Südzucker Group. Südzucker Group Roadshow Investor Relations September 2007

Transcription

1 Südzucker Group Südzucker Group Roadshow Investor Relations September 2007

2 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 2

3 Südzucker Group at a glance Within its key markets and customer groups Südzucker holds leading market positions in Sugar (Europe), Fruit preparations (World), Bioethanol (Europe), Functional Food (World), Frozen Pizza (Europe) and Fruit juice concentrates (Europe) Clear strategy of market leadership in all business segments Above 70 % of revenues generated outside Germany Strong presence in growth region Eastern Europe Group revenues 5.8 bn FY 2006/07 Sugar (61.4%) Special Products (22.7%) Fruit (15.9%) Development of new growth markets (e.g. Russia, China, Brasil) Early market entry into growth business platforms (e.g. Functional Food, Fruit preparations) Tremendous growth option Bioethanol triggered Index membership: MDAX, FTSE Euromid, Dow Jones Euro Stoxx TMI, MSCI Germany PortionPack (7.1%) Frozen Pizza (30.7%) Functional Food (27.1%) Starch (19.4%) Bioethanol (15.7%) Südzucker Group: Page 3

4 Südzucker Group: Strategic Objectives Segment Market Position Growth Profitability Sugar # 1 in Europe Leverage market share in Europe: Ongoing cost reduction and Industrial sugar structural measures Sales to Italy via marketing partner Market entry in Bulgaria Distribution to Balkan from Bosnia refinery Ongoing examination of interesting markets & players Special Products Rising earnings contribution for the group driven by Bioethanol and Functional Food Bioethanol Objective: # 1 in Europe Largest European faciltity runs on full capacity Growing capacity usage in new facilities by 2010 Capacity from > 260k m 3 to > 1,000 k m 3 EU mandatory blending 5.75% by 2010 Synergies with Südzucker group Unlock new distribution channels Diversified raw material base Leverage brand names CropPower85 and ProtiGrain (wheat, sugar, corn) Functional Food # 1 worldwide Product innovations in line with market trends Improve efficiency of business processes in Isomalt and E.g. Palatinose: sugar based ingredients for (e.g. Facility Chile) Oligofructose sports and wellness drinks Growing nutrition awareness Growing per capita income in emerging markets Starch Develop niche starches with higher value added Freiberger #1 in Europe Growing European market for frozen food Fruit Boost margins through synergies and growth alongside global nutritional trends Fruit Preparations # 1 worldwide Production in Russia, China and Brasil Synergies between integrated companies Yoghurt drinks among the strongest growing Worldwide sourcing and distribution Fruit Juice # 1 in Europe food segments globally Economies of scale Concentrates Growing per capita income in emerging markets Fix cost degression on back of rising output Global market growth: 5-7 % p.a. Südzucker Group: Page 4

5 Südzucker Group revenues: Past Present Future 2002/ / /10 e 21% 16% * 17% 79% 23% 61% 34% 49% * 14 months Sugar Special Products Fruit Investment offensive 03/04-07/08 with 3.3 bn focused on segments Special Products (Functional Food, Bioethanol) and Fruit Until end of 2008/09 completion of capacity upgrades Bioethanol Past investments and expansion program Bioethanol lead to increasing revenues and earnings contributions of Special Products and Fruit Südzucker Group: Page 5

6 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 6

7 Strong position in Europe in challenging environment Key characteristics of new sugar market regime (since 1st July 2006) Reduction of sugar reference price on producer level and simultaneous overproportional decline of basic beet price Abolition of C sugar and simultaneous introduction of industrial sugar business Reduction of EU sugar quota (by 5 to 6 mn t) Non-recurring option for quota acquisition and quota surrender against compensation Target Market equilibrium in Europe Südzucker quota share 23,7 % (2006/07) Belgium 69 % 20 % France Germany 40 % 100 % Austria EU sugar quota 17.4 mn t 19 % Czech Republic 37 % 25 % Poland 28 % Slovakia Hungary 35 % Moldova: market share Moldova Romania 2005/ /10e Total production Total production approx. 20 mn t mn t C-sugar Industrial sugar export Quota reduction 5-6 mn t Südzucker share 22% Additional quota EU sugar quota mn t Südzucker share > 22% 56 % Südzucker Group: Page 7

8 further developed Südzucker quota share 24.6 % (2007/08) EU accession Romania and Bulgaria on 1st January 2007 Production and sales organisation AGRANA Romania S.A. Establishment of trading corporation and joint venture in Bulgaria Future deficit market Italy: Increase of market share via distribution partnership Belgium 69 % 20 % France Germany 40 % Austria Polen 25 % Czech Republic 100 % 51 % 25 % Hungary Slovakia 42 % 35 % 56 % Moldova* Romania Bosnia-Herzegovina: Installation of sugar refinery (capacity 150,000 t) Bosnia- Herzegovina Bulgaria Italy * Moldova: market share Südzucker Group: Page 8

9 Segment Sugar: Outlook 2007/08 *) Impact temporary lasting Continued restrictive EU export policy Disappointing quota restitution 2007/08 Expected significant increase of already announced preventive withdrawal over 13.5 % for sugar marketing year 2007/08 Outlook Operating Profit (mn ) Missing contribution margin Restructuring levy increases to 174 (126) /t; further-on charge on entire quota, i.e. also on non-produced sugar (agreed withdrawal by EU commission) Idle capacities 2nd step in decline of factory margin Abolition of C sugar business First time charge of production levy new sugar market regime / /08e circa break-even *) not taking into account new proposal of EU commission to reform the reform Südzucker Group: Page 9

10 Segment Sugar: Mid term outlook Improved proposal by EU commission (7 May 2007) significantly increases probability to reach market equilibrium Current regulation New EU proposal *) Beet growers share in restructuring premium after quota renouncement at least 10 % Initiative right for quota surrender alone on behalf of manufacturer Share of beet growers restructuring premium after renouncement fixed at 10 % plus 237,50 /t top-up Initiative right for quota renouncement extended to beet growers for up to 10 % of quota SZ-assessment pos. neg. Restructuring levy (sugar marketing year 2007/08) has to be paid on entire quota Südzucker Group: Page 10 In case of quota renouncement by manufacturer exceeding individual preventive withdrawal (sugar marketing year 2007/08) no charge of restructuring levy on this withdrawal *) Taking effect in sugar marketing year 2008/09 if finalised

11 Current regulation in numbers Restructuring fund works for 4 years until 2009/10 (for amounts of restructuring levy refer to page 43) Distribution between manufacturer s and grower s share Industry's share Minimum farmers' share Effective farmers' share The restructuring amount declines from 730 /t (2006/07) down to 520 /t in 2009/10 Amount is being shared between manufacturers (<= 90%) and beet growers (at least 10%) / t quota sugar < 657 < 657 > 73 > 73 < 562,5 > 62,5 520 < 468 > /07 * 2007/08e 2008/09e 2009/10e 2010/11e Beet growers share in restructuring premium after quota renouncement at least 10%: Partially ended up in significantly higher shares of up to 35% (e.g. Ireland) Sugar manufacturers have no stable calculation base No initiative right for farmers Comparatively low incentives for sugar manufacturers and beet growers Sugar marketing year Sugar marketing year: 1st Oct Sept. (12 months) *) Exception 2006/07: 1st July - 30 Sept. (15 months) Development of restructuring premium Sugar year Deadline Quota price per tonne * 2007/ / t 2008/ / t 2009/ / t 2010/ / t *) Quota has to be renounced by end of January to receive the restructuring amount of the following sugar marketing year Südzucker Group: Page 11

12 The new EU proposal in numbers Sugar manufacturers: Refund of fixed 174 /t for the quantity of preventive withdrawal 2007/08, i.e. the restructuring levy on the preventive withdrawal (~13% of total 07/08 quota for Südzucker) Condition: Surrender of at least the quota corresponding to the 07/08 preventive withdrawal by 31st January 2008 PLUS fixed 562,5 /t for any quota relinquished to the restructuring fund 2008/09e: Fixed 736,5 /t much more attractive than <562,5 /t (under current regulation) / t quota sugar Distribution between manufacturer s and grower s share < 657 < ,5 237,5 * 736, Industry's share Farmers' share Beet growers: 2008/09e: Premium fixed at 10% (= 62,5 /t) plus 237,50 /t top-up 300 /t much more attractive than >62,5 /t (under current regulation) PLUS: Initiative right for farmers for up to 10% 0 > 73 > 73 62, / /08e 2008/09e 2009/10e 2010/11e Sugar marketing year *) paid for quantity of preventive withdrawal 07/08 (~13% of 07/08 SZ quota) Significantly higher economic incentives for manufacturers and growers Südzucker Group: Page 12

13 Main drivers for sugar earnings in 2007/08 Earnings driver Current assumptions Potential trigger Earnings impact Full year market withdrawal > 20% Higher or lower market withdrawal Any percentage deviation to our assumption (refering to sugar year 2007/08) as expected has an impact on operating earnings EU Reform of Reform Not included in current Depending on final EU agreement and outlook as proposal possible Südzucker action e.g.: is not yet signed Quota renouncement Capacity adaptation In case of quota renouncement > 13%: The 174 /t refund of restructuring levy on preventive withdrawal: Reduction of temporary charge has positive impact on operating profit 2007/08e The 562,5 /t restructuring premium: High positive one-off impact on restructuring and special items, but: has to cover corresponding restructuring expenses Higher incentives improve quota renouncement with positive sustainable impact on market balance Südzucker Group: Page 13

14 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 14

15 Segment Special Products with strong positons in each division Divisonal overview Südzucker Group: Page 15 Bioethanol: Bioethanol for fuel sector Functional Food: Premium food ingredients like Isomalt, Inulin, Oligofructose or rice starch Freiberger: Deep frozen convenience food (Pizza, Pasta, Baguettes) Starch: Starch and starch niche products with food and non-food industry PortionPack: Various portioned products Positioning & Strategy Market position: Bioethanol: Leading European manufacturer Backbone: Europe s largest bioethanol plant (Zeitz) Functional Food: World market leader with Isomalt (market share ~80%) and Oligofructose (market share ~65%) Growth driver: Mandatory blending requirement for bioethanol Increase in awareness for healthy food and growing percapita income (emerging markets) in Mio /01 CAGR: 10,1 % / Starch 19% (0.25) Revenue development / / / / /07 Revenue split 06/07 (bn ) PortionPack 7% (0.1) Freiberger 31% (0.4) 2009/10e ~1.900 Functional Food 27% (0.35) Bioethanol 16% (0.2)

16 Division Bioethanol: Capacity upgrades 2005/ /10e Zeitz ( m³) Zeitz ( m³) Zeitz Annex ( m³) Loon-Plage ( m³) Loon-Plage ( m³) Pischelsdorf ( m³) Wanze ( m³) Hungrana ( m³) * Hungrana ( m³) * CropEnergies AG Südzucker / AGRANA (* Joint Venture Share) Südzucker Following investment phase, division bioethanol will command about 1 mn m³ production capacity in 2009/10 (market share > 10 %) Diversification of raw material basis (Wheat, sugar, corn) Established production know-how in combination with strong brands (e.g. CropPower 85, ProtiGrain) and distribution network Südzucker Group: Page 16

17 Division Bioethanol: Growth potential Economics: In 06/07 Division has more than trippled revenues from 61mn to > 200mn yoy CropEnergies generated operating margin of 14.3% Division set to boost revenues and operating profit triggered by capacity upgrades and market growth in mn Revenue development CAGR: ~78% ~ ~ / / /10e Market potential: 8 CropEnergies SZ Bioethanol total Market potential Bioethanol ~7,9 (Tax driven) support of biofuels by EU Directive Mandatory blending of 5.75% biofuels to conventional fuels by 2010: EU market potential of ~7.9 mn m 3 by 2010 EU proposal to increase blending to 10% by 2020 in mn m CAGR: ~78% ~0,9 ~1,5 0 0,1 0,3 ~1,0 2005/ / /10e SZ Bioethanol Bioethanol market (fuel appliances) Südzucker Group: Page 17

18 Segment Special Products: Outlook 2007/08 Growth Continued revenue progression division Bioethanol: >30 % Growth Functional Food on comparable basis in core products (absolute decline due to sale of inulinfructose production) Continuous growth of other divisions Optimisation Increasing capacity utilisation Enhancement of production processes (e. g. Chile) Profit increase Rising earnings contributions (especially from Bioethanol and Functional Food) Südzucker Group: Page 18

19 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 19

20 Segment Fruit with leading positions in both divisions Overview Fruit preparations: World market leader Customers: dairy, baking and ice cream industry 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, functional food and starch in mn Revenue development ~ months 12 months / / / / /10e Accelerated organic growth Emphasis on expansion into attractive growth regions (e.g. Brasil, Russia, China) 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) Synergies / Production cost optimisation Juice & Fruit Holding GmbH, Vienna AGRANA Fruit S.A. Paris Fruit preparations 80% of segment revenues 37% world market share 26 facilities on the globe AGRANA Juice GmbH, Gleisdorf Fruit juice concentrates 20% of segment revenues 10% world market share 11 facilities worldwide Südzucker Group: Page 20

21 Segment Fruit: Outlook 2007/08 Growth Optimisation Continued growth path combined with huge effort for integration of acquired companies Growth engine: production in Russia, joint ventures in China und Brasil Realisation of price increases in light of product innovation (e.g. co-operation of Functional Food and Fruit) Clear priority on lifting synergies through integration of acquired companies (e.g. purchasing, distribution, product development, administration) Exploitation of scale effects and increase in utilisation Profit increase Increase in earnings contribution due to synergies Reduced fixed cost level/ growing top-line contribution Südzucker Group: Page 21

22 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 22

23 Südzucker Group: Outlook 2007/08 *) Revenues Südzucker Group: ~ bn Segment Sugar: decline in light of announced withdrawal Organic growth in segments Special Products and Fruit (previous year 14 months) Operating Profit Südzucker Group: ~ mn Segment Sugar circa break-even Segment Special Products: increase Segment Fruit: significant increase on comparable basis (previous year 14 months) Capex Südzucker Group: ~ 500 mn (fixed assets) thereof 50% bioethanol *) not taking into account new proposal of EU commission to reform the reform Südzucker Group: Page 23

24 Südzucker Group: Midterm Outlook 2009/10 *) Revenues ~ bn Segments Special Products and Fruit with share of about 50% Operating Profit > 450 mn Capex ~ 250 mn (fixed assets) *) not taking into account new proposal of EU commission to reform the reform Südzucker Group: Page 24

25 Executive Summary Outlook 2007/ /09 Segment Sugar: Continued operational structural measures to adjust production capacities Burden from sugar market regime overlaps with high temporary charges New EU reform proposal with positive impulse Segments Special Products and Fruit: Market growth and existing production facilities generate higher earnings in Bioethanol, Functional Food and Fruit Outlook 2009/10 Group operating profit to exceed pre-regime-change level following temporary earnings burden within sugar segment (> 450 mn ) Significant increase in visibility after transition period (particularly beyond end of temporary impacts within sugar segment) and balanced earnings structure Südzucker Group: Page 25

26 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 26

27 Key figures 2006/07 (in mn ) 2006/ /06 Δ Revenues ,8% EBITDA ,0% EBITDA Margin 11,8% 12,5% Operating Profit ,8% Operating Margin 7,3% 8,4% Restructuring and special items Goodwill Impairment Income from operations (EBIT) Cashflow ,1% Net Financial Debt ,1% Equity Ratio 42,4% 47,1% Capital Employed ,0% RoCE 9,0% 8,6% Earnings per share ( ) -1,72 1,36-3,08 Cashflow per share ( ) 2,93 2,95-0,03-0,9% Dividend per share ( ) 0,55 0,55 0,00 0,0% Südzucker Group: Page 27

28 Revenues by segment (in mn ) 2006/ /06 Δ Südzucker Group ,8% Sugar ,4% Special Products ,8% Fruit ,0% Segment Sugar confirms high pre-year level despite restrictive EU export policy Segment Special Products: Division Bioethanol shows boost in revenues (by 145 mn to 206 mn ) driven by high organic growth of CropEnergies Group Segment Fruit: dynamic growth (+69 %; internal growth +13 %) Segments Special Products and Fruit are growth drivers of the Group (Revenues 2.2 bn, share in group revenues already 39 %) Südzucker Group: Page 28

29 Operating profit by segment (in mn ) 2006/ /06 Δ Südzucker Group ,8% Sugar ,3% Special Products ,7% Fruit ,6% Segment Sugar burdened by first-time temporary restructuring levy on non-produced quota and by restrictive EU export policy Segments Special Products and Fruit increase their earnings contribution in spite of higher depreciation following investment offensive Segment Special Products: Division Bioethanol for the first time generates significant positive earnings contribution following start-up of CropEnergies activities Segment Fruit: Operating profit rises in proportion to revenues Südzucker Group: Page 29

30 Earnings before income taxes (in mn ) 2006/ /06 Δ Operating Profit ,8% Restructuring and special items Goodwill Impairment Income from operations (EBIT) Income from associated companies Financial expense ,8% Earnings before income taxes Burden from required reduction of sugar production capacities (Marseille (F), Lubna (PL), Groß-Gerau (D), Regensburg (D): 109 mn ); income from inulin quota sale and dilution gain CropEnergies (142 mn ) Impairment loss due to reduction of valuation for French sugar- (482 mn ) and Functional Food- activities (98 mn ) Südzucker Group: Page 30

31 Earnings per share (in mn ) 2006/ /06 Δ Net earnings Group thereof shareholders Südzucker AG thereof Hybrid capital ,3% thereof minority interest ,7% Earnings per share ( ) -1,72 1,36-3,08 0,52 1,34 1,36-1,72 2,54 Earnings per share 2006/07 Impairment Sugar Impairment Functional Food Earnings per share 2006/07 pre Impairment Earnings per share 2005/06 Südzucker Group: Page 31

32 Development of net financial debt (mn ) NFD NFD Cash flow 324 Working capital -599 Investments -163 Dividends IPO proceeds Crop Energies Others NFD Reduction of net financial debt (NFD) - in spite of ongoing high investments - through continued high cash flow and positive working capital effects Südzucker Group: Page 32

33 Investments (in mn ) 2006/ /06 Δ Capex ,3% Sugar ,9% Special Products ,7% Fruit ,4% Financial Assets ,2% Sugar ,3% Special Products Fruit ,1% Subtotal ,5% Purchase new sugar quota Südzucker Group total ,7% Segment Sugar: Maintenance capex reduced to normalised level Segment Special Products: continued above average capex level for capacity extension Bioethanol Full usage of option to acquire additional quota (256,000 t) Südzucker Group: Page 33

34 Return on Capital Employed (RoCE) 2006/ / /07 (in mn ) RoCE RoCE Operating Profit Cap. Employed Südzucker Group 9,0% 8,6% Sugar 9,6% 9,0% Special Products 8,4% 8,7% Fruit 8,0% 5,8% Segment Sugar: Improved RoCE as a result of reduction in capital employed (Impairment loss) In segment Special Products temporary impact on RoCE by continued high investments; further on attractive market growth will lead to higher capacity usage (e. g. Orafti/Chile) Segment Fruit in 2006/07 catches up with group level Südzucker Group: Page 34

35 Balance sheet ratios (in mn ) Total assets Equity Equity ratio 42,4% 47,1% Goodwill/Equity 33,0% 46,8% Net financial debt (NFD) Gearing (NFD/Equity) 24,1% 31,5% Cashflow Net Financial Debt / Cashflow 1,5x 2,2x Goodwill Property, plant, equipment Working Capital Capital Employed RoCE 9,0% 8,6% Südzucker Group: Page 35

36 Balance Sheet Structure (in mn ) Intangible assets ,9% ,6% Property, plant, equipement ,5% ,3% Shares in associated companies 69 0,9% 77 1,0% Other investments and loans 132 1,7% 179 2,3% Securities 28 0,4% 27 0,3% Receivables and other assets 8 0,1% 5 0,1% Deferred tax assets 30 0,4% 76 1,0% Non-current assets ,8% ,5% Inventories ,3% ,2% Trade receivables and other assets ,3% ,3% Current tax receivables 59 0,7% 46 0,6% Securities 108 1,4% 47 0,6% Cash and cash equivalents ,5% 459 5,8% Current assets ,2% ,5% Total assets ,0% ,0% (in mn ) Equity attributable to shareholders of SZ AG ,6% ,5% Hybrid capital 684 8,6% 684 8,6% Other minority interest 571 7,2% 472 6,0% Shareholder's equity ,4% ,1% Provisions for pensions and similar obligations 399 5,0% 396 5,0% Other provisions 177 2,2% 142 1,8% Non-current financial liabilities ,1% ,0% Other liabilities 21 0,3% 27 0,3% Deferred tax liabilities 249 3,1% 349 4,4% Non-current liabilities ,8% ,6% Other provisions 152 1,9% 208 2,6% Current financial liabilities 259 3,3% 280 3,5% Trade and other payables ,3% ,5% Current tax liabilities 27 0,3% 57 0,7% Current liabilities ,8% ,3% Total liabilities and shareholders' equity ,0% ,0% Südzucker Group: Page 36

37 Overview 1. Südzucker Group at a glance and strategic objectives page 3 2. Development of Segments Sugar page 7 Special Products page 15 Fruit page Outlook page Appendix Financial Year 2006/07 at a glance page 27 Additional segmental information page 38 Südzucker Group: Page 37

38 Segment Sugar Profile (1) Key data 2006/07 Beet growers: 62,300 Beet acreage: 444,900 ha Revenue development Sugar processing: 27.5 mn tons ~2.700 Sugar production: 4.6 mn tons in mn Core competences Production of high quality sugar with wide range of products Sugar for food appliances ( Quota Sugar ) Sugar for chemical/pharmaceutical appliances ( Industrial Sugar ) / / / / / / / /10e Processing and upgrading of large quantities of sugar beet and sugar Distribution: Proximity to customers within European market Postitioning & Strategy EU-quota share 24,6% (sugar marketing year 2007/08) Eastward enlargement: consistent development of market share Examination of expansion outside of Europe (e.g. Brasil) Key data EU-business Campaign 2006/07 EU-15 EU-12 2 EU-27 Population in mn Sugar consumption in mn t 12,9 2,7 15,6 SZ sugar quota mn t 1 3,3 0,7 4,1 SZ production facilities Quota sharel 1 23% 24% 24% 1 excl. Eastern Sugar, 2 incl. Romania, 3 incl. 1 refinery Südzucker Group: Page 38

39 Segment Sugar Profile (2) Südzucker quota share 24,6% (2007/08) EU quota share (2007/08) 1 Poland Tereos (10.0 %) Nordzucker (9.8 %) British Sugar (8.5 %) Belgium France 20 % 69 % Germany Italy 25 % 25 % Slovakia Czech 40 % Republik 42 % Moldova 56 % 100 % Austria 51 % Hungary 35 % Romania Bosnia- Herzegovina Bulgaria Südzucker- Group (24.6 %) EU-Quota 2007/08: mn t Pfeifer & Langen (6.5 %) Danisco (6.3 %) Ebro Puleva (4.7 %) All others (29.6 %) 1 as of April Sugar marketing year 2007/08: October 2007 September 2008 Südzucker Group: Page 39

40 Segment Sugar: Development 2006/07 (I) (in mn ) 2006/ /06 Δ Revenues ,4% EBITDA ,2% EBITDA Margin 11,6% 12,1% Operating Profit ,3% Operating Margin 7,3% 8,5% Restructuring and special items Goodwill Impairment Income from operations (EBIT) Investments ,1% Capital Employed ,4% RoCE 9,6% 9,0% Südzucker Group: Page 40

41 Segment Sugar: Development 2006/07 (II) Revenues (in mn ) Burden from first step decline of factory margin Extraordinary charge from restructuring levy on market withdrawal 2006/07 Restrictive EU export policy weighs on quota sugar sales and earnings Continued increase in energy prices Cost savings from abolished production levy and cost reduction programs Industrial sugar business starts sucessfully Other effects / / / / / Operating Profit (in mn ) / /07 Südzucker Group: Page 41

42 FINANCIAL TRANSPARENCY Segment Sugar: Factories Located in Beet Belt Poland Germany Belgium Czech Republic Moldova Slovakia Austria France Hungary Romania White sugar yield in the EU 2005/06 t white sugar /ha Südzucker EU sugar production (incl. Südzucker) Südzucker Group: Page 42 Ø EU-15 11,0 9,4 Ø EU-10 8,3 7,6 Ø EU-25 9,7 8,0

43 New Sugar Regime: Development Producer s Margin Sugar marketing year 2005/ / / / /10 3 Δ cum. Reference price (consumer level) /t S % Restructuring levy /t S Reference price (producer level) /t S % Basic beet price /t B % Beet cost /t S % Producer's margin /t S % Producer's margin in % reference price 42% 50% 50% 1) July 1 st, 2005 June 30 th, ) July 1 st, 2006 September 30 th, ) October 1 st September 30 th Südzucker Group: Page 43

44 Segment Special Products: Development 2006/07 (I) (in mn ) 2006/ /06 Δ Revenues ,8% EBITDA ,5% EBITDA Margin 13,8% 14,6% Operating Profit ,7% Operating Margin 8,8% 9,6% Restructuring and special items Goodwill Impairment Income from operations (EBIT) ,0% Investments ,6% Capital Employed ,9% RoCE 8,4% 8,7% Südzucker Group: Page 44

45 Segment Special Products: Development 2006/07 (II) Functional Food: Dynamic development of core products (e.g. Isomalt) Decline in revenues and earnings after sale of inulinfructose production (quota sale) Earnings impact from difficult first campaign and low utilisation of plant in Chile 931 Revenues (mn ) Others Starch Freiberger Bioethanol Funct. Food Bioethanol: CropEnergies boosts revenues significantly to 146,8 (60,5) mn and operating profit by 34,4 to 21,0 mn Step-up in capacity usage Higher sales volumes Realisation of higher sales prices Moderate raw material price development 2002/ / / / / Operating Profit (mn ) Others / /07 Südzucker Group: Page 45

46 Segment Special Products the divisions Division Business platform Positioning & Strategy Bioethanol Bioethanol for the fuel sector Europes largest Bioethanol facility in Zeitz, D (CropEnergies, AGRANA) By-products for agricultural enterprises IPO CropEnergies AG September 2006 Customers: Mineral oil industry, agricultural farms Kap. Upgrade from 260 k m 3 to 1,000 k m 3 by 2010 Diversified raw material basis: Wheat, sugar, corn Presence in Südzucker home markets EU-mandatory blending 5.75% until 2010 Objective: Market leadership in Europe Functional Food High-value food ingredients Growing nutrition awareness Palatinit Isomalt: sugar substitute produced from sugar Global market leadership mit share of ~ 80 % Palatinose: low glycemic carbohydrate w/ longlasting energy provision Growing market for sports drinks Galen IQ: Isomalt based raw materials for pharmaceutical appliances ORAFTI Inulin, Oligofructose: Pre-biotic ballast substance from chicoree root Global market share ~ 65 % Remy Rice starch: Food ingredients on rice basis Double digit growth rates Freiberger Deep frozen Pizza, Pasta, Baguettes Annual production > 450 Mio -> largest producer in EU Starch Starch- and starch niche products for food- and non-food appliances Develop starch niche products with higher value added PortionPack Portion packs for the food and non-food sectors European market leader Südzucker Group: Page 46

47 Segment Special Products Profile: Bioethanol Starting point (investment case) Diversification into sugar related growth areas Utilisation of core competences of Südzucker-Group Upgrading of agricultural raw material into premium preliminary products for processing industry Sugar thick juice as renewable resource (e.g. sugar factory Zeitz) Closeness to alternative raw material sources (wheat, sugar, corn) Market growth: (Fiscal) sponsorship of bio-fuels within EU member states Mandatory blending of bio-fuels (5.75% until 2010 further plans to increase up to 10% in 2020) Implementation & Strategy Investments into markets that have already or will implement EU-directive Germany, Austria, Belgium, France, Hungary Financial headroom through IPO of CropEnergies Triplication of capacity to 1 mn m 3 bioethanol in 2010 Improvement in operating margin through higher utilisation Objective: Market leadership in Europe by 2010 (market share > 10%) in mn in mn m Revenue development CAGR: ~78% 206 ~ / / /10e CropEnergies SZ Bioethanol total Market potential Bioethanol CAGR: ~78% ~600 ~7,9 ~1,5 ~0,9 0,1 0,3 ~1,0 2005/ / /10e SZ Bioethanol Bioethanol market (fuel appliances) Südzucker Group: Page 47

48 Special Products: Market potential Bioethanol Biofuel No.1 worldwide World production Increase of 12.5% up to 50.5 million m³ 38.8 million m³ for applications in the fuel sector (76.7%) Biggest producer: USA with approx. 20 million m³ Production in Europe Increase of the total production of 21.6% up to 3.4 million m³ Growth through the expansion of bioethanol production for the fuel sector especially in Germany Price development More or less stable price level in Europe ' 000 m³ e Biodiesel Bioethanol 431 1,134 Source: F.O. Licht EU bioethanol production for the fuel sector in,000 m³ 28 % 72 % Rest of EU Germany Source: ebio Südzucker Group: Page 48

49 Division Bioethanol: CropEnergies AG Zeitz (Germany) Expansion of production capacity from 260,000 m 3 to 360,000 m 3 bioethanol per year Expansion in two phases (existing plant extension, new annex plant) Broadening of raw material basis also using sugar juices Wanze (Belgium) Construction of production plant Production capacity of up to 300,000 m 3 bioethanol per year CO 2 -optimised energy supply by using biomass for energy supply Comparative advantage in Belgium by acquired production licences of 125,000 m 3 /year Dunkirk (France) Preparations for the takeover of Ryssen Alcools activities Site Wanze 2006 with sugar factory Site Wanze 2008 of bioethanol plant (planned) Südzucker Group: Page 49

50 Division Bioethanol: AGRANA Group AGRANA Bioethanol GmbH: Pischelsdorf (Austria) Establishement of capacities by autumn 2007 for: Bioethanol: up to m3/a Animal feed: ~ t/a Part of production distributed to CropEnergies on basis of sales contract HUNGRANA: Szabadegyháza (Hungary) 50:50 joint venture of AGRANA with Tate&Lyle Capacity upgrades for: Bioethanol: from to m3/a Corn processing: from to t/day Isoglucose: from ~ to ~ t/a Strengthening of bioethanol position in Hungary Site AGRANA Pischelsdorf Site HUNGRANA Szabadegyháza Südzucker Group: Page 50

51 Segment Fruit: Development 2006/07 (I) 1) (in mn ) 2006/ /06 Δ Revenues ,0% EBITDA ,4% EBITDA Margin 9,7% 10,7% Operating Profit ,6% Operating Margin 5,0% 5,0% Restructuring and special items Goodwill Impairment Income from operations (EBIT) ,6% Investments ,9% Capital Employed ,8% RoCE 8,0% 5,8% 1) 14 months Südzucker Group: Page 51

52 Segment Fruit: Development 2006/07 (II) Substantial enlargement of segment and improvement of market position through profitable external growth Full consolidation ATYS (12 months vs. 9 months) and first time consolidation of DSF Adaption of fiscal year (including 14 months in 2006/07) Organic growth 13 % (on a comparable 12 month basis sales ~ 780 Mio. ) Successful start of integration program (respective integration cost included) Market entry China (Fruit juice concentrates [Juice]) and Brasil (Fruit preparations [Fruit]) both via joint venture Revenues (in mn ) / / / / /07 Operating Profit (in mn ) Juice Fruit months 12 months 27 World Market Leader 2005/ /07 Südzucker Group: Page 52

53 Segment Fruit: Production sites Südzucker Group: Page 53

54 Disclaimer This presentation contains forward-looking statements that reflect management's current views with respect to future events. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. We do not intend or assume any obligation to update any forwardlooking statement, which speaks only as of the date on which it is made. Südzucker Group: Page 54

55 Südzucker Group, Page 55