Knut Nesse, CEO Nutreco 19 September 2013 Nutreco Ambition 2016 AGENDA 1 Welcome 2 The Challenge 3 Our ambition 4 Our Strategy 5 Innovation & Solutions Feeding the Future Growth Sustainable Growth in Practice Meeting Surging Demand 1
Doubling food production Halving the pressure on the planet Feeding 9 billion people in 2050 Surging demand GROWING URBANISATION GROWING POPULATION MIDDLE CLASS 7 to 9 billion by 2050 50% to 70% by 2050 3 billion more by 2030 CONVERGING DIETS Globally: 37 to 50 kg meat, 83 to 99 kg dairy by 2050 Source: McKinsey 2011, Resource Revolution FAO, World Agriculture towards 2030/2050, The 2012 Revision 2
Struggling supplies ADVERSE WEATHER BIOFUEL PRODUCTION LOW STOCKS PRICE SPECULATIONS 5 The essential link Raw material markets Animal nutrition & fish feed producers Farmers Struggling supplies Surging demand 3
Nutreco s two divisions Revenue in 2012 of 5.2 billion Over 100 production and processing plants in 30 countries Multinational workforce of approximately 10,000 employees Revenue EBITA* Animal Nutrition 3.3 billion 149 million Fish Feed 1.9 billion 142 million * Before exceptional items from continuing operations and excluding corporate costs 7 Nutreco Ambition 2016 AGENDA 1 Welcome 2 The Challenge 3 Our ambition 4 Our Strategy 5 Innovation & Solutions Feeding the Future Growth Sustainable Growth in Practice Meeting Surging Demand 4
Nutreco Ambition 2016 driving sustainable growth Higher value added portfolio of nutritional solutions Segments Premix, Feed Specialties & Fish Feed Growth geographies Latin America, Russia, Asia & Africa Sustainability Nutreco s Animal Nutrition value proposition Swine Poultry Ruminant YOUR LOGO Premix Feed specialties Feed additives Animal health Young animal feeds Quality assurance Ingredient optimisation 5
Premix & Feed Specialties Nutreco s subsidiaries Trouw, Sloten and Selko produce and market premixes, farm minerals, young animal feeds, preventive animal health products and feed additives. Market position Presence Customers Suppliers Trouw is no. 2 global premix producer with an estimated market share of 12% Main competitors are DSM, Cargill (Provimi) and Evialis Trouw has 15 production facilities in Europe, 17 plants in the Americas and 3 plants in Asia Feed compounders, integrators, distributors, farmers, companion animal industry and home mixers Producers of amino acids, trace elements & minerals, vitamins, dairy products, preventive animal health products, organic acids among others Nutreco Ambition 2016 AGENDA 1 Welcome 2 The Challenge 3 Our ambition 4 Our Strategy 5 Innovation & Solutions Feeding the Future Growth Sustainable Growth in Practice Meeting Surging Demand 6
Sustainable growth in practice Increasing productivity in animal Reducing antibiotics in animal 1 2 3 Upgrading the value of by products from other industries Sustainable growth in practice Increasing productivity in animal Reducing antibiotics in animal 1 2 3 Upgrading the value of by products from other industries 7
Sustainable advances in animal (NL) From 1975 to 2010 animal became more efficient Milk production per cow 65% Piglets raised per sow per year 65% Feed conversion ratio broilers 30% Sustainable advances in animal (NL) Fewer resources and lower emissions to produce the animal protein for feeding the 9 billion per kg milk 100% 90% 80% 70% per kg pig meat 100% 90% 80% 70% per kg broiler meat 100% 90% 80% 70% 60% 60% 60% 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 Energy use Carbon footprint Land occupation 8
Huge variation in practice Top 10 producing countries generate twice the number of piglets per sow per year (average 24) compared to the least producing countries (average 12) Sustainable growth in practice Increasing productivity in animal 1 2 Reducing antibiotics in animal 3 Upgrading the value of by products from other industries 9
Reducing antibiotics in animal Much has been achieved but it has also resulted in challenges Antibiotic sales in the Netherlands (x 1,000 kg) 519 487 434 356 376 390 378 310 565 506 495 Reference 2009 433 Target 2011: 396 338 244 Target 2013: 247? 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013 Source: Trends in Veterinary antibiotic usage in the Netherlands, MARAN, 2012 A global portfolio of branded specialty products Feed additives Preventive animal health products Young animal feeds Important innovations 10
Sustainable growth in practice Increasing productivity in animal Reducing antibiotics in animal 1 2 3 Upgrading the value of by products from other industries Upgrading the value of by products from other industries e.g. biofuel industry 3% 37% 60% 10 KG RAPESEED 60% of the output is by product 13 million tonnes rapeseed meal in EU 27 every year, productively used in animal feed 11
Upgrading the value of by products from other industries e.g. sugar industry (x million tonnes) 100 SUGAR BEETS 18.6 SUGAR 2.2 MOLASSES 11.6 FRESH PULPS 2.7 DRY PULPS ANIMAL FEED INDUSTRY EU 27 Use of raw materials by the feed industry (2011) 12% 48% 28% 12% Around 40% of animal feed is derived from by products But: use of by products results in challenges concerning e.g. digestibility, variation in nutrient content, gut health, food safety Source: FEFAC, 2012 12
Nutreco Ambition 2016 AGENDA 1 Welcome 2 The Challenge 3 Our ambition 4 Our Strategy 5 Innovation & Solutions Feeding the Future Growth Sustainable Growth in Practice Meeting Surging Demand The innovation cycle Application Solution Centres (ASCs) are the interface between local marketplaces and Nutreco s global marketing and innovation teams Customers Operating companies ASC R&D Needs Business input Interface Nutritional and technical know how 13
Animal Nutrition research centres More than 100 qualified experts working in 6 research centres in 3 countries Expertise Certifications Qualified experts Ruminant RC (NL) Swine RC (NL) Ingredient RC (NL) Poultry RC (ES) Food RC (ES) Agresearch (CA) ISO 9001 GMP+ HACCP Animal nutrition Veterinarian Immunology Molecular biology Biochemistry Feed technology Food technology Food microbiology Nutreco Swine Research Nutreco invests in R&D State of the art research technologies for nutritional research for sows, piglets and finishing pigs 14
The Netherlands: Centre of Excellence The Netherlands is a leading country in agri food sector 2 nd exporter of food (& flowers) in the world Many agricultural multinationals have their research in the Netherlands Top universities and institutes, such as Wageningen University Collaborations between business and science of vital importance for innovation Thank you for your attention! 15