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Dairy Young Animal Feeds

Willem Kernkamp – GM Sloten GroupNutreco Capital Markets Day 2013Derbyshire, UK | 17 September 2013

Introduction

Market

Strategy

Summary

2

Introduction

Sloten – Leading in young animal nutrition

4

Branded Dairy Young Animal Feeds

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Complete production process

6

Innovation

MarketingWorldwidedistribution

network

Business focus

Market

IFCN, 2012; for India: FAOSTAT

360 mio dairy cows at 144 mio farms

12 mio head

40 mio head

222 mio head  

40 mio head

6 mio head

40mio head

Worldwide average: < 3 cows/farmCow number ~ 0 ‐ 1 % per yearFarm number ~ ‐[2‐10]% per yearIFCN estimates 330,000 farms > 100 cows

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USA

Brazil Ethiopia

India

Netherlands

Russia

1996 2011

1996 2011

1996 2011

1996 2011

1996 2011

1996 2011

9,169 L/cow

393 L/cow

8,663 L/cow

1,361 L/cow

3361 L/cow

1,169 L/cow

Sources: IFCN, 2012; for India: FAOSTAT

Diversity in farm management capabilities

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Diversity …

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Diversity …

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Current market of rearing milk replacers for

calves is estimated to be 700 Kt/year.

The potential accessible market is

estimated around 1,400 Kt/year.

Sloten’s worldwide market share of rearing

milk replacers = ~ 7 %

Key market figures

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Sloten competes with:

• the cow (~ 60% of the potential market)

• +/-125 rearing calf milk replacer competitors worldwide:1. Dairy industry: ~ 200 Kt/yr2. Veal industry: ~ 90 Kt/yr3. Milk replacer specialists (spray dryers): ~ 330 Kt/yr4. Mixers (mainly premix companies): ~ 80 Kt/yr

Rearing milk replacer market

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Dairy raw material market

Milk is usually consumed locally.NZ, US, NW-EU largest exporters. Asia, specifically China largest importer. 5-7% is traded in solid forms on world market.

Many factors influence surpluses/deficits creating volatility in raw material costs.

+ 40% in 12 weeks

-20% in 3 weeks

The answer to high volatility in raw material costs has been:

Increase market intelligenceShort positions and weighted stocksEffective demand planning and S&OPMarket driven pricing processValue creation for end users

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Strategy

Today’s calves are tomorrow’s dairy cows

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Life Start sets Life Performance

Best Life Start one only gets

• with excellent early nutrition

• when the calf is never sick

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Best Life StartMaximum development of body tissues (udder cells, all organs) and body systems (immune and digestive system)

A better Life Start is value for farmers

Best Life Performance100 g/day more youth growth = 700 litresmore milk and 50% lower culling rate in the first lactationFull expression of genetic potentialIncreased sustainability of farming

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PRODUCT / VALUE  PROPOSITION

MARKETS / SEGMENTS

Actual

40  50 kg per calf=  +20 %  growth potential

Substitution of cow’s milk=  +60% growth potential

Competing in current markets (worldwide market share ~7%) = +93% growth potential

New

The concept is value for Nutreco

Actual New21

Active worldwide …

Active in 55 countries. Network of dealers.Focus on 17 countries: GE, NL, BE, DK, UK, ES, IT, PO, HU, NO, RU, BR, CN, MX, CL, CO, NZ. 65% of our milk replacers sold in EU‐27. 

Active in 55 countries. Network of dealers.Focus on 17 countries: GE, NL, BE, DK, UK, ES, IT, PO, HU, NO, RU, BR, CN, MX, CL, CO, NZ. 65% of our milk replacers sold in EU‐27. 

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Roadmap 2010 - 2015”: “We must scale up to higher volumes,

capitalise on capabilities and meet P&FS EBITA margins of >7%”

Improve marketing: further definition of customer segments and demands, use

of new techniques (media, means, tools) additional to personal sales method.

Develop “content marketing” to influence end-users and shorten time to market

Align distributors and capture growth

Drive innovations / the “Calf Proposition”; create value for farmers

Set-up new production units in high import tax and/or low raw material cost

countries like Russia, …

Scale up further through M&A to capitalise on our capabilities

Strategy Plan 2010-2015 summarised

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Summary

Summary

The company, products and value proposition have perceived high quality

The innovative concept “Life Start sets Life Performance” drives growth

Market potential big enough for lasting growth

Distribution management and marketing on end users to reduce time to

market

Quality of strategy, organisation and distribution channel shown in results

even in the volatile markets we work in

EBITA nearly tripled

% EBITA/Sales well above target 7 % (in 2012 and 2013)

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THANK YOU