Nordzucker AG Interim ReportFinancial Year 2013/2014 First Quarter / March 1 – May 31, 2013
Hartwig Fuchs, Chief Executive Officer, Nordzucker AG
Group figures and ratios
Nordzucker Q1-Report 2013/2014
Group figures and ratios first quarter 2013/2014
Operating business
Q1 2013/2014
Q1 2012/2013
Change absolute
Revenues
EUR m
580
586
-6
Total revenues
EUR m
376
404
-28
Gross income
EUR m
216
231
-15
EBITDA
EUR m
130
143
-13
EBIT
EUR m
109
121
-12
Net income
EUR m
87
90
-3
Cash flow from operating activities
EUR m
-59
176
-235
Investments in property, plant and equipment and intangible assets
EUR m
19
10
9
31/5/2013
31/5/2012
Change absolute
Balance sheet as of May 31
Balance sheet total
EUR m
2,202
2,142
60
Equity
EUR m
1,394
1,079
315
63
50
Equity ratio
%
Debt capital
EUR m
808
1,063
-255
Financial liabilities
EUR m
148
156
-8
Cash and cash equivalents
EUR m
14
73
-59
Net debt (Cash and cash equivalents less financial liabilities)
EUR m
134
83
51
Q1 2013/2014
Q1 2012/2013
Change absolute
Northern Europe Sugar factories
5
5
–
2
2
–
Structure figures
Sugar refineries
Central Europe Sugar factories
5
5
–
Liquid sugar factories
2
2
–
Bioethanol plants
1
1
–
Eastern Europe Sugar factories
3
3
–
1
1
–
Sugar refineries
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2
Highlights
Nordzucker Q1-Report 2013/2014
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Highlights of the first quarter 2013/2014
Contents Living our values. Creating growth.
4
Letter from the Management Board
5
Sites in Europe
6
Management Report
7
Earnings, financial position and net assets
7
Supplementary report
9
Outlook 9 Income statement
10
Statement of comprehensive income
10
Cash flow statement
11
Balance sheet
12
Statement of changes in shareholders’ equity
14
Financial calendar
15
Results for the quarter In the first three months of the 2013/2014 financial year Nordzucker generated revenues of EUR 579.8 million, only slightly below the high figure of EUR 586.3 million reported in the same period in the previous year. Higher sales of quota sugar offset lower prices and lower sales volumes of non-quota sugar. Net income of EUR 87.2 million for the first three months of the current financial year was only EUR 2.4 million lower than net income in the same period in the previous year. The current sugar market regime expires in 2017 The current sugar market regime (SMR), which regulates the terms of trade for sugar manufacturers in the EU, expires on 30 September 2017 in accordance with a resolution of the Council of Ministers for Agriculture, the European Parliament and the European Commission. The SMR continues to apply in its current form until then. Subsequent to that date, quota rules and minimum beet prices no longer apply. Sugar beet development Due to the prevailing weather conditions, sowing Group-wide took place ten days later than the five-year average. Sowing in Germany and Finland was comparatively late, even very late. The less than optimal weather conditions in April and May – first cold, then a lot of rain and little sun – together with a very strong herbicidal impact contributed to substantial growth delays. In addition to this, there were problems in some German regions due to heavy rain and flooding. As a result the harvest this year is expected to be lower than in the previous year, reaching the five-year average at best.
3
Living our values. Creating growth.
Nordzucker Q1-Report 2013/2014
Living our values. Creating growth.
Axel AumĂźller, Chief Operating Officer
Hartwig Fuchs, Chief Executive Officer
Mats Liljestam, Chief Marketing Officer
Dr Michael Noth, Chief Financial Officer
Dr Niels PĂśrksen, Chief Agricultural Officer
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4
Letter from the Management Board
Nordzucker Q1-Report 2013/2014
Dear Shareholders, We were once again able to report good business performance in the first three months of 2013/2014. Both revenues and earnings are only slightly below the high levels reported in the previous year. The primary reason for this was the continued increase in sales of quota sugar at similar prices to those applying last year. However, we need to remain realistic for the current year. Worldwide, production is significantly higher than consumption, so that sugar stocks are increasing both in the EU and elsewhere. This is resulting in falling prices on the global market. This price decrease is expected to have an increasing impact on the EU sugar market in the course of the current financial year. Contracts closed recently already indicate this trend. In view of this, it is unlikely that our results in the current year will match the record results we reported last year. However, we can be satisfied with the development of our earnings in the first quarter of this year. The financial statements for the first quarter of our financial year are being completed at an eventful time for Nordzucker. With the decision of the EU bodies to allow the sugar market regime in its current form to expire in 2017, the sugar industry in the EU is again facing far-reaching changes. Over recent years we have established a good basis to meet these challenges, so that we are in a position to take advantage of the resulting opportunities for further growth. At the same time we continue to prepare the company for the changes in the business conditions. We are improving our competitiveness when it comes to beet cultivation, sugar production and marketing. Only in this way will we be able to expand our market position further. Our 175-year history, in which you as shareholders have taken a number of decisions of historic importance, shows that we are able to emerge stronger from periods of continuous change. Accordingly we appreciate the support that you showed us in the recent Annual General Meeting for the journey ahead. This also applies to the resolution approving the merger of Nordharzer Zucker Aktiengesellschaft with Nordzucker Holding Aktiengesellschaft. The Executive Board of Nordzucker AG particularly welcomes this decision to make the farmers’ ownership structure more efficient, streamlined and robust. A strong holding company not only facilitates our collaboration and processes, but also gives us an even bigger and more dependable partner for future development.
Yours sincerely, Nordzucker AG The Executive Board
Axel Aumüller
Hartwig Fuchs
Dr Michael Noth
Mats Liljestam
Dr Niels Pörksen
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5
Sites in Europe
Nordzucker Q1-Report 2013/2014
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6
Sites in Europe
29
Group headquarters D 1 Braunschweig
Northern Europe
Regional head office DK 2 Nordic Sugar, Copenhagen Sugar plants and refineries D 3 Clauen 4 Nordstemmen 5 Uelzen 6 Klein Wanzleben 7 Schladen DK 8 Nakskov 9 Nykøbing S 10 Arlöv 11 Örtofta FIN 12 Porkkala 13 Säkylä LT 14 Kėdainiai PL 15 Chełmża 16 Opalenica SK 17 Trenčianska Teplá D 18 Liquid sugar plant Groß Munzel 19 Liquid sugar plant Nordstemmen Sugar plants – non-consolidated minority stake CZ 20 Dobrovice 21 České Meziříčí Other D S DK B Sales LV LT EE IS NO IE
locations 22 fuel 21, bioethanol 23 Köpingebro (Fibrex) 24 NP Sweet, Copenhagen 25 Office Brussels
offices 26 Riga 27 Vilnius 28 Tallinn 29 Reykjavik 30 Oslo 31 Dublin
13 12 30 28
26 11 2 10 24 23 8 9
31
14 27
15
5 18 4
25
3
19
6
1
22
16
7
20
Central Europe
21 17
Eastern Europe
Management report
Nordzucker Q1-Report 2013/2014
Earnings, financial position and net assets Consolidated revenues
The quarterly financial report of the Nordzucker Group as of 31 May
In EUR m
2013 has been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted and published by the Interna-
586
580
tional Accounting Standards Board (IASB). The financial statements comply fully with the IFRS and result in the presentation of a true and fair view of the earnings and financial position and net assets of Nordzucker AG and its consolidated subsidiaries and associated companies. No changes have been made to the accounting methods used for the preparation of the consolidated annual financial statements as of 28 February 2013.
Q1 2012/2013
Q1 2013/2014
For more information please see the Notes section of the 2012/2013 Annual Report. The production of sugar is a seasonal business. The production stage, from the beginning of September until January, is entirely in the second half of the financial year. This should be taken into consideration when interpreting the first quarter earnings.
Consolidated EBIT In EUR m
121
Revenues and earnings 109
In the first quarter of the 2013/2014 financial year, the Nordzucker Group achieved revenues of EUR 579.8 million, which was thus slightly lower than the previous year’s level (EUR 586.3 million). Increased quota sugar revenues offset lower revenues from nonquota sugar. Sales of quota sugar increased compared to the same period in the previous year, while prices remained at a similar level to those in the previous year. These trends were offset by changes in the non-quota sugar business. Here we recorded lower sales
Q1 2012/2013
Q1 2013/2014
volumes compared to the previous year as well as lower prices. The increased level of reduction in stocks – EUR 21.3 million more than in the previous year – was primarily a result of the higher beet costs in the last campaign and which determine the stock valuation. On the other hand, the cost of materials and services fell from EUR 172.5 million to EUR 159.6 million. This was primarily a result of lower sugar import volumes compared to the previous year.
At EUR 46.0 million, personnel expenses remained at a similar level to the previous year (EUR 45.7 million). Depreciation, amortisation and impairment were also constant at EUR 20.9 million. Other operating expenses fell from EUR 49.1 million to EUR 46.8 million.
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7
Management report
Nordzucker Q1-Report 2013/2014
Consolidated net income
The operating result (EBIT) of the Nordzucker Group totalled
In EUR m
EUR 108.8 million in the first quarter of the 2013/2014 financial
90
87
year, compared to EUR 121.5 million in the same period of the previous year. The net financial result improved, amounting to EUR 5.0 million in the first quarter of the reporting year compared with EUR -2.0 million in the previous year. This included in particular the higher dividend received from our investment in the Czech company Tereos TTD a.s. in the amount of EUR 8.3 million (previous year: EUR 4.7 million).
Q1 2012/2013
Q1 2013/2014
Overall the net income for the period is slightly lower for the Group than in the previous year, totalling EUR 87.2 million before minority interests (previous year: EUR 89.6 million).
Consolidated balance sheet structure as of 31 May 2013 In EUR m 2,202
Cash flow and balance sheet Cash flow from operating activities of EUR -59.3 million in the first
2,202
three months of the financial year was significantly less than in the previous year (EUR 176.2 million). This trend was largely a result of
48%
the reduction of trade payables as of the balance sheet date. The 63%
reduction was due to the fact that beet payments in Germany were made earlier in 2013.
38%
16%
14%
21%
Assets
Equity &
Cash flow from investing activities fell from EUR -10.2 million to EUR -16.5 million. This was due to higher levels of investment in property, plant and equipment compared to the previous year (EUR 18.5 million; previous year: EUR 9.8 million).
liabilities
The cash flow from financing activities amounted to EUR 77.5
Non-current assets
Equity
Inventories
Non-current liabilities
the quarter.
Other current assets
Current liabilities
The Nordzucker Group’s consolidated balance sheet total increased
million, compared to EUR -100.3 million in the previous year. Cash and cash equivalents amounted to EUR 14.2 million at the end of
slightly compared to the previous year, amounting to EUR 2,202.2 million at the end of the quarter (previous year: EUR 2,141.6 million). The reason for the increase was the higher level of stocks compared
Consolidated net debt
to the end of the first quarter of the previous year. In contrast, a
In EUR m
lower level of trade payables was recorded, which in turn was more 134
than offset by the changes in equity. Thanks to this positive development, equity rose from EUR 1,079.3
83
million at the end of the first quarter of the previous year to EUR 1,394.1 million. Despite the rise in the balance sheet total, the equity ratio went up from 50.4 per cent to 63.3 per cent. Net debt (financial liabilities less cash and cash equivalents) was in-
Q1 2012/2013
Q1 2013/2014
creased compared to the previous year, totalling EUR 134.2 million after EUR 83.2 million in the previous year. This reflects the earlier timing of beet payments compared to the previous year.
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8
Nordzucker Q1-Report 2013/2014
Management report
Supplementary report Expiry of the sugar market regime on 30 September 2017 In their negotiations on the future of the Common Agricultural Policy (CAP) on 26 June 2013, the European Commission, the Council of Ministers for Agriculture and the European Parliament agreed that the sugar market regime is to expire at the end of the sugar marketing year 2016/2017 (30 September 2017). The SMR continues to apply in its current form until then. Since the last SMR reform, the quota regime has limited the internal EU supply of sugar for the food industry to approximately 85 per cent of actual consumption. After 2017 all the sugar produced in the EU will be allowed to be used for food purposes in the common European market. An increasing supply of isoglucose and increased competition present new challenges for beet cultivation and sugar production in the EU. In addition, more consolidation in the European sugar market can be expected. Merger of Nordharzer Zucker Aktiengesellschaft and Nordzucker Holding Aktiengesellschaft resolved At the Annual General Meeting on 9 July 2013, the shareholders of Nordharzer Zucker Aktiengesell足足 schaft voted to approve the merger of Nordharzer Zucker Aktiengesellschaft with Nordzucker Holding Aktiengesellschaft. The shareholders of Nordzucker Holding Aktiengesellschaft also voted to approve the merger at their Annual General Meeting the following day. Nordharzer Zucker Aktiengesellschaft holds approximately 7.8 per cent of the shares of Nordzucker AG, and Nordzucker Holding Aktiengesellschaft holds a further 76.2 per cent. The changes will become effective upon entry into the commercial register, at which time the shareholdings in Nordzucker Holding Aktiengesellschaft will be combined to create a significant shareholding in Nordzucker AG of approximately 84.1 per cent.
Outlook In the current 2013/2014 financial year, we expect world market prices to remain at their present, substantially lower level, since stocks are still rising and global sugar production exceeds consumption overall. This price decrease is expected to have an increasing impact on the EU sugar market in the course of the current financial year. Contracts closed recently already indicate this trend. 足Accordingly, lower revenues and earnings can be expected for the financial year 2013/2014.
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9
Nordzucker Q1-Report 2013/2014
Consolidated quarterly financial statements
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Consolidated quarterly financial statements Consolidated income statement Nordzucker AG, Braunschweig Germany, for the period from March 1 to May 31, 2013
Revenues Changes in finished goods and work in progress Own work capitalised Total revenues Other operating income Cost of materials and services
1/3/2013 - 31/5/2013 TEUR
1/3/2012 - 31/5/2012 TEUR
Change TEUR
579,768
586,291
-6,523
-204,039
-182,675
-21,364
213
125
88
375,942
403,741
-27,799
6,222
6,170
52
159,648
172,485
-12,837
Personnel expenses
45,974
45,729
245
Depreciation of property, plant and equipment, amortisation and impairment of intangible assets
20,949
21,116
-167
Appreciation of property, plant and equipment, amortisation and impairment of intangible assets Other operating expenses Operating result (EBIT) Net interest a) Interest income and similar income b) Interest expenses and similar expenses Net income/loss from investments a) Net income/loss from associated companies and joint ventures accounted for under the equity method b) Other net income from investments Other net financial income/loss a) Other financial income
76
0
76
46,829
49,111
-2,282
108,840
121,470
-12,630
823
1,870
-1,047
2,806
4,164
-1,358
-1,983
-2,294
311
-97
-70
-27
8,318
4,712
3,606
8,221
4,642
3,579
18
3,056
-3,038
1,239
7,372
-6,133
-1,221
-4,316
3,095
5,017
-1,968
6,985
113,857
119,502
-5,645
26,646
29,950
-3,304
87,211
89,552
-2,341
2,803
1,960
843
84,408
87,592
-3,184
87,211
89,552
-2,341
Currency conversion for foreign operations
-6,792
-9,015
2,223
Net result of cash flow hedges
-2,686
-353
-2,333
b) Other financial expenses Net financial income/loss Earnings before taxes Income taxes Consolidated net income Consolidated net income attributable to minority interests Consolidated net income attributable to shareholders of the parent company
Statement of comprehensive income Consolidated net income
Income taxes Other net income/loss after taxes Total net income/loss after taxes Consolidated total net income attributable to minority interests Consolidated total net income attributable to shareholders of the parent company
1,054
106
948
-8,424
-9,262
838
78,787
80,290
-1,503
2,773
1,960
813
76,014
78,330
-2,316
10
Nordzucker Q1-Report 2013/2014
Consolidated quarterly financial statements
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Consolidated cash flow statement Nordzucker AG, Braunschweig, Germany, for the period from March 1 to May 31, 2013
Earnings before taxes Interest and similar income Interest and similar expenses Net depreciation, amortisation and impairment on non-current assets Net depreciation on financial assets Changes in non-current provisions Other non-cash expenses Net loss/income from associated companies
1/3/2013 - 31/5/2013
1/3/2012 - 31/5/2012
TEUR
TEUR
TEUR
113,857
119,502
-5,645
Change
-823
-1,870
1,047
2,806
4,164
-1,358
20,873
21,116
-243
4
0
4
-13,281
2,517
-15,798
-4
-102
98
97
70
27
204,039
182,675
21,364
Changes in current provisions
21,229
13,323
7,906
Proceeds on disposal of non-current assets
-2,000
830
-2,830
-10,874
-40,372
29,498
-346,745
-115,006
-231,739
160
1,870
-1,710
Changes in finished goods and work in progress
Changes in inventories, trade receivables and other assets not attributable to investing or financing activities Changes in trade payables and other liabilities not attributable to investing or financing activities Interest received in the financial year Interest paid in the financial year Taxes paid in the financial year Cash flow from operating activities Proceeds on disposal of property, plant and equipment Payments for investments in property, plant and equipment Proceeds on disposal of intangible assets Payments for investments in intangible assets Proceeds on disposal of financial assets Payments for investments in financial assets
-880
-3,793
2,913
-47,763
-8,733
-39,030
-59,305
176,191
-235,496
2,412
232
2,180
-18,491
-9,849
-8,642
0
0
0
-437
-594
157
-5
9
-14
-11
0
-11
Proceeds from the sale of consolidated companies and other business units
0
0
0
Payments for the acquisition of consolidated companies and other business units
0
0
0
-16,532
-10,202
-6,330
Cash flow for investing activities Payments to shareholders (dividends)
0
6
-6
Proceeds from borrowing
144,217
0
144,217
Loan repayments
-66,733
-100,280
33,547
Cash flow from financing activities
77,484
-100,274
177,758
Changes in cash and cash equivalents
1,647
65,715
-64,068
11,297
7,406
3,891
Currency-related changes in cash and cash equivalents
1,241
-582
1,823
Cash and cash equivalents at the end of the period
14,185
72,539
-58,354
Cash and cash equivalents at the beginning of the period
11
Nordzucker Q1-Report 2013/2014
Consolidated quarterly financial statements
|
Consolidated balance sheet as of May 31, 2013, Nordzucker AG, Braunschweig, Germany Assets
29/2/2013 TEUR
31/5/2013 TEUR
31/5/2012 TEUR
Intangible assets
165,337
162,171
170,914
Property, plant and equipment
853,050
850,154
841,568
5,676
5,077
6,117
Non-current assets Fixed assets
Investment property Financial investments Shares in associated companies and joint ventures accounted for under the equity method
Other financial investments
3,068
2,674
3,536
23,536
23,843
20,407
26,604
26,517
23,943
1,050,667
1,043,919
1,042,542
Financial assets
0
0
0
Other assets
9
1
48
9
1
48
Receivables and other assets
Deferred taxes
7,827
23,266
2,692
1,058,503
1,067,186
1,045,282
Raw materials, consumables and supplies
46,885
51,011
48,187
Work in progress
50,491
46,391
47,123
Current assets Inventories
Finished goods and merchandise
930,387
738,631
609,243
1,027,763
836,033
704,553
250,088
Receivables and other assets Trade receivables from external companies
212,425
218,915
Receivables from related parties
4,263
4,411
122
Current income tax receivables
1,470
2,203
3,135
Financial assets
12,597
11,725
16,444
Other current assets
62,376
44,954
47,157
293,131
282,208
316,946
Cash and cash equivalents Assets held for sale
11,297
14,185
72,539
1,332,191
1,132,426
1,094,038
2,497
2,547
2,286
1,334,688
1,134,973
1,096,324
2,393,191
2,202,159
2,141,606
12
Nordzucker Q1-Report 2013/2014
Consolidated quarterly financial statements
|
Consolidated balance sheet as of May 31, 2013, Nordzucker AG, Braunschweig, Germany Shareholders’ equity and liabilities
29/2/2013 TEUR
31/5/2013 TEUR
31/5/2012 TEUR
Subscribed capital
123,651
123,651
123,651
Capital reserves
127,035
127,035
127,035
Retained earnings
954,501
1,038,092
741,041
58,901
50,507
42,420
1,264,088
1,339,285
1,034,147
51,880
54,790
45,202
1,315,968
1,394,075
1,079,349
Shareholders’ equity
Other comprehensive income Equity attributable to shareholders of the parent company Minority interests
Non-current provisions and liabilities 151,944
151,665
134,410
Other provisions
Provisions for pensions and similar obligations
32,541
18,933
25,525
Financial liabilities
4,575
4,754
86,343
Liabilities towards related parties
5,500
5,500
5,511
294
2,689
1,071
Other financial liabilities Other liabilities
12,555
11,999
15,868
Deferred taxes
136,238
150,382
146,390
343,647
345,922
415,118
Current provisions and liabilities Provisions for pensions and similar obligations
5,283
5,283
5,281
Other provisions
73,683
94,304
80,437
Financial liabilities
66,108
143,592
69,429
Current income tax liabilities Trade payables Liabilities towards related parties Other financial liabilities Other liabilities
62,882
57,886
70,080
465,425
95,273
340,901
16,245
17,174
11,394
6,383
3,996
13,837
37,567
44,654
55,780
733,576
462,162
647,139
2,393,191
2,202,159
2,141,606
13
Consolidated quarterly financial statements
Nordzucker Q1-Report 2013/2014
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Consolidated statement of changes in shareholders’ equity for the consolidated quarterly financial statements as of May 31, 2013, Nordzucker AG, Braunschweig Equity attributable to shareholders of the parent company
Minority interests
Total equity
Subscribed capital
Capital reserves
Retained earnings
Other comprehensive income
TEUR
TEUR
TEUR
TEUR
TEUR
TEUR
TEUR
123,651
127,035
653,604
51,682
955,972
43,259
999,231
Consolidated net income
0
0
87,592
0
87,592
1,960
89,552
Other net income/loss
0
0
0
-9,262
-9,262
0
-9,262
Total net income / loss after taxes
0
0
87,592
-9,262
78,330
1,960
80,290
Dividend payment
0
0
0
0
0
6
6
Others
0
0
-155
0
-155
-23
-178
As of 31/5/2012
123,651
127,035
741,041
42,420
1,034,147
45,202
1,079,349
As of 1/3/2013
123,651
127,035
954,501
58,901
1,264,088
51,880
1,315,968
Consolidated net income
0
0
84,408
0
84,408
2,803
87,211
Other net income/loss
0
0
0
-8,394
-8,394
-30
-8,424
Total net income / loss after taxes
0
0
84,408
-8,394
76,014
2,773
78,787
Dividend payment
0
0
0
0
0
0
0
Others
0
0
-817
0
-817
137
-680
123,651
127,035
1,038,092
50,507
1,339,285
54,790
1,394,075
As of 1/3/2012
As of 31/5/2013
Shareholders‘ structure Nordzucker AG* EUR 123.7m share capital
Nordzucker Holding Aktiengesellschaft 84.1 %, EUR 104.0 m
Union-Zucker Südhannover Gesellschaft mit beschränkter Haftung 10.8 %, EUR 13.4m
Direct shareholders‘ 5.1 %, EUR 6.3m
*Only effective following entry into the commercial register.
14
Nordzucker Q1-Report 2013/2014
Important dates
Financial calendar Publications July 15, 2013
Release Q1/3M Interim Report 2013/2014
October 15, 2013
Release Q2/6M Interim Report 2013/2014
January 15, 2014
Release Q3/9M Interim Report 2013/2014
Online publications The following publications can be downloaded from www.nordzucker.de • Annual Report • Interim Reports • Declaration of compliance • Sustainability report
Financial calendar
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Nordzucker AG K端chenstrasse 9 38100 Braunschweig Germany Telephone: +49 (0)531 2411 0 Fax: +49 (0)531 2411 100 info@nordzucker.de www.nordzucker.de Corporate Communications Klaus Schumacher Telephone: +49 (0)531 2411 366 pr@nordzucker.de Investor Relations Bianca Deppe-Leickel Telephone: +49 (0)531 2411 335 ir@nordzucker.de Shares register Claus-Friso Gellermann Telephone: +49 (0)531 2411 118 aktien@nordzucker.de
This Interim Report for the Nordzucker Group is also available in German. The report can be downloaded in German or English from the internet under www.nordzucker.de from the download center as a PDF.