of the year

• Acquisitions in Nigeria and Brazil and capital investments in new plants in Asia and Africa will strengthen Nutreco's presence in growth geographies

• Total dividend proposal of € 1.05 (2013: € 1.00), with the interim dividend being €0.30 (2013: € 0.30). Pay-out ratio 45% (2013: 45%)

• Extraordinary General Meeting of shareholders on 9 February 2015 to discuss the SHV offer of € 45.25 per ordinary share (cum dividend)

Key figures

Knut Nesse, CEO Nutreco: "The year 2014 contained several important developments for Nutreco. We achieved higher financial results, in line with our expectations. We developed innovative products for our customers and expanded our global product portfolio. We made organisational improvements to enhance our leadership position in animal nutrition and fish feed and invested in our global people and talent management programme. Finally, our shareholders received a compelling cash offer by SHV for their Nutreco shares, an offer that is in the best interests of all our stakeholders including our shareholders and therefore recommended by our Boards. 

The EBITA result in 2014 of € 266.4 million was 3.9% better than last year. Results improved in our Animal Nutrition segment, as well as our Fish Feed segment, despite challenges in certain markets and adverse foreign currency impacts. Our Compound Feed & Meat Iberia segment had to cope with lower meat prices in the second half of the year which has impacted those results.

The developments in 2014 make me even more convinced that Nutreco has the right strategy and the right people in place to fulfil its mission of 'Feeding the Future'."

'Driving sustainable growth' strategy
Nutreco's innovation agenda has made significant progress this year in five specific areas: young animal feed for swine, young animal feed for ruminants, animal health products, feed additives and shrimp feed. Our young animal feed product portfolio has been brought together under the umbrella of the 'LifeStart' concept and is being rolled out to our customers. A core group of products has been identified for global distribution and this is where we are concentrating our product development and marketing investments. We want to deliver our best products to customers in as many geographies as possible. Results from trials of the MicroBalance concept for shrimp feed show significant success in reducing fishmeal inclusion rates. A commercial launch plan is being developed and will be undertaken in 2015. Nutreco has developed and implemented a substantial part of its new global feed additives strategy and strengthened its salesforce worldwide with 30 new feed additive positions.

The innovation agenda cannot succeed without the close cooperation with customers and suppliers. To this end, Nutreco has continued to initiate strategic partnerships in areas such as ingredient sourcing, product development and knowledge sharing. In the fourth quarter of 2014 Nutreco renewed its strategic partnership with European compound feed producer ForFarmers. The partnership covers the purchase of premixes, feed additives and specialties as well as a close working relationship on research, innovation and the marketing of high quality nutritional solutions, for example within the young animal feed sector. This partnership is an example of an alliance which will result in better returns for Nutreco's customers.

A core element in our strategy is the focus on growth geographies. Nutreco is investing € 15 million to construct new premix facilities in Indonesia and Vietnam and remodel its Chinese premix facility. In June, Nutreco entered into a fish feed joint venture in Nigeria which will invest in the local production of extruded fish feed for Nigeria as well as the wider West African region. In December, Nutreco announced the acquisition of two animal nutrition companies in Brazil. Fatec and BRNova supply premixes and animal health products and are good strategic fits complimentary to Nutreco's existing Brazilian business.

SHV offer for Nutreco
On 19 September 2014 Nutreco received an initial, unsolicited proposal for all the shares of Nutreco from Dutch privately-owned multinational SHV. The Nutreco Boards followed a thorough process since then which led to the announcement of a recommended cash offer for Nutreco at an offer price of € 40 (cum dividend) per ordinary share on 20 October 2014. After Nutreco received a letter with an expression of interest from Cargill the offer price was increased by SHV to € 44.50 (cum dividend) per ordinary share on 10 November 2014. Cargill never made an offer and informed the markets on 22 December 2014 that it would no longer pursue an acquisition of Nutreco.

On 5 December Nutreco published its Position Statement and SHV its Offer Memorandum, while launching its recommended cash offer. The Position Statement provides shareholders with more insight into the support of the Executive Board and the Supervisory Board of Nutreco for the SHV offer, the process which has been followed, including the key events that have occurred, the financial and strategic merits and the reasoned opinion of the Boards in recommending the SHV offer.

On 30 January 2015 SHV increased the offer price to € 45.25 (cum dividend) per ordinary share. In addition, significant shareholders APG and NN have committed to tendering their shares. APG, holding approximately 9.79% of the issued ordinary Nutreco shares, and NN, holding approximately 7.52% of the issued ordinary Nutreco shares, have entered into irrevocable undertakings with SHV to tender all shares directly or indirectly held by them under the offer in the offer period under the same terms as applicable to all shareholders.

On 9 February 2015 Nutreco will discuss the SHV offer with its shareholders at the Extraordinary General Shareholder Meeting (EGM). The offer period ends on 17 February 2015.

Further information on the offer can be found on Nutreco's investor relations website www.nutreco.com/en/Investor-relations.

NOTES ON FINANCIAL RESULTS

Revenue

Revenue analysis

Revenue amounted to € 5,253.0 million, an increase of 0.3% compared with 2013 (€ 5,237.2 million). The volume increase of 2.2% was primarily driven by growth in Fish Feed and Animal Nutrition. The price effect was -1.0%. The contribution of acquisitions was 1.6% which relates to the acquisitions of Gisis in Ecuador, Hendrix Misr in Egypt, Skretting Nigeria, and Fatec and BRNova in Brazil. The foreign exchange effect was -2.5% and mainly related to the Canadian Dollar and the Norwegian krone.

EBITA before exceptional items

EBITA before exceptional items increased by 3.9% to € 266.4 million (2013: € 256.3 million). The exceptional items amounted to € -16.5 million (2013: € -13.0 million) and consist of costs related to impairments in Spain, restructuring costs, and transaction related costs. The foreign exchange impact on EBITA before exceptional items was € -5.0 million (2013: € -9.5 million) and mainly related to the Canadian dollar and the Norwegian krone over the full year. There was a mitigating effect in the last quarter however as the euro weakened against all major currencies.

EBITA in the Animal Nutrition segment of € 125.0 million was 12.0% higher than in 2013
(€ 111.6 million). This increase was driven by good performances in most markets. As a result of this performance the EBITA margin increased to 6.8% (2013: 6.2%); this increase is attributable to improved margins in Europe, Middle East and Africa, mainly due to good performance of young animal feeds and feed additives.

EBITA in Fish Feed was 2.8% higher at € 134.3 million compared with € 130.6 million in 2013. The higher EBITA in 2014 is mainly due to the contribution of the businesses in Ecuador and Egypt. The increase in salmonid feed volumes in the first half year was mainly caused by favourable growing conditions especially in Norway compared to the exceptionally cold seawater temperatures in 2013. The lower EBITA in the second half year was mostly due to lower sales in Norway (impact of Marine Harvest entry into salmon feed), partly offset by good performances in Ecuador, Egypt, Vietnam and Japan. The EBITA margin was slightly down in 2014 at 6.3% (2013: 6.5%).
Compound Feed & Meat Iberia segment's EBITA decreased by 14.0% to € 34.9 million (2013: € 40.6 million). The decrease was mainly related to lower meat prices in the second half of the year.

Corporate costs are 4.9% higher than in 2013 at € 27.8 million (2013: € 26.5 million).

Net financing costs
Net financing costs amounted to € 29.9 million (2013: € 31.9 million). Financial expenses were slightly lower at € 32.0 million (2013: € 34.7 million). Financial income was
€ 2.1 million (2013: € 2.2 million).

Income tax expense
Income tax expense increased from € 50.1 million to € 53.0 million. The effective tax rate is 25.6% (2013: 24.9%).

Result for the period
The total result after tax increased by 2.0% from € 150.8 million to € 153.8 million. Basic earnings per share increased by 1.4% to € 2.21 (2013: € 2.18). The total result for the period attributable to owners of Nutreco was € 152.0 million (2013: € 150.2 million).

Cash position and capital structure
The net debt position as at 31 December 2014 was € 414.8 million compared to € 348.9 million as at 31 December 2013. The increase was mainly due to the additional share buyback programme and acquisitions in Nigeria and Brazil. Nutreco purchased 1,680,553 of its ordinary shares at an average price of € 29.28 per share, for a total consideration of € 49.2 million, with the purpose of optimising the efficiency of the balance sheet and to enhance future earnings per share. Total equity as at 31 December 2014 was € 983.4 million. The net working capital of € 300.8 million was € 25.6 million higher than as at 31 December 2013 (€ 275.2 million).

Dividend
The Annual General Meeting of shareholders to be held on 26 March 2015 will be recommended to declare a total dividend of € 1.05 per share (2013: € 1.00) for the 2014 financial year. This represents a pay-out of 45% (2013: 45%) of the total result attributable to holders of ordinary shares of Nutreco over the period from 1 January 2014 to 31 December 2014, excluding impairment and the book result on disposed activities. In August 2014, Nutreco distributed an interim dividend of € 0.30 (2013: € 0.30) per ordinary share. Nutreco's policy since 2006 is to pay out a dividend of 35-45% of the annual profit over the fiscal year, excluding impairment and results on disposed activities. Since the implementation of this policy, Nutreco has maintained a 45% pay-out ratio. Following adoption of the dividend proposal, the final dividend of € 0.75 can be received in cash. The ex-dividend date is 30 March 2015. The cash dividend will be made payable to shareholders on 2 April 2015.

As noted in the Offer Memorandum and SHV's press release dated 30 January 2015, the offer price by SHV for Nutreco shares is cum dividend, so the offer price of € 45.25 includes the final dividend of € 0.75. At each stage of SHV's bid, the offer price has always included any final dividend.

Agenda 2015
Nutreco will continue to execute its strategy with a focus on:

• A higher value-added portfolio of nutritional solutions
• Driving operational excellence in mature markets
• Growth in geographies Latin America, Russia, Asia and Africa
• Sustainability

Calendar

END OF PRESS RELEASE

Note to the editor (not for publication)
This press release is also published in Dutch. In the event of differences, the English language version shall prevail as the authoritative version.

Driving sustainable growth
Nutreco's strategy 'Driving sustainable growth' is to grow and improve profitability by providing innovative and sustainable nutritional solutions for its customers. This will be realised by focusing on a higher value-added portfolio of nutritional solutions such as premixes, feed specialties and fish feed, and by expanding into the growth geographies of Latin America, Russia, Asia and Africa, which will see the largest increases in both production and consumption of animal protein food products.

Nutreco
Nutreco is a global leader in animal nutrition and fish feed. Our advanced feed solutions are at the origin of food for millions of consumers worldwide. Quality, innovation and sustainability are guiding principles, embedded in the Nutreco culture from research and raw material procurement to products and services for agriculture and aquaculture. Experience across 100 years brings Nutreco a rich heritage of knowledge and experience for building its future. Nutreco employs approximately 11,000 people in 35 countries, with sales in 80 countries. Nutreco is listed on the NYSE Euronext stock exchange in Amsterdam and reported annual revenue of € 5.3 billion in 2014.

www.nutreco.com

Investor and analyst enquiries
Jurgen Pullens, Director Investor Relations
T +31 (0) 33 422 6134
M +31 (0) 6 5159 9483
E jurgen.pullens@nutreco.com

Media enquiries
Mark Woldberg, Manager Corporate Communication
T +31 (0) 33 422 6178
M +31 (0) 6 1503 3036
E mark.woldberg@nutreco.com

Cautionary note regarding forward-looking statements
This announcement contains forward-looking statements. Forward-looking statements are statements that are not based on historical fact, including statements about our beliefs and expectations. Any statement in this announcement that expresses or implies our intentions, beliefs, expectations or predictions (and the assumptions underlying them) is a forward-looking statement. Such statements are based on plans, estimates and projections as currently available to the management of Nutreco. Forward-looking statements therefore speak only as of the date they are made and we assume no obligation to publicly update any of them in the light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. A number of significant factors could therefore cause actual future results to differ materially from those expressed or implied in any forward-looking statement. Such factors include but are not limited to conditions on the markets in Europe, the United States and elsewhere from which we derive a substantial portion of our revenue, potential defaults on the part of borrowers or trading counterparties, the implementation of our restructuring programme including the envisaged reduction in headcount and the reliability of our risk management policies, procedures and methods. For more information on these and other factors, please refer to our annual report. The forward-looking statements contained in this announcement are made as of the date hereof and the companies assume no obligation to update any forward-looking statement contained in this announcement.

The full press releases in English and Dutch are attached in the pdfs below.