FINANCIAL YEAR 2015/2016 3 M O N T H S / 1 M A R C H TO 3 1 M AY 2 0 1 5
2
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Key figures three months 2015/2016
O p e r at i n g b u s i n e s s 1/3/2015 – 31/5/2015
1/3/2014 – 31/5/2014
Change
Revenues
EUR m
374
501
– 127
EBIT
EUR m
– 7
39
– 46
Net income
EUR m
– 7
24
– 31
Cash flow from operating activities
EUR m
99
– 17
116
Investment in property, plant and equipment and intangible assets
EUR m
8
20
– 12
31/5/2015
31/5/2014
Change
B a l a n c e s h e e t r at i o
Total assets
EUR m
2,026
2,048
– 22
Equity
EUR m
1,276
1,395
– 119
Equity ratio
%
63
68
– 5
Debt capital
EUR m
750
653
97
Financial liabilities
EUR m
8
8
0
Cash and cash equivalents
EUR m
131
25
106
Net debt (Cash and cash equivalents less financial liabilities)
EUR m
– 123
– 17
– 106
1/3/2015 – 31/5/2015
1/3/2014 – 31/5/2014
Change
Sugar plants
5
5
–
Sugar refineries
2
2
–
Sugar plants
5
5
–
Liquid sugar plants
2
2
–
Bioethanol plants
1
1
–
Sugar plants
3
3
–
Sugar refineries
1
1
–
Structure figures
Northern Europe
Central Europe
Eastern Europe
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Content
Highlights of the first three months 2015/2016
5
Q ua r t e r ly r e s u lt / Co u r s e o f b u s i n e s s
7
In the first three months of the 2015/2016 financial year, Nordzucker generated revenues of EUR 373.8 million. This was again well below the revenues of EUR 500.8 million for the same period in the previous year. The group reported a loss for the period of EUR 6.9 million, largely due to lower prices for quota sugar.
Earnings and financial position and net assets
Average har vest expected
Letter from the executive Board
10 C o n s o l i dat e d i n c o m e s tat e m e n t
10 C o n s o l i dat e d s tat e m e n t o f comprehensive income
11 C o n s o l i dat e d c a s h f lo w s tat e m e n t
12 C o n s o l i dat e d b a l a n c e s h e e t
14 C o n s o l i dat e d s tat e m e n t of changes in shareholders’ equity
15 Financial c alendar
Sowing largely began early in the Group this year, but the subsequent weather conditions meant that in many regions it went on for a long time. As a result, the initial growing conditions were not as ideal as in the previous year. Around 4,000 hectares in Germany had to be resown due to siltation. Thereafter, the temperatures in almost all regions were too low, delaying the development of the young beet. Overall, the harvest is expected to be below average, albeit with large regional variation.
3
4
N O R D Z U C K E R I N T E R I M R E P O R T 3 M O N T H S 2015/2016
Dr Lars Gorissen Dr Michael Noth
Axel Aumüller Hartwig Fuchs (Chief Executive Officer)
Mats Liljestam
the e xeCu ti v e Boa rd of nordzuCKer ag
N O R D Z U C K E R I N T E R I M R E P O R T 3 M O N T H S 2015/2016
dear sharehoLders, the steep fall in eu sugar prices in the previous 15 months led to a fall in revenue for the first quarter of our financial year of around 25 per cent and was responsible for a loss of eur 6.9 million for the period. the reduction in cultivation areas, the scaled-back harvest predictions in europe and the stabilised pricing level with initial downward tendencies in some countries in the eu, will only have a limited impact on the current financial year. we therefore confirm our forecast that a positive result at the end of the financial year is unlikely. in the medium term, however, we do expect prices to recover, both in europe and on the global markets. in addition, we expect global sugar production to initially fall below the volume demanded, reducing stocks and thus having a corresponding effect on prices. nevertheless, the rise in prices will be limited by the increasing intensity of the competition on the eu sugar market. the market situation remains challenging, a situation we expect to continue in the 2016/17 financial year. we do, however, intend to address these challenges with an extensive package of measures: included among these is the forCe efficiency programme, with which we want to save at least eur 50 million a year, and the package includes our targets as part of the 20:20:20 vision as well as the Change project, with which we want to achieve a change in thinking regarding market and customer orientation. we are continuing to invest sustainably in our plants and a large proportion of these investments can be allotted to profitable expenses, which will secure us an improved cost basis for production in the future. we are in a financially strong position and possess the drive and ambition to utilize this phase for the sustainable realignment of our company. yours sincerely, nordzucker ag the executive Board
hartwig fuchs
mats Liljestam
axel aum端ller
dr. Lars gorissen
dr. michael noth
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6
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Sites in Europe
Group H e a d q u a rter s D
1
Braunschweig
R egi o n a l H e a d O f f ice DK
2
Copenhagen
S u g a r P l a nt s a n d re f inerie s D
DK
S
FIN
3
Clauen
4
Nordstemmen
5
Uelzen
6
Klein Wanzleben
7
Schladen
8
Nakskov
9
Nykøbing
10
Arlöv
11
Örtofta
12
Porkkala
13
Säkylä
LT
14
Kèdainiai
PL
15
Chełmża
16
Opalenica
SK
17
Trenč ianska Teplá
D
18
Liquid sugar plant Groß Munzel
19
Liquid sugar plant Nordstemmen
s u g a r p l a nts – n o n - c o ns o lid a ted M in o rit y s t a k e CZ
20
Dobrovice
21
Ceské Meziříčí
29
13 12
30
28
26
2 24
31
11
14
10 23
8
9
1
6 22
27
5 18 25
4 19
3
15
16
7
20
21 17
o ther l o c a ti o n s D
22
Bioethanol plant, Klein Wanzleben
S
23
Köpingebro (Fibrex)
DK
24
NP Sweet, Copenhagen
B
25
Office Brussels
s a l e s o f f ice s LV
26
Riga
LT
27
Vilnius
EE
28
Tallinn
IS
29
Reykjavik
NO
30
Oslo
IE
31
Dublin
GR
32
Athens
32
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Earnings and financial position and net assets
General remarks
Revenues and earnings
The quarterly financial reports as of 31 May 2015 for Nordzucker AG (Küchenstrasse 9, 38100 Braunschweig, Germany) have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted and published by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRS IC) as applicable in the European Union (EU-IFRS). The financial statements comply fully with EU-IFRS and give a true and fair view of the net assets, financial and earnings position of Nordzucker AG and its consolidated subsidiaries, joint ventures and associated companies (hereinafter known as “Nordzucker Group” or “Group”).
In the first three months of the financial year 2015/2016 the Nordzucker Group generated revenues of EUR 373.8 million, approximately 25 per cent less than in the previous year. The fall in revenues was mainly due to lower prices for quota sugar, but also partly to declining sales volumes of sugar and non-quota sugar. Revenues from animal feed and bioethanol, however, were above the prior-year level.
No changes have been made to the accounting policies used for the preparation of the annual IFRS consolidated financial statements as of 28 February 2015. These can be found in the Annual Report 2014/2015 (www.nordzucker.de). Seasonal sugar production
The production of sugar is a seasonal business. The production phase, 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.
Production costs came to EUR 322.7 million, compared with the figure of EUR 407.0 million in the same period of the previous year. However, this fall in production costs was only able to partly compensate for the drop in revenues. Sales costs decreased slightly due to lower sales volumes to approx. EUR 37.0 million (prior-year period: EUR 37.9 million). Administrative expenses came to EUR 18.2 million, also down on the figure of EUR 20.3 million in the same period of the previous year. Other income decreased to EUR 6.2 million (prior-year period: EUR 8.4 million). Other expenses came to EUR 8.9 million (prior-year period: EUR 5.0 million). At EUR 42.6 million, personnel expenses were down slightly on last year (EUR 44.8 million). Depreciation, amortization and impairment were also down on last year (EUR 18.4 million compared with EUR 20.0 million).
Con s olidated Rev en ues
Con s olidated E B IT
in EUR m
in EUR m
600 500
100
501
80 374
400
60
300
40
200
20
100
0
0
39 – 7
– 20 3 months 2014/2015
3 months 2015/16
3 months 2014/2015
3 months 2015/16
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8
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
The operating result (EBIT) of the Nordzucker Group totalled EUR – 6.7 million in the first three months of the 2015/2016 financial year, compared with EUR 39.0 million in the same period of the previous year. Financial income of EUR 0.1 million was below the previous year’s figure of EUR 0.8 million. The Group was able to cut its financial expenses to EUR 1.9 million from EUR 4.3 million in the previous year. In the first three months of the financial year 2015/2016 the Nordzucker Group reported a loss before minority interests of EUR 6.9 million, in contrast with the same period a year ago, which saw net income for the period of EUR 23.5 million. The steep fall in the price of quota and non-quota sugar was the main reason for the loss.
Con s olidated N et debt Consolidated net income
in EUR m
for the period
in EUR m
20 0
100
– 20
80
– 40
60
– 60
40
– 80
24
20
– 7
0 – 20
– 100 – 120 – 140
3 months 2014/2015
– 17
3 months 2015/2016
– 123 3 months 3 months 2014/2015 2015/2016
C ash flow and bal ance sheet
Cash flow from operating activities of EUR 99.2 million in the first three months of the financial year 2015/2016 was significantly higher than the previous year’s figure (EUR – 16.8 million). In contrast to the first quarter of 2014/2015 a large volume of liabilities to suppliers were not yet due for payment in the reporting period.
Gro up bal an c e s h e e t s t ru c t u r e a s o f 3 1 M ay 2 0 1 5
in EUR m
2,500 2,250 2,000
2,026
2,026
1,750 1,500
45 %
63 %
39 %
17 %
1,250 1,000 750 500 250 0
16 %
Assets
20 %
Equity & liabilities
Non-current assets
Equity
Inventories
Non-current liabilities
Other current assets
Current liabilities
Net cash flow from investing activities came to EUR – 13.4 million compared with EUR – 20.5 million for the same period last year. Lower cash outflows were largely due to lower capital expenditure on items of property, plant and equipment (EUR – 8.1 million compared with EUR – 20.1 million), although this was offset by higher payments for investments in financial assets (EUR – 5.1 million compared with EUR – 0.2 million). There was virtually no cash flow from financing activities in the first three months of the financial year 2015/2016; in the same period of the previous year cash flow from financing activities came to EUR 4.0 million as a result of borrowing. Cash and cash equivalents rose by EUR 105.7 million, from EUR 25.1 million in the previous year to EUR 130.8 million at the end of the first three months of the financial year 2015/2016. Total consolidated assets came to EUR 2,025.8 million as of the reporting date of 31 May 2015 (31 May 2014: EUR 2,048.1 million).
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Total assets were reduced by impairment losses recognized on intangible assets from the acquisition of the Nordic Sugar group. Lower receivables, mainly trade receivables, also contributed to the decline. Cash and cash equivalents were much higher than in the same period a year ago, however. The fall in total assets was matched by a decline of approx. EUR 119.1 million in shareholders’ equity, which led to a lower equity ratio of 63.0 per cent (prior-year period: 68.1 per cent). Non-current provisions and liabilities went up by around EUR 34.3 million at the end of the reporting period 31 May 2014 and current provisions and liabilities were around EUR 62.4 million higher than the previous year. The latter was mainly due to much higher trade liabilities. Cash and cash equivalents exceeded financial liabilities by EUR 123.1 million at the end of the reporting period as of 31 May 2015. At the end of the same period in the previous year (31 May 2014), the excess amount was EUR 16.8 million.
S u p p l e m e n ta r y r e p o r t There have been no significant changes to the situation of the company for the current year since the reporting date of the interim financial statements.
Outlook A number of factors are depressing the European sugar markets in the current financial year 2015/2016. Global market prices are very low. This means sugar can be imported into the EU relatively cheaply. Sugar stocks in the EU are high at the start of the financial year 2015/2016 and the reduction of land under cultivation by almost all European sugar producers will only have an effect over the course of the current financial year. All producers are fighting hard for market share in order to secure the best possible position for themselves when the sugar market regime expires in 2017. Nordzucker is still working to optimize the company. A new efficiency drive was launched at the beginning of the calendar year 2015, which should make a substantial contribution to greater efficiency in the years ahead. The aim is to make savings of at least EUR 50 million. As the full effect of the much lower prices will be felt in the current financial year we stand by our forecast that Nordzucker is highly unlikely to close the financial year 2015/2016 with positive earnings. We nevertheless expect the global and European sugar markets to recover again in the medium term. A further rise in demand for sugar, combined with a flat supply, will ultimately result in higher sugar prices again. Prices for new contracts indeed seem to have reached a floor and customers are becoming more interested in longer-term contracts. Nordzucker is adhering to its strategy of examining growth opportunities in the sugar market inside and outside Europe and of maintaining a substantial level of capital expenditure in its European core business. These projects will not have any significant effect on revenues and income in the current financial year 2015/2016, but may result in additional capital expenditure. Nordzucker is financially very well positioned and so has the ability to make these kinds of investments in the future.
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10
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
C o n s o l i dat e d f i n a n c i a l s tat e m e n t s N o r d z u ck e r AG
C o n s o l i dat e d i n c o m e s tat e m e n t Nordzucker AG, Braunschweig, Germany, for the period from 1 March 2015 to 31 May 2015
1/3/2015 – 31/5/2015
1/3/2014 – 31/5/2014
Change
373,801
500,786
– 126,985
– 322,674
– 407,034
84,360
51,127
93,752
– 42,625
Sales costs
– 36,957
– 37,901
944
Administrative expenses
– 18,202
– 20,293
2,091
6,217
8,443
– 2,226
in EUR thousands Revenues Production costs Gross profit
Other income Other expenses Operating result (EBIT) Financial income Financial expenses Result from companies accounted for using the equity method Earnings before taxes Income taxes Consolidated net income of which attributable to non-controlling interests of which attributable to shareholders of the parent company
– 8,894
– 5,002
– 3,892
– 6,709
38,999
– 45,708
149
763
– 614
– 1,897
– 4,316
2,419
– 102
0
– 102
– 8,559
35,446
– 44,005
1,701
– 11,944
13,645
– 6,858
23,502
– 30,360
– 66
951
– 1,017
– 6,792
22,551
– 29,343
C o n s o l i d at e d s tat e m e n t o f c o m p r e h e n s i v e i n c o m e 1/3/2015 – 31/5/2015
1/3/2014 – 31/5/2014
Change
– 6,858
23,502
– 30,360
Remeasurement of defined benefit plans
11,625
– 10,138
21,763
Deferred taxes on items of other comprehensive income not reclassified to the income statement
– 3,445
3,041
– 6,486
Other comprehensive income from items not reclassified to the income statement
8,180
– 7,097
15,277
Exchange differences on translating foreign operations
1,460
– 6,083
7,543
Net result of cash flow hedges
1,971
– 2,006
3,977
Deferred taxes on items of other comprehensive income reclassified to the income statement
– 583
571
– 1,154
Other comprehensive income from items reclassified to the income statement
2,848
– 7,518
10,366
Consolidated comprehensive income after taxes
4,170
8,887
– 4,717
in EUR thousands Consolidated net income
of which attributable to non-controlling interests of which attributable to shareholders of the parent company
– 65
953
– 1,018
4,235
7,934
– 3,699
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
C o n s o l i dat e d c a s h f lo w s tat e m e n t Nordzucker AG, Braunschweig, Germany, for the period from 1 March 2015 to 31 May 2015
in EUR thousands Earnings before taxes Interest and similar income Interest and similar expenses Depreciation, amortisation and impairment/reversals of impairment of non-current assets Amortisation and impairment/reversals of impairment of non-current financial investments
1/3/2015 – 31/5/2015
1/3/2014 – 31/5/2014
Change
– 8,559
35,446
– 44,005
– 76
– 760
684
1,593
3,979
– 2,386
18,292
19,927
– 1,635
0
– 4
4
Changes in non-current provisions
2,061
9,616
– 7,555
Other non-cash expenses/income
1,435
– 27
1,462
102
0
102
– 3,498
8,907
– 12,405
– 22
164
– 186
200,447
250,305
– 49,858
– 112,212
– 325,261
213,049
76
155
– 79
– 561
– 2,062
1,501
140
– 17,194
17,334
99,218
– 16,809
116,027
57
152
– 95
– 8,098
– 20,082
11,984
0
22
– 22
– 273
– 340
67
Net income from joint ventures Changes in current provisions Proceeds on disposal of non-current assets 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 Cash flow for/from investing activities
2
3
– 1
– 5,133
– 245
– 4,888
– 13,445
– 20,490
7,045
Proceeds from borrowing
13
3,957
– 3,944
Loan repayments
– 1
0
– 1 – 3,945
Cash flow from financing activities
12
3,957
Changes in cash and cash equivalents
85,785
– 33,342
119,127
Cash and cash equivalents at the beginning of the period
44,989
58,339
– 13,350
Effect of foreign exchange rate changes Cash and cash equivalents at the end of the period
10
86
– 76
130,784
25,083
105,701
11
12
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
C o n s o l i dat e d b a l a n c e s h e e t as of 31 May 2015, Nordzucker AG, Braunschweig, Germany
ASSETS in EUR thousands
28/2/2015
31/5/2015
31/5/2014
Non-current assets Fixed assets Intangible assets Property, plant and equipment Investment property
25,323
24,298
64,435
848,848
841,553
847,711
3,521
2,983
4,471
Financial investments Shares in companies accounted for using the equity method Other financial investments
2,568
7,599
2,788
23,931
23,931
23,808
26,499
31,530
26,596
904,191
900,364
943,213
Financial assets
0
0
0
Other assets
6
6
9
6
6
9
Receivables and other assets
Deferred taxes
4,792
5,314
6,215
908,989
905,684
949,437
Raw materials, consumables and supplies
53,512
52,435
58,613
Work in progress
47,175
46,642
53,371
885,429
695,605
692,037
986,116
794,682
804,021
138,889
150,766
208,832
67
93
154
6,820
5,327
10,067
Financial assets
13,197
18,737
17,991
Other assets
42,742
18,218
31,023
201,715
193,141
268,067
Current assets Inventories
Finished goods and merchandise Receivables and other assets Trade receivables Receivables from related parties Current income tax receivables
Cash and cash equivalents Current Assets Assets held for sale
44,989
130,784
25,083
1,232,820
1,118,607
1,097,171
1,703
1,519
1,500
1,234,523
1,120,126
1,098,671
2,143,512
2,025,810
2,048,108
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Equit y and liabilities in EUR thousands
28/2/2015
31/5/2015
31/5/2014
Subscribed capital
123,651
123,651
123,651
Capital reserves
127,035
127,035
127,035
1,035,604
1,028,812
1,099,637
Shareholders’ equity
Retained earnings Other comprehensive income Equity attributable to shareholders of the parent company Non-controlling interests
– 56,383
– 45,355
– 6,089
1,229,907
1,234,143
1,344,234
41,636
41,570
50,548
1,271,543
1,275,713
1,394,782
Non-current provisions and liabilities Provisions for pensions and similar obligations
219,334
208,878
154,802
Other provisions
33,603
34,693
26,377
Financial liabilities
7,407
7,380
4,569
Liabilities towards related parties
5,500
5,500
5,500
18
18
18
Other liabilities
9,220
8,932
11,278
Deferred taxes
83,955
87,268
115,797
359,037
352,669
318,341
Provisions for pensions and similar obligations
11,308
11,291
11,336
Other provisions
66,845
63,404
98,208 3,733
Other financial liabilities
Current provisions and liabilities
Financial liabilities Current income tax liabilities Trade payables Liabilities towards related parties Other financial liabilities Other liabilities
248
261
16,269
13,953
5,156
327,348
225,452
121,673
39,777
38,259
33,984
6,035
5,595
7,981
45,102
39,213
52,914
512,932
397,428
334,985
2,143,512
2,025,810
2,048,108
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14
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
C o n s o l i dat e d s tat e m e n t o f c h a n g e s in shareholders’ equity Nordzucker AG, Braunschweig, Germany
in EUR thousands
Subscribed capital
As of 1/3/2014
123,651
Net income
Retained earnings
Other comprehensive income
127,035 1,077,009
8,528
Capital reserves
Consolidated comprehensive income
22,551
Dividend payment Other
Total equity
1,336,223
49,595
22,551
951
23,502
– 14,617
– 14,617
2
– 14,615
– 14,617
8,887
22,551
Other comprehensive income
NonEquity attributable to shareholders of controlling interests the parent company
1,385,818
7,934
953
0
0
0
0
77
77
0
77
As of 31/5/2014
123,651
127,035 1,099,637
– 6,089
1,344,234
50,548
1,394,782
As of 1/3/2015
123,651
127,035 1,035,604
– 56,383
1,229,907
41,636
1,271,543
– 6,792
– 66
– 6,858
11,028
11,028
0
11,028
11,028
Net income
– 6,792
Other comprehensive income Consolidated comprehensive income
4,236
– 66
4,170
Dividend payment
0
0
0
0
Other
0
0
0
0
1,234,143
41,570
1,275,713
As of 31/5/2015
– 6,792
123,651
127,035 1,028,812
– 45,355
N o r d z u c k e r I n t e r i m R e p o r t 3 m o n t h s 2015/2016
Financial c alendar
15 October 2015 Publication of the Interim Report for the first six months of 2015/16 15 January 2016 Publication of the Interim Report for the first nine months of 2015/16
o n l i n e p u b l i c at i o n s The following publications can be downloaded from www.nordzucker.de > Annual Reports and Interim Reports > Decleration of compliance > Letter to shareholders
Subscribe to the Interim Report at www.nordzucker.de
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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 Christian Kionka Telephone: +49 (0) 531 2411-173 pr@nordzucker.de Investor Relations Bianca Deppe-Leickel Telephone: +49 (0) 531 2411-335 ir@nordzucker.de Shares register Martin Eichholz Telephone: +49 (0) 531 2411-119 aktien@nordzucker.de
Printed copies of this interim Report for the Nordzucker Group are also available in German. Alternatively, the report is available online in German or English and can be downloaded as a PDF at www.nordzucker.de from the Download Centre.