After a comprehensive process, the Company says it has become apparent that at the current time no agreement at a fair valuation and in the best interests of all stakeholders can be reached. Accordingly, these Spanish and Portuguese businesses will remain part of Nutreco.
Driven by its strategic focus on the growth segments Animal Nutrition and Fish Feed, Nutreco initiated a strategic review of its Spanish and Portuguese compound feed and meat businesses in 2013. After carefully reviewing strategic opportunities for these businesses, Nutreco announced an intended divestment in February 2014. A thorough process was undertaken, during which discussions took place with several interested parties. Nutreco continuously operated with the clear intention that any valuation for the businesses should reflect their market-leading positions, solid financial results and future potential.
As these discussions developed, it became clear that no fair valuation could be obtained at the current time. In the best interests of Nutreco's shareholders and in order to bring certainty to its employees, customers and other stakeholders, the divestment process has been halted.
New Business Unit
Both the Spanish and Portuguese businesses will remain part of Nutreco as a new and separate Business Unit Compound Feed & Meat Iberia. These businesses are well-managed, combine market leadership with operational excellence and are cash generative. The new Business Unit will be led by Javier Rodriguez Ceballos, who will report directly to the CEO of Nutreco.
The Spanish and Portuguese businesses comprise Sada which is Spain's market leader in poultry meat products with a 26 per cent market share, the Nanta compound feed business in Spain and Portugal with a 13 per cent market share, and Inga Food which operates pig farming and trading activities in Spain.
Sada will continue to improve its footprint in the retail and food-service channels and will focus on fresh packed and value-added poultry products that offer the best growth opportunities. Nanta has a clear farmer focus and aims to strengthen its market leadership position in the non-integrated compound feed market. The first quarter operating results of the compound feed and meat businesses in Spain and Portugal improved compared to Q1 2013.
As a consequence of the decision, the classification of the assets and liabilities of the compound feed and meat businesses as 'held for sale' will be reversed in the consolidated financial statements and the results will be reported as continued operations in 2014. The 2013 consolidated statement of comprehensive income and the consolidated cash flow statement will be adjusted accordingly for comparison purposes.
Outlook First Half-year 2014
Nutreco reconfirms its outlook, which - as a consequence of the decision to end the divestment process - will include the results of the Business Unit Compound Feed & Meat Iberia.
The following developments are expected for the first half year 2014:
- Animal Nutrition: operating result slightly higher than last year (H1 2013: €56.9 million)
- Fish Feed: an operating result which is clearly higher than last year (H1 2013: €35.1 million)
- Compound Feed & Meat Iberia: an operating result which is clearly higher than last year (H1 2013: €13.8 million)
Based on current trading conditions we expect EBITA before exceptional items for continuing operations for the first half of 2014 to be clearly higher than the first half year of 2013 (€94.1 million, including Compound Feed & Meat Iberia). Due to seasonality of the business, the majority of Nutreco's result is generated in the second half of the year.