Nordzucker AG Interim Report
Financial Year 2008/09
1st Half-year
March 1 – August 31, 2008
Group figures and ratios
Operating business
H1
2008/09
H1
2007/08
Change
absolute
-14
Revenues
EUR m
561
575
Total revenues
EUR m
158
256
-98
Gross income
EUR m
75
177
-102
EBITDA
EUR m
79
71
8
EBIT
EUR m
44
49
-5
Net profit
EUR m
21
44
-23
Cash flow from operating activities
EUR m
173
184
-11
Investments in property, plant and equipment
EUR m
35
57
-22
Investments in financial assets
EUR m
38
14
24
H1
2008/09
H1
2007/08
Change
absolute
Balance sheet ratios as of 31/08
Balance sheet total
EUR m
1,534
1,418
116
Equity
EUR m
738
693
45
Equity ratio
%
48
49
-1
Debt capital
EUR m
796
725
71
Financial liabilities
EUR m
355
207
148
Cash and cash equivalents
EUR m
42
150
-108
Net debt
EUR m
313
57
256
H1
2008/09
H1
2007/08
Change
absolute
Number of plants (total)
12
15
-3
Number of plants abroad
7
9
-2
(Cash and cash equivalents less financial liabilities)
Structure figures
Nordzucker markets and trends
Highlights of the first half-year 2008/09
Contents
Letter from the
Management Board
4
Management report
6
Financial and earnings situation 6
Approval of Danisco shareholders
On August 20, 2008 the shareholders of Danisco approved the sale of Danisco Sugar
A/S to Nordzucker AG by a clear majority. This constitutes a further important step
towards a common future for the two companies. The acquisition is still subject to
the approval of the competition authorities.
Revenues and earnings
6
Balance sheet and cash flow
7
Campaign 2008
8
Supplementary report
8
Outlook
8
Income statement
9
Cash flow statement
10
Balance sheet
11
Statement of changes in
Raw cane sugar conversion begins in Chelmza
On July 24, 2008 raw cane sugar conversion began at the Chelmza factory in
Poland. Two days later the first sugar capable of being sold under demanding Euro-
shareholders’ equity
13
Financial calendar
14
pean quality standards was produced. Raw cane sugar conversion in Chelmza marks
for Nordzucker the beginning of a new phase in the European sugar market, which
will be defined by increasing quantities of imported sugar.
Campaign 2008 begins
The sugar factory in Klein Wanzleben provided the kick-off to this year’s beet campaign in Northern Germany, starting on September 16, 2008. In the North German
factories the campaign generally began smoothly. Nordzucker is expecting slightly
higher sugar and beet yields than average. The campaign in Serbia began earlier, on
September 4 in the Vrbas factory. During the current campaign the Group as a
whole will process around ten million tonnes of beet.
Nordzucker Half-Year Report 2008/09
3
Dear Shareholders,
Hans-Gerd Birlenberg (born in 1954)
• Chairman of the Management Board
of Nordzucker AG since 2007 and
Management Board member since 2006
• Responsible for:
Finance & Controlling, IT, Corporate
Communications, Corporate Counsel,
Human Resources, Risk Management,
Sales (Eurosugar)
We are currently experiencing the most significant period of change that the European sugar market has known. In addition to reducing capacities, the reform of the
sugar market regime also requires a realignment on the part of the market and of
sugar-producing companies. For Nordzucker, growth in the core sugar business and
efficient processes with highly motivated staff are the key to ensuring the company’s
future success. In the first half-year 2008/09 we have made further significant
progress on the way to that goal.
Danisco Sugar – another hurdle successfully taken
Attaining critical mass is especially vital for success in a consolidating market. In this
respect the acquisition of Danisco Sugar A/S is an important milestone for Nordzucker.
An agreement on the takeover was signed on July 14, 2008 and approved by Danisco
shareholders on August 20, 2008. This opens the path to a successful future for both
companies. Now only the approval of the competition authorities is required to consummate the acquisition. The procedure is currently underway.
Dr Hendrik Einfeld (born in 1945)
• Member of the Management Board of
Nordzucker AG since 2007
• Responsible for:
Agriculture, Raw Material Procurement
Germany and International
New performance potential for a successful future
Nordzucker has launched an internal project to increase efficiency in order to confront the challenges ahead from declining reference prices, higher energy costs and
the liberalisation of the market for raw sugar. It is intended to help to position itself
in a changing industry as even more cost-conscious and efficient. Together with our
staff we tap further improvement potential in all areas of the company and thereby
crafting an early response to the changes before us.
The motivation and satisfaction of our employees and the trust of you, our shareholders, are vitally important in this decisive phase. Therefore, we would like to
express our thanks to both our staff and shareholders.
Yours sincerely,
Dr Martin Wienkenhöver (born in 1956)
• Member of the Management Board of
Nordzucker AG since April 1, 2008
Nordzucker AG
The Management Board
• Responsible for:
Supply Chain (Purchasing,
Production Quality Management
and Logistics)
Hans-Gerd Birlenberg
Dr. Henrik Einfeld
Dr. Martin Wienkenhöver
Nordzucker Half-Year Report 2008/09
4
Nordzucker locations
Poland
Germany
Czech Republic
Slovakia
Hungary
Company headquarters in Braunschweig
Sugar plants
D
PL
1
Clauen
CLA
2
Nordstemmen
NST
3
Uelzen
UEL
Serbia
4
Klein Wanzleben
WZL
5
Schladen
SLA
6
Opalenica
OPA
Sugar plants –
7
Chelmza
CHE
non-consolidated minority stakes
CZ
SK
8
Trecianska Tepla
TRE
SRB
9
Bac
BAC
10
Vrbas
VRB
11
Pecinci
PEC
Other locations
D
D
12
Kovacica
KOV
13
Liquid sugar plant Nordstemmen
FNS
14
Liquid sugar plant Groß Munzel
FGM
HU
15
Dobrovice
DOB
16
Ceske Mezirici
CES
17
Ehrenkirchen (Hübner/ Medopharm) EHR
18
fuel 21
fuel
19
Hatvan
HAT
Nordzucker Half-Year Report 2008/09
5
Management report
Financial and earnings situation
The interim financial statements for the
year on year. In Serbia and Poland in
Consolidated revenues
Nordzucker Group as of August 31, 2008
contrast, considerable market pressure
in EUR m
have been prepared in accordance with
brought down revenues. In view of the
International Financial Reporting Standards
quota return which applies for Hungary
(IFRS) as adopted and published by the
and Poland as of this campaign, more
International Accounting Standards Board
balanced markets are expected for
(IASB). Supplementary commercial regu-
Southern and Eastern Europe as well in
lations were also taken into account. The
future. Other operating income amounted
requirements of IFRS have been met in
to EUR 111.2m and was therefore well
full and provide a true and fair view of
above last year’s figure of EUR 15.0m. This
the financial and earnings position of
is principally made up of EU restructuring
Nordzucker AG, including its subsidiaries,
aid payable to Nordzucker for 2009 and
associated companies and joint ventures.
2010 as a result of surrendering quotas
As they have different reporting dates, all
in the second wave up to March 31, 2008,
consolidated companies have been includ-
in which some 163,000 tonnes of quota
ed in Nordzucker’s consolidated financial
were returned. The cost of materials and
statements as of June 30, 2008.
services in the amount of EUR 82.3m
575
561
H1 2007/08
H1 2008/09
mainly consists of consumables and supThe accounting and valuation methods
plies as well as the cost of purchased
applied in preparing the consolidated
merchandise. Mainly due to higher energy
Consolidated EBIT
annual financial statements as of February
costs, this item rose by some EUR 4.1m
in EUR m
29, 2008 have been maintained un-
compared with last year’s figure of EUR
changed. Further information is available
78.2m. Personnel expenses remained
in the notes to the 2007/08 Annual
roughly the same as last year (48.8) at
Report.
EUR 48.1m. These also include the sever-
49
44
ance payments to staff in factories closed
Sugar production is a seasonal business.
in Hungary as a non-recurring item. De-
The production phase from the middle of
preciation and amortisation increased in
September to early January falls complete-
comparison with the same period of the
ly in the second half of the company’s
previous year from EUR 22.5m to EUR
financial year. This should be taken into
35.1m. This increase is largely attributable
account when interpreting the results for
to extraordinary depreciation as a result
the first half-year.
of the plant closure in Hungary.
Revenues and earnings
Other operating expenses of EUR 59.9m
Group revenues for the first half-year of
(72.3) mainly include anticipated recon-
the financial year 2008/09 came to EUR
version expenses for the factory closed in
560.6m, and were therefore EUR 14.5m
Hungary.
H1 2007/08
H1 2008/09
below the figure for the same period last
year (575.1). Stable market conditions
In the first half of the financial year 2008/09
meant that in Germany and Slovakia a
the Group’s operating earnings (EBIT)
slight increase in revenues was reported
came to EUR 43.5m, slightly below last
Nordzucker Half-Year Report 2008/09
6
Management report
year’s figure of EUR 49.0. Sharp drops in
repayment of bonds and borrowings of
Consolidated net income
inventories, particularly in comparison
EUR 196.1m (0) resulted in a decline of
in EUR m
with the same period last year, had a signif-
EUR 103.4m in cash and cash equivalents
icant impact on the result. These stemmed
as of August 31, 2008 to EUR 42.0m
mainly from the higher valuation of sugar
(145.4).
44
stocks due to the expenses caused by the
restructuring levy for the 2007 campaign.
21
The consolidated balance sheet total for
Nordzucker Group as of the end of the
Consolidated net income after taxes for
first half-year 2008 was EUR 1,533.9m
the period totalled EUR 20.9m, compared
(1,418.3). Fixed assets declined by some
with EUR 43.7m last year.
EUR 43.9m year on year to EUR 786.1m.
H1 2007/08
H1 2008/09
This is due in particular to a decrease in
Balance sheet and cash flow
intangible assets, which stems in turn
Proceeds from the sale of products, mer-
from the write-down of additional quotas
chandise and services amounted to EUR
purchased in 2006 as part of the quota
625.4m for the first half of the current
surrender. Other assets include the enti-
financial year, exceeding last year’s figure
tlement to EU restructuring aid. The es-
of EUR 566.7m. This was offset by pay-
tablishment of Eurosugar in October 2007
ments to suppliers and staff of EUR 404.9m
resulted in a shift between trade receiv-
(382.1) as well as interest expense of EUR
ables from third parties and receivables
12.9m (6.9). After accounting for other
from related parties.
Balance sheet structure
as of August 31, 2008
Consolidated figures in EUR m
1,534
60%
inpayments and outpayments and tax
refunds, cash flow from operating activities
Shareholders’ equity rose in comparison
came to EUR 173.1m (183.7).
with the same period last year from EUR
693.3m to EUR 738.4m.
16%
1,534
48%
24%
24%
28%
Assets
Liabilities
EUR 34.6m was invested in property, plant
and equipment in the reporting period
Despite greater liabilities the equity ratio
(56.9). Investments in financial assets came
only sank slightly to 48.1 per cent (48.9)
to EUR 37.8m (14.3) and proceeds from
and remained high overall.
Long-term
assets
Shareholders‘
equity
(0.1). This led to a total cash flow of EUR
The increase in short-term and long-term
Inventories
-73.6m from investing activities (-77.5).
financial liabilities and the change in cash
Long-term
liabilities
The net total of proceeds from bond issues
and cash equivalents resulted in net debt
and borrowings of EUR 133.1m (-9.2) and
of EUR 313.3m (57.5).
Other short-term
assets
Short-term
liabilities
the disposal of financial assets to EUR 28.9m
Nordzucker Half-Year Report 2008/09
7
Campaign 2008
This year’s campaign began in North
due to heavy rain, which interrupted sup-
Germany on September 16 at the Klein
plies, causing the Pecinci factory to shut
Wanzleben factory. The quantity and
down for a few days. At the end of Sep-
quality of the beet look promising.
tember the Serbian factories were still not
Nordzucker is expecting slightly above-
up to full production capacity due to the
average beet yields of around 60 tonnes
weather and the problems this caused in
per hectare for Northern Germany. Here,
beet delivery. The lack of available beet
the sugar content was already above 17
has meant that only three factories have
per cent as early as the beginning of Sep-
commenced production in Serbia so far
tember.
this year.
A fire broke out in the turbine building at
Production at the Trecianska Tepla plant
the Clauen factory on October 6, which
in Slovakia was hampered by technical
interrupted production until October 10.
problems at the start of the campaign,
At the other North German plants the
but processing is now running normally.
campaign has so far gone smoothly.
Average to above-average beet and sugar
The international campaign began at the
yields are expected in Slovakia, Poland and
Vrbas factory in Serbia as early as Septem-
Serbia.
ber 4. Serbia had difficult harvesting conditions at the beginning of September
Supplementary report
No events of particular significance for
date for the interim financial statements
Nordzucker’s financial and earnings posi-
on August 31, 2008.
tion have occurred after the balance sheet
Outlook
The return of quotas and the reduction of
price this will lead to sharp pressure on
the reference price will cut Nordzucker’s
margins. From today’s perspective, risks in
revenues in the current financial year. The
the field of alternative energies and high
restructuring levy is payable for the last
energy costs are set to depress results at
time this financial year. In accordance with
year-end.
tax regulations Nordzucker has allocated
the cost of the restructuring levy on a pro
The acquisition of Danisco Sugar has laid
rata basis to the stocks held at the time
the foundations for Nordzucker’s sustain-
the financial statements were prepared.
able future development.
Given the imminent drop in the reference
Nordzucker Half-Year Report 2008/09
8
Consolidated half-year financial statements
Consolidated half-year financial statements
Consolidated income statement
for the period from March 1 – August 31, 2008, Nordzucker AG, Braunschweig
1/3/200831/8/2008
in TEUR
1/3/200731/8/2007
in TEUR
Change
in TEUR
560,570
575,149
-14,579
403,549
320,780
-82,769
568
1,209
-641
111,225
15,031
96,194
268,814
270,609
-1,795
5. Cost of materials and services
82,254
78,159
4,095
6. Personnel expenses
48,101
48,849
-748
35,107
22,548
12,559
1. Revenues
2. Decrease
in finished goods and work in progress
3. Own work capitalised
4. Other operating income
7. Depreciation, amortisation
of intangible assets, property, plant and equipment and impairment losses
8. Appreciation
on intangible assets, property, plant and equipmentand impairment losses
9. Other operating expenses
10. Operating result (EBIT)
11. Net interest
a) Interest income
b) Interest expenses
12. Net income/loss from investments
a) Net income/loss from associated
companies “at equity”
b) Other net income/loss from investments
34
229
-195
59,876
72,317
-12,441
43,510
48,965
-5,455
5,675
2,542
3,133
14,749
9,354
5,395
-9,074
-6,812
-2,262
0
0
0
-201
0
-201
-201
0
-201
98
305
-207
14. Net financial income/expense
-9,177
-6,507
-2,670
15. Income tax expense
13,420
-1,257
14,677
16. Group net profit
20,913
43,715
-22,802
1,062
7,690
-6,628
19,851
36,025
-16,174
13. Other net financial income/expense
17. Minority interests
18. Net income after minority interests
Nordzucker Half-Year Report 2008/09
9
Consolidated half-year financial statements
Consolidated cash flow statement
for the period from March 1 – August 31, 2008, Nordzucker AG, Braunschweig
1/3/200831/8/2008
in EUR m
Proceeds from the sale of goods, merchandise and services
1/3/200731/8/2007
in EUR m
625.4
566.7
-404.9
-382.1
3.7
2.8
Tax received (refunds)
20.7
14.8
Other inpayments
12.2
40.2
-12,9
-6.9
Payments to suppliers and employees
Interest received
Interest paid
Tax paid
-1
-48.9
-29.9
-31.6
-32.9
Proceeds from extraordinary items
10.7
11.4
Payments for extraordinary items
-1.3
-0.4
173.1
183.7
Other outpayments
Cash flow from operating activities
Proceeds on disposal of long-term assets
Payments for investments in long-term assets
Proceeds on disposal of intangible assets
0.9
3.1
-34.6
-56.9
0.0
0.0
Payments for investments in intangible assets
-0.4
-9.5
Proceeds on disposal of financial assets
28.9
0.1
-37.8
-14.3
0.0
0.0
-23.6
0.0
Proceeds from financial investments associated with short-term treasury management
0.0
0.0
Payments for financial investments associated with short-term treasury management
-7.0
0.0
-73.6
-77.5
Payments for investments in financial assets
Proceeds from the sale of consolidated companies and other business units
Payments for the acquisition of consolidated companies and other business units
Cash flow from investing activities
Proceeds from changes in equity
Dividend payments
Proceeds from the sale of loans and borrowing funds
Loan repayments
Cash flow from financing activities
Changes in cash and cash equivalents
0.0
0.0
-23.2
-38.5
133.1
-9.2
-196.1
0.0
-86.2
-47.7
13.3
58.5
Effect of changes to foreign exchange rates, the group of consolidated companies
and valuation methods
-0.1
0.0
Cash and cash equivalents at the beginning of the period
28.8
86.9
Cash and cash equivalents at the end of the period
42.0
145.4
Nordzucker Half-Year Report 2008/09
10
Consolidated half-year financial statements
Consolidated balance sheet
as of August 31, 2008, Nordzucker AG, Braunschweig
Assets
29/2/2008
in TEUR
31/8/2008
in TEUR
31/8/2007
in TEUR
Change
in TEUR
Long-term assets
Fixed assets
Intangible assets
73,444
66,373
109,369
-42,996
663,149
675,146
693,202
-18,056
Investment property
7,093
6,960
6,439
521
Financial assets
Shares in associated companies “at equity”
3,861
3,950
771
3,179
Property, plant and equipment
Other financial assets
21,037
33,683
20,211
13,472
24,898
37,633
20,982
16,651
Accounts receivable and other assets
Financial assets
Other assets
Deferred taxes
730
771
799
-28
118,341
92,777
1,182
91,595
119,071
93,548
1,981
91,567
37,995
37,254
33,070
4,184
925,650
916,914
865,043
51,871
30,347
66,259
40,978
25,281
19,413
Short-term assets
Inventories
Raw materials, consumables and supplies
Work in progress
Finished goods and merchandise
31,143
38,923
19,510
570,003
146,680
150,705
-4,025
631,493
251,862
211,193
40,669
70,222
57,767
108,488
-50,721
135,182
92,669
8,273
84,396
4,077
1,654
3,087
-1,433
10,534
10,403
9,995
408
Accounts receivable and other assets
Trade receivables from external companies
Receivables from related parties and companies
Receivables from income tax
Financial assets
Other short-term assets
Assets held for sale
Cash and cash equivalents
26,761
158,986
61,761
97,225
246,776
321,479
191,604
129,875
1,949
1,676
762
914
28,846
42,008
149,678
-107,670
909,064
617,025
553,237
63,788
1,834,714
1,533,939
1,418,280
115,659
Nordzucker Half-Year Report 2008/09
11
Consolidated half-year financial statements
Consolidated balance sheet
as of August 31, 2008, Nordzucker AG, Braunschweig
29/2/2008
in TEUR
31/8/2008
in TEUR
31/8/2007
in TEUR
Change
in TEUR
123,651
123,651
123,651
0
Capital reserves
127,035
127,035
127,035
0
Retained earnings
387,446
384,112
353,692
30,420
Accumulated other equity
28,066
39,316
27,799
11,517
Minority interests
65,244
64,265
61,121
3,144
731,442
738,379
693,298
45,081
100,666
101,381
99,849
1,532
13,931
Shareholders’ equity and liabilities
Shareholders' equity
Subscribed capital
Long-term provisions and liabilities
Provisions for pensions and similar obligations
Other provisions
30,904
27,347
13,416
198,293
138,843
134,824
4,019
0
0
7,575
-7,575
Other liabilities
28,851
19,960
23,826
-3,866
Deferred taxes
76,395
82,436
78,300
4,136
435,109
369,967
357,790
12,177
Financial liabilities
Other financial liabilities
Short-term provisions and liabilities
Provisions for pensions and similar obligations
Other provisions
Financial liabilities
Income tax liabilities
Trade payables
Liabilities due to related parties and companies
Other financial liabilities
Other liabilities
4,878
4,878
4,989
-111
31,886
19,941
24,648
-4,707
193,856
216,468
72,314
144,154
19,389
14,814
7,575
7,239
200,234
105,888
97,587
8,301
5,771
17,493
5,002
12,491
32,578
27,851
67,664
-39,813
179,571
18,260
87,413
-69,153
668,163
425,593
367,192
58,401
1,834,714
1,533,939
1,418,280
115,659
Nordzucker Half-Year Report 2008/09
12
Consolidated half-year financial statements
Consolidated statement of changes in shareholders’ equity
as of August 31, 2008, Nordzucker AG, Braunschweig
Subscribed
capital
in TEUR
Capital
reserves
in TEUR
Retained
earnings
in TEUR
Accumulated
other equity
in TEUR
Minority
interests
in TEUR
Total equity
in TEUR
123,651
127,035
340,921
23,042
68,364
683,013
Currency effects
0
0
0
3,918
0
3,918
Fair value adjustment
0
0
0
838
0
838
Group net profit
0
0
36,024
0
7,690
43,714
Dividend payment
0
0
-23,185
0
0
-23,185
Others
0
0
-68
1
-14,933
-15,000
As of 31/8/2007
123,651
127,035
353,692
27,799
61,121
693,298
As of 29/2/2008
123,651
127,035
387,446
28,066
65,244
731,442
Currency effects
0
0
0
10,008
0
10,008
Fair value adjustment
0
0
0
1,242
0
1,242
Group net profit
0
0
19,850
0
1,062
20,912
Dividend payment
0
0
-23,185
0
0
-23,185
Others
0
0
1
0
-2,041
-2,040
123,651
127,035
384,112
39,316
64,265
738,379
As of 28/2/2007
As of 31/8/2008
Shareholders‘ structure Nordzucker AG
EUR 123.7m share capital
Nordzucker Holding Aktiengesellschaft: 76.23 %, EUR 94.3m
Union-Zucker Südhannover GmbH: 10.82 %, EUR 13.4m
Nordharzer Zucker AG: 7.83 %, EUR 9.7m
Direct shareholders‘: 5.12 %, EUR 6.3m
Nordzucker Half-Year Report 2008/09
13
Financial calendar
Publications
October 30, 2008
H1 Report 2008/09
Online publications
The following publications can be downloaded from www.nordzucker.de
• Annual Report
• Interim Reports
• Declaration of compliance
• Sustainability Report
Nordzucker Half-Year Report 2008/09
14
Nordzucker AG
Küchenstrasse 9
D-38100 Braunschweig
Telephone: +49 (0)531 24110
Fax: +49 (0)531 2411 100
[email protected]
www.nordzucker.de
Shares register
Wilhelm Just
Telephone: +49 (0)531 2411 160
[email protected]
Investor Relations
Bianca Deppe-Leickel
Telephone: +49 (0)531 2411 335
[email protected]
Public Relations
Tanja Schneider-Diehl
Telephone: +49 (0)531 2411 314
[email protected]
This Nordzucker interim report is published in English and German on our website at
www.nordzucker.de.