Q3 INTERIM REPORT

Q3 INTERIM REPORT FIRST TO THIRD QUARTER 2014/15 1 March – 30 November 2014 Publication date: 13 January 2015. ... million on account of sharply lower...

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Q3 INTERIM REPORT FIRST TO THIRD QUARTER 2014/15 1 March – 30 November 2014 Publication date: 13 January 2015

• CONSOLIDATED GROUP REVENUES down 11 % from last year at € 5,233 (5,871) million • CONSOLIDATED GROUP OPER ATING PROFIT falls to € 174 (579) million on account of sharply lower sugar segment and CropEnergies segment profits • FORECAST FOR FISCAL 2014/15 OVER ALL: consolidated group revenues of about € 7.0 (7.5) billion; consolidated group operating profit of about € 200 (622) million

CONTENT S OVERVIEW

FINANCIAL CALENDAR Press and analysts' conference fiscal 2014/15 Q1 – 1 quarter report 2015/16 st

Annual general meeting fiscal 2014/15 Q2 – 1 st half year report 2015/16 Q3 – 1 to 3 quarter report 2015/16 st

rd

21 May 2015 9 July 2015 16 July 2015 8 October 2015 13 January 2016

This interim report is available in German and English. This translation is provided for convenience and should not be relied upon exclusively. PDF files of the interim report can be downloaded from the company’s website at: www.suedzucker.de/de/Investor-Relations/ or www.suedzucker.de/en/Investor-Relations/ Südzucker AG's fiscal year is not aligned with the calendar year. The first to third quarter period extends from 1 March to 30 November. On the following pages, the numbers in brackets represent the correspon­d­ ing previous year's figures or items. Numbers and percentages stated are subject to differences due to rounding. Typing and printing errors reserved.

CONTENTS 02

IN T ERIM M A N AG EMEN T REPOR T

02

Economic report

14

Events after the balance sheet date

14

Risk management

14

Outlook

16

IN T ERIM FIN A NCI A L S TAT EMEN T S

16

Consolidated statement of comprehensive income

17

Consolidated cash flow statement

18

Consolidated balance sheet

20

Consolidated statement of changes in shareholders’ equity

22

Development of the items of other comprehensive income

23

NOT E S TO T HE IN T ERIM FIN A NCI A L S TAT EMEN T S

25

(1) Principles of preparation of the interim consolidated financial statements

30

(2) Companies included in consolidation

30

(3) Earnings per share

30

(4) Inventories

31

(5) Trade receivables and other assets

31

(6) Trade payables and other liabilities

32

(7) F inancial liabilities, securities and cash and cash equivalents (net financial debt)

32

(8) Additional disclosures on financial instruments

34

(9) Related parties

OVERVIEW

KEY FIGURES to 30 November 2014 1 st – 3rd quarter 2014/15

2013/14

+/– in %

5,871

– 10.9 – 51.9

Revenues and earnings Revenues

€ million

5,233

EBITDA

€ million

373

776

%

7.1

13.2

Depreciation

€ million

– 199

– 197

1.2

Operating profit

€ million

174

579

– 69.9

%

3.3

9.9

€ million

128

455

– 71.8

€ million

385

700

– 45.1

EBITDA margin

Operating margin Net earnings Cash flow and investments Cash flow Investments in fixed assets

€ million

267

276

– 3.2

Investments in financial assets/acquisitions

€ million

1

1

– 20.0

Total investments

€ million

268

277

– 3.2

1

Performance Fixed assets 1

€ million

2,775

2,692

3.1

Goodwill

€ million

1,145

1,145

0.0

Working capital

€ million

1,549

1,690

– 8.3

Capital employed

€ million

5,582

5,640

– 1.0

Total assets

€ million

8,625

9,134

– 5.6

Shareholders‘ equity

€ million

4,570

4,891

– 6.6

Net financial debt

€ million

267.0

63

> 100

Equity ratio

%

53.0

53.5

Net financial debt as % of equity (Gearing)

%

5.8

1.3

€ million

2,556

3,789

Market capitalization Total shares issued as of 30 November

– 32.5

Millions of shares

204.2

204.2

0.0

Closing price on 30 November



12.52

18.56

– 32.5

Earnings per share on 30 November



0.33

1.76

– 81.3

Thousands of shares

2,001

1,111

80.1

Points

16,984

16,334

4.0

Performance Südzucker share 1 March to 30 November

%

– 37.9

– 44.7

Performance MDAX® 1 March to 30 November

%

0.5

22.8

18,598

18,333

Average trading volume/day MDAX® closing price on 30 November

Employees 1

Including intangible assets.

1.4

Overview

OVERVIEW First to third quarter 2014/15 • Consolidated group revenues are down 11 % from last year at € 5,233 (5,871) million. • Consolidated group operating profit falls to €  174 (579) million on account of sharply lower sugar segment and ­CropEnergies segment profits. • Sugar segment reports lower revenues and operating profit due to sharply declining quota-sugar sales revenues throughout Europe: • Revenues: – 18 % to € 2,536 (3,107) million • Operating profit: € 44 (420) million • The special products segment’s operating profit rises ­despite slightly lower revenues, driven especially by lower costs: • Revenues: – 2 % to € 1,305 (1,331) million • Operating profit: € 82 (62) million

• The CropEnergies segment’s revenues continue to climb. Operating profit turns negative driven by declining ethanol sales revenues despite lower net raw ­material costs: • Revenues: + 9 % to € 576 (527) million • Operating profit: € – 6 (38) million • The fruit segment reports lower revenues and operating profit due to weaker volumes and sales revenues. The ­decline is partly offset by lower raw material costs and cost saving initiatives. • Revenues: – 10 % to € 816 (906) million • Operating profit: € 54 (59) million

Forecast for fiscal 2014/15 overall: • Consolidated group revenues of about € 7.0 (7.5) billion ­e xpected. • Consolidated group operating profit is expected to be about € 200 (622) million. • ROCE will decline significantly with capital employed ­remaining stable.

Revenues by segment first to third quarter 2014/15: € million

60 % 60 % 50 % 50 % 40 % 40 % 30 % 30 % 20 % 20 % 10 % 10 % 0% 0 %

48 %

2014/15

2013/14

Sugar segment

2,536

3,107.0

– 18.4

Special products segment

1,305

1,331

– 1.9

576

527

9.4

CropEnergies segment

25 % 11 %

16 %

Fruit segment Group total

Zucker Sugar

Spezialitäten CropEnergies Special products CropEnergies

1 st – 3rd quarter +/– in %

816

906

– 10.0

5,233

5,871

– 10.9

Frucht Fruit

60 % TA B L E 0 1

50 % 50 40 % % 40 30 % %

30 Operating profit by segment first to third quarter 2014/15: 20 % % 20 10 % % 10 0% % 0% -10 % 50 % 50 % 40 % 40 % 30 % 30 % 20 % 20 % 10 % 10 % 0 % 0 % -10 % – 10%

Zucker Zucker

Spezialitäten Spezialitäten

47 %

CropEnergies CropEnergies

Frucht Frucht

31 %

25 %

€ million

Sugar segment

– 3 % Spezialitäten CropEnergies Special products CropEnergies

2013/14

44

420

+/– in %

– 89.6 31.6

Special products segment

82

62

CropEnergies segment

– 6

38



Fruit segment

54

59

– 7.5

Group total

174

579

– 69.9

%20

Zucker Sugar

1 st – 3rd quarter 2014/15

Frucht Fruit TA B L E 0 2

%20

1

2

INTERIM MANAGEMENT REPORT Economic report

ECONOMIC REPORT Accounting rules for joint ventures amended

Südzucker Group business development – ­Performance

Due to the mandatory application of IFRS 11 (Joint Arrangements), all joint ventures proportionally consolidated through the end of 2013/14 will be accounted for using the equity method starting with the beginning of fiscal 2014/15. This has led to changes in the income statement, the cash flow statement and the balance sheet, which are explained in detail in the notes to the interim financial statements. Prior year figures were adjusted accordingly.

R E V E N U E S A N D O PE R AT I N G PRO FI T  At €  5,233 (5,871) million, consolidated group revenues in the first nine months of fiscal 2014/15 were well below last year’s. The sugar, fruit and special products segments’ revenues fell, while the ­CropEnergies segment’s rose.

As anticipated, consolidated group operating profit fell sharply in the first nine months, to € 174 (579) million. The result was driven mainly by the decline in the sugar and ­CropEnergies segments’ operating profit. The fruit segment reported solid results for the third quarter and as expected was able to reduce the year-over-year decline. Special pro­ ducts was on the other hand able to generate a significantly higher operating profit.

Revenues and operating profit € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

Revenues

€ million

1,752

1,934

– 9.4

5,233

5,871

– 10.9

EBITDA

€ million

125

270

– 53.8

373

776

– 51.9

Depreciation on fixed assets and intangible assets

€ million

– 98

– 98

– 0.5

– 199

– 197

1.2

Operating profit

€ million

27

172

– 84.2

174

579

– 69.9

Result from restructuring/special items

€ million

– 1

– 2

– 53.3

6

– 4



Income from companies consolidated at equity

€ million

– 4

17



15

43

– 64.8

Income from operations

€ million

22

187

– 88.0

195

618

– 68.4

EBITDA margin

%

7.1

13.9

7.1

13.2

Operating margin

%

1.6

8.9

3.3

9.9

Investments in fixed assets

+/– in %

€ million

99

110

– 9.6

267

276

– 3.2

Investments in financial assets/acquisitions

€ million

1

1

0.0

1

1

– 20.0

Total investments

€ million

100

111

– 9.6

268

277

– 3.2

Shares in companies consolidated at equity

€ million

317

282

12.5

Capital employed

€ million

5,582

5,640

– 1.0

18,598

18,333

1.4

Employees 1

1

Including intangible assets. TA B L E 0 3

INTERIM MANAGEMENT REPORT Economic report

Income statement € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

1,752

1,934

– 9.4

5,233

5,871

– 10.9

Operating profit

27

172

– 84.2

174

579

– 69.9

Result from restructuring/special items

– 1

– 2

– 53

6

– 4



Income from companies consolidated at equity

– 4

17



15

43

– 64.8

Income from operations

22

187

– 88.0

195

618

– 68.4

– 10

– 14

– 28.6

– 31

– 42

– 26.2 – 71.5

Revenues

Financial result

+/– in %

Earnings before income taxes

12

173

– 93.1

164

576

Taxes on income

– 3

– 30

– 90.8

– 36

– 121

– 70.5

9

143

– 93.6

128

455

– 71.8

– 9

111



66

358

– 81.3

Net earnings of which attributable to Südzucker AG shareholders of which attributable to hybrid capital of which attributable to minority interests Earnings per share (€)

7

7

0.0

20

20

0.0

11

25

– 56.7

42

77

– 45.7

– 0.04

0.55



0.33

1.76

– 81.3

TA B L E 0 4

I N CO M E FRO M O PER AT I O NS  Income from operations of

€  195 (618) million comprises an operating profit of €  174 (579) million, the earnings contribution from companies consolidated at equity of €  15 (43) million and the result of ­restructuring and special items of € 6 (– 4) million.

million. The sugar segment’s total of € – 7 (21) million relates mainly to its share of earnings from trading company ED&F Man, Studen Group and a joint-venture distribution company. The special products segment’s total of €  22 (23) million ­includes its share of earnings from Hungrana Group’s starch business.

INCOME FROM RESTRUC TURING AND SPECIAL ITEMS  The

result from restructuring and special items of € 6 (– 4) million is due to the conclusion of a court case concerning value added tax payments for sugar deliveries to Italy in 1994 and 1995, which has already been discussed in earlier financial reports. A further income contribution resulted from the settlement of a court case against Raffinerie Tirlemontoise in Belgium related to wastewater levies. Restructuring costs arose from the ratio­ nalization of fruit preparations production sites, including the closure of the Kröllendorf plant in Austria, plus an early retirement program aimed at cutting administration costs at the Raffinerie Tirlemontoise in Belgium. Last year the CropEnergies segment recognized expenses before the bioethanol plant in Wilton was started up in fall 2013. These expenses were offset by insurance settlements received by the special products segment for property damage at BENEO inulin factory in Chile. I N CO M E FRO M CO M PA N I E S CO NSO L I DAT ED AT EQ U I T Y 

Income from companies consolidated at equity was € 15 (43)

FI N A N CI A L R E SU LT  The financial result in the first nine

months of fiscal 2014/15 improved to €  – 31 (– 42) million. ­ verage debt was higher than the year prior while net interest A expense came in at €  – 29 (– 31) million. The cost of other ­financing activities in the first nine months of the fiscal year was €  – 2 (– 11) million. The year prior this item included ­currency exchange losses attributable to the financing of subsidiaries in Eastern Europe, as well as South and Central America. TA X E S O N I N CO M E   Earnings before taxes were reported at

€ 164 (576) million and as a result taxes on income came in at € – 36 (– 121) million. The group’s tax rate was 22 (21) %. CO NSO L I DAT ED N E T E A R N I N G S   Of the consolidated net earnings of €  128 (455) million, €  66 (358) million are allocated to Südzucker AG shareholders, € 20 (20) million to hybrid bondholders and €  42 (77) million to other non-controlling interests, mainly the co-owners of AGRANA Group and CropEnergies Group.

3

4

INTERIM MANAGEMENT REPORT Economic report

E A R N ING S PER SH A R E Earnings per share came in at € 0.33 (1.76). The calculation was based on the time-weighted average of 204.2 (204.2) million shares outstanding.

Investments and financing – Financial position Cash flow € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

Cash flow

138

246

– 43.9

385

700

+/– in %

– 45.1

Increase (–) / decrease (+) in working capital

114

71

61.2

351

226

55.2

Investments in fixed assets Sugar segment

52

52

2.3

133

147

– 9.5

Special products segment

27

35

– 24.9

82

84

– 2.5

CropEnergies segment

12

7

59,5

23

14

61.1

Fruit segment Total investments in fixed assets 1 Investments in financial assets/acquisitions

8

16

2.3

29

31

– 4.9

99

110

– 9.6

267

276

– 3.2

1

1

0.0

1

1

– 20.0

100

111

– 9,9

268

277

– 3.2

Increases in stakes held in subsidiaries

0

0



30

0



Capital increase/decrease

0

0



0

0

– 100.0

– 1

– 1

14.3

– 173

– 261

– 33.8

Total investments

Dividends paid 1

Including intangible assets. TA B L E 0 5

C A SH FLOW   Cash flow tracked declining operating profits

and came in at € 385 million, down from € 700 million during the same period last year. Cash flow thus reached 7.4 (11.9) % of sales revenues in the first nine months. WO R K ING C A PI TA L   The cash flow from working capital of

most of which was for construction of the starch plant in Zeitz and the installation of the biomass boiler at the BENEO location in Pemuco, Chile. The CropEnergies segment invested € 23 (14) million in the food-grade netral alcohol plant being constructed at the Zeitz site and to further optimize its production systems. The fruit segment invested € 29 (31) million, mainly in the fruit preparations area and for the commissioning of the fourth fruit preparations factory in Lysander, New York.

€ 351 million resulted mainly from a reduction in inventories until the beginning of the new campaign; the build up in sugar stocks to November 30 is juxtaposed by a concurrent increase in liabilities toward beet farmers.

I N CR E A SE S I N S TA K E S H E L D I N SU BSI DI A R I E S   This item

INVESTMENTS IN FIXED A SSETS   Investments in fixed assets

relates to the acquisition of a minority share in AGRANA Bioethanol GmbH by AGRANA Stärke GmbH.

(including intangible assets) totaled €  267 (276) million. The sugar segment’s investments of € 133 (147) million were mainly for replacements and investments in improving energy efficiency. The special products segment invested € 82 (84) million,

DI V I DE N DS PA I D   Dividends totaled € 173 (261) million and

consisted mainly of the dividend of € 102 (184) million paid at the end of the annual general meeting by Südzucker AG, a coupon payment of € 37 (37) million to the hybrid bondhol­

INTERIM MANAGEMENT REPORT Economic report

ders and dividends paid to co-owners of AGRANA and Crop­ Energies Group. DE V E LO PM E N T O F N E T FI N A N CI A L DEB T  Cash flow of € 385 million and a seasonal cash inflow of € 351 million in working capital substantially exceeded cash outflow for

i­nvestments totaling € 268 million, € 30 million that went ­toward the acquisition of shares in AGRANA Bioethanol GmbH and € 173 million distributed in the form of dividends. Net financial debt was thus reduced by € 269 million and went from € 536 million on 28 February 2014 to € 267 million on 3­ 0 November 2014.

Balance sheet – assets Balance sheet € million

30 November 2014

30 November 2013

+/– in %

Intangible assets

1,186

1,183

0.2

Fixed assets

2,734

2,655

3.0

Assets

Remaining assets

612

589

3.9

Non-current assets

4,532

4,427

2.4

Inventories

2,105

2,398

– 12.2

Trade receivables

955

1,062

– 10.0

Remaining assets

1,033

1,247

– 17.2

Current assets

4,093

4,707

– 13.1

Total assets

8,625

9,134

– 5.6

– 5.3

Liabilities and equity Equity attributable to shareholders of Südzucker AG

3,211

3,391

Hybrid capital

684

684

0.0

Other minority interests

675

816

– 17.2 – 6.6

Total equity

4,570

4,891

Provisions for pensions and similar obligations

788

699

12.7

Financial liabilities

679

683

– 0.6

Remaining liabilities

288

306

– 5.9

1,755

1,688

4.0

391

369

6.1

1,313

1,452

– 9.6

596

734

– 18.8

Current liabilities

2,300

2,555

– 10.0

Total liabilities and equity

8,625

9,134

– 5.6

Net financial debt

267

63

> 100

Equity ratio in %

53

54

6

1

Non-current liabilities Financial liabilities Trade payables Remaining liabilities

Net financial debt as % of equity (gearing)

TA B L E 0 6

5

6

INTERIM MANAGEMENT REPORT Economic report

NON- CURRENT A SSETS   Non-current assets rose € 105 million to € 4,532 (4,427) million. Fixed assets rose to € 2,734 (2,655) million. This reflects primarily the investments of € 262 million minus depreciation of € 189 million. The € 23 million increase in other assets to € 612 (589) million relates mainly to the increase in the fair value of companies consolidated at equity to €  317 (282) million. Goodwill was unchanged and intangible assets were about the same as last year at € 1,186 (1,183) million. CU R R EN T A SSE T S  Current assets declined € 614 million to € 4,093 (4,707) million. The main reason is the lower inventory numbers of the sugar and fruit segments, which despite larger stocks, declined € 293 million to € 2,105 (2,398) million on account of lower prices. In addition, trade receivables were down €  107 million to €  955 (1,062) million due to lower prices. The decline of € 214 million in other assets to € 1,033 (1,247) million is mainly due to reduced cash on hand.

lities were down € 18 million to € 288 (306) million. Included therein are tax liabilities totaling € 81 (94) million. CU R R EN T L I A B I L I T I E S   Current liabilities fell € 255 million to € 2,300 (2,555) million. This was due to the drop in trade payables, which were down € 139 million to € 1,313 (1,452) million. Included therein are € 710 (942) million for liabilities toward beet farmers. Other debts, consisting of other provisions, taxes owed and other liabilities, were reduced by € 138 million to € 596 (734) million. Current financial liabilities on the other hand rose € 22 million to € 391 (369) million. N E T FI N A N CI A L DE B T   Net financial debt fell € 269 million,

from € 536 million on 28 February 2014 to € 267 (63) million as of 30 November 2014. This is a seasonal phenomenon. The ratio of net financial debt to equity was 6 (1) %.

Employees SH A R E H O L DER S ’ EQ U I T Y Shareholders’ equity declined

€ 321 million to € 4,570 (4,891) million; the equity ratio was slightly less than last year at 53 (54)  % as total assets contracted. The reduction in Südzucker AG shareholders’ ­ ­equity to € 3,211 (3,391) million reflects mainly the impact of income-neutral revaluation of defined benefit pension obligations as a result of the sharply lower discount rate. The drop of €  141 million in other non-controlling interests to €  675 (816) million is primarily due to the increased stake in AGRANA Beteiligungs-AG in the fourth quarter of fiscal 2013/14. NO N - CU R R EN T L I A B I L I T I E S  Non-current liabilities rose

€ 67 million to 1,755 (1,688) million. This was driven mainly by higher provisions for pensions and similar obligations, which rose € 89 million to € 788 (699) million after the discount rate was adjusted from 3.50 % to 2.50 %. Financial liabilities of € 679 (683) million were comparable to last year. Other liabi­

1 st – 3rd quarter 2014/15

2013/14

Sugar

8,016

8,027

Special products

4,402

4,361

0.9

443

421

5.2

CropEnergies Fruit Group

+/– in %

– 0.1

5,737

5,524

3.9

18,598

18,333

1.4

TA B L E 0 7

The average number of persons employed by the group in the first nine months of fiscal 2014/15 rose to 18,598 (18,333). The increase of 213 persons in the fruit segment, bringing the total workforce to 5,737 (5,524), is driven in part by the new US fruit preparations factory in Lysander, New York.

INTERIM MANAGEMENT REPORT Economic report

Sugar segment Market developments, economic policy, general framework WO R L D SUG A R M A R K E T  German market analyst F.O. L­icht’s first estimate of the world’s sugar balance for the 2014/15 campaign year, released in October 2014, forecasts that sugar production will fall for the second year in a row, to 178.7 (181.4) million tonnes. With consumption rising further to 176.8 (175.2) million tonnes and taking into consideration other volume changes, sugar inventories will decline slightly for the first time in four years to 76.7 (77.3) million tonnes or 43.4 (44.1) % of one year’s consumption.

The world market price for white sugar at the end of the first quarter was 345 €/t, the same as at the beginning of the fiscal year. At the beginning of July, the price declined further, reaching about 320 €/t at the end of the second quarter. The world market price for white sugar has been at about the same level since then and was quoted at 326 €/t at the end of the third quarter.

A duty-free non-quota sugar import volume of 0.4 million tonnes annually for use by the chemical, pharmaceutical and fermentation industries is available until the 2016/17 sugar marketing year. In previous years, this quota was hardly used. E N E RG Y M A R K E T   Oil prices literally collapsed in the third

quarter of 2014/15. The plunge was triggered by the continued global oversupply, fed by high crude oil volumes produced by the United States and OPEC, plus weaker economic data and increasingly pessimistic demand forecasts. At the end of September 2014, the price of North-Sea Brent crude was still 95 USD/barrel, but in October prices started to correct sharply. On the last trading day of the third quarter, 28 November, Brent crude was quoted at 72 USD/barrel; by the end of December 2014, the price for a barrel of Brent had dropped to 58 USD. The plunging oil price and the dumping of Russia’s currency have also exerted pressure on prices in the European gas markets. This has been reinforced by the unusually mild weather. In addition, gas storage tanks are almost full. EU SUG A R P O L I CI E S, W TO N EG OT I AT I O NS A N D FR EE

EU SUG A R M A R K E T  During the 2013/14 sugar marketing

T R A DE AG R E E M E N T S  As part of an economic partnership

year just ended (1 October 2013 to 30 September 2014), pre­ ferential imports continued to climb while total sugar production reached 16.8 (17.4) million tonnes 1), largely fulfilling sugar quotas. Overall, supply and demand for sugar was almost ­balanced.

agreement between the EU and SADC (South African Development Community), the EU and South Africa have formally agreed that South Africa be granted an annual duty-free ­import quota to the EU of 150,000  tonnes of sugar and 80,000 tonnes of ethanol. The agreement is expected to come into force in 2016, after ratification by both parties.

For the new 2014/15 sugar marketing year, with overall rising expectations of a good European sugar beet harvest, it is ­expected that EU sugar quotas will be filled and non-quota sugar production will rise. Preferential imports may shrink as a result of the much lower sugar prices in the EU, but European sugar market demand will still be adequately satisfied by the EU’s supply of beet sugar. Export licenses for 1.35 million tonnes of non-quota sugar were granted for the 2014/15 sugar marketing year, the same as last year. Export licenses were granted in October and for 650,000 tonnes of sugar for 700,000 tonnes in December 2014. Only about 30 % of the amount applied for per contract 2) was granted.

After several months of delays, the path has been cleared for implementing the Bali package. Agreement has been reached on immediately implementing the technical trade facilitation items already negotiated in December 2013, also for the agricultural sector. Aside from the aforementioned, there were no material changes to the regulatory general conditions in the first nine months of the fiscal year related to EU sugar policies, WTO negotiations and free trade agreements than those outlined on pages 78 – 79 of the 2013/14 annual report (management report, economic report, sugar segment).

Source: EU Commission website An export license contract is limited to 50,000 tonnes per company per week.

1) 2)

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8

INTERIM MANAGEMENT REPORT Economic report

Business performance R E V E N U E S A N D O PER AT I N G PRO FI T   The sugar segment’s

revenues for the first nine months of fiscal 2014 /15 fell 18 % to € 2,536 (3,107) million. The main reasons for the decline were falling quota sugar and non-quota sugar export sales revenues; however, overall sugar sales volumes rose. Operating profit dropped steeply to € 44 (420) million in the first nine months of the fiscal year, as forecast. This drop was caused mainly by the sales revenues development for quota sugar volume. In the first half of the fiscal year, the drop in quota sugar sales revenues was already noticeable in Southern and Eastern Europe. Since the third quarter and the beginning of the 2014/15 sugar marketing year on 1 October 2014, quota-sugar sales revenues in the other EU markets have followed the trend. In the third quarter, the period between 1  September and 30 November 2014, besides decreasing sales revenues the distribution of former harvest sugar from the 2013 campaign and write-downs on import contracts generated pressure; as a result, a quarterly operating loss of € – 24 (117) million had to be posted for these three months. The result from restructuring and special items of € 10 (– 2) million comprises income related to the conclusion of court cases concerning wastewater levies in Belgium and concern-

ing value added tax payments for sugar deliveries to Italy in 1994 and 1995. The latter was already discussed in earlier ­financial reports. Offsetting this income were restructuring costs associated with an early retirement program aimed at reducing administration costs at the Raffinerie Tirlemontoise in Belgium. The result from companies consolidated at equity in the sugar segment was € – 7 (21) million, most of which relates to the earnings contribution from the British trading company ED&F Man, but also the earnings contributions from Studen Group and a joint-venture distributor. Low global sugar prices had a negative impact on earnings in the sugar segment at ED&F Man, whose 2013/14 fiscal year ended on 30  September. The oversupply of sugar on world markets drove the trading result sharply lower. The difficult market conditions generated operating losses at participations in Mexico, the United States and Ukraine. As a result, the interest value in several companies was revised downward. On the other hand, ED&F Man was able to extend last year’s successes in the coffee, MLP (Man liquid products) and shipping segments. The relatively new capital market segment also reported growth. However, overall, these business units were unable to offset losses in the sugar segment.

Business performance – Sugar segment € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

838

1,022

– 18.0

2,536

3,107

+/– in %

– 18.4 – 74.1

Revenues

€ million

EBITDA

€ million

35

176

– 80.6

132

510

Depreciation on fixed assets and intangible assets

€ million

– 59

– 59

– 1.0

– 88

– 90

– 1.1

Operating profit

€ million

– 24

117



44

420

– 89.6

Result from restructuring/special items

€ million

– 2

0



10

– 2



Income from companies consolidated at equity

€ million

– 12

8



– 7

21



Income from operations

€ million

– 38

125



47

439

– 89.2

%

4.1

17.2

5.2

– 16.4

EBITDA margin Operating margin

%

– 2.9

11.4

1.7

13.5

Investments in fixed assets 1

€ million

52

52

2.3

133

147

– 9.5

Investments in financial assets/acquisitions

€ million

0

0

0.0

0

0

– 66.7

Total investments

€ million

52

52

2.3

133

147

– 9.6

Shares in companies consolidated at equity

€ million

240

208

15.6

Capital employed

€ million

2,884

2,867

0.6

8,016

8,027

– 0.1

Employees 1

Including intangible assets. TA B L E 0 8

INTERIM MANAGEMENT REPORT Economic report

CU LT I VAT I O N A N D 201 4 / 1 5 C A M PA I G N  Early planting combined with excellent weather conditions that continued even after the campaign started resulted in beet yields at Südzucker Group of 83 t/ha, about 20 % above the five-year average and 10 % higher than the previous record set in 2011. Südzucker Group’s sugar yield of around 17.0 (17.7)  % is below the five-year average. The average campaign duration is expected to last 124 (102) days, with the longest campaign, in Austria, expected to last over 160 days.

B EE T

INVESTMENT S   In the first nine months of 2014/15, the sugar

segment invested € 133 (147) million, most of which was for replacement investments, investments in efficiency improvements, energy savings; for example, in the animal feed production systems at the Ochsenfurt, Offstein and Rain factories, as well as centralization of the main headquarters at the Mannheim site. Logistics and infrastructure projects are also underway at the Plattling, Tienen/Belgium and Zeitz factories.

Special products segment R E V E N U E S A N D O PE R AT I N G PRO FI T   The special products segment’s revenues fell from € 1,331 to 1,305 million in the first nine months of the fiscal year. The decline was driven especially by lower sales revenues. Seen in isolation, third quarter revenues stabilized at last year’s level.

Operating profit on the other hand rose significantly to € 82 (62) million. Lower costs more than offset the decline in sales revenues. The result of € 22 (23) million from companies consolidated at equity is mainly attributable to the share of earnings from Hungrana Group’s starch business. I N V E S T M E N T S   The special products segment invested € 82

(84) million. The BENEO division’s spending was mainly on efficiency improvements and installation of a biomass boiler to improve energy use at the site in Pemuco, Chile. A large share of the starch division’s investments went toward construction of the wheat starch plant at the Zeitz site.

Business performance – Special products segment € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

+/– in %

Revenues

€ million

450

448

0.5

1,305

1,331

– 1.9

EBITDA

€ million

55

46

20.1

137

116

17.8

Depreciation on fixed assets and intangible assets

€ million

– 18

– 18

– 0,5

– 55

– 54

1.9

Operating profit

€ million

37

28

33.6

82

62

31.6

Result from restructuring/special items

€ million

0

3

– 100.0

0

4

– 100.0

Income from companies consolidated at equity

€ million

8

9

– 15.1

22

23

– 6.4

Income from operations

€ million

45

40

13.8

104

89

16.6

%

12.4

10.3

10.5

8.7

EBITDA margin Operating margin

%

8.3

6.2

6.3

4.7

Investments in fixed assets 1

€ million

27

35

– 24.9

82

84

Investments in financial assets/acquisitions

€ million

1

1

0.0

1

1

0.0

Total investments

€ million

28

36

– 24.4

83

85

– 2.5

Shares in companies consolidated at equity

€ million

75

73

3.2

Capital employed

€ million

1,347

1,320

2.0

4,402

4,361

0.9

Employees 1

– 2.5

Including intangible assets. TA B L E 0 9

9

10

INTERIM MANAGEMENT REPORT Economic report

CropEnergies segment

million m3, slightly less than last year. Between January and September 2014, fuel-grade ethanol volume in Germany declined 2.5  % year-over-year to about 1.1 million m3. During the same period, E10 volume rose 4.5 % and took a 15.4 % share of Germany’s gasoline market.

Market developments, economic policy, ­general framework E T H A N O L M A R K E T  Market analysts expect that in the United States, the world’s largest bioethanol market, producers will make 54.9 million m3 of ethanol in 2015, about the same amount as last year, but substantially more than needed to meet the estimated steady domestic demand of 52.2 million m3. Net bioethanol exports are expected to remain high at 2.7 (2.6) million m3. One-month futures for bioethanol on the Chicago Board of Trade (CBOT) fell slightly, from 581 USD/m3 at the beginning of September to about 555 USD/m3 at the end of November 2014. In the interim, ethanol prices to the beginning of October 2014 had dropped dramatically to 396 USD/m3 as a result of lower raw material costs, high inventories and low gasoline prices.

Due to a meager sugar cane harvest from Brazil’s 2014/15 sugar marketing year (April to March), bioethanol production in Brazil is expected to shrink by 4.2  % to 26.8 million m³, while domestic consumption is projected to climb 3.5 % to 26.3 million m³. Production for the 2015/16 sugar marketing year is expected to fall by a slight 0.7 % to 26.6 million m3. Bioethanol consumption is expected to fall by the same percentage, to 26.1 million m3. Brazilian bioethanol prices slid from 672 USD/m³ FOB Santos at the beginning of September 2014 to 560 USD/m³ at the end of November 2014. The d­ ecline was the result of the progressing cane sugar harvest and weaker foreign and domestic demand.

GRAIN MARKET  In its 10 December 2014 estimate for the

2014/15 harvest year, the US Department of Agriculture (USDA), forecast global grain production (excluding rice) to reach 1,998 million tonnes, only slightly lower than last year’s record number. It is estimated that world grain consumption will climb 1.4 % to 1,970 million tonnes and global inventories of grain are expected to jump 6.9 % to 422 million tonnes. The EU Commission estimates that the harvest for the 2014/15 grain marketing year will climb 6.4 % to 322 million tonnes, significantly higher than expected grain consumption of about 280 million tonnes (+2.5 %). The larger harvest is expected to boost global inventories 45 % to 48 million tonnes. More than half of the EU’s grain harvest is used for animal feed. The amount used to produce bioethanol, animal feed and food byproducts out of bioethanol production continues to be only 3 % of the harvest. In view of the excellent harvest prospects, European wheat prices on the Euronext Paris slipped from about 192 €/t at the beginning of September 2014 to 184 €/t at the end of November 2014. At the end of September 2014, prices briefly corrected to 150 €/t, but started climbing again when the corn harvest was delayed. The devaluation of the euro to the US dollar also exerted upward pressure on prices. I M PL EM EN TAT I O N O F T H E EU RO PE A N CL I M AT E A N D

In the EU, bioethanol prices were quoted at 477  €/m FOB ­Rotterdam at the end of November 2014, significantly below the price of 514 €/m3 quoted at the beginning of September 2014. This is a very low price compared to the rest the world. In September 2014, the price briefly touched 570 €/m3, driven by temporary reduced supplies of bioethanol and the seasonal increase in bioethanol demand. European bioethanol prices are currently being determined by price reporting agencies based on low volumes. The European antitrust authorities have been investigating since May 2013 to what extent this causes irregularities or distortions. 3

Because of declining gasoline consumption and largely unchanged mandatory blend ratios in EU member states, market analysts expect fuel-grade ethanol consumption in the EU market to fall 2.5 % to 5.3 million m3 in 2014. In Germany, fuel-grade ethanol consumption is expected to come in at 1.5

E N E RG Y PACK AG E   Please refer to page 90 of the 2013/14

annual report (management report, economic report, Crop­ Energies segment) for a summary of the Renewable Energy ­Directive. PROPOSED AMENDMENTS TO THE RENEWABLE ENERGY DIRECTIVE AND THE FUEL QUALIT Y DIRECTIVE   Please refer to pages 90 and 91 of the 2013/14 annual report (management report, economic report, CropEnergies segment) for a summary of the recommended changes to the directives.

On 9 December 2014, the European Council adopted a common position on the EU Commission’s and EU Parliament’s ratified draft of the proposed amendments to the directive. The increase in the share of conventional biofuels to 7  %, elimination of a quadruple allocation of biofuels from waste and scrap and greater controls concerning the latter’s sustain-

INTERIM MANAGEMENT REPORT Economic report

ability represent a compromise that is a considerable ­improvement over the EU Commission’s original draft. However, the planned multiple allocation of biofuels would signi­ ficantly reduce the incentive to substitute fossil fuels and thus the achievable greenhouse gas emission savings. In addition, the separate mandatory blend ratio of 7.5  % of renewable ­energies in the gasoline sector called for by the European Parliament is missing. After the common position has been submitted to the European Parliament in January 2015, there will be a second reading. The legislative procedure is expected to be completed in spring 2015. PROPOSAL TO IMPLEMENT THE FUEL QUALIT Y DIRECTIVE

On 6 October 2014, the EU Commission adopted a directive to define calculation procedures as per the fuel quality directive. The European Council endorsed the draft directive on 17 December 2014. The European Parliament’s decision is expected at the beginning of 2015.

I N T RO DU C T I O N

OF

G R E E N H O USE

GAS

R E DU C T I O N

Q U OTA S I N G E R M A N Y   Effective 1 January 2015, Germany’s

biofuel quota was replaced by a greenhouse gas reduction quota, which is part of a decarbonization strategy. Lawmakers revised the Federal Emission Control Act (BimSchG) as result of this change. Specified greenhouse gas savings in the fuel sector were thereby raised from 3 to 3.5 % by weight for 2015 and 2016. However, for subsequent years the greenhouse gas savings targets were lowered from 4.5 to 4.0  % by weight ­effective 2017 and from 7 to 6  % by weight effective from 2020 onward. Although the German bioethanol industry argued in favour of the introduction of greenhouse gas savings quotas, it pointed out that the high potential of biofuels to cut greenhouse gases will not be realized as a result of the reduction in savings targets as of 2017. B I O FU EL R EG U L AT I O NS I N B ELG I U M I N B ELG I U M , ­legislators agreed on a new law to promote biofuels, which

aims to support especially sustainable biofuels and incentivize the ­introduction of E10. The new law is currently being reviewed by the EU Commission.

Business performance – CropEnergies segment € million

3rd quarter 2014/15

2013/14

1 st – 3rd quarter +/– in %

2014/15

2013/14

+/– in %

Revenues

€ million

204

185

9.8

576

527

9.4

EBITDA

€ million

7

21

– 63.5

21

62

– 66.5

Depreciation on fixed assets and intangible assets

€ million

– 9

– 9

5.9

– 27

– 24

10.2

Operating profit

€ million

– 2

12



– 6

38



Result from restructuring/special items

€ million

1

– 5

– 100

0

– 6

– 100

Income from companies consolidated at equity

€ million

0

0



0

– 1



Income from operations

€ million

– 1

7



– 6

31



EBITDA margin

%

3.6

10.8

3.6

11.8

Operating margin

%

– 0.8

6.2

– 1.1

7.2

Investments in fixed assets 1

€ million

12

7

23

14

Investments in financial assets/acquisitions

€ million

0

0



0

0



Total investments

€ million

12

7

59.5

23

14

61.1

Shares in companies consolidated at equity

€ million

2

1

28.6

Capital employed

€ million

525

545

– 3.7

443

421

5.2

Employees 1

59.5

61.1

Including intangible assets. TA B L E 1 0

11

12

INTERIM MANAGEMENT REPORT Economic report

Business performance CropEnergies segment

Fruit segment

R E V E N U E S A N D O PER AT I N G PRO FI T  The CropEnergies segment’s revenue rose further to €  576 (527) million. The growth is attributable to substantially higher volumes of bioethanol, food and animal feed, especially at the plant in Wilton, Great Britain acquired last July, but also at the existing facilities in Zeitz and Wanze, Belgium.

Market developments, economic policy, ­general framework

Operating profit fell further to €  – 6 (38) million, especially driven by substantially lower ethanol sales revenues. Higher volumes and declining net raw material costs were not enough to completely offset the reduced income. The result from companies consolidated at equity of € 0 (– 1) million r­elates to the share of earnings from CT Biocarbonic GmbH, which produces liquid food-grade carbon dioxide at the Zeitz facility. IN V E S T M E N T S   The segment invested € 23 (14) million in the

first nine months, mainly to broaden its product portfolio and improve plant efficiencies at its Belgian, German and UK sites. The high-quality food-grade rectified spirit plant being constructed at the Zeitz site will produce up to 60,000 m³ of product a day and is scheduled to start operations at the beginning of 2015.

M A R K E T S   Demand for fruit preparations is growing slightly

in non-European markets, while continuing to decline somewhat in the EU. Current market numbers for the European ­yogurt market are down 2 %, whereas they are still up 2 % in Russia. Political uncertainty reduced demand in Ukraine, but percentagewise the drop is only in the single digits to date. Macroeconomic and political problems are also slowing market growth in North Africa and Argentina. For fruit juice concentrates, Western European consumption of juices with a high ratio of juice continues to trend lower, ­especially in Germany. Sanctions banning the import of fresh fruit into Russia together with cheap apples in light of the bountiful harvest drove apple juice concentrate prices sharply lower in the EU. Low prices and the US dollar to euro exchange rate, favorable to European exports, led to increased sales of European apple juice concentrates to customers in the United States. Russian import restrictions on goods from Ukraine made it necessary to import locally produced products to Europe, from where they were distributed further.

INTERIM MANAGEMENT REPORT Economic report

R AW M AT ER I A L M A R K E T S   The fruit harvests in Europe and America had been completed by the end of the third quarter. Because of only moderate demand in all markets, prices for most raw materials were lower with only a few exceptions. Tropical fruit prices rose, not least because of the changes in the euro to US dollar exchange rate.

Operating profit was also slightly lower than last year at € 54 (59) million. Here too, lower sales revenues and sales volumes had a negative impact, but falling raw material costs and cost-cutting measures partly offset the decline. Operating profit in the third quarter was higher than during the same period last year, which reduced the year-over-year decline.

European fruit juice concentrate factory loading in the third quarter was good. The favorable weather conditions led to an excellent apple and berry harvest. Due to the large harvests in Europe, high inventories of dessert fruit and noncontract residual inventories of apple juice concentrates, apple prices collapsed, which subsequently impacted the selling price of apple juice concentrates.

The expenses posted in the result from restructuring and ­special items are for fruit preparations production site rationalization, including the closure of the Kröllendorf plant in ­Austria.

Business performance

I N V E S T M E N T S   The fruit segment invested € 29 (31) million

in the first nine months, primarily in the fruit preparations ­division. One of the main priorities here was completion of the fourth fruit preparations factory in the United States at the site in Lysander, New York. The fruit juice concentrates d­ ivision also invested, especially to improve production efficiency.

R E V E N U E S A N D O PER AT I N G PRO FI T   The fruit segment’s revenues fell to € 816 (906) million, mainly due to lower sales revenues and volumes of apple juice concentrates. But lower sales revenues from fruit preparations also weighed on ­earnings.

Business performance – Fruit segment € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

Revenues

€ million

260

279

– 6.8

816

906

EBITDA

€ million

28

27

1.5

83

88

– 5.1

Depreciation on fixed assets and intangible assets

€ million

– 12

– 12

– 2.5

– 29

– 29

– 0.3

Operating profit

€ million

16

15

4.5

54

59

– 7.5

Result from restructuring/special items

€ million

0

0



– 4

0



Income from companies consolidated at equity

€ million

0

0



0

0



Income from operations

€ million

16

15

4.5

– 15.3

%

10.6

9.8

EBITDA margin Operating margin

50

59

10.3

9.7

6.7

6.5

29

31

+/– in %

– 10.0

%

6.2

5.5

Investments in fixed assets 1

€ million

8

16

Investments in financial assets/acquisitions

€ million

0

0



0

0



Total investments

€ million

8

16

– 46.8

29

31

– 4.9

Shares in companies consolidated at equity

€ million

0

0



Capital employed

€ million

825

908

– 9.1

5,737

5,524

3.9

Employees 1

– 46.8

– 4.9

Including intangible assets. TA B L E 1 1

13

14

INTERIM MANAGEMENT REPORT E VENTS AF TER THE BAL ANCE SHEE T | RISK MANAGEMENT | Outlook

EVENTS AFTER THE BALANCE SHEET DATE

OUTLOOK

There have been no especially significant events since 30 November 2014 that would have a material impact on the company’s assets, financial position or earnings.

Group performance

RISK MANAGEMENT As an international company, Südzucker Group is exposed to macroeconomic, industry-specific and business opportunities and risks. Information about the group’s risk management system, risks and potential opportunities is provided in the 2013/14 annual report under “Risk management“ on pages 99 to 110, and in the “Economic report“ as part of segment reporting. The opportunities and risks that arose in the first nine months of fiscal 2014/15 beyond those presented in detail in the 2013/14 annual report as a result of changes in the regulatory environment are as follows: The EU has stated that antidumping duties apply for bioethanol imported from the United States via Norway. New biofuel promotion legislation has been agreed in Belgium. It is ­currently being reviewed by the EU Commission. EU energy ministers have recommended limiting the ratio of biofuels in the transportation sector to 7 % in 2020 if arable crops are being used for their production. The German legislature adopted an amended Federal Emission Control Act that introduces greenhouse gas reduction quotas and goes into effect on 1 January 2015. Taking into account all known facts, we have not identified any risks, either individually or as a whole, that threaten the continued existence of Südzucker Group.

Unchanged since April 2014, Südzucker expects consolidated group revenues to decline in fiscal 2014/15, to about € 7.0 (7.5) billion. We expect sugar ­segment revenues to drop significantly, special products segment revenues to remain steady, a moderate rise in the Crop­Energies segment’s revenues and a slight decline in fruit segment revenues. Achieving the projected significantly lower consolidated operating profit of about € 200 (622) million remains challenging. The decline in consolidated group operating profit continues to be driven primarily by sharply lower earnings in the sugar and CropEnergies segments. We continue to expect the special products segment’s earnings to rise substantially. Within fruit segment we continue to expect earnings to reach prior year’s level. Due to the sharply lower consolidated group operating profit, we also expect the return on capital employed (ROCE) to drop signi­ ficantly, while capital employed is expected to remain stable. From today’s perspective we expect that continously difficult eco­nomic environment in the European sugar and ethanol markets will not only negatively impact fiscal 2014/15, but also weigh heavily on fiscal 2015/16 results. European ethanol markets could see new stimulus from the amendments to the renewable energy directive in which conventional biofuels are mandated to be blended at a 7 % ratio. The act is scheduled to come into force in spring 2015.

INTERIM MANAGEMENT REPORT Outlook

Sugar segment

CropEnergies segment

We expect the sugar segment’s revenues to fall significantly in fiscal 2014/15. Not only will the reduced sales revenues from the 2013/14 sugar marketing year now impact the entire fiscal year, sales revenues at the beginning of the 2014/15 sugar marketing year were even lower. Because of the continuing deterioration of the business situation in the EU sugar market in the first nine months of the fiscal year, we expect operating profit to be significantly lower, falling to €  10 to 40 million (previous year: € 438 million).

Low ethanol prices have significantly worsened the earnings situation of European bioethanol producers. Consequently ­CropEnergies continues to expect a challenging market en­ vironment, for which, as one of the leading producers, Crop­ Energies is well positioned. CropEnergies continues to expect revenues to grow between 5 and 10 % to over €  750 million (previous year: € 720 million) in fiscal 2014/15.

The significantly lower operating profit will result in a sharp drop in the sugar segment’s ROCE, while capital employed will remain steady. Achieving this forecast depends largely on developments in the volumes and sales results going forward. We do not expect the EU Commission to launch temporary market ­ ­management initiatives. The European sugar market is adequately supplied while prices are low. There is no need for regulatory intervention. In view of the increasing earnings volatility and the changes to the EU sugar policy effective 1 October 2017, we are currently intensifying our efforts to improve our cost structures, ­particularly in the sugar segment.

Special products segment We continue to expect the special products segment’s fiscal 2014/15 revenue to remain stable and operating profit to rise substantially, to more than € 100 million (previous year: € 85 million), with contributions from all divisions. We expect the disproportionate increase in operating profit compared to the increase in capital employed to result in a higher ROCE.

Due to the continuing uncertainty surrounding future market and price developments, CropEnergies is forecasting an operating profit in a range between € – 20 and 0 million (previous year: € 35 million). We expect ROCE to drop substantially because of the lower ­operating profit, while capital employed is expected to remain stable.

Fruit segment We expect the fruit segment’s revenues to decline slightly in fiscal 2014/15 due to the price-driven lower revenues from the fruit juice concentrates division. Operating profit should be about the same as last year. We expect the fruit prepa-­rations division’s operating profit to remain steady at last year’s level despite startup costs for the new factory in the United States, while the fruit juice concentrates division’s profit will be slightly less than last year’s. Overall, we expect ROCE to be unchanged as operating profit and capital employed remain stable.

15

16

INTERIM FINANCIAL STATEMENTS Consolidated statement of comprehensive income

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1 € million

1 st – 3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

+/– in %

1,751.5

1,934.1

– 9.4

5,233.0

5,870.9

– 10.9

607.7

744.1

– 18.3

– 294.2

– 217.5

35.3

31.9

22.7

40.5

78.1

51.0

53.1

– 9.1 – 3,339.2 – 3,665.7

– 8.9

Income Statement Revenues Change in work in progress and finished goods inventories and internal costs capitalized Other operating income Cost of materials Personnel expenses Depreciation Other operating expenses

– 1,776.0 – 1,954.7 – 229.9

– 219.9

4.5

– 617.4

– 608.0

1.5

– 97.5

– 98.2

– 0.7

– 199.1

– 197.2

1.0

– 261.2

– 257.9

1.3

– 681.1

– 657.9

3.5

Income from companies consolidated at equity

– 4.1

16.5



15.0

42.6

– 64.8

Income from operations

22.4

186.7

– 88.0

195.1

618.2

– 68.4

Financial income Financial expense

6.3

6.9

– 8.7

22.9

23.8

– 3.8

– 16.8

– 20.5

– 18.0

– 54.0

– 66.3

– 18.6

Earnings before income taxes

11.9

173.1

– 93.1

164.0

575.7

– 71.5

Taxes on income

– 2.8

– 30.5

– 90.8

– 35.7

– 121.1

– 70.5

Net earnings of which attributable to Südzucker AG shareholders of which attributable to hybrid capital of which attributable to minority interests Earnings per share (€) Dilusion effect Diluted earnings per share (€)

9.1

142.6

– 93.6

128.3

454.6

– 71.8

– 8.1

111.4



67.1

358.4

– 81.3

6.5

6.5

0.0

19.6

19.6

0.0

10.7

24.7

– 56.7

41.6

76.6

– 45.7

– 0.04

0.55



0.33

1.76

– 81.3

0.00

0.00



0.00

0.00



– 0.04

0.55



0.33

1.76

– 81.3

9.1

142.6

– 93.6

128.3

454.6

– 71.8

5.5

7.1

– 22,5

– 0.3

1.1



– 0.3

0.0



0.8

– 0.1



Other comprehensive income Net earnings Market value of hedging instruments (cash flow hedge) after deferred taxes 2 Market value of securities (available for sale) after deferred taxes 2 Exchange differences on net investments in foreign operations after deferred taxes

0.5

1.1

– 54.5

– 0.4

– 0.7

– 42.9

Foreign currency translation differences 2

18.1

– 19.6



22.1

– 63.6



Income and expenses to be recognized in the income statement in the future

23.8

– 11.4



22.2

– 63.3



Remeasurement of defined benefit pension plans and similar obligations after deferred taxes 3

– 1.3

0.0



– 85.8

0.1



Income and expenses recognized in other comprehensive income

22.5

– 11.4



– 63.6

– 63.2

0.6

Comprehensive income

31.6

131.2

– 75.9

64.7

391.4

– 83.5

of which attributable to Südzucker AG shareholders

13.2

102.7

– 87.1

8.6

310.6

– 97.2

6.5

6.5

0.0

19.6

19.6

0.0

11.9

22.0

– 45.9

36.5

61.2

– 40.4

of which attributable to hybrid capital of which attributable to minority interests

The prior year numbers have been adjusted in accordance with IAS 8. Further disclosures are included in note (1) of the notes. Including the effects from companies consolidated at equity. 3 Will not be reclassified subseqently to profit and loss. 1 2

TA B L E 1 2

INTERIM FINANCIAL STATEMENTS Consolidated cash flow statement

CONSOLIDATED CASH FLOW STATEMENT 1 € million

Net earnings Depreciation and amortization of intangible assets, fixed assets and other investments Decrease (–) / Increase (+) in non-current provisions and deferred tax liabilities and increase (–) / decrease (+) in deferred tax assets

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

9.1

142.6

– 93.6

128.3

454.6

+/– in %

– 71.8

97.5

98.3

– 0.8

199.1

197.3

0.9

9.6

19.8

– 51.5

42.4

43.4

– 2.3

22.0

– 14.5



15.0

5.0

> 100

138.2

246.2

– 43.9

384.8

700.3

– 45.1

Gain (–) / Loss (+) on disposal of items included in non-current assets and of securities

– 0.7

– 0.7

– 0.0

0.7

– 1.1



Decrease (–) / Increase (+) in current provisions

26.5

2.2

> 100

– 12.3

– 5.7

> 100

Other income (–) / expenses (+) not affecting cash Cash flow

Increase (–) / decrease (+) in inventories, receivables and other current assets

– 676.6

– 925.8

– 26.9

316.4

40.3

> 100

Decrease (–) / Increase (+) in liabilities (excluding financial liabilities)

764.2

994.4

– 23.1

47.2

191.7

– 75.4

Increase (–) / Decrease (+) in working capital

114.1

70.8

61.2

351.3

226.3

55.2

I. Net cash flow from operating activities

251.6

316.3

– 20.5

736.8

925.5

– 20.4

Investments in fixed assets and intangible assets

– 99.3

– 109.9

– 9.6

– 267.2

– 276.0

– 3.2 – 20.0

Investments in financial assets

– 0.8

– 0.8

0.0

– 0.8

– 1.0

– 100.1

– 110.7

– 9.6

– 268.0

– 277.0

– 3.2

Cash received on disposal of non-current assets

2.5

2.2

13.6

3.2

7.5

– 57.3

Cash paid (–) / received (+) for the purchase / sale of securities

0.8

– 170.1



2.0

– 219.0

– – 46.2

Investments

II. Cash flow from investing activities

– 96.8

– 278.6

– 65.3

– 262.8

– 488.5

Increases in stakes held in subsidiaries

0.0

0.0



– 29.8

0.0



Capital decrease (–) / increase (+) / acquisiton (–) / sale (+) of own shares

0.0

0.0



0.0

0.3

– 100.0 – 33.8

Dividends paid

– 0.8

– 0.7

14.3

– 172.6

– 260.9

Repayment (–) / Issuance (+) of commercial papers

0.0

0.0

0.0

15.0

0.0



Other Repayment (–) / Refund (+) of financial liabilities

0.0

0.0

0.0

– 128.0

– 13.6

> 100 > 100

Repayment (–) / Refund (+) of financial liabilities

– 141.0

– 13.4

> 100

– 113.0

– 13.6

III. Cash flow from financing activities

– 141.8

– 14.1

> 100

– 315.4

– 274.2

15.0

13.0

23.6

– 44.9

158.6

162.8

– 2.6

due to exchange rate changes

2.7

3.3

– 18.2

– 2.5

– 6.6

– 62.1

due to changes in entities included in consolidation

0.0

0.0



0.0

0.5

– 100.0

Change in cash and cash equivalent (total of I., II. and III.)

Decrease (–) / Increase (+) in cash and cash equivalents

15.7

26.9

– 41.6

156.1

156.7

– 0.4

Cash and cash equivalents at the beginning of the period

642.7

595.3

8.0

502.3

465.5

7.9

Cash and cash equivalents at the end of the period

658.4

622.2

5.8

658.4

622.2

5.8

€ million

3rd quarter 2014/15

Dividends received from companies consolidated at equity and other investments Interest receipts

0.1

2013/14

1 st – 3rd quarter +/– in %

0.3

– 66.7

2014/15

4.1

2013/14

+/– in %

20.2

– 79.7 14.4

4.8

1.8

> 100

18.3

16.0

Interest payments

– 4.5

– 4.2

7.1

– 33.3

– 33.3

0.0

Income taxes paid

– 7.7

– 21.5

– 64.2

– 22.6

– 77.3

– 70.8

1

The prior year numbers have been adjusted in accordance with IAS 8. Further disclosures are included in note (1) of the notes. TA B L E 1 3

17

18

INTERIM FINANCIAL STATEMENTS Consolidated balance sheet

CONSOLIDATED BALANCE SHEET 1 € million

30 November 2014

30 November 2013

+/– in %

28 February 2014

+/– in %

Intangible assets

1,185.8

1,183.0

0.2

1,188.5

Fixed assets

2,734.3

2,654.5

3.0

2,656.1

2.9

317.2

282.0

12.5

284.8

11.4

23.8

23.8

0.0

23.7

0.4

104.4

105.5

– 1.0

104.6

– 0.2

25.8

54.8

– 52.9

27.7

– 6.9

140.8

122.9

14.6

123.0

14.5

Non-current assets

4,532.1

4,426.5

2.4

4,408.4

2.8

Inventories

2,105.1

2,398.4

– 12.2

2,359.7

– 10.8

Trade receivables

955.4

1,061.5

– 10.0

916.8

4.2

Other assets

291.4

284.0

2.6

373.1

– 21.9

Assets

Shares in companies consolidated at equity Other investments Securities Other assets Deferred tax assets

– 0.2

Current tax receivables

42.2

80.9

– 47.8

63.7

– 33.8

Securities

40.7

260.7

– 84.4

40.8

– 0.2

658.4

622.2

5.8

502.3

31.1

Cash and cash equivalents Current assets

4,093.2

4,707.7

– 13.1

4,256.4

– 3.8

Total assets

8,625.3

9,134.2

– 5.6

8,664.8

– 0.5

INTERIM FINANCIAL STATEMENTS Consolidated balance sheet

€ million

30 November 2014

30 November 2013

+/– in %

28 February 2014

204.2

204.2

0.0

204.2

+/– in %

Liabilities and shareholders’ equity Issued subscribed capital Nominal value own shares

0.0

0.0

0.0



0.0



204.2

204.2

0.0

204.2

0.0

Capital reserves

1,614.9

1,614.9

0.0

1,614.9

0.0

Revenue reserves and Other comprehensive Income

1,391.4

1,571.8

– 11.5

1,486.1

– 6.4

Equity attributable to shareholders of Südzucker AG

3,210.5

3,390.9

– 5.3

3,305.2

– 2.9

Outstanding subscribed capital

Hybrid capital

683.9

683.9

0.0

683.9

0.0

Other minority interests

675.9

816.4

– 17.2

673.8

0.3

4,570.3

4,891.2

– 6.6

4,662.9

– 2.0

787.7

698.9

12.7

657.6

19.8

95.6

85.7

11.6

81.5

17.3

678.9

682.7

– 0.6

681.4

– 0.4

19.7

14.5

35.9

18.2

8.2

Total equity Provisions for pensions and similar obligations Other provisions Financial liabilities Other liabilities Tax liabilities

80.7

93.8

– 14.0

75.0

0.0

Deferred tax liabilities

92.5

112.3

– 17.6

104.0

– 11.1

1,755.1

1,687.9

4.0

1,617.7

8.5

Other provisions

177.0

182.6

– 3.1

189.5

– 6.6

Financial liabilities

391.4

368.9

6.1

501.9

– 22.0

Trade payables

1,312.6

1,451.8

– 9.6

1,145.3

14.6

Other liabilities

354.9

458.8

– 22.6

464.3

– 23.6

64.0

93.0

– 31.2

83.2

– 23.1

Current liabilities

2,299.9

2,555.1

– 10.0

2,384.2

– 3.5

Total liabilities and equity

8,625.3

9,134.2

– 5.6

8,664.8

– 0.5

266.8

63.2

> 100

535.6

– 50.2

53.0

53.5

53.8

5.8

1.3

11.5

Non-current liabilities

Current tax liabilities

Net financial debt Equity ratio Net financial debt as % of equity (gearing) 1

The prior year numbers have been adjusted in accordance with IAS 8. Further disclosures are included in note (1) of the notes. TA B L E 1 4

19

20

INTERIM FINANCIAL STATEMENTS Consolidated statement of changes in shareholders’ equity

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUIT Y € million

1 March 2013

Issued subscribed capital

Nominal value own shares

Capital reserve

204.2

0.0

1,614.9

Market valuations and exchange differences  on net investments

1

Foreign currency translation differences 1 Income and expenses to be recognized in the income statement in the future Remeasurement of defined benefit pension plans and similar obligations after deferred taxes 2 Income and expenses recognized directly in equity Net earnings Comprehensive income Distributions Capital increase / decrease

0.0

0.0

Own shares

0.0

0.0

0.0

30 November 2013

204.2

0.0

1,614.9

1 March 2014

204.2

Other changes

1,614.9

Market valuations and exchange differences 1 on net investments Foreign currency translation differences 1 Income and expenses to be recognized in the income statement in the future Remeasurement of defined benefit pension plans and similar obligations after deferred taxes 2 Income and expenses recognized directly in equity Net earnings Comprehensive income Distributions Capital increase / decrease

0.0

Own shares

0.0

0.0

0.0

204.2

0.0

1,614.9

Other changes 30 November 2014 Including the effects from companies consolidated at equity. 2 Will not be reclassified subsequently to profit and loss. 1

INTERIM FINANCIAL STATEMENTS Consolidated statement of changes in shareholders’ equity

Other comprehensive Income

Revenue reserves

Equity of Südzucker share-holders

Hybrid capital

Other minority interests

– 12.0

1,457.2

3,264.3

683.9

782.7

Total equity

4,730.9

– 0.7

– 0.7

1.0

0.3

– 47.2

– 47.2

– 16.4

– 63.6

– 47.9

– 47.9

– 15.4

– 63.3

– 47.9 – 47.9

– 59.9

0.1

0.1

0.0

0.1

0.1

– 47.8

– 15.4

– 63.2

358.4

358.4

76.6

454.6

19.6

358.5

310.6

19.6

61.2

391.4

– 183.8

– 183.8

– 19.6

– 40.4

– 243.8

0.0

0.0

14.2

14.2

– 1.3

– 1.5

683.9

816.4

4,891.2

683.9

673.8

4,662.9

0.0

0.0

– 0.2

– 0.2

1,631.7

3,390.9

0.0

0.0 – 77.8

1,563.9

3,305.2

– 0.3

– 0.3

0.4

0.1

23.5

23.5

– 1.4

22.1

23.2

23.2

– 1.0

22.2

– 81.7

– 81.7

– 4.1

– 85.8

23.2

– 81.7

– 58.5

– 5.1

– 63.6

67.1

67.1

19.6

41.6

128.3

23.2

– 14.6

8.6

19.6

36.5

64.7

– 102.1

– 102.1

– 19.6

– 33.7

– 155.4

0.0

0.0

0.0

0.0

0.0

0.0

– 1.2

– 1.2

– 0.7

– 1.9

1,446.0

3,210.5

675.9

4,570.3

– 54.6

0.0 683.9

TA B L E 1 5

21

22

INTERIM FINANCIAL STATEMENTS Development of the items of other comprehensive income

DEVELOPMENT OF THE ITEMS OF OTHER COMPREHENSIVE INCOME  1

Other comprehensive income

€ million

1 March 2013 Changes recognized in equity Changes recognized in profit or loss

Market value of hedging instruments (cash flow hedge) 2

Market value of securities (available for sale) 2

Exchange differences on net investments in Accumulated exforeign operations change differcences 2

Total income and expenses to be recognized in the income statement in the future

– 3.4

4.6

– 10.6

– 24.1

– 33.5

17.4

– 0.0

– 0.9

– 63.6

– 47.1

– 16.2

– 16.2

Deferred tax

– 0.1

– 0.1

0.2

30 November 2013

– 2.3

4.5

– 11.3

– 87.7

– 96.8

1 March 2014

– 2.5

3.2

– 10.7

– 114.3

– 124.3

Changes recognized in equity

– 3.4

1.4

– 0.6

22.1

19.5

Changes recognized in profit or loss

3.0

Deferred tax

0.1

– 0.6

0.2

– 2.8

4.0

– 11.1

30 November 2014

0.0

3.0 – 0.3 – 92.2

– 102.1

The disclosure includes the equity of Südzucker shareholders and other minorities interests. 2 Including the effects from companies consolidated at equity. 1

TA B L E 1 6

Notes to the interim financial statements 

NOTES TO THE INTERIM FINANCIAL STATEMENTS  Segment report € million

3rd quarter

1 st – 3rd quarter

2014/15

2013/14

+/– in %

2014/15

2013/14

1,860.9

2,033.3

– 8.5

5,528.2

6,159.4

+/– in %

Südzucker Group Gross revenues Consolidation

– 10.2

– 109.4

– 99.2

10.3

– 295.2

– 288.5

2.3

1,751.5

1,934.1

– 9.4

5,233.0

5,870.9

– 10.9

124.7

269.7

– 53.8

373.2

775.7

– 51.9

EBITDA margin

7.1 %

13.9 %

7.1 %

13.2 %

Depreciation

– 97.5

– 98.0

– 0.5

– 199.1

– 196.7

1.2

Operating profit

27.2

171.7

– 84.2

174.1

579.0

– 69.9

Operating margin

1.6 %

8.9 %

3.3 %

9.9 %

Result from restructuring/special items

– 0.7

– 1.5

– 53.3

6.0

– 3.4



Income from companies consolidated at equity

– 4.1

16.5



15.0

42.6

– 64.8

Income from operations

22.4

186.7

– 88.0

195.1

618.2

– 68.4

99.3

109.9

– 9.6

267.2

276.0

– 3.2

0.8

0.8

0.0

0.8

1.0

– 20.0

100.1

110.7

– 9.6

268.0

277.0

– 3.2

Revenues EBITDA

Investments in fixed assets

1

Investments in financial assets/acquisitions Total investments Shares in companies consolidated at equity

317.2

282.0

12.5

Capital employed

5,581.5

5,640.0

– 1.0

Number of employees

18,598

18,333

1.4

Sugar segment Gross revenues

912.0

1,093.5

– 16.6

2,731.9

3,314.7

– 17.6

Consolidation

– 73.8

– 71.4

3.4

– 195.6

– 207.2

– 5.6

Revenues

838.2

1,022.1

– 18.0

2,536.3

3,107.5

– 18.4

34.2

176.2

– 80.6

131.8

509.2

– 74.1

4.1 %

17.2 %

5.2 %

16.4 %

EBITDA EBITDA margin Depreciation

– 58.8

– 59.4

– 1.0

– 88.0

– 89.0

– 1.1

Operating profit

– 24.6

116.8



43.8

420.2

– 89.6

Operating margin

– 2.9 %

11.4 %

1.7 %

13.5 %

– 0.7

0.0



10.6

– 0.5

Result from restructuring/special items



Income from companies consolidated at equity

– 12.4

7.6



– 7.1

19.9



Income from operations

– 37.7

124.4



47.3

439.6

– 89.2

52.6

51.4

2.3

132.9

146.9

– 9.5

Investments in fixed assets 1 Investments in financial assets/acquisitions Total investments Shares in companies consolidated at equity Capital employed Number of employees 1

0.1

0.1

0.0

0.1

0.3

– 66.7

52.7

51.5

2.3

133.0

147.2

– 9.6

240.4

207.9

15.6

2,884.3

2,867.0

0.6

8,016

8,027

– 0.1

Including intangible assets. TA B L E 17

23

24

Notes to the interim financial statements 

€ million

3rd quarter 2014/15

2013/14

Gross revenues

467.5

Consolidation

– 17.3

Revenues

450.2

1 st – 3rd quarter +/– in %

2014/15

2013/14

+/– in %

460.1

1.6

1,354.2

1,365.5

– 12.0

44.2

– 49.0

– 34.9

40.4

448.1

0.5

1,305.2

1,330.6

– 1.9

20.1

17.8

Special products segment

EBITDA EBITDA margin Depreciation

55.6

46.3

12.4 %

10.3 %

– 18.2

– 18.3

– 0,5 33.6

– 0.8

136.9

116.2

10.5 %

8.7 %

– 54.9

– 53.9

1.9

82.0

62.3

31.6

6.3 %

4.7 %

Operating profit

37.4

28.0

Operating margin

8.3 %

6.2 %

Result from restructuring/special items

0.0

2.5

– 100.0

0.0

3.4

– 100.0

Income from companies consolidated at equity

7.9

9.3

– 15.1

21.8

23.3

– 6.4

Income from operations

45.3

39.8

13.8

103.8

89.0

16.6

Investments in fixed assets 1

26.5

35.3

– 24.9

81.9

84.0

– 2.5

0.7

0.7



0.7

0.7

0

27.2

36.0

– 24.4

82.6

84.7

– 2.5

75.0

72.7

3.2

1,347.3

1,320.3

2.0

4,402

4,361

0.9

572.6

9.4

Investments in financial assets/acquisitions Total investments Shares in companies consolidated at equity Capital employed Number of employees CropEnergies segment Gross revenues

221.8

201.0

10.3

626.4

Consolidation

– 18.3

– 15.7

16.6

– 50.5

– 46.0

9.8

Revenues

203.5

185.3

9.8

575.9

526.6

9.4

7.3

20.0

– 63.5

20.8

62.1

– 66.5

EBITDA EBITDA margin

3.6 %

10.8 %

3.6 %

11.8 %

Depreciation

– 9.0

– 8.5

5.9

– 26.9

– 24.4

10.2

Operating profit

– 1.7

11.5



– 6.1

37.7



Operating margin

– 0.8 %

6.2 %

– 1.1 %

7.2 %

– 0.0

– 4.0

– 100.0

0.0

– 6.3

– 100

0.4

– 0.4



0.3

– 0.6



Income from operations

– 1.3

7.1



– 5.8

30.8



Investments in fixed assets 1

11.8

7.4

59.5

23.2

14.4

61.1

Result from restructuring/special items Income from companies consolidated at equity

Investments in financial assets/acquisitions Total investments Shares in companies consolidated at equity Capital employed Number of employees 1

0.0

0.0



0.0

0.0



11.8

7.4

59.5

23.2

14.4

61.1

1.8

1.4

28.6

524.8

545.2

– 3.7

443

421

5.2

Including intangible assets. TA B L E 17

Notes to the interim financial statements 

€ million

3rd quarter 2014/15

2013/14

259.6 0.0 259.6

1 st – 3rd quarter +/– in %

2014/15

2013/14

+/– in %

278.7

– 6.9

815.7

906.6

– 0.1

– 100.0

– 0.1

– 0.4

– 75.0

278.6

– 6.8

815.6

906.2

– 10.0

1.5

– 5.1

Fruit segment Gross revenues Consolidation Revenues EBITDA EBITDA margin Depreciation

27.6

27.2

10.6 %

9.8 %

– 11.5

– 11.8

– 2.5 4.5

Operating profit

16.1

15.4

Operating margin

6.2 %

5.5 %

– 0.0

0.0

Result from restructuring/special items Income from companies consolidated at equity



– 10.0

83.7

88.2

10.3 %

9.7 %

– 29.3

– 29.4

– 0.3 – 7.5

54.4

58.8

6.7 %

6.5 %

– 4.6

0.0



0.0

0.0



0.0

0.0



16.1

15.4

4.5

49.8

58.8

– 15.3

Investments in fixed assets 1

8.4

15.8

– 46.8

29.2

30.7

– 4.9

Investments in financial assets/acquisitions

0.0

0.0



0.0

0.0



Total investments

8.4

15.8

– 46.8

29.2

30.7

– 4.9

0.0

0.0



Capital employed

825.1

907.5

– 9.1

Number of employees

5,737

5,524

3.9

Income from operations

Shares in companies consolidated at equity

1

Including intangible assets. TA B L E 17

(1) Principles of preparation of the interim consolidated financial statements Südzucker Group’s interim financial statements as of 30 November 2014 were prepared in accordance with the rules on interim financial reporting pursuant to IAS 34 (Interim Financial Reporting), in conformance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB). Südzucker AG’s consolidated financial statements dated 30 November 2014 have been condensed as per IAS 34. The consolidated interim statements dated 30 November  2014 were not subject to any inspection or audit review. In December 2014, the company’s name was changed from “Südzucker Aktiengesellschaft Mannheim/Ochsenfurt“ to “Südzucker AG“. Südzucker AG’s board of directors prepared these interim financial statements on 30 December 2014. As presented in the notes to the financial statements of the 2013/14 annual report under item (1) “Principles of preparation of the consolidated financial statements“ on pages 130 to 137, there were new and/or amended standards and interpretations that came into effect and were applied for the first time in preparing these interim financial statements. Provisions for pensions and similar obligations were already discounted to 2.50 % at the end of the second quarter of 2014/15; the discount rate had already been reduced to 3.00 % on 31 May 2014. The discount rate applied throughout fiscal 2013/14 was 3.50 %. Income taxes were calculated on the basis of local corporate income tax rates in consideration of the income tax forecast for the entire fiscal year. Material special items are fully recognized neglecting the determination of the annual tax rate in the respective quarter in which they occur.

25

26

Notes to the interim financial statements 

Sugar is primarily produced from September to January. This is why depreciation on systems used for the campaign is predominantly applied during this period. Any material, personnel and other operating expenses incurred in preparation for production prior to the next sugar campaign are capitalized during the fiscal year via changes in inventories and recognized on the balance sheet under inventories as work in progress. These are then taken into account during subsequent sugar production when ­determining the production costs of the sugar produced and thus recognized under inventories as part of finished goods. The same accounting and valuation methods as those used to prepare the group annual financial statements dated 28 February 2014 were applied for the remainder of this interim report. The relevant explanatory notes under item 5, “Accounting policies“, pages 145 to 152 of the 2013/14 annual report, thus also apply here. Südzucker Group’s 2013/14 annual report can be viewed or downloaded at www.suedzucker.de/de/Investor-Relations/ and/or www.suedzucker.de/en/Investor-Relations/.

IFRS presentation changes The first-time adoption of IFRS 11 (Joint Arrangements) at the beginning of fiscal 2014/15 had an impact on the balance sheet, the statement of comprehensive income and other items of the financial statements since the previously proportionally consolidated joint ventures of Studen Group (sugar segment), Hungrana Group (special products segment) and CT Biocarbonic GmbH (CropEnergies segment) are included at equity effective the beginning of fiscal 2014/15. Retrospective application of the new standard led to similar effects on the comparative periods presented. The following overview is a breakdown of the assets and liabilities grouped together for the first time as of 1 March 2013 in at-equity investment items:

€ million 1 March 2013

Effects resulting from initial application of IFRS 11

Non-current assets

87.6

Inventories

26.4

Receivables and other assets

1.4

Cash and cash equivalents and securities

18.0

Current assets

45.7

Total assets Non-current liabilities

133.3 – 7.8

Current liabilities

– 51.0

./. Total liabilities

– 58.7

= Carrying amount of participation value

74.6

TA B L E 1 8

Notes to the interim financial statements 

The decrease in assets and liabilities led to a reduction in capital employed and net financial debt. These changes affect the statement of comprehensive income in terms of lower revenues, as well as all profit/loss items in the operating results, financial result and income taxes; net earnings and earnings per share remain unchanged. Earnings after taxes from the affected companies exclusively flow into the earnings from companies accounted for using the equity method. To show that these companies are in fact operational investments and not financial assets, income from companies accounted for using the equity method are presented as operating profit. The following tables include the values published last year in accordance with IAS 8 in the first nine months of fiscal 2013/14; that is, the balance sheet published as at 28 February 2014, their adjustment and the adjusted values. Statement of comprehensive income (excerpt) from 1 March to 30 November 2013

€ million

Amount adjusted 1 – 3rd quarter 2013/14

Adjustment

5,870.9

– 157.7

st

Amount reported 1 st – 3rd quarter 2013/14

Income Statement Revenues EBITDA Depreciation Operating profit Result from restructuring/special items Income from companies consolidated at equity Income from operations Income from companies consolidated at equity Financial income

6,028.6

775.7

– 34.7

810.4

– 196.7

6.3

– 203.0

579.0

– 28.4

607.4

– 3.4

0.0

– 3.4

42.6

42.6

0.0

618.2

14.2

604.0

0.0

– 20.4

20.4

23.8

0.1

23.7

Financial expense

– 66.3

0.5

– 66.8

Earnings before income taxes

575.7

– 5.6

581.3

Taxes on income

– 121.1

5.6

– 126.7

Net earnings

454.6

0.0

454.6

of which attributable to Südzucker AG shareholders

358.4

0.0

358.4

of which attributable to hybrid capital

19.6

0.0

19.6

of which attributable to minority interests

76.6

– 0.0

76.6

Earnings per share (€)

1.76

0.00

1.76

Dilusion effect

0.00

0.00

0.00

Diluted earnings per share (€)

1.76

0.00

1.76

Comprehensive income

391.4

0.0

391.4

of which attributable to Südzucker AG shareholders

310.6

310.6

0.0

of which attributable to hybrid capital

19.6

0.0

19.6

of which attributable to minority interests

61.2

0.0

61.2 TA B L E 1 9

27

28

Notes to the interim financial statements 

Cash flow statement (excerpt) from 1 March to 30 November 2013

€ million

Cash flow Gain (–) / Loss (+) on disposal of items included in non-current assets and of securities

Amount adjusted 1 – 3rd quarter 2013/14

Adjustment

700.3

1.3

st

Amount reported 1st – 3rd quarter 2013/14

699.0

– 1.1

0.0

– 1.1

Increase (–) / Decrease (+) in working capital

226.3

– 11.4

237.7

I. Net cash flow from operating activities

925.5

– 10.1

935.6

– 276.0

5.2

– 281.2

– 1.0

– 0.1

– 0.9

– 277.0

5.1

– 282.1

7.5

– 0.3

7.8

Investments in fixed assets and intangible assets Investments in financial assets Investments Cash received on disposal of non-current assets Cash paid (–) / received (+) for the purchase / sale of securities

– 219.0

0.1

– 219.1

II. Cash flow from investing activities

– 488.5

4.9

– 493.4

III. Cash flow from financing activities

– 274.2

9.0

– 283.2

162.8

3.8

159.0

– 6.6

0.6

– 7.2

Change in cash and cash equivalent (total of I., II. and III.) Change in cash and cash equivalents due to exchange rate changes due to changes in entities included in consolidation Decrease (–) / Increase (+) in cash and cash equivalents

0.5

0.0

0.5

156.7

4.4

152.3

Cash and cash equivalents at the beginning of the period

465.5

– 18.0

483.5

Cash and cash equivalents at the end of the period

622.2

– 13.6

635.8 TA B L E 2 0

Notes to the interim financial statements 

Balance sheet as at 30 November 2013 and 28 February 2014 Amount adjusted € million

30.11.2013

Amount reported

Amount adjusted

Adjustment

30.11.2013

28.02.2014

Amount reported Adjustment

28.02.2014

Assets Intangible assets

1,183.0

– 2.1

1,185.1

1,188.5

– 4.5

1,193.0

Fixed assets

2,654.5

– 76.4

2,730.9

2,656.1

– 73.1

2,729.2

282.0

79.9

202.1

284.8

58.5

226.3

23.8

– 4.5

28.3

23.7

– 0.1

23.8

105.5

0.0

105.5

104.6

0.0

104.6

54.8

0.0

54.8

27.7

0.1

27.6

122.9

– 0.5

123.4

123.0

– 0.4

123.4

Shares in companies consolidated at equity Other investments Securities Other assets Deferred tax assets Non-current assets

4,426.5

– 3.6

4,430.1

4,408.4

– 19.5

4,427.9

Inventories

2,398.4

– 20.3

2,418.7

2,359.7

– 26.8

2,386.5

Trade receivables

1,061.5

– 23.3

1,084.8

916.8

– 14.2

931.0

284.0

6.8

277.2

373.1

5.8

367.3

80.9

– 1.2

82.1

63.7

– 0.1

63.8

Securities

260.7

0.0

260.7

40.8

0.0

40.8

Cash and cash equivalents

622.2

– 13.6

635.8

502.3

– 8.8

511.1

Current assets

4,707.7

– 51.6

4,759.3

4,256.4

– 44.1

4,300.5

Total assets

9,134.2

– 55.2

9,189.4

8,664.8

– 63.6

8,728.4

204.2

0.0

204.2

204.2

0.0

204.2

0.0

0.0

0.0

0.0

0.0

0.0

204.2

0.0

204.2

204.2

0.0

204.2

Capital reserves

1,614.9

0.0

1,614.9

1,614.9

0.0

1,614.9

Revenue reserves and Other comprehensive Income

1,571.8

0.0

1,571.8

1,486.1

0.0

1,486.1

Equity attributable to shareholders of Südzucker AG

3,390.9

0.0

3,390.9

3,305.2

0.0

3,305.2

Hybrid capital

683.9

0.0

683.9

683.9

0.0

683.9

Other minority interests

816.4

0.0

816.4

673.8

0.0

673.8

4,891.2

0.0

4,891.2

4,662.9

0.0

4,662.9

698.9

– 0.1

699.0

657.6

0.0

657.6

Other assets Current tax receivables

Liabilities and shareholders’ equity Issued subscribed capital Nominal value own shares Outstanding subscribed capital

Shareholders’ equity Provisions for pensions and similar obligations Other provisions Financial liabilities Other liabilities Tax liabilities Deferred tax liabilities Non-current liabilities

85.7

– 93.8

179.5

81.5

0.0

81.5

682.7

– 5.7

688.4

681.4

– 5.6

687.0

14.5

0.0

14.5

18.2

– 0.1

18.3

93.8

93.8

0.0

75.0

0.0

75.0

112.3

– 2.0

114.3

104.0

– 3.1

107.1

1,687.9

– 7.8

1,695.7

1,617.7

– 8.8

1,626.5

Other provisions

182.6

0.0

182.6

189.5

0.0

189.5

Financial liabilities

368.9

– 23.7

392.6

501.9

– 28.9

530.8

Trade payables

1,451.8

– 6.6

1,458.4

1,145.3

– 14.7

1,160.0

Other liabilities

458.8

– 17.1

475.9

464.3

– 10.6

474.9

Current tax liabilities

93.0

0.0

93.0

83.2

– 0.6

83.8

Current liabilities

2,555.1

– 47.4

2,602.5

2,384.2

– 54.8

2,439.0

Total liabilities and shareholders’ equity

9,134.2

– 55.2

9,189.4

8,664.8

– 63.6

8,728.4

Net financial debt

63.2

– 15.8

79.0

535.6

– 25.7

561.3

Equity ratio

53.5

53.2

53.8

53.4

1.3

1.6

11.5

12.0

Net financial debt as % of equity (gearing)

TA B L E 2 1

29

30

Notes to the interim financial statements 

Non-current tax liabilities were recognized for the first time in a separate balance sheet item as of 28  February  2014; the ­previous year’s numbers were adjusted accordingly.

(2) Companies included in consolidation As of the end of the third quarter of 2014/15, the scope of consolidation included 155 companies in addition to Südzucker AG (end of fiscal 2013/14: 159 companies). A newly founded company was consolidated for the first time and one company sold, resulting in a loss on disposal in the amount of €  2.0 million, which was reported under income (loss) from operations. In ­addition, four companies were merged. In total, 14 companies (end of fiscal 2013/14: 15 companies) were accounted at equity.

(3) Earnings per share The calculation of earnings per share according to IAS 33 from 1 March to 30 November 2014 was based on a time-weighted average of 204.2 million shares outstanding. Earnings per share came in at € – 0.04 (0.55) for the third quarter and € 0.33 (1.76) for the first nine months. Earnings per share were not diluted.

(4) Inventories € million

Raw materials and supplies

30 November

2014

2013

471.2

528.5

1,183.6

1,334.2

192.5

179.4

Work in progress and finished goods Sugar segment Special products segment CropEnergies segment Fruit segment Total of work in progress and finished goods Merchandise

46.0

44.2

142.5

211.5

1,564.6

1,769.3

69.3

100.6

2,105.1

2,398.4 TA B L E 2 2

Inventories were lower than the year prior at € 2,105.1 (2,398.4) million, mainly due to lower raw material prices. In the sugar segment, quota sugar inventories from the 2013/14 campaign were depreciated by € 17.7 (0.0) million in the second quarter of 2014/15. These were sold in the meantime. In addition, sugar import obligations resulted in charges of € 16.8 million.

Notes to the interim financial statements 

(5) Trade receivables and other assets € million

Remaining term

30 November

Trade receivables Receivables due from the EU Other taxes recoverable Positive market value derivatives Remaining financial assets Remaining non-financial assets Other assets

Remaining term

2014

to 1 year

over 1 year

2013

to 1 year

955.4

955.4

0.0

1,061.5

1,061.5

over 1 year

0.0

9.4

9.4

0.0

3.1

3.1

0.0

122.6

122.6

0.0

110.3

110.3

0.0

7.6

7.6

0.0

7.0

7.0

0.0

101.5

75.7

25.8

138.1

83.3

54.8

76.1

76.1

0.0

80.3

80.3

0.0

317.2

291.4

25.8

338.8

284.0

54.8 TA B L E 2 3

Trade receivables tracked declining revenues and were thus lower than the year prior at € 955.4 (1,061.5) million. Other financial assets of € 101.5 (138.1) million include mainly receivables from non-consolidated companies, shareholdings and employees and other third parties. Non-financial assets of € 76.1 (80.3) million are largely related to advances made and accruals/deferrals.

(6) Trade payables and other liabilities € million 30 November

Remaining term

Remaining term

2014

to 1 year

over 1 year

2013

to 1 year

Liabilities to beet growers

710.4

710.4

0.0

942.3

942.3

0.0

Liabilities to other trade trade payables

602.2

602.2

0.0

509.5

509.5

0.0

1,312.6

1,312.6

0.0

1,451.8

1,451.8

0.0

34.4

34.4

0.0

33.2

33.2

0.0

108.8

107.6

1.2

126.3

125.3

1.0

Trade payables Liabiliities for production levy Liabilities for personnel expenses

over 1 year

Liabilities for other taxes and social security contributions

59.5

59.5

0.0

55.2

55.2

0.0

Negative market value derivatives

14.1

14.1

0.0

11.0

11.0

0.0

139.0

120.5

18.5

220.2

206.7

13.5

17.0

17.0

0.0

26.1

26.1

0.0

1.8

1.8

0.0

1.3

1.3

0.0

374.6

354.9

19.7

473.3

458.8

14.5

Remaining financial liabilities Remaining non-financial liabilities On-account payments received on orders Other liabilities

TA B L E 2 4

31

32

Notes to the interim financial statements 

Trade payables fell to € 1,312.6 (1,451.8) million. Payables to beet farmers fell to € 710.4 (942.3) million, mainly due to lower beet prices in the 2014/15 campaign. This was offset by an increase in liabilities to other trade payables to € 602.2 (509.5) million. Liabilities for personnel expenses mainly represent commitments for bonuses, premiums, vacation and overtime pay. The remaining financial liabilities fell to €  139.0 (220.2) million and include interest payment obligations. The increase in trade ­liabilities and the associated decline in the remaining financial liabilities is primarily due to a change in presentation, since liabilities from outstanding invoices and comparable items are now recognized under trade payables. Other non-financial liabilities totaling € 17.0 (26.1) million mainly include accrued and deferred items.

(7) Financial liabilities, securities and cash and cash equivalents (net financial debt) € million 30 November

Bonds of which convertible Liabilities to banks Liabilities from finance leasing Financial liabilities Securities (non-current assets)

Remaining term

Remaining term

2014

to 1 year

over 1 year

2013

to 1 year

540.4

131.9

408.5

433.5

26.9

406.6

0.0

0.0

0.0

0.0

0.0

0.0

529.7

259.4

270.3

617.8

341.9

275.9

0.2

0.1

0.1

0.3

0.1

0.2

1,070.3

391.4

678.9

1,051.6

368.9

682.7

– 104.4

– 105.5

Securities (current assets)

– 40.7

– 260.7

Cash and cash equivalents

– 658.4

– 622.2

Investments in securities and cash and cash equivalents

– 803.5

– 988.4

266.8

63.2

Net financial debt

over 1 year

TA B L E 2 5

Financial liabilities rose € 18.7 million to € 1,070.3 (1,051.6) million with a smaller investment portfolio (securities, cash and cash equivalents) totaling € 803.5 (988.4) million. As a result, net financial debt rose € 203.6 million to € 266.8 (63.2) million.

(8) Additional disclosures on financial instruments C A R RY IN G A M O U N T S A N D FA I R VA LU E S   The following table shows the changed carrying amounts and applicable fair values of Südzucker’s gross financial liabilities. According to the definition of IFRS 13 (Fair Value Measurement), fair value is the price that would be received for the sale of an asset; that is, the price that would be paid for the transfer of a liability in an orderly transaction between market participants at the measurement date.

Notes to the interim financial statements 

30 November

2014

2013

IAS 39 measurement category

Carrying amount

Bonds

Financial liabilities measured at armotised cost

540.4

581.5

433.5

477.7

Liabilities to banks

Financial liabilities measured at armotised cost

529.7

536.9

617.8

625.4

€ million

Liabilities from finance leasing

n/a

Gross financial liabilities

Fair value

Carrying amount

Fair value

0.2

0.2

0.3

0.3

1,070.3

1,118.6

1,051.6

1,103.4

TA B L E 2 6

The carrying amount of cash and cash equivalents, trade receivables and other financial receivables, trade payables and other financial liabilities is considered a reasonable estimate of the fair value. Fair values cannot be determined for securities measured at amortized cost since market values or exchange prices were not available in the absence of an active market. M E A SU R EM EN T L E V EL S   The following table shows the carrying amount and fair value of financial assets and liabilities by measurement level. Level 1: Measurement based on unadjusted prices determined on active markets. Level 2: Measurement using prices derived from prices determined on active markets. Level 3: Measurement method that considers influencing factors not exclusively based on observable market data; currently not applied by Südzucker Group.

€ million 30 November

Securities – Available for Sale Positive market values – derivatives without hedge accounting Positive market values – hedge accounting derivatives

Fair value hierachy 2014

Evaluation level 1

Evaluation level 2

2013

Evaluation level 1

Evaluation level 2

60.1

20.1

40.0

281.2

241.2

40.0

5.4

2.3

3.1

4.2

1.8

2.4

2.2

1.7

0.5

2.8

0.2

2.6

67.7

24.1

43.6

288.2

243.2

45.0

Negative market values – derivatives without hedge accounting

7.3

1.0

6.3

8.8

0.4

8.4

Negative market value – hedge accounting derivatives

6.8

0.2

6.6

2.2

0.2

2.0

14.1

1.2

12.9

11.0

0.6

10.4

Financial assets

Financial liabilities

TA B L E 2 7

33

34

Notes to the interim financial statements 

For more details on how the fair value of each financial instrument is determined and their allocation to measurement levels, please refer to the notes to the consolidated financial statements in the 2013/14 annual report under item (32) “Additional ­disclosures on financial instruments“ on pages 195 to 198.

(9) Related parties There have been no material changes to the related parties described in the notes to the 2013/14 annual report under item (36) on pages 199 to 201.

Mannheim, 30 December 2014 Südzucker AG The executive board

Dr. Wolfgang Heer

Dr. Lutz Guderjahn

Dr. Thomas Kirchberg

Thomas Kölbl

Johann Marihart



35

36

Forward looking statements/forecasts This report contains forward looking statements. The statements are based on current assumptions and estimates made by the executive board and information currently available to its members. The forward looking statements are not to be viewed as guarantees of the future developments and results presented therein. Future developments and results are in fact dependent on a variety of factors and are subject to various risks and imponderables. They are based on assumptions that could in fact prove to be invalid. The risk management report in the 2013/14 annual report on pages 99 to 110 presents an overview of the risks. It is supplemented by information in this interim report. We ­assume no obligation to update the forward-looking statements made in this report.

SÜDZUCKER AG

Contacts Investor Relations Nikolai Baltruschat [email protected] Phone: +49 621 421 - 240 Fax: +49 621 421 - 449 Financial press Dr. Dominik Risser [email protected] Phone: +49 621 421 - 428 Fax: +49 621 421 - 425 Südzucker on the Internet For more information about Südzucker Group please go to our website: www.suedzucker.de Published by Südzucker AG Maximilianstrasse 10 68165 Mannheim, Germany Phone: +49 621 421 - 0 © 2015