Financial Year 2016/17 Conference Call Presentation, 18 May 2017

Transcription

1 Financial Year 2016/17 Conference Call Presentation, 18 May 2017 Thomas Kölbl (CFO) Südzucker Conference Call, FY 2016/17, page 1

2 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 2

3 Financial Highlights Financial Year 2016/17 Group revenues increase to 6,476(6,387) mn Group operating result significantly up to 426(241) mn Cash flow significantly up to 634(480) mn Earningsper share1.05 (0.53) ; excl. special items Dividend* increase to 0.45(0.30) per share Net financial debtreducedby142 mn to (555) mn, despite investments in financial assets of 164 mn Successfulcapital capital market transactions: * Proposal Bond placement November 2016: Duration 7 years, coupon 1,25% Capital increase Agrana and placement of Südzucker held Agrana shares; netcash inflow189 mn Südzucker Conference Call, FY 2016/17, page 3

4 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 4

5 Earnings increasein all segments (mn ) 2016/ /16 Crop Special Fruit Sugar Group Energies Prod. Revenues ,4% Ope rating Profit ,7% Revenues ,7% Operating Profit Revenues ,5% Operating Profit ,4% Revenues ,3% Operating Profit ,6% Revenues ,6% Operating Profit ,0% Segment sugar moderate increase quota sugar prices EU framework limits latitude until Ocotber 2017 Segment special products higher volumes lower prices start-up costs starch plant Zeitz Segment CropEnergies successful re-start of Ensus lower ethanol prices lower raw material costs Segment fruit Margin recovery fruit juice concentrates Successful diversification strategy Südzucker Conference Call, FY 2016/17, page 5

6 Diversified andstrong cashflow base* operating result share in % 17 % 17 % Depreciaton EBITDA Cash flow Fruit % Crop Energies % 184 Special Products operating result segments Sugar 634 Net Financial Debt 413 * Financial year 2016/17 in mn Südzucker Conference Call, FY 2016/17, page 6

7 Income from operations (mn ) 2016/ /16 Revenues Operating result Restructuring costs/special items Income from companies consolidated at equity Income from operations (EBIT) Result from restructuring and special items: Main burden Expense test phase wheat starch factory Zeitz / standstill costs bioethanol factory Wilton New part-time retirement program Südzucker AG Value added and excise tax risks Romania Main income Reversed accruals related to the shutdown of the bioethanol factory in Wilton in February 2015 after it was restarted Income from companies consolidated at equity: Segment sugar: 7 (32) mn ; relatesmainlytoparticipationin ED&F Man Segment special products: 28 (23) mn ; share of earnings from Hungrana group s starch and bioethanol activities Südzucker Conference Call, FY 2016/17, page 7

8 Net earnings (mn ) 2016/ /16 Income from operations (EBIT) Financial result Earnings before income taxes Taxes on income Net earnings Financial result: Net interestresult-27 mn on previousyear slevel Resultfromotherfinancingactivities-7 (-23) Mio. improved(especiallydue tocurrency effects) Taxrate: Previous year burdened by negative currency result Financial year 2016/17: Revaluation of funds balance at AGRANA Fruit/Ukraine Group taxrate 23 (20) % Südzucker Conference Call, FY 2016/17, page 8

9 Earningsper share (mn ) 2016/ /16 Consolidated net earnings thereof Südzucker AG shareholders thereof hybrid capital of which attributable to other non-controlling interests Earnings per share ( ) 1,05 0,53 0,52 Other minority interests relate mainly to minority shareholders of the AGRANA Group and CropEnergies Group. Earningsper share: 1.05 (0.53) Dividend proposal: 0.45 (0.30) /share Payout: 92 (61) mn Südzucker Conference Call, FY 2016/17, page 9

10 Investments and depreciations (mn ) 2016/ / /17 Fixed Assets Depreciation 283 Sugar Sugar 129 Special Products Special Products 79 CropEnergies CropEnergies 37 Fruit Fruit 38 Financial Assets Total investments Increases in stakes held in subsidiaries Capital increase/decrease Total Investment focus Sugar: energy efficiency and logisitics Special products: Development of new production capacities division starch and plant optimization at BENEO and Freiberger Investments in financial assets Sugar: Increasein ED&F Man participationby10% toabout35 % (82 mn ); acquisitionof Terra e.g. (29 mn ) Fruit: Acquisition of Main Process, Argentina(46 mn ) Südzucker Conference Call, FY 2016/17, page 10

11 Development Net Financial Debt (mn. ) NFD Dividend payments 16 Others AGRANA capital increase 10:1* 49 Secondary: 3.5 % AGRANA shares* 164 Investment in financial assets NFD NFD Cash flow Inv. in Working Capital Südzucker Conference Call, FY 2016/17, page 11 Capex NFD NFD * net

12 Strong balance sheet ratios mn Net Financial Debt Gearing (NFD : Equity) 13,3% 12,4% 8,4% Cash flow NFD / Cash flow 1,5x 1,2x 0,7x Total assets Shareholders' equity Equity ratio 52,6% 55,0% 56,0% Capital Employed RoCE 3,1% 4,2% 7,1% Südzucker Conference Call, FY 2016/17, page 12

13 Targets 2016/17 again achieved or exceeded Outlook 2016/17 Reported 2016/17 Revenues bn 6.5 bn Operating Result mn 426 mn Investments Fixed Assets ~ 350 mn 329 mn Net Financial Debt mn deutliche 413 mn Ergebniserholung Südzucker Conference Call, FY 2016/17, page 13

14 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 14

15 Sugar balanceeu and world World* EU** 180,8 178,6 174,8 179,3 176,9 180,4 189,0 184,0 mn t 13/14 14/15 15/16 16/17e Production EU 17,6 20,3 15,7 17,4 from beet 16,8 19,5 14,9 16,7 from maize 0,7 0,8 0,8 0,8 Impo rt 3,2 2,8 2,9 2,9 80,2 72,5 67,2 69,8 Import white sugar 0,8 0,7 k.a. k.a. EU Refining of imported raw sugar 2,5 2,2 k.a. k.a. Export 1,4 1,5 1,4 1,4 2014/ / /17e 2017/18e 44,9% * 40,4% * 37,3% * 37,9% * Production Consumption Ending Stock * Ending stock in % of consumption Consumption 20 20,2 19,3 19,7 Ending sto cks 2,6 4,0 1,9 1,2 * F.O. Licht estimates for 2017/18e, April 2017 ** EU-Commission Südzucker Conference Call, FY 2016/17, page 15

16 Price environment Sugar price development ( /t) World market price EU price ex works EU- vs. World market price World market*: 2015/16: significant inventory decline firsttime since6 years 2016/17: further inventory decrease leads to low inventory level 2017/18e: despite expected slight inventory increase, still low inventory level Thereforefollowingstrong increasein 2016, current price decrease EU: Massive reduction until December 2014 Followed by bottoming out until H Since 2016: Increase follows increased world market price level * World market price ex works: without transportation and other costs Südzucker Conference Call, FY 2016/17, page 16

17 Segment Sugar: Development 2016/17 Revenues(mn ) Operating Result(mn ) 2,855 2, / / / /16 Increase quota sugar sales revenues Lower sugar volumes Increase quota sugar sales revenues Decrease in volumes Others Südzucker Conference Call, FY 2016/17, page 17

18 Segment Sugar: Outlook 2017/18 Revenues Sales revenues increase on financial year average Increase in volumes from October 2017 Moderate increase in revenues(prev. year: 2,776 mn ) Operating Result End of quotaandmimimumbeetpricesystemin EU sugar market from 1 October 2017 makes outlook difficult Expecetd sales revenues increase on financial year average and volume increase, especially exports Increase in production and distribution volumes leads to significant improvement in capacity utilization and respective cost degression effects from 2017 Significant operating result expected (prev. year: 72 mn ) Südzucker Conference Call, FY 2016/17, page 18

19 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 19

20 Segment Special Products: Overview Leading market positions in all four divisions Sustainably high cashflow quality Very good fundamental development Growth based on intact megatrends: unchanged trend to alternative and functional food ingredients further increase in demand for convenience products Unbroken global increase in demand for animal feed(e.g. Gluten) Continuous capacity adjustment follows market growth Starch** 40 % Revenue split 2016/17 PortionPack 6 % 1,819 mn Revenues (mn )* 1,862 Freiberger 29 % BENEO (Functional Food) 25 % 1,806 1,791 1,819 1,740 1,724 * IFRS 11 adjusted since 2013/14 ** incorporates AGRANA bioethanol and starch activities 2011/ / / / / /17 Südzucker Conference Call, FY 2016/17, page 20

21 Segment Special Products: Development 2016/17 Revenues(mn ) Operating Result(mn ) 1,791 1, / / / /17 Higher volumes Lower sales revenues (partially currency based) Installement starch factory Zeitz Higher volumes Start-up costs starch factory Zeitz Others Südzucker Conference Call, FY 2016/17, page 21

22 Segment Special Products: Outlook 2017/18 Revenues Divisions Freiberger, Beneo, starch and PortionPack with overall volume increase Slightly higher revenues(prev. year: 1,819 mn ) Operating Result Expected lower earnings takes into account higher raw material costs, lower ethanol sales revenues and further from new starch factory Zeitz (installed in 2016/17) Significant decrease in operating result expected (prev. year: 184 mn ) Südzucker Conference Call, FY 2016/17, page 22

23 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 23

24 Segment CropEnergies: Market environment High ethanol price volatility Quotation: Wheat /t / Ethanol /m 3 Sept. 2016: All-time-low 427 /m³ End of February 2017: 640 (510) /m³ Several influencing factors Raw material decrease further due to global harvest surplus Record harvest 2016/17 (all grain qualities/ -grades): 2,097 mnt (+6 %) ( /m 3 ) NYMEX Fuel EtOH T2 FOB Rdm. Euronext Paris Wheat No ( /t) EU: Harvestdecreaseto295 mnt (-5 %); domesticconsumption285 mnt Nettorohertrag für Weizen-EtOH Record inventory level 510 mn t Wanze Südzucker Conference Call, FY 2016/17, page 24

25 Segment CropEnergies: Development 2016/17 Revenues(mn ) Operating Result(mn ) / / / /17 Higher volume Lower ethanol sales revenues Lower ethanol sales revenues Lowernetrawmaterial costs Successful re-start of Ensus Others Südzucker Conference Call, FY 2016/17, page 25

26 Segment CropEnergies: Outlook 2017/18 Revenues Followingefficiencygainsat Ensus, flexible usageof total production capacity possible Ongoing high capacity usage Revenues expectation 725 bis 800 Mio. (prev. year: 726 mn ) Operating Result Bioethanol prices expected below previous year s level in light of ongoing volatility Operating resultexpectedin range40 to80 mn (prev. year: 98 mn ) Südzucker Conference Call, FY 2016/17, page 26

27 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 27

28 Segment Fruit: Development 2016/17 Revenues(mn ) Operating Result(mn ) 1,083 1, / /17 Fruit preparations Volume increase Higher sales revenues Fruit juice concentrates Stable volumes Higher sales revenues 2015/ /17 Fruit preparations Volume increase Cost increase higher than increase in sales revenues Fruit juice concentrates Stable volumes Margin recoveryin light of higher sales revenues Südzucker Conference Call, FY 2016/17, page 28

29 Segment Fruit: Outlook 2017/18 Revenues Division fruitpreparationswithincreasein revenuesin light of higher volumes Division fruit juice with revenues increase as well Moderate revenues increase(prev. year: 1,155 mn ) Operating Result Divisions fruit preperations and fruit juice concentrates with earnings increase based on stable raw material price development Operating result above previous year s level expected (prev. year: 72 mn ) Südzucker Conference Call, FY 2016/17, page 29

30 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 30

31 Outlook 2017/18 (I): Revenues and Operating Result Sugar Revenues 2016/ /18e 2.8 bn Operating Result 2016/ /18e 72 mn Special Products 1.8 bn 184 mn CropEnergies 726 mn mn 98 mn mn Fruit 1.2 bn 72 mn > prev. year Group bn bn 426 mn mn Südzucker Conference Call, FY 2016/17, page 31

32 Outlook 2017/18 (II) : Other key figures 2016/ /18e EBITDA 709 mn mn Depreciation 283 mn > prev. year Investments Fixed Assets 329 mn ~350 mn Net Financial Debt 413 mn mn Südzucker Conference Call, FY 2016/17, page 32

33 Outlook 2017/18 (III) : Other key figures 2016/ /18e RoCE 7.1 % > prev. year Cash flow 634 mn > prev. year Cash flow/ Revenues 9.8 % > prev. year Equity ratio 56.0 % > prev. year Südzucker Conference Call, FY 2016/17, page 33

34 Outlook 2017/18 (IV)*: Further improvement of financial key figures 1,632 Net Financial Debt Cash Flow mn 504 1, > prev. year / / / / / / / / / /18e NFD/CF Equity Ratio 3.2x 42 % 1.9x 1.4x 1.0x 0.5x 0.8x 1.5x 1.2x 0.7x x 0.5x 47 % 51 % 48 % 54 % 53 % 53 % 55 % 56 % > prev. year * IFRS 11 adjusted since 2013/14 Südzucker Conference Call, FY 2016/17, page 34

35 Summary Sugar Special Products CropEnergies Fruit From October 2017: Volume increase and cost degression effects Good starting point: Leading market position and flexible raw material price model FY 2017/18: Significant earnings increase expected (prev. year: 72 mn ) Raw material price increase and further start-up costs factory Zeitz FY 2017/18: Significant earnings decrease(prev. year 184 mn ), against very high level in 2016/17, still high cashflow quality Despite ongoing volatile ethanol prices, still high earnings level expected FY 2017/18: Expectedearningsrange40-80 Mio. (prev. year: 98 mn ) FY 2017/18: Further Revenues and earnings increase expected (prev. year: 72 mn ) Group Well diversified portfolio Increasing profitability Confirmation of high cashflow quality Strong financial and rating ratios Südzucker Conference Call, FY 2016/17, page 35

36 Agenda 1. Financial Highlights page3 2. Annual Financial Statement 2016/17 page 5 3. Development of Segments Sugar page 15 Special Products page 20 CropEnergies page 24 Fruit page28 4. Outlook page Appendix page 37 Südzucker Conference Call, FY 2016/17, page 36

37 Segment Sugar (mn ) 2016/ /16 Revenues ,7% EBITDA > 100 EBITDA-Margin 7,3% 1,7% Operating Result Operating Margin 2,6% -2,7% Restructuring and special items Result from companies consolidated at equity ,4% Result from operations Investments ,8% Fixed Assets ,5% Financial Assets / Acquisitions > 100 Capital Employed ,2% RoCE 2,3% -2,6% Südzucker Conference Call, FY 2016/17, page 37

38 Segment Special Products (mn ) 2016/ /16 Revenues ,5% EBITDA ,5% EBITDA-Margin 14,4% 13,7% Operating Result ,4% Operating Margin 10,1% 9,5% Restructuring and special items ,5% Result from companies consolidated at equity ,1% Result from operations ,7% Investments ,0% Fixed Assets ,0% Financial Assets / Acquisitions Capital Employed ,4% RoCE 12,2% 11,9% Südzucker Conference Call, FY 2016/17, page 38

39 Segment CropEnergies (mn ) 2016/ /16 Revenues ,3% EBITDA ,9% EBITDA-Margin 18,6% 18,5% Operating Result ,6% Operating Margin 13,4% 13,2% Restructuring and special items ,3% Result from companies consolidated at equity Result from operations ,7% Investments ,2% Fixed Assets ,2% Financial Assets / Acquisitions Capital Employed ,4% RoCE 20,4% 17,7% Südzucker Conference Call, FY 2016/17, page 39

40 Segment Fruit (mn ) 2016/ /16 Revenues ,6% EBITDA ,2% EBITDA-Margin 9,5% 9,4% Operating Result ,0% Operating Margin 6,2% 5,7% Restructuring and special items ,0% Result from companies consolidated at equity Result from operations ,1% Investments ,2% Fixed Assets ,9% Financial Assets / Acquisitions Capital Employed ,2% RoCE 8,3% 7,5% Südzucker Conference Call, FY 2016/17, page 40

41 Group balance sheet (mn ) (mn ) Intangible assets ,2% ,6% Fixed assets ,5% ,7% Shares in companies consolidated at equity 433 5,0% 333 4,1% Other investments and loans 24 0,3% 22 0,3% Securities 19 0,2% 19 0,2% Receivables and other assets 10 0,1% 14 0,2% Deferred tax assets 132 1,5% 133 1,6% Non-current assets ,7% ,7% Inventories ,5% ,3% Trade receivables and other assets ,5% ,3% Current tax receivables 21 0,2% 36 0,4% Securities 126 1,4% 126 1,5% Cash and cash equivalents 581 6,6% 459 5,6% Current assets ,3% ,3% Equity attributable to shareholders of SZ AG ,3% ,8% Hybrid capital 653 7,5% 653 8,0% Other minority interest ,2% 661 8,1% Shareholder's equity ,4% ,0% Provisions for pensions and similar obligations 823 9,4% 798 9,8% Other provisions 92 1,0% 103 1,3% Non-current financial liabilities ,5% 734 9,0% Other liabilities 24 0,3% 16 0,2% Tax liabilities 103 1,2% 99 1,2% Deferred tax liabilities 81 0,9% 62 0,8% Non-current liabilities ,4% ,3% Other provisions 233 2,7% 209 2,6% Current financial liabilities 221 2,5% 425 5,2% Trade payables and other liabilities ,9% ,2% Current tax liabilities 49 0,6% 61 0,7% Current liabilities ,7% ,7% Total assets ,0% ,0% Total liabilities and shareholders' equity ,0% ,0% Südzucker Conference Call, FY 2016/17, page 41

42 Return on Capital Employed(RoCE RoCE)* Capital 5,950 5,873 5,877 5,791 6,012 5,901 Employed (mn ) Group RoCE (%) 16.3 % 10.6 % 3.1 % 4.2 % 7.1 % 8.3 % 2012/ / / / /17 Ø 5 years Sugar 22.4 % 13.7 % 0.2 % -2.6 % 2.3 % ~7.2 % RoCE Special Products 9.5 % 6.3 % 8.7 % 11.9 % 12.2 % ~9.7 % CropEnergies 17.3 % 6.4 % -2.2 % 17.7 % 20.4 % ~11.9 % Fruit 5.0 % 8.1 % 8.4 % 7.5 % 8.3 % ~7.5 % * IFRS 11 adjusted since 2013/14, inclusive goodwill Südzucker Conference Call, FY 2016/17, page 42

43 Unchangedhigh high liquidity* (mn ) mit IFRS 11 mit IFRS 11 mit IFRS 11 mit IFRS 11 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 res erves * IFRS 11 adjustedsince28 February2014 Südzucker Conference Call, FY 2016/17, page 43

44 Favourable financing maturity profile* (mn mn ) asof 28 February2017 EUR-Bond % EUR-Bond % Promissory Note Syndicated loan 1,050 mn Commercial Paper Programm 600 mn (perpetual) Hybrid Bond 700 mn (perpetual) 5.25 % p.a. beforejune 2015 payoutannually/ since June M-Euribor bp payout quarterly * Maturity: 2018/150 Mio., 2020/600 Mio., 2021/300 Mio. Südzucker Conference Call, FY 2016/17, page 44

45 Hybrid bond: 2016/17 cash flow covenant* safely achieved (mn ) 2007/ / / / / / / / / / /18e Revenues ,7-7,0 Cash flow > prev. year Cash flow / Revenues 8,6% 8,6% 9,7% 9,8% 11,8% 12,6% 9,3% 5,7% 7,5% 9,8% * IFRS 11 adjusted since 2013/14 Cash flow covenant (cash flow / revenues >5 %) so far significantly exceeded Cash flow covenant fulfillment also expected in 2017/18 Options forhybrid bond2005 (depending dependingon continuous financial planning): Since30 June 2015: quarterlyvariable interestpayment, 3M Euriborplus 3.10 % p.a. Periodfrom31 March 2017 to30 June 2017 (excl.), rate of remunerationfixedat % p.a. Since30 June 2015, bondcanbecalledandredeemedon quarterlybasisat nominal value (accordingto 6 (5) & (6) of the terms and conditions) Preconditiontouseissuercallrightisreplacementthroughnewhybrid orequitycapital within 12 months A bondrepurchase also partially ispossibleat anytime Still preferred option: No call of hybrid bond 9,8% > prev. year. Südzucker Conference Call, FY 2016/17, page 45

46 Disclaimer This presentation contains forward looking statements. The statements are based on current assumptions and estimates made by the executive board and information currently available to its members. The forward looking statements are not to be viewed as guarantees of the future developments and results presented therein. Future developments and results are in fact dependent on a variety of factors and are subject to various risks and imponderables. They are based on assumptions that could in fact prove to be invalid. The risk management report in the 2016/17 annual report on pages 88 to 99 presents an overview of the risks. We assume no obligation to update the forward-looking statements made in this presentation. This presentation includes percentage and number rounding. Typing and printing errors reserved. IFRS 11 application as of financial year 2013/14. Written and visual value statements are standardized as follows: ±1% stable / ±1-4% slight / ±4-10% moderate / >/< 10% significant Südzucker Conference Call, FY 2016/17, page 46

47 Investor Relations Financial calender 13 July 2017 Q1 1 st quarterreport2017/18 20 July 2017 Annual general meeting for fiscal 2016/17 12 October 2017 Q2 1 st half yearreport2017/18 11 January 2018 Q3 1 st to3 rd quarterreport2017/18 23 April 2018 Preliminary figures financial year 2017/18 17 May 2018 Press and analysts conference fiscal 2017/18 Contact Nikolai Baltruschat Head of Investor Relations Tel.: +49 (621) nikolai.baltruschat@suedzucker.de Bernhard Juretzek Manager Investor Relations Tel.: +49 (621) bernhard.juretzek@suedzucker.de Sandra Kochner Assistant Tel.: +49 (621) sandra.kochner@suedzucker.de Südzucker AG Maximilianstrasse Mannheim, Germany investor.relations@suedzucker.de Südzucker Conference Call, FY 2016/17, page 47