Letter to the shareholders Current information for the shareholders of Nordzucker AG, Nordzucker Holding AG and the partners of Union-Zucker Südhannover GmbH Issue 04 | 22 July 2014
Dear shareholders, Our Annual General Meeting was held on 10 July at the Stadthalle Braunschweig, where this year’s motto was “Sugar has a future”. We took the opportunity there to inform you of our earnings for the 2013/14 financial year. Our main intention, however, was to look ahead to the situation awaiting us when the quota system expires in 2017. Every area of our company is preparing itself for a time which will require us to be much more focused on our market and customers. Thanks to our success in recent years, the size of our company and our solid financial situation, we see ourselves as well prepared. We now need to increase our focus on the market in every area of the company. That’s why we increased our capital expenditure and are working on increasing the profitability of sugar beet, setting up market-focused contract systems with our beet farmers after 2017 and improving efficiency in every area of our company. At the Annual General Meeting we also explained our clear growth strategy: the sugar market is growing globally, but not in Europe. Nordzucker needs to continue growing in order to remain successful going forward. That’s why we are looking further afield to growth regions outside Europe, in order to take advantage of market opportunities and meet the increasing demand on site. We will remain committed to sugar production in our European core regions. Annual General Meeting decides to distribute a dividend of EUR 1.30 The Annual General Meeting approved the proposed dividend of EUR 1.30 (previous year: EUR 1.80) per share with an overwhelming majority. This is a good dividend which can be viewed as beneficial in the long term, but also reflects the extremely difficult conditions and the downturn over the last two quarters. Appointments to the Supervisory Board The end of the Annual General Meeting was also the scheduled end of the terms of office of the Supervisory Board members Michael Gerlif, Dr Harald Isermeyer, Jochen Johannes Juister and Andreas Scheffrahn. Michael Gerlif, Dr Harald Isermeyer and Jochen Johannes Juister were elected for another term of office on the Supervisory Board. Andreas Scheffrahn left the Supervisory Board at his own request. We would like to thank Andreas Scheffrahn for his many years of work on the boards of Nordzucker AG and Nordzucker Holding AG.
Nordzucker AG l P.O. Box 49 21 l 38039 Braunschweig l Phone +49 531 2411-0 l ir@nordzucker.de l www.nordzucker.de
Grit Worsch (47) was newly elected to the Supervisory Board. She is a member of the Executive Board of Volksbank Osterburg-Lüchow-Dannenberg, where she is responsible for Goods and Human Resources. In 22 years at the Volksbank, she held numerous management positions with different areas of responsibility. Hans-Christian Koehler confirmed as Chairman of the Supervisory Board After the Annual General Meeting the newly elected Supervisory Board of Nordzucker AG came together for its constitutive meeting. At the meeting Hans-Christian Koehler – a farmer from Barum-Eppensen – was re-elected as Chairman of the Supervisory Board. His deputies, Helmut Meyer for the shareholder representatives and Dieter Woischke for the employee representatives, were also confirmed. Annual General Meeting of Nordzucker Holding AG The Annual General Meeting of Nordzucker Holding AG was held the day before. It was the first time that the shareholders of the former Nordharzer Zucker AG came together under the umbrella of the holding company. Hans Jochen Bosse (Ohrum) was elected to the Supervisory Board for the first time. In the subsequent meeting of the Supervisory Board, he was elected as Chairman of the Supervisory Board after Andreas Scheffrahn left the Supervisory Board of Nordzucker Holding AG. First quarter of 2014/15 ends with sharp fall in earnings As expected, revenues and earnings fell in the first quarter of the 2014/15 financial year due to the on going price pressure. Revenues totalled EUR 501 million, thereby significantly down on the EUR 580 million achieved in the same period last year. Higher sales volumes were unable to make up for the lower prices for quota and non-quota sugar. Net income for the period fell sharply year on year, amounting to EUR 24 million compared with EUR 87 million. Outlook for the financial year The outlook for the financial year remains subdued. We expect pressure on prices to persist. Stocks of quota and non-quota sugar in the EU are still high. Global market prices remain low on a long-term scale. We stand by our estimate that revenues and earnings will decline in the financial year 2014/2015. Fire at the plant in Uelzen On 26 June 2014, a fire broke out at the Uelzen plant on the conveyor bridge to silo 9, which was only built last year. The blaze spread rapidly to other parts of the bridge and to the roof of the silo, causing it to collapse. Thankfully, no one was hurt. The fire was brought under control in the course of the day, but the clean-up work is still ongoing. With the exception of the fire reducing our storage capacities, the upcoming campaign will not be affected. Early row closure points towards high yields In a five-year comparison, sowing took place much earlier than usual. Rows were also closed at least one week earlier than usual in all farming regions. In most German fields, rows were already closed at the beginning of June. Rows were also closed in Poland and Slovakia in June, giving the beet a head start of around 14 days in terms of growth. Beets also developed well in Northern Europe. Rows in these countries closed at least one week ahead of schedule. We therefore expect a good harvest with above-average sugar yields across the Group. Nordzucker AG The Executive Board
Nordzucker AG l P.O. Box 49 21 l 38039 Braunschweig l Phone +49 531 2411-0 l ir@nordzucker.de l www.nordzucker.de