Fiscal year 2017/18
Special products segment
The special products segment is comprised of the BENEO (BENEO-Orafti/BENEO-Palatinit/BENEO-Remy), Freiberger , PortionPack Europe divisions, as well as AGRANA's starch and bioethanol businesses as well as the wheat starch plant in Zeitz, Germany.
Key figures for the special products segment
|Depreciation of fixed assets and intangible assets||EUR million||-97||-79|
|Operating result||EUR million||158||184|
|Restructuring/special items||EUR million||-3||-4|
|Income from companies consolidated at equity||EUR million||30||28|
|Result from operations||EUR million||185||208|
|Investments in fixed assets||EUR million||121||126|
|Investments in financial assets/acquisitions||EUR million||430||0|
|Total investments||EUR million||551||126|
|Capital employed||EUR million||2,055||1,499|
|Return on capital employed||%||7,7||12.2|
Revenues and operating result
The special products segment was able to increase year-over-year revenues to € 1,997 (1,819) million. In addition to steady volume growth in almost all product categories, contributions from frozen pizza producer Richelieu Foods Inc., Braintree, Massachusetts, acquired 1 December 2017, and HASA GmbH, Burg, Germany, purchased in July 2017, were included for the first time.
The operating result decline continued in the fourth quarter. At the end of fiscal 2017/18, it was posted at € 158 (184) million, down from last year's unusually strong result. The result improvement from volume and revenue gains was more than consumed by significantly higher write-downs and especially higher raw material prices than a year earlier.
Result from companies consolidated at equity
The result of € 30 (28) million from companies consolidated at equity is mainly attributable to the share of earnings from Hungrana Group’s starch and bioethanol businesses.
Capital employed and return on capital employed (ROCE)
Capital employed increased primarily as a result of the acquisition of frozen pizza producers Richelieu Foods Inc. and HASA GmbH, together with investments, particularly in the starch area, to € 2,055 (1,499) million. The lower operating result of € 158 (184) million caused ROCE to decline to 7.7 (12.2) %.
Investments in fixed assets
The special products segment invested € 121 (126) million. The BENEO division’s investments were mainly for efficiency improvements in the production process at Orafti in Oreye, Belgium, and the expansion of the agglomerations system at Palatinit in Offstein, Germany. The starch division’s main investments were for a capacity expansion in Aschach, Austria. The Freiberger division focused its investments on improving efficiencies by installing new production systems at the Westhoughton, Great Britain, location.
Investments in financial assets
Investments in financial assets totaling € 430 (0) million comprise € 384 million for the 100 % acquisition of American pizza producer Richelieu Foods Inc., and € 46 million for the 100 % purchase of frozen pizza producer HASA GmbH.
The BENEO division owns five production plants that convert chicory, beet sugar and rice to isomalt, Palatinose, inulin, oligofructose and rice starch for food and animal feed. Production volumes and storage capacities were systematically adjusted to match the market and sales growth. The division was also able to successfully complete various process optimization projects in fiscal 2017/18.
Freiberger's production volume rose, due especially to the acquisition of HASA GmbH and Richelieu Foods Inc., the largest frozen and deli pizza producer in the American private label segment. The company produces frozen and chilled pizzas, from classic stone oven varieties to pizza from fresh dough to Alsace pizza, as well as various frozen pasta dishes, snacks, baguettes and sauces, at eleven plants in Germany, Great Britain, Austria and the United States.
We serve the portion pack market segment from five European locations under the brand names Hellma, Van Oordt, Elite, SAES and Single Source, as well as in line with specific customer demands. The portfolio comprises primarily production of single packages for sugar, sweeteners, honey, herbs, marmalades, cookies, sauces, coffee whitener, instant beverages and some non-food articles.
We were also able to boost production of starch and bioethanol at all of our sites. This is mostly due to the expansion of the cornstarch capacity at the Aschach site in Austria and the wheat starch plant in Zeitz, which operated year round for the first time. The volume of potato starch processed at the factory in Gmünd, Austria, was also significantly higher, with the campaign extending to 164 (149) days. Production at the Pischelsdorf location in Austria was up only slightly.