Turnover 1st quarter 2007 : €178 M (+ 6,2%)
| In €M - IFRS Standards | 2005 | 2006 | Variation |
| 1st quarter | 647,3 | 637,0 | +6.2% |
Worldwide context of high raw materials price
Globally, the animal nutrition market was affected by the continuation of the upward spiral in raw material proces, for cereals especially, which took hold in the 4th quarter last year.
Varying from country to country, these increases may be able to be passed on either fully or partially, to the sales prices. At the same time, forward hedging operations have been put in place to limit the impacts.
Nutrition France activity holding up well
NUTRITION – COMPOUND FEED
For the Nutrition France activity directly managed by EVIALIS, volumes decreased slightly in line with a structural slowdown in the market. Poultry feed increased by 5% in volumes over the first quarter compared with 2006, illustrating a consumer tendency towards « quality chicken » following the avian flu crisis. All the same the levels reached this quarter are still lower than before the start of this crisis. As for the pig sector, volumes are down in a market which is highly competitive due to decreasing livestock productions, and lower meat prices which penalize the stockbreeders. Finally, concerning ruminants, after the favorable conditions of the first quarter 2006, the market has gradually stabilized.
Difficult time for Nutréa
Turning to Nutréa, the joint venture established with Unicopa for the West of France, volumes have fallen significantly compared with the first quarter, underlining the difficulty to re-conquer export markets which were closed by embargoes arising from the avian flu virus.
Good international performances for Nutrition International
Nutrition International business progressed significantly over the first quarter, with a contribution of €33.1 M, an increase of 23% on a like-for-like basis with last year.
By way of example, Asia’s volumes increased by 33%, to achieve a contribution of €12.2 M. Our three factories in Vietnam continue to progress, winning market shares, particularly in the aquaculture sector. In India and Indonesia the subsidiaries are finding their feet again, having been badly affected by the avian flu virus in 2006.
In Poland our subsidiary achieved improved volumes and total sales, which reflect the market share gained on the poultry sector.
In Spain, efforts made on ruminants and poultry have borne their fruits. The increase in raw materials prices was unfortunately only partially passed on to sales price due to local competition.
Brazil gave a steady performance for turnover on a like-for-like basis, but the teams there are pursuing their project to modify the product mix and manage their profit margins and expense.
The South African subsidiary Monti Foods in the compound feed sector which was acquired at end 2005 continues to make good headway, achieving a 20% rise in both volumes and turnover.
Strengthening of our Premix France activities
In a French market which remains under pressure, the Premix Specialties France Division is making strong progress following the integration of the Nutreco business at the beginning of the year, almost doubling its contribution to Group turnover at €9.8 M for the quarter.
Premix: good international development
Eastern Europe globally contributed €3.9 M to Group turnover. This figure benefits from the integration last January of the Russian premix subsidiary, which counts for €1.6M.
The Southern Europe zone (Spain, Italy and Portugal) made a contribution to Group turnover of €4.2 M with improvements in tonnage, in the context of price pressure.
Finally the turnover for South Africa amounted to €2.2 M, representing on a like-for-like basis, an increase of 20%.
Health
In a market marked by the diminishing of breeding stocks, the animal health activity is holding up well in spite of a market which is subject to price pressure in the area of medicated premixes.
Outlook
These first figures for 2007 confirm the difficulties faced on the French market, leading to lowering of breeding stocks, increased competition, affecting prices and a struggle to regain export markets which were lost during the avian flu crisis.
Moreover, the growing utilization of raw materials for bio-energy has brought about a short-term increase in the cost of goods sold, which is not always possible to pass on fully or straight away to the stockbreeders. In the future we can expect certain volatility in prices which will be maintained at a high level.
This context emphasizes the relevance of the strategic plan CAP 2010 defined by the Group and based on the following axes :
• innovation, so that the Group can bring optimal nutritional and economical solutions to farmers ;
• internationalization through organic growth or external acquisitions, to join in the growth of rapidly developing countries.
• optimization of our French structures to capitalize on a technically and quality demanding market.
THE GROUP WILL COMMUNICATE ITS HALF-YEAR TURNOVER ON 26 JULY 2007