contents · besides the sales of semen through inseminations by ai-vets, vrv again managed to sell...

CRV Holding BV Annual Report 2004-2005

2

Contents

Preface 3

Profile 4

Major events in 2004-2005 6

CRV International 8

HG 12

NRS 16

Financial information 18

Auditors’ report 23

Preface


3

How do you mean, simply?

In a group discussing our last completed financial year,

someone said: “It was simply a good year.” No mergers or

take-over troubles, no veterinary crises like Foot and Mouth

Disease or IBR and no substantial deviations from our

budget, so we have made a profit.

However, in the past financial year not everything went

smoothly. Our focused strategy has helped us to stay on

course and maintain our speed.

In view of our strategic goals, we can reflect on our

performance over the past year:

– To operate in a market- and customer-orientated manner.

With the competition clearly getting closer, we are well

able to keep our market share. Continuous adaptation of

products and services helps to improve the price-quality

ratio and the level of service.

– To maintain and increase our turnover.

For a large part, the increase in turnover has been

realized by our subsidiaries, who have certainly

contributed to a good year financially. The export of HG

semen, with equal prices, has increased by 11 percent.

– The assets of the holding increased by € 1.8 million,

mainly due to favourable exchange rates. The exchange

rates of the Brazilian real, New Zealand dollar as well as

the Czech crown have risen against the euro. This has

resulted in another positive contribution to our results

made by our subsidiaries.

– Diminish our financial and veterinary vulnerability.

On the one hand we are constantly working on cost

control. On the other hand, to reduce our veterinary

vulnerability, we decided to build a bull barn in the Czech

Republic and to refurbish our existing barns.

In summary, there is a lot happening. In closing “Simply a

good year”, I hope you enjoy reading this annual report,

and maybe you will get the same feeling as I: “What do you

mean, simply?”

Hans Huijbers,

Chairman


4 ProfileCRV Holding BV operates internationally in the field of cattle

improvement. The international division of CRV includes subsidiaries in

Brazil, New Zealand and the Czech Republic as well as sales offices in

Germany and Spain.

The organization has a division of services and operational sales (Dutch

and Flemish regional divisions) and two product divisions: NRS

(information products) and HG (genetic products). The shareholders in

the holding include the Dutch Cooperative Cattle Improvement Delta

(CR Delta) and the Flemish Cattle Improvement Association (VRV). CRV’s

head office is located in the Dutch city of Arnhem. Beyond the domestic

market, the products and services of CRV are marketed world-wide in

more than fifty countries.

Structure CRV

Our missionCRV is a leading cattle improvement cooperative that creates enduring

added-value for cattle farmers through:

• offering quality products and services;

• active involvement of members and employees;

• ongoing innovation;

• constant attention to trends in society.

Profile

Our strategyCRV’s strategy is:

• to operate in a market- and customer-orientated manner;

• to realize an increase in turnover internationally;

• to diminish our veterinary vulnerability;

• to create a financially healthy company development;

• to adhere to the concept of a cooperative and/or society.

Executive Board CRVDr. J. Jansen President

Dr. Ir. J. Dommerholt NRS director

Ing. A. Lindeboom HG director

Ir. D.L. Volckaert Regional director

Supervisory Board CRVJ.A.M. Huijbers (chairman) Wintelre

P. Broeckx (vice-chairman) Dessel (B.)

E.J.F. Alderkamp Zevenaar

J. Bakker Engelum

R.W.J.M. Bonnier Blaricum

L.M.J.M. Cox Roermond

N.A.L. van Leeuwe Sint Margriete (B.)

J.F. van Outryve Linden (B.)

H. Schonewille Zuidwolde

M.A. Siebenga Zeewolde

A.J. van Weele Maarssen

The CRV executive board, from left to right:

Ate Lindeboom, Jan Jansen,

Jan Dommerholt and Denis Volckaert


5


September 2004HG Deutschland (Germany) takes on the marketing of HG semen in

Austria. This step was taken to strengthen the relationship with

Austrian customers.

October 2004NRS establishes a significant liaison with the Chinese dairy industry by

supplying the IRIS cattle information system to the Dairy Association of

China (DAC).

January 2005– The first CR Delta Cow-Expo, held in Leeuwarden, The Netherlands, is

a major success. This one-day event attracts 6000 visitors, who, besides

the judging of individual cow classes, also see eight progeny groups by

HG sires parading around the show ring. During the break they

inspected the progeny groups on stands, which are situated between

the trade stands at the theme park.

– At the VRV-Agriflanders Show 2005, the biggest cow event in

Flanders, Belgium, thousands of spectators, with the Belgian Prince

Laurent among them, see the best of what Flemish breeding has to

offer parading around the show ring.

February 2005HG graduates the world’s no. 1 red carrier: Delta Canvas. Canvas, who is

the leading sire for kgs of fat and protein along with fantastic type

figures, combines two great cow families. On the paternal side we find

Delta Sparta RF, who is from the Tex family at Art-Acres. On his

maternal side there is Delta Canberra, a VG87 Celsius granddaughter of

Delta Esmeralda VG86, the famous Cleitus daughter out of Walkup Bell

Lou Etta VG88.

March 2005– HG announces the acquisition of the worldwide marketing rights to

the most promising Red Holstein sire: Poos Stadel Classic. Based on the

performance of his daughters, Classic is expected to deliver show-

winning type combined with high production. On top of that, HG has

high expectations on longevity, based at the high life time production

in his cow family and the performance of his father, Stadel.

– Ambreed introduces the New Zealand Merit Index (NZMI™), an

alternative breeding strategy for dairy farmers. The NZMI™ is an

advanced sire and cow selection tool focused on significantly improving

future herd production, management traits and type. NZMI™ includes

information on type and animal management traits as well as

production. This is in contrast to the current New Zealand dairy industry

index used to measure genetic merit, which is heavily weighted on

6

The daughter group of Hidden Future got a lot of attention

at the CR Delta Cow-Expo in Leeuwarden

Major events in 2004-2005

7production with lower emphasis on durability traits. Eleven traits that

influence production, management and long herd life make up the

new index.

June 2005– After more than 14 years, the life of HG top sire Eastland Cash comes

to an end. For years Cash has written breeding history. Breeders valued

Cash because of his durable and persistent daughters. HG has sold 1.2

million doses of semen of this super sire worldwide.

– Ned Boy daughter Emma 80 is the 500th cow in the Netherlands to

complete a lifetime production of 10,000 kgs of fat and protein. Her

maternal grandsire is Tops Monitor Legend, the record holder with the

largest number of daughters crossing this magical mark.

July 2005The second CR Delta Cow-Expo attracts 5000 visitors. Of the progeny

groups, Delta Canvas RF and Loe Martin particularly make a great

impression.

August 2005Lagoa takes up a new challenge: sexed semen. Expectations are that,

particularly in the Nelore elite segment and in the dairy sector with

Holstein, Gir and Girolando (Holstein x Gir), this sexed semen can play a

major role.

The daughter group of Win 395 in Leeuwarden



CRV International

8

CRV InternationalCRV is a company operating globally, selling 6.4 million doses

of semen annually and carrying out 2.8 million inseminations

world-wide. In addition to AI, CRV also offers other services. One of

these is milk recording, which is offered in The Netherlands, Flanders,

Czech Republic and New Zealand.

CR DeltaIn the Netherlands, considerable market changes in the

field of DIY inseminations and DIY milk recording have

leveled off. The new approach where CR Delta supports dairy farmers

more actively in the field of breeding advice and fertility issues has

borne fruit. As a result of the personal approach and an update of the

program to make it more user friendly, the number of farmers using

CR Delta’s mating program has grown considerably to over 7000.

As a tool to keep a grip on fertility, CR Delta introduced

“Vruchtbaarheidsattentie” (Fertility monitor). With this product,

farmers receive a wealth of information about the fertility of their

cows. In part, this information is based on data collected by CR Delta AI

Technicians while inseminating cows. Along with this management

tool, CR Delta AI Technicians also provide their customers with personal

support.

Sales of products and services were slightly below budget. These losses

were however more than compensated for by cost saving measures.

Semen sales received a boost in the second half of the year when, in

February, a discount structure was introduced for farmers with their

own semen flask. At the same time new products in combination with

competitive pricing strengthened CR Delta’s competitiveness.

The number of cows scored by CR Delta classifiers in 2004-2005 was

significantly higher than the year before. In total they classified just

over 9000 cows more, which means a 5% increase. The two main

reasons for this are, firstly, an increase in herd size of the farmers

classifying and, secondly, new farms starting to have their cows

classified. Following classification, farmers are getting valuable

information that can be used to choose the right bull for a mating. A

bonus is that this increase in classifications increases the solid base for

calculating reliable breeding values for conformation traits.

CR Delta Cow-Expo’s were organised in the Northern (January) and

South Western (July) regions. The CR Delta Cow-Expo is a major event

where all activities revolve around cows and contacts. These one-day

shows both attracted over 5000 visitors, who, besides the judging of

the best cows from the region, also could see eight progeny groups by

HG sires parading in the show ring. During the break the progeny

groups could be inspected on stands, which were situated between the

trade stands at the theme park.

InhoudCRV Holding BV Annual Report 2004-2005

VRVIn the past financial year, VRV faced amended government

policies and changes inside the cattle industry. For the second

consecutive year the number of farms participating in official milk

recording decreased severely, which was primarily due to farms going

out of business. This is not only the case with smaller farms; falling cow

numbers along with a stable number of cows per farm point in the

direction of more serious shifts in the dairy sector. The negative trend

in total cow numbers has also caused the number of inseminations to

drop by several percent every year. In the 2004-2005 financial year, VRV

recorded 180,451 first inseminations, which were carried out by 47 AI-

vets (in Belgium only vets are allowed to carry out inseminations by

law).

The use of semen from Red Holstein and SDVR (Belgian native rare

breeds) bulls decreased again, with black and white Holstein becoming

the most popular breed for semen sales at the expense of Belgian Blue.

Besides the sales of semen through inseminations by AI-vets, VRV again

managed to sell over 400,000 doses of semen in Flanders, despite ever

increasing competition. The favourable price-quality ratio, reliability of

the breeding program, the wide product range and the customer

friendly approach time after time appear to be the strong points.

Agriflanders is the major show in Flanders, and therefore a very

important event for VRV. At this event the most beautiful Flemish cows

– both beef and dairy – are judged, while there is also a progeny

showcase and a sale of top animals. A promotional offer at this year’s

show resulted in more than a hundred new customers for herd

classification, with practically everyone combining this with the VRV

mating program. This was more than enough to compensate for the

number of herds that quit using this service.

The department of data processing spent a lot of time on the

integration of the Dutch and Flemish data processing systems. The

majority of the activities involved preparations for the introduction of

MPR (Milk Production Registration) in Flanders. Adjusting the database

was a very complex operation.

9

Ambreed (New Zealand)The past year has been a period of consolidation for

Ambreed within a very competitive market. The

highlights of the year have included the increased development of

export sales into a total of 24 different countries, the development and

launch of a new cow and sire index and the emergence of a world class

Jersey line-up. The Holstein Friesian sires continue to provide outcross

options for our many international markets, while the domestic market

has continued to be stable.

Herd Testing and Recording, which is a relatively new service for

Ambreed, is starting to provide the enormous benefits of having a

database of information to launch new and innovative products.

HG Deutschland (Germany)Last year was a very successful year for HG Deutschland,

with an increased market share in the import segment and

the gain of many new customers. The reasons for this trend are

primarily the quality and the results of the HG bulls in Germany. Second

crop daughters especially are performing very well in Germany. In

figures, this means that of the Top 30 RZG (German Total Index)

imported bulls with an index based on German milking daughters,

more than 30% come from HG. The list includes bulls like Cello,

Addison and Lord Lily.

Secondly, German dairy farmers are getting more and more convinced

about the quality of HG bulls. In their opinion HG bulls stand for

reliable proofs, high durability and top production with high protein.

For the coming years HG Deutschland expects further growth. The

liberalisation of the semen market and the high total number of cows

in Germany provide a lot of opportunities.

HG España (Spain)In the past financial year in Spain, the trend of the last

two years was repeated: a decline in the number of

farmers and cows and also a decrease in milk price. Despite this

situation, HG España has kept its sales stable through the strengthening

of the sire line-up with the arrival of bulls such as Canvas, Classic and

Loe Martin in the second semester.

At the end of the financial year HG España completely restructured its

way of selling. In the North and in the South, sales through a

distributor network were converted into direct sales, while a new

salesman was contracted in the Northern area. With its sales team

becoming more professional every day, HG España is ready to grow.


10

Besides Holstein, Ambreed also has top class Jersey and Ayrshire bulls. These three excellent examples of the threebreeds are Cresent Mr Erect (Jersey), Kingsway Casanova (Ayrshire) and Russeldale Slade (Holstein)


Lagoa da Serra (Brazil)Again it was a better year for Lagoa, with a higher

turnover and more profit, this time as a result of a

substantial recovery in the milk price and thus of the entire dairy sector,

which firmly invested in genetics. Since the HG-product has proven its

qualities in the field in Brazil and is highly valued, its sales increased

considerably. An extra bonus for the HG-product was the introduction

of a component and cell count related payment system, which is a

logical effect of Brazil becoming an exporter of dairy products.

The Brazilian beef sector faced a serious crisis as a result of over supply.

Beef semen sales plummeted immediately but, thanks to the higher

priced Nelore show segment, Lagoa was able to maintain its financial

returns.

The dairy sector has now discovered the export market, like the beef

sector did previously. The outlook for the Brazilian livestock industry

remains good. Its huge potential means that any production growth

that occurs as soon as the economic climate improves slightly is always

explosive. By contrast, market developments usually move slowly which

rapidly leads to surpluses, like this year in the beef industry with a

dramatic fall in prices as a consequence.

Another thing is the tardy and step motherly policy of the Brazilian

government regarding quality control and the prevention of livestock

diseases. Because of this, Brazil will take advantage of its enormous

production potential only stutteringly.

Lagoa took up a new challenge this year: sexed semen. In particular

sexed semen can play a major role in the Nelore elite segment and in

the dairy sector with Holstein, Gir and Girolando (Holstein x Gir).

CZ Delta (Czech Republic)This past year was the first full fiscal year for CZ Delta

after it was established. The most popular breed sold

through CZ Delta insemination service was the Fleckvieh, with just over

50% of the semen sales, followed by Holstein with just over 40%. Of

the semen sold through other parties, the Holstein is the most popular

breed. The percentage of sales from HG bulls within total Holstein sales

saw a large increase, with four times as many doses of HG semen sold

compared to last year.

Despite the permanent decrease of cow numbers in the Czech Republic,

CZ Delta acquired new customers and maintained its number one

position on the Czech breeding market. CZ Delta permanently strives

for a good relationship with its customers. To support this objective, CZ

Delta organised several meetings with customers in the autumn of

2004, held in the different regions of the Czech Republic. Part of the

agenda of these meetings was the presentation to the prize winners of

the CZ Delta competition for having the highest content of fat and

protein in the milk.

CZ Delta continued its two breeding programs. The Holstein breeding

program was completely integrated into the HG breeding program.

With 45 bulls tested per year, the Czech Fleckvieh breeding program is

the largest one for this breed in the Czech Republic. The bulls are joint

tested with two partners in Bohemia, in the South of the Czech

Republic: Reprogen and Jihocesky Chovatel. With these partners there

is also an agreement on the exchange of Fleckvieh and Holstein semen.

Outside the Czech Republic CZ Delta also co-operates in joint testing

with Besamungsverein Neustadt a/d Aisch in Germany and with OÖ

Besamungstation, Hohenzell in Austria.

The Managing Director of CZ Delta, Mr. Karel Hru‰ka, left his position

at the end of March. He was replaced by Mr. Vlastimil Dominik, who

joined CZ Delta at the beginning of March.

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Synergy advantageWith the acquisition of Ambreed in New Zealand and CZ Delta in the

Czech Republic, CRV now owns two other organizations that run a

Holstein breeding program besides HG. The decision was made to take

full advantage of the synergy between the various programs and to

merge CZ Delta’s black and white Holstein program completely with HG’s.

This means that 35 young bulls will be dual-tested annually in both

countries. Furthermore there will be an exchange of 10 young bulls

between HG and Ambreed every year. A further efficiency advantage is

being made by scaling down the Holstein program by 25 bulls. This is

possible because of the investment in new breeding techniques. As a

result of the cooperation there are advantages being obtained not only in

the field of breeding, but also in the housing and semen collection of

bulls. The decision was made to house 200 young bulls awaiting their

proofs along with 25 active bulls in the Czech Republic. In addition to cost

saving, bio security is the main reason behind this decision. As a result of

accommodating bulls in the Czech Republic, the bull barns in Beilen and

Lexmond (both NL) will be closed in the coming years. The facilities in

Giekerk, Harfsen and Ambt Delden (all three in Holland) are going to be

refurbished, where the emphasis will be on bull comfort.

Less rearingIn the past, the young test bulls have been collected at a very early stage,

no more than six weeks of age. They now will be brought in at an age of

eight months. This will obviously lead to a surplus of rearing facilities. The

facility at Ambt Delden (NL), which at the moment is a rearing and lay-off

facility, will be converted into a full-scale lay-off facility. These proposals

will result in a loss of eleven jobs, mostly among stockmen in the

Netherlands.


1212

HG


EmbryosThis year, 2000 ET and 2700 IVP-embryos were produced, mainly out of

Delta animals. These embryos are still in high demand among Dutch

and Belgian dairy farmers, which in recent years has resulted in a

continuous increase in sales. On the one hand Delta embryos have a

purpose to support the nucleus program and on the other hand to

provide the farmer with valuable genetics. There has been an ample

and diverse supply of embryos throughout the year via the Delta

Heifer-embryo program. For the first time in years, embryos from top

donors have been sold, and any resulting bull calves will be bought

back by HG.

Success Delta proven bullsThis year the Delta nucleus program has been very successful with

newly proven sires like Delta Olympic, Delta Canvas RF, Delta Lionel RF

and Delta Linfield. On top of this, new sires Apina Fortune and Ganvo

Alexander who were added to the active list have also descended from

established Delta cow families. Olympic and Canvas RF in particular

have set themselves up as flagships of the Delta program, with both

sires being used as sires of sons in many countries around the world. In

the last months of this financial year, Delta Olympic, with Delta Linfield

following in his tracks, was even able to push Himster Grandprix, who

up to then had been the most popular sire, from the number one

position.

MRY in the pictureThe MRY breeding program attracted a great deal of attention this

year. As a consequence of the arrival of a number of newly proven sires

like Daniel, Domien and Duisenberg, the use of MRY proven sires was

clearly on the way up, particularly in the second half of the year. The

growing interest in MRY bulls was, alongside other factors, a result of

the fact that farmers who had shown an interest in cross breeding were

pointed towards the MRIJ breed as an option. Its strong breed

characteristics like protein percentage, robustness, condition score and

daughter fertility make the MRY a very attractive breed.

1313

Milk genomicsMilk is a versatile product that contains many healthy nutrients. There

is more and more demand from the milk processors to be able to

distinguish between the various milk components. For the efficient

production of cheese and dairy products with specific “health claims”,

the dairy industry wishes to acquire milk of a more specific

composition. For the processing of cheese for example, the casein

composition and the amount of whey protein are crucial, while from a

public health point of view, the composition of fatty acids is relevant. In

this scenario, it is attractive for the dairy farmer to be able to supply

the dairy industry with milk of the desired composition. CRV, the Dutch

Dairy Board and Wageningen University have therefore started a major

research project to determine whether the milk composition can be

influenced by breeding. The Dutch Government is giving financial

support to this project.

Use of genetic markersThis year the number of genetic markers used in the selection of young

bulls has been increased. The pedigree index of prospective young bulls

is now being enhanced by marker information about production

characteristics, durability, calving ease and daughter fertility. As a result,

HG’s product development is getting a considerable boost. New markers

will be added in the next financial year. Which markers are as yet

unknown, but the attention is particularly focused on functional traits.

Bull damsHG’s entire breeding program has four underlying selection programs,

these being the joint venture with Genex/CRI, Euro-Donor (Black and

White and Red Holstein bull dams from breeders in Europe) and of

course the nucleus, the Delta program. The following cows are fine

examples of these four different selection programs.

Delta Riedel VG86 (Delta program)One of last year’s top donors at Delta was Noorder Dustin daughter

Delta Riedel, who goes back to the famous Etazon Hyde cow. Riedel is

the second generation of this cow family evaluated at Delta. Just like

her dam, she combines excellent production with strong conformation.

Thanks to her pedigree, there are favourable health traits firmly

embedded in this cow. Her sire Dustin Being is one of the very few

proven bulls who is able to improve the fertility of his daughters. As a

top donor, Riedel will get a lot of opportunities to prove herself within

Delta.

Erf Geesje 91 VG86 (black and white Euro Donor)Erf Geesje 91 is a first crop daughter of Holim Rafael who has worked

her way up to bull dam status. This cow clearly stands out from her

herdmates in the hundred cow herd of the Krijnen brothers from Den

Horn. Her sire Rafael is not the only parent who has contributed to this

success, as her dam, being a typical daughter of durability specialist

Delta Luxemburg, has already produced 59,000 kgs of milk.

Milkworth Manfred Yadda VG86 (joint venture)Milkworth Manfred Yadda is a daughter of Ha-Ho Cubby Manfred, a

bull born in 1991, who nowadays still has tremendous figures for

production, longevity and daughter fertility. On top of this, Manfred

has an outcross pedigree and transmits the very rare combination of

calving ease himself and in his daughters. He also has proved quite

capable of transmitting these traits to his offspring. Manfred therefore

sets the standard for the significant attention HG pays to management

traits in its joint program with Genex/CRI. In this joint venture, plenty of

use is being made of his sons and (grand)daughters. This year two sons

have been progeny tested from Milkworth Manfred Yadda VG86.


14


Maaike 9673, AV 87 (Red Holstein Euro Donor)Kian’s first second crop daughters are confirming the high expectations

based on their sire’s excellent proof. His best daughters are being used

as bull dams for HG’s red Holstein breeding program. An example is the

Flemish Maaike 9673. This VG87 scored cow is a tremendous producer

and has been flushed successfully with Poos Stadel Classic.

International marketIn this financial year the export department has made tremendous

progress across the board and targets were more than met. The large

increase in sales (+ 11% in doses and turn over) compared to the

previous financial year is particularly noticeable. The contribution of

our subsidiaries to this result was significant, with other export markets

also playing an important role.

Obviously our product line-up had a positive effect. The following sires

have made a considerable contribution to those excellent results:

Top five most sold bulls internationallyBlack and White Holstein Red Holstein

1. Doolhof December 1. Oudkerker Reno

2. Art-Acres Win 395 2. Almere Pericles

3. Himster Grandprix 3. Kian

4. Hunter 4. Jerom

5. Ruud Trevor 5. Cocktail 19

15

Doolhof December climbed to the number 1 position

Breeding values internationallyNRS is getting more and more involved with the estimation of breeding

values internationally. In this financial year, NRS set up a system for the

estimation of breeding values for milk production traits in New Zealand

for Ambreed. This means that breeding values are now being

calculated with the Animal Model for dairy farmers who have their milk

recording data processed by Ambreed. In doing this, Ambreed is the

first company in New Zealand to use this procedure. NRS also supplied

Corfilac (Consorzio di Ricerca Filiera Lattiero-Casearia), a dairy research

centre on Sicily, with milk recording software based on the Animal

Model. For the Hungarian OMMI, the national institute involved with

quality control in the agricultural sector, NRS started developing a

model for the estimation of breeding values for longevity.

New customers for IRISThe IRIS software package, which was developed by NRS, welcomed a

number of important customers this year. In October 2004 the Dairy

Association of China (DAC) signed a contract with NRS for the

acquisition of this cattle information system. Furthermore, a contract

was made with the Henan Huahuaniu Group in the Chinese province of

Henan for the development of a system for milk recording along with

the use of IRIS. The Holstein Association of Greece started using IRIS for

the processing of herdbook and milk recording data.

Developments in the estimation of breeding valuesThe estimation of breeding values in The Netherlands and Flanders was

adjusted on a number of points:

– The Inet-formula was adjusted according to the latest views regarding

feeding and future milk prices. This also had an effect on the

calculation of DPS.

– The estimation of breeding values for fertility traits was changed to

the Animal Model method. Breeding values are now being estimated

for 56 days non return rate (NR56), the interval between calving and

first insemination, and calving interval. Condition score and milk

production traits are being used as predictors. This resulted in higher

reliabilities of bull proofs based on first crop daughters only (an

increase from 55% to 80%), which makes it a better tool to breed

higher daughter fertility.

– Improving the estimation of breeding values for durability resulted in

more stable bull proofs.

16

NRS


These three cows crossed the line of 100,000 kg of milk together on one day at the same farm. Tim (5), Wim (39) en Louis (76) de Wit from Waspik (NL) are the proud owners of this special trio

17

Productive lifetime and lifetime production of culled animals

lifetime production

1,300

1,200

1,100

1,000

900

800

days

29,000

27,000

25,000

23,000

21,000

19,000

17,000

kg m

ilk


1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20051986

year of culling

Lifetime yields up again Dutch dairy cows that were culled this year have produced for two

weeks longer on average than cows that were culled the year before. In

fact when studying the trend over the last five years, it appears that

this year cows produced for an average of more than 100 days longer in

their lifetime than in the year 2000. The graph below also illustrates the

trend in lifetime yields in The Netherlands since 1992. Looking at this

trend, there is a stable increase in lifetime yields. Average lifetime yield

was 27,707kg M at 4.41% F and 3.49% P, which resulted in total

production of 2,190kg F&P. The top 10% of herds achieved a lifetime

yield of 39,561kg M and 3128kg F&P, a figure that sets a goal for the

remaining 90% of herds.

Successful internet product: VeeManagerVeeManager is an on-line management system for farmers developed

by NRS. Its use via the CR Delta and VRV websites saw a booming

growth with over 3300 active users at the end of this financial year. This

meant an increase of 1300 users in 2004-2005. By using VeeManager,

farmers don’t need to invest in on-farm software and always have

access to the latest up-to-date user-friendly programs. Users are also

guaranteed that there is never any loss of data.

Delta Vera 3 (s. Canvas)

productive lifetime

Operational developmentsTurnover increased to EUR 122.1 million. The figures now reflect the

full financial years of both prior year acquisitions, Ambreed and

CZ Delta. The underlying consolidated operational result before

amortisation of goodwill came to EUR 4.7 million. The result after

taxation and minority interests third parties amounted to EUR 0.5

million. The Executive Board is satisfied with the level and stability of

these results.

Purchase of products and services in the domestic market was slightly

lower than expected. This loss of turnover was more than compensated

by cost savings. During the past few years the market knew important

changes in respect of DIY-AI and DIY-milk recording, but has now

stabilised. CRV’s choice to support the farmers more actively in respect

of sire mating advice and fertility has proven successful. The number of

subscribers to the mating advice service SAP increased to more than

7,000. A new service, fertility manager, was introduced into the

northern and eastern regions of the domestic market.

Semen sales picked up during the second half of the financial year. In

February, a new discount scheme was introduced for DIY-AI farms. At

the same time CRV’s competitiveness improved by a renewed product

range combined with competitive pricing. HG saw an 11% increase in

the volume of exported semen at stable prices. Sales through foreign

subsidiaries further increased, thus obtaining more grip on export.

During the financial year it was decided to rearrange the breeding

programme. The Holstein Friesian (HF) programmes of HG and CZ Delta

are to be integrated and a number of B&W Holstein bulls will be co-

sampled, thereby reducing the size of the joint breeding programme.

Lastly, some 200 HG waiting bulls will be housed at CZ Delta. Significant

cost savings will be realised from 2006 onwards. It was further decided

18

Financial information


to stop introducing bullcalves into HG housing in the Netherlands at

the age of 6 weeks. Instead, bullcalves will be collected at the age of at

least 8 months. The veterinary status of the bullcalves will be

determined at the farms of origin. This also leads to cost savings.

The NMa Appeal Advice Committee ruled against the appeal which had

been instigated by CRV against the fine imposed by NMa because of

HG’s discount scheme. Upon this ruling, NMa maintained the level of

the fine at EUR 2.6 million. HG disputes that there has been misuse of

its market position and will appeal to the Court in Rotterdam.

NRS maintained its domestic turnover. Internet sales of products

underwent a strong growth. A second purchaser for the IRIS software

package was found in China. Furthermore, a package will also be

supplied to a purchaser in Greece. This means that there are now about

600,000 cows abroad of which performance data (milkrecording, AI,

classification, etc.) and/or pedigree data are processed through IRIS .

The number in the home market is approximately 1.5 million cows. The

replacement of the NRS Information System by IRIS progressed well and

the conversion will be complete by the end of 2005. Both in terms of

functionality and size, NRS is one of the leading international

organisations in the field of information processing on behalf of and

for the cattle breeding and cattle improvement industries.

On average, the foreign subsidiaries had a good year and contributed

positively to the group result. Lagoa improved its operational result yet

again. Sales of HF semen picked up strongly, not only in volume but

also in price. Sales of Nelore semen, on the other hand, fell back as a

result of changing circumstances in the beef market.

The results of the sales offices in Germany and Spain were again just

above the break-even level. Ambreed’s result was clearly positive, in

19


spite of the turnover being lower than expected. CZ Delta showed a

marked improvement in its result over the last few months, but, on

balance, was not able to book a positive operational result. During the

course of the year it was possible to forge a good working relationship

with Ambreed and CZ Delta. This is a precondition for further

integration into the CRV group. Together, HG and the CRV daughters

sold more than 6 million straws of semen throughout the world.

ConsolidationThe consolidated financial statements of CRV Holding BV include the

financial data of CRV Holding BV and its group companies.

The consolidation includes:

% interest

CRV Holding BV, Arnhem (the Netherlands) and its subsidiaries

• HG BV, Arnhem (the Netherlands) 100%

• NRS BV, Arnhem (the Netherlands) 100%

• CR Delta Noord BV, Arnhem (the Netherlands) 100%

• CR Delta Oost BV, Arnhem (the Netherlands) 100%

• CR Delta Zuid-West BV, Arnhem (the Netherlands) 100%

• Vlaamse Rundvee Verbetering CVBA, Oosterzele (Belgium) 100%

• CRV International BV, Arnhem (the Netherlands) 100%

and its subsidiaries:

• Lagoa da Serra Ltda, Sertãozinho (Brazil) 100%

• HG España S.L., Madrid (Spain) 100%

• HG Deutschland GmbH, Damme (Germany) 100%

• Ambreed NZ Limited, Hamilton (New Zealand) 100%

• CZ Delta spol s.r.o., Prague (Czech Republic) 94% *)

and its subsidiaries:

• Kesa Plus s.r.o., Uhersky Brod 100%

• Licinius s.r.o., Uhersky Brod 100%

• Avoncroft Sires Ltd., Bromsgrove (UK) 100% **)

*) As at 1 September 2004 6% of the shares of CZ Delta is owned by three former

partners of KESA PLUS, a HG-distributor who’s activities have been merged with

CZ Delta.

**) The sales activities of Avoncroft were ceased on 1 May 2004. Avoncroft will

probably be wound up in the new financial year.


20


21

CRV Holding

Key figures CRV Holding

General 2004-2005 2003-2004

Employees (full-time; on average) 1,286 1,345

Sample takers (full-time; on average) 233 246

Results (consolidated) 2004-2005 2003-2004

Net turnover (€ 1 mln.) 122.1 115.2

Operating result (€ 1 mln.) 2.6 2.6

Result after taxation (€ 1 mln.) 0.4 0.4

Balance (consolidated) 31-08-2005 31-08-2004

Group equity (€ 1 mln.) 55.7 53.7

Balance sheet total (€ 1 mln.) 88.3 91.8

Solvency (group equity/ balance sheet total) 63.1% 58.5%

Cash flow (€ 1 mln.) 1.4 – 5.2

C o n s o l i d a t e d b a l a n c e31-08-2005 31-08-2004

A s s e t s (x € 1,000) (x € 1,000)

Fixed assets

Intangible fixed assets 7,037 10,088

Tangible fixed assets 40,439 42,580

Financial fixed assets 634 812

Total fixed assets 48,110 53,480

Current assets

Inventories 6,828 6,608

Accounts receivable 17,030 16,147

Cash at bank and in hand 16,305 15,535

Total current assets 40,163 38,290

Total 88,273 91,770

31-08-2005 31-08-2004E q u i t y a n d l i a b i l i t i e s (x € 1,000) (x € 1,000)

Group Equity 55,660 53,734

Provisions 3,124 3,069

Long-term debt 1,725 2,328

Current liabilities 27,764 32,639

Total 88,273 91,770


22 C o n s o l i d a t e d p r o f i t a n d l o s s a c c o u n t

2004-2005 2003-2004x € 1,000 x € 1,000

Net turnover

Genetic material 55,466 52,385

Services 50,782 47,298*)

Information products 12,287 12,065

Management 3,589 3,403*)

Total net turnover 122,124 115,151

Changes in inventories – 55 – 245

Capitalised production 1,737 1,587

Other operating income 618 311

Total operating income 124,424 116,804

Operating expenses

Purchases 4,392 4,786

Production costs 22,242 20,346

Staff costs 64,244 60,811

Traveling and car expenses 7,561 7,110

Accommodation expenses 2,860 2,982

Depreciation, amortisation and book results 9,170 7,414

Other operating expenses 11,359 10,787

Total operating expenses 121,828 114,236

Operating result 2,596 2,568

2004-2005 2003-2004x € 1,000 x € 1,000

Various result components

Financial income and expenses, on balance – 7 528

Result from participating interests 18 – 208

Total of various result components 11 320

Result from ordinary operations

before taxation 2,607 2,888

Taxes -2,253 2,440

Result after taxation 354 448

Minority interest 117 0

Result after taxation and minority interest 471 448

*) adjusted for purposes of comparison

CRV Holding


Auditors’ report

23We have audited the abbreviated balance sheet and profit and loss

account of CRV Holding BV, Arnhem, for the year ended 31 August 2005.

The abbreviated balance sheet and profit and loss account have been

derived from the financial statements of CRV Holding BV for the year

ended 31 August 2005. In our auditors' report dated 8 November 2005 we

expressed an unqualified opinion on these financial statements. The

abbreviated balance sheet and profit and loss account are the

responsibility of the company's management. Our responsibility is to

express an opinion on the abbreviated balance sheet and profit and loss

account.

In our opinion, the abbreviated balance sheet and profit and loss account

are consistent, in all material respects, with the annual accounts from

which they have been derived.

For a better understanding of the company's financial position and results

and of the scope of our audit, the abbreviated balance sheet and profit

and loss account should be read in conjunction with the annual accounts

from which the balance sheet and profit and loss account have been

derived and our auditors' report thereon.

Eindhoven, 20 April 2006

KPMG ACCOUNTANTS NV

L.J.J.M. Vale RA

contents · besides the sales of semen through inseminations by ai-vets, vrv again managed to sell...

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