Quarterly Report • Oct 9, 2014
Quarterly Report
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ON THE FIRST HALF OF 2014|15 REPORT
All prior-year values have been restated under IFRS 11 (equity method accounting has replaced proportionate consolidation); also see notes to the consolidated financial statements, from page 15.
Further information
AGRANA as expected registered a significant decrease in revenue in the first half of 2014|15, under the impact of market prices. In the Sugar and Fruit segments, EBIT was also reduced, while we were able to improve operating profit (EBIT) in the Starch segment. One-time costs of € 4.6 million for streamlining the location structure of the fruit preparations business in Austria weighed on profitability in the Fruit segment.
With declining selling prices taking effect, the situation in the Sugar segment will be further aggravated in the coming months. Lower raw material costs for the new beet crop will only partly offset the strain exerted by this development. For this reason too, AGRANA will continue to put strong emphasis on structural optimisation and rigorous cost management. Besides lower raw material costs, another positive factor is the successful shift of the Austrian apple juice production operations to the Kröllendorf site, which allowed us to expand processing capacity there by about 30% to 900 tonnes per day, thus generating savings both in fixed costs and on energy consumption. Group-wide, we were also able to cut energy costs by approximately 8% compared to the year-earlier reporting period, despite higher processing volumes.
At AGRANA, research and development has always been an important driver of our business success. Efficient research creates competitive advantage in the marketplace, and a keen innovative spirit has consistently given us the ability to grow at rates above the industry average. With the opening of the new AGRANA Research & Innovation Center (ARIC) in Tulln, Austria, we are bringing our previously geographically separate R&D activities together in one location. This way, we can take greater advantage of synergies in infrastructure and in multi-segment research projects.
Regarding raw materials, we are expecting very good potato, cereal, sugar beet and apple crops. Thanks to the good beet yields, we believe that over a five-month sugar campaign, we will for the first time produce more than one million tonnes of beet sugar. The purposeful investment in silo capacity in Tulln and in Kaposvár, Hungary, will thus stand us in good stead.
For the full 2014|15 financial year, we expect a significant reduction in Group EBIT as a result of likely sustained downward pressure on prices for sugar and bioethanol. Due to the markedly lower sales prices, we also foresee a significant decrease in Group revenue.
Sincerely
Johann Marihart Chief Executive Officer
Since the beginning of this financial year, with the adoption of IFRS 11 (Joint Arrangements), the joint ventures of the STUDEN group (Sugar segment) and HUNGRANA group (Starch segment), which previously were proportionately consolidated, are accounted for using the equity method. As this standard requires retrospective application, the prior-year data have been restated accordingly. Details of the impacts on the presentation and results are provided in the consolidated financial statements (from page 15) under the heading "Restatements in accordance with IAS 8".
| AGRANA Group | H1 | H1 |
|---|---|---|
| €m, except % and per share amounts | 2014 15 | 2013 14 |
| Revenue | 1,285.2 | 1,565.6 |
| EBITDA2 | 113.2 | 125.6 |
| Operating profit before | ||
| exceptional items and results of | ||
| equity-accounted joint ventures | 78.2 | 90.6 |
| Share of results of | ||
| equity-accounted joint ventures | 12.9 | 13.6 |
| Exceptional items | (4.1) | 0.0 |
| Operating profit [EBIT]3 | 87.0 | 104.2 |
| EBIT margin | 6.8% | 6.7% |
| Net financial items | (7.1) | (15.2) |
| Income tax expense | (18.9) | (19.8) |
| Profit for the period | 60.9 | 69.2 |
| Earnings per share | € 4.08 | € 4.59 |
| Investment4 | 38.6 | 55.7 |
| AGRANA Group | Q2 | Q2 |
|---|---|---|
| €m, except % and per share amounts | 2014 15 | 2013 14 |
| Revenue | 638.0 | 765.6 |
| EBITDA2 | 49.7 | 57.3 |
| Operating profit before | ||
| exceptional items and results of | ||
| equity-accounted joint ventures | 31.7 | 38.9 |
| Share of results of | ||
| equity-accounted joint ventures | 6.5 | 5.8 |
| Exceptional items | (4.1) | 0.0 |
| Operating profit [EBIT]3 | 34.1 | 44.6 |
| EBIT margin | 5.3% | 5.8% |
| Net financial items | (4.4) | (7.6) |
| Income tax expense | (7.9) | (7.7) |
| Profit for the period | 21.7 | 29.3 |
| Earnings per share | € 1.42 | € 1.94 |
| Investment4 | 23.7 | 34.2 |
In the first half of 2014|15 (ended 31 August 2014), revenue of the AGRANA Group was € 1,285.2 million, down 17.9% from the prior-year comparative period. Revenue in the Starch segment was almost level with one year earlier; the revenue reduction in the Sugar and Fruit segments was explained mostly by lower sales prices.
Operating profit (EBIT), at € 87.0 million, was 16.5% below the level of the prior year's first half. While EBIT grew in the Starch segment, lower revenues in the Sugar and Fruit segments weighed on earnings in terms of absolute figures. However, the EBIT margin improved slightly at Group level, representing increases in the Sugar and Starch segments. In the Fruit segment a margin expansion was prevented by negative exceptional items of € 4.6 million related to the streamlining of fruit preparations production sites
REVENUE BY SEGMENT
1 All prior-year values have been restated under IFRS 11 (equity method accounting has replaced proportionate consolidation); also see notes to the consolidated financial statements, from page 15.
2 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, depreciation and amortisation.
3 Operating profit (EBIT) is after exceptional items and results of equity-accounted joint ventures.
4 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.
in Austria (also see page 9). Net financial items in the first half of 2014|15 amounted to a net expense of € 7.1 million (H1 2013|14: net expense of € 15.2 million); the year-on-year improvement resulted primarily from net currency translation gains. After an income tax expense of € 18.9 million, corresponding to a tax rate of 23.7% (H1 2013|14: 22.3%), profit for the period was € 60.9 million (H1 2013|14: € 69.2 million). Earnings per share attributable to AGRANA shareholders amounted to € 4.08 (H1 2013|14: € 4.59).
In the first half of 2014|15, AGRANA invested a total of € 38.6 million, or € 17.1 million less than in the year-earlier comparative period. The analysis of capital expenditures by segment is as follows:
| €m | H1 | H1 |
|---|---|---|
| 2014 15 | 2013 14 | |
| Sugar segment | 13.4 | 23.0 |
| Starch segment | 4.4 | 17.8 |
| Fruit segment | 20.8 | 14.9 |
A short overview of the most important investment projects in the AGRANA Group:
█ Completion of the new US fruit preparations plant in Lysander, New York, which began production in Q1 2014|15 (Fruit)
█ Installation of third production line at fruit preparations plant in Brazil is in progress; early tests were conducted in August (Fruit)
Additionally in the first half of 2014|15, € 5.5 million (H1 2013|14: € 7.2 million) was invested in the equityaccounted joint ventures (the STUDEN and HUNGRANA groups).
Operating cash flow before change in working capital rose slightly by 1.4% year-on-year to € 93.3 million (H1 2013|14: € 92.0 million), as the effect of easing profit for the period was more than made up for by an increase in the excess of non-cash expenses over non-cash income. With a somewhat larger decrease of € 127.4 million in working capital (H1 2013|14: decrease of € 104.1 million), net cash from operating activities in the first half of 2014|15 was € 220.2 million (H1 2013|14: € 195.5 million). Net cash used in investing activities eased slightly to € 38.3 million (H1 2013|14: net cash use of € 40.2 million). The payment of the dividend for the 2013|14 financial year and a reduction in long-term borrowings were reflected in net cash used in financing activities of € 94.4 million (H1 2013|14: net cash use of € 93.4 million).
Total assets eased slightly compared with 28 February 2014, to € 2.3 billion, and the equity ratio rose from 49.9% to 52.1%.
While trade receivables went up slightly, AGRANA achieved a strong seasonal reduction in inventories, leading to an overall decrease in current assets. Non-current liabilities were reduced by paying down long-term borrowings. Current liabilities eased (despite marginally higher current borrowings), mainly because the payments made to beet growers in the first quarter of 2014|15 led to lower trade payables.
06 SUGAR SEGMENT Taking advantage of good market conditions, a € 300 million syndicated loan obtained at the end of 2012 was renewed early with the existing bank lenders in July 2014 for five years (until 2019) as strategic long-term financing.
Net debt as of 31 August 2014, at € 287.4 million, was down significantly – by € 99.4 million – from the 2013|14 yearend level. The gearing ratio of 24.1% at the interim balance sheet date was thus substantially lower than on 28 February 2014, when it had stood at 32.4%.
| Share data | H1 2014 15 |
|---|---|
| High (24 Jun 2014) | € 90.20 |
| Low (17 Apr 2014) | € 81.07 |
| Closing price (29 Aug 2014) | € 82.10 |
| Closing book value per share (31 Aug 2014) | € 79.43 |
| Closing market capitalisation (31 Aug 2014) | € 1,166.0m |
AGRANA started the 2014|15 financial year at a share price of € 87.70. The Ukraine crisis and the challenging market environment for sugar manufacturers led to a volatile, negative overall share price performance in the first six months. Although in June the share price temporarily rose above the € 90 mark, it was only € 82.10 at the end of the second quarter. This represented a drop of 6.39% over the first half of the year, with trading volume averaging 2,200 shares per day (based on double counting, as published by the Vienna Stock Exchange). However, AGRANA outperformed the Austrian blue-chip index, the ATX, which lost 11.06% over the same period.
AGRANA's share price performance can be followed in the investor relations section of the Group's homepage at www.agrana.com. The market capitalisation at 31 August 2014 was € 1,166.0 million, with an unchanged 14,202,040 shares outstanding.
The 27th Annual General Meeting of AGRANA Beteiligungs-AG on 4 July 2014 approved the payment of a dividend (unchanged from the previous year) of € 3.60 per share for the 2013|14 financial year; the dividend was paid in July 2014.
| Sugar segment | H1 | H1 |
|---|---|---|
| €m, except % | 2014 15 | 2013 141 |
| Revenue | 378.1 | 572.9 |
| EBITDA2 | 34.5 | 45.9 |
| Operating profit before | ||
| exceptional items and results of | ||
| equity-accounted joint ventures | 28.6 | 38.5 |
| Share of results of | ||
| equity-accounted joint ventures | (1.0) | (0.4) |
| Exceptional items | 0.5 | 0.0 |
| Operating profit [EBIT]3 | 28.1 | 38.1 |
| EBIT margin | 7.4% | 6.7% |
| Investment4 | 13.4 | 23.0 |
| Sugar segment | Q2 | Q2 |
| €m, except % | 2014 15 | 2013 141 |
| Revenue | 193.0 | 279.4 |
| EBITDA2 | 14.2 | 21.4 |
| Operating profit before | ||
| exceptional items and results of | ||
| equity-accounted joint ventures | 11.1 | 17.5 |
| Share of results of | ||
| equity-accounted joint ventures | (0.5) | (0.3) |
| Exceptional items | 0.5 | 0.0 |
| Operating profit [EBIT]3 | 11.1 | 17.1 |
| EBIT margin | 5.8% | 6.1% |
| Investment4 | 10.0 | 14.3 |
In the first half of 2014|15, revenue in the Sugar segment fell by 34.0% year-on-year to € 378.1 million. The reason was a continued reduction in sales prices and, to a lesser extent, a decrease in quantities sold into the sugar-using industry and to resellers. Revenues from by-products rose slightly.
1 All prior-year values have been restated under IFRS 11 (equity method accounting has replaced proportionate consolidation); also see notes to the consolidated financial statements, from page 15.
2 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, depreciation and amortisation.
3 Operating profit (EBIT) is after exceptional items and results of equity-accounted joint ventures.
4 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.
07
As expected, EBIT, at € 28.1 million, was down from the high year-ago value. The margin contraction in the second quarter was driven by the persistent erosion of sugar prices. The positive net exceptional items resulted from refunds in connection with the EU production levy.
For the 2013|14 sugar marketing year (SMY, October 2013 to September 2014) the analytics firm F.O. Licht is currently1 forecasting the first decrease in world sugar production seen in five years, along with further growth in consumption. Supply will nonetheless continue to exceed demand, making greater pressure on prices likely.
Amid considerable volatility during the first half of the year due to frequently changing crop forecasts, especially for the main Brazilian production regions, the world market price towards the end of the reporting period was very low; specifically, at the end of August 2014 the white sugar quotation was US\$ 423, or € 321, per tonne.
In the just-completed SMY 2013|14, with total EU sugar production of 16.8 million tonnes (prior SMY: 17.4 million tonnes) and steady quota sugar production, preferential imports continued to increase. Overall, sugar supply and demand were largely in balance.
For the new SMY 2014|15 now under way, with broadly rising crop expectations for European beet sugar, the level of utilisation of the EU sugar quota is expected to be steady. Owing to the falling sugar prices in the EU, preferential imports could decline. There is sufficient supply in the EU sugar market even without exceptional measures by the European Commission.
In SMY 2013|14 the Commission released 1.35 million tonnes of European out-of-quota sugar for export. The export licences were allocated in October and December 2013. For SMY 2014|15 the first such tranche has also been released, for the export of 0.6 million tonnes from October 2014. This is to be topped up later to 1.35 million tonnes.
The area planted to sugar beet by AGRANA's contract growers was reduced by about 5,000 hectares to approximately 97,000 hectares. In Austria about 600 hectares are dedicated to organic beet production this year.
While the contract acreages are thus lower, this year's very good weather and growing conditions mean that above-average beet yields can be expected in all countries. Processing in all seven AGRANA sugar factories began between 5 and 15 September. Given the high volumes of beet, a record-length campaign is forecast in all production countries.
| Starch segment | H1 | H1 |
|---|---|---|
| €m, except % | 2014 15 | 2013 142 |
| Revenue | 351.2 | 365.1 |
| EBITDA3 | 22.6 | 18.6 |
| Operating profit before | ||
| exceptional items and results of | ||
| equity-accounted joint ventures | 11.3 | 8.7 |
| Share of results of | ||
| equity-accounted joint ventures | 13.9 | 14.0 |
| Operating profit [EBIT]4 | 25.2 | 22.7 |
| EBIT margin | 7.2% | 6.2% |
| Investment5 | 4.4 | 17.8 |
1 Third Estimate of World Sugar Balance, June 2014.
5 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.
2 All prior-year values have been restated under IFRS 11 (equity method accounting has replaced proportionate consolidation);
also see notes to the consolidated financial statements, from page 15.
3 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, depreciation and amortisation.
4 Operating profit (EBIT) is after exceptional items.
| 08 | Starch segment | Q2 | Q2 | As a result of the positive crop outlook and good global |
|---|---|---|---|---|
| €m, except % | 2014 15 | 2013 141 | supply picture, commodity prices for these raw materials | |
| Revenue | 173.9 | 184.2 | have fallen significantly in the past months. At the end | |
| EBITDA2 | 9.3 | 7.7 | of August, wheat quoted at about € 174 per tonne and corn | |
| Operating profit before | at around € 152 (November delivery, NYSE Euronext Liffe, | |||
| exceptional items and results of | Paris). | |||
| equity-accounted joint ventures | 3.7 | 2.1 | ||
| Share of results of | Grain production in Austria, excluding grain corn | |||
| equity-accounted joint ventures | 7.0 | 6.1 | (non-silage corn), is estimated by Agrarmarkt Austria (AMA) | |
| Operating profit [EBIT]3 | 10.7 | 8.2 | at approximately 3.2 million tonnes, or about 10% more than | |
| EBIT margin | 6.2% | 4.5% | the prior year's 2.9 million tonnes. For grain corn, produc | |
| Investment4 | 2.8 | 10.5 | tion is expected to grow by almost 30% to 2.1 million tonnes. |
Revenue in the first half of 2014|15 was € 351.2 million, 3.8% less than in the same period one year earlier. The decline was caused primarily by lower selling prices for bioethanol, native corn starch and starch saccharification products, which outweighed the positive effect of higher volumes from, among other sources, the wheat starch plant in Pischelsdorf, Austria, that began production in June 2013. Sales prices for core products were significantly below the year-earlier levels, while prices of by-products were up a little.
At € 25.2 million, EBIT was up 11.0% year-on-year and profitability (the EBIT margin) expanded by one percentage point to 7.2%. Both in starch and bioethanol, lower selling prices were more than offset by reduced raw material prices. The result of subsidiary HUNGRANA, which is now accounted for using the equity method, was in line with the prior-year comparative period.
World grain production in the 2014|15 grain marketing year5 is estimated by the International Grains Council at 1.98 billion tonnes (prior year: 1.99 billion tonnes), somewhat above the expected level of consumption. Global wheat production is forecast at slightly above predicted consumption, while global corn (maize) production is expected to exceed demand somewhat more visibly. There will thus be further growth in global stocks.
supply picture, commodity prices for these raw materials have fallen significantly in the past months. At the end of August, wheat quoted at about € 174 per tonne and corn at around € 152 (November delivery, NYSE Euronext Liffe, Paris).
Grain production in Austria, excluding grain corn (non-silage corn), is estimated by Agrarmarkt Austria (AMA) at approximately 3.2 million tonnes, or about 10% more than the prior year's 2.9 million tonnes. For grain corn, production is expected to grow by almost 30% to 2.1 million tonnes.
On 26 August the potato starch factory in Gmünd, Austria, began the processing of starch potatoes from the 2014 harvest. On the strength of the good weather conditions, fulfilment by growers is expected to be 100% of the contracted amount of starch potatoes (about 228,000 tonnes, including organic potatoes). The summer's heavy precipitation promises good crop quantities, although with a lower starch content this year of about 17.5% (prior year: 18.5%).
Receiving of freshly harvested wet corn at the corn starch plant in Aschach, Austria, began on 11 September. Processing volume is expected to be similarly high as in the prior year (about 110,000 tonnes) and the wet corn campaign is projected to run until the middle of December. Production will then switch to the use of dry corn. In the first half of 2014|15, some 203,000 tonnes of corn was processed, in line with the prior year. At HUNGRANA, the subsidiary which is now equity-accounted, the wet corn campaign started at the end of August and wet corn processing is expected to rise to about 250,000 tonnes this year (prior year: 230,000 tonnes). Approximately 537,000 tonnes of corn was processed there in the first half of 2014|15, closely matching the year-earlier result. In Romania, wet corn is being processed since early September.
At the complex in Pischelsdorf, Austria (the bioethanol and wheat starch plant), about 368,000 tonnes of raw materials were processed in the first half of 2014|15 (H1 2013|14: 309,000 tonnes), with a ratio of about 60 to 40 of cereals (wheat and triticale) to corn. Processing of wet corn was launched in the middle of September and is expected to increase to about 100,000 tonnes this year (prior year: 93,000 tonnes).
1 All prior-year values have been restated under IFRS 11 (equity method accounting has replaced proportionate consolidation); also see notes to the consolidated financial statements, from page 15.
2 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, depreciation and amortisation.
| Fruit segment | H1 | H1 |
|---|---|---|
| €m, except % | 2014 15 | 2013 14 |
| Revenue | 555.9 | 627.6 |
| EBITDA1 | 56.1 | 61.1 |
| Operating profit | ||
| before exceptional items | 38.3 | 43.4 |
| Exceptional items | (4.6) | 0.0 |
| Operating profit [EBIT]2 | 33.7 | 43.4 |
| EBIT margin | 6.1% | 6.9% |
| Investment3 | 20.8 | 14.9 |
| Fruit segment | Q2 | Q2 |
| €m, except % | 2014 15 | 2013 14 |
| Revenue | 271.1 | 302.0 |
| EBITDA1 | 26.2 | 28.2 |
| Operating profit | ||
| before exceptional items | 16.9 | 19.3 |
| Exceptional items | (4.6) | 0.0 |
| Operating profit [EBIT]2 | 12.3 | 19.3 |
| EBIT margin | 4.5% | 6.4% |
| Investment3 | 10.9 | 9.4 |
Fruit segment revenue decreased by 11.4% in the first six months of 2014|15, to € 555.9 million. In fruit preparations, sales quantities were at the prior-year level, but foreign exchange effects from the stronger euro led to a revenue decline of just under 5%. The revenue reduction of about 25% in the fruit juice concentrate business resulted from both a small year-on-year decline in sales volumes reflecting crops and buying-in, and from lower selling prices for apple juice concentrate.
EBIT in the first half was € 33.7 million, a decrease of 22.4% from one year earlier. While the fruit juice concentrate activities generated a slight improvement in margins, earnings in the fruit preparations business were adversely affected by a provisioning expense for the planned closure of the plant in Kröllendorf, Austria, and the shift of its production to other plants, and by currency translation. Without these two exceptional items, the profitability of the Fruit segment would have continued to rise. This underscores the success of the measures initiated in the previous years to trim material and structural costs.
For fruit preparations, there is continuing growth in the non-European markets and a slight demand decline within the EU. Specifically, current market data for the last 52 weeks show a 2% decrease in Europe, while Russia saw growth of 4% and the US market was steady at an uptick of 0.2%. In Ukraine the political uncertainty had the effect of reducing demand, but thus far only by percentage rates in the single digits. Macroeconomic and political problems are also lowering the market trajectory in North Africa and Argentina.
Concerning fruit juice concentrates, Western European consumption of beverages high in fruit juice remains on a gentle easing trend, with most of this decrease occurring in Germany. Lower apple prices as a result of large crops and Russia's import ban on fresh fruit from the EU are leading to a significant drop in prices for apple juice concentrate.
This year's winter and spring crops of tropical fruits and strawberries in regions with a Mediterranean climate (such as Morocco, Egypt and Mexico) were average, with prices driven by strong demand from the USA. By contrast, the availability of raw materials from the summer harvests was, with few exceptions, very good.
Demand in the North American market is rising. Drought and water shortages in California, one of the main sourcing regions for the US fruit and vegetable market, led to very poor harvests of strawberries and stone fruits. AGRANA is making up the resulting shortfalls through procurement from other countries, mainly from Europe.
AGRANA BETEILIGUNGS-AG H1 2014|15
1 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, depreciation and amortisation.
2 Operating profit (EBIT) is after exceptional items and results of equity-accounted joint ventures.
3 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.
During the first half of 2014|15 in the fruit juice concentrate business, Poland largely produced not-from-concentrate juice. As a consequence of favourable weather conditions, berry crops were uniformly good. Reflecting the supply volumes and market developments, raw material prices were lower than in the year before. For apples, very good crops are forecast in all major European production regions.
AGRANA uses an integrated system for the early identification and monitoring of risks that are relevant to the Group.
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.
A detailed description of the Group's business risks is provided on pages 72 to 76 of the annual report 2013|14.
No significant events occurred after the interim balance sheet date of 31 August 2014 that had a material effect on AGRANA's financial position, results of operations or cash flows.
For the 2014|15 financial year as a whole, AGRANA expects a significant decrease in Group revenue (2013|14: € 2,841.7 million), driven by much lower average prices. For operating profit (EBIT) the Group is forecasting a significant reduction (2013|14: € 167.0 million) as a result of the price declines that are manifesting notably for sugar and ethanol.
In the Sugar segment, AGRANA predicts a significant revenue contraction (2013|14: € 962.9 million) as a consequence of the decline in sugar selling prices that is continuing in the second half of 2014|15. As the revenue reduction will only partly be offset by lower raw material costs, a significant decrease in EBIT is projected (2013|14: € 49.2 million).
For the Starch segment, AGRANA expects the 2014|15 financial year to bring a slight reduction in revenue (2013|14: € 706.7 million). The significant contraction in the prices of bioethanol and isoglucose should be largely made up through higher volumes; the new wheat starch plant in Pischelsdorf, Austria, will be operating at capacity. In the Starch segment, AGRANA currently expects a difficult market situation for bioethanol and saccharification products. EBIT could come in slightly below the prior-year level (2013|14: € 54.0 million).
The Fruit segment's revenue is predicted to dip slightly for the 2014|15 financial year (2013|14: € 1,172.1 million). EBIT earnings are seen moderately lower than in the prior year (2013|14: € 63.8 million) on continuing restructuring measures. In the fruit preparations business, AGRANA anticipates that all regions will experience a positive trend in sales volumes and a slight rise in revenue. Despite the start-up costs for the new US plant, it should be possible to match the prior year's EBIT (in local currency), thanks particularly to synergy effects in production costs and structural costs; however, restructuring measures and the strong euro will weigh on consolidated EBIT in fruit preparations. In fruit juice concentrates, a price-induced significant easing trend in revenue is expected year-on-year. EBIT of the Juice business, however, should be only slightly lower than in the prior year. The outlook for the Fruit segment is based on the assumption that the current slight decline in sales volume in Russia and Ukraine continues, but does not turn into a plunge.
In 2014|15 the AGRANA Group's total investment of about € 96 million for the financial year will be in line with depreciation.
| Second quarter | First six months | ||||
|---|---|---|---|---|---|
| (1 June–31 August) | (1 March–31 August) | ||||
| CONSOLIDATED INCOME STATEMENT | 2014 15 | 2013 141 | 2014 15 | 2013 141 | |
| ¤000 | ¤000 | ¤000 | ¤000 | ||
| Revenue | 637,983 | 765,564 | 1,285,206 | 1,565,583 | |
| Changes in inventories of finished and unfinished goods | (115,285) | (122,842) | (228,120) | (306,887) | |
| Own work capitalised | 446 | 1,488 | 1,376 | 2,368 | |
| Other operating income | 6,688 | 5,011 | 14,475 | 9,332 | |
| Cost of materials | (344,227) | (444,395) | (689,342) | (852,805) | |
| Staff costs | (69,416) | (65,994) | (137,043) | (132,784) | |
| Depreciation, amortisation and impairment losses | (18,048) | (18,431) | (35,023) | (34,973) | |
| Other operating expenses | (70,535) | (81,503) | (137,420) | (159,196) | |
| Share of results of equity-accounted joint ventures | 6,475 | 5,742 | 12,857 | 13,577 | |
| Operating profit after exceptional items | 34,081 | 44,640 | 86,966 | 104,215 | |
| Finance income | 1,011 | 3,096 | 5,659 | 5,935 | |
| Finance expense | (5,455) | (10,758) | (12,773) | (21,182) | |
| Net financial items | (4,444) | (7,662) | )7,114) | (15,247) | |
| Profit before tax | 29,637 | 36,978 | 79,852 | 88,968 | |
| Income tax expense | (7,957) | (7,726) | (18,935) | (19,789) | |
| Profit for the period | 21,680 | 29,252 | 60,917 | 69,179 | |
| Attributable to shareholders of the parent | 20,166 | 27,613 | 57,904 | 65,200 | |
| Attributable to non-controlling interests | 1,514 | 1,639 | 3,013 | 3,979 | |
| Earnings per share under IFRS (basic and diluted) | € 1.42 | € 1.94 | € 4.08 | € 4.59 |
| Second quarter | First six months | |||
|---|---|---|---|---|
| (1 June–31 August) | (1 March–31 August) | |||
| CONSOLIDATED STATEMENT | 2014 15 | 2013 14 | 2014 15 | 2013 14 |
| OF COMPREHENSIVE INCOME | ¤000 | ¤000 | ¤000 | ¤000 |
| Profit for the period | 21,680 | 29,252 | 60,917 | 69,179 |
| Other comprehensive income/(expense) | ||||
| – Currency translation differences | (7,735) | (11,224) | (3,531) | (15,937) |
| – Available-for-sale financial assets under IAS 39, | ||||
| after deferred taxes | 149 | (87) | 72 | 114 |
| – Cash flow hedges under IAS 39, after deferred taxes | (1,203) | 690 | (2,436) | (214) |
| (Expense) to be recognised in the income statement | ||||
| in the future | (8,789) | (10,621) | (5,895) | (16,037) |
| Change in actuarial gains and losses on defined | ||||
| benefit pension obligations and similar liabilities (IAS 19), | ||||
| after deferred taxes | (13) | 64 | (25) | 9 |
| (Expense) recognised directly in equity | (8,802) | (10,557) | (5,920) | (16,028) |
| Total comprehensive income for the period | 12,878 | 18,695 | 54,997 | 53,151 |
| Attributable to shareholders of the parent | 12,461 | 17,477 | 52,775 | 50,509 |
| Attributable to non-controlling interests | 417 | 1,218 | 2,222 | 2,642 |
| CONSOLIDATED BALANCE SHEET | 31 August | 28 February | |
|---|---|---|---|
| 2014 | 20141 | ||
| €000 | €000 | ||
| ASSETS | |||
| A. | Non-current assets | ||
| Intangible assets | 243,270 | 243,327 | |
| Property, plant and equipment | 650,691 | 643,613 | |
| Equity-accounted joint ventures | 68,836 | 57,057 | |
| Securities | 104,550 | 104,584 | |
| Investments in non-consolidated subsidiaries and outside companies | 1,159 | 1,120 | |
| Receivables and other assets | 21,983 | 24,525 | |
| Deferred tax assets | 30,818 | 29,685 | |
| 1,121,307 | 1,103,911 | ||
| B. | Current assets | ||
| Inventories | 450,890 | 685,450 | |
| Trade receivables and other assets | 466,635 | 452,025 | |
| Current tax assets | 26,616 | 14,249 | |
| Securities | 48 | 146 | |
| Cash and cash equivalents | 222,180 | 135,856 | |
| 1,166,369 | 1,287,726 | ||
| Total assets | 2,287,676 | 2,391,637 | |
| EQUITY AND LIABILITIES | |||
| A. | Equity | ||
| Share capital | 103,210 | 103,210 | |
| Share premium and other capital reserves | 411,362 | 411,362 | |
|---|---|---|---|
| Retained earnings | 613,463 | 611,906 | |
| Equity attributable to shareholders of the parent | 1,128,035 | 1,126,478 | |
| Non-controlling interests | 64,643 | 66,255 | |
| 1,192,678 | 1,192,733 | ||
| B. | Non-current liabilities | ||
| Retirement and termination benefit obligations | 57,042 | 56,746 | |
| Other provisions | 12,422 | 12,631 | |
| Borrowings | 307,321 | 327,611 | |
| Other payables | 1,276 | 1,365 | |
| Deferred tax liabilities | 12,238 | 12,602 | |
| 390,299 | 410,955 | ||
| C. | Current liabilities | ||
| Other provisions | 38,045 | 37,397 | |
| Borrowings | 306,809 | 299,773 | |
| Trade and other payables | 305,186 | 419,682 | |
| Current tax liabilities | 54,659 | 31,097 | |
| 704,699 | 787,949 | ||
| Total equity and liabilities | 2,287,676 | 2,391,637 |
1 The prior-year data were restated in accordance with IAS 8. Further information is provided from page 15.
| CONDENSED CONSOLIDATED CASH FLOW STATEMENT | ||
|---|---|---|
| 2014 15 | 2013 141 | |
| for the first six months (1 March–31 August) | ¤000 | ¤000 |
| Operating cash flow before change in working capital | 93,260 | 92,004 |
| Gains on disposal of non-current assets | (419) | (669) |
| Change in working capital | 127,395 | 119,133 |
| Net cash from operating activities | 220,236 | 210,468 |
| Net cash (used in) investing activities | (38,254) | (55,200) |
| Net cash (used in) financing activities | (94,438) | (93,407) |
| Net increase in cash and cash equivalents | 87,544 | 61,861 |
| Effect of movements in foreign exchange rates on cash and cash equivalents | (1,220) | (2,450) |
| Cash and cash equivalents at beginning of period | 135,856 | 126,448 |
| Cash and cash equivalents at end of period | 222,180 | 185,859 |
| CONDENSED CONSOLIDATED | Equity | Non- | Total |
|---|---|---|---|
| STATEMENT OF CHANGES IN EQUITY | attributable to | controlling | |
| for the first six months (1 March–31 August) | shareholders | interests | |
| of the parent | |||
| ¤000 | ¤000 | ¤000 | |
| 2014 15 | |||
| At 1 March 2014 | 1,126,478 | 66,255 | 1,192,733 |
| Fair value movements under IAS 39 | (2,364) | 0 | (2,364) |
| Change in actuarial gains and losses on | |||
| defined benefit pension obligations and similar liabilities | (27) | 2 | (25) |
| Currency translation loss | (2,738) | (793) | (3,531) |
| Other comprehensive (expense) for the period | (5,129) | (791) | (5,920) |
| Profit for the period | 57,904 | 3,013 | 60,917 |
| Total comprehensive income for the period | 52,775 | 2,222 | 54,997 |
| Dividends paid | (51,128) | (3,906) | (55,034) |
| Other changes | (90) | 72 | (18) |
| At 31 August 2014 | 1,128,035 | 64,643 | 1,192,678 |
| At 1 March 2013 | 1,125,829 | 86,060 | 1,211,889 |
|---|---|---|---|
| Fair value movements under IAS 39 | 0 | (100) | (100) |
| Change in actuarial gains and losses on | |||
| defined benefit pension obligations and similar liabilities | 10 | (1) | 9 |
| Currency translation loss | (14,701) | (1,236) | (15,937) |
| Other comprehensive (expense) for the period | (14,691) | (1,337) | (16,028) |
| Profit for the period | 65,200 | 3,979 | 69,179 |
| Total comprehensive income for the period | 50,509 | 2,642 | 53,151 |
| Dividends paid | (51,127) | (886) | (52,013) |
| Other changes | (423) | 540 | 117 |
| At 31 August 2013 | 1,124,788 | 88,356 | 1,213,144 |
| SEGMENT REPORTING | 2014 15 | 2013 141 | 2014 15 | 2013 141 | |
|---|---|---|---|---|---|
| for the first six months | ¤000 | ¤000 | ¤000 | ¤000 | |
| (1 March–31 August) | |||||
| Share of results of | |||||
| Total revenue | equity-accounted joint ventures | ||||
| Sugar | 419,301 | 614,800 | Sugar | (1,016) | (428) |
| Starch | 355,562 | 370,682 | Starch | 13,873 | 14,005 |
| Fruit | 556,081 | 627,862 | Fruit | 0 | 0 |
| Group | 1,330,944 | 1,613,344 | Group | 12,857 | 13,577 |
| Inter-segment revenue | Operating profit [EBIT]2 | ||||
| Sugar | (41,218) | (41,958) | Sugar | 28,078 | 38,066 |
| Starch | (4,375) | (5,543) | Starch | 25,168 | 22,708 |
| Fruit | (145) | (260) | Fruit | 33,720 | 43,441 |
| Group | (45,738) | (47,761) | Group | 86,966 | 104,215 |
| Revenue | Investment3 | ||||
| Sugar | 378,083 | 572,842 | Sugar | 13,401 | 23,015 |
| Starch | 351,187 | 365,139 | Starch | 4,364 | 17,761 |
| Fruit | 555,936 | 627,602 | Fruit | 20,840 | 14,924 |
| Group | 1,285,206 | 1,565,583 | Group | 38,605 | 55,700 |
| Operating profit before | |||||
| exceptional items and results of | |||||
| equity-accounted joint ventures | Staff count | ||||
| Sugar | 28,634 | 38,494 | Sugar | 2,049 | 2,071 |
| Starch | 11,295 | 8,703 | Starch | 858 | 851 |
Fruit 38,270 43,441 Fruit 6,078 5,766 Group 78,199 90,638 Group 8,985 8,688
Exceptional items
| Sugar | 460 | 0 |
|---|---|---|
| Starch | 0 | 0 |
| Fruit | (4,550) | 0 |
| Group | (4,090) | 0 |
3 Investment represents purchases of property, plant and equipment and intangibles (excluding goodwill).
The interim report of the AGRANA Group for the three months ended 31 August 2014 was prepared in accordance with the rules for interim financial reporting under IAS 34, in compliance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and their interpretation by the IFRS Interpretations Committee. Consistent with IAS 34, the consolidated financial statements of AGRANA Beteiligungs-Aktiengesellschaft ("AGRANA Beteiligungs-AG") at and for the period ended 31 August 2014 are presented in condensed form. These interim consolidated financial statements were not audited or reviewed. They were prepared by the Management Board of AGRANA Beteiligungs-AG on 29 September 2014.
The annual report 2013|14 of the AGRANA Group is available on the Internet at www.agrana.com for online viewing or downloading.
In the preparation of these interim financial statements, certain new or changed standards and interpretations became effective for the first time, as described on pages 91 to 95 of the 2013|14 annual report in the notes to the consolidated financial statements, section 2, "Basis of preparation".
Except as noted above, the same accounting methods were applied as in the preparation of the annual consolidated financial statements for the year ended 28 February 2014 (the latest full financial year).
The notes to those 2013|14 annual consolidated financial statements therefore apply mutatis mutandis to these interim accounts. Corporate income taxes were determined on the basis of country-specific income tax rates, taking into account the tax planning for the full financial year.
The initial application of IFRS 11 (Joint Arrangements) at the beginning of the 2014|15 financial year had impacts on the balance sheet, income statement and other parts of the financial statements, as the joint ventures in the
STUDEN group (Sugar segment) and in the HUNGRANA group (Starch segment), which previously were proportionately consolidated, are now accounted for using the equity method.
The retrospective application of the new standard also had analogous impacts on the comparative periods presented. An analysis of the assets and liabilities which at 1 March 2013 were for the first time combined in the item "equityaccounted joint ventures" is provided in the following overview:
| 1 March 2013 | Transition effect |
|---|---|
| ¤000 | of initial application |
| of IFRS 11 | |
| Non-current assets | 82,293 |
| Current assets | 45,985 |
| Inventories | 26,370 |
| Receivables and other assets | 1,654 |
| Cash and cash equivalents | 17,961 |
| Total assets 128,278 |
|
| Non-current liabilities | (5,572) |
| Current liabilities | (50,162) |
| Total liabilities | (55,734) |
| Carrying amount of |
| equity-accounted joint ventures | 72,544 |
|---|---|
The decrease in assets and liabilities led to a reduction in capital employed and in net debt. Impacts in the income statement, besides a reduction in revenue, occurred in all components of operating profit after exceptional items and of net financial items, as well as in income tax expense. Profit for the period and earnings per share were not affected. The after-tax profit of the companies involved enters into the Group accounts solely through the share of results of joint ventures that are accounted for using the equity method. In view of the fact that these companies constitute operating rather than financial investments, the share of results of joint ventures which are equityaccounted is reported as a component of operating profit after exceptional items.
The tables below give the values published for the first six months of the prior year (or in the case of the balance sheet, for the end of the prior year), the amount of their restatement for the transition to the equity method, and the values after the transition.
| CONSOLIDATED INCOME STATEMENT | As | Transition | Restated |
|---|---|---|---|
| for the first six months of the prior year (period ended 31 August 2013) | published | to equity | for equity |
| method | method | ||
| ¤000 | ¤000 | ¤000 | |
| Revenue | 1,674,339 | (108,756) | 1,565,583 |
| Changes in inventories of finished and unfinished goods | (309,404) | 2,517 | (306,887) |
| Own work capitalised | 2,501 | (133) | 2,368 |
| Other operating income | 9,929 | (597) | 9,332 |
| Cost of materials | (927,491) | 74,686 | (852,805) |
| Staff costs | (135,801) | 3,017 | (132,784) |
| Depreciation, amortisation and impairment losses | (38,996) | 4,023 | (34,973) |
| Other operating expenses | (167,065) | 7,869 | (159,196) |
| Share of results of equity-accounted joint ventures | 0 | 13,577 | 13,577 |
| Operating profit [EBIT]1 | 108,012 | (3,797) | 104,215 |
| Finance income | 5,968 | (33) | 5,935 |
| Finance expense | (21,408) | 226 | (21,182) |
| Net financial items | (15,440) | 193 | (15,247) |
| Profit before tax | 92,572 | (3,604) | 88,968 |
| Income tax expense | (23,393) | 3,604 | (19,789) |
| Profit for the period | 69,179 | 0 | 69,179 |
| Attributable to shareholders of the parent | 65,200 | 0 | 65,200 |
| Attributable to non-controlling interests | 3,979 | 0 | 3,979 |
| Earnings per share under IFRS (basic and diluted) | € 4.59 | € 0.00 | € 4.59 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | As published |
Transition to equity method |
Restated for equity method |
|---|---|---|---|
| for the first six months of the prior year (period ended 31 August 2013) | |||
| ¤000 | ¤000 | ¤000 | |
| Profit for the period | 69,179 | 0 | 69,179 |
| (Expense) recognised directly in equity | (16,028) | 0 | (16,028) |
| Total comprehensive income for the period | 53,151 | 0 | 53,151 |
| Attributable to shareholders of the parent | 50,509 | 0 | 50,509 |
| Attributable to non-controlling interests | 2,642 | 0 | 2,642 |
| CONSOLIDATED BALANCE SHEET | As | Transition | Restated | ||
|---|---|---|---|---|---|
| at the end of the prior year (28 February 2014) | published | to equity | for equity | ||
| method | method | ||||
| €000 | €000 | €000 | |||
| ASSETS | |||||
| A. | Non-current assets | ||||
| Intangible assets | 247,763 | (4,436) | 243,327 | ||
| Property, plant and equipment | 711,626 | (68,013) | 643,613 | ||
| Equity-accounted joint ventures | 0 | 57,057 | 57,057 | ||
| Securities | 104,584 | 0 | 104,584 | ||
| Investments in non-consolidated subsidiaries and outside companies | 1,169 | (49) | 1,120 | ||
| Receivables and other assets | 24,532 | (7) | 24,525 | ||
| Deferred tax assets | 30,084 | (399) | 29,685 | ||
| 1,119,758 | (15,847) | 1,103,911 | |||
| B. | Current assets | ||||
| Inventories | 712,222 | (26,772) | 685,450 | ||
| Trade receivables and other assets | 461,090 | (9,065) | 452,025 | ||
| Current tax assets | 14,364 | (115) | 14,249 | ||
| Securities | 146 | 0 | 146 | ||
| Cash and cash equivalents | 144,484 | (8,628) | 135,856 | ||
| 1,332,306 | (44,580) | 1,287,726 | |||
| Total assets | 2,452,064 | (60,427) | 2,391,637 | ||
| A. | Equity | |||
|---|---|---|---|---|
| Share capital | 103,210 | 0 | 103,210 | |
| Share premium and other capital reserves | 411,362 | 0 | 411,362 | |
| Retained earnings | 611,906 | 0 | 611,906 | |
| Equity attributable to shareholders of the parent | 1,126,478 | 0 | 1,126,478 | |
| Non-controlling interests | 66,255 | 0 | 66,255 | |
| 1,192,733 | 0 | 1,192,733 | ||
| B. | Non-current liabilities | |||
| Retirement and termination benefit obligations | 56,796 | (50) | 56,746 | |
| Other provisions | 12,642 | (11) | 12,631 | |
| Borrowings | 331,469 | (3,858) | 327,611 | |
| Other payables | 1,387 | (22) | 1,365 | |
| Deferred tax liabilities | 15,614 | (3,012) | 12,602 | |
| 417,908 | (6,953) | 410,955 | ||
| C. | Current liabilities | |||
| Other provisions | 37,441 | (44) | 37,397 | |
| Borrowings | 328,316 | (28,543) | 299,773 | |
| Trade and other payables | 444,012 | (24,330) | 419,682 | |
| Current tax liabilities | 31,654 | (557) | 31,097 | |
| 841,423 | (53,474) | 787,949 | ||
| Total equity and liabilities | 2,452,064 | (60,427) | 2,391,637 | |
| CONDENSED CONSOLIDATED CASH FLOW STATEMENT | As | Transition | Restated |
|---|---|---|---|
| for the first six months of the prior year (period ended 31 August 2013) | published | to equity | for equity |
| method | method | ||
| ¤000 | ¤000 | ¤000 | |
| Operating cash flow before change in working capital | 111,251 | (19,247) | 92,004 |
| Gains on disposal of non-current assets | (674) | 5 | (669) |
| Change in working capital | 96,492 | 22,641 | 119,133 |
| Net cash from operating activities | 207,069 | 3,399 | 210,468 |
| Net cash (used in) investing activities | (58,648) | 3,448 | (55,200) |
| Net cash (used in) financing activities | (99,495) | 6,088 | (93,407) |
| Net increase in cash and cash equivalents | 48,926 | 12,935 | 61,861 |
| Effect of movements in foreign exchange rates on cash and cash equivalents | (2,651) | 201 | (2,450) |
| Cash and cash equivalents at beginning of period | 144,409 | (17,961) | 126,448 |
| Cash and cash equivalents at end of period | 190,684 | (4,825) | 185,859 |
In the first quarter of the financial year the Vienna-based AGRANA ZHG Zucker Handels GmbH was consolidated for the first time. In the second quarter of 2014|15 the equityaccounted AGRAGOLD Holding GmbH, based in Vienna, was merged into AGRANA-STUDEN Beteiligungs GmbH, Vienna. In total, 65 companies were fully consolidated (end of 2013|14 financial year: 64 companies) and eleven companies were accounted for using the equity method (end of 2013|14 financial year: twelve companies).
Most of the Group's 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 financial third quarter. The material costs, staff costs and other operating expenses incurred before the sugar campaign in preparation for production are recognised intra-year under the respective type of expense and capitalised within inventories as unfinished goods.
Operating profit after exceptional items (EBIT) in the first half of 2014|15 was € 87.0 million (H1 2013|14: € 104.2 million). The decrease in EBIT was attributable largely to lower earnings in the Sugar and Fruit segments. An additional downside effect on EBIT in the Fruit segment was exerted by negative net exceptional items of € 4.6 million related to the concentration of fruit preparations production operations in Austria, while the Sugar segment recorded net exceptional items income of € 0.5 million (from reimbursements of production levies).
Net financial items amounted to an expense of € 7.1 million (H1 2013|14: expense of € 15.2 million). The improvement resulted from (small) currency translation gains in the reporting period, which contrasted with high translation losses incurred in the year-earlier period.
After taxes, Group profit for the period was € 60.9 million (H1 2013|14: € 69.2 million).
In the six months to the end of August 2014, cash and cash equivalents grew by € 86.3 million to € 222.2 million. Operating cash flow before changes in working capital was € 93.3 million (H1 2013|14: € 92.0 million), a rise of € 1.3 million year-on-year. The change arose mainly from a reduction in profit for the period and an increase in other non-cash expenses and income. The latter item included, among other elements, unrealised currency translation losses within net financial items, the effects of deferred taxes and non-cash current taxes. Net cash used in operating activities during the first six months of 2014|15 was € 220.2 million (H1 2013|14: net cash used of € 210.5 million).
In the current financial year, lower investment in purchases of property, plant and equipment in the Sugar and Starch segments led to a reduction in net cash used in investing activities, whereas the Fruit segment saw a continued rise in property, plant and equipment purchases. At Group level, net cash used in investing activities in the first half of 2014|15 was € 38.3 million (H1 2013|14: € 55.2 million).
Net cash used in financing activities, at € 94.4 million, was in line with the first half of the prior year.
Total assets eased by € 103.9 million compared with the prior-year end (28 February 2014), to € 2,287.7 million. On the assets side of the balance sheet, the reduction was primarily the result of lower inventories, which outweighed an increase in cash and cash equivalents. On the liabilities side, a drop in trade and other payables contributed to the reduction in the balance sheet total. With shareholders' equity of € 1,192.7 million (28 February 2014: € 1,192.7 million), the equity ratio at the end of August was 52.1% (28 February 2014: 49.9%).
To hedge risks from operating and financing activities (risks related to changes in interest rates, exchange rates and commodity prices), the AGRANA Group to a limited extent uses common derivative financial instruments. Derivatives are recognised at cost at the inception of the derivative contract and are subsequently measured at fair value at every balance sheet date. Changes in value are as a rule recognised in profit or loss. Where the conditions for cash flow hedge accounting under IAS 39 are met, the unrealised changes in value are recognised directly in equity.
In the table below, the financial assets and liabilities measured at fair value are analysed by their level in the fair value hierarchy. The levels are defined as follows under IFRS 7:
█ Level 1 consists of those financial instruments for which the fair value represents exchange or market prices quoted for the exact instrument on an active market (i.e., these prices are used without adjustment or change in composition).
█ In Level 2, the fair values are determined on the basis of exchange or market prices quoted on an active market for similar assets or liabilities, or using other valuation techniques for which the significant inputs are based on observable market data.
█ Level 3 consists of those financial instruments for which the fair values are determined on the basis of valuation techniques using significant inputs that are not based on observable market data.
In the reporting period no reclassifications were made between levels of the hierarchy.
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| ¤000 | ¤000 | ¤000 | ¤000 | |
| 31 AUGUST 2014 | ||||
| Securities (non-current) | 19,550 | 0 | 0 | 19,550 |
| Investments in non-consolidated subsidiaries | ||||
| and outside companies (non-current) | 0 | 0 | 276 | 276 |
| Derivative financial assets at fair value through equity | ||||
| (hedge accounting) | 0 | 210 | 0 | 210 |
| Derivative financial assets at fair value through profit or loss | ||||
| (held for trading) | 2,233 | 742 | 0 | 2,975 |
| Securities (current) | 48 | 0 | 0 | 48 |
| Financial assets | 21,831 | 952 | 276 | 23,059 |
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| ¤000 | ¤000 | ¤000 | ¤000 | |
| Liabilities from derivatives at fair value through equity | ||||
| (hedge accounting) | 2,213 | 4,519 | 0 | 6,732 |
| Liabilities from derivatives at fair value through profit or loss | ||||
| (held for trading) | 0 | 2,380 | 0 | 2,380 |
| Financial liabilities | 2,213 | 6,899 | 0 | 9,112 |
| 31 AUGUST 2013 | ||||
| Securities (non-current) | 20,476 | 0 | 0 | 20,476 |
| Investments in non-consolidated subsidiaries | ||||
| and outside companies (non-current) | 0 | 0 | 277 | 277 |
| Derivative financial assets at fair value through equity | ||||
| (hedge accounting) | 0 | 62 | 0 | 62 |
| Derivative financial assets at fair value through profit or loss | ||||
| (held for trading) | 0 | 771 | 0 | 771 |
| Securities (current) | 38 | 0 | 0 | 38 |
| Financial assets | 20,514 | 833 | 277 | 21,624 |
| Liabilities from derivatives at fair value through equity | ||||
| (hedge accounting) | 0 | 1,379 | 0 | 1,379 |
| Liabilities from derivatives at fair value through profit or loss | ||||
| (held for trading) | 0 | 4,455 | 0 | 4,455 |
| Financial liabilities | 0 | 5,834 | 0 | 5,834 |
For cash and cash equivalents, securities, trade and other receivables and trade and other payables, it can be assumed that the carrying amount is a realistic estimate of fair value.
The following table presents the carrying amounts and fair values of borrowings. The fair values of bank loans and overdrafts, other loans from non-Group entities, borrowings from affiliated companies in the Südzucker group and obligations under finance leases are measured at the present value of the payments related to the borrowings:
| Carrying | Fair value | |
|---|---|---|
| amount | ||
| ¤000 | ¤000 | |
| 31 AUGUST 2014 | ||
| Bank loans and overdrafts, and other loans from non-Group entities | 364,048 | 367,534 |
| Borrowings from affiliated companies in the Südzucker group | 250,000 | 256,361 |
| Finance lease obligations | 82 | 90 |
| Borrowings | 614,130 | 623,985 |
| 31 AUGUST 2013 | ||
| Bank loans and overdrafts, and other loans from non-Group entities | 413,876 | 418,102 |
| Borrowings from affiliated companies in the Südzucker group | 250,000 | 257,132 |
| Finance lease obligations | 54 | 59 |
| Borrowings | 663,930 | 675,293 |
In the first six months of the financial year the AGRANA Group had an average of 8,985 employees (H1 2013|14: 8,688). An increase of about 300 positions in the Fruit segment was attributable mainly to a higher requirement for seasonal labour in Ukraine, Morocco and Mexico and to the new production site in the USA.
There were no material changes in related party relationships since the year-end balance sheet date of 28 February 2014. Transactions with related parties as defined in IAS 24 are conducted on arm's length terms. Details of individual related party relationships are provided in the AGRANA annual report for the year ended 28 February 2014.
No significant events occurred after the first-quarter balance sheet date of 31 August 2014 that had a material effect on AGRANA's financial position, results of operations or cash flows.
22 We confirm that, to the best of our knowledge:
█ the condensed consolidated interim financial statements, which have been prepared in accordance with the applicable accounting standards, give a true and fair view of the Group's financial position, results of operations and cash flows within the meaning of the Stock Exchange Act; and
█ the Group's management report for the first six months gives a true and fair view of the Group's financial position, results of operations and cash flows within the meaning of the Stock Exchange Act in relation to (1) the important events in the first six months of the financial year and their effects on the condensed consolidated interim financial statements, (2) the principal risks and uncertainties for the remaining two quarters of the financial year, and (3) the reportable significant transactions with related parties.
Vienna, 29 September 2014
The Management Board of AGRANA Beteiligungs-AG
Johann Marihart Fritz Gattermayer Chief Executive Officer Member of the Management Board Business Strategy, Production, Quality Management, Sales, Raw Materials, Purchasing, Human Resources, Communication (including Investor Relations), and Sugar Segment Research & Development, and Starch Segment
Walter Grausam Thomas Kölbl Member of the Management Board Member of the Management Board Finance, Controlling, Treasury, Information Technology & Internal Audit Organisation, Mergers & Acquisitions, Legal, and Fruit Segment
| 13 January 2015 | Publication of results for first three quarters of 2014 15 |
|---|---|
| 13 May 2015 | Publication of annual results for 2014 15 (press conference) |
| 3 July 2015 | Annual General Meeting for 2014 15 |
| 8 July 2015 | Dividend payment and ex-dividend date |
| 9 July 2015 | Publication of results for first quarter of 2015 16 |
| 8 October 2015 | Publication of results for first half of 2015 16 |
Phone: +43-1-211 37-12905 Fax: +43-1-211 37-12926 E-mail: [email protected]
Markus Simak
Phone: +43-1-211 37-12084 Fax: +43-1-211 37-12926 E-mail: [email protected]
http://reports.agrana.com
This English translation of the AGRANA report is solely for readers' convenience and is not definitive. In the event of discrepancy or dispute, only the German-language version shall govern.
This interim 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 differ 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 in macroeconomic variables such as exchange rates, inflation 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.
As a result of the standard round-half-up convention used in rounding individual amounts and percentages, this report may contain minor, immaterial rounding errors.
No liability is assumed for misprints, typographical and similar errors.
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