Quarterly Report • Oct 14, 2021
Quarterly Report
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R E P O R T O N T H E FIRST HALF OF 2021|22
1 Debt-equity ratio (ratio of net debt to total equity).
2 Average number of full-time equivalents in the reporting period.
| 3 | Letter from the Management Board |
|---|---|
| 4 | Group management report |
| 4 | AGRANA Group results for the first half of 2021 22 |
| 7 | AGRANA capital market developments |
| 7 | Corporate governance |
| 8 | Fruit segment |
| 9 | Starch Segment |
| 11 | Sugar Segment |
| 13 | Management of risks and opportunities |
| 13 | Number of employees |
| 13 | Related party disclosures |
| 13 | Significant events after the interim reporting date |
| 14 | Outlook |
| 15 | Interim consolidated financial statements |
| 15 | Consolidated income statement |
| 16 | Consolidated statement of comprehensive income |
| 16 | Condensed consolidated cash flow statement |
| 17 | Consolidated balance sheet |
| 18 | Condensed consolidated statement of changes in equity |
| 19 | Notes to the interim consolidated financial statements |
| 25 | Management Board's responsibility statement |
| 26 | Other information |
Dear Investor,
In the first half of 2021|22 we achieved EBIT earnings of € 44.8 million (first half of the prior year: € 55.8 million). Despite an extremely volatile business environment, we thus remain on track and reiterate our positive EBIT guidance for the full financial year. Specifically, this means that in 2021|22, we plan to exceed last year's € 78.7 million operating profit significantly, which is to say by at least 10%.
A heterogeneous business trajectory since the outbreak of the Covid-19 pandemic led to sharp swings between the quarters of the prior year, which is resulting in some base effects in the opposite direction this financial year. This is one reason why, after a weaker first six months of 2021|22, we are projecting significantly stronger earnings in the second half of the year than one year earlier.
It is a well-known fact that commodity markets have soared dramatically in the past several months, also taking the prices of agricultural commodities to levels 30% to 50% above those of a year ago. Higher energy costs too are weighing on earnings in all our business segments. The coronavirus pandemic with all its ripple effects – including for our customers – is not over yet. In the coming months, volatile markets both on the purchasing and sales sides will continue to demand our close attention and careful management.
We are confident that we will master these challenges well. In the past quarters we have already taken measures to both deal with the price increases faced in procurement and to reflect the higher production costs in adjusted sales prices. The strategic partnerships we have built over three decades, as well as our market position, will certainly be helpful in this area.
At AGRANA, the second half of the year is always a time of intensive campaign production (beet, potato, wet corn, apple). In the Sugar segment, all plants have been running at full capacity since the beginning of October, and capacity utilisation is projected to increase compared to the prior year thanks to a higher volume of beet. Rising sugar prices too will improve earnings in the second half of 2021|22. In the Fruit segment, a 2021 apple campaign marked by good volume is expected to lead to a recovery for the fruit juice concentrate business in the latter half of the year.
Sustainability is an integral aspect of AGRANA's business activities. To underpin our commitment to climate protection, the Group joined the Science Based Targets initiative in July 2021 and will establish corresponding climate targets within 24 months.
Dear valued shareholder, please be assured that the AGRANA team will continue to tackle the work ahead with high ambition and motivation. Our goal is not just to achieve our short-term financial targets but, in the long term, to fully leverage the potential of a strong, innovative and well-positioned company.
The Management Board team of AGRANA Beteiligungs-AG
Markus Mühleisen Chief Executive Officer
Ingrid-Helen Arnold Stephan Büttner Norbert Harringer
| Consolidated income statement | H1 | H1 |
|---|---|---|
| (condensed) €m, except as otherwise indicated |
2021 22 | 2020 21 |
| Revenue | 1,424.4 | 1,309.3 |
| EBITDA1 | 94.0 | 101.1 |
| Operating profit before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 41.0 | 47.4 |
| Share of results of equity-accounted | ||
| joint ventures | 6.1 | 8.9 |
| Exceptional items | (2.3) | (0.5) |
| Operating profit (EBIT) | 44.8 | 55.8 |
| EBIT margin | 3.1% | 4.3% |
| Net financial items | (7.1) | (9.1) |
| Profit before tax | 37.7 | 46.7 |
| Income tax expense | (10.6) | (12.3) |
| Profit for the period | 27.1 | 34.4 |
| Attributable to shareholders | ||
| of the parent | 28.0 | 33.9 |
| Earnings per share (€) | 0.45 | 0.54 |
In the first half of the 2021|22 financial year (the six months ended 31 August 2021), revenue of the AGRANA Group was € 1,424.4 million, up moderately from the same period one year earlier, with the growth coming largely from higher sales volumes in the Starch segment. The revenue trend in the Fruit and Sugar segments was also positive.
Operating profit (EBIT) was € 44.8 million in the first half of 2021|22, a significant decrease from the year-ago level of € 55.8 million. In the Fruit segment, EBIT declined to € 25.8 million (H1 prior year: € 30.1 million) as a result of a markedly weaker performance in the fruit juice concentrate business. A considerable increase in raw material costs was the main cause of a significant EBIT decrease in
| Consolidated income statement (condensed) €m, except as otherwise indicated |
Q2 2021 22 |
Q2 2020 21 |
|---|---|---|
| Revenue | 718.6 | 656.7 |
| EBITDA1 | 49.2 | 46.4 |
| Operating profit before exceptional items and results of equity-accounted joint ventures |
22.3 | 19.3 |
| Share of results of equity-accounted joint ventures |
3.9 | 5.0 |
| Exceptional items | (2.3) | (0.5) |
| Operating profit (EBIT) | 23.9 | 23.8 |
| EBIT margin | 3.3% | 3.6% |
| Net financial items | (3.3) | (3.0) |
| Profit before tax | 20.6 | 20.8 |
| Income tax expense | (5.6) | (5.6) |
| Profit for the period | 15.0 | 15.2 |
| Attributable to shareholders of the parent |
15.3 | 15.1 |
| Earnings per share (€) | 0.24 | 0.24 |
the Starch segment to € 29.0 million (H1 prior year: € 34.7 million). In the Sugar segment, EBIT deteriorated from one year earlier to a deficit of € 10.0 million (H1 prior year: deficit of € 9.0 million), due above all to lower margins in the 2020|21 sugar marketing year. The Group's net financial items amounted to an expense of € 7.1 million, down from an expense of € 9.1 million in the year-earlier period, thanks primarily to an improvement in currency translation differences. After an income tax expense of € 10.6 million, corresponding to a tax rate of 28.1% (H1 prior year: 26.3%), profit for the period was € 27.1 million (H1 prior year: € 34.4 million). Earnings per share attributable to AGRANA shareholders decreased to € 0.45 (H1 prior year: € 0.54).
1
In the first half of the 2021|22 financial year, AGRANA invested € 30.3 million, or € 2.5 million more than in the year-earlier comparative period. Capital expenditure by segment was as follows:
| H1 | H1 | ||
|---|---|---|---|
| Investment | 2021 22 | 2020 21 | Change |
| €m, except % | |||
| Fruit segment | 12.2 | 13.4 | –9.0% |
| Starch segment | 7.4 | 9.4 | –21.3% |
| Sugar segment | 10.7 | 5.0 | 114.0% |
| Group | 30.3 | 27.8 | 9.0% |
In addition to the regular projects for product quality improvement, asset replacement and maintenance across all production sites, the following individual investments are worthy of note:
The item "operating cash flow before changes in working capital" eased to € 90.9 million in the first half of 2021|22 (H1 prior year: € 112.8 million), as a result partly of the lower profit for the period. After a larger increase of € 34.7 million in working capital than one year earlier (H1 prior year: increase of € 28.1 million), net cash from operating activities in the first half of 2021|22 was € 39.3 million (H1 prior year: € 71.5 million). Net cash used in investing activities declined to € 23.0 million due to lower payments for purchases of subsidiaries, despite higher payments for purchases of property, plant and equipment and intangibles (H1 prior year: net cash use of € 32.3 million). With a moderately higher dividend pay-
Additionally in the first half of 2021|22, € 6.5 million (H1 prior year: € 21.1 million) was invested in the equity-accounted joint ventures (the HUNGRANA and STUDEN groups and Beta Pura GmbH; values for these entities are stated at 100% of the totals).
ment, a significant increase in borrowings compared to the year-earlier period led to a net cash inflow of € 5.3 million from financing activities (H1 prior year: net outflow of € 29.0 million).
| Consolidated balance sheet (condensed) | 31 August 2021 | 28 February 2021 | Change |
|---|---|---|---|
| €m, except % and pp | |||
| ASSETS | |||
| Non-current assets | 1,229.1 | 1,232.0 | –0.2% |
| Of which intangible assets, including goodwill | 258.4 | 254.6 | 1.5% |
| Of which property, plant and equipment | 845.4 | 859.7 | –1.7% |
| Current assets | 1,229.4 | 1,240.7 | –0.9% |
| Of which inventories | 556.4 | 700.6 | –20.6% |
| Of which trade receivables | 422.8 | 323.1 | 30.9% |
| Of which cash and cash equivalents | 133.0 | 111.0 | 19.8% |
| Total assets | 2,458.5 | 2,472.7 | –0.6% |
| 1,322.1 | 1,329.1 | –0.5% |
|---|---|---|
| 1,265.0 | 1,273.8 | –0.7% |
| 57.1 | 55.3 | 3.3% |
| 589.1 | 597.4 | –1.4% |
| 481.9 | 493.6 | –2.4% |
| 547.3 | 546.2 | 0.2% |
| 156.5 | 80.3 | 94.9% |
| 236.1 | 311.5 | –24.2% |
| 2,458.5 | 2,472.7 | –0.6% |
| Net debt | 485.8 | 443.5 | 9.5% |
|---|---|---|---|
| Gearing ratio1 | 36.7% | 33.4% | 3.3pp |
| Equity ratio | 53.8% | 53.8% | 0.0pp |
Total assets were steady relative to the 2020|21 year-end balance sheet date, at € 2.46 billion as of 31 August 2021 (28 February 2021: € 2.47 billion), with an equity ratio of 53.8% (28 February 2021: 53.8%).
The value of non-current assets was almost unchanged at € 1,229.1 million. Current assets, at € 1,229.4 million, also remained steady overall; while inventories were seasonally reduced, trade receivables increased. Non-current liabilities eased slightly, to € 589.1 million. Current liabilities were virtually constant on balance, as an increase in short-term borrowings coincided with a reduction in trade payables.
Net debt as of 31 August 2021 stood at € 485.8 million, up € 42.3 million from the year-end level of € 443.5 million marked on 28 February 2021. The gearing ratio rose accordingly to 36.7% as of the interim balance sheet date (28 February 2021: 33.4%).
| Share data | H1 2021 22 | |
|---|---|---|
| High (16 June 2021) | € | 20.55 |
| Low (25 March 2021) | € | 17.18 |
| Closing price (31 August 2021) | € | 19.00 |
| Closing book value per share | € | 20.24 |
| Closing market capitalisation | €m | 1,187.3 |
AGRANA started the 2021|22 financial year at a share price of € 17.60 and closed at € 19.00 on the last trading day of August 2021, charting a moderate gain of 8.0%. The Austrian blue-chip index, the ATX, rose by 20.2% over the same period.
The average daily trading volume1 in the period from March to August 2021 measured about 19,000 shares (H1 prior year: approximately 27,000 shares).
AGRANA's share price performance can be followed on the Group's website at www.agrana.com under the tab sequence > Investor > AGRANA Share > Share Price, Share Details & Research. The market capitalisation at the end of August 2021 was € 1,187.3 million.
The 34th Annual General Meeting of AGRANA Beteiligungs-AG on 29 June 2021 approved the payment of a dividend of € 0.85 per share for the 2020|21 financial year (2019|20: € 0.77 per share); the dividend was paid in July 2021.
CEO Johann Marihart retired on 31 May 2021. Fritz Gattermayer and Thomas Kölbl also left the AGRANA Management Board at the end of May 2021, as part of a reorganisation and rejuvenation of the board.
On 1 June 2021, Markus Mühleisen took over from Johann Marihart as CEO of AGRANA Beteiligungs-AG. At the beginning of June, Thomas Kölbl was succeeded by Ingrid-Helen Arnold, who has been a member of the management board of Südzucker AG, Mannheim, Germany, since 1 May 2021.
Since 1 June 2021, the Management Board of AGRANA Beteiligungs-AG thus has the following four members:
In addition to his duties as CEO of AGRANA, Markus Mühleisen is now also responsible for the Group's sales, among other areas, and has assumed responsibility for the Sugar segment as well effective 1 June 2021. Stephan Büttner is now in charge of purchasing in addition to his CFO responsibilities, and also heads the Fruit segment. Norbert Harringer, in addition to his role as CTO, is now responsible for raw materials and R&D and has also assumed the CEO function in the Starch segment.
Markus Mühleisen was additionally appointed to the management board of Südzucker AG, with effect from 1 June 2021.
| H1 | H1 | |
|---|---|---|
| Fruit segment | 2021 22 | 2020 21 |
| €m, except % | ||
| Revenue | 633.4 | 601.8 |
| EBITDA1 | 47.1 | 50.3 |
| Operating result before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 28.1 | 30.6 |
| Exceptional items | (2.3) | (0.5) |
| Operating profit [EBIT] | 25.8 | 30.1 |
| EBIT margin | 4.1% | 5.0% |
| Q2 | Q2 | |
| Fruit segment | 2021 22 | 2020 21 |
| €m, except % | ||
| Revenue | 312.7 | 298.1 |
| EBITDA1 | 22.0 | 24.2 |
| Operating result before exceptional | ||
| items and results of equity-accounted joint ventures |
12.2 | 14.6 |
| Exceptional items | (2.3) | (0.5) |
| Operating profit [EBIT] | 9.9 | 14.1 |
Fruit segment revenue in the first half of 2021|22, at € 633.4 million, was moderately above the year-earlier level. The fruit preparations business saw revenue growth, stemming partly from higher sales volumes. Revenue in the fruit juice concentrate activities declined slightly for price and volume reasons.
The Fruit segment's EBIT was € 25.8 million in the first six months, off 14.3% from one year earlier. The causes of the deterioration lay in sales of fruit juice concentrates, which saw reduced delivery volumes in combination with lower contribution margins of apple juice concentrates produced from the 2020 crop. In fruit preparations, the solid performance, achieved despite higher costs that were due especially to personnel bottlenecks in North America, was driven by improved earnings in the Europe and Russia regions as well as in Dirafrost's frozen fruit solutions business. Detracting from earnings in the Fruit segment was a one-off combined expense of € 2.3 million from a damage claim and reorganisation measures.
AGRANA Fruit Japan Co., Ltd., Tokyo, Japan, was included in the consolidated financial statements for the first time in the second quarter of 2021|22, by full consolidation; for more information on this new company, see the notes to the interim consolidated financial statements, page 20.
The market setting for fruit preparations is determined by consumer trends in the global markets for dairy products, ice-cream, food service and bakery. The top trends continue to revolve around naturalness, health, pleasure, convenience and sustainability. The Covid-19 pandemic is having a big impact on many of these consumer trends. While consumers in Europe and North America increasingly want natural, sustainable and wholesome products, the top criterion in South America, Asia and Africa is the affordability of foods. For fruit preparations this means, on the one hand, ever higher expectations for a given product, and on the other hand, a reduction in fruit content in the final product and/or substitution using aromas.
The main market for fruit preparations, that of yoghurt, is being negatively affected by the Covid-19 pandemic. Current forecasts by Euromonitor project a global volume growth rate for yoghurt of 2.3% in the 2021 calendar year; that is half the percentage rate predicted before the outbreak of the Covid-19 crisis. Especially the market for flavoured spoonable yoghurt is stagnating based on current projections.
In fruit juice concentrates, customer call-offs of apple juice concentrate were up significantly in spring 2021 compared to the fourth quarter of 2020|21 (the three months ended February 2021).
For most of the berry juice concentrate volumes produced from the 2021 harvest, contracts were already concluded with customers. These contracts augur an improvement in contribution margins relative to one year earlier.
For the fruit preparations business, the harvest of strawberry, the principal fruit, was completed in July in all relevant procurement markets. The planned volume requirement was fully contracted in production regions with Mediterranean climate zones such as Egypt, Morocco and Spain, at slightly lower prices than last year. In Mexico, the foremost sourcing country, the prior year's volume was surpassed. As a result of reduced planting acreage and weather-induced unfavourable growing conditions, the strawberry quantities in China were down significantly year-on-year.
The availability of raspberries as a raw material was below normal for the third consecutive year, with substantial price hikes of more than 100% compared to the prioryear period. Reasons for this were repeated weatherrelated poor harvests in Serbia and North America and sustained high demand from the fresh market and frozen fruit retail segment; both factors led to historic low inventories. In order to be able to cover primarily the European requirements, raspberries were purchased largely in Ukraine, where prices were below the levels in Serbia and Poland.
The global peach harvest was significantly poorer than in the past few years. Frost damage in Greece and Spain and inclement weather in China, the most important producer country, led to below-average yields and thus to considerable price increases.
The forecasts for the harvests still underway for wild and cultivated blueberries in Eastern Europe and North America, the top purchasing regions, point to rising prices compared to last year. To secure the amounts needed, AGRANA is also buying this fruit in alternative procurement regions, such as Peru and Morocco.
In the first half of 2021|22, about 189,000 tonnes of raw materials were purchased for the fruit preparations business.
In the fruit juice concentrate activities, AGRANA was able to process greater volumes than in the prior year thanks to good availability of red berries (an industry term that includes strawberries, raspberries, black and red currants, sour cherries, chokeberries and elderberries).
For apples, the principal fruit in the juice concentrate business, good raw material availability is expected in the main crop production regions.
| Starch segment €m, except % |
H1 2021 22 |
H1 2020 21 |
|---|---|---|
| Revenue | 476.8 | 407.2 |
| EBITDA1 | 46.0 | 48.0 |
| Operating result before exceptional items and results of equity-accounted |
||
| joint ventures | 22.1 | 25.1 |
| Share of results of equity-accounted joint ventures |
6.9 | 9.6 |
| Operating profit [EBIT] | 29.0 | 34.7 |
| EBIT margin | 6.1% | 8.5% |
| Q2 | Q2 | |
| Starch segment €m, except % |
2021 22 | 2020 21 |
| Revenue | 242.2 | 202.8 |
| EBITDA1 | 25.3 | 23.4 |
| Operating result before exceptional items and results of equity-accounted |
||
| joint ventures | 13.3 | 11.8 |
| Share of results of equity-accounted | ||
| joint ventures | 4.2 | 5.9 |
| Operating profit [EBIT] | 17.5 | 17.7 |
The Starch segment's revenue in the first half of 2021|22 was € 476.8 million, representing significant growth of 17.1% from one year earlier. Higher volumes of core products and by-products were demanded than in the same period of the previous year. For ethanol, the Platts quotations moved within a high trading range thanks to increased gasoline demand, averaging € 623 per cubic metre in the first six months of 2021|22, or € 44 more than in the year-ago period. The continuous rise in grain prices since the autumn of 2020 was partly passed on in adjusted prices for starches and by-products on the sales side. There was also an increase in revenue from reselling of purchased animal feedstuffs.
At € 29.0 million, EBIT in the Starch segment was down by a significant 16.4% year-on-year. The main reason for this was a noticeable increase in purchase prices for wheat, corn (maize) and energy compared to the previous year, which could not yet be fully offset by adjusting product prices. Higher depreciation as a result of the major investments made in recent years also had a negative impact on earnings. High selling prices for ethanol made a positive contribution to EBIT performance, especially in the second quarter. The earnings contribution of the equity-accounted HUNGRANA group fell from € 9.6 million to € 6.9 million. Despite increased sales volumes and ethanol prices, the historic high corn prices in Hungary could not yet be made up for by higher prices for saccharification and starch products.
In the reporting period, the Covid-19 pandemic remained an influential factor in almost all sales markets for starch products.
Demand in the market for native starches was stable. The packaging paper sector has become a growing sales market due to the boom in online commerce. Graphic paper manufacturers are increasingly converting capacity to the production of corrugated board, which results in a sustained higher requirement for starch.
In the infant formula sector, European producers were faced with shrinking markets. The Chinese market in particular is increasingly being served by domestic producers, resulting in significantly reduced volumes of imports from Europe.
The supply situation for starch-based saccharification products was tight due to the short-term increase in consumption during the summer months. In the medium term, margins in the liquid saccharification products segment are expected to remain under pressure owing to a surplus of installed capacity.
For starch-based feeds, the high raw material prices and the associated uncertainty in the markets, both on the sales and purchasing side, will be the key driver in the coming months.
The ethanol and fuel market is showing strong momentum. In the public policy environment, elements such as the Renewable Energy Directive II (RED II) and the European Commission's "Fit for 55" package of measures, as well as expanding blending mandates in the EU (introduction of E10 in the UK and Sweden), are providing positive impetus for the market and demand.
World grain production in the 2021|22 grain marketing year (July to June) is estimated by the International Grains Council in its forecast of 26 August 2021 at 2.28 billion tonnes, which is about 70 million tonnes more than in the prior year, but around 5 million tonnes short of expected consumption. Wheat production is forecast at 782 million tonnes (prior year: 773 million tonnes; estimated 2021|22 consumption: 783 million tonnes) and the projected production of corn is 1,202 million tonnes (prior year: 1,127 million tonnes; estimated 2021|22 consumption: 1,201 million tonnes). Total ending grain stocks are to ease to approximately 589 million tonnes (prior year: 595 million tonnes).
Grain production in the EU-27 is estimated by Stratégie Grains at about 288 million tonnes (prior year: 278 million tonnes). Of this total, the soft wheat harvest is to account for about 130 million tonnes, significantly more than the 2020 crop of 119 million tonnes. The 2021 corn harvest in the EU is expected to reach 65 million tonnes (prior year: 63 million tonnes).
The wheat and corn quotations on the NYSE Euronext Liffe commodity derivatives exchange in Paris rose significantly since early March 2021. A combination of strong demand for corn and grains and weaker harvests due to weather extremes in key production areas was responsible for these price gains, amid increased volatility. At the quarterly balance sheet date, the quotations were around € 220 per tonne for corn and € 249 for wheat (year earlier: € 167 and € 188 per tonne, respectively).
On 2 September 2021 the potato starch factory in Gmünd, Austria, began the processing of starch potatoes from the 2021 harvest. Thanks to the favourable weather conditions during the growing season, contract fulfilment by the growers is expected to reach 100% to 105% of the contracted amount of starch potatoes. The average starch content will be about 18.5%, similar to last year's.
The receiving of freshly harvested wet corn at the corn starch plant in Aschach, Austria, began in the middle of September 2021. A wet corn volume of about 120,000 to 130,000 tonnes is expected to be received, comparable to the prior year, and its processing should be completed by mid-December. Processing will then switch to the use of dry corn. In the first half of 2021|22, approximately 247,000 tonnes of corn was processed in Aschach (H1 prior year: 234,000 tonnes).
As raw materials for the integrated biorefinery1 in Pischelsdorf, Austria, in the first half of 2021|22, AGRANA used non-corn grains (wheat, organic wheat, and triticale) and corn in a ratio of approximately 84 to 16. The total processing volume at this facility in the first six months of the financial year was about 551,000 tonnes (H1 prior year: 466,000 tonnes). Processing of wet corn began in the middle of September 2021. A wet corn receiving volume of about 85,000 to 90,000 tonnes is expected, roughly similar to last year, with processing likely to be completed by mid-December.
The purchasing of feedstock for the plants in Aschach and Pischelsdorf from the 2020 crop is complete. Including the amounts contracted from the 2021 harvest, approximately 75% of the raw material supply for the 2020|21 financial year is secured.
The start of the wet corn campaign at the equityaccounted plant in Hungary (HUNGRANA) occurred in early September 2021. The projection is for a wet corn processing volume similar to last year's, which was 250,000 tonnes (quantities given for HUNGRANA, a joint venture, represent the totals rather than each owner's "share"). In the first half of 2021|22, some 557,000 tonnes of corn was processed here (H1 prior year: 521,000 tonnes).
| H1 | H1 | |
|---|---|---|
| Sugar segment | 2021 22 | 2020 21 |
| €m, except % | ||
| Revenue | 314.2 | 300.3 |
| EBITDA2 | 0.8 | 2.8 |
| Operating result before exceptional | ||
| items and results of equity-accounted joint ventures |
(9.2) | (8.3) |
| Share of results of equity-accounted | ||
| joint ventures | (0.8) | (0.7) |
| Operating loss [EBIT] | (10.0) | (9.0) |
| EBIT margin | (3.2%) | (3.0%) |
| Q2 | Q2 | |
| Sugar segment €m, except % |
2021 22 | 2020 21 |
| Revenue | 163.7 | 155.8 |
| EBITDA2 | 1.8 | (1.2) |
| Operating result before exceptional items and results of equity-accounted |
||
| joint ventures | (3.2) | (7.1) |
| Share of results of equity-accounted | ||
| joint ventures | (0.3) | (0.9) |
| Operating loss [EBIT] | (3.5) | (8.0) |
| EBIT margin | (2.1%) | (5.1%) |
The Sugar segment's revenue in the first half of 2021|22 was up slightly from one year earlier, to € 314.2 million. The increase was driven by rising sugar selling prices and higher revenue from sales of beet seed and other agricultural products.
1 Wheat starch production as well as bioethanol production from corn, wheat and B- and C-type starches from the wheat starch plant. 2 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, and operating depreciation and amortisation.
The EBIT result in the first half of 2021|22, at a deficit of € 10.0 million, was weaker than in the year-earlier period. In the 2020 sugar campaign, AGRANA's own production was below average due to pests, especially in Austria. The resulting lower margin from the necessary compensatory reselling and refining of sugar was a key driver of the reduced Sugar EBIT performance in the first six months of 2021|22.
Since the outbreak of the coronavirus pandemic and a plunge in world sugar quotations in March/April 2020 (with a new twelve-year low for raw sugar of US\$ 203.1 per tonne reached at the time), sugar prices have risen steadily, due partly to the expectations for the world market sugar balance.
During the period under review, prices were further supported by developments such as the delayed availability of Indian raw sugar exports on the markets, a meagre offseason harvest in Brazil and an improving macro environment (vaccination programmes, rising supply of agricultural commodities).
The raw sugar quotation in New York reached a 4½-year high of 20.22 US¢ per pound in August 2021 (about US\$ 446 per tonne). This recent price rise was triggered by concerns over frost damage in Brazil, the world's largest sugar exporter.
In its estimate from September 2021 of the world sugar balance for the end of the sugar marketing year (SMY) 2021|22, the analytics firm IHS Markit (formerly F.O. Licht) has projected a production deficit. The forecast calls for production of 182.9 million tonnes (SMY 2020|21: 179.1 million tonnes) and growth in consumption to 185.0 million tonnes (SMY 2020|21: 181.0 million tonnes), which, after an allowance for unrecorded disappearance of –1.2 million tonnes (the difference between world exports and imports), implies a decrease in global sugar stocks to 65.7 million tonnes (SMY 2020|21: 69.1 million tonnes) and a deficit of about 3.4 million tonnes.
At the end of the reporting period, white sugar quoted at US\$ 483.3 per tonne and raw sugar stood at US\$ 437.4 (year earlier: US\$ 359.7 and US\$ 279.1 per tonne, respectively).
In SMY 2020|21, sugar production in the EU-27, at about 14.5 million tonnes, will represent a noticeable decrease from EU production in the previous year (which was 17.5 million tonnes, including the UK); a historic low ending balance is expected.
The EU's crop monitoring service is forecasting an average EU beet yield of 75.0 tonnes per hectare for the new 2021 campaign on a reduced area of 1.387 million hectares (prior year: 1.401 million hectares).
From the abolition of the sugar quotas at the end of September 2017, the average sugar prices under the EU price reporting system had declined significantly for a long time. By January 2019 the price was only € 312 per tonne. In the 2019 and 2020 calendar years the price of sugar in the EU recovered continually, and the threshold of € 400 per tonne was all but reached again in June 2021.
In the first half of 2021|22 in the reseller market, the high sugar sales achieved in the summer months of the prior year could not be repeated. However, there was a significant recovery in sales volumes in the industrial market. Overall, the Sugar segment sold only about 5,000 tonnes less sugar than in the previous year.
The sugar price trend continues to be positive. Prices rose year-on-year in both the reseller and industrial business. With the start of the new 2021|22 sugar marketing year on October 1, 2021, sugar deliveries based on new contract agreements already began for a majority of customers. As a result of general market developments as well, further increases in selling prices are to be expected.
The area contracted by AGRANA with its growers for sugar beet production in the 2021 crop year was about 87,000 hectares (prior year: around 86,000 hectares). Of this, about 2,100 hectares was dedicated to growing organic sugar beet.
In Austria, the contract area for beet production was expanded by about 13% from the prior year, to almost 39,000 hectares.
Planting of the seed, which was delayed for weather reasons, began from early March and (except in Romania) was completed by mid-April. After damage from night frosts experienced at the beginning of April, ultimately
about 7,100 hectares of beet fields were turned over, mainly in Slovakia, Hungary and Austria. However, almost all of this acreage was replanted to beet. The persistently cool and rainy weather, the use of obstacle furrow ploughs (which create a protective deep, steep-sided furrow around the outside of the fields), the deployment of pheromone traps and the effect of the neonicotinoid seed dressing very sharply limited the activity of the beet weevil during this crop year.
In view of the weather and growing conditions to date, beet yields in Austria, the Czech Republic, Romania and Slovakia are likely to be above average. In Hungary, below-average yields are expected due to the summer's severe drought.
The AGRANA Group's actual area under sugar beet is currently nearly 86,000 hectares, including about 38,000 hectares in Austria.
The beet campaigns at all factories started between the middle of September and the beginning of October 2021. In addition, a thick-juice campaign is underway at the Tulln plant in Austria since 6 September 2021.
At the raw sugar refineries in Bosnia and Herzegovina and Romania, about 175,000 tonnes of raw cane sugar were converted into some 169,000 tonnes of white sugar thus far in the 2021|22 financial year. At the plant in Tulln, Austria, the molasses desugarisation facility is operated year-round and crystallised betaine is produced.
AGRANA uses an integrated system for the early identification and monitoring of risks that are relevant to the Group.
There are currently no known risks to the AGRANA Group's ability to continue as a going concern and no future risks of this nature are discernible at present.
A detailed description of the Group's business risks, including risks related to the coronavirus disease (Covid-19), is provided on pages 88 to 94 of AGRANA's annual report 2020|21.
| Average full-time equivalents |
H1 2021 22 |
H1 2020 21 |
Change |
|---|---|---|---|
| Fruit segment | 5,932 | 6,112 | –2.9% |
| Starch segment | 1,140 | 1,142 | –0.2% |
| Sugar segment | 1,746 | 1,896 | –7.9% |
| Group | 8,818 | 9,150 | –3.6% |
In the first half of 2021|22 the AGRANA Group employed an average of 8,818 full-time equivalents (H1 prior year: 9,150). The decrease in personnel was due primarily to a reduced need for seasonal workers in the fruit preparations business and to cost reduction measures taken particularly in the Sugar segment.
For disclosures on related party relationships, refer to the notes to the interim consolidated financial statements.
No significant events occurred after the interim balance sheet date of 31 August 2021 that had a material effect on AGRANA's financial position, results of operations or cash flows.
| AGRANA Group €m |
2020 21 Actual |
2021 22 Forecast |
|---|---|---|
| Revenue | 2,547.0 | |
| EBIT | 78.7 | |
| Investment1 | 72.3 | 95 |
Moderate increase2
Significant increase2
Despite the continuing substantial challenges arising from the Covid-19 pandemic and high raw material and energy costs, the Group's operating profit (EBIT) for the full 2021|22 financial year is expected to mark a significant increase. Group revenue is projected to show moderate growth.
EBIT in the third quarter of this 2021|22 financial year will be broadly in line with the results of the first and second quarter (between € 20 million and € 25 million). EBIT for the fourth quarter is expected to be very significantly above the prior-year comparative period.
| Fruit segment €m |
2020 21 Actual |
2021 22 Forecast |
|---|---|---|
| Revenue | 1,166.6 | |
| EBIT | 41.2 | |
| Investment1 | 34.2 | 47 |
Moderate increase2
Significant increase2
In the Fruit segment, AGRANA expects the 2021|22 financial year to bring growth in revenue and EBIT. In the fruit preparations business, the focus is, among other priorities, on full utilisation of the capacity created and on further diversification within the non-dairy business3. In fruit juice concentrates, as a result of improved conditions, a significantly higher earnings contribution is expected in the second half of the year compared to the year-earlier period.
| Starch segment €m |
2020 21 Actual |
2021 22 Forecast |
|---|---|---|
| Revenue | 558.5 | |
| EBIT | (27.3) | |
| Investment1 | 15.9 | 26 |
Moderate increase2
Significant reduction2
For the Starch segment, moderate growth in revenue is forecast for the 2021|22 financial year. As a result of substantially higher raw material and energy prices, EBIT is expected to be significantly below the prior year's figure. Thanks to the emerging progress towards overcoming the Covid-19 crisis, it is expected that market demand will recover and price increases will become feasible that reflect the higher procurement costs for, in particular, grains, energy and other inputs.
| Sugar segment €m |
2020 21 Actual |
2021 22 Forecast |
|---|---|---|
| Revenue | 558.5 | |
| EBIT | –27.3 | |
| Investment1 | 15.9 | 22 |
Significant increase2
Very significant improvement2
For the Sugar segment in 2021|22, AGRANA expects a continual improvement in conditions in the EU sugar market. AGRANA anticipates being able to significantly boost capacity utilisation again in the 2021 campaign, especially at the two Austrian sugar sites, as it has taken various steps to ensure a significant increase in beet supply. On the distribution side, sugar sales volumes and sugar prices in the EU are expected to rise. This positive trend in the EU sugar market environment, coupled with rigorous cost management, points to a very significant improvement in EBIT.
Given the ongoing Covid-19 crisis and the associated strong volatility in all business segments, the forecast for the full year is subject to very high uncertainty.
Total investment across the three business segments in the 2021|22 financial year, at approximately € 95 million, is to exceed the 2020|21 level, but will be significantly below this year's budgeted depreciation of about € 120 million.
1 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.
2 These quantitative terms as used in this "Outlook" section are defined as specific ranges of percentage change; see the definitions on page 26. 3
For the first six months ended 31 August 2021 (unaudited)
| First six months | Second quarter | |||
|---|---|---|---|---|
| (1 March – 31 August) | (1 June – 31 August) | |||
| €000, except per-share data | H1 2021 22 | H1 2020 21 | Q2 2021 22 | Q2 2020 21 |
| Revenue | 1,424,390 | 1,309,323 | 718,579 | 656,709 |
| Changes in inventories of finished and unfinished goods | (146,675) | (166,241) | (64,678) | (69,189) |
| Own work capitalised | 414 | 375 | 253 | 159 |
| Other operating income | 17,797 | 18,865 | 10,378 | 9,734 |
| Cost of materials | (889,760) | (750,830) | (459,623) | (394,230) |
| Staff cost | (169,428) | (168,331) | (84,157) | (85,308) |
| Depreciation, amortisation and impairment losses | (53,007) | (53,664) | (26,821) | (27,042) |
| Other operating expenses | (145,032) | (142,577) | (73,881) | (72,007) |
| Share of results of equity-accounted joint ventures | 6,072 | 8,883 | 3,873 | 4,957 |
| Operating profit [EBIT] | 44,771 | 55,803 | 23,923 | 23,783 |
| Finance income | 11,494 | 16,913 | 1,095 | 7,984 |
| Finance expense | (18,594) | (26,029) | (4,424) | (11,025) |
| Net financial items | (7,100) | (9,116) | (3,329) | (3,041) |
| Profit before tax | 37,671 | 46,687 | 20,594 | 20,742 |
| Income tax expense | (10,595) | (12,245) | (5,632) | (5,504) |
| Profit for the period | 27,076 | 34,442 | 14,962 | 15,238 |
| Attributable to shareholders of the parent | 27,968 | 33,939 | 15,269 | 15,093 |
| Attributable to non-controlling interests | (892) | 503 | (308) | 145 |
| Earnings per share under IFRS (basic and diluted) | € 0.45 | € 0.54 | € 0.24 | € 0.24 |
| First six months (1 March – 31 August) |
Second quarter (1 June – 31 August) |
||||
|---|---|---|---|---|---|
| €000 | H1 2021 22 | H1 2020 21 | Q2 2021 22 | Q2 2020 21 | |
| Profit for the period | 27,076 | 34,442 | 14,962 | 15,238 | |
| Other comprehensive income/(expense): | |||||
| Currency translation differences and hyperinflation adjustments | 14,722 | (41,374) | 7,329 | (18,933) | |
| Changes in fair value of hedging instruments (cash flow hedges), after deferred taxes |
2,166 | 130 | 2,622 | (1,161) | |
| Effects from equity-accounted joint ventures | 1,537 | (3,086) | (523) | (1,165) | |
| Income/(expense) to be recognised in the income statement in the future |
18,425 | (44,330) | 9,428 | (21,259) | |
| Change in actuarial gains and losses on defined benefit pension obligations and similar liabilities, after deferred taxes |
(481) | 331 | (1,829) | (2,259) | |
| Changes in fair value of equity instruments, after deferred taxes | (111) | 0 | (93) | 0 | |
| (Expense)/income that will not be recognised in the income statement in the future |
(592) | 331 | (1,922) | (2,259) | |
| Other comprehensive income/(expense) | 17,833 | (43,999) | 7,506 | (23,518) | |
| Total comprehensive income/(expense) for the period Attributable to shareholders of the parent Attributable to non-controlling interests |
44,909 45,064 (155) |
(9,557) (7,275) (2,282) |
22,468 22,895 (429) |
(8,280) (7,595) (685) |
| For the first six months (1 March – 31 August) €000 |
H1 2021 22 | H1 2020 21 |
|---|---|---|
| Operating cash flow before changes in working capital | 90,908 | 112,751 |
| Changes in working capital | (34,697) | (28,050) |
| Interest received and paid and income tax paid, net | (16,928) | (13,161) |
| Net cash from operating activities | 39,283 | 71,540 |
| Net cash (used in) investing activities | –22,998 | –32,262 |
| Net cash from/(used in) financing activities | 5,327 | –29,068 |
| Net increase in cash and cash equivalents | 21,612 | 10,210 |
| Effect of movement in foreign exchange rates and hyperinflation adjustments on cash and cash equivalents |
(365) | (5,321) |
| Cash acquired in initial consolidation of subsidiaries | 753 | 0 |
| Cash and cash equivalents at beginning of period | 110,971 | 93,415 |
| Cash and cash equivalents at end of period | 132,971 | 98,304 |
| €000 | 31 August 2021 |
28 February 2021 |
31 August 20201 |
|---|---|---|---|
| ASSETS | |||
| A. Non-current assets | |||
| Intangible assets, including goodwill | 258,415 | 254,599 | 255,344 |
| Property, plant and equipment | 845,405 | 859,659 | 884,116 |
| Equity-accounted joint ventures | 79,727 | 72,118 | 82,717 |
| Securities | 19,521 | 19,416 | 19,426 |
| Investments in non-consolidated subsidiaries and outside companies | 410 | 1,683 | 1,004 |
| Other assets | 7,907 | 8,106 | 11,450 |
| Deferred tax assets | 17,709 | 16,440 | 15,293 |
| 1,229,094 | 1,232,021 | 1,269,350 | |
| B. Current assets | |||
| Inventories | 556,362 | 700,613 | 556,081 |
| Trade receivables | 422,823 | 323,055 | 381,847 |
| Other assets | 106,199 | 96,069 | 80,546 |
| Current tax assets | 11,006 | 10,005 | 4,327 |
| Cash and cash equivalents | 132,971 | 110,971 | 98,304 |
| 1,229,361 | 1,240,713 | 1,121,105 | |
| Total assets | 2,458,455 | 2,472,734 | 2,390,455 |
| EQUITY AND LIABILITIES A. Equity |
|||
| Share capital | 113,531 | 113,531 | 113,531 |
| Share premium and other capital reserves | 540,760 | 540,760 | 540,760 |
| Retained earnings | 610,693 | 619,493 | 594,383 |
| Equity attributable to shareholders of the parent | 1,264,984 | 1,273,784 | 1,248,674 |
| Non-controlling interests | 57,067 | 55,313 | 61,139 |
| B. Non-current liabilities | 1,322,051 | 1,329,097 | 1,309,813 |
| Retirement and termination benefit obligations | 65,923 | 67,786 | 72,102 |
| Other provisions | 29,324 | 29,396 | 29,537 |
| Borrowings | 481,867 | 493,637 | 445,191 |
| Other payables | 4,848 | 1,094 | 5,451 |
| Deferred tax liabilities | 7,094 | 5,502 | 9,096 |
| 589,056 | 597,415 | 561,377 | |
| C. Current liabilities | |||
| Other provisions | 13,968 | 17,478 | 19,802 |
| Borrowings | 156,450 | 80,274 | 152,139 |
| Trade payables | 236,148 | 311,524 | 207,695 |
| Other payables | 135,762 | 130,800 | 132,431 |
| Tax liabilities | 5,020 | 6,146 | 7,198 |
| 547,348 | 546,222 | 519,265 | |
| Total equity and liabilities | 2,458,455 | 2,472,734 | 2,390,455 |
| For the first six months (1 March – 31 August) €000 |
Equity attributable to shareholders of the parent |
Non-controlling interests |
Total |
|---|---|---|---|
| 2021 22 | |||
| At 1 March 2021 | 1,273,784 | 55,313 | 1,329,097 |
| Changes in fair value of equity instruments | –117 | 0 | –117 |
| Changes in fair value of hedging instruments (cash flow hedges) | 2,289 | –175 | 2,114 |
| Changes in actuarial gains and losses on | |||
| defined benefit pension obligations and similar liabilities | –608 | –2 | –610 |
| Tax effects | –382 | 44 | –338 |
| Currency translation gain and hyperinflation adjustments | 15,914 | 870 | 16,784 |
| Other comprehensive income for the period | 17,096 | 737 | 17,833 |
| Profit/(loss) for the period | 27,968 | –892 | 27,076 |
| Total comprehensive income/(expense) for the period | 45,064 | –155 | 44,909 |
| Dividends paid | –53,116 | –242 | –53,358 |
| Additional contributions from other shareholders | 0 | 1,800 | 1,800 |
| Changes in equity interests and in scope of consolidation | –747 | 350 | –397 |
| Other changes | –1 | 1 | 0 |
| At 31 August 2021 | 1,264,984 | 57,067 | 1,322,051 |
| For the first six months (1 March – 31 August) | Equity attributable to shareholders |
Non-controlling | |
|---|---|---|---|
| €000 | of the parent | interests | Total |
| 2020 211 | |||
| At 1 March 2020 | 1,303,586 | 63,435 | 1,367,021 |
| Changes in fair value of hedging instruments (cash flow hedges) | –13 | –62 | –75 |
| Changes in actuarial gains and losses on | |||
| defined benefit pension obligations and similar liabilities | 466 | –1 | 465 |
| Tax effects | –131 | 15 | –116 |
| Currency translation (loss) and hyperinflation adjustments | –41,536 | –2,737 | –44,273 |
| Other comprehensive (expense) for the period | –41,214 | –2,785 | –43,999 |
| Profit for the period | 33,939 | 503 | 34,442 |
| Total comprehensive (expense) for the period | –7,275 | –2,282 | –9,557 |
| Dividends paid | –48,116 | –720 | –48,836 |
| Other changes | 479 | 706 | 1,185 |
| At 31 August 2020 | 1,248,674 | 61,139 | 1,309,813 |
For the first six months ended 31 August 2021 (unaudited)
| For the first six months (1 March – 31 August) €000 |
H1 2021 22 |
H1 2020 21 |
For the first six months (1 March – 31 August) €000 |
H1 2021 22 |
H1 2020 21 |
|---|---|---|---|---|---|
| Total revenue | Share of results of equity accounted joint ventures |
||||
| Fruit | 633,843 | 602,501 | Fruit | 0 | 0 |
| Starch | 481,641 | 412,494 | Starch | 6,912 | 9,572 |
| Sugar | 328,441 | 318,440 | Sugar | (840) | (689) |
| Group | 1,443,925 | 1,333,435 | Group | 6,072 | 8,883 |
| Inter-segment revenue | Operating profit [EBIT]1 | ||||
| Fruit | (422) | (667) | Fruit | 25,808 | 30,108 |
| Starch | (4,861) | (5,266) | Starch | 29,029 | 34,698 |
| Sugar | (14,252) | (18,179) | Sugar | (10,066) | (9,003) |
| Group | (19,535) | (24,112) | Group | 44,771 | 55,803 |
| Revenue | Investment2 | ||||
| Fruit | 633,421 | 601,834 | Fruit | 12,174 | 13,409 |
| Starch | 476,780 | 407,228 | Starch | 7,434 | 9,397 |
| Sugar | 314,189 | 300,261 | Sugar | 10,737 | 4,965 |
| Group | 1,424,390 | 1,309,323 | Group | 30,345 | 27,771 |
| Operating profit before exceptional items and results of equity-accounted |
|||||
| joint ventures | Number of employees (FTE3) |
| Group | 40,955 | 47,435 |
|---|---|---|
| Sugar | (9,226) | (8,314) |
| Starch | 22,117 | 25,126 |
| Fruit | 28,064 | 30,623 |
| Group | 8,818 | 9,150 |
|---|---|---|
| Sugar | 1,746 | 1,896 |
| Starch | 1,140 | 1,142 |
| Fruit | 5,932 | 6,112 |
| Group | (2,256) | (515) |
|---|---|---|
| Sugar | 0 | 0 |
| Starch | 0 | 0 |
| Fruit | (2,256) | (515) |
1
Operating profit (EBIT) is after exceptional items and results of equity-accounted joint ventures. 2 Investment represents purchases of property, plant and equipment and intangible assets (excluding goodwill).
3 Average number of full-time equivalents in the reporting period.
The interim report of the AGRANA Group for the period ended 31 August 2021 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 2021 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 4 October 2021.
The restatement under IAS 8 at 29 February 2020 resulting from audit findings of the Austrian Financial Reporting Enforcement Panel (OePR) is presented on page 114 of the annual report 2020|21.
The AGRANA Group's annual report 2020|21 is available on the Internet at www.agrana.com/en/ir/publications 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 111 to 113 of the annual report 2020|21 in the notes to the consolidated financial statements, section 2, "Basis of preparation".
At the time of preparation of the consolidated financial statements for the year ended 28 February 2021, AGRANA's judgement was that the coronavirus crisis would not have any material long-term impact on the AGRANA Group's business activities. The Group still does not expect any significant negative effects on its financial position, results of operations or cash flows.
No indications of a possible impairment (triggering event) were identified for goodwill and property, plant and equipment.
The credit risk on trade receivables was assessed and this did not result in any material changes in the applied loss rates and the related impairment allowances.
Except for the newly effective IFRS and interpretations, the same accounting methods were applied as in the
preparation of the annual consolidated financial statements for the year ended 28 February 2021 (the latest full financial year).
The notes to those 2020|21 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.
Effective 1 April 2021, a business in the form of individual assets and liabilities was acquired from the Japanese food manufacturer Taiyo Kagaku Co. Ltd, Yokkaichi, Japan. The Tokyo, Japan-based AGRANA Fruit Japan Co., Ltd., as the acquiring company, was included in the consolidated financial statements for the first time in the second quarter of 2021|22, by full consolidation. In addition to dairy and ice-cream manufacturers, the Japanese fruit preparations plant also supplies customers in the bakery industry. AGRANA is thus taking an important step in its expansion in Asia and its presence in the growing Japanese market.
The acquisition had the following effects on the AGRANA Group:
| €000 | Carrying amount at acquisition date |
|---|---|
| Non-current assets | 5,429 |
| Inventories | 2,706 |
| Total assets | 8,135 |
| Less non-current liabilities | (1,143) |
| Less current liabilities | (294) |
| Net assets (i.e., equity) | 6,698 |
| Goodwill | 471 |
| Acquisition cost | 7,169 |
| Of which in cash | 3,630 |
At the half-year balance sheet date, in total in the consolidated financial statements, 59 companies besides the parent were fully consolidated (28 February 2021 year-end: 58 companies) and 13 companies were accounted for using the equity method (28 February 2021: 13 companies).
Most of the Group's sugar production falls into the period from September to January. 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 (through the item "changes in inventories of finished and unfinished goods").
Operating profit (EBIT) in the first half of 2021|22 was € 44.8 million (H1 prior year: € 55.8 million).
Despite higher revenue in all three business segments, earnings were lower than in the first half of the prior year. In the Starch segment, higher raw material prices led to a decline in EBIT; in the Sugar segment, lower margins were largely responsible for the earnings deterioration there. A markedly weaker performance in the fruit juice concentrate business and a net exceptional items expense of € 2.3 million from a damage claim and from reorganisation measures drove an EBIT reduction in the Fruit segment.
The Group's net financial items amounted to an expense of € 7.1 million (H1 prior year: expense of € 9.1 million). This positive change resulted primarily from an improvement in currency translation differences.
The Group's profit for the period was € 27.1 million (H1 prior year: € 34.4 million).
From the beginning of March to the end of August 2021, cash and cash equivalents increased by € 22.0 million to € 133.0 million.
Net cash from operating activities, at € 39.3 million, was € 32.2 million lower than in the first half of the prior year. The change resulted in part from the year-on-year decrease in profit for the period, combined with a higher cash outflow under changes in working capital through a greater increase in trade receivables than in the yearearlier comparative period.
Net cash used in investing activities, at € 23.0 million (H1 prior year: € 32.3 million), was less than the year-ago level, due mainly to higher proceeds from the disposal of non-current assets and lower purchases of subsidiaries, which outweighed a small increase in capital expenditures.
The net cash inflow from financing activities, at € 5.3 million (H1 prior year: net cash use of € 29.1 million) was attributable mainly to the fact that syndicated credit lines of € 35.0 million were obtained for working capital financing (H1 prior year: repayment of € 15.0 million). The dividend paid in 2021 to the shareholders of AGRANA Beteiligungs-AG increased from the previous year's € 48.1 million to € 53.1 million.
Total assets eased by € 14.2 million compared with 28 February 2021, to a new total of € 2,458.5 million. With non-current assets almost unchanged in amount, the minor decrease on the assets side was driven primarily by a reduction in inventories, while trade receivables and cash and cash equivalents showed increases. The decrease on the liabilities side of the balance sheet was driven by a significant reduction in trade payables and occurred despite an increase in borrowings.
With shareholders' equity of € 1,322.1 million (28 February 2021: € 1,329.1 million), the equity ratio at the end of August remained at 53.8% (28 February 2021: 53.8%).
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 hedging relationship meets the hedge accounting requirements under IFRS 9, 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 of the fair value hierarchy. The levels are defined as follows under IFRS 7:
In the reporting period no reclassifications were made between levels of the hierarchy.
| 31 August 2021 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| €000 | ||||
| Securities (non-current) | 12,488 | 0 | 7,033 | 19,521 |
| Investments in non-consolidated subsidiaries and outside | ||||
| companies (non-current) | 0 | 0 | 410 | 410 |
| Derivative financial assets at fair value through other | ||||
| comprehensive income (hedge accounting) | 5,249 | 22 | 0 | 5,271 |
| Derivative financial assets at fair value through profit and loss | 0 | 985 | 0 | 985 |
| Financial assets | 17,737 | 1,007 | 7,443 | 26,187 |
| Liabilities from derivatives at fair value through other | ||||
| comprehensive income (hedge accounting) | 2,048 | 619 | 0 | 2,667 |
| Liabilities from derivatives at fair value through profit and loss | 61 | 3,921 | 0 | 3,982 |
| Financial liabilities | 2,109 | 4,540 | 0 | 6,649 |
| 31 August 2020 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| €000 | ||||
| Securities (non-current) | 12,276 | 0 | 7,150 | 19,426 |
| Investments in non-consolidated subsidiaries and outside | ||||
| companies (non-current) | 0 | 0 | 1,004 | 1,004 |
| Derivative financial assets at fair value through other | ||||
| comprehensive income (hedge accounting) | 985 | 67 | 0 | 1,052 |
| Derivative financial assets at fair value through profit and loss | 18 | 6,810 | 0 | 6,828 |
| Financial assets | 13,279 | 6,877 | 8,154 | 28,310 |
| Liabilities from derivatives at fair value through other | ||||
| comprehensive income (hedge accounting) | 606 | 885 | 0 | 1,491 |
| Liabilities from derivatives at fair value through profit and loss | 0 | 3,316 | 0 | 3,316 |
| Financial liabilities | 606 | 4,201 | 0 | 4,807 |
For cash and cash equivalents, securities, investments in non-consolidated subsidiaries, trade receivables and other assets, and trade and other payables, the carrying amount can be assumed to be 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, and other loans from non-Group entities, are measured at the present value of the payments related to the borrowings:
| Carrying | Fair | |
|---|---|---|
| 31 August 2021 | amount | value |
| €000 | ||
| Bank loans and overdrafts, and other loans from non-Group entities | 609,894 | 611,040 |
| Lease liabilities | 28,423 | – |
| Borrowings | 638,317 | 611,040 |
| Carrying | Fair | |
| 31 August 2020 | amount | value |
| €000 | ||
| Bank loans and overdrafts, and other loans from non-Group entities | 572,062 | 573,992 |
| Lease liabilities | 25,268 | – |
| Borrowings | 597,330 | 573,992 |
Further details on the fair value measurement of the individual types of financial instruments and their assignment to levels of the fair value hierarchy are provided on pages 164 to 168 of the annual report 2020|21, in section 11.3, "Additional disclosures on financial instruments".
In the first half of 2021|22 the AGRANA Group employed an average of 8,818 full-time equivalents (H1 prior year: 9,150). The reduction in personnel resulted mainly from a lower requirement for seasonal workers in the Fruit segment (notably in Mexico, Morocco and Poland) and from cost reduction measures taken particularly in the Sugar segment.
There were no material changes in related party relationships since the year-end balance sheet date of 28 February 2021 or since the year-ago comparative period. Transactions with related parties as defined in IAS 24 are conducted on arm's length terms. Further information on individual related party relationships is provided in the AGRANA annual report 2020|21 (from page 175).
No significant events occurred after the interim balance sheet date of 31 August 2021 that had a material effect on AGRANA's financial position, results of operations or cash flows.
We confirm that, to the best of our knowledge:
Vienna, 4 October 2021
Markus Mühleisen Chief Executive Officer Strategy and Business Policy, Quality Management, Sales, Human Resources, Public Relations, Corporate Secretariat (line authority), and Sugar Segment
Stephan Büttner Member of the Management Board Finance, Information Technology, Mergers & Acquisitions, Legal, Compliance, Purchasing, Investor Relations, and Fruit Segment
Ingrid-Helen Arnold Member of the Management Board Internal Audit
Norbert Harringer Member of the Management Board Production/Investment, Raw Materials, Research and Development, and Starch Segment
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.
| Modifier | Visualisation | Numerical rate of change |
|---|---|---|
| Steady | | 0% up to +1% or 0% up to –1% |
| Slight(ly) | or |
More than +1% up to +5% or more than –1% bis –5% |
| Moderate(ly) | or |
More than +5% up to +10% or more than –5% up to –10% |
| Significant(ly) | or |
More than +10% up to +50% or more than –10% up to –50% |
| Very significant(ly) | or |
More than +50% or more than –50% |
This interim report has not been audited or reviewed.
For financial performance indicators not defined in a footnote, please see the definitions on page 204 of the annual report 2020|21.
In the interest of readability, this document may occasionally use language that is not gender-neutral. Any gender-specific references should be understood to include masculine, feminine and neuter as the context permits.
As a result of the standard round-half-up convention used in rounding individual amounts and percentages, this interim report may contain minor, immaterial rounding errors.
No liability is assumed for misprints, typographical and similar errors.
This English translation of the interim report is solely for readers' convenience and is not definitive. In the event of discrepancy or dispute, only the German version shall govern.
| 13 January 2022 | Results for first three quarters of 2021 22 |
|---|---|
| 13 May 2022 | Results for full year 2021 22 (annual results press conference) |
| 28 June 2022 | Record date for participation in Annual General Meeting |
| 7 July 2022 | Results for first quarter of 2022 23 |
| 8 July 2022 | Annual General Meeting in respect of 2021 22 |
| 13 July 2022 | Ex-dividend date |
| 14 July 2022 | Record date for dividend |
| 15 July 2022 | Dividend payment date |
| 13 October 2022 | Results for first half of 2022 23 |
| 12 January 2023 | Results for first three quarters of 2022 23 |
Friedrich-Wilhelm-Raiffeisen-Platz 1 1020 Vienna, Austria www.agrana.com
Hannes HAIDER 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]
Published 14 October 2021 by AGRANA Beteiligungs-AG Friedrich-Wilhelm-Raiffeisen-Platz 1 1020 Vienna, Austria
reports.agrana.com/en
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