Nordzucker AG Interim Report Financial Year 2008/09. 1st Quarter

Transcription

1 Nordzucker AG Interim Report Financial Year 2008/09 1st Quarter March 1 May 31, 2008

2 Group figures and ratios Operating business Q1 2008/09 Q1 2007/08 Change absolute Revenues EUR m Total revenues EUR m Gross income EUR m EBITDA EUR m EBIT EUR m Net profit EUR m Cash flow from operating activities EUR m Investments in property, plant and equipment EUR m Investments in financial assets EUR m Balance sheet Q1 2008/09 Q1 Change 2007/08 absolute Balance sheet total EUR m 1,653 1, Equity EUR m Equity ratio % Debt capital EUR m Financial liabilities EUR m Cash and cash equivalents EUR m Net debt EUR m (Cash and cash equivalents less financial liabilities) Structure figures Q1 2008/09 Q1 Change 2007/08 absolute Number of plants (total) Number of plants abroad 9 9 0

3 Nordzucker markets and trends highlights from the first quarter of 2008/09 Contents Letter from the Management Board 4 Management Report 7 Financial and earnings situation 7 Revenues and earnings 7 Balance sheet and cash flow 8 Beet developments in Quota return: second phase Following the quota surrender conducted on January 31, 2008, the European Commission has once again given sugar companies the opportunity to return further quotas at the same conditions. Almost all of the companies participated in this further quota surrender, including Nordzucker. This move takes the European Commission very close to achieving its goal of reducing the sugar quota by six million tonnes. Sugar production ceases in Hungary On March 10, the Management Board of the Hungarian subsidiary Mátra Cukor Zrt. announced the closure of the last remaining Hungarian plant, Szerencs. The company will then no longer produce sugar in Hungary. Mátra Cukor will nevertheless continue to supply the Hungarian market. The Szolnok and Hatvan sites will continue to temporarily store and pack sugar. Supplementary report 9 Outlook 9 Income statement 10 Cash flow statement 11 Balance sheet 12 Statement of changes in shareholders equity 14 Financial calendar 15 Nordzucker signs agreement to acquire Danisco Sugar A/S The Danish Danisco A/S Group announced plans to sell its sugar division in March Nordzucker participated in the subsequent bidding process. On July 14, Danisco and Nordzucker signed an agreement regarding the acquisition of Danisco Sugar A/S. The takeover is set to be approved by Danisco s shareholders on August 20, 2008, and must also be endorsed by the monopolies and mergers authorities. Nordzucker considers Danisco to be an ideal partner. This step will consolidate Nordzucker s market position long term. Nordzucker Q1-Report 2008/09 3

4 Dear Shareholders, Hans-Gerd Birlenberg (born in 1954) Chairman of the Management Board of Nordzucker AG since 2007 and Management Board member since 2006 Responsible for: Finance & Controlling, IT, Corporate Communications, Corporate Counsel, Human Resources, Risk Management, Sales Dr Hendrik Einfeld (born in 1945) Member of the Management Board of Nordzucker AG since 2007 Responsible for: Agriculture, Raw Material Procurement Germany and International The reform of the EU sugar market regime has permanently changed the sugar market in the EU. The first and second phases of the quota return have now been completed. Following the surrender of almost six million tonnes of sugar, deficit markets are emerging in Europe. Further challenges are presented by the opening of the market as of 2009 and the uncertainty surrounding the shape which the sugar regime will take from The sugar market is therefore entering a crucial consolidation phase, and we want to play an active role in this. Growth the key to our success On July 14, 2008 Nordzucker AG signed an agreement with Danisco A/S concerning the acquisition of Danisco Sugar A/S. In the reformed sugar market, which will also be open for imports from 2010, domestic sugar producers will need a certain size in order to operate on the market successfully. With Danisco Sugar, we are taking a major step towards achieving this critical size and the necessary market strength as quickly as possible. By acquiring Danisco Sugar, we are extending our European market share to approximately 16 per cent. Danisco Sugar the ideal partner for Nordzucker Danisco Sugar generated revenues of EUR 918m and posted an EBIT of EUR 78m in the last financial year. With some 2,000 employees, Danisco Sugar operates six sugar factories and two refineries, producing a total of one million tonnes of sugar. All of this means that Danisco Sugar is in good shape. Danisco Sugar s distribution structures in Scandinavia and the Baltics paired with Eurosugar s highly efficient European marketing platform will make up a sales organisation with virtually comprehensive Europe-wide coverage. This will make Eurosugar and Danisco Sugar even more attractive for current clients and potential customers who operate throughout the whole continent. On August 20, 2008 the Danisco Management Board will ask its shareholders for a formal mandate to conclude the sale to Nordzucker. The acquisition is also subject to the approval of the monopolies and mergers authorities. Dr Martin Wienkenhöver (born in 1956) Member of the Management Board of Nordzucker AG since April 1, 2008 Responsible for: Supply Chain (Purchasing, Production Quality Management and Logistics) Nordzucker Q1-Report 2008/09 4

5 European market position sustainably strengthened By acquiring Danisco Sugar, we are significantly consolidating our position as Europe s second largest sugar company and adding an attractive market with a population of approximately 30 million to the area we cover. This is a crucial basis for securing beet cultivation in our catchment area in the medium and long term. With the agreement regarding the acquisition of Danisco Sugar, we have achieved a major goal on the way to becoming Europe s leading sugar company an objective we continue to consistently pursue. We would like to thank all our staff and you our valued shareholders for constantly boosting our company s further development and placing your trust in us. Yours sincerely, Nordzucker AG The Management Board Hans-Gerd Birlenberg Dr Henrik Einfeld Dr Martin Wienkenhöver Nordzucker Q1-Report 2008/09 5

6 Nordzucker locations Poland Germany Czech Republic 9 Slovakia Hungary 11 Sugar plants D 1 Clauen CLA 2 Nordstemmen NST 3 Uelzen UEL 4 Klein Wanzleben WZL 5 Schladen SLA 6 Güstrow * GÜS PL 7 Opalenica OPA 8 Chelmza CHE SK 9 Trecianska Tepla TRE HU 10 Szerencs* SZE 11 Szolnok * SZO SCG 12 Bač BAC 13 Vrbas VRB 14 Pećinci PEC 15 Kovačica KOV 16 Liquid sugar plant Nordstemmen FNS 17 Liquid sugar plant GroßMunzel FGM Serbia Sugar plants not consolidated minority stakes CZ 18 Dobrovice DOB 19 Ceske Mezirici CES Company headquarter Braunschweig Other locations D 20 Frellstedt (MEF) FRE D 21 Ehrenkirchen (Hübner-Medopharm) EHR HU 22 Hatvan HAT * closed after the 2007 campaign Nordzucker Q1-Report 2008/09 6

7 Management Report Financial and earnings situation The interim financial statements for the Nordzucker Group as of May 31, 2008 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted and published by the International Accounting Standards Board (IASB). Supplementary commercial regulations were also taken into account. The requirements of IFRS have been met in full and provide a true and fair view of the financial and earnings situation of Nordzucker AG, including its subsidiaries, associated companies and joint ventures. As they have different reporting dates, all consolidated companies have been included in Nordzucker s consolidated financial statements as of March 31. The accounting and valuation methods applied in preparing the consolidated annual financial statements as of February 29, 2008 have been maintained without amendment. Further information is available in the notes to the Annual Report 2007/08. Sugar production is a seasonal business. The production phase from the middle of September to early January falls completely in the second half of the company s financial year. This should be taken into account when interpreting the results for the first quarter. Revenues and earnings In the first quarter of the 2008/09 financial year, Group revenues came to EUR 277.2m. This was roughly on a par with the same period of the previous year (280.1). Revenues developed as planned in Germany, Hungary, Poland, Serbia and Slovakia. Other operating income rose from approximately EUR 7.4m to EUR 95.2m. This comprises the restructuring aid to be paid for Germany and Hungary by the EU arising from the second phase of quota returns to March 31, This relates to a returned quantity totalling some 163,000 tonnes. The cost of materials and services mainly consists of consumables and supplies along with expenditure for goods purchased; this figure only increased slightly on the year. The same applies to personnel expenses. Depreciation and amortisation increased in comparison to the same period of the previous year from EUR 11.3m to EUR 25.3m. This increase is largely attributable to extraordinary depreciation linked with the plant closure in Hungary. Consolidated revenues in EUR m Q1 2007/08 Q1 2008/09 EBIT consolidated in EUR m Q1 2007/08 Q1 2008/09 Nordzucker Q1-Report 2008/09 7

8 Management Report In the first quarter of the previous year, other operating expenses included a restructuring levy of EUR per tonne on the quantity of sugar withdrawn by the European Commission. As no market withdrawal is planned for 2008/09, no such expenditure will be payable. The other operating expenses of EUR 30.0m primarily comprise upcoming reconversion expenses associated with the plant closure in Hungary. In the first quarter of the 2008/09 financial year, the Group s operating result (EBIT) came to EUR 47.0 million (17.5). This growth was predominantly due to the Group s entitlement to the EU restructuring aid associated with the second phase of quota returns. The consolidated net income for the period totalled EUR 24.1m as compared with EUR 7.7m in the previous year. Balance sheet and cash flow The proceeds from the sale of goods, merchandise and services came in at EUR 333.4m in the first quarter of the 2008/09 financial year and therefore exceeded the previous year s figure (313.1). This was offset by payments to suppliers and employees of EUR 274.6m (310.2). Taking into account other inpayments and outpayments plus tax refunds, the cash outflow from operating activities was EUR 5.8m (34.7). In the reporting period, EUR 19.2m was invested in long-term assets (15.5). Investments in financial assets came to EUR 18.5m (0). This was offset by proceeds on disposal of financial assets totalling EUR 13.9m. All in all, the cash flow from investing activities was EUR -23.9m (-13.4). After taking into account EUR 119.7m (8.4) due to borrowing and loan repayments of EUR 94.3m (0), cash and cash equivalents as of May 31, 2008 were down EUR 22.2m at EUR 24.8m. As of May 31, 2008, the Nordzucker Group s consolidated balance sheet total amounted to EUR 1,652.8m (1,429.6). Fixed assets decreased by some EUR 27.8m in comparison to the same period of the previous year. This was primarily due to a decline in intangible assets following a write-down of the additional quotas acquired in 2006 in connection with the quota return. Other assets include the restructuring aid receivable from the EU. Due to the establishment of Eurosugar in October 2007, there has been some shift between the trade receivables from external companies and the receivables from related parties and companies. Shareholders equity grew in comparison with the same period of the previous year and came in at EUR 763.8m after EUR 691.7m a year earlier. This increase was primarily due to growth in retained earnings. Despite an increase in liabilities, the equity ratio only decreased slightly, dropping to 46.2 per cent (48.4). This remains a high figure. The increase in current and non-current financial liabilities together with the change in cash and cash equivalents led to net debt of EUR 405.0m (177.7). Consolidated net income in EUR m 8 24 Q1 2007/08 Q1 2008/09 Balance sheet structure as of May 31, 2008 consolidated figures in EUR m 1,653 1,653 54% 26% 20% Assets Long-term assets Inventories Other short-term assets 46% 28% 26% Liabilities Shareholders equity Long-term liabilities Short-term liabilities Nordzucker Q1-Report 2008/09 8

9 Management Report Beet developments in 2008 Throughout the Group, due to wet weather in spring, beet was sown later than usual, as compared to the yearly average. However, the sowing period in each country was very short and limited on the whole. rows as early as the end of May. In Germany and Poland, regional thunderstorms in this vegetation period meant that the water supply to beet in different areas varied, causing the crops to close rows at different times. Spring was warmer than usual, which boosted the beet s emergence and early development. The subsequent rainfall distribution in May and June was favourable and sufficient in Serbia and Slovakia, prompting the crops to close Overcast weather with high levels of precipitation in the first half of July compensated for the water deficits present in some areas. Based on the current state of development, we can expect an above-average harvest. Supplementary report The Danish Danisco A/S Group announced plans to sell its sugar division in March Nordzucker participated in the subsequent bidding process. On July 14, Danisco and Nordzucker signed an agreement regarding the acquisition of Danisco Sugar A/S. The takeover is set to be approved by Danisco s shareholders on August 20, 2008, and must also be endorsed by the monopolies and mergers authorities. Nordzucker considers Danisco to be an ideal partner. This step will consolidate Nordzucker s market position in the long-term. Outlook The quota returns and lower reference price will reduce Nordzucker s revenues in the course of the financial year. Revenues can be expected to drop by some five per cent in the current financial year. The restructuring levy is payable for the last time in this financial year. There are no plans for further quota withdrawals. Based on the information available today, we anticipate the operating result for 2008/09 being lower than that of the previous year. Our plans to acquire Danisco Sugar have laid the foundations for the sustainable development of Nordzucker. Danisco Sugar is a partner which is in outstanding shape all round and will strengthen Nordzucker considerably right from the start. Nordzucker Q1-Report 2008/09 9

10 Consolidated quarterly financial statements Consolidated quarterly financial statements Consolidated income statement for the period from March 1 May 31, 2008, Nordzucker AG, Braunschweig 1/3/ /5/2008 1/3/ /5/2007 Change 1. Revenues 277, ,118-2, Decrease in finished goods and work in progress 201, ,809 41, Own work capitalised 3,371 2,322 1, Other operating income 95,233 7,418 87, , ,049 44, Cost of materials and services 46,949 44,813 2, Personnel expenses 25,112 24, Depreciation, amortisation of intangible assets, property, plant and equipment and impairment losses 25,298 11,345 13, Appreciation on intangible assets, property, plant and equipmentand impairment losses Other operating expenses 29,951 32,121-2, Operating result (EBIT) 47,015 17,531 29, Net interest a) Interest income 2,625 1,431 1,194 b) Interest expenses 6,728 4,212 2,516-4,103-2,781-1, Net income/loss from investments a) Net income/loss from associated companies at equity b) Other net income/loss from investments Other net financial income/expense , Net financial income/expense -4,361-3, Income tax expense 18,571 6,027 12, Group net profit 24,083 7,720 16, Minority interests Net income after minority interests 24,048 7,606 16,442 Nordzucker Q1-Report 2008/09 10

11 Consolidated quarterly financial statements Consolidated cash flow statement for the period from March 1 May 31, 2008, Nordzucker AG, Braunschweig 1/3/ /5/2008 in EUR m 1/3/ /5/2007 in EUR m Proceeds from the sale of goods, merchandise and services Payments to suppliers and employees Interest received Tax received (refunds) Other inpayments Interest paid Tax paid Other outpayments Proceeds from extraordinary items Payments for extraordinary items Cash flow from operating activities Proceeds on disposal of long-term assets Payments for investments in long-term assets Proceeds on disposal of intangible assets Payments for investments in intangible assets Proceeds on disposal of financial assets Payments for investments in financial assets Proceeds from the sale of consolidated companies and other business units Payments for the acquisition of consolidated companies and other business units Proceeds from financial investments associated with short-term treasury management Payments for financial investments associated with short-term treasury management Cash flow from investing activities Proceeds from changes in equity Dividend payments Proceeds from the sale of loans and borrowing funds Loan repayments Cash flow from financing activities Changes in cash and cash equivalents Effect of changes to foreign exchange rates, the group of consolidated companies and valuation methods Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Nordzucker Q1-Report 2008/09 11

12 Consolidated quarterly financial statements Consolidated balance sheet as of May 31, 2008, Nordzucker AG, Braunschweig Assets 29/2/ /5/ /5/2007 Change Long-term assets Fixed assets Intangible assets 73,444 70, ,473-35,572 Property, plant and equipment 663, , ,556-7,277 Investment property 7,093 7,025 5,692 1,333 Financial assets Shares in associated companies at equity 3,861 3, ,091 Other financial assets 21,037 31,000 20,365 10,635 24,898 34,862 21,136 13,726 Accounts receivable and other assets Financial assets Other assets 118,341 85, , ,071 85,824 1,753 84,071 Deferred taxes 37,995 31,839 36,079-4, , , ,689 52,041 Short-term assets Inventories Raw materials, consumables and supplies 30,347 31,151 33,420-2,269 Work in progress 31,143 28,788 1,391 27,397 Finished goods and merchandise 570, , ,269 26, , , ,080 51,705 Accounts receivable and other assets Trade receivables from external companies 70,222 58, ,648-48,555 Receivables from related parties and companies 135,182 90,702 6,073 84,629 Receivables from income tax 4,077 5,706 1,035 4,671 Financial assets 10,534 12,214 10,928 1,286 Other short-term assets 26, ,068 45,303 98, , , , ,796 Assets held for sale 1,949 1, Cash and cash equivalents 28,846 24,843 47,039-22, , , , ,206 1,834,714 1,652,834 1,429, ,247 Nordzucker Q1-Report 2008/09 12

13 Consolidated quarterly financial statements Consolidated balance sheet as of May 31, 2008, Nordzucker AG, Braunschweig Shareholders equity and liabilities 29/2/ /5/ /5/2007 Change Shareholders' equity Subscribed capital 123, , ,651 0 Capital reserves 127, , ,035 0 Retained earnings 387, , ,557 62,936 Accumulated other equity 28,066 39,230 25,334 13,896 Minority interests 65,244 62,427 67,131-4, , , ,708 72,128 Long-term provisions and liabilities Provisions for pensions and similar obligations 100,666 96,123 97,360-1,237 Other provisions 30,904 30,685 12,948 17,737 Financial liabilities 198, , ,338 82,263 Other financial liabilities 0 0 7,375-7,375 Other liabilities 28,851 53,912 24,759 29,153 Deferred taxes 76,395 80,610 90,197-9, , , , ,954 Short-term provisions and liabilities Provisions for pensions and similar obligations 4,878 9,756 7,157 2,599 Other provisions 31,886 26,453 32,458-6,005 Financial liabilities 193, , , ,797 Income tax liabilities 19,389 21,300 13,614 7,686 Trade payables 200,234 99,371 85,267 14,104 Liabilities due to related parties and companies 5,771 9,353-1,748 11,101 Other financial liabilities 32,578 30,093 48,346-18,253 Other liabilities 179,571 1,525 95,389-93, , , ,902 40,165 1,834,714 1,652,834 1,429, ,247 Nordzucker Q1-Report 2008/09 13

14 Consolidated quarterly financial statements Consolidated statement of changes in shareholders equity for the consolidated quarterly financial statements as of May 31, 2008, Nordzucker AG, Braunschweig Subscribed Capital Retained Accumulated Minority capital reserves earnings other equity interests Total equity As of 28/2/ , , ,921 23,042 68, ,013 Currency effects , ,316 Fair value adjustment Group net profit 0 0 7, ,721 Dividend payment Others ,347-1,318 As of 31/5/ , , ,557 25,334 67, ,708 As of 29/2/ , , ,446 28,066 65, ,442 Currency effects , ,448 Fair value adjustment , ,716 Group net profit , ,082 Dividend payment Others ,852-2,852 As of 31/5/ , , ,493 39,230 62, ,836 Shareholders structure Nordzucker AG EUR 123.7m share capital Nordzucker Holding Aktiengesellschaft: %, EUR 94.3m Union-Zucker Südhannover GmbH: %, EUR 13.4m Nordharzer Zucker AG: 7.83 %, EUR 9.7m Direct shareholders : 5.12 %, EUR 6.3m Nordzucker Q1-Report 2008/09 14

15 Financial calendar Publications July 28, 2008 Q1-Report 2008/09 Online publications The following publications can be downloaded from Annual Report Interim Reports Declaration of compliance Sustainability report Nordzucker Q1-Report 2008/09 15

16 Nordzucker AG Küchenstrasse 9 D Braunschweig Telephone: +49 (0) Fax: +49 (0) info@nordzucker.de Shares register Wilhelm Just Telephone: +49 (0) aktien@nordzucker.de Investor Relations Bianca Deppe-Leickel Telephone: +49 (0) ir@nordzucker.de Public Relations Tanja Schneider-Diehl Telephone: +49 (0) pr@nordzucker.de This Nordzucker interim report is published in English and German on our website at