Earnings Release • Oct 14, 2010
Earnings Release
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| Key fi nancials | H1 2010 11 H1 2009 10 | |
|---|---|---|
| AGRANA Group | ||
| Revenue | € 1,073.3m | € 1,034.2m |
| Operating profi t before | ||
| exceptional items | € 64.8m | € 43.9m |
| Operating margin | 6.0% | 4.2% |
| Operating profi t after | ||
| exceptional items | € 64.8m | € 43.9m |
| Purchases of property, plant | ||
| and equipment and intangibles1 | € 19.1m | € 16.3m |
| Staff count | 8,798 | 8,177 |
Revenue of the AGRANA Group increased by € 39.1 million or 3.8% in the fi rst half of the 2010|11 fi nancial year (1 March to 31 August 2010) to € 1,073.3 million (H1 2009|10: € 1,034.2 million). The revenue growth in the Starch and Fruit segments refl ected the net eff ect of volume growth and somewhat lower prices. In the Sugar segment, the price-related reduction in quota sugar revenue was almost fully off set by signifi cantly increased non-quota sugar exports. Revenue in the Starch segment rose as a result of higher sales volumes. Sales prices of starch products still showed an easing trend in the reporting period as they were brought into line with the lower raw material prices for last year's crop, but a reversal of this trend is underway. AGRANA's revenue also increased in the Fruit segment, as sales volumes grew both in fruit preparations and fruit juice concentrates.
In the fi rst six months of 2010|11, operating profi t before exceptional items was € 64.8 million, up 47.6% (€ 20.9 million) from the year-earlier level of € 43.9 million. The profi t growth was driven mainly by an improvement in the Starch and Fruit segments, where the sales volume expansion was refl ected in higher earnings; in the Sugar segment, profi t was held approximately at the year-ago level. As well, the optimisation measures already initiated in the prior fi nancial year made a positive diff erence in operating profi t before exceptional items. Net fi nancial items amounted to a net expense of € 16.0 million (H1 2009|10: net surplus of € 2.4 million), attributable primarily to a change in foreign currency translation diff erences. After a tax expense of € 11.4 million (representing a tax rate of 23%), the Group's profi t for the period was € 37.4 million (H1 2009|10: € 34.8 million). Earnings per share attributable to AGRANA shareholders grew from € 2.46 to € 2.57.
In the fi rst half of 2010|11, € 19.1 million was invested in purchases of property, plant and equipment and intangible assets (H1 2009|10: € 16.3 million). The Sugar segment accounted for € 8.2 million of this (H1 2009|10: € 4.9 million), relating largely to the sites in Slovakia (installation of a new molasses tank), Hungary (further investment in the biogas plant in Kaposvár), Austria (detailed planning for a new sugar silo in Tulln) and the Czech Republic. In the Starch segment, € 2.9 million (H1 2009|10: € 3.8 million) was spent on investment, mostly for industrial machinery and plant in Hungary. € 8.0 million (H1 2009|10: € 7.6 million) was invested in the Fruit segment. With the funds, the project for the production of chocolate fruities in Gleisdorf, Austria, was launched and a tunnel freezer for individual quick freezing of fruit pieces was installed at the location in Mexico.
Operating cash fl ow before change in working capital was boosted by 31.0% to € 77.0 million (H1 2009|10: € 58.8 million), moving in step with the rise in operating profi tability. Given the seasonal reduction of € 46.0 million in working capital in the six months to 31 August (H1 2009|10: reduction of € 63.3 million), net cash fl ow from operating activities was steady year-on-year at € 122.9 million (H1 2009|10: € 122.5 million). Net cash used in investing activities amounted to € 14.5 million (H1 2009|10: € 9.9 million) amid slightly increased investment in property, plant and equipment and intangibles of € 19.1 million (H1 2009|10: € 16.7 million). With the dividend payment of € 28.2 million (H1 2009|10: € 29.3 million) and a further reduction of € 64.5 million in net debt (H1 2009|10: reduction of € 51.9 million), net cash used in fi nancing activities increased somewhat to € 92.7 million (H1 2009|10: € 81.3 million).
While total assets were 5.7% lower than on 28 February 2010, the equity ratio rose from 47.9% to 51.4%. Current assets declined by € 98.0 million, as inventories decreased while trade receivables and cash and cash equivalents increased as a result of the revenue growth. The decrease of € 97.3 million in current liabilities resulted largely from reduced trade payables and the repayment of borrowings. Net debt at 31 August 2010 stood at € 300.2 million, a reduction of € 76.4 million from the end of the 2009|10 fi nancial year.
| Share data | H1 2010 11 |
|---|---|
| High (23 April 2010) | € 75.60 |
| Low (26 May 2010) | € 56.88 |
| Closing price (31 August 2010) | € 71.01 |
| Closing book value per share (31 August 2010) | € 62.62 |
| Closing market capitalisation (31 August 2010) | € 1,008.5 |
AGRANA's share price eased marginally in the fi rst half of 2010|11, by 1.9%, thus slightly outperforming the ATX, Austria's blue-chip equity index, which declined by 2.1% over the same period. With a reduced average trading volume of just under 2,400 shares per day during the reporting period (based on single counting), AGRANA's shares saw a strong market movement as a result of the adjustment of the MSCI benchmark index which took eff ect on 26 May 2010. June
brought a correction of this one-off eff ect and by the reporting date, AGRANA's shares returned to the approximate level marked at the beginning of the fi nancial year. The market capitalisation at 31 August 2010 was € 1,008.5 million, with an unchanged 14.2 million shares outstanding. With eff ect from 21 June 2010, AGRANA has been included in the VÖNIX, the Austrian sustainability index. This equity index comprises 22 stocks out of a base universe of 60 companies that are leading in social and environmental performance.
AGRANA's share price performance can be followed in the investor relations section of AGRANA's home page at www.agrana.com.
The 2010 calendar year is marked by strong swings in sugar prices on the world market. The reasons are that two years of global sugar defi cits have shrunk inventories to their lowest level in two decades, and that recurring news reports of unfavourable weather conditions in Brazil are causing nervousness among investors. However, it now is very likely that Thailand and India will achieve signifi cantly better harvest volumes than originally believed.
In the fi rst half of 2010|11 (1 March to 31 August), world market prices for sugar, after reaching a low in of early May, rebounded substantially. From US\$ 435 or € 319 per tonne on 1 March 2010, raw sugar fi rst fell to US\$ 301 or € 233 per tonne by 6 May, then recovered to US\$ 435 or € 343 per tonne as at the end of the reporting period. At the start of the fi nancial year, white sugar traded at around US\$ 636 or € 466 per tonne; at 31 August 2010 it quoted at around US\$ 579 or € 456. On 7 May, white sugar traded at US\$ 438 or € 344 per tonne.
According to the latest forecasts by F. O. Licht, sugar production in Europe will decrease in the 2010|11 sugar marketing year as a result of less favourable weather conditions, from 26.4 million tonnes in the previous year to 24.5 million tonnes, thus approximately reaching the 2008|09 level (24.6 million tonnes). Total production in the EU countries is forecast at 14.9 million tonnes of sugar, a reduction of 2.3 million tonnes from the year before.
| Key fi nancials | H1 2010 11 H1 2009 10 | |
|---|---|---|
| Sugar segment | ||
| Revenue | € 366.2m | € 371.4m |
| Operating profi t before | ||
| exceptional items | € 12.3m | € 13.1m |
| Operating margin | 3.4% | 3.5% |
| Purchases of property, plant | ||
| and equipment and intangibles1 | € 8.2m | € 4.9m |
Revenue in the Sugar segment eased by 1.4% in the fi rst half of 2010|11. Revenue in the second quarter of 2010|11 (June to August), at € 185.1 million, approximately matched the fi rst (March to May) quarter's € 181.1 million, but was well below the fi gure for the prior year's second quarter of € 195.9 million. The biggest reason was the – expected – price decline for quota sugar since October 2009 compared with the prior-year reporting period. By contrast, growth was achieved in sales of non-quota sugar, with volumes up by about 34,000 tonnes in the fi rst half of 2010|11 from one year earlier.
The Sugar segment recorded an operating profi t of € 12.3 million before exceptional items, slightly less than the prioryear fi gure of € 13.1 million. The decrease was attributable mainly to the second quarter of 2010|11: Although operating profi t before exceptionals, at € 6.1 million, matched the result of the fi rst quarter of 2010|11, it fell short of the very good second quarter of 2009|10, when the result had been € 9.1 million. The operating profi t performance in the individual countries and regions varied widely overall. On the one hand, the beet sugar production countries (Austria, Czech Republic, Slovakia and Hungary) performed well and benefi ted from the world market price in their out-of-quota sugar sales. On the other hand, in the refi ning countries (Romania, Bulgaria and Bosnia-Herzegovina) the high world market price of raw sugar drove cost hikes to the point where production was temporarily reduced in order to save costs.
For the 2010|11 sugar marketing year the area on which beet was grown for the AGRANA Group was expanded to 88,200 hectares. As a consequence of fl ooding, about 1,800 hectares of this was lost to production in the Czech Republic, Slovakia and Romania. In Austria, about 750 hectares of organic beet will be harvested. Beet yields are likely to be average to good in all countries in view of weather and growing conditions. In total, a beet crop of about 5.2 million tonnes is projected (prior year: 5.1 million tonnes),
from which approximately 770,000 tonnes of sugar are to be produced (prior year: 747,000 tonnes). Harvesting in all countries (except Romania) began in the middle of September.
The International Grains Council (IGC) estimates world grain production in the 2010|11 grain marketing year (July 2010 to June 2011) at 1.75 billion tonnes (prior year: 1.79 billion tonnes). For wheat, production is forecast at 644 million tonnes (prior year: 677 million tonnes) and the forecast for corn (maize) is 829 million tonnes (prior year: 809 million tonnes). At the same time, consumption is estimated at 657 million tonnes of wheat and 837 million tonnes of corn. Both for wheat and corn, a small decrease in global inventories is thus predicted. The prices of wheat and corn in commodity markets have risen signifi cantly since the end of June amid the overall reduction in crop forecasts and the dry weather in Russia. Thus, at the end of August 2010 on the Euronext Liff e commodity derivatives exchange in Paris, wheat futures for November 2010 delivery quoted at about € 228 per tonne and corn futures traded at almost € 200 per tonne. At the end of June 2010, both prices had still been about € 150 per tonne.
This year's Austrian grain harvest is estimated by Agrarmarkt Austria (AMA) at 4.6 million tonnes, about 5% less than in the bumper year 2009|10. While the wheat crop is thus expected to be almost in line with the prior-year level, a contraction of about 9% is forecast for corn and barley.
| Key fi nancials | H1 2010 11 H1 2009 10 | |
|---|---|---|
| Starch segment | ||
| Revenue | € 272.6m | € 251.8m |
| Operating profi t before | ||
| exceptional items | € 30.8m | € 20.4m |
| Operating margin | 11.3% | 8.1% |
| Purchases of property, plant | ||
| and equipment and intangibles1 | € 2.9m | € 3.8m |
The revenue growth of 8.3% in the fi rst half of 2010|11 from € 251.8 million to € 272.6 million was propelled by higher sales quantities in all major groups of core products and by-products. These volume increases outweighed the eff ect of the lower sales prices.
The segment operating profi t of € 30.8 million before exceptional items improved by € 10.4 million on the prior-year result of € 20.4 million. Next to the volume growth, the heightened performance of the Austrian bioethanol business was another key factor in the operating margin improvement from 8.1% to 11.3%.
On 30 August the potato starch factory in Gmünd, Austria, began to process starch potatoes from the 2010 harvest. After the adverse weather during the main growing period – a cold, wet spring followed by dryness in the summer – the crop is projected at approximately 170,000 tonnes (prior year: 187,400 tonnes). Starch potato production will thus probably only reach about 85% of the contracted amount and approximately 37,000 tonnes of potato starch is forecast to be produced (prior year: 40,200 tonnes).
Wet corn processing at the Austrian corn starch plant in Aschach started on 5 September, with plans to process a wet corn volume of about 100,000 tonnes (in line with the prior year), completing the processing by the end of November. Subsequently, production will switch to the use of dry corn. In the fi rst half of 2010|11, some 191,000 tonnes of corn was processed (H1 2009|10: 182,000 tonnes).
The Hungarian subsidiary HUNGRANA plans to process 180,000 tonnes in the wet corn campaign, which began on 1 September 2010. The total corn processing volume at the Hungarian site in the 2010 calendar year will probably exceed 1 million tonnes (50% of it attributable to AGRANA's ownership share), thus surpassing the prior year's amount. HUNGRANA has an isoglucose quota of about 220,000 tonnes.
In Romania in the 2010|11 fi nancial year to date, approximately 15,000 tonnes of corn were processed in several sub-campaigns. Thanks to increased export activities, this processing quantity in the fi rst six months of the year was higher than in the year-earlier period (12,000 tonnes). Since the beginning of September, the Ţăndărei facility, too, is processing freshly harvested wet corn.
Throughout the EU, certifi cation of the sustainability of the production of biofuels will be legally required from 1 January 2011. In Austria, compliance with sustainability requirements for raw materials will be monitored by AMA. Under the process, raw materials from farmers who receive the EU's "single farm payments" and who must thus abide by the cross-compliance conditions (specifi ed farming standards) and by the relevant environmental protection legislation are to be classifi ed as sustainable.
As raw materials for the generation of bioethanol, the fl exible production plant used wheat, triticale, barley and corn in the fi rst half of 2010|11. For the 2011 crop, AGRANA is again off ering contracts for ethanol wheat and ethanol triticale. Since mid-September, as in the prior year, wet corn is being processed, with a planned total wet corn volume of about 20,000 to 30,000 tonnes.
The fi rst six months witnessed a recovery in the demand for fruit preparations. This positive trend can be seen in nearly all countries where these products are manufactured or marketed. Within the European markets, the growth is led by Eastern Europe, and especially Russia, with gains in the double digits. Another well-performing market is the USA, where numerous new product launches and the strengthened focus of some AGRANA customers on store brands are driving gratifying rates of growth in the dairy sector. Argentina and South Africa continue to suff er from the aftermath of the fi nancial crisis, but signs of the upturn were already visible in the quarter completed. In Mexico as well, there has been an improvement in the overall economic situation and in demand for fruit yoghurt. An important driver of this demand growth is a diversifi cation strategy followed by Brazil's biggest yoghurt producers towards more value-oriented products for less affl uent segments of the population.
In the fruit juice concentrates business, during the reporting period, the market showed steady beverage sales volumes in Western Europe and single-digit growth rates in Eastern Europe. Fruit juice consumption is expected to rise further. The North American market also exhibited a level trend.
| Key fi nancials | H1 2010 11 H1 2009 10 | |
|---|---|---|
| Fruit segment | ||
| Revenue | € 434.5m | € 411.0m |
| Operating profi t before | ||
| exceptional items | € 21.7m | € 10.5m |
| Operating margin | 5.0% | 2.6% |
| Purchases of property, plant | ||
| and equipment and intangibles1 | € 8.0m | € 7.6m |
Fruit segment revenue increased by 5.7% in the fi rst half of 2010|11, to € 434.5 million. Higher sales volumes of fruit preparations and fruit juice concentrates more than made up for the somewhat lower average sales prices in the reporting period. Western and Central Europe registered volume gains in relation to the fi rst half of the prior year. Beyond the market growth, AGRANA won additional market share, thanks in part to improved products and services. Eastern Europe sustained its good performance, buttressed by strong demand in Russia which exceeded the capacity of the fully utilised Russian plant and could only be met with the help of facilities in Poland and Ukraine. Sales quantities in North America also grew at a very satisfactory pace, as an increase in per-capita consumption coincided with market share wins. Latin America likewise surpassed the comparative period's sales, with very positive impetus from greater customer demand in Brazil. The India-Pacifi c region continued to trend very well.
In fruit juice concentrates, considerable volume gains were achieved especially for apple juice concentrate sales. Since the beginning of the fi nancial year, there has been fi rst a general stabilisation, and then an increase, in market prices.
The operating margin in the Fruit segment widened to 5.0% (H1 2009|10: 2.6%). The fi rst-half operating profi t of € 21.7 million before exceptional items was much higher than one year earlier (€ 10.5 million). Despite a small decline in prices, the operating result benefi ted not only from the signifi cant volume growth but also from further cost reductions.
The unfavourable weather patterns during the fi rst half of the year in the key fruit production regions worldwide have signifi cant implications for the availability of raw materials –
particularly of berries and stone fruit – for the fruit preparations business. This, combined with a distinct pick-up in demand, led to price increases for almost all fruits in Europe and globally. Prices in North America climbed to a similar degree as in Europe. Considerable increases occurred in South America as a result of more buying from Europe to cover demand, and in China, where both a signifi cant deterioration in the euro–US dollar exchange rate and a tripling of ocean freight rates had an impact on prices. In spite of this diffi cult situation, 85% of AGRANA's fruit requirement for the whole year is secured. If demand in the markets remains near current levels, further price hikes are expected, at least for the early crops in Latin America.
As to the fruit juice concentrate activities, the crop forecasts in China are at the prior-year level, but the price of fruit for processing is driven by the strong fresh-market demand. For the European apple crop, a poor production volume is forecast. The excess supply in the fresh market was reduced in recent months by intensifi ed exports, lower imports in the summer months from the southern hemisphere, and good retail sales. At the beginning of the season, the price of processing apples is already twice as high as one year earlier. From October, processing apple prices are expected to stabilise; processing volumes will be approximately 20% to 30% lower than in the year before. In Poland, notfrom-concentrate juice was produced from storage apples until the middle of June. Apple processing started at the end of July in Ukraine, the beginning of August in Poland and the end of August in Hungary, Austria and China. Black and red currants were processed into not-from-concentrate juice and concentrate beginning in the middle of July in Denmark and mid-June in Poland.
AGRANA uses an integrated system for the early identifi cation and monitoring of risks relevant to the Group. A detailed description of the Group's business risks is provided on pages 62 to 66 of the 2009|10 annual report.
As explained in the annual report, in the 2009|10 fi nancial year, competition authorities initiated investigations of AGRANA subsidiaries in two Eastern European countries. The focus of the investigation includes questions in connection with the EU sugar market reform and the implementation of the new sugar market regulations.
08 On 7 September 2010 AGRANA was informed that the Austrian Federal Competition Authority had fi led an application with the Cartel Court in Vienna for a declaratory judgement against, among other parties, AGRANA Zucker GmbH, Vienna, and SÜDZUCKER AG, Mannheim/Ochsenfurt, Germany, for an alleged past contravention of the Austrian Cartel Act. AGRANA is currently reviewing the allegation, of which it was not previously aware.
There are at present no known risks to the AGRANA Group's ability to continue in operational existence, and no future risks of this nature are currently discernible.
No signifi cant reportable events relevant to the fi nancial position, results of operations or cash fl ows occurred after the balance sheet date of 31 August 2010.
Notable increases in raw material prices were already evident towards the end of the fi rst half of 2010|11. Although this trend will have a negative eff ect on the profi tability of AGRANA in the second half of the fi nancial year, AGRANA reiterates the expectations for the full year. Thus, year-onyear revenue growth in the Starch and Fruit segments will more than off set the somewhat lower revenue in the Sugar segment and generate a slight increase in Group revenue. The operating profi t improvement in the Sugar and Fruit segments and the stable, good result in the Starch segment should lead to growth in Group operating profi t before exceptional items. The AGRANA Group's operating margin will improve further compared with the 2009|10 fi nancial year.
In the Sugar segment, 2010|11 will be the fi rst fi nancial year where the regulatory environment created by the EU sugar regime reform will apply in its form eff ective until 2015. This means that the temporary strain from the sugar market's restructuring phase is now eliminated. The upcoming campaign promises the full utilisation of the sugar quota and also a relatively large quantity of non-quota sugar. For the full year, however, a decrease in Sugar segment revenue is expected as a result of the market-reform-induced price declines in autumn 2009 which have left prices lower for the long term, and of the reduced volumes in the refi ning countries. Nonetheless, it should be possible to increase operating profi t before exceptional items.
AGRANA expects sales volume growth in the Starch segment for the full year and signifi cantly rising market prices for starch products in the latter half of 2010|11. For the bioethanol activities, revenue growth is forecast as a result of the volume expansion in production and sales. Since summer 2010, there have already been some signifi cant increases in the prices of the processed raw materials for starch production, which will weigh on the operating margin in the months ahead. However, the higher raw material prices are already leading to higher selling prices under new contracts, both in native and modifi ed starches and saccharifi cation products, and in co-products.
In the Fruit segment, a market recovery is emerging for the 2010|11 fi nancial year that will be expressed in rising sales quantities. The short-term outlook for the coming months indicates that sales volumes in fruit preparations will continue to grow. However, price increases for raw materials are in some cases only feeding through to product selling prices with a delay, and this limits the strength of the further year-on-year earnings improvement that can be expected in the second half of the year. Given the apple crop forecasts, apple prices are expected to triple from the prior year, which could cause a substantial rise in concentrate prices.
Investment in the 2010|11 fi nancial year will total about € 60 million.
CONSOLIDATED INCOME STATEMENT 2010|11 2009|10 2010|11 2009|10 ¤000 ¤000 ¤000 ¤000 Revenue 532,876 527,968 1,073,346 1,034,213 Changes in inventories of fi nished and unfi nished goods (53,540) (115,466) (158,779) (205,727) Own work capitalised 959 327 1,681 1,038 Other operating income 7,088 3,238 13,233 7,837 Cost of materials (324,476) (273,745) (597,432) (549,502) Staff costs (50,487) (48,536) (102,849) (96,740) Depreciation, amortisation and impairment losses (17,897) (16,598) (35,491) (33,264) Other operating expenses (64,046) (53,310) (128,958) (113,928) Operating profi t after exceptional items 30,477 23,878 64,751 43,927 Finance income 4,073 9,098 5,822 19,814 Finance expense (13,841) (7,616) (21,828) (17,375) Net fi nancial items (9,768) 1,482 (16,006) 2,439 Profi t before tax 20,709 25,360 48,745 46,366 Income tax expense (3,301) (7,303) (11,390) (11,561) Profi t for the period 17,408 18,057 37,355 34,805 Attributable to shareholders of the parent 16,877 18,002 36,559 34,899 Non-controlling interests 531 55 796 (94) Earnings per share under IFRS € 1.19 € 1.27 € 2.57 € 2.46 CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Profi t for the period 17,408 18,057 37,355 34,805 Income/(expense) recognised directly in equity – Currency translation diff erences (9,577) 5,493 1,462 14,676 – Available-for-sale fi nancial assets 168 413 268 589 – Cash fl ow hedge 160 2,311 (759) 7,764 – Tax eff ect of cash fl ow hedges (14) (584) 255 (2,109) Net income/(expense) recognised directly in equity (9,263) 7,633 1,226 20,920 Total recognised income and expense for the period 8,145 25,690 38,581 55,725 Attributable to shareholders of the parent 7,994 25,324 38,295 54,795 Non-controlling interests 151 366 286 930 Second quarter (1 June– 31 August) First six months (1 March – 31 August)
| CONDENSED CONSOLIDATED CASH FLOW STATEMENT | 2010 11 | 2009 10 | |
|---|---|---|---|
| for the fi rst six months (1 March – 31 August) | ¤000 | ¤000 | |
| Operating cash fl ow before change in working capital | 76,950 | 58,844 | |
| Losses/(gains) on disposal of non-current assets | (82) | 294 | |
| Change in working capital | 46,047 | 63,312 | |
| Net cash from operating activities | 122,915 | 122,450 | |
| Net cash (used in) investing activities | (14,467) | (9,886) | |
| Net cash (used in) fi nancing activities | (92,678) | (81,272) | |
| Net increase in cash and cash equivalents | 15,770 | 31,292 | |
| Eff ect of movements in foreign exchange rates on cash and cash equivalents | 1,757 | 2,103 | |
| Cash and cash equivalents at beginning of period | 70,388 | 75,458 | |
| Cash and cash equivalents at end of period | 87,915 | 108,853 |
| CONSOLIDATED BALANCE SHEET | 31 Aug 2010 | 28 Feb 2010 | |
|---|---|---|---|
| ¤000 | ¤000 | ||
| ASSETS | |||
| A. | Non-current assets | ||
| Intangible assets | 250,426 | 252,446 | |
| Property, plant and equipment | 582,617 | 597,788 | |
| Securities | 105,379 | 104,977 | |
| Investments in non-consolidated subsidiaries | |||
| and outside companies, and loan receivables | 6,160 | 7,027 | |
| Receivables and other assets | 12,897 | 10,652 | |
| Deferred tax assets | 36,634 | 30,845 | |
| 994,113 | 1,003,735 | ||
| B. | Current assets | ||
| Inventories | 309,715 | 468,576 | |
| Trade receivables and other assets | 381,643 | 336,688 | |
| Current tax assets | 6,556 | 5,013 | |
| Securities | 365 | 3,515 | |
| Cash and cash equivalents | 87,915 | 70,388 | |
| 786,194 | 884,180 | ||
| EQUITY AND LIABILITIES | |||
| A. | Equity | ||
| Share capital | 103,210 | 103,210 | |
| Share premium and other capital reserve | 411,362 | 411,362 | |
| Retained earnings | 374,767 | 364,657 | |
| Equity attributable to equity holders of the parent | 889,339 | 879,229 | |
| Non-controlling interests | 25,550 | 25,425 | |
| 914,889 | 904,654 | ||
| B. | Non-current liabilities | ||
| Retirement and termination benefi t obligations | 44,581 | 44,263 | |
| Other provisions | 15,017 | 14,073 | |
| Borrowings | 185,381 | 208,301 | |
| Other payables | 1,875 | 2,229 | |
| Deferred tax liabilities | 20,856 | 19,369 | |
| 267,710 | 288,235 | ||
| C. | Current liabilities | ||
| Other provisions | 28,324 | 28,592 | |
| Borrowings | 308,507 | 347,160 | |
| Trade and other payables | 244,432 | 308,533 | |
| Current tax liabilities | 16,445 | 10,741 | |
| 597,708 | 695,026 | ||
| Total equity and liabilities | 1,780,307 | 1,887,915 |
| CONDENSED CONSOLIDATED | Equity attributable | Non- | Total |
|---|---|---|---|
| STATEMENT OF CHANGES IN EQUITY | to equity holders | controlling | equity |
| for the fi rst six months (1 March – 31 August) | of the parent | interests | |
| ¤000 | ¤000 | ¤000 | |
| 2010 11 | |||
| At 1 March 2010 | 879,229 | 25,425 | 904,654 |
| Change in revaluation reserve (IAS 39) | (242) | 6 | (236) |
| Change in equity as a result of currency translation diff erences | 1,978 | (516) | 1,462 |
| Net income/(expense) recognised directly in equity | 1,736 | (510) | 1,226 |
| Profi t for the period | 36,559 | 796 | 37,355 |
| Total recognised income and expense for the period | 38,295 | 286 | 38,581 |
| Dividends paid | (27,694) | (476) | (28,170) |
| Other changes | (491) | 315 | (176) |
| At 31 August 2010 | 889,339 | 25,550 | 914,889 |
| 2009 10 At 1 March 2009 |
804,155 | 21,758 | 825,913 |
| Change in revaluation reserve (IAS 39) | 6,250 | (6) | 6,244 |
| Change in equity as a result of currency translation diff erences | 13,646 | 1,030 | 14,676 |
| Net income recognised directly in equity | 19,896 | 1,024 | 20,920 |
| Profi t/(loss) for the period | 34,899 | (94) | 34,805 |
| Total recognised income and expense for the period | 54,795 | 930 | 55,725 |
|---|---|---|---|
| Dividends paid | (27,694) | (1,632) | (29,326) |
| Other changes | (1,617) | 1,741 | 124 |
| At 31 August 2009 | 829,639 | 22,797 | 852,436 |
11
| (1 March – 31 August) | ||
|---|---|---|
| Operating profi t | ||
| Total revenue | after exceptional items | |
| Inter-segment revenue | Investment | |
| Revenue | Staff count | |
| SEGMENT REPORTING | 2010 11 | 2009 10 | 2010 11 | 2009 10 | |
|---|---|---|---|---|---|
| for the fi rst six months | ¤000 | ¤000 | ¤000 | ¤000 | |
| (1 March – 31 August) | |||||
| Operating profi t | |||||
| Total revenue | after exceptional items | ||||
| Sugar | 392,895 | 401,271 | Sugar | 12,283 | 13,063 |
| Starch | 288,826 | 269,336 | Starch | 30,794 | 20,365 |
| Fruit | 434,564 | 411,010 | Fruit | 21,674 | 10,499 |
| Group | 1,116,285 | 1,081,617 | Group | 64,751 | 43,927 |
| Inter-segment revenue | Investment | ||||
| Sugar | (26,656) | (29,837) | Sugar | 8,209 | 4,924 |
| Starch | (16,188) | (17,536) | Starch | 2,876 | 3,770 |
| Fruit | (95) | (31) | Fruit | 8,007 | 7,645 |
| Group | (42,939) | (47,404) | Group | 19,092 | 16,339 |
| Revenue | Staff count | ||||
| Sugar | 366,239 | 371,434 | Sugar | 2,082 | 2,195 |
| Starch | 272,638 | 251,800 | Starch | 878 | 879 |
| Fruit | 434,469 | 410,979 | Fruit | 5,838 | 5,103 |
| Group | 1,073,346 | 1,034,213 | Group | 8,798 | 8,177 |
The interim report of the AGRANA Group for the six months ended 31 August 2010 has been prepared in accordance with the rules for interim fi nancial reporting under IAS 34, in compliance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB) and their interpretation by the Inter national Financial Reporting Interpretations Committee (IFRIC). The interim consolidated fi nancial statements at and for the period ended 31 August 2010 have not been audited or reviewed.
The standards and interpretations eff ective for the fi rst time in the preparation of interim accounts in the 2010|11 fi nancial year did not have an impact on the presentation of the Group's fi nancial statements or on its fi nancial position, results of operations or cash fl ows. These standards and interpretations are outlined on pages 77 to 78 of the 2009|10 annual report. Except for these changes, the same accounting policies were applied as in the preparation of the consolidated annual fi nancial statements for the year
ended 28 February 2010 (the 2009|10 fi nancial year). To this extent, the accounting policies set out in the 2009|10 annual report from page 82 therefore apply mutatis mutandis to these interim accounts.
Corporate income taxes were determined on the basis of country-specifi c income tax rates, taking into account the tax planning for the full fi nancial year.
The 2009|10 annual report of the AGRANA Group is available on the Internet at www.agrana.com for online viewing or downloading.
In the second quarter of 2010|11 a newly formed company in Hungary, Biogáz Fejlesztő Kft., was included in the fi nancial statements for the fi rst time, by full consolidation. The company's principal business activity is gas production and marketing.
Most of the Group's beet sugar production falls into the three months from October to December. Depreciation and impairment of plant and equipment used in the campaign are therefore incurred largely in the fi nancial third quarter. The maintenance costs for the autumn 2010 campaign that were accrued before the fi nancial third quarter are recognised on an intra-year accrual basis as prepaid expenses in the items "trade receivables and other assets" and "receivables and other assets".
Operating profi t after exceptional items in the fi rst half of 2010|11 was € 64.8 million (H1 2009|10: € 43.9 million). The improvement in profi t was driven by the Starch and Fruit segments.
Net fi nancial items amounted to a net fi nance expense of € 16.0 million (H1 2009|10: net fi nance income of € 2.4 million). The decrease of € 18.4 million primarily represented foreign-exchange eff ects. While the prior-year period had brought high currency translation gains of € 14.6 million, the fi rst half of 2010|11 saw translation losses of € 2.4 million.
After tax, Group profi t for the fi rst half of the fi nancial year was € 37.4 million (H1 2009|10: € 34.8 million).
In the six months to the end of August 2010, cash and cash equivalents increased from € 70.4 million to a closing balance of € 87.9 million. Compared to the fi rst half of the prior year, operating cash fl ow before change in working capital
grew by € 18.2 million, to € 77.0 million (H1 2009|10: € 58.8 million), and working capital was reduced by less than in the comparative period. This resulted in net cash from operating activities of € 122.9 million (H1 2009|10: € 122.5 million).
The amount of net cash used in investing activities of € 14.5 million (H1 2009|10: net cash used of € 9.9 million) refl ects the continuing moderate scale of capital investment.
A reduction of € 22.9 million in non-current borrowings and of € 38.7 million in current borrowings, together with the dividend payment by AGRANA Beteiligungs-AG, resulted in net cash use of € 92.7 million in fi nancing activities (prior year: net cash used in fi nancing activities of € 81.3 million).
The reduction of € 107.6 million in total assets from the level of 28 February 2010 to a new total of € 1,780.3 million was attributable largely to the campaign-driven contraction in inventories. On the liabilities side, the reduction in the balance sheet total resulted principally from lower trade and other payables. With total equity of € 914.9 million (28 February 2010: € 904.7 million), the equity ratio at the end of August was 51.4% (28 February 2010: 47.9%).
In the fi rst half of the year the AGRANA Group had an average of 8,798 employees (H1 2009|10: 8,177). A decrease of 113 employees in the Sugar segment resulted from internal restructuring measures in Romania and Bulgaria. An increase of 735 positions in the Fruit segment was driven by the greater use of seasonal labour in Morocco, Mexico, Ukraine and China.
We confi rm that, to the best of our knowledge:
█ the condensed consolidated interim fi nancial statements, which have been prepared in accordance with the applicable accounting standards, give a true and fair view of the fi nancial position, results of operations and cash fl ows;
Vienna, 14 October 2010
Johann Marihart Fritz Gattermayer
Walter Grausam Thomas Kölbl Member of the Management Board Member of the Management Board
█ the Group's interim management report gives a true and fair view of the fi nancial position, results of operations and cash fl ows of the Group in relation to (1) the important events in the fi rst six months of the fi nancial year and their eff ects on the condensed consolidated interim fi nancial statements, (2) the principal risks and uncertainties for the remaining six months of the fi nancial year, and (3) the reportable signifi cant transactions with related parties.
Chief Executive Offi cer Member of the Management Board
This report contains forward-looking statements, which are based on assumptions and estimates made by the Management Board of AGRANA Beteiligungs-AG. Although these assumptions, plans and projections represent the Management Board's current intentions and best knowledge, a large number of internal and external factors may cause actual future developments and results to diff er materially from these assumptions and estimates. Some examples of such factors are, without limitation: negotiations concerning world trade agreements; changes in the overall economic environment, especially macroeconomic variables such as exchange rates, infl ation and interest rates; EU sugar policy; consumer behaviour; and public policy related to food and energy.
AGRANA Beteiligungs-AG does not guarantee in any way that the actual future developments and actual future results achieved will match the assumptions and estimates expressed or made in this interim report, and does not accept any liability in the event that assumptions and estimates prove to be incorrect.
| 13 January 2011 | Publication of results for fi rst three quarters of 2010 11 |
|---|---|
| 13 May 2011 | Press conference on annual results for 2010 11 |
| 1 July 2011 | Annual General Meeting for 2010 11 |
| 6 July 2011 | Dividend payment and ex-dividend date |
| 14 July 2011 | Publication of results for fi rst quarter of 2011 12 |
| 13 October 2011 | Publication of results for fi rst half of 2011 12 |
AGRANA Beteiligungs-Aktiengesellschaft Donau-City-Strasse 9 1220 Vienna, Austria www.agrana.com
Corporate Communications/Investor Relations: Hannes Haider Phone: +43-1-211 37-12905 Fax: +43-1-211 37-12045 E-mail: [email protected]
Corporate Communications/Public Relations: Ulrike Pichler Phone: +43-1-211 37-12084
| Fax: | +43-1-211 37-12045 |
|---|---|
| E-mail: | [email protected] |
This English translation of the AGRANA report is solely for readers' convenience. Only the German-language report is defi nitive.
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