Südzucker Group Thomas Kölbl (CFO) Deutsche Bank 11 th Annual Global Consumer Conference Paris, June 17-19, 2014

Transcription

1 Südzucker Group Thomas Kölbl (CFO) Deutsche Bank 11 th Annual Global Consumer Conference Paris, June 17-19, 2014

2 Disclaimer This presentation contains forward looking statements based on assumptions and estimates made by the executive board of Südzucker AG. Although the executive board may be convinced that these assumptions and estimates are reasonable, future actual developments and future actual results may vary considerably from the assumptions and estimates due to many external and internal factors. For example, matters to be mentioned in this connection include negotiations relating to the world trade agreement (WTA), changes to the overall economic situation, changes to EU sugar policies, consumer behavior and state food and energy policies. Südzucker AG assumes no responsibility and accepts no liability for future developments and future actual results achieved being the same as the assumptions and estimates included in this presentation. This presentation includes percentage and number rounding. Written and visual value statements are standardized as follows: ± 1% stable / ± 1-4% slight / ± 4-10% moderate / >/< 10% significant Südzucker Group, page 2

3 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 3

4 Südzucker Group at a glance Global operating German food group with long-standing corporate history: 1837: Foundation of first sugar company 1926: Foundation of Süddeutsche Zucker-AG Revenues: 7,735 bn Operating profit: 658 Production facilities: ~ 100 Employees: ~ Beneficiary of mega trends within food, animal feed and energy area Stock exchange listing in Germany MDAX-member Trading volume: ~ 1.2 mn shares/day Market Cap and Shareholder Structure* Zucker Invest GmbH (10%) Südzucker indirect via Z&S (43%) Agrana ~1.2 bn Free float (38%) Südzucker ~3.2 bn SZVG** (52%) Südzucker direct (~7%) Free float (7%) Südzucker (69%) Crop Energies ~400 mn Z&S*** (86%) SZVG* Free float (7%) (24%) * May 2014 ** Süddeutsche Zuckerrübenverwertungs-Genossenschaft eg *** Z&S Zucker und Stärke Holding AG (~50% Südzucker, ~50% ZBG (Zucker- Beteiligungsgesellschaft m.b.h.)) Südzucker Group, page 4

5 Group Key Figuresremainon high level (mn ) 2010/ / / /14 Revenues EBITDA EBITDA-Margin 12,6% 14,5% 15,8% 12,1% Operating profit Operating Margin 8,5% 10,7% 12,3% 8,5% Restructuring and special items Income from operations (EBIT) Cash flow Net Financial Debt Equity Ratio 50,8% 47,9% 53,7% 53,4% Total investments Capital Employed RoCE 9,8% 13,2% 16,3% 11,0% Earnings per share ( ) 1,33 1,99 3,08* 1,38 Cashflow per share ( ) 2,92 3,20 4,88 3,37 Dividend per share ( ) 0,55 0,70 0,90 0,50 * incl. one-off positive tax effect of 0.40 ** Proposal Südzucker Group, page 5 **

6 Key Figures 2013/14 (mn ) Sugar Special Prod. CropEnergies Fruit Group Revenues EBITDA EBITDA-Margin 14,1% 10,6% 9,5% 9,0% 12,1% Depreciation Operating profit Operating Margin 11,0% 6,5% 4,8% 5,5% 8,5% Cash flow 689 Investments in fixed assets Capital Employed RoCE (incl. Goodwill) 13,6% 8,7% 6,3% 8,1% 11,0% RoCE (excl. Goodwill) 17,8% 10,9% 6,3% 9,2% 13,6% Equity Ratio 53,4% Gearing (NFD/Equity) 12,0% Earnings per share ( ) 1,38 Dividend per share ( ) 0,50 * * Proposal Südzucker Group, page 6

7 Return on Capital Employed(RoCE) 2009/ / / / /14 5 years Sugar 7.5% 10.4% 17.1% 22.4% 13.6% 14.2% Segments Special Prod. CropEnergies 10.5% 2.3% 10.8% 8.7% 10.7% 10.2% 9.5% 17.3% 8.7% 6.3% 10.0% 9.0% Fruit 5.5% 6.7% 4.7% 5.0% 8.1% 6.0% RoCE 7.5% 9.8% 13.2% 16.3% 11.0% 11.6% Group Operating Profit 403 mn 521 mn 751 mn 972 mn 658 mn 661 mn Capital Employed 5,374 mn 5,314 mn 5,707 mn 5,950 mn 5,975 mn 5,664 mn Südzucker Group, page 7

8 Leading Market Positions and clear Strategic Objectives Segment/Division Market Position Strategy / Main Drivers Sugar BENEO Freiberger Starch PortionPack CropEnergies Fruit Preparations Fruit Juice Concentrates #1 in Europe #1 worldwide in Isomalt and Oligofructose #1 in Europe in frozen Pizza (private label) #1 in Europe in portion packs One of the leading bioethanol players in Europe #1 worldwide #1 in Europe Further enhancement of leading market position in Europe; especially in deficit markets Expedite internationalization; partnership with ED&F Man Leverage strength of core products into product innovations Further internal and external growth Focus on specialty starches Market share expansion through new facilities Development of product portfolio and regions Full exploitation of implemented capacity build-up Consolidation of the leading position Integration of Ensus Take full benefit of global increase in demand for healthy food and upmarket products through new facilities (e.g. USA) Usage of integrated platform to raise synergies in combined global sourcing and distribution New platform with Austria Juice supports growth and profitability Südzucker Group, page 8

9 Portfolio benefits from megatrends mn t USD 8,000 6,000 4,000 2,000 sugarconsumption worldwide population growth worldwide 211, , ,000 91,000 51,000 11,000 8,000 6,000 4,000 2,000,0 per capita income worldwide emerging markets Sources: United Nations, F.O. Licht Source: ERS International Macroeconomic Data Set mn barrel / day USD / barrel mn t 100 oil consumption global animal feed production 20 0 crude oil price Source: BP Source: USDA Südzucker Group, page 9

10 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 10

11 Rating Rating agency Long-term rating Short-term rating BBB+ * Stable Outlook ** A 2 Baa1 *** StableOutlook **** P 2 Since April 15, 2014: * Credit watch negative ** Credit watch negative *** Review for downgrade **** Review for downgrade Südzucker Group, page 11

12 Comfortable liquidity position (mn ) Net financial debt Cash & Cash equivalents / securities Gross financial debt Long-term financial debt Short-term financial debt Bank credit lines: undrawn Syndicated loan facility undrawn Syndicated loan facility Agrana undrawn Commercial paper program undrawn = Total liquidity reserves Südzucker Group, page 12

13 Financingmaturityprofile* (mn ) asof February28, EUR-Bond Promissory Note Südzucker Syndicated loan 2013/ mn (back-up facility) Agrana Syndicated loan 2012/ mn Commercial Paper Programm 600 mn (perpetual) Hybrid Bond 700 mn (perpetual) 5.25 % before June 2015 / since June M-Euribor bp margin * Displayed to 2019; 10-year tranche of Agrana promissory note in the amount of 7 mn due in 2022 Südzucker Group, page 13

14 Hybrid bond 2005 / cash flow covenant (mn ) 2005/ / / / / / / / / /15e Revenues (IFRS) ~ Cash flow (IFRS) > 450 Cash flow / Revenues 9,9% 9,6% 8,6% 8,6% 9,7% 9,8% 11,8% 12,6% 8,9% > 6,5% Cash flow covenant (cash flow / revenues >5 %) so far significantly exceeded Cash flow covenant fulfillment also expected in 2014/15 Options for hybrid bond (depending on continuous financial planning): Open market tender at any time ( 6 (7)) First time call possibility June 2015 ( 6 (5) & (6)); condition: Instrument replacement in 12m period before No action: Variable coupon based on 3M-Euribor bp margin Currently preferred option no action Südzucker Group, page 14

15 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 15

16 Segment Sugar: Key figures (mn ) 2010/ / / /14 Revenues EBITDA EBITDA-Margin 12,2% 16,8% 19,6% 14,1% Operating profit Operating Margin 8,7% 13,7% 16,7% 11,0% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 10,4% 17,1% 22,4% 13,6% Südzucker Group, page 16

17 Segment Sugar: Development 2013/14 Revenues (mn ) Operating profit (mn ) 4,232 3, / / / /14 Significant quota sugar price reduction Decrease non-quota sugar sales World market price driven decrease in export sugar pricing Significant quota sugar price reduction Increase in quota sugar production costs Lower non-quota sales and export pricing Others Südzucker Group, page 17

18 EU sugarmarket* -supplyanddemand World Market EU Production EU Demand World Market Quota sugar ~16-17 mn t CAGR 2-3% Demand** 176 mn t ~13 mn t o/w SZ 3.2 mn t 3-4 mn t o/w SZ: Mauritius ~0.4 mn t Raw sugar imports for raffination through SZ ~0.3 mn t Production** 181 mn t o/w SZ ~25% up to 0.4 mn t max. ~1.4 mn t ~3-4 mn t ~2-3 mn t Non-quota sugar *Simplified, excl. isoglucose **F.O. Licht estimate for 2013/14, February 2014 Südzucker Group, page 18

19 Segment Sugar Market environment(i): World market World Sugar Balance (mn t) Sugar world market price ( /t) White sugar / / / /14e 36.2% * 38.7% * 42.1% * 43.3% * Production Consumption Endng stock * Ending stock in % of consumption World sugar market well supplied 250 May-12 Nov-12 May-13 Nov-13 May-14 Low sugar world market price Südzucker Group, page 19

20 Segment Sugar Market environment(ii): EU Influence of low world market price via imports High EU quota sugar inventories through EU commission measures (1.2 mn t) Decreasing shares of annual contracts, higher share of short term contracts respectively supply via spot market Significantly lower EU sugar pricing EU quota sugar inventory (mn t) Sept.'07 Sept.'08 Sept.'09 Sept.'10 Sept.'11 Sept.'12 Sept.'13 Price reporting EU-KOM ( /t) 740 Increasingly more difficult market environment Fulleffectin FY 2014/ Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Südzucker Group, page 20

21 EU quota sugar production- sugar marketing year* 2013/14 Market share** EU quota sugar production Südzucker quota share per country(in %) Südzucker Group (24 %) Nordzucker (15 %) Great Britain Poland Tereos (11 %) Belgium72 Germany Czech Republic 39 Slovakia Moldova British Sugar (11 %) 20 France 100 Austria 100 Hungary 35 Rumania All others (16 %) Royal Cosun (7 %) Cristal Union (8 %) Pfeifer & Langen (8 %) Portugal Spain Italy Bosnia- Hercegowina Greece Bulgaria * Sugar marketing year: Oct. Sep. ** Südzucker estimates Südzucker Group, page 21 Südzucker distribution entities Non-EU production

22 Mauritius cooperation strengthens distribution power in the EU Exclusive distributor of ~ 400,000 tonnes p.a. sugar contingent from Mauritius into the EU until 2015 Imported sugar volumew Wleverages European distribution platform Wsupports core regions Wsupports market position in European deficit markets 400,000 tonnes sugar Distribution power of Südzucker Group builds on ~ 5.0 million tonnes sugar (consisting of production of quota sugar, industrial sugar and refined sugar as well as imported sugar from Mauritius) Mauritius Südzucker Group, page 22

23 Participation in ED&F Man offers a global footprint Private, employee owned company, founded 1783 ~ 3,400 employees in 60 countries Revenues: 9 bn USD Profit from ordinary activities: 299 mn USD Operations: Sugar: Approx. 9 mn t trading volume with significant presence in Central and South America, Far East, South East Asia and Africa Sugar only Liquid Products only Coffee only Multiple businesses Participations in production and refining capacities amongst others in Russia, the Ukraine, Mexico, Chile and Venezuela Marketing of coffee and molasses Trading in biofuels, edible oils as well as shipping and financial services Südzucker Group, page 23

24 EU sugar and agriculturial policy road map June 2013: Decision about CAP and EU sugar policy Common Agricultural Policy (CAP) Autumn/Winter 2013: Ratification CAP and EU sugar policy by EU Parliament and EU Council Transition Period new EU sugar policy EU sugar policy: Extension to 30 September 2017 New market framework 1 October 2017 Quota reduction Run-time: until 30 September 2015 Extension for sugar and isoglucose quota Confirmation of overall framework No quota for sugar or isoglucose Liberalised EU sugar marketw Wbut EU border protection still in place Südzucker Group, page 24

25 Segment Sugar: Mid term Outlook (I) EU sugar policy until 30 September 2017 Extension sugar and isoglucose quota Quota sugar: Minimum beet price Contractual duty between industry and farmer Specification of EU-Toolbox : Market withdrawals, convertion of nonquota into quota sugar, import tender Exports limited to about 1.4 mn t p.a. New market framework 1 October 2017 Elimination of sugar and isoglucose quota No minimum beet price Contractual duty between industry and farmer Temporary options: Private storage No export restrictions Further measures (e.g. security net ) require resolution Border Protection: unchanged Import duty 419 /t (white sugar) resp. 339 /t (raw sugar) from non-preferential countries Preferential agreements with LDC-/ACP- and Andean countries: unchanged Südzucker Group, page 25

26 Segment Sugar: Mid term Outlook (II) EU sugar demand currently served by EU sugardemandasof October1, 2017 served by EU beet sugar 70 % EU sugar demand 19 mn t EU beet sugar 10 % EU sugar demand 19 mn t Imports 16 % Quota EU isoglucose 4 % Non-Quota Max. Export Volume (WTO): about 1.4 mn t No export restrictions Südzucker Group, page 26

27 Segment Sugar: Implications for Südzucker Opportunities Südzucker is in good starting position as largest producer with focus on best growing regions Only limited effort needed to increase and extend current production level (with high entry barrier at the same time) Utilization of current European logistic network to optimize sugar distribution and development of new markets Investment program to exploit future market potential (e.g. starch) Strengthening and extension of cooperations (e.g. ED&F Man, LDC/ACP producer) Challenges Stronger competition, possibly also from Isoglucose Further EU free trade agreements with third party countries Raw material security in increasingly more volatile market environment Volatility in world market price and volume with stronger influence on EU market Südzucker Group, page 27

28 Segment Sugar: Outlook 2014/15 Revenues Price reduction with all-the year effect Increased trend towards spot business Significant revenue decrease (Previous year*: 3,901 mn ) Operating Profit Decreasing price level in light of increasingly worsening economic environment in EU sugar market Burden from increase in fixed costs per tonne due to once again shorter campaign 2013 Significant decrease to about 100 mn (Previous year*: 436 mn ) * 2013/14 adjusted for IFRS 11 effects Südzucker Group, page 28

29 Segment Sugar: Mid term Outlook Global demand trend of ~ 2% p.a. growth intact (population growth, increase in per-capita incomew) Recovery of world market price Temporary EU market distortion in transition period Strong market position in combination with strong foothold in best growing area in the centre of demand Necessary efficiency improvements Increase in production ~120 days (fixed cost degression) Omission of EU minimum beet price / flexible beet price payment Cost savings program Capex Maintenance Administration (further centralization) No restrictions on exports anymore (partnership with ED&F Man) Operating Profit Perspective ~ 250 mn ~ 100 mn 2014/15 mid term Südzucker Group, page 29

30 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 30

31 Segment Special Products: Key figures (mn ) 2010/ / / /14 Revenues EBITDA EBITDA-Margin 13,8% 12,8% 11,5% 10,6% Operating profit Operating Margin 9,1% 8,3% 7,1% 6,5% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 10,8% 10,7% 9,5% 8,7% Südzucker Group, page 31

32 Segment Special Products: Development 2013/14 Revenues (mn ) Operating profit (mn ) 1,862 1, / / / /14 Increase in volume sold Lower pricing in division starch Starch (incl. AGRANA bioethanol) Decrease pricing stronger than decrease in raw material costs Start-up costs wheat starch plant Pischelsdorf Others Südzucker Group, page 32

33 Segment Special Products BENEO: World market leader with premium food ingredients like Isomalt, Inulin, Oligofructose or rice starch Freiberger: Private-label chilled and deep frozen convenience food (Pizza, Pasta, Baguettes) Starch: Starch, starch niche products for food and non-food industry, isoglucose and AGRANA bioethanol activities PortionPack: Various portioned products; wide range of products of food and non-food articles Revenues (mn ) CAGR 2008/ /14: ~6 % 1,283 Starch* 45% 1,427 1,396 Revenue split 2013/14 PortionPack 7% 1,882 mn 1,575 1,806 1, / / / / / /14 Freiberger 27% BENEO (Functional Food) 21% * incorporates AGRANA bioethanol and starch activities Südzucker Group, page 33

34 Segment Special Products: Division BENEO BENEO Group bundles Functional Food-operations Worldwide unchanging growing demand for Functional Food ingredients in view of increasing competition Increase in awareness for healthy food and growing percapita income (emerging markets) Market leadership in main product categories BENEO-Orafti (prebiotic fibres from chicory roots): Core products Inulin and Oligofructose; distribution of CropEnergies by-product BeneoPro W BENEO-Palatinit (functional carbohydrates): Global leadership with Isomalt. Successful positioning of product innovations Palatinose and galeniq BENEO-Remy (rice starches): e.g. rice starches, rice flours, rice bran, rice concentrates, W Sales Offices Regional Centers Production facility Exploitation of growth potential of our core products Development of new markets via innovations Offstein Südzucker Group, page 34

35 Segment Special Products: Division Starch* Well established player as manufacturer of specialty starches for the paper, textile, cosmetics, pharmaceutical and construction industries Principal focus on organic and GM-free starches for the food industry Commisioning of new Agrana starch factory for production of wheat starch and gluten at the site of bioethanol plant in Pischelsdorf (June 2013). Investment of 70 mn. Capacity for 107,000 t wheat starch, 23,500 t wheat gluten, 55,000 t wheat bran and 70,000 t of material substitutes ( B+C starch ) for bioethanol. New modular concept with new Südzucker starch factory planned at the site of bioethanol plant in Zeitz. Comissioning planned in Investment of 125 mn. Capacity for up to 140,000 t wheat starch products. Gmünd (A) Aschach (A) Pischelsdorf (A) Szabadegyhaza(HU) Tandarei (RO) Production starch Production bioethanol * incorporates AGRANA bioethanol and starch activities Pischelsdorf Südzucker Group, page 35

36 Segment Special Products: Division Freiberger Freiberger produces and markets chilled and frozen pizzas as well as frozen pasta and baguettes Solutions are specifically geared toward the strategies of its business partners: retail industry, caterers and food service operators Unrivalled European market leader for own label/private lable frozen pizzas Successful reconception of site in Westhoughton, UK Distribution center USA Westhoughton Berlin Osterweddingen Production facility Muggensturm Oberhofen Muggensturm Südzucker Group, page 36

37 Segment Special Products: Division PortionPack Europe European market leader in individually packaged portions for the food and non-food sectors In addition to conventional sugar packets, product range includes a wide spectrum of other food portion packs such as baked-goods, chocolate and sandwich spreads Besides to the out-of-home market (restaurants, hotels, caterers) and food retailers, PortionPack Europe also services industry and the advertising/promotion sectors Telford Oud-Beijerland (NL) Herentals (B) Nuremberg Landgraaf (NL) Prague Krakow Barcelona facility Prague Südzucker Group, page 37

38 Segment Special Products: Outlook 2014/15 Revenues Divisions Freiberger, Beneo and PortionPack overall performance to be stable Division starch with slight decrease Slight decrease in revenues (Previous year*: 1,740 mn ) Operating Profit Divisions Freiberger, Beneo and PortionPack overall performance to be stable Division starch: Lower prices to burden ethanol business Omission of start-up losses of wheat starch plant Moderate decrease in operating profit (Previous year*: 85 mn ) * 2013/14 adjusted for IFRS 11 effects Südzucker Group, page 38

39 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 39

40 Segment CropEnergies: Key figures (mn ) 2010/ / / /14 Revenues EBITDA EBITDA-Margin 17,5% 15,9% 18,5% 9,5% Operating profit Operating Margin 10,5% 10,0% 13,5% 4,8% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 8,7% 10,2% 17,3% 6,3% Südzucker Group, page 40

41 Segment CropEnergies: Development 2013/14 (I) Revenues (mn ) Operating profit (mn ) / / / /14 Significantly higher ethanol sales Increased price level for animal feed and food products Significantly lower ethanol pricing Significantly lower ethanol pricing Start-up costs Ensus Others Südzucker Group, page 41

42 Segment CropEnergies: Development 2013/14 (II) Market development: Increase grain prices Decrease in fuel demand Higher imports from duty-free preferential sources and from USA via Norway avoiding current duty regulation Strong ethanol price decrease since autumn 2013 Acquisition Ensus: Boost of nominal capacity by 400,000 m 3 p.a. to ~1.2 mn m 3 p.a. bioethanol and production of food and animal feed to ~1 mn t p.a. Capex program 60 mn ; efficiency gains and increase in purchase and sales flexibility Quotation: Platts fuel-etoh T2 /m Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Wilton Houston Rotterdam Loon-Plage Wanze Duisburg Zeitz São Paulo Production facility Tank storage Trading Südzucker Group, page 42

43 EU biofuels market and policy Amendment of Renewable Energies Directive and Fuel Quality Directive European Parliament and Council demand higher blending quotas Discussion to be continued after elections in May 2014 Result of the delay: member states do not increase blending quotas at this point in time Assessment EU: Market potential and market reality Source: National action plans of EU Member States (2010); F.O. Licht (2014) Appropriate way of dealing with biofuels is needed and legal framework until 2020 and beyond must be clear in order to reach climate and energy goals Greenhouse gas (GHG) emissions and dependence on oil in the transport sector can only be reduced by using biofuels EU-wide introduction of E10 would reduce GHG emissions by approx. 10 million tonnes CO 2eq annually (in 1,000 m 3 ) 15,000 12,500 10,000 7,500 5,000 2,500,0 Market NAP Südzucker Group, page 43

44 Segment CropEnergies: Outlook 2014/15 Revenues Increase in production and sales of bioethanol, food and animal feed via new production site Ensus and further optimization in production facilities Revenue increase to above 800 mn (Previous year*: 720 mn ) Operating Profit High volatility in bioethanol and raw material pricing impede forecast High price sensitivity; 10 price change per cubicmeter bioethanol leads to about 10 mn earnings impact Operating profit is expected in a range of -30 to +20 mn (Previous year*: 36 mn ) EBITDA in range of +10 to +60 mn (Previous year*: 69 mn ) * 2013/14 adjusted for IFRS 11 effects Südzucker Group, page 44

45 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 45

46 Segment Fruit: Key figures (mn ) 2010/ / / /14 Revenues EBITDA EBITDA-Margin 9,4% 7,9% 7,3% 9,0% Operating profit Operating Margin 5,4% 4,1% 4,0% 5,5% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 6,7% 4,7% 5,0% 8,1% Südzucker Group, page 46

47 Segment Fruit: Development 2013/14 Revenues (mn ) Operating profit (mn ) 1,140 1, / /14 Increase in revenues due to higher volumes despite lower prices in H2 Full year consolidation of Austria Juice 2012/ /14 Fruit preparations(revenue share ~ 75%) Higher volumes Cost reductions more than offset price decrease Fruit juice concentrates(revenue share ~ 25%) Full year consolidation of Austria Juice Higher volumes Cost reductions more than offset price decrease Südzucker Group, page 47

48 Segment Fruit with leading positions in both divisions Overview Division Fruit preparations: World market leader Customers: dairy, baking and ice cream industry Division Fruit juice concentrates: Leading European producer (market leader in apple juice concentrates) Core competences Upgrading of agricultural raw material into premium preliminary products for food industry Global sourcing and distribution of fruit ingredients Positioning & Strategy Shared customer base with segments/divisions sugar, BENEO and starch Growth drivers: Especially yogurt drinks rank among the fastest growing food products globally Increase in awareness for healthy food and growing per-capita income (emerging markets) Further growth via fruit juice concentrates merger Reorganisation measures in division fruit preparations in Central Europe New US facility for fruit preparations Total investments 30 mn Production capacity 45,000 tonnes annually Production facility AGRANA FruitS.A.S. Fruit preparations ~75% of segment revenues ⅓ of world market 26 facilities worldwide AGRANA J&F Holding GmbH AUSTRIA JUICE GmbH Fruit juice concentrates ~25% of segment revenues European market leader 14 facilities worldwide Südzucker Group, page 48

49 Division Fruit Preparations: Fourth production site USA US market offers average annual growth of about 6 % in contrast to the flat European market, particularly in view of the trend toward fruit yoghurts containing a high proportion of fruit preparation. Expanding market presence in North America by constructing a fruit preparation plant in Lysander, NY (Northeastern region of the US). Production started 31 March 2014 New facility will serve as a response to rising customer demand in Canada and the Northeastern Region of the US New production capacity of 45,000 t p.a. Total investment amounts to around 30 million Production facility Südzucker Group, page 49

50 Segment Fruit: Outlook 2014/15 Revenues Slightly lower revenues in division fruit juice concentrates compensated by higher volumes in division fruit preparations in all main regions Revenues on prior year s level (Previous year: 1,172 mn ) Operating Profit Earnings improvement in division fruit preparations despite start-up losses of new US plant Slightly lower earnings in division fruit juice concentrates Operating profit on prior year s level (Previous year: 65 mn ) Südzucker Group, page 50

51 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 51

52 Bridge (I) Income statement figures adjusted accounting changes due to IFRS 11 figures presented mn 2013/ /14 Revenues EBITDA Depreciation Operating profit Result from restructuring and special items Income from companies consolidated at equity Income from operations Income from companies consolidated at equity Financial result Earnings before income taxes Taxes on income Net earnings Affected joint ventures Studen (Segment sugar) Hungrana (Segment special products) CT Biocarbonic (Segment CropEnergies) At-equity instead of prorata consolidation since Südzucker Group, page 52

53 Bridge IFRS (II) Segment data figures adjusted accounting changes due to IFRS 11 figures presented mn 2013/ /14 Fruit CropEn. Special Pr. Sugar Group Revenues Operating profit Revenues Operating profit Revenues Operating profit Revenues Operating profit Revenues Operating profit Südzucker Group, page 53

54 Outlook 2014/15 (I) Revenues 2013/14* 2014/15e Operating Profit 2013/14* 2014/15e Sugar 3.9 bn 436 mn ~100 mn Special Products 1.7 bn 85 mn CropEnergies 720 mn >800 mn 36 mn -30 to +20 mn Fruit 1.2 bn 65 mn Group 7.5 bn ~ 7.0bn 622 mn ~ 200mn * IFRS 11 adjusted Südzucker Group, page 54

55 Outlook 2014/15 (II) 2013/14* 2014/15e 212/13e EBITDA 933 mn ~ 500 mn Investments Fixed Assets Investments Finan. Assets Step-up subsidiaries 383 mn 22 mn 193 mn ~ mn - ~ 30 mn ** RoCE 11.0 % * Not adjusted for IFRS 11 ** Purchase Agrana bioethanol minorities Südzucker Group, page 55

56 Outlook 2014/15 (III) 2013/14* 2014/15e 212/13e Net Financial Debt 561 mn ~ mn Cash flow 689 mn >450 mn Cash flow / Revenues 8.9 % >6.5 % Equity ratio 53.4 % ~ 53 % * Not adjusted for IFRS 11 Südzucker Group, page 56

57 Summary (I) Financial Year 2013/14 Despite significant decrease in operating profit following record year 2012/13, third best operating profit of corporate history Adjusted targets achieved RoCE > 10 % Despite higher capex level, antitrust fine and increase in Agrana shareholding, only slight increase in net financial debt Successful launch of wheat starch plant at bioethanol site Pischelsdorf, Austria Start of integration phase of acquired British bioethanol producer Ensus Südzucker Group, page 57

58 Summary (II) Financial Year 2014/15 Burden mainly from temporary difficult market environment in sugar and ethanol markets lead to significant operating profit decrease on group level Continuation of high capex level to secure future growth New starch and neutral alcohol plants to enlarge Zeitz site Launch of fourth fruit preparations plant to enforce market presence in USA Ongoing very solid balance sheet figures Comfortable liquidity position Südzucker Group, page 58

59 Mid term Outlook (I) Operating Profit Fruit Special Products Crop Energies Launch USA Volume growth parallel to market growth Ensus: Utilization and efficiency gains Normalisation ethanol pricing ~ 550 mn ~ 200 mn 2014/15 Sugar Recovery wm price Market equilibrium Cost savings Utilization Pischelsdorf Launch Zeitz Biomass boiler Chile Mid term Megatrends intact (population growth, increase in per-capita income...) Südzucker Group, page 59

60 Mid termoutlook (II) EBITDA andcapex ~ mn ~ 850 mn Room for manoeuvre Growth ~ 500 mn Maintenance Maintenance ~250 mn EBITDA Capex EBITDA Capex 2014/15 mid term Südzucker Group, page 60

61 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 61

62 Revenue development (mn ) -144 mn (-2%) -271 (-6%) +20 (+1%) +75 (+12%) +32 (+3%) Fruit Sugar Special Products Crop Energies 7,879 7, / /14 Südzucker Group, page 62

63 Operating profit development (mn ) -314 mn (-32%) -272 (-38%) 972 Sugar -10 (-8%) Special Products -52 (-60%) Crop Energies +20 (+43%) Fruit / /14 Südzucker Group, page 63

64 Earnings before income taxes (mn ) 2013/ /13 Operating profit Restructuring & special items Income from operations (EBIT) Income from companies consolidated at equity Financial result Earnings before income taxes Result from restructuring and special items: Antitrust fine: 155 mn (cash out 195 mn ) Income from reimbursement for excess production levies paid during the 2001/02 to 2005/06 sugar marketing years: 44 mn Start-up losses Ensus: 6 mn Financial result: Interest result improved from -52 to -39 mn due to lower average debt and lower interest rates Result from other financing activities improved from -50 to -22 mn (previous year one-off costs due to buyback of convertible bond) Südzucker Group, page 64

65 Earnings per share (mn ) 2013/ /13 Earnings before income taxes Taxes on income Consolidated net earnings thereof Südzucker AG shareholders thereof hybrid capital thereof other minority interest Earnings per share ( ) 1,38 3,08-1,70 * incl. one-off positive tax effect of 0.40 Group tax rate came in at 22 (15) %. Without one-off positive tax effect of 76 mn, tax rate would have been 24 % in 2012/13. Other minority interests of 82 mn relate mainly to minority shareholders of the AGRANA Group and CropEnergies. Dividend proposal: 0.50 (0.90) /share (~ of last 5 years) Payout ratio: 36 (29) % Amount distributed: 102 (184) mn * Südzucker Group, page 65

66 Investments and depreciations (mn ) 2013/ / /14 Fixed Assets Depreciation 275 Sugar Sugar 123 Special Products Special Products 77 CropEnergies CropEnergies 34 Fruit Fruit 41 Financial Assets Sugar Special Products CropEnergies Fruit Total investments Increases in stakes held in subsidiaries Capital increase/decrease Total Investments in financial assets linked to additional payment for the achievement of defined earnings targets since the acquisition of participation in ED&F Man Holdings Ltd., London Fixed asset investments of 450 mn below announced level Increase in stakes held in subsidiaries concern Agrana Beteiligungs-AG, Vienna Südzucker Group, page 66

67 Net Financial Debt remains on low level despite one-off payments (mn ) Dividends Investments Earn-out ED&F Man Acquisition Agrana Cash flow 24 Working Capital 62 Capital increase subsidiaries NFD NFD Südzucker Group, page 67

68 Financial headroom remains high NFS Cash flow mn / / / / / /14 NFD/CF 3.2x 1.9x 1.4x 1.0x 0.5x 0.8x Südzucker Group, page 68

69 Very solid balance sheet ratios (mn ) Total assets Equity Equity ratio 50,8% 47,9% 53,7% 53,4% Net Financial Debt (NFD) Gearing (NFD/Equity) 23,2% 19,9% 9,8% 12,0% Cash flow NFD/Cash flow 1,4x 1,0x 0,5x 0,8x Goodwill Fixed assets* Working Capital ** Capital Employed RoCE 9,8% 13,2% 16,3% 11,0% * Including intangible assets **Adjustment segment fruit: Goodwill book value redirected to participation level of parent company Südzucker Group, page 69

70 Adjusted targets 2013/14 achieved Outlook 2013/14 Reported 2013/14 Revenues ~ 7.6 bn 7.7 bn Operating Profit ~ 650 mn 658 mn Investments* ~ 450 mn 383 mn Net Financial Debt ~ mn deutliche 561 mn Ergebniserholung * excl. investments in financial assets Südzucker Group, page 70

71 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 71

72 Long-term development (I) Pre-Reform Transition Period Post-Transition Period Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Outlook (mn ) 2004/ / / / / / / / / / /14e Revenues ~ 7,000 EBITDA ~ 500 EBITDA-Margin 15,0% 12,5% 11,8% 8,5% 8,3% 11,3% 12,6% 14,5% 15,8% 12,1% Operating profit ~ 200 Operating Margin 10,8% 8,4% 7,3% 4,0% 4,4% 7,0% 8,5% 10,7% 12,3% 8,5% Income from operations (EBIT) * Earnings before income taxes (EBT) Net earnings thereof to SZ AG shareholders Market capitalization Closing price on February 28/29 16,18 22,21 15,97 14,50 13,66 17,06 19,90 21,75 33,55 20,15 Earnings per share ( ) 1,67 1,36-1,72 0,10 0,86 1,06 1,33 1,99 3,08 1,38 Dividend per share ( ) 0,55 0,55 0,55 0,40 0,40 0,45 0,55 0,70 0,90 0,50 Cash flow > 450 Investments total ~ Capital Employed RoCE 11,3% 8,6% 8,8% 4,7% 5,2% 7,5% 9,8% 13,2% 16,3% 11,0% Total Assets Equity Equity Ratio 38,1% 47,1% 42,4% 41,7% 41,9% 46,5% 50,8% 47,9% 53,7% 53,4% ~ 53% Net Financial Debt (NFD) ~ Gearing (NFD/Equity) 61,1% 31,5% 24,1% 45,7% 50,5% 30,9% 23,2% 19,9% 9,8% 12,0% ** *** * Extraordinary impact from Goodwill impairment loss. ** Proposal *** Capex (excluding investments in financial assets). Südzucker Group, page 72

73 Long-term development (II) Cash flow (mn ) > 450 Revenues (bn ) ~7.0 Net Financial Debt (mn ) 1,508 1,632 1,177 1, ~ Operating Profit (mn ) ~200 NFD/CF 2.2x 1.5x 3.0x 3.2x 1.9x 1.4x 1.0x 0.5x 0.8x Sugar Special Products CropEnergies Fruit Südzucker Group, page 73

74 Return on Capital Employed(RoCE) 2009/ / / / / /15e Sugar 7.5% 10.4% 17.1% 22.4% 13.6% Segments Special Prod. CropEnergies 10.5% 2.3% 10.8% 8.7% 10.7% 10.2% 9.5% 17.3% 8.7% 6.3% Fruit 5.5% 6.7% 4.7% 5.0% 8.1% RoCE 7.5% 9.8% 13.2% 16.3% 11.0% Group Operating Profit 403 mn 521 mn 751 mn 972 mn 658 mn ~200 mn Capital Employed 5,374 mn 5,314 mn 5,707 mn 5,950 mn 5,975 mn Südzucker Group, page 74

75 Return on Capital Employed(RoCE) 2013/ /13 (mn ) RoCE RoCE Op. Profit Cap. Employed Südzucker Group 11,0% 16,3% Sugar 13,6% 22,4% Special Products 8,7% 9,5% CropEnergies 6,3% 17,3% Fruit* 8,1% 5,0% * Adjustment segment fruit: Goodwill book value redirected to participation level of parent company Sugar: Special Products: CropEnergies: Fruit: Group: High capex combined with lower earnings lead to decrease Below previous year s level with stable capital employed Decrease due to lower earnings and higher capital employed through acquisition of Ensus Improvement via raw material driven lower capital employed and earnings hike Significant earnings reduction and stable capital employed lead to significant decrease in RoCE Südzucker Group, page 75

76 Breakdown of Capital Employed (2013/14) Breakdown by assets Breakdown by segments 21% 13% 9% 46% 5,975 mn 5,975 mn 54% 33% 24% Goodwill Working Capital Fixed assets Sugar CropEnergies Special Products Fruit Südzucker Group, page 76

77 Südzucker with strong capital market presence Südzucker Bonds Südzucker Share 36% 7% 10% Financial liabilities* 52% mn shares 38% 57% Liabilities to banks Others Bonds (mn ) Due date Coupon Nominal value Bond 2011/ ,125% 400,0 Hybrid bond 2005/15 * as of February 28, 2014 incl. hybrid bond ** first issuer call right by Südzucker as of June 2015 ** 5,25% 700,0 SZVG Zucker Invest GmbH Free Float Key figures as of February 28, 2014 Market capitalization: ~ 4.1 bn (MDAX rank: 22) Free-float market cap.: ~ 1.6 bn (MDAX rank: 29) -trading volume Südzucker share: ~1.2 mn units / -share price mn (MDAX rank: 5) Südzucker Group, page 77

78 Financing maturity profile (as of February 28, 2014) April 2014 June 2015 Dec Nov April 2017/19/ % Südzucker promissory note, 45 mn 5.25% Hybrid Bond 2005/perpetual, 700 mn Issuer call June 30 June 2015 at the earliest. Pursuant to 6 (5) and (6) of bond documentation the exercise of the call right is subject to having issued, within the twelve month preceding the redemption becoming effective, replacement capital (parity and/or junior securities and/or shares) against issue proceeds at least equal to the amounts payable upon redemption. Syndicated loan AGRANA, 450 mn, Margin 90 bp, short-term borrowing facility 1-6 months Syndicated loan, 600 mn, Margin 40 bp at Baa1/BBB+, short-term borrowing facility 1 month < 1 year Agrana promissory note, 110 mn March 2018 Perpetual 4.125% Bond 2011/2018, 400 mn Commercial Paper-Program, perpetual, 600 mn Drawn lines: 90 mn Südzucker Group, page 78

79 Liquidity profile end of period (mn ) Q4 2013/14 Q3 2013/14 Q2 2013/14 Q1 2013/14 Q4 2012/13 Net financial debt Cash & Cash equivalents / securities Gross financial debt Long-term financial debt Short-term financial debt Bank credit lines undrawn Syndicated loan undrawn Syndicated loan Agrana undrawn Commercial paper program undrawn Bank credit lines (undrawn) Cash & cash equivalents / securities Syndicated loan (undrawn) Commercial paper (undrawn) = Total liquidity reserves Südzucker Group, page 79

80 Group balance sheet (mn ) Assets Liabilities ,924 (21.8 %) Other current assets 1,914 (21.9 %) 2,292 (26.0 %) Current liabilities 2,439 (27.9 %) 2,568 (29.2 %) Inventories 2,387 (27.4 %) 1,783 (20.3 %) Non-current liabilities 1,627 (18.7 %) 4,314 (49.0 %) Non-current assets 4,428 (50.7 %) 4,731 (53.7 %) Equity 4,663 (53.4 %) Total 8,806 8,728 Total 8,806 8,728 Südzucker Group, page 80

81 Group balance sheet (mn ) (mn ) Intangible assets ,7% ,5% Fixed assets ,3% ,9% Shares in companies consolidated at equity 226 2,6% 190 2,2% Other investments and loans 24 0,3% 30 0,3% Securities 105 1,2% 106 1,2% Receivables and other assets 28 0,3% 44 0,5% Deferred tax assets 123 1,4% 122 1,4% Non-current assets ,7% ,0% Inventories ,3% ,2% Trade receivables and other assets ,9% ,8% Current tax receivables 64 0,7% 91 1,0% Securities 41 0,5% 42 0,5% Cash and cash equivalents 511 5,9% 484 5,5% Current assets ,3% ,0% Equity attributable to shareholders of SZ AG ,9% ,1% Hybrid capital 684 7,8% 684 7,8% Other minority interest 674 7,7% 783 8,9% Shareholder's equity ,4% ,7% Provisions for pensions and similar obligations 658 7,5% 688 7,8% Other provisions 82 0,9% 87 1,0% Non-current financial liabilities 687 7,9% 808 9,2% Other liabilities 18 0,2% 16 0,2% Tax liabilities 75 0,9% 94 1,1% Deferred tax liabilities 107 1,2% 89 1,0% Non-current liabilities ,6% ,2% Other provisions 190 2,2% 189 2,1% Current financial liabilities 531 6,1% 287 3,3% Trade payables and other liabilities ,7% ,6% Current tax liabilities 84 1,0% 87 1,0% Current liabilities ,9% ,0% Total assets ,0% ,0% Total liabilities and shareholders' equity ,0% ,0% Südzucker Group, page 81

82 Agenda 1. Overview and strategic objectives page 4 2. Financing page Development of Segments Sugar page 16 Special Products page 31 CropEnergies page 40 Fruit page Outlook 2014/15 page Appendix Annual Financial Statement 2013/14 page 62 Long-term development and key figures page 72 Additional information page 83 Südzucker Group, page 82

83 Revenue by region 2013/14 Rest of world (16 %) Germany (26 %) 7,735 mn EU 13 (15 %) EU 15 (43 %) Südzucker Group, page 83

84 Segment Sugar: Campaign SMY 2013/14 Beet growers 42,100 (42,600) Beet acreage: 396,000 (422,000) ha Sugar factories (incl. refineries): 32 (32) Beet processing: 27.2 (28.7) mn tons Sugar production: 4.7 (4.9) mn tons thereof from beets: 4.3 (4.5) mn tons thereof raw sugar raffination: 0.5 (0.4) mn tons Südzucker Group, page 84

85 Südzucker well positioned in Beet Belt Germany Poland Belgium Czech Republic Slovakia Moldova France Austria Hungary Romania Südzucker Group, page 85

86 Price developmentforrawandwhitesugar (NYMEX, LIFFE, EU) Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Quotation for sugar in / ton Quotation for sugar in / ton White sugar contract No. 5 LIFFE London (Future contract switching upon expiry) Raw sugar contract No. 11 NYMEX New York (Future contract switching upon expiry) Südzucker Group, page 86

87 EU: Production and consumption of bioethanol in 2013 Production 2013e: 6.6 million m 3 (+0%) Fuel: 4.6 million m 3 (+0.9%) Production increase e. g. in Germany, Poland, Spain, the UK and Hungary 2014e: 7.0 million m 3 (+5.9%) Consumption 2013e: 7.9 million m 3 (-3.0%) Fuel: 5.5 million m 3 (-4.3%) EU-wide decrease of fuel ethanol with the exception of the UK (+5.8%) E10 continues to be only available in Germany, Finland and France 2014e: 8.0 million m 3 (+0.9%) (in million m 3 ) Production of bioethanol Alcohol for traditional applications Bioethanol for fuel application (in 1,000 m 3 ) 2,000 1,500 1,000,500,0 Production and consumption of fuel ethanol e 2014e Source: F.O.Licht Production Consumption Production Consumption Production Consumption Production Consumption Production Consumption Production Consumption Production Consumption GER FRA GBR ESP SWE POL Others Source: F.O.Licht Südzucker Group, page 87

88 Bioethanol sales in Germany in 2013 Consumption of fuel ethanol in Germany declines by 3.4% to 1.5 million m 3 Approx. 86% or 1.3 million m 3 bioethanol are directly blended to petrol Blending quota in petrol sector: 4.2% January to February 2014: Increase of consumption by 2.7% to 224,000 m 3 Slight increase of E10 sales despite declining petrol sales Increase by 5.4% to 2.8 million tonnes Market share of 15.0% January to February 2014 further increase by 7.2% to 434,000 tonnes (market share: 15.5%) (in 1,000 m 3 ) (in 1,000 t) Bioethanol consumption in Germany 4,1% 3,8% 4,1% 4,4% 5% 4,0% 4,2% 4,1% 4% 3% 2% 1% 0% E10 sales in Germany and France 6% EtOH in ETBE Direct blending EtOH in E85 blending rate Source: BAFA Germany France Source: BAFA, SNPAA Südzucker Group, page 88