ANNUAL RESULTS 2013/14 (April 1st, 2013 / March 31st, 2014)

Transcription

1 Press release Lille, June 19th 2014 ANNUAL RESULTS 2013/14 (April 1st, 2013 / March 31st, 2014) For 2013/14, Tereos, the largest sugar producer in France and fifth sugar producer in the world, reported a sound performance in an environment less favorable than in 2012/13. Revenue of 4.7 billion euros, ranking the Group among the leaders in Europe and around the world in its business segments EBITDA of 691 million euros, the third best performance in the history of the Group Net profit of 176 million euros A decrease in net debt (- 252 million euros) Alexis Duval, Chief Executive Officer of Tereos, declared: Despite a less favorable environment after two years of exceptionally high world sugar prices, Tereos is reporting good results: an EBITDA of 691 million euros which is the third best performance in the history of the Group. This reflects Tereos strong assets to evolve in increasingly open and volatile markets. Our long-term strategy is designed to allow Tereos to remain among the most competitive producers in Europe and to take advantage of major drivers of growth thanks to our increasing international presence. This will enable us to seize opportunities both in our historic markets and in markets of emerging countries. Thierry Lecomte, Chairman of the Supervisory Board of Tereos, stressed the following: Sugarbeet yields for the campaign were in the low average of the past five years. But above and beyond these results, it is important to highlight long-term trends. Sugarbeet yields have been increasing regularly for years thanks to progresses in agronomy, agricultural practices and genetics. Tereos has successfully experimented major innovations such as simplified sugarbeet sampling process and a new soil tare incentive system, which will be extended to all plants in the upcoming campaign. These are some of the factors which will be essential for our competitiveness going forward and which will enable us to operate in a more open market and without quotas.

2 1. HIGHLIGHTS IN 2013/14 During the past fiscal year, in a context pointing to the end of quotas in 2017 and the opening up of the markets, the Group continued to implement a major competitiveness plan in Europe and to develop its positions internationally in order to take advantage of growth in the emerging countries. GROWTH IN PROCESSED VOLUMES Sugarbeet: 17.5 Mt (+3.3%) Cereals: 4.2 Mt (+4%) Sugarcane: 21.9 Mt (+5.9%) INDUSTRIAL AND AGRICULTURAL COMPETITIVENESS EUROPE Successful experimentation of a simplified sugarbeet sampling process and a soil tare reduction plan, which will be extended in 2014 to all French sugar production units. Launch of a plan to increase sugarbeet growing areas to enable a lengthening of the duration of the Artenay sugarbeet campaign by 15 days starting in 2014, with the stated objective of a 20% increase nationwide by the year A major phase of the energy savings plan rolled out in 2013 in all French sugar production units aimed at a 15% reduction in energy consumption and a 20% reduction in CO2 emissions by Development of the products portfolio of the Lillebonne unit, which expanded its activity to the production of proteins and sweeteners. Romania: increase in sugarbeet yields, confirming the agricultural potential for the Ludus unit. The incorporation of the Haussimont potato starch cooperative will enable Tereos to support further the development of agricultural surfaces. INNOVATION Start-up of the world s first sugarbeet vinasse methanization unit in Artenay (Loiret) to produce biogas covering 50% of the energy needs of their distilleries, leading to a significant reduction in CO2 emissions. Tereos is strongly involved in Improve, a research platform devoted to promoting plant-based proteins. In 2013, Tereos signed a partnership with Michelin to study the development of the production of tires from biomass. INTERNATIONAL DEVELOPMENT In Brazil, 2013 proved to be a record crop for Guarani with bioelectricity production increasing sharply thanks to cogeneration. The new Palmital corn starch unit began operations in May. In China, in partnership with Wilmar, the number one agro-industrial group in Asia, Tereos acquired a second starch unit, based in Tieling in Northern China. The Dongguan starch unit, located near Canton, will start production in end In Indonesia, the leading economy in Southeast Asia, Tereos is entering this market through the acquisition of 50% of Redwood, the country s sole corn starch plant. 2/5

3 2. OUTLOOK 2014/15 SUGARBEETS Production is expected to benefit from an increase in surfaces for the 2014/15 campaign. The simplified sugarbeet sampling process and the new incentive system to encourage improvements in the quality of the sugarbeet (reduction of soil tare, use of new varieties with higher sugar content) will be expanded to all French sugar production units starting with the 2014 crop. In addition Tereos will continue to foster discussions in the industry on the simplification of reception (measurement methods). The Group will continue its investment program aimed at reducing energy consumption and CO2 emissions. The methanization unit in Dobrovice (Czech Republic) should start its operations by the beginning of the next campaign; its biogas production covering 100% of the energy requirements of the distillery. SUGAR CANE In Brazil, the outlook for the current crop points to an increase in sugarcane volumes of around 4% (around 20.5 Mt). Volumes of bio-electricity are expected to continue to rise with the Tanabi cogeneration unit starting its operations. The Group continues to implement the Guarani 2016 competitiveness plan aimed at increasing agricultural and industrial production and developing bio-electricity from cogeneration. CEREALS In Europe, where the economic environment remains slow, the benefits of the Performance 2015 competitiveness plan will gather pace during the year. In Brazil, the Palmital unit will continue to ramp up production. In China, the Dongguan unit will start production during the second half of In Indonesia, the integration of Redwood is now underway with an operational improvement and product diversification plan. 3. MARKET TRENDS SUGAR World sugar consumption continues to rise by around 2.5% a year, driven by the population growth of the emerging countries. 80% of world sugar production now comes from sugarcane, and Brazil alone accounts for more than 40% of world sugar exports. After four years of excess production, the world s sugar inventories reached a record level in September 2013, leading to a decline in the world price. The European market, which is now in structural deficit after the 2006 reform, is now largely dependent on imports. In 2013/14, the lack of growth and regulatory measures taken by the European Commission also led to an increase in inventory levels, which weighed on quota sugar prices. In June 2013, the European Union bodies announced the end of sugar and isoglucose quotas on September 30 th, STARCH AND SWEETENERS World production and consumption of starch-based produced are increasing driven by Asia, and China in particular which now accounts for nearly 33% of world production. Demand in Europe is sluggish, mainly owing to the economic situation. Price trends in most of the starch-based product segments are still affected by the volatility of cereal prices. ALCOHOL In 2013, world alcohol production (bioethanol and traditional alcohol) rose by 4% over Demand remained steady in Brazil, driven by the growth of the automobile market (with nine new cars out of ten equipped with Flex-fuel engines) and the increase from 20% to 25% of the blend rate of bioethanol contained in gasoline. On the European market, prices were down sharply owing to a decrease in gasoline consumption and an increase in duty-free imports. 3/5

4 4. FINANCIAL RESULTS En M 2003/ / /14 Variation Revenue 1,720 4,920 4,697-5% EBITDA % EBITDA margin % 16.1% 14.7% - Net profit % Net debt / EBITDA 2-2.8x 2.8x - 1 Following the change in the financial year closing date, end-march 2013 results comprised only six months. For purposes of comparison with the 12-month financial year at end-march 2014, a 12-month pro-forma statement as at end-march 2013 was prepared. 2 Adjusted EBITDA: EBITDA before price complements and excluding discontinued activities and accounting effect of the adjustment to fair value of financial instruments and biological assets. 3 net profit after price complements. The consolidated revenue of the Tereos Group stood at 4,697 million euros in 2013/14 (versus 4,920 million euros in 2012/13). At constant exchange rates, revenue was down 2% (-81 million euros) in a more difficult economic environment overall. The downward trend in the Group s revenue reflects the more sluggish economic conditions, especially in Southern and Eastern Europe, and falling sugar and ethanol prices in Europe. However, the Group benefited from investments made in the past few years, in particular through the increase in surfaces and record sugar cane yields in Brazil, as well as the increase in the amount of cereals processed (Marckolsheim and Lillebonne for Europe, Palmital for Brazil). Lastly, the Group benefited from the acquisition of the Ludus sugar production unit in Romania. Adjusted EBITDA (before price complements) held up well at 691 million euros in 2013/14, compared with 794 million euros in 2012/13. At constant exchange rates, adjusted EBITDA was down 9% or 74 million euros. Profitability was sustained by the operational performance of the sugar activities in Europe and the Indian Ocean, the increase in the amount of sugarcane processed in Brazil, and the initial positive effects of the competitiveness plan Performance 2015 in Cereals Europe, as well as the improved performance of the Lillebonne unit. These factors made up in large part for the negative impact of falling sugar prices, starch & sweeteners margins affected by high cereal prices, the decline in the price of ethanol in Europe and start-up costs for corn starch facility in Brazil. Net financial expense stood at 135 million euros, slightly down by 4 million euros compared with the prior year. The Group s net income stood at 176 million euros. Net debt was down to 1,960 million euros as of March 31 st, 2014, compared with 2,212 million as of March 31 st, The ratio of net debt to adjusted EBITDA was stable at 2.8x as of March 31 st, /5

5 5. RESULTS BY ACTIVITY AND GEOGRAPHIC REGION SUGARBEET PROCESSING In France and the Czech Republic, Tereos is the leading sugar producer and supplies food and non-food clients (fermentation, pharmaceuticals and chemicals) as well as the retail market. Tereos also holds large positions in both of those countries in alcohol production. In 2013, Tereos established a presence in Romania, a country short in sugar production, with the acquisition of the Ludus sugar production unit. 2013/14 sugarbeet yields were at the level of the past five year average, both in France and the Czech Republic. They were up in Romania due to the initial effects of the agricultural improvements made by the Group. In 2013/14, Tereos processed 17.5 Mt of sugarbeet and produced 2.8 Mt of polarizable sugar. SUGARCANE PROCESSING Tereos, through its subsidiary Guarani, is the third largest producer of sugar and ethanol in Brazil. It has seven large capacity industrial units in the state of Sao Paulo. The year 2013/14 saw an increase in sugarcane production in Brazil and declines in Reunion Island and Mozambique owing to adverse climatic conditions. In 2013/14, Tereos processed 21.9 Mt of sugar canes and produced around 1.9 Mt of polarizable sugar and m³ of ethanol. It sold 750GWh of electricity. CEREALS PROCESSING Tereos is Europe s third largest producer of starch and starch by-products for the food, pharmaceutical and chemical industries as well as the paper and cardboard, animal nutrition and cosmetics industries. Volumes of starch-based products sold during the year are slightly up. In 2013/14, Tereos processed 4.2 Mt of cereals, potatoes and cassava and produced around 2 Mt of starch and 500,000 m3 of alcohol. About Tereos Tereos is the fifth largest sugar producer in the world, specializing in the processing of sugarbeet, sugarcane and cereals. The Group has leading positions in the alcohol market (No. 1 in Europe and No. 3 in Brazil) and the starch market (No. 3 in Europe). Tereos operates 42 industrial units and has 24,000 employees on four continents. In 2013/14, the Group had revenue of 4.7 billion euros. As a cooperative group, Tereos brings together 12,000 cooperative members, all acting towards a long-term vision: extracting value from agricultural commodities and contributing to bring quality ingredients to the market. For additional information Communications Department: +33 (0) edemaret@tereos.com Investor Relations Department: +33 (0) dgirault@tereos.com 5/5