annual report 2011-2012 - crv international4 annual report 2011-2012 message from the chairman 5...

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annual report

2011 -2012

better cows | better life

annual report

2011 -2012

4 Annual report 2011 -2012

MESSAGE FROM tHe CHaIrMan 5

CRV: Better CoWS | Better lIFe 6

MAJOR eVentS 8

lonG-lIVInG COWS 12

BREEDING FOR A proDuCtIVe lIFe 14

BuSIneSS reVIeW CRV HOLDING 20

Photography: Alex Arkink, Alain Baars, Stefani Buijsman, Alger Meekma,

Frank Robinson and CRV (including Harrie van Leeuwen, Ivonne Stienezen

and Kristina Waterschoot)

CONTENTS


CrV at 10: FoCuSInG on SuStaInaBIlItYDuring the last financial year CRV celebrated its 10th anniversary. Ten years ago the Flemish co-operative VRV and the Dutch co-operative CR Delta decided to join forces in order to benefit mutually from each other’s strengths. And we certainly made that wish come true. Over the past 10 years we have grown into a successful, strong, international cattle improvement organisation.

The last financial year was no exception in terms of strong growth. However, owing to the high level of investments and pressure on margins in the last months we ended the financial year on a negative note. But the investments we made have set us in good stead for the future. In terms of IT, we invested in a new ERP (enterprise resource planning) system which is helping us manage our cash and goods flows and is also improving the quality of the information we obtain for managing CRV worldwide.

Another investment was our acquisition of Liberty Genetics in New Zealand. This too is an investment with an eye on the future. New Zealand is an interesting country, not only in terms of dairy but also with regard to breeding. This acquisition also played a role in CRV’s growth.

In order to continue along this growth path, we need to run our business in a sustainable way. This not only applies to CRV but to dairy and beef producers as well. Society is calling on them to farm more and more responsibly, and CRV wants to help them do so. For this reason CRV has sought the co-operation of other partners in the supply chain. For example, we want to work with FrieslandCampina to develop practical solutions for cattle breeders.

A good example of a new practical solution is Ovalert, the fertility management system we rolled out in various countries during the last financial year. Ovalert combines various existing products to form an integrated solution. The result is a product that makes life easier. And this also ties in nicely with our slogan: BETTER COWS | BETTER LIFE. Our many enthusiastic users bear witness to the fact that we have succeeded in achieving this.

evert alderkamp | Chairman CRV

MESSAGE FROM tHe CHaIrMan

6

CrV is an international cattle improvement organisation which helps cattle breeders to continuously improve their herds. our shareholders are the Dutch co-operative Cr Delta u.a. and the Flemish co-operative VrV vzw. Dutch and Flemish cattle breeders are the members of these co-operatives and are therefore the owners of CrV: by cattle breeders for cattle breeders.

CRV operates in an international structure with business units that serve our local customers. This enables us to always talk to our customers in their own time zones and culture zones. It also helps us keep track of our local customers’ wants and needs. CRV’s products and services are delivered to approximately 60 countries. Our head office, located in Arnhem, supports all our business units and their local branches.

StrateGYGrowth is key to CRV. Current worldwide trends and developments in markets and customers call for signif icant investments in innovation, technologies, products and solutions. To be able to make these investments with a view to maintaining our position as the leading cattle improvement organisation, we need to grow both nationally and internationally. But we want to grow in a focused way, using available resources as eff iciently as possible. We offer innovative solutions and concepts that match the needs of our customers: dairy and cattle farmers worldwide. We can respond to changes quickly by investing in innovation, but also by keeping a constant eye on these changes in the market and those affecting our customers. In all of this, our focus lies clearly on sustainability.

CRV: Better CoWS | Better lIFe

CRV WORLDWIDE: BuSIneSS unItS CloSe to tHe CuStoMer

Western europe

north america

South america

Central europe

oceania

other export countries

Annual report 2011 -2012

7

CRV aims to continue to supply its customers with high quality products and services going forward. For example, CRV is committed to achieving sustainable and efficient cattle breeding that supports the continuity of its members’ and customers’ operational management. So cattle breeders have a great influence on CRV’s policy through the co-operative’s advisory bodies and member committees.

CrV SuperVISorY BoarD (as of 31 august 2012)– E. J. F. Alderkamp, Zevenaar | Chairman– N. A. L. van Leeuwe, Sint-Margriete | Vice-chairman– B. E. G. ten Doeschot, Hengelo– C. Gorter, Makkinga– P. E. van der Grift, Bunnik– H. L. M. Hermsen, Havelte– A. P. H. J. Kersten, Sevenum– D. Ryckaert, Dikkelvenne– H. Schonewille, Zuidwolde– M. A. Siebenga, Lelystad– B. Uyttendaele, Den Haag– M. D. L. Y. R. Vernimmen, Brasschaat

CrV eXeCutIVe BoarD– R. M. A. (Roald) van Noort

Chairman of the CRV Executive Board– J. F. H. M. (Joop) Kersten

Executive Director Finance & Organisation– A. (Ate) Lindeboom

Executive Director Operations & Development

CRV Supervisory Board

CRV Executive Board: Joop Kersten, Roald van Noort and Ate Lindeboom (from left to right)

MISSIon: CRV is a leading customer-focused cattle improvement co-operative, fully committed to adding value for farmers on an ongoing basis


8

SepteMBer 2011– CRV Lagoa (Brazil) is a partner to and participant in the first

conference on the tropical synthetic dairy breed Girolando.– The Dutch Product Board for Livestock and Meat (PVV)

commissions CRV to set up a central database to record the use of veterinary medicines in cattle.

– CRV launches Ovalert, an integrated fertility management system involving pedometers, in the Netherlands and Flanders.

noVeMBer 2011– Ralma Christmas Fudge, dam of CRV bull Cricket, wins joint first

place in Holstein International magazine’s Global Cow of the Year 2011 contest.

– Readers of the Brazilian journal Rural vote CRV Lagoa the best AI company in Brazil.

JanuarY 2012 – Kian daughter Data was the cow with the highest fat and

protein production in Germany in 2011. She produced 1,241 kg fat and protein in one lactation.

FeBruarY 2012– The Ubachs family from the Dutch town of Epen wins the third

CRV Sustainability trophy. CRV awards this prize for the most sustainable dairy farm in Flanders and the Netherlands.

– CRV and FrieslandCampina announce their strategic joint venture on sustainability, designed to help their members make their business operations more sustainable.

MarCH 2012– CRV welcomes its 1000th follower on the social network

Twitter (@crv4all).– CRV Lagoa (Brazil) rolls out the bull advice programme

SireMatch. The programme has been adapted to meet the needs of the Brazilian market.

– CRV Ambreed (New Zealand) launches the web-based cattle management system CRV InSight.

– CRV launches the Dairy Management Guide, a publication developed for dairy farmers all over the world. This book provides information on how to simplify and improve dairy farm management.

MAJOR eVentS

Pedometers are part of the Ovalert fertility management system


Annual report 2011-20129 CRV jaarverslag 2010-2011

10

aprIl 2012– The members of the CR Delta and VRV co-operatives receive a

total of €3 million in member benefits in 2010-2011 – their share of CRV’s profits.

– A number of changes are made to the breeding value estimates calculated in April by GES (Genetic Evaluation Sires). The NVI (Dutch-Flemish index) is adjusted, and meat index and degree of relationship calculations are added.

– CRV CZ takes over a group of AI technicians in the Czech region of Bohemia.

MaY 2012– CRV acquires Liberty Genetics in New Zealand. Liber ty

Genetics is a niche player in the New Zealand market, with a small but good breeding programme. The company will continue to operate under the Liberty Genetics brand and trade name.

– CRV launches Ovalert on the German market. The fertility management programme has been adapted for Germany.

– CRV extends data collection to test farms. Cattle breeders in the Dutch and Flemish breeding programme will add claw health data to the information they record.

– The Grassland Alliance, a joint venture between CRV and NCBC in Ireland, organises its first successful conference. This joint venture focuses on the grazing system, the cattle farming system with year-round grazing.

June 2012– CRV CZ organises a Fleckvieh cattle show in the Czech town

of Nekor.– The new corporate film is premiered. The film gives a brief and

powerful picture of the global company CRV and can be found on CRV’s YouTube channel (http://www.youtube.com/crv4all, search for ‘meet CRV’). The film is available in various languages.

– The tropical dairy cattle breed Gir (Brazil) has a new record holder: Iname FIV. This daughter of CRV bull Jaguar set her new world record at a four-day competition at which she produced an average of more than 44 kg per day.

Proud winners show their Fleckvieh cow at a cattle show in the Czech Republic


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– CRV launches a cattle management app for mobile phones, enabling our online cattle management system VeeManager to be used on the go.

– Employees and a CRV member cattle breeder together raise more than €50,000 for the Dutch Cancer Society.

– CRV CZ launches the Farmsoft cattle management system.– CRV bull Kian reaches the respectable age of 15. Because

of his great popularity and physical fitness, Kian still mounts weekly for semen production.

– CRV shows a number of different daughter groups at the All Holland Dairy Show (NRM). There is also a category solely for cows that produced 100,000 kg of milk for the first time. The NRM also welcomes many foreign visitors, including employees and customers of our international branches.

JulY 2012– Af ter an extensive inspection, CRV Lagoa (Brazil)’s ISO

certificates are renewed again.

auGuSt 2012– CRV Germany offers male sexed semen from the bull Orbit for

use in cows from which no female progeny is wanted. Orbit scores well on calving ease and calf vitality.

– The red-and-white bull Classic, whose daughters enjoyed great success in the show ring, is culled. He was almost 13 years old.

MAJOR eVentS


Classic daughter Brook Marie 61 (owned by Hans Puttenstein of Kamperveen, the Netherlands), general champion red-and-white at the All Holland Dairy Show, is just one example of Classic’s show success

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Cattle breeders opt for long-living cows. and naturally CrV also plays a role in this. CrV helps its member customers achieve high lifetime yields from their herds in many different ways. one way is by collecting good quality data on the cattle as a basis for breeding.

When you are aiming for long-living cows, fertility is important. As a cattle breeder, how do you make sure the cow falls pregnant again at the right time? Naturally, at CRV we aim to breed bulls that deliver fertile daughters. We also supply a number of different management tools. The most exciting of these is the new Ovalert fertility management system (see box on page 15). AI technicians

are also offering cattle breeders an increasing range of fertility services backed up by instruction and training.

lIFetIMe proDuCtIon at tHe all HollanD DaIrY SHoWThere were plenty of long-living cows at the All Holland Dairy Show (NRM) in Zwolle (the Netherlands) in June. The various contests and daughter groups shone the spotlight on many attractive cows, but the most outstanding of them all was the 100,000 kg group. No fewer than 22 cows that had produced at least 100,000 kg of milk were paraded slowly around the ring. It was a great example of what Dutch cows have to offer in terms of lifetime yield.

lonG-lIVInG COWS


The parade of cows that produced 100,000 kg of milk during the All Holland Dairy Show (NRM) was very impressive


JoInt VentureSIn order to remain as faithful as possible to the motto BETTER COWS | BETTER LIFE, CRV works with partners on various levels. Well-known joint ventures are the Grassland Alliance and EuroGenomics, which saw more new members join this year. Sustainability is the theme of a joint venture between CRV and dairy processors FrieslandCampina. Society is keeping close tabs on how our food is produced. And this places certain demands on the way dairy farmers operate. So both co-operatives want to provide their members with tools to help make their farms more sustainable. The areas covered are: using veterinary medicines responsibly, improving udder health, claw health and mineral utilisation.During this f inancial year the basis was also laid for collaborating with top breeding organisations and the Wageningen University and Research Centre (Wageningen UR). Under the name Breed4Food we joined forces with Hendrix Genetics (poultry and pigs), Topigs (pigs) and Cobb Europe (poultry). Our collaboration in the area of breeding research is intended to promote sustainable food production through breeding.

These four companies and Wageningen UR will together form a top institute. They are working together to develop techniques, but it will be up to each partner individually to make use of the techniques in breeding programmes, for example.

The chairmen of CRV and FrieslandCampina, Evert Alderkamp and Piet Boer, signed a joint venture agreement on sustainability

Lifetime yields in the Netherlands 2002-2012

31,000

29,000

27,000

25,000

23,000

21,000

19,000

17,000

lifetime yield

kg

mil

k

YEAR CUllED

30,000

2002 2004 2006 2008

2010 2012

Lifetime yields in Flanders 2007-2012

29,000

27,000

25,000

23,000

21,000

19,000

17,000

15,000

lifetime yield

kg

mil

k

YEAR CUllED

20082007 2009 2010 2011 2012

28,000

In the Netherlands and Flanders CRV collects a range of data from milk production records to help cattle breeders improve their livestock management. This data shows that cattle breeders in the Netherlands and Flanders have been achieving high lifetime yields for years.

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a key element of CrV’s breeding goal is longevity. there are various ways of achieving this. on these pages you will find a brief summary of CrV’s breeding activities.

To live a long and productive life, a cow needs to have good claw health. In order to breed bulls that score well on claw health and that also pass on good claw health, last financial year CRV started recording claw health data as part of its breeding programme in the Netherlands and Flanders.

re-ConFIrMInG GenoMIC BreeDInG ValueSAs in previous years, more genomic bulls obtained a breeding value based on daughters in the past financial year. These trial animals are the best proof that genomics does indeed work (see table). On average, genomic bulls maintain their breeding value well; the numbers dropping are roughly in line with the numbers rising, as an analysis of 505 bulls reveals. In terms of NVI, the bulls dropped only two points on average during the switch from genomic to daughter breeding values. Most of the bulls that scored well for genomics also have a high daughter breeding value. The bulls with the highest daughter breeding values were already in the group with the highest genomic breeding values. Thus Persuader, Refiner, Pilot, Silver, Silky, Stuart and Percival

(all 200 NVI or more on basis of daughters) are also winners on the basis of genomics.

More polleD WInnerSThe joint ef for ts of breeders and AI organisat ions have dramatically increased the number of polled cattle at the top of the population. Many of the very best cow families have now been used to breed high quality, naturally polled animals. This has resulted in a higher genetic level and more diversity in lineages.In the breeding programme, CRV is currently using polled animals that are on a comparable level to horned bull dams and bull sires. In the red-and-white breeding programme, for example, 30% of embryos already come from a polled sire and/or dam.The polled Fasna Asterix P is one of CRV’s best-selling red-and-white InSire bulls. And the range is constantly growing. Good livestock data forms the basis for good breeding. The digital era presents us with many different ways of collecting this data. All our branches are developing in this area on an ongoing basis.

oValert Ovalert is more than just a pedometer system, it is a complete fertility management system. Ovalert is available in different packages. It can be connected up to anything from mating advice to fertility and AI services. Very soon after its initial launch, Ovalert was adapted for the German market.

BREEDING FOR A proDuCtIVe lIFe


* 505 bulls were divided into three groups on the basis of their genomic breeding value NVI. It was then checked which group the bull was placed in based on its daughter breeding value.

gENOmiC BREEDiNg VAlUE* tOtAl

high average low number of bulls

high 114 39 15 168 average 47 82 40 169 low 7 48 113 168total number of bulls 168 169 168 505

COMPARISON OF GenoMIC BreeDInG ValueS for NVI with later breeding value on the basis of daughter information, based on 505 bulls

DA

Ug

HtE

R

BR

EED

iNg

VA

lUE*

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CrV InSIGHtDuring the 2011-2012 financial year, CRV Ambreed in New Zealand launched a cattle management system: CRV Insight. This web-based application enables cattle breeders in New Zealand to enter or view their livestock data whenever and wherever they want. The programme had 600 subscribers in its first year alone.CRV in the Czech Republic also successfully launched a new cattle management system, called FarmSoft.

SIreMatCH ‘MatCHeD’ For BraZIl anD tHe uSaSireMatch, CRV’s international online bull advice programme, has also been adapted for the Brazilian and North American markets. After countries including New Zealand, Germany, Denmark and Spain, Brazil and the USA now also have a version adapted to reflect the local language, breeding goals, key figures and bull packages. This mating advice programme was launched in the USA on April 1, and by the end of the financial year bull advice based on the US breeding goal had been given for almost 5000 cows. The system is also a useful tool for showing cattle breeders what CRV – a relatively new player in the American market – can do for them.

DIGItal DeVelopMentSThe internet offers many new opportunities for offering services to customers – like SireMatch – but it is also a quick and easy


oValert In praCtICeAntony Nooijen is a Dutch dairy farmer who uses Ovalert. He milks 106 cows with two milking robots. Why did he buy Ovalert? “I had too many cows that were not falling pregnant. And too few pregnancies were being detected, particularly among my maiden heifers, partly because they are kept in a separate barn”, he says. Antony Nooijen is very happy with Ovalert. “I really like this system, not only because of the results but also because it is easy to use. It took some getting used to to begin with, of course, but now I have really got the hang of it. Thanks to Ovalert we detect all our pregnant maiden heifers now. And if there are any cows that are not pregnant now, there will be a reason for it, like cysts.”Nooijen’s results are excellent as well. The average calving age of his heifers in the 10 months Nooijen has been using the system has dropped from 28 months to 24.5 months. And it is still falling. “We are trying to achieve a calving age of between

23 and 24 months. Our calving interval has already dropped from about 435 to about 410 days”, he adds.

Antony Nooijen

16

way to keep in touch with them. For example, the North America, South America and Central Europe business units each have their own Facebook page. You can also follow some of them on Twitter. The Western Europe business unit broke the 1000 Twitter follower barrier in the last financial year. CRV can also be found on YouTube. The Western Europe business unit’s YouTube channel, for example, includes f ilms of daughter groups at the All Holland Dairy Show (NRM). CRV Lagoa uses this medium alongside its own TV station to show customers their bulls. CRV Lagoa also uses the internet for study purposes. Participants in CRV Lagoa’s training programme use the internet for learning, for example by sharing photographs and experiences.

FurtHer GroWtH In tHe uSaCRV has grown strongly in the USA. We now have representatives in f ive of the ten key milk producing states: Michigan, New York, Pennsylvania, Washington and, of course, our home base Wisconsin. Finding the right people for these tasks was the first rung on our success ladder in the USA. Good interpersonal relations, combined with CRV products, will enable us to continue to grow even further in the USA. But CRV not only focuses on growth. We also work hard to retain our existing customers. Fertility management and support by service teams plays a key part in this, including with the help of SireMatch.


BREEDING FOR A proDuCtIVe lIFe

17

SpreaDInG rISK WItH aMerICan BreeDInG proGraMMeThe Holstein breeding programme in the USA is bearing fruit on many levels. Top bull Hunter is meeting the high expectations vested in him (see box). But the US breeding programme is also helping to spread the risk. This was illustrated very clearly when the borders were closed to products from countries including the Netherlands and Flanders on account of the Schmallenberg virus. With our range of US bulls, we were able to continue to service our customers all over the world.CRV also does good business with Jerseys in the USA. The Jersey breeding programme meets a need among American dairy farmers. It is an important addition to our offering in the key milk producing states. This financial year also saw six new bulls added to the Angus breeding programme. This beef breed is a useful enhancement of CRV’s range.

neW SeGMent In neW ZealanDCRV has boosted its position in New Zealand with the acquisition of Liberty Genetics. Liberty Genetics specialises in selecting young bulls with a high BW (New Zealand index). The company has a range of top Holstein (grazing segment) and Jersey breeding bulls, and also has a strong position in the cross market.Liberty Genetics is a niche player in the New Zealand market. The company will continue to operate under its own name in Oceania, alongside CRV Ambreed and CRV Australia.

neW ZealanD CHart topperSOur breeding programme in Oceania has also been successful. CRV Ambreed has consolidated its position at the top of the RAS list, the list of sires offered by New Zealand AI organisations ranked by breeding value. There are no less than eight CRV Ambreed sires in the top 13. CRV markets both Holstein and Jersey sires that have won the prestigious title of ‘Best Newcomer’.

leaDInG tHe WaY In GenoMICSGenomics is also garnering a lot of attention in New Zealand. CRV has entered into a joint venture in this field with the Dairy Futures CRC in Australia. This research project, which covers the whole of Oceania, focuses on further improving genomic breeding values. With this project and all our other efforts in this field worldwide, CRV is now leading the way in breeding programmes based on genomic breeding values.


Hunter CalVeS Create a StIrCookiecutter MOM Hunter was once again CRV’s top bull in the American TPI list in the 2011-2012 financial year. The bull is widely used, including in breeding programmes and as a bull sire for AI organisations. Hunter calves are now being born all over the world and are extremely appealing: they are attractive, easy-to-milk calves with an unusually long length. The first Hunter daughters have been genomically tested and the results are impressive. Michigan Huntr Oreo, born on the University of Michigan dairy farm, is right up there at the top of the US rankings with a TPI score of more than 2500. Brandt-View Hunter Heart was sold as a three-month-old heifer calf at the annual US pedigree elite auction. For $41,000 Heart moved to the breeders of CRV bull Goli, De-Su Holsteins in Iowa.Hunter and his progeny are well on their way to meeting the high expectations vested in them.


top 5 lIStS OF THE MOST POPULAR HolSteIn BullS IN THE BUSINESS UNIT GloBal SaleS anD DeVelopMent (worldwide sales)

top 5 lIStS OF THE MOST POPULAR HolSteIn BullS IN THE BUSINESS UNIT WeStern europe

Jaguar Te Do Gavião (Brazil)

BlACk & WHitE

Paramount

Yank

Cameron

Cricket

Canvas

HOlstEiN

Paramount

Opinion

Lass

Olympic

Olympic 38

BEEf BREEDs

Gaius (Angus)

CFM Orgulho (Nelore)

S2 New Design (Angus)

C 2569 Da Mn (Nelore)

Backup (Nelore)

RED & WHitE

Kodak

Fidelity

Pleasure

Curtis

Bonfire

OtHER DAiRY BREEDs

Jaguar (Gir Leitero)

Curio (Girolando)

Napolitano (Girolando)

Cowboy (Girolando)

Fardo (Girolando)

BlACk & WHitE

Cricket

Improver

Impuls

Paramount

Navarro

RED & WHitE

Fidelity

Kodak

Kylian

Kian

Ideal

top 5 lIStS OF THE MOST POPULAR BULLS IN THE BUSINESS UNIT SoutH aMerICa

Epocha daughter (Czech Republic)

popular CrV-BullS, BASED ON DOSES SOLD


Paramount daughter Lena 297 (the Netherlands)Okura Lika Murmur SJ3 daughter (New Zealand)

top 5 lIStS OF THE MOST POPULAR BULLS IN THE BUSINESS UNIT nortH aMerICa

HOlstEiN

Hunter

Yank

Ichant

Butembo

Heman

top 5 lIStS OF THE MOST POPULAR BULLS IN THE BUSINESS UNIT Central europe

top 5 lIStS OF THE MOST POPULAR BULLS IN THE BUSINESS UNIT oCeanIa

flECkViEH

Erogen

Epocha

Equipa

Epigraf

Bonsai

HOlstEiN

Ichant

Yank

Shulan

Alfons

Predestine

HOlstEiN (local)

Ros Mhor TEF Shadow

Maire Ex Presso

Telesis Euon Firenze

Oakura Oman Overdrive

Marchel Fire Macca-OC S2F

jERsEY

Okura Lika Murmur S3J

Pukeroa TGM Manzello

Canaan Nevvy Pioneer

Arrieta NN Degree

Marsden NN Elicit

OtHER DAiRY BREEDs

Maverick (Jersey)

Dark Knight (Angus)

Piere (grazing)

Murmur (Jersey)

Charity (Angus)

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During the 2011-2012 f inancial year, CRV worked on a new strategy for the coming three years. In order for us to continue to invest in people and technology, growth remains a key focal point in our new strategy. A new aspect is the element of sustainability. CRV will be increasing its commitment to this aspect. CRV provides its members and customers with a f irm basis for cows with a high lifetime production combined with good longevity and therefore lower greenhouse gas emissions. CRV is also taking a close look at its own processes and introducing initiatives to reduce its carbon footprint. CRV aims to set itself apart from its competitors in terms of sustainability. The organisation is aware that everyone will have to use scarce raw materials for food and energy production more sparingly in the future if we want to hand over our planet in a fit state for the next generation.

neW erp SYSteMThe latest phase in the implementation of the new ERP system M3 supplied by Lawson got under way in the 2011-2012 financial year. The system went live in the Netherlands and Flanders on October 1 2012. It will be implemented in Germany and the Czech Republic in the next financial year. The implementation of this new system, known as WAVE within CRV, placed significant demands on all CRV employees. A complement to everyone who played their part in this project.

taX anD CaoWe have concluded our discussions with the Dutch Tax and Customs Administration on the application of the low VAT rate for information products. The authority found in our favour and we were able to refund our Dutch customers more than €2.1 million in overpaid VAT in the 2011-2012 financial year.In the 2011-2012 financial year we also signed an agreement in principle with the trade unions on the new corporate collective labour agreement (CAO) for CRV in the Netherlands. The wording will be developed further and the CAO formalised in the next financial year. Certain arrangements included in the CAO have already been set in train.

BuSIneSS reVIeW


21

The above table shows the development of CRV over the past five financial years. To aid comparison, the key figures are shown inclusive and exclusive of member dividend or sales discounts and amortisation of goodwill. In the event of an acquisition, goodwill is the added value of a company over and above its net worth. Goodwill is written off in the form of amortisation.

HIGHer SaleS – loWer MarGInSThe 2011-2012 f inancial year ended for CRV with a net loss. The last quarter in particular was behind expectations despite renewed strong growth in net sales of €13.8 million before payment of the member dividend, up to a level of over €169 million. This is an increase of approximately nine per cent. This growth exceeded the budget, with growth being achieved in all business units. However, this did not translate into increased profits. The growth

in sales was primarily achieved in categories with lower gross margins such as services, Ovalert and semen from third parties. In addition, CRV was unable to pass on the cost of inf lation adequately in its sales prices. Furthermore, customers tended to purchase cheaper mixes of products due to the deterioration in market conditions. CRV also faced higher running costs resulting from the introduction of a new office automation system (ERP) and its implementation costs.The operating result before amortisation of goodwill and member benef its therefore dropped to €2.3 million. Amortisation of goodwill was significantly higher due to our having written off the goodwill associated with the acquisition of CRV Bela Vista and CRV Xseed in the 2010-2011 financial year over an entire year. As a result, the operating result after amortisation of goodwill is negative. For this reason, no member dividends are payable for the 2011-2012 financial year.

CRV HOLDING

CRV FInanCIal KeY FIGureS

(X EUR thousand) 2011-2012 2010-2011 2009-2010 2008-2009 2007-2008

net sales before member benefit or sales discount 169,569 155,797 142,140 133,372 136,476

member benefit or sales discount 0 -2,991 -1,909 -1,140 -1,270

net sales after member benefit or sales discount 169,569 152,806 140,231 132,232 135,206

operating results before amortisation of goodwill, member benefit or sales discount 2,270 8,986 7,572 7,033 7,598

amortisation of goodwill -2,986 -1,763 -2,201 -764 -2,586

member benefit or sales discount 0 -2,991 -1,909 -1,140 -1,270

operating result -716 4,232 3,462 5,129 3,742

result after taxation -786 2,991 4,733 4,544 2,027

shareholders’ equity 75,078 76,414 73,138 65,802 62,278

balance sheet total 115,826 123,149 112,453 103,689 102,188

working capital (including liquid assets) 26,118 31,009 36,171 26,487 24,949

liquidity (current ratio) 1.82 1.86 2.28 1.97 1.83

solvency 64.9% 62.1% 65.0% 63.5% 60.9%


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WorlD MarKetThe world market in 2011-2012 was dominated by sustained drought in the USA, Brazil and Australia. As a result, maize and wheat harvests in particular were below expectations. The drought, combined with the compulsory addition of maize-based ethanol in the USA, led to higher production costs. Dairy farmers were not able to pass on these higher costs in a higher milk price so they were barely able to make a profit. Beef cattle breeders were also faced with these high production costs, Although beef prices were at a high enough level to enable livestock farmers to still turn a profit.

WeStern europe: net SaleS HIGHerIn the past f inancial year the Western Europe business unit focused on implementing Ovalert in the market and rolling out the new ERP system. Both projects went extremely well, although the implementation of the ERP system was three months behind schedule. Nonetheless, except for some operational teething trouble the system is now working to everyone’s satisfaction. We would never have achieved this without the t ireless commitment of our staf f and consultants and our supplier Lawson’s support personnel.The introduction of Ovalert is heralding a new era in cattle improvement. The sale of Ovalert is one of our most successful market launches of recent years. Compared with the last financial year, CRV saw net sales in Western Europe rise by more than four per cent partly due to Ovalert, despite a slight drop in market share in genetic products in the Netherlands. In Germany our market share increased further, as did our operating result. However, the Western Europe business unit’s

operating result fell due to the lower margins resulting from the changed sales mix and extra costs for the automation systems.

SoutH aMerICa: MarKet SHare eXpanDeDDespite the significant downturn in the market in Brazil, the South America business unit was able to grow its net sales by 15 per cent (in euros) compared with last year. CRV Lagoa increased its market share at its competitors’ expense in the dairy cattle segment in particular. In beef cattle, CRV Lagoa’s market share increased in line with

BuSIneSS reVIeW CRV HOLDING

tHanKS to MeMBerS, CuStoMerS anD StaFFOur staff have worked tirelessly to bring about significant growth this year. The Executive Board thanks them for their commitment, and also extends its thanks to members and customers for the trust they have placed in CRV products.


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the market. However, its operating result fell compared with the previous year. CRV Bela Vista’s sales were in line with targets, but its operating result was below expectations. Both companies clearly suffered from the reduced growth in the Brazilian economy and the deterioration in the investment climate. In addition, CRV Bela Vista’s integration in the CRV organisation brought with it higher costs than planned and the expected margin on the sale of sexed semen by CRV Bela Vista remained below expectations.

oCeanIa: CrV SIreS DoMInateCRV Ambreed’s sires dominate the RAS list in New Zealand (the ranking of sires based on breeding values) in both the Jersey and the Holstein segment. This is a clear sign that our many years of dedication to the New Zealand breeding programme are beginning to bear fruit. Thanks to a large extent to the good rankings of CRV sires, the Oceania business unit was able to increase sales by 29 per cent. CRV Ambreed’s operating result was lower than last year due to the additional cost of genotyping cows and reorganisation costs in the logistics and sales departments.The CRV group and the Oceania business unit were given a boost in the 2011-2012 financial year with the acquisition of Liberty Genetics. Liberty Genetics is active in a segment in which CRV Ambreed is not active (trial bulls only) and therefore complements CRV Ambreed. With the acquisition of Liberty Genetics, CRV’s market share in the New Zealand market has grown to more than 30 per cent. Because sales of semen are highly seasonal in New Zealand and Liberty Genetics was acquired outside the sales season, Liberty Genetics did no more than add costs to the Oceania business unit in the 2011-2012 financial year. The business unit’s operating result was therefore down. Besides the above, CRV Ambreed introduced the data management programme Insight, making it an increasingly mature player in the New Zealand cattle improvement market.

nortH aMerICa: StronG GroWtHCRV USA’s sales saw a 144 per cent increase on last year. Exports of American product to other CRV business units were given much

attention and now form a significant proportion of CRV’s sales in the USA. Sales in the American market rose by 50 per cent compared with the previous year, although that was not sufficient to cover the costs associated with the planned growth. The operating result was down on the previous financial year.

Central europe: poSItIVe operatInG reSult2011-2012 was a good year for the Central Europe business unit. Its sales increased by nine per cent compared with the previous year despite a shrinking market, and its operating result is once again positive after a number of negative years. The Central Europe business unit is clearly reaping the benefits of the reorganisations and cost savings of the past three years.

GS&D: GroWtH WItH poSItIVe operatInG reSultThe Global Sales & Development (GS&D) business unit was able to grow its net sales by 29 per cent compared with last year. Its operating result improved by 12 per cent despite the negative contributions from the South African and Spanish activities. The result in South Africa was negative due to extra costs for the acquisition of distributors who were previously competitors. This acquisition should result in a significant increase in market share in South Africa in the next financial year.The Schmallenberg virus impacted on the Global Sales & Development business unit at the end of the financial year, but this disease is expected to have the greatest impact in the 2012-2013 f inancial year. Unfortunately the European Union member states have failed to tackle the issue of Schmallenberg adequately. This is giving rise to financial losses for CRV.




eXpeCteD CourSe oF eVentS In 2012-2013In the 2012-2013 financial year we expect four issues to influence CRV’s markets and business operations:– Due to export requirements put in place in response to the

Schmallenberg virus, exports of semen from the European Union will be limited, particularly to the USA and the so-called Mercosur countries including Brazil. At the end of the 2012 calendar year worldwide stocks of CRV sperm from the Netherlands/Flanders and the Czech Republic have run out. This will impact negatively on our financial results unless the export requirements are relaxed.

– The continuing high prices of feed raw materials will affect CRV’s customers’ prof itability. We therefore expect the pressure on margins to continue.

– The slow recovery of the world economy will not result in increased demand for dairy and beef products in 2012-2013. Dairy and beef prices will therefore not rise substantially.

– On April 1 2013 the US Department of Agriculture (USDA) will open up genomic evaluation of bulls to third parties. It is not yet known what the rates of pay will be. We cannot predict the impact of this measure, but there will very likely be more genetic products available on a TPI basis, which will result in lower yield prices.

To be able to respond to these expected market developments and to achieve the necessary growth, CRV will be implementing a Performance Improvement Programme (PIP) in the first quarter of the 2012-2013 financial year. This programme is already under way.

KeY FIGureS CRV HOLDING BV

General 2010-2011 2009-2010

employees (full-time; on average) 1,328 1,276

milk samplers (full-time; on average) 149 159

reSultS (consolidated)

net turnover (€1 mln) 169.6 152.8

operating result (€1 mln) -0.7 4.2

result after taxation (€1 mln) -0.8 3.0

BalanCe SHeet (consolidated)

group equity (€ mln) 75.1 76.4

balance sheet total (€ mln) 115.8 123.1

solvency (shareholders’ equity/balance sheet total) 64.8% 62.0%

cash flow (€1 mln) -9.3 -1.0

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ConSolIDateD BalanCe SHeet CRV

aCtIVa 31-8-2011 (X € 1,000) 31-8-2010 (X € 1,000)

fixED AssEts

intangible fixed assets 13,223 14,108

tangible fixed assets 40,471 38,659

financial fixed assets 4,071 3,190

total fixed assets 57,765 55,957

CURRENt AssEts

inventories 17,657 14,809

account receivable 26,543 27,882

cash at bank and in hand 13,861 24,501

total current assets 58,061 67,192

total 115.826 123.149

paSSIVa 31-8-2011 (X € 1,000) 31-8-2010 (X € 1,000)

shareholders’ equity 75,078 76,414

group equity 75,078 76,414

provisions 4,478 5,014

long-term debt 3,987 5,537

current liabilities 32,283 36,184

total 115,826 123,149

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ConSolIDateD proFIt anD loSS aCCount CRV

2011-2012 (x € 1,000) 2010-2011 (x € 1,000)

NEt tURNOVER

genetic material 82,223 75,294

information products 17,224 17,106

services 60,684 56,091

management 9,438 4,315

total net turnover 169,569 152,806

changes in inventories 2,243 2,270

capitalised production 932 677

other operating income 161 554

total operating income 173,105 156,307

OpERAtiNg ExpENsEs

purchases 17,043 10,865

production costs 37,478 33,634

staff costs 82,305 74,593

travelling and car expenses 10,772 10,773

accommodation expenses 4,185 3,236

depreciation, amortisation and book results 8,300 8,103

other operating expenses 13,738 10,871

total operating expenses 173,821 152,075

operating result -716 4,232

VARiOUs REsUlt COmpONENts

financial income and expenses, on balance 114 292

result from participating interests 1,311 1,637

result from ordinary operations before taxation 709 6,162

taxes -1,495 -3,170

result after taxatation -786 2,991


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