Nutrition & Health
- Sales grow thanks primarily to increased sales volumes and positive currency effects
- Earnings down due to higher fixed and raw material costs
- Acquisition of Equateq Ltd. and Pronova BioPharma ASA strengthens business with omega-3 fatty acids
- Outlook 2013: increased sales and volumes; higher earnings with slightly improved margins
Nutrition & Health – Sales by region (Location of customer)Enlarge image
In the Nutrition & Health division, our sales to third parties increased by €97 million to €1,959 million (volumes 3%, prices –1%, currencies 3%). This growth is mainly attributable to rising sales volumes as well as positive currency effects.
With demand largely stable, we were able to improve sales volumes in all business areas and almost all regions. Volumes showed the strongest growth in South America and in the aroma chemicals business. In some product lines, we were unable to keep up with demand; this was due to already fully utilized capacities as well as a shortage of key raw materials. Because of the drought in the Midwestern United States, many farmers reduced their livestock levels, which led to weaker demand in the animal feed business starting in the middle of 2012. Our sales prices overall were slightly below those of the previous year; price increases in other business areas were able to lessen the declines in vitamins resulting from continued intense competition.
Despite positive sales volume development, income from operations did not match the level of 2011. We were only partly able to pass on higher raw material costs to our customers, which put pressure on margins. Furthermore, fixed costs increased owing to negative currency exchange effects and higher research spending.
In May 2012, we acquired Equateq Ltd., a producer of highly concentrated omega-3 fatty acids, further strengthening our business with these products for the pharmaceutical and dietary supplement industry. The public takeover bid was successful for the Norwegian company Pronova BioPharma ASA, a leading provider of omega-3 fatty acids. We completed the transaction in January 2013.
We aim to once again increase sales and volumes in 2013. We expect growth momentum in all business areas and regions. The market launch of new products such as highly concentrated omega-3 fatty acids for pharmaceutical applications is expected to contribute to this sales increase. With slightly improved margins, we strive to raise earnings.