Südzucker back on the road to success
Südzucker AG Mannheim/Ochsenfurt, Mannheim, has absorbed the substantial charges resulting from the European sugar policies over the past three years and is reporting strong profits in spite of the general economic crisis. In fiscal 2009/10, operating profit jumped 56 percent to EUR 403 (prior year: 258) on revenues of EUR 5.7 (prior year: 5.9) billion, down three percent from last year.
The sugar, special products and fruit segments were able to boost profits substantially, while the CropEnergies segment's profits were lower than last year because of higher costs in connection with the startup of the new factory in Belgium. The sugar and special products segments reported lower revenues, the fruit segment's revenue was the same as last year and the CropEnergies segment's revenue rose.
The executive and supervisory boards will recommend to the annual general meeting on July 20, 2010 that the dividend be increased to EUR 0.45 (prior year: 0.40) per share. The total distributed thus rises to EUR 85.2 (prior year: 75.7) million. This recommendation reflects the profit recovery and end of the transition phase in the European sugar market on the one hand, while on the other, it takes into consideration Südzucker's goal of further reducing the group's debt. For the financial year just ended, Südzucker was able to cut net financial debt to EUR 1.1 billion (prior year: 1.6) billion.
The average size of Südzucker Group's workforce shrank to 17,493 (prior year: 17,939) in fiscal 2009/10. The reduction of about 600 employees in the sugar and fruit segments as a result of restructuring measures more than offset the increase of 150 in the special products and CropEnergies segments.
Sugar segment - profits up 58 percent after restructuring phase
The sugar segment's revenues fell to 3,154 (prior year: 3,320) million because of lower sales revenues from quota sugar due to the restructuring of the EU sugar market. The segment was able to boost
2009/10 operating profit by 58 percent to EUR 217 (prior year: 137) million. Although lower quota sugar volumes and reduced quota sugar sales revenues weighed on profits in 2009/10, this was offset by lower costs driven by plant shutdowns, cost reduction measures and write-downs of sugar quotas following the quota surrenders, all of which were now applied for an entire year, and the elimination of charges associated with the restructuring phase.
Südzucker produced 4.8 (prior year: 4.2) million tonnes of sugar and continues to be Europe's largest sugar producer by a wide margin, with a 24 percent share of the EU's sugar quota.
Special products segment - significant profit improvement
The special products segment's revenues reached EUR 1,396 (prior year: 1,427) million. The segment was able to increase operating profit by 28 percent to EUR 138 (prior year: 108) million. While the starch division's profit grew substantially in the first half of the year on account of lower raw material costs, due to lower sales revenues, the business unit was unable to match the prior year's strong profits in the second half year. The bioethanol plant in Pischelsdorf made good progress. The economic crisis is impacting BENEO's Functional Food Division business units. In spite of this, BENEO was able to report a further recovery in profit growth. The Freiberger and PortionPack Europe divisions were able to defend their position in a difficult market environment.
CropEnergies segment - capacity expansion continues
The CropEnergies segment's revenues for the financial year just ended came in at EUR 362 (prior year: 319) million. CropEnergies thus continues to grow. Due to the cost of starting up the bioethanol facility in Wanze, Belgium, operating profit fell to EUR 12 (prior year: 18) million.
Fruit segment - profits recover
The fruit segment's operating profit recovered dramatically and reached EUR 36 (prior year: -5) million. The main reason for the prior year's loss was a EUR 32 million write-down of apple juice concentrates inventories from the 2007 harvest. Revenues came in at EUR 806 (prior year: 805) million, about the same as last year. Substantially lower sales revenues for apple juice concentrate was offset by significantly higher volumes. Volumes in the fruit preparations division were slightly higher than last year.
Forecast for fiscal 2010/11
For fiscal 2010/11, we are forecasting consolidated revenues to reach EUR 5.7 billion, about the same as last year, although the sugar segment will see a further decline. In contrast, the special products and CropEnergies segments' revenues are expected to rise while the fruit segment's revenues are expected to remain stable. The forecast for operating profit is about EUR 450 million, which compares to EUR 403 million in fiscal 2009/10.
We are expecting the sugar segment's operating profit recovery to continue in the first full year after completion of the EU sugar market restructuring phase. We are also expecting higher operating profits in the CropEnergies and fruit segments. We do not expect the special products segment to be able to match the high prior year's level.
Südzucker AG, Mannheim/Ochsenfurt
Central Public Relations Department
Dr Dominik Risser
Phone: +49 621 421-205
Fax: +49 621 421-425
The Südzucker Group
Südzucker, with its sugar, special products, CropEnergies and fruit segments, is one of the leading companies in the food industry. In the traditional sugar business, the group is the world market leader, with 30 sugar factories and three refineries, extending from France in the west via Belgium, Germany and Austria, through to Poland, the Czech Republic, Slovakia, Romania, Hungary, Bosnia and Moldova in the east. The special products segment, consisting of the functional food (BENEO Group), starch, chilled/frozen products (Freiberger) and portion packs businesses, is an important growth driver. The CropEnergies segment covers the bioethanol activities in Germany, Belgium and France. In the fruit segment, the group operates internationally, is the world market leader for fruit preparations and is a leading supplier of fruit juice concentrates in Europe.
In 2009/10, the group employed 17,500 persons and generated revenues of EUR 5.7 billion.