Analyst presentation – recommended cash offer by
SHV of € 40 per share for all shares of Nutreco
Amsterdam, 20 October 2014
Knut Nesse, CEO
Agenda
1
SHV offer for Nutreco
2
Third quarter trading update
3
Summary
SHV offer for Nutreco
3
Attractive offer
• Intended full cash offer by SHV of € 40 per share
• Attractive premium of 42% to previous close of Friday 17 October
• Full support and unanimous recommendation from Supervisory Board and
Executive Board
• SHV supports Nutreco’s growth strategy
• Intended offer in best interests of shareholders and all other stakeholders
4
Transaction details
• Full cash offer consisting of € 40 per share, representing:
• 42% premium over Nutreco's closing price on 17 October
• 34% premium over Nutreco's average closing price last 3 months
• The offers values 100% of the ordinary shares1 at € 2,685 million
• Acceptance threshold: at least 95% of outstanding ordinary shares
• SHV has the cash available to provide deal certainty
1. Based on number of outstanding shares as per 20 October 2014
5
Transaction details
• SHV supports the execution of Nutreco's business strategy, including
planned capital expenditures and merger & acquisitions
• Maintain head office and key support functions in the Netherlands
• Nutreco will retain corporate identity, values and culture
• SHV will respect existing employee rights
• Nutreco will retain representation of independent members of the
Supervisory Board
6
Process to date
• In September 2014, Nutreco received letter of interest from SHV
• Transaction Committee was formed consisting of Executive and Supervisory Board
members
• Constructive discussions with SHV leading to today’s announcement
• Unanimous decision making by both Boards
• Boards have carefully assessed the intended offer and, in line with their fiduciary
duties, the strategic options and the interests of all stakeholders
• Leonardo & Co. and ING Corporate Finance have issued fairness opinions
7
In the best interests of all stakeholders
• Transaction provides shareholders with premium of 42% since last closing price
• SHV supports our long-term growth strategy enabling Nutreco to expand
• Commitment to continue developing innovative nutritional solutions for customers
on platforms such as feed efficiency, life start and preventive animal health
• SHV endorses the three core elements of Nutreco’s success: strategy execution,
innovation and competence of its people
8
Introduction to SHV
• SHV is a privately-held family company which aims to maintain its strong position in
a number of operational activities and selected investment activities
• SHV invests for the long term, expands and develops businesses and provides their
customers with excellent products and services, which add value
• The company was founded in the Netherlands in 1896 as a result of the merger
between a number of large coal trading companies
• Today, SHV is present in 50 countries on all continents and employs about 47,000
people
9
Fit with SHV
• SHV values us for our reputation as a responsible employer, dedication to
customers and animal health, and strong relationships with both raw material
suppliers as well as farmers
• Combination of long-term investment approach and track record of supporting
international growth make SHV best possible partner for the next phase of our
development
• Nutreco and SHV share the same values with focus on people
• SHV considers Nutreco as a great opportunity to further broaden its presence
within the food and agriculture industries
10
Nutreco going forward
• Current Executive Board is committed to take Nutreco to the next phase under this
new ownership
• Continuation of existing commitments to clients and suppliers
• SHV believes in the long-term potential of our business, and will assist us to
enhance our various positions for long-term sustainable growth
11
Our mission
12
Total shareholders return since IPO in 1997
AEX
1,200
1,000
800
TSR of 771%
at a price of
€40/share
Nutreco (€)
50
40
30
600
20
400
200
0
10
0
13
Timetable and next steps
Event
Announcement intended offer
Timing
Monday, 20 October 2014
Launch of offer; publication offer memorandum
Expected in Q4 2014
Extraordinary General Meeting of Shareholders
Expected in Q1 2015
End of acceptance period
Expected in Q1 2015
14
Third quarter trading update
15
Revenue development third quarter 2014
1,490.5
Volume
-1.0%
Price
-1.0%
Currency
-2.2%
Acquisitions
0.0%
1,428.9
Organic decline
-2.0%
Q3 2014
Q3 2013
%
Animal Nutrition
454.9
444.6
+2.3
Fish Feed
639.4
696.1
-8.2
Compound Feed & Meat Iberia
334.6
349.8
-4.4
1,428.9
1,490.5
-4.1
(€ x million)
Total revenue
Q3 2013
Q3 2014
16
Third quarter trading update highlights
• Animal Nutrition: Organic volume effect was +3.2% due to higher sales in mature markets, growth
geographies and young animal feed
• Fish Feed: Lower revenue mainly due to significantly lower salmon feed sales to Marine Harvest in
Norway. The organic volume growth of fish feed for other species was +5.4%
• Compound Feed & Meat Iberia: +3.3% organic volume growth. Good progress made in increasing
sales to customers across various channels; YTD 75% of volumes lost to Mercadona replaced
• Share buy-back programme of € 100 million terminated: purchased 1,680,553 shares for € 49.2
million at an average price of € 29.25 per share
• Outlook: Nutreco expects full year 2014 EBITA before exceptional items from continuing operations
to be at least equal to last year (2013: € 256.3 million)
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Summary
SHV offer
Strategy
•
Received intended offer
for € 40 cash per share
• Higher value-added portfolio
of nutritional solutions
• Animal Nutrition volume
growth +3.2%
•
42% premium to last
closing price
• Premix, feed specialties and
fish feed
•
Boards of Nutreco are
supportive of offer
•
Intended offer in best
interest of shareholders
and all other stakeholders
• Growth geographies Latin
America, Russia, Asia and
Africa
• Fish Feed: lower sales to MH;
sales volume to other species
+5.4%
• Sustainability throughout the
feed-to-food chain
Q3 trading update
Feeding the Future
• Our mission is to
contribute to meeting the
rising food needs of a
growing world population
in a sustainable manner
• CF&M Iberia: volumes +3.3%
• Outlook: EBITAE at least
equal to 2013 (€ 256.3M)
18
APPENDIX
19
Market capitalisation
Total issues ordinary shares
Total treasury stock (as at 20 October)
Total adjusted number of shares
Market capitalisation at € 40/share
70,237,364
3,100,937
67,136,427
€2,685 million
20
LTM EV/EBITDA (x)
1H-2014
Offer price (€)
Number of shares outstanding (million)
Market capitalisation at € 40 per share
Cash
Short term financial debt
Long term financial debt
Total financial debt
Enterprise value
LTM EBITDA
LTM EV/EBITDA (x)
40.00
69.6
2,782
(79)
93
392
405
3,188
331
9.6x
Note: based on adjusted number of shares outstanding as per reporting date
21