Nordzucker AG. Press conference on the financial statements. Braunschweig, Germany, 24 May 2017

Transcription

1 Nordzucker AG Press conference on the financial statements Braunschweig, Germany, 24 May 2017

2 Agenda Ready for a new era Results for 2016/2017 Competitive beet cultivation Production and sustainability Outlook 2

3 Ready for a new era We know the market. know our customers. produce sustainably. are improving processes. are increasing sugar yields together with our growers. are cutting costs. are one team. are opening up new markets. 3

4 Strong performance for sugar in 2016/2017 Sugar Animal feed Molasses Bioethanol Tougher competition Prices up due to developments on the global market and in the EU Difficulties in the dairy market in the first halfyear Clear recovery in the second half-year Stable sales Considerable price pressure from imports Prices extremely volatile Acted flexibly in the market Increased sales as a result of selling activities 4

5 Sales perform well from the start Industrial customers: Sales and exports increased Focus on major customers Sustainability pays dividends An extra something in service Retail customers: Tougher competition Strong brands Sales only slightly down Nordzucker all around the world, Kevin Young, Pitcairn Islands, South Pacific Photo: Dr Andreas Döring 5

6 Deficit on sugar market in 2016/2017 in million tonnes Global deficit 6.1 million tonnes Africa America Asia Europe Oceania Production Demand Saldo Source: AP Commodities Ltd. 6

7 Global sugar stocks fluctuate in million tonnes of sugar, raw value ? / / / / / / / / / /18e Source: F.O. Licht, AP Commodities Ltd. 7

8 Sugar prices on global market and in EU EUR 496/t 400 EUR 439/t 200 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15 Jul 16 Apr 17 EU market price Worldmarket price (London no. 5) Source: EU price reporting, 30/4/2017 8

9 Agenda Ready for a new era Results for 2016/2017 Competitive beet cultivation Production and sustainability Outlook 9

10 Key figures for 2016/2017 at a glance Revenues: Up around 6% to EUR 1,708 million Net income: EUR 99 million after EUR 15 million in the previous year Free cash flow: EUR 149 million after EUR 134 million in the previous year RoCE: 8.5% after 1.0% in the previous year No debts, net capital investments increase to EUR 308 million Equity ratio rises to 65% Dividend proposal: EUR 1.10 per share 10

11 Revenues increase EUR million Consolidated revenues % 1708 More sugar sold Higher prices achieved for quota and non-quota sugar Sales activities expanded Revenues from animal feed virtually unchanged / / /17 11

12 Strong improvement in earnings EUR million Net income and EBIT EUR + 84 million 131 Earnings up as a result of higher prices and volumes Savings from FORCE of over EUR 30 million per year / / /17 Net income before minority interests EBIT 12

13 FORCE efficiency programme on track Procurement Production planning LEAN Strong potential to cut costs Focal points: Maintenance Raw materials, processing aids, packaging Administrative area Greater importance due to the expiry of quotas and export restrictions Planning process from perspective of market to beet cultivation Training in LEAN methods First success achieved Systematic rolling out across entire company Target: To save EUR 50 million annually over EUR 30 million per year already achieved. 13

14 Strong profitability indicators Previous year 2016/ % 7.7% EBIT margin EBIT margin: Ratio of operating result (EBIT) to revenues operating profitability excluding capital employed 1.0% 8.5% RoCE RoCE Return on Capital Employed: Ratio of operating result (EBIT) to capital employed (EBIT margin x capital turnover) 14.9 EUR million 99.1 EUR million Net income Net income: In contrast to EBIT, it also includes interest and tax; absolute earnings from shareholders perspective 14

15 Improvement in liquidity EUR million 200 Free cash flow Free cash flow: Cash flow from operating activities minus cash flow from investing activities Cash flow from operating activities: /2017: EUR 268 million 56 Previous year: EUR 199 million / / /17 15

16 Net capital investments continue to increase EUR million Increase in equity: / / / / / / / Net capital investments 2016/2017: EUR 1,375 million Previous year: EUR 1,278 million Improvement in equity ratio: 63.5% to 64.9% Net debt Well above target ratio of 30% Excellent net assets position provides greater scope for action Purchase price Nordic Sugar Net debt / Capital investment 16

17 Attractive dividend EUR Dividend per share 2, ,50 1, * 0,50 0, / / / / / / / / / /17 Distribution of EUR 53.1 million planned *) Proposal 17

18 Earnings forecast 2017/2018 Stable market position until September Forecasts difficult for the period after the SMR ends Net income in the 2017/2018 financial year at least at the same level as in 2016/17 Further strengthening of financial resources Scope for investments in core business and growth despite increased volatility 18

19 Agenda Ready for a new era Results for 2016/2017 Competitive beet cultivation Production and sustainability Outlook 19

20 Growing year 2016/ /2017 Beet yield Sugar content Sugar yield 71.0 t/ha 17.7% 12.5 t/ha Previous year 66.4 t/ha 17.5 % 11.6 t/ha Second-best sugar yield in history target: to further increase sugar yields 20

21 Beet cultivation: high-performing and sustainable Improving cultivation methods and increasing yields agri!og Interconnecting logistics Harmonizing systems SAI AgriPortal Digital communication with growers AgriPortalConsult Providing cultivation advice digitally Sustainable Agriculture Initiative Sustainable beet cultivation: Gold or silver in all regions 21

22 Beet remains attractive Beet has a future Earnings will continue to increase Important role in crop rotation Beet secures operating income One-year and multi-year agreements Fixed and variable prices Organic beet cultivation included again Beet needs partnership Comprehensive advice from Nordzucker on cultivationrelated and economic matters 22

23 Agenda Ready for a new era Results for 2016/2017 Competitive beet cultivation Production and sustainability Outlook 23

24 2016/2017 campaign: Smooth production Sugar production: 2.5 million tonnes (Previous year: 2.0) Campaign duration: 103 days on average (Previous year: 88) Plants: Reliable and efficient Campaign progression: Predominantly good weather conditions 24

25 Capital expenditure in 2016/2017 EUR million Capital expenditure Reducing energy consumption Improving logistics / / /17 Optimizing processes and IT Increasing service and quality 2017/2018: EUR 87 million planned focus on efficiency gains and market orientation 25

26 New energy and climate targets set - 45% - 65% -10% - 10% Achieved: Reduction in energy consumption per tonne of sugar since 1990 Achieved: Decrease in CO 2 per tonne of sugar since 1990 New target: Reduction in energy consumption per tonne of sugar by 2020 New target: Decrease in CO 2 per tonne of sugar by 2020 Nordzucker sustainability portal: 26

27 Calories are the decisive factor Kcal/g Energy content of food Anyone who eats more calories than they consume will gain weight 10 Fat 9 Food alone is not responsible for obesity and illness Alcohol 7 Sugar is more than just sweet 5 Sugar 4 Starch 4 Protein 4 Consumer misunderstanding: less sugar in food does not automatically mean fewer calories 0 Nutritional education starting at primary school More information: We are committed. 27

28 Agenda Ready for a new era Results for 2016/2017 Competitive beet cultivation Production and sustainability Outlook 28

29 Factors influencing the EU sugar market in future Export limit abolished Increasing influence of the global market: Convergence of prices Greater volatility Production quotas abolished Production quotas from isoglucose abolished Imports as part of preferential agreements EU protection will continue Influence from other agricultural markets 29

30 Exports as an opportunity Nordzucker: high European quality standards, certified and clear From the field to the customer: transparent value chain, sustainable production Comprehensive advice and service Premium for EU sugar Targeted exports: securing international customers 30

31 Global market for sugar is growing millions of tonnes Sugar consumption % /- 0 t North America Annual growth in demand by region ,000 t Latin America, Caribbean +/- 0 t Europe + 660,000 t Africa + 2,300,000 t Asia Growth only outside the EU Source: OECD-FAO 31

32 Clear growth strategy Actively shape consolidation within the EU market Maintain and increase market shares Promote and safeguard beet cultivation Take advantage of market knowledge Open up new markets within the EU Protect core markets Develop global customers Expand structured exports Achieve high level of customer retention Create added value for customers: Service, logistics and quality Sustainability Grow outside of the EU Growth through partnerships and acquisitions Focus regions: Asia, Africa and South America 32

33 Ready for a new era Expert. Solid. Strong. Sustainable. Market-oriented. More than 175 years of experience in the sugar business has provided us with extensive knowledge of beet cultivation, sugar production and markets. With a high equity ratio and no debt, we are in a very solid financial position. We continuously enhance our performance and improve processes, products and our service. We practise sustainability from the field to the customer. We know the markets and base our plans and decisions on the market. 33

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