Erste Bank INVESTOR CONFERENCE Stegersbach September 28, September 28,

Transcription

1 Erste Bank INVESTOR CONFERENCE Stegersbach September 28, 2006 SUGAR STARCH FRUIT September 28,

2 AGRANA Key figures AGRANA is a multinational enterprise headquartered in Vienna with a turnover of 1,500 mn AGRANA operates 54 production facilities on all five continents AGRANA employs over 8,100 people SUGAR Zucker AGRANA is one of Central Europe s biggest suppliers of sugar Revenues: Staff: 2, ,000 tons of processed sugar beets and 290,000 tons of raw sugar 9 sugar factories and 3 food production facilities STARCH FRUIT AGRANA s Starch Division is one of Europe s leading suppliers of specialty products and isoglucose Revenues: Staff: ,000 tons of processed starch potatoes and 730,000 tons of maize 4 starch factories AGRANA s Fruit Division is the world s leader in fruit preparations and Europe s foremost manufacturer of fruit juice concentrates Revenues: Staff: 4,487 Processed fruit: 670,000 tons 38 production plants September 28,

3 AGRANA's Strategy Growth in AGRANA's core businesses Sugar Strengthening the group's leadership in Central Europe AGRANA aims to maintain its position as an efficiency and technology leader in the Central European sugar industry Starch Fruit Pursuing the strategy of increasing the output of highly refined speciality starch products Focus on the production of innovative customer-orientated products and starch based solutions for the customers Enlargement of maize starch capacities as well as isoglucose and bioethanol production AGRANA is aiming to continue faster-than-market growth in fruit preparations and fruit juice concentrates Fruit Preparations: further expansion around the globe, enabling AGRANA to service its global food industry customers Fruit Juice Concentrates: AGRANA intends to expand beyond Europe September 28,

4 A Global Presence built up within 18 Years From a Local Supplier to a Global Player 1988: AGRANA Holding created by consolidating the Austrian sugar and starch industries : Dynamic expansion into CEEC (1) sugar and starch markets 2003: Diversification into the fruit segment 2005: Capital Increase for pursuing dynamic growth strategy Admittance to the ATX Production Plants Sugar Starch 4 Fruit Food production facilities 1 under construction 1 under construction 1 under construction Total: 54 Production plants September 28, Notes: 1. Central Eastern European Countries

5 AGRANA s Shareholder Structure Totality: ,040 shares Value of the company at the stock exchange: approx. 1,100 mn ~ 10.5% Raiffeisen Raiffeisen Bank Bank Coop. Coop. Lower LowerAustria ZBG ZBG Südzucker ~ 80% ~ 50% ~ 50% 24.5% Free Float Free Float Z & S Zucker und und Stärke Holding AG AG 75.5% September 28,

6 People are our Prime Resource AGRANA is a multinational enterprise headquartered in Austria. AGRANA s Sugar and Starch divisions are active in Europe. Its Fruit Division is global. Corporate Social Responsibility is not only a modern buzzword for us but is implemented in all companies of our group. We develop our staff in accordance with AGRANA s competence wheel. We promote the exchange of information, communication and training. We encourage our staff to think and act with entrepreneurial spirit. Our working style and leadership is founded on cooperation and trust. The health and safety of the workforce are especially important to us. Management gets rewarded on the basis of its performance. Employees by regions: 8, ,015 4,156 4,121 1,994 EU (thereof 1,746 in Austria) Other European countries Remaining foreign countries September 28, Notes: 1. Average

7 Financial Year Highlights Dynamic growth mn in accordance with IFRS Change Revenues 1, % Operating profit % Net restructuring expenses Consolidated earnings for the year Dividends per share in % September 28, Notes: 1. Proposed to AGM

8 SUGAR Division: Highlights Business Development Revenues SUGAR in mn Increase in revenues by 13.9% to mn o Significant expansion of quantity through increased exports o Strong rising global sugar prices from autumn 2005 Operating profit decreases from 60.7 to 38.7 mn (before restructuring) o Decreasing prices in our EU markets o o Major Events Rising costs for energy supply Higher EU contributions Sept 05: Reduction of sugar production quota by EU of around 12% for campaign Nov 05: EU decision about New Sugar Market Regime Jan 06: AGRANA decides to close down two sugar factories in Austria and Slovakia Feb 06: 14% quota cut September 28,

9 Top Sugar Producer in Central Eastern Europe Market Position EU Quota for AGRANA s Market (t 000) Sugar Factory Country Quota Position Austria #1 Sugar Factory Plant under construction Hungary Czech Republic Slovakia Romania Bosnia and Herzegovina NA (1) 150 (2) #1 #2 #3 #1 #1 PRAG CZECH REP. AUSTRIA Hrusovany Tulln Leopoldsdf. VIENNA Opava SLOVAKIA Sered BRATISLAVA Petöhaza BUDAPEST HUNGARY Kaposvar BOSNIA HERZEGOVINA Brcko SARAJEVO ROMANIA Roman Buzau BUKAREST September 28, Notes: 1. Production of beet sugar and refining of raw sugar Planned capacity of refined raw sugar 2008

10 SUGAR Division Reform of the EU Sugar CMO - I Key elements o a 36 per cent price cut on white sugar (reference price) beginning in and operated over four years and a cut of about 39 per cent on beet o decoupled compensation to beet farmers at a level slightly above 60 per cent of the price cuts in 2006 and 2007 and 64.2 per cent of the price cuts in 2008 and 2009 o merging of A and B quota into a single production quota o replacement of the existing intervention price by a reference price and by a private storage mechanism; until 2010, limited intervention option for a maximum quantity of 600,000 tons per year of white sugar at 80 per cent of the reference price of the following year o introduction of a voluntary restructuring scheme lasting 4 years with a degressive exit payment to encourage total factory closure and the renunciation of quota to be financed by a levy on the sugar industry by way of a levy lasting three years o compensation for the loss of C sugar production by way of the availability of an additional amount of 1.1 million tons against a one-off payment of 730 per ton of sugar September 28,

11 SUGAR Division Reform of the EU Sugar CMO - II o exemption from quota regulation of sugar for use in the chemical and pharmaceutical industries and for making bioethanol o increase of isoglucose quota of 300,000 tons over three years with an increase of 100,000 tonnes each year o option of allocations of additional isoglucose quotas totalling 103,000 tons to Sweden, Italy and Lithuania subject to a one-off payment of 730 per ton o option of using beet sugar facilities for refining raw sugar from 2009 o retention of compulsory licenses for imports and exports; quantities of imports from LDC1 countries generally unlimited from 2009 within the scope of the Everything but Arms Initiative; however, automatic triggering of the safeguard clause in the event of market disruptions o continuation of exports within the WTO limit o validity until ; no review clause September 28,

12 SUGAR Division The Future of the EU Sugar Regime Comment EU Quotas and Volumes (million t) WTO Panel decision regarding C-Sugar will limit exports; in Austria surplus will be used for bioethanol t mn C-Sugar exports are not possible any more due to WTO-Panel decision Due to sugar imports from ACP, Balkan, LDC s and WTO-limits there is a need for a quota reduction of approx. 5.5 mn tons till 2010 at the latest A Restructuring Fund is installed to encourage the voluntary cessation of less efficient white sugar producers in exchange for an exit payment C-Sugar 17.4 EU Sugar Quota 1, ACP minus 5.5 mn t WTO-limits (current quota exports) LDC and Western Balkan Agreement September 28,

13 SUGAR Division Model for Price and Margin Development caused by the new Sugar Market Regime ? Gross earnings / / / / / / Theoretical industrial margin Beet costs Restructuring levy??? Market price Intervention/ Reference price September 28,

14 Development of White Sugar Quotation London (SPOT USD/ton) Daily Q/ LSUc1 Line, Q/LSUc1, Last Trade(Last) 9/25/2006, 362 8/2/ /17/2006 (LON) Price USD T Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep # September 28,

15 West Balkan an important sugar market The West Balkan countries have traditionally been export destinations for quota sugar and C-sugar from the EU Bosnia-Herzegovina and Albania are solely import regions WTO panel decision and the new sugar market regime stop exports of EU sugar AGRANA decided to set up a raw sugar refinery to maintain it s attractive market share in the region EU net Exports to the West Balkan Countries (in t 000) EU net Export May 22, 2006 Expiration of EU C-sugar exports September 28,

16 Sugar refinery - Brcko Capacity of 150,000 tons Investment of 30 million 160 employees Start of construction in mid 2006 Start of operation in 2007 September 28,

17 STARCH Division: Highlights Major Events Revenues Starch in mn May 05: AGRANA decides to build up a new bioethanol plant in Austria (up to ,000 m 3 ethanol, start up , 125 mn investment) July 05: Decision to increase capacity of Hungarian starch factory (from 1,200 tons daily grinding capacity to 1,500 tons start up Q2 06, 10 mn investment) September 28,

18 STARCH Division: Specialization Strategy VALUE Derivatives, Ethers and Esters Maltodextrins Isoglucose Glucose Syrups Commodities (Potato and Maize Starch) End Product Use Textile Industry, Construction Industry, Cosmetic Industry Food Industry (e.g. Baby Food) Food Industry (e.g. Soft Drinks) Food Industry (e.g. Confectionery Products) Foodstuffs, Paper, Textiles, Pharmaceuticals Comment VOLUME Starch consumption correlates with the level of industrialization Strong growth in emerging markets (CEECs, Latin America, Asia) expected Convenience food market needs starch specialities and is growing rapidly Starch is an important intermediate product for the food industry AGRANA Strategy Value versus volume AGRANA focuses on specialties Extension of the value chain by focusing on tailormade products for the construction, textile, baby food and cosmetic industries Strong customer relationships September 28,

19 STARCH Division Bioethanol Activities EU-Biofuels Directive advises admixture - of 2% in of 5.75% in 2010 in all EU countries Implementation in Austria with compulsory admixtures and tax benefits - of 2.5% from Oct 1, of 4.3% from Oct 1, of 5.75% from Oct 1, 2008 Implementation in Hungary with tax benefits and additional compulsory admixtures beginning with Sept 1, of 1.0% (current level) - of 4.4% from Capacity from 10/2007 up to 240,000 m 3 Raw materials available in Austria -75% wheat -15% corn - 10% beet-thick-juice Investment of 125 mn Estimated price level ~ 500 /m 3 In 2008 expected net sales of 115 mn (A) plus 50 mn (H: on a pro rata basis) Operating margin should be > 10% Capacity current around 52,000 m 3 from 1/2008 around 156,000 m 3 Raw material ~ 400,000 tonnes corn Investment of 90 mn till 2008 (AGRANA s share: 45 mn ) September 28,

20 STARCH Division: Outlook Sales increase in combination with solid price development for expected Record investment program in totaling 144 mn o 104 mn in bioethanol plant o o 20 mn in plants in Aschach and Gmünd 20 mn in the expansion of Hungrana Continuous focus on and enforcement of speciality products with higher margins September 28,

21 FRUIT Division: Highlights Major Events Revenues Fruit in mn June 05: Agreement with Atys shareholders to accelerate complete acquisition end of 2005 (one year earlier) July 05: Successful start up of new plant for 500 Sept 05: Dec 05: Dec 05: Jan 06: Feb 06: fruit preparation in Russia Delisting of Steirerobst at the Vienna stock exchange Acquisition of 50% minority stake of Atys-Turkey Re-acquisition of DSF (= Atys-Germany) which was prohibited by German competition authorities in the first round 2004 Acquisition of 50% minority stake of Atys-Austria Acquisition of 44% minority stake of Steirerobst /04 04/05 05/06 September 28,

22 FRUIT Division Previous Structure AGRANA started to build up the fruit division in 2003 to compensate the expected decline in the sugar division AGRANA acquired - step by step - 6 fruit processing companies up to now AGRANA became the world leader in fruit preparations for dairy industry and the leading European fruit juice concentrate producer 100% 100% 100% 100% 100% 100% September 28,

23 FRUIT Division New Structure AGRANA started to integrate and to optimise the cost- and production structure of the fruit division Integration was implemented by July 1, 2006 Juice & Fruit Holding GmbH Margin increase will come up mainly due to materializing synergies within the group: - Common sourcing - New integrated sales organization for fruit juice concentrates - Joint R & D AGRANA Fruit S.A. all fruit preparation companies AGRANA Juice GmbH all juice concentrate companies September 28,

24 Fruit Preparation Market Share in Dairy Industry World Market Share European Market Share 37% 32% AGRANA Group 63% World Market Volume 1.1 mn tons 68% European Market Volume 670,000 tons Other September 28,

25 AGRANA Fruit Preparation in Brazil AGRANA FRUIT BRASIL LTDA. The new Brazilian subsidiary will be established jointly with RICAELI, a Brazilian frozen food company. Plant is located in Cabreuva, State of Sao Paulo. The production will be started in the second quarter of In the first step a capacity of 3,300 tons is planned. In 2008 it will be extended to 5,500 tons. September 28,

26 AGRANA Juice in China Xianyang Andre Juice Co. Ltd. Xianyang Andre Juice is a subsidiary of Hongkong listed company Yantai North Andre Juice Company, Ltd. Plant is located in the province Shaanxi which is the largest apple growing area in China Capacity of tons is planned to be doubled 2007: expected revenues of 24 mn 160 employees September 28,

27 AJC WORLD-PRODUCTION: 1.3 mn tons t t t t t t t t Source: AF-Estimates AF-Estimates based on: US-Apple Production and Utilization Analysis by Peter Igel (08/05) t September 28,

28 AJC WORLD CONSUMPTION: 1.3 mn tons t t t t t t t t t Source: AF-Estimates based on: US-Apple Production and Utilization Analysis by Peter Igel (08/05) and Fruit Juice Consumption by Wild (11/04) September 28,

29 Apple Juice Concentrates Global Movements PRODUCTION CONSUMPTION IMPORT PRODUCTION CONSUMPTION IMPORT BLENDING EXPORT PRODUCTION & EXPORT PRODUCTION & EXPORT September 28,

30 FRUIT Division: Outlook Completion of the integration actions of the acquisitions o Realization of cost advantages o Elimination of redundant actions Extension of the market position and continuation of the growth course September 28,

31 Financial Year Results SUGAR STARCH FRUIT September 28,

32 Consolidated Income Statement - March 1 to February 28 (in accordance with IFRS) in mn Revenues 1, Operating profit Net restructuring expenses (thereof 13.4 mn depreciation/amortization/write-downs of intangible and tangible fixed assets) Income from operations Net financial income (expenses) Profit before income tax Income tax expense Consolidated earnings for the year - of which attributable to shareholders of AGRANA Beteiligungs-AG ROS ROCE Earnings per share in accordance with IFRS in Earnings per share in relation to the number of shares in circulation on the balance-sheet date in % 8.4% % 11.2% September 28,

33 Revenues and Operating Profit by Segments Revenues 50% 50 % 33% 67% Operating Profit 1,499.6 mn mn 33% 61% 39% 67% 99.5 mn 90.8 mn Specialities Sugar September 28,

34 Consolidated Cash Flow Statement in mn Net cash from profit Change in working capital Net cash from (used in) operating activities Proceeds from disposals of fixed assets Purchases of tangible and intangible fixed assets Purchases of financial fixed assets Changes in the scope of consolidation Net cash from (used in) investing activities Capital increase by AGRANA Beteiligungs-AG Changes in non-current financial liabilities Changes in current financial liabilities Dividends paid Net cash from (used in) financing activities Cash and cash equivalents at end of the period September 28,

35 Key Figures Balance Sheet in mn 2/28/2006 2/28/2005 Non-current assets Current assets Equity Non-current liabilities Current liabilities Net financial liabilities Equity ratio Gearing % 34.7% % 14.4% September 28,

36 Revenues and Operating Profit by Segments 1 st Quarter Revenues in mn Sugar Starch Fruit TOTAL 5/31/ /31/ Operating Profit in mn Sugar Starch Fruit TOTAL 5/31/ Results for Q will be published on October 12, /31/ September 28,

37 Outlook SUGAR STARCH FRUIT September 28,

38 Course for growth set Leading market positions in sugar, starch & fruit Focus on value orientated growth Solid equity ratio, net cash from operating activities and moderate gearing ensure capability for further acquisitions Speciality segment is the growth driver of revenues and profit o Starch Division: Capacity increase and specialization are driving starch sales o Bioethanol generates additional growth in Austria and Hungary o Increasing isoglucose quota will contribute to growth in Hungary o Fruit Division: strong organic growth and acquisitions Sugar Division: Still an important core segment; consequent rationalisation o Cost efficiency through introduced restructuring actions Revenues Outlook ( mn) ~ 2,000 mn ~ 1,800 mn (1) 1,500 mn 42% % 36% % 14% 12% % 38% 36% / /07e 2008/09e Sugar Starch Fruit The portions of each division as percentage of total revenues are rough estimates. September 28, Notes: 1. Revenues contain 14 months of associated fruit companies

39 Disclaimer This presentation is being provided to you solely for your information and may not be reproduced or further distributed to any other person or published, in whole or in part, for any purpose. This presentation comprises the written materials/slides for a presentation concerning AGRANA Beteiligungs-Aktiengesellschaft ( Company ) and its business. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or investment decision. This presentation includes forward-looking statements, i.e. statements that are not historical facts, including statements about the Company's beliefs and expectations and the Company's targets for future performance are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore investors should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events. Although care has been taken to ensure that the facts stated in the presentation are accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been verified by the Company no representation or warranty, express or implied, is given by or on behalf of the Company any of its respective directors, or any other person as to the accuracy or completeness of the information or opinions contained in this presentation. Neither the Company nor any of its respective members, directors, officers or employees or any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. September 28,