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| Annual report 2007/08 Abstract |
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Results of operations, financial position
and net assets |
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Consolidated revenues and
operating profit
Revenues | In 2007/08 the group's revenues came
in at € 5,780 (5,765) million, almost unchanged from last year.
Operating profit | Consolidated operating profit
declined by 44 %, to € 233 (419) million. This drop was driven
by the upheavals in the European sugar market, which led to the
expected dramatic reduction in the sugar segment's operating profit.
In contrast, the special products segment was able to generate significantly
higher profits. After adjusting for the profit contribution from
the prior year's year-end realignment, the fruit segment's result
was also higher than a year earlier.
Income (loss) from operations | Income from operations
of € 189 (-129) million is comprised of an operating profit
of € 233 (419) million and the results of restructuring and
special items at € -44 (32) million, a large portion of which
are attributable to the capacity reductions in the sugar sector.
Last year, we had to address the pending quota reductions with goodwill
write-downs totaling € 580 million.
Results of restructuring and special items | Of
the results of restructuring and special items totaling -€
44 million, -€ 20 million are attributable to the sugar segment.
In the special products segment, the € -19 (141) million result
of restructuring and special items includes the start-up costs of
the bioethanol plants in Belgium and Austria and the profit from
the sale of the Ryssen Group end user bottling business. In the
fruit segment, the restructuring result of € -5 (0) million
includes the cost of closing AGRANA Fruit Bohemia s.r.o. in Kaplice/Czech
Republic.
Income from associated companies | Income from
associated companies rose to € 23 (1) million and consists
primarily of the prorated income from Eastern Sugar B.V.
Financial result | The financial result improved
by € 6 million year-over-year, closing at € -93 (-99)
million. The higher interest expenses resulting from increased interest
rates and a higher average debt load were more than offset by capital
gains on sold securities plus the higher income from investments.
Consolidated net earnings | Given the difficult
market environment, fiscal 2007/08 ended with satisfactory consolidated
net earnings of € 100 million, which compares to a consolidated
net loss of € 246 million last year. The remainder of the group
consolidated net earnings relate mainly to other minority interests;
namely, the co-owners of the AGRANA and CropEnergies Groups.
Consolidated cash flow statement
Cash flow | Cash flow reached € 498 million,
which compares to € 554 million last year. The financing requirements
resulting from the increase in working capital of € 692 million
were due to a 170,000 tonnes increase in sugar inventories caused
by the large harvest and the failure of the EU market withdrawal.
In the special products and fruit segments, inventories rose due to
both price and volume. In some cases, raw material inventories were
increased to secure price levels in the face of volatile market prices.
Payment for the additional quota acquired the previous year was due
before the end of February 2008. The restructuring grant of €
305 million will be paid in two installments; 40 % in June 2009 and
60 % in February 2010. Trade receivables have also increased due to
the significantly higher sugar sales in Italy and Greece.
Capital expenditures | The group's capital expenditures
on fixed assets and intangible assets (excluding additional quotas)
totaled € 493.9 (377.6) million. The sugar segment accounted
for € 138.7 (139.4) million, special products € 312.3 (190.4)
million and fruit € 42.9 (47.8) million. In fiscal 2007/08, Südzucker
spent € 3 (159) million on additional quotas, all for the Czech
Republic.
Balance sheet
Assets totaled € 7,917 (7,932) million, about the same as last
year. The solid equity ratio of 42 (42) % remains unchanged.
The € 312 million increase in non-current assets to €
4,263 million is mainly the result of restructuring fund receivables.
The significant investments in bioethanol plants, which led to an
increase in plant, property and equipment, are offset by the disposal
of acquired additional quotas from the intangible assets associated
with the quota surrender. Current assets declined by € 327
million to € 3,654 million. The investments and the increases
in inventories were financed by reducing cash and cash equivalents
by € 614 million. The decrease of € 333 million in long-term
debt resulted in a final total of € 2,032 million. This is
primarily due to the reclassification of the convertible bond due
on December 8, 2008 to current liabilities. The increase in other
long and short-term provisions is primarily due to the increased
partial retirement accruals and accruals for early retirement schemes,
together with accruals for severance plans and dismantling programs
that had to be formed in conjunction with factory closures and the
required adjustment of the general administration cost structure.
The increase in net financial debt to 1,508 € million is due
to the capital spending on the expansion of bioethanol capacities
and working capital financing needs.
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