Quarterly Report • Oct 12, 2023
Quarterly Report
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REPORT ON THE FIRST HALF OF 2023|24
Ratio of net debt to total equity.
Average number of full-time equivalents in the reporting period.
Letter from the Management Board
| 4 | Group management report |
|---|---|
| 4 | AGRANA Group results for the first half of 2023 24 |
| 8 | AGRANA capital market developments |
| 9 | Fruit segment |
| 11 | Starch Segment |
| 13 | Sugar Segment |
Other information
Dear Investor,
AGRANA remains on track after the first six months of the 2023|24 financial year. In a continuing volatile business environment, the Group generated EBIT of € 110.9 million in the first half of 2023|24, compared to € 11.1 million1 in the first half of the prior, 2022|23 financial year.
AGRANA has adjusted well to the new market dynamics, especially where raw material and energy prices are concerned; this is also reflected, among other ways, in a good first-half performance by the Fruit and Sugar segments. In the Fruit segment, our fruit preparations business has been back on course since the beginning of the financial year, including achieving a good business performance in the food service product area. In the fruit juice concentrate activities, the earnings situation remains very satisfactory and the value-added business saw significant growth in revenue. The Sugar segment as well improved its EBIT. The sugar business in the summer was very good, marked by strong demand from the beverage industry, which had a positive impact on our warehouse and inventory management. In terms of sales, duty-free sugar imports from Ukraine (which were temporarily banned during the summer months) will for the time being pose a continuing challenge to AGRANA, which our sugar sales organisation will tackle with new approaches. We are currently in the final phase of negotiations with our customers for the new 2023|24 sugar marketing year, and we expect sugar prices to consolidate at the present level. In the Starch segment, AGRANA is dealing with a sluggish economy and inventory reduction by customers in Europe. However, with flexibility and adjustments in our own production, we were able to maintain the margin on starch products. At the same time, due to sharply lower Platts quotations, the performance on the ethanol side of the business was far weaker than in the year-earlier comparative period, when ethanol profits were above average. On balance, this led to an overall decline in Starch segment EBIT in the first half of 2023|24.
For our traditional raw material update at the half-year mark and around the start of the campaigns (apples, potatoes, sugar beet), we can report that in the Starch segment, a good wet-corn campaign is expected. However, a smaller harvest is projected for potatoes. Beet processing in the Sugar segment has been underway at all plants since the beginning of October. Capacity utilisation in the factories is anticipated to be higher than last year thanks to more contracted acreage. For the fruit preparations business, the harvest of strawberry, its principal fruit, was completed in July with positive results in all relevant procurement markets. The 2023 apple campaign is off to a good start.
Dear valued shareholder, we are also pleased to announce a key further milestone in the area of sustainability: The Science Based Targets initiative – SBTi, the globally recognised non-governmental organisation – has completed its review of the AGRANA Group's ambitious climate targets and officially confirmed that they are in line with the 1.5°C goal of the Paris climate agreement. This makes us the first food company in Austria with validated emission reduction targets.
In our outlook for 2023|24, we expect the Group's EBIT to be very significantly higher than for the 2022|23 financial year2 . On the path to achieving this, we will continue to keep in focus the issues of inflation, economic weakness in Europe and rising interest costs. Consistent working capital management will also remain a key to financial success in the long term. We now want to move from COVID-19- and war-related "crisis mode" back into full "execution and growth" mode. This was also conveyed at our Annual General Meeting on 7 July 2023, where we presented the cornerstones of AGRANA's Sustainable Value Growth strategy. Against the backdrop of climate change and sweeping transformations in the entire value chain of food production – from agriculture to the end customer – we will pursue the following priorities in the coming years: 1) Strengthen the core business through a greater focus on innovation, comprehensive customer orientation and new sales channels; 2) Develop new growth markets and solutions based on natural, renewable raw materials; 3) Further develop the organisation and corporate culture; 4) Achieve net-zero greenhouse gas emissions (Scope 1, 2 and 3) by 2050 at the latest. With our Sustainable Value Growth strategy, the AGRANA Group has launched an exciting, forward-looking and pioneering process for further profitable growth and sustainable success.
The Management Board team of AGRANA Beteiligungs-AG
Markus Mühleisen, CEO Ingrid-Helen Arnold Stephan Büttner Norbert Harringer
| Consolidated income statement | H1 | H1 |
|---|---|---|
| (condensed) | 2023 24 | 2022 23 |
| €m, except as otherwise indicated | ||
| Revenue | 1,959.5 | 1,792.3 |
| EBITDA1 | 163.7 | 141.2 |
| Operating profit before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 112.7 | 86.5 |
| Share of results of equity-accounted | ||
| joint ventures | (2.2) | 13.5 |
| Exceptional items | 0.4 | (88.9) |
| Operating profit (EBIT) | 110.9 | 11.1 |
| EBIT margin | 5.7% | 0.6% |
| Net financial items | (24.3) | (10.2) |
| Profit before tax | 86.6 | 0.8 |
| Income tax expense | (22.3) | (17.8) |
| Profit/(loss) for the period | 64.3 | (17.0) |
| Attributable to shareholders | ||
| of the parent | 60.6 | (21.5) |
| Earnings/(loss) per share (€) | 0.97 | (0.34) |
In the financial first half of 2023|24 (the six months ended 31 August 2023), revenue of the AGRANA Group was € 1,959.5 million, up moderately from the same period one year earlier, with the growth coming from adjusted prices in all segments.
Operating profit (EBIT) was € 110.9 million in the first half of 2023|24, a very marked increase from the year-ago level of € 11.1 million. The rise in EBIT resulted largely from the base effect of the prior-year comparative period's net exceptional items expense of € 88.9 million, which was due mainly to impairment losses on assets and goodwill in the Fruit segment. In the Fruit segment, EBIT increased to a profit of € 43.7 million (H1 prior year: loss of € 60.0 million), lifted not just by the non-recurrence of the above impairment but also by a better operating performance in both the fruit juice concentrate and the
| Consolidated income statement (condensed) |
Q2 2023 24 |
Q2 2022 23 |
|---|---|---|
| €m, except as otherwise indicated | ||
| Revenue | 993.4 | 906.0 |
| EBITDA1 | 73.1 | 69.1 |
| Operating profit before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 47.8 | 41.6 |
| Share of results of equity-accounted | ||
| joint ventures | (0.4) | 6.9 |
| Exceptional items | 0.0 | (89.0) |
| Operating profit/(loss) [EBIT] | 47.4 | (40.5) |
| EBIT margin | 4.8% | –4.5% |
| Net financial items | (11.0) | (4.4) |
| Profit/(loss) before tax | 36.4 | (45.0) |
| Income tax expense | (10.1) | (8.1) |
| Profit/(loss) for the period | 26.3 | (53.1) |
| Attributable to shareholders | ||
| of the parent | 24.5 | (55.6) |
| Earnings/(loss) per share (€) | 0.39 | (0.89) |
fruit preparations business. Meanwhile, a much weaker ethanol business than in the year-earlier period drove a significant decrease in Starch segment EBIT to € 36.2 million (H1 prior year: € 56.7 million). EBIT in the Sugar segment improved to € 31.0 million (H1 prior year: € 14.4 million) due to higher margins than a year ago. The Group's net financial items amounted to an expense of € 24.3 million, up from a € 10.2 million net expense in the year-earlier period, as a result primarily of adverse changes in net interest expense and (to a lesser extent) in currency translation differences. After an income tax expense of € 22.3 million, corresponding to a tax rate of 25.8% (H1 prior year: > 100%), profit for the period was € 64.3 million (H1 prior year: loss of € 17.0 million). Earnings per share attributable to AGRANA shareholders improved to a positive € 0.97 (H1 prior year: loss of € 0.34 per share).
In the first half of the 2023|24 financial year, AGRANA invested € 41.9 million, or € 6.2 million more than in the year-earlier comparative period. Capital expenditure by segment was as follows:
| Investment €m, except % |
H1 2023 24 |
H1 2022 23 |
Change |
|---|---|---|---|
| Fruit segment | 15.7 | 10.9 | 44.0% |
| Starch segment | 14.3 | 7.7 | 85.7% |
| Sugar segment | 11.9 | 17.1 | –30.4% |
| Group | 41.9 | 35.7 | 17.4% |
In addition to the regular projects for product quality and energy efficiency improvement and for asset replacement and maintenance across all production sites, the following individual investments are worthy of note:
Additionally in the first half of 2023|24, € 13.5 million (H1 prior year: € 8.2 million) was invested in the equityaccounted joint ventures (the HUNGRANA and STUDEN groups and Beta Pura GmbH; these values for joint ventures are not stated at AGRANA's share but at 100% of the totals).
Prices for natural gas and electricity fell significantly in the first half of 2023|24 compared to the prior year and then stabilised, but are still higher than before the outbreak of the Ukraine war. Markets remain on edge, with negative news causing strong reactions, especially in Europe. For its energy needs, AGRANA follows a hedging strategy designed to ensure certainty in budgeting for medium-term requirements. For the shorter end of the hedging period, the key targets are achieved and the strategy is successfully implemented. For the later years, liquidity is low, which means that the target figures are achieved with a certain delay. The government requirements regarding the stockpiling of natural gas are being met by the storage operators, so that the situation appears to be under control on the supply side at the moment. As a residual risk remains, AGRANA decided at the beginning of the year to again use extra light heating oil for this autumn's campaign in the Sugar segment as an alternative energy supply at the sites in Austria and Slovakia, as they are equipped with appropriate burners. As well, extra light heating oil is to be available as a backup option for those Starch segment locations for which delivery logistics can be made more flexible.
| Consolidated cash flow statement (condensed) €m, except % |
H1 2023 24 | H1 2022 23 | Change |
|---|---|---|---|
| Operating cash flow before changes in working capital | 180.1 | 135.3 | 33.1% |
| Changes in working capital | (142.7) | (166.9) | 14.5% |
| Interest received and paid and income tax paid, net | (25.7) | (11.9) | –116.0% |
| Net cash from/(used in) operating activities | 11.7 | (43.5) | 126.9% |
| Net cash (used in) investing activities | (40.5) | (29.3) | –38.2% |
| Net cash from financing activities | 34.5 | 93.0 | –62.9% |
| Net increase in cash and cash equivalents | 5.7 | 20.2 | –71.8% |
| Effects of movement in foreign exchange rates and | |||
| hyperinflation adjustments on cash and cash equivalents | (9.2) | 4.4 | –309.1% |
| Cash and cash equivalents at beginning of period | 118.3 | 103.6 | 14.2% |
| Cash and cash equivalents at end of period | 114.8 | 128.2 | –10.5% |
Operating cash flow before changes in working capital grew to € 180.1 million in the first half of 2023|24 (H1 prior year: € 135.3 million) as a result mainly of the much better profit for the period. After a far smaller increase of € 142.7 million in working capital than one year earlier (H1 prior year: increase of € 166.9 million), net cash from operating activities in the first half of 2023|24 was € 11.7 million (H1 prior year: net cash use of € 43.5 million). Net cash used in investing activities rose to € 40.5 million (H1 prior year: net cash use of € 29.3 million) as a consequence of higher payments for purchases of property, plant and equipment and intangibles. In combination with a higher dividend payment, a smaller increase in current borrowings compared to the year-ago period led to a reduced net cash inflow of € 34.5 million from financing activities (H1 prior year: net cash inflow of € 93.0 million).
| Consolidated balance sheet (condensed) €m, except % and pp |
31 August 2023 | 28 February 2023 | Change |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | 1,025.7 | 1,041.0 | –1.5% |
| Of which intangible assets, including goodwill | 113.1 | 115.1 | –1.7% |
| Of which property, plant and equipment | 802.5 | 819.4 | –2.1% |
| Current assets | 1,782.9 | 1,962.1 | –9.1% |
| Of which inventories | 957.5 | 1,210.0 | –20.9% |
| Of which trade receivables | 563.5 | 471.5 | 19.5% |
| Of which cash and cash equivalents | 114.8 | 118.3 | –3.0% |
| Total assets | 2,808.6 | 3,003.1 | –6.5% |
| EQUITY AND LIABILITIES | |||
|---|---|---|---|
| Equity | 1,248.3 | 1,256.6 | –0.7% |
| Equity attributable to shareholders of the parent | 1,182.3 | 1,193.6 | –0.9% |
| Non-controlling interests | 66.0 | 63.0 | 4.8% |
| Non-current liabilities | 570.1 | 658.3 | –13.4% |
| Of which borrowings | 476.5 | 562.9 | –15.3% |
| Current liabilities | 990.2 | 1,088.2 | –9.0% |
| Of which borrowings | 435.8 | 257.7 | 69.1% |
| Of which trade payables | 302.7 | 587.0 | –48.4% |
| Total equity and liabilities | 2,808.6 | 3,003.1 | –6.5% |
| Net debt | 779.6 | 684.9 | 13.8% |
|---|---|---|---|
| Gearing ratio1 | 62.5% | 54.5% | 8.0pp |
| Equity ratio | 44.4% | 41.8% | 2.6pp |
Total assets, at € 2,806 million as of 31 August 2023, were moderately lower than at the 2022|23 year-end balance sheet date, and the equity ratio was 44.4% (28 February 2023: 41.8%). Non-current assets were off slightly at € 1,025.7 million. Current assets, at € 1,782.9 million, decreased moderately, with inventories reduced significantly while trade receivables saw a considerable rise. Non-current liabilities declined significantly to € 570.1 million. Current liabilities, at € 990.2 million, decreased moderately as an increase in short-term borrowings coincided with a significant reduction in trade payables. Net debt as of 31 August 2023 stood at € 779.6 million, an increase of € 94.7 million from the year-end level of 28 February 2023. The gearing ratio at the half-year balance sheet date was 62.5% (28 February 2023: 54.5%).
| Share data | H1 2023 24 | |
|---|---|---|
| High (5 June 2023) | € | 18.10 |
| Low (24 March 2023) | € | 15.45 |
| Closing price (31 August 2023) | € | 15.60 |
| Closing book value per share | € | 18.92 |
| Closing market capitalisation | €m | 974.8 |
AGRANA started the 2023|24 financial year at a share price of € 17.00 and closed at € 15.60 on the last trading day of August 2023, a decrease of 8.2%. The Austrian blue-chip index, the ATX, fell by 11.8% over the same period.
The average daily trading volume in the period from March to August 2023 was slightly less than 14,000 shares1 (H1 prior year: approximately 17,500 shares1 ).
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 2023 was € 974.8 million.
The 36th Annual General Meeting of AGRANA Beteiligungs-AG on 7 July 2023 approved the payment of a dividend of € 0.90 per share for the 2022|23 financial year (2021|22: € 0.75 per share); the dividend was paid in July 2023.
| H1 | H1 | |
|---|---|---|
| Fruit segment | 2023 24 | 2022 23 |
| €m, except % | ||
| Revenue | 791.1 | 727.5 |
| EBITDA1 | 62.8 | 50.0 |
| Operating profit before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 43.7 | 29.8 |
| Exceptional items | 0.0 | (89.8) |
| Operating profit/(loss) [EBIT] | 43.7 | (60.0) |
| EBIT margin | 5.5% | (8.2%) |
| Q2 | Q2 | |
| Fruit segment | 2023 24 | 2022 23 |
| €m, except % | ||
| Revenue | 390.0 | 366.8 |
| EBITDA1 | 28.8 | 20.2 |
| Operating profit before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 19.3 | 10.0 |
| Exceptional items | 0.0 | (89.9) |
| Operating profit/(loss) [EBIT] | 19.3 | (79.9) |
Fruit segment revenue in the first six months of 2023|24 grew to € 791.1 million, or by 8.7% from the prior-year level. The revenue expansion both in the fruit preparations and fruit juice concentrate businesses resulted from price changes.
EBIT of the segment as a whole was a profit of € 43.7 million in the first half of the financial year (H1 prior year: loss of € 60.0 million. In the prior year, following an impairment test on 31 August 2022, non-cash impairment on assets and goodwill was recognised in exceptional items as part of EBIT.) In fruit preparations, the item "operating profit before exceptional items and results of equity-accounted joint ventures" was very significantly above the year-ago level. The improvement was attributable mainly to a positive business performance in the Europe region (including Ukraine) and North America. The fruit juice concentrate business further grew its earnings compared to the already very good yearearlier period. This was driven primarily by improved contribution margins of apple juice concentrates made from the 2022 crop.
The market environment for fruit preparations is determined by consumer trends in the global markets for dairy products, ice-cream and food service. The top trends continue to revolve around naturalness, health, pleasure, convenience and sustainability. Given the challenging economic times with high inflation, consumers are increasingly also focusing on affordability and on limiting themselves more to essential products. The uncertain and volatile market situation is having a particularly negative impact on the mid-price segment, as consumers reach either for low-priced products (retailers' own brands) or for premium products that offer a clear advantage.
According to the latest data as of August 2023 from Euromonitor, the global market for spoonable fruit yoghurt (the main market for the fruit preparations business) contracted slightly in volume terms from 2022 to 2023, by 0.6%. Global annual volume growth of 1.8% is forecast for the next several years to 2028. Within that total, the Western Europe region is expected to decline slightly (–1.1%), the Asia region with China as its largest market is to be flat (+0.1%), and mildly positive growth is forecast for North America (+1.3%). Besides yoghurt, the main market segments significant to the diversification of the fruit preparations activities are ice-cream and food service. The ice-cream market is forecast to grow globally by 2.0% p.a. from 2023 to 2028. In the food service segment, the main markets served by AGRANA are quick service restaurants (QSR) and coffee & tea shops. Current forecasts from GlobalData predict the future trajectory of these sectors to 2027 to be very positive, with average annual growth of 5.5% for QSR and 7.1% for coffee & tea shops.
In the fruit juice concentrate business, the level of customer call-offs for apple juice concentrate was good in the first half of 2023|24. In the case of berry juice concentrates, call-offs decreased as a result of frontloaded purchases in the previous financial year.
Amid very good market demand, the contracts for both apple and berry juice concentrates made from the 2022 crop were concluded at historic high contribution margins that were well above those of the prior year.
For the fruit preparations business, the harvest of strawberry, its principal fruit, was completed in July in all relevant procurement markets. The planned volume requirement was fully contracted in the production regions of the Mediterranean climate zone such as Egypt, Morocco and Spain as well as in Mexico and China. Average purchase prices were below the prior year's, due mostly to lower production costs on the supplier side and sufficient raw material availability.
The peach harvest in Spain, Greece and China, the main sourcing regions, produced average yields. Purchase prices were in line with the prior year.
The harvest of wild and cultivated blueberries in the main European and North American crop regions was favourable thanks to good growing conditions. Purchase prices fell significantly compared to the year before.
A positive development was also seen in raspberry procurement: Good crop yields in the European growing regions and high stocks of frozen product from the previous year resulted in significant price declines.
Mango and pineapple purchase prices fell as a result of easing freight costs from Asia.
In the first half of 2023|24, about 176,000 tonnes of raw materials were purchased for the fruit preparations activities, including 29,000 tonnes of strawberries.
In the 2023 berry juice processing season in the fruit juice concentrate business, which ended at the beginning of September, raw material availability was average. For apples, the principal fruit for juice concentrates, a weaker harvest is predicted overall in the EU, including in Poland. This means that rising raw material costs can be expected in the now-started 2023 apple campaign.
| H1 | H1 | |
|---|---|---|
| Starch segment | 2023 24 | 2022 23 |
| €m, except % | ||
| Revenue | 614.8 | 655.3 |
| EBITDA1 | 61.6 | 74.2 |
| Operating profit before exceptional | ||
| items and results of equity-accounted | ||
| joint ventures | 39.3 | 49.6 |
| Share of results of equity-accounted | ||
| joint ventures | (3.1) | 7.1 |
| Operating profit (EBIT) | 36.2 | 56.7 |
| EBIT margin | 5.9% | 8.7% |
| Q2 | Q2 | |
| Starch segment €m, except % |
2023 24 | 2022 23 |
| Revenue | 297.7 | 336.2 |
| EBITDA1 | 27.0 | 36.9 |
| Operating profit before exceptional | ||
| items and results of equity-accounted joint ventures |
15.9 | 24.6 |
| Share of results of equity-accounted | ||
| joint ventures | (1.8) | 2.8 |
| Operating profit (EBIT) | 14.1 | 27.4 |
Revenue in the first half of 2023|24 was € 614.8 million. This was moderately below the value of the year-earlier comparative period, in which the war in Ukraine led to powerful increases in market prices. In recent months,
there was a normalisation in starch market prices due to declining energy and raw material prices, with an impact on the sales pricing of the entire starch product portfolio. Selling prices for ethanol fell significantly, owing to a steep year-on-year drop of about 30% in Platts quotations.
At € 36.2 million, EBIT in the Starch segment was down significantly year-on-year. A key reason lay in the lowmargin ethanol business as a result of the considerable decline in Platts quotations. The second factor was that AGRANA's share of the earnings result of the equityaccounted HUNGRANA group deteriorated very significantly, turning negative to a deficit of € 3.1 million (H1 prior year: profit of € 7.1 million). This joint venture in Hungary purchased raw materials and energy at high prices and this significant increase in costs could not be passed on to customers sufficiently through price adjustments; another contributing factor was that HUNGRANA's sales volumes declined substantially and capacity utilisation was therefore reduced.
Since the second half of 2022|23, a trend of declining market demand has been underway that continued and even intensified in all product segments in the first half of 2023|24. The previously tight supply in the market has now turned into an oversupply, accompanied by an increase in idle processing capacity. This leads to strong downward pressure on prices and thus to a buyer's market.
Customers in the food and non-food industries are responding to the new market conditions (including weak sales and consumption and rising interest rates) with greater caution in their purchasing behaviour and are reducing their inventories. The construction industry experienced a significant slump in business, which manifested itself in a pronounced reduction in demand for modified starches for dry mortars and tile adhesives. Falling demand and prices in the entire conventional plastics and bioplastics market are also having an impact. Technical starches for paper and packaging seem to have bottomed out by now. Inventories of semi-finished and finished products in the paper industry have been reduced as far as possible and the plants are again being operated on a consumption-driven basis.
Fuel ethanol prices dropped significantly in the first half of 2023|24 compared to the previous year due to high imports from the USA and Brazil. This occurred even though demand for fuels was good in Europe, especially in Austria, where the introduction of E10 provided
1 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, and operating depreciation and amortisation.
additional impetus. European production is facing considerable competitive pressure.
World grain production in the 2023|24 grain marketing year (July to June) is estimated by the International Grains Council in its forecast of 17 August 2023 at 2.29 billion tonnes, which is about 31 million tonnes more than in the prior year and falls short of expected consumption by around 13 million tonnes. Wheat production is forecast at 784 million tonnes (prior year: 803 million tonnes; estimated 2023|24 consumption: 805 million tonnes) and the projected production of corn is 1,221 million tonnes (prior year: 1,160 million tonnes; estimated 2023|24 consumption: 1,207 million tonnes). Total ending grain stocks are to ease to approximately 584 million tonnes (prior year: 597 million tonnes).
Grain production in the EU-27 is estimated by Stratégie Grains at about 265 million tonnes (prior year: 265 million tonnes). Of this total, the soft wheat harvest is to account for about 125 million tonnes, as in the prior year. The 2023 corn harvest in the EU, at about 59 million tonnes, is expected to increase from the year before (prior year: 52 million tonnes).
The corn and wheat quotations on the Euronext Paris commodity derivative exchange fell markedly since early March 2023. These price declines were caused, among other things, by the good volume of the winter cereal harvest in the EU, an average to good outlook for the 2023 corn harvest, solid stocks, and lower demand for commodities due to the economic situation. At the balance sheet date, the quotations were around € 213 per tonne for corn and € 221 for wheat (year earlier: € 320 and € 330 per tonne, respectively).
At the beginning of September 2023, the potato starch factory in Gmünd, Austria, began receiving starch potatoes from the 2023 harvest (with contracts for about 215,000 tonnes of the raw material). Given the unfavourable weather conditions during the growing
season, contract fulfilment by the growers is expected to reach about 85% of the contracted amount of starch potatoes. The average starch content is projected at about 18.5% (prior year: 18.9%).
The receiving of freshly harvested wet corn at the corn starch plant in Aschach, Austria, began in the middle of September 2023. A wet corn volume of about 115,000 to 120,000 tonnes is expected to be received (which is lower than in the prior year), with its processing estimated to be completed by the end of December 2023. Processing will then switch to the use of dry corn. In the first half of 2023|24, approximately 190,000 tonnes of corn was processed in Aschach (H1 prior year: almost 230,000 tonnes).
Raw materials for the integrated biorefinery1 in Pischelsdorf, Austria, in the first six months of 2023|24 were non-corn grains (wheat, organic wheat, and triticale) and corn in a ratio of approximately 9 to 1. The total processing volume at this facility in the first six months of the financial year was about 450,000 tonnes (H1 prior year: approximately 500,000 tonnes). Processing of wet corn in Pischelsdorf started at the beginning of September; at around 80,000 tonnes, the expectation is for a slightly lower receiving volume than in the previous year and a processing period running until the end of December 2023.
The purchasing of feedstock from the 2022 crop for the facilities in Aschach and Pischelsdorf is complete. Including the amounts contracted from the 2023 harvest, the bulk of the raw material supply for the 2023|24 financial year is secured.
The wet corn campaign at the equity-accounted plant in Hungary (HUNGRANA) was launched at the end of August 2023. Thanks to the good weather conditions, a significantly higher wet corn processing volume of 140,000 to 145,000 tonnes is expected than in the prior year, when it was 124,000 tonnes (volumes for equityaccounted entities are stated at 100% of the total). In the first half of 2023|24, about 280,000 tonnes of corn was processed here (H1 prior year: 540,000 tonnes).
| H1 | H1 |
|---|---|
| 2023 24 | 2022 23 |
| 553.6 | 409.5 |
| 39.3 | 17.0 |
| 29.7 | 7.1 |
| 0.9 | 6.4 |
| 0.4 | 0.9 |
| 31.0 | 14.4 |
| 5.6% | 3.5% |
| Sugar segment | Q2 2023 24 |
Q2 2022 23 |
|---|---|---|
| €m, except % | ||
| Revenue | 305.7 | 203.0 |
| EBITDA1 | 17.3 | 12.0 |
| Operating result before exceptional items and results of equity-accounted |
||
| joint ventures | 12.6 | 7.0 |
| Share of results of equity-accounted | ||
| joint ventures | 1.4 | 4.1 |
| Exceptional items | 0.0 | 0.9 |
| Operating profit (EBIT) | 14.0 | 12.0 |
| EBIT margin | 4.6% | 5.9% |
The Sugar segment's revenue in the first half of 2023|24 was € 553.6 million, marking a significant increase from one year earlier. This growth, achieved despite lower sales volumes, was driven by a substantial rise in sugar selling prices. This price trend was very positive both in the reseller business (i.e., with wholesalers and retailers) and the industrial market.
EBIT of € 31.0 million in the first half of the year represented a vigorous improvement from the yearearlier period. The very significant increase in sugar sales prices was reflected in these strong half-year earnings. The AGRANA-STUDEN group, a joint venture, delivered historic high earnings in the prior, 2022|23 financial year. This year, a positive result was achieved at the half-year mark, albeit lower than one year ago and comparable to the preceding years. The joint venture Beta Pura GmbH remains in restructuring. The Sugar segment's positive net exceptional items of € 0.4 million were related to further recoveries from ongoing tax proceedings in Romania (H1 prior year: recoveries of € 0.9 million).
In its world sugar balance estimate of 4 July 2023, the market research firm S&P Global Commodity Insights has forecast an even balance of global sugar supply and demand for the 2022|23 sugar marketing year (SMY, from 1 October 2022 to 30 September 2023), after three consecutive years of deficits. A projected increase in sugar production (driven by Brazil, and despite production declines in Mexico, China, the EU, India and Pakistan) is offset by expected further growth in consumption.
For SMY 2023|24, S&P Global Commodity Insights' initial estimate is for a surplus of 1.5 million tonnes, with production continuing to rise (especially in India, Pakistan, China, the EU and Mexico, while declining in Brazil) and consumption increasing. The ratio of stocks to consumption would thus remain unchanged at the low level of 35%.
World market prices for white and raw sugar had risen to US\$ 562.4 and US\$ 486.8, respectively, by the end of the 2022|23 financial year. This trend continued in the first half of 2023|24, with quotations reaching US\$ 715.2 per tonne of white sugar and US\$ 551.9 per tonne of raw sugar at the end of August (31 August 2022: US\$ 550.8 and US\$ 393.5, respectively) amid high volatility.
In SMY 2022|23, sugar production for the EU-27 (excluding isoglucose) fell to 14.6 million tonnes (SMY 2021|22: 16.6
million tonnes), with a further slight reduction in acreage and with below-average yields due to the drought in the summer of 2022. The EU thus remained a net importer of sugar in SMY 2022|23.
For SMY 2023|24, the European Commission expects a slight increase in beet sowing area. A combination of late sowing and of growing conditions that thus far have been less than optimal points to the likelihood of an average harvest. Sugar production is expected to increase to 15.5 million tonnes, which would continue to leave the EU a net importer of the sweetener.
According to EU price reporting, the average white sugar price in the EU reached € 821 per tonne in July 2023, up by € 348 per tonne from July of the previous year. Within the EU, there were significant regional price differences between the deficit and surplus regions. The deficit markets were under pressure from low-price imports from Ukraine, which is why the price increases in the Romanian and Bulgarian markets lost momentum in the summer.
In response to the armed conflict in Ukraine, the European Parliament and the 27 EU member states in June 2022 approved the temporary suspension of tariffs and import quotas for sugar – initially until June 2023. Duty-free sugar imports from Ukraine increased to about 390,000 tonnes by the end of July 2023 as a result of this special arrangement (under the original agreement concluded in 2014, Ukraine had duty-free access to the EU market for around 20,000 tonnes).
The EU approval for duty-free sugar imports from Ukraine has now been extended by the EU until the beginning of June 2024. For its part, however, the Ukrainian government had banned the export of sugar to the EU from the beginning of June 2023 until the start of the new campaign in mid-September 2023, as it now considered the supply of sugar to the domestic population to be at risk. For the new crop year 2023|24, Ukrainian beet growers have significantly expanded their planting acreage; therefore, a resumption and expansion of exports from Ukraine to the EU must currently be expected, starting in September 2023.
The area contracted by AGRANA with its growers for sugar beet production in the 2023 crop year was about 87,000 hectares (2022 crop year: around 74,000 hectares). Of this, about 800 hectares represented contracts for organic production. In Austria, the contract area for beet production increased by 6% from the prior year to about 36,200 hectares.
Sowing in Austria started at the end of March 2023 and was not completed until the beginning of May, due to frequent rainfall and cool temperatures. A cool and humid May was followed by several weeks of dry and hot weather from mid-June, which was interrupted only in some areas by precipitation from thunderstorms. A cool weather period from the beginning of August brought the much-needed, widespread precipitation throughout the catchment area. The beet stands were free of disease or damage at the end of August thanks to the high proportion of varieties resistant to leaf disease, and thus good sugar yield increases can be expected in the remainder of the growing season. Due to the partly delayed sowing and the intermittent dry phases, an Austria-wide average beet yield of about 72 to 75 tonnes per hectare is expected (prior year: 80 tonnes).
The 2023 beet campaign was kicked off in mid-September by the first factories in the Czech Republic, Slovakia, Hungary and Romania. A thick-juice campaign was started at the plant in Tulln, Austria, towards the end of September 2023. Based on the current estimate of beet volume this year for the AGRANA Group, factory utilisation is expected to rise by more than 10 percentage points year-on-year to 95%.
In the first half of the 2023|24 financial year, 205,000 tonnes of raw sugar was refined at the AGRANA raw sugar refinery in Buzau, Romania. The Group's plant in Bosnia and Herzegovina as well ran a raw sugar campaign from June to August, producing about 45,000 tonnes of white sugar.
In the first half of 2023|24, just over 1,100 tonnes of crystalline betaine were produced at the Tulln, Austria, site in the betaine crystallisation plant (by the joint venture Beta Pura GmbH, Vienna). The raw material for this came exclusively from the molasses desugarisation stream of the Tulln sugar factory; no external feedstock was purchased.
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 is provided on pages 108 to 118 of the annual report 2022|23.
| Average full-time equivalents |
H1 2023 24 |
H1 2022 23 |
Change |
|---|---|---|---|
| Fruit segment | 6,015 | 6,033 | –0.3% |
| Starch segment | 1,167 | 1,141 | 2.3% |
| Sugar segment | 1,821 | 1,763 | 3.3% |
| Group | 9,003 | 8,937 | 0.7% |
In the first half of 2023|24, the AGRANA Group employed an average of 9,003 full-time equivalents1 (H1 prior year: 8,937). A slight increase in personnel in the Starch and Sugar segments reflected both the filling of vacant positions and hiring in step with the pace of business.
For disclosures on related party relationships, refer to the notes to the interim consolidated financial statements.
No significant events occurred after the interim balancesheet date of 31 August 2023 that had a material effect on AGRANA's financial position, results of operations or cash flows.
| AGRANA Group €m |
2022 23 Actual |
2023 24 Forecast |
|---|---|---|
| Revenue | 3,637.4 | |
| EBIT | 88.3 | |
| Investment1 | 102.9 | 140 |
Moderate increase2
Very significant increase2
At Group level for the full 2023|24 financial year, AGRANA expects a very significant increase in operating profit (EBIT). Moderate growth in Group revenue is projected based on the revenue trend in the first half of the year.
EBIT for the third quarter of this financial year is expected to be below the year-earlier figure of € 39.1 million.
| Fruit segment €m |
2022 23 Actual |
2023 24 Forecast |
|---|---|---|
| Revenue | 1,481.9 | |
| EBIT | (38.5) | |
| Investment1 | 37.7 | 52 |
Slight increase2 Very significant improvement2
In the Fruit segment, AGRANA expects the full 2023|24 financial year to bring an improvement in revenue and in operating profit. In the fruit preparations business, a positive revenue trend is projected, driven primarily by price adjustments; EBIT here is to improve very significantly, due both to the base-year effect of the goodwill impairment in 2022|23 and the fact that the business is targeting an increase in operating margins for 2023|24. In the fruit juice concentrate activities, revenue for this financial year is predicted to be in line with one year earlier. In view of the sales contracts for berry juice concentrate closed to date for product from the 2023 crop, the earnings situation in the concentrate business in 2023|24 is expected to remain good.
| Starch segment | 2022 23 | 2023 24 |
|---|---|---|
| €m | Actual | Forecast |
| Revenue | 1,293.8 | |
| EBIT | 80.2 | |
| Investment1 | 31.0 | 48 |
Moderate reduction2
Significant reduction2
For the Starch segment, a moderate decrease in revenue is now forecast for the 2023|24 financial year. The falling energy and raw material prices have resulted in a lower general level of sales prices. As inputs are being purchased further in advance than last year, manufacturing costs are not able to fall at the same rate, which is negatively affecting margins. Moreover, the ethanol business is projected to remain highly volatile, with earnings below those of the prior year. Starch EBIT is therefore expected to be significantly less than last year.
| Sugar segment €m |
2022 23 Actual |
2023 24 Forecast |
|---|---|---|
| Revenue | 861.7 | |
| EBIT | 46.6 | |
| Investment1 | 34.2 | 40 |
Significant increase2
Steady2
In the Sugar segment, AGRANA is projecting price-related revenue growth for 2023|24 despite lower sugar sales volumes. Due to the volatile EU sugar market environment (including the expected high Ukrainian imports to AGRANA's core markets), EBIT is now forecast to be in line with last year.
Key sources of uncertainty for the forecast remain the war in Ukraine and its consequences. Given the unpredictability of the further course of the war, effects such as exceptional cost increases and demand declines cannot be ruled out. Since the outbreak of the war, the volatility in the Group's product markets and procurement markets has further intensified. Unless indicated otherwise, AGRANA's projections are based on the assumptions that the physical supplies of energy and raw materials remain assured and that purchasing price increases, especially for raw materials and energy, can be passed on in adjusted customer contracts.
1 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.
Total investment across the three business segments in the 2023|24 financial year, at approximately € 140 million, is to significantly exceed both the 2022|23 value and this year's budgeted depreciation of about € 120 million. Around 14% of this capital expenditure will be for emission reduction measures in the Group's own production operations as part of the AGRANA climate strategy.
For the first six months ended 31 August 2023 (unaudited)
| First six months | Second quarter | |||
|---|---|---|---|---|
| (1 March – 31 August) | (1 June – 31 August) | |||
| €000, except per-share data | H1 2023 24 | H1 2022 23 | Q2 2023 24 | Q2 2022 23 |
| Revenue | 1,959,495 | 1,792,342 | 993,413 | 906,043 |
| Changes in inventories of finished and unfinished goods | (226,939) | (136,534) | (160,576) | (35,096) |
| Own work capitalised | 318 | 384 | 155 | 212 |
| Other operating income | 18,367 | 30,836 | 7,399 | 15,783 |
| Cost of materials | (1,184,903) | (1,177,457) | (561,848) | (630,604) |
| Staff cost | (197,638) | (177,176) | (99,712) | (90,691) |
| Depreciation, amortisation and impairment | (51,022) | (145,910) | (25,333) | (118,745) |
| Other operating expenses | (204,601) | (188,923) | (105,753) | (94,308) |
| Share of results of equity-accounted joint ventures | (2,152) | 13,517 | (347) | 6,904 |
| Operating profit/(loss) [EBIT] | 110,925 | 11,079 | 47,398 | (40,502) |
| Finance income | 29,160 | 35,628 | 2,720 | 14,990 |
| Finance expense | (53,421) | (45,854) | (13,718) | (19,407) |
| Net financial items | (24,261) | (10,226) | (10,998) | (4,417) |
| Profit/(loss) before tax | 86,664 | 853 | 36,400 | (44,919) |
| Income tax expense | (22,349) | (17,803) | (10,118) | (8,103) |
| Profit/(loss) for the period | 64,315 | (16,950) | 26,282 | (53,022) |
| Attributable to shareholders of the parent | 60,593 | (21,456) | 24,525 | (55,513) |
| Attributable to non-controlling interests | 3,722 | 4,506 | 1,757 | 2,491 |
| Earnings/(loss) per share under IFRS (basic and diluted) | € 0.97 | € (0.34) | € 0.39 | € (0.89) |
| First six months | Second quarter | |||
|---|---|---|---|---|
| (1 March – 31 August) | (1 June – 31 August) | |||
| €000 | H1 2023 24 | H1 2022 23 | Q2 2023 24 | Q2 2022 23 |
| Profit/(loss) for the period | 64,315 | (16,950) | 26,282 | (53,022) |
| Other comprehensive (expense)/income: | ||||
| Currency translation differences and hyperinflation adjustments | (16,999) | 36,787 | (16,662) | 10,714 |
| Changes in fair value of hedging instruments (cash flow hedges), after deferred taxes |
(998) | (44) | 9,313 | (6,325) |
| Effects from equity-accounted joint ventures | 3,998 | (4,823) | 114 | (1,144) |
| (Expense)/income to be recognised in the income statement in the future |
(13,999) | 31,920 | (7,235) | 3,245 |
| Change in actuarial gains and losses on defined benefit pension obligations and similar liabilities, after deferred taxes |
(1,689) | 9,519 | (220) | 3,755 |
| Changes in fair value of equity instruments, after deferred taxes | 316 | (183) | 0 | (183) |
| (Expense)/income that will not be recognised | ||||
| in the income statement in the future | (1,373) | 9,336 | (220) | 3,572 |
| Other comprehensive (expense)/income | (15,372) | 41,256 | (7,455) | 6,817 |
| Total comprehensive income/(expense) for the period | 48,943 | 24,306 | 18,827 | (46,205) |
| Attributable to shareholders of the parent Attributable to non-controlling interests |
44,907 4,036 |
21,424 2,882 |
17,519 1,308 |
(47,788) 1,583 |
| For the first six months (1 March – 31 August) | H1 2023 24 | H1 2022 23 |
|---|---|---|
| €000 | ||
| Operating cash flow before changes in working capital | 180,148 | 135,255 |
| Changes in working capital | (142,665) | (166,899) |
| Interest received and paid and income tax paid, net | (25,751) | (11,921) |
| Net cash from/(used in) operating activities | 11,732 | (43,565) |
| Net cash (used in) investing activities | (40,508) | (29,302) |
| Net cash from financing activities | 34,489 | 93,024 |
| Net increase in cash and cash equivalents | 5,713 | 20,157 |
| Effect of movement in foreign exchange rates and hyperinflation adjustments on cash and cash equivalents |
(9,214) | 4,424 |
| Cash and cash equivalents at beginning of period | 118,343 | 103,593 |
| Cash and cash equivalents at end of period | 114,842 | 128,174 |
| €000 | 31 August 2023 |
28 February 2023 |
31 August 2022 |
|---|---|---|---|
| ASSETS | |||
| A. Non-current assets | |||
| Intangible assets, including goodwill | 113,132 | 115,098 | 115,955 |
| Property, plant and equipment | 802,502 | 819,418 | 824,438 |
| Equity-accounted joint ventures | 66,698 | 66,460 | 74,646 |
| Securities | 17,928 | 17,378 | 17,735 |
| Investments in non-consolidated subsidiaries and outside companies | 280 | 280 | 280 |
| Other assets | 4,160 | 2,559 | 3,678 |
| Deferred tax assets | 21,048 | 19,817 | 11,885 |
| 1,025,748 | 1,041,010 | 1,048,617 | |
| B. Current assets | |||
| Inventories | 957,547 | 1,210,019 | 829,631 |
| Trade receivables | 563,459 | 471,495 | 514,744 |
| Other assets | 140,453 | 158,702 | 129,552 |
| Current tax assets | 6,597 | 3,506 | 5,026 |
| Cash and cash equivalents | 114,842 | 118,343 | 128,174 |
| 1,782,898 | 1,962,065 | 1,607,127 | |
| Total assets | 2,808,646 | 3,003,075 | 2,655,744 |
| 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 | 527,947 | 539,284 | 544,826 |
| Equity attributable to shareholders of the parent | 1,182,238 | 1,193,575 | 1,199,117 |
| Non-controlling interests | 66,029 | 62,994 | 58,674 |
| B. Non-current liabilities | 1,248,267 | 1,256,569 | 1,257,791 |
| Retirement and termination benefit obligations | 51,747 | 53,535 | 45,249 |
| Other provisions | 28,174 | 28,388 | 29,290 |
| Borrowings | 476,536 | 562,868 | 378,601 |
| Other payables | 5,447 | 6,670 | 4,343 |
| Deferred tax liabilities | 8,257 | 6,841 | 9,108 |
| 570,161 | 658,302 | 466,591 | |
| C. Current liabilities | |||
| Other provisions | 25,993 | 19,516 | 13,243 |
| Borrowings | 435,828 | 257,748 | 424,714 |
| Trade payables | 302,731 | 586,991 | 324,210 |
| Other payables | 190,378 | 199,479 | 160,751 |
| Tax liabilities | 35,288 | 24,470 | 8,444 |
| 990,218 | 1,088,204 | 931,362 | |
| Total equity and liabilities | 2,808,646 | 3,003,075 | 2,655,744 |
| For the first six months (1 March – 31 August) €000 |
Equity attributable to shareholders of the parent |
Non-controlling interests |
Total |
|---|---|---|---|
| 2023 24 | |||
| At 1 March 2023 | 1,193,575 | 62,994 | 1,256,569 |
| Changes in fair value of equity instruments | 411 | 0 | 411 |
| Changes in fair value of hedging instruments (cash flow hedges) | 6,987 | (304) | 6,683 |
| Changes in actuarial gains and losses on | |||
| defined benefit pension obligations and similar liabilities | (2,168) | (1) | (2,169) |
| Tax effects | (2,802) | 40 | (2,762) |
| Currency translation (loss)/gain and hyperinflation adjustments | (18,114) | 579 | (17,535) |
| Other comprehensive (expense)/income for the period | (15,686) | 314 | (15,372) |
| Profit for the period | 60,593 | 3,722 | 64,315 |
| Total comprehensive income for the period | 44,907 | 4,036 | 48,943 |
| Dividends paid | (56,240) | (1,001) | (57,241) |
| Other changes | (4) | 0 | (4) |
| At 31 August 2023 | 1,182,238 | 66,029 | 1,248,267 |
| Equity | |||
|---|---|---|---|
| For the first six months (1 March – 31 August) | attributable to shareholders |
Non-controlling | |
| €000 | of the parent | interests | Total |
| 2022 23 | |||
| At 1 March 2022 | 1,224,560 | 56,982 | 1,281,542 |
| Changes in fair value of equity instruments | (238) | 0 | (238) |
| Changes in fair value of hedging instruments (cash flow hedges) | (54) | (334) | (388) |
| Changes in actuarial gains and losses on | |||
| defined benefit pension obligations and similar liabilities | 12,738 | (1) | 12,737 |
| Tax effects | (3,175) | 79 | (3,096) |
| Currency translation gain/(loss) and hyperinflation adjustments | 33,609 | (1,368) | 32,241 |
| Other comprehensive income/(expense) for the period | 42,880 | (1,624) | 41,256 |
| (Loss)/profit for the period | (21,456) | 4,506 | (16,950) |
| Total comprehensive income for the period | 21,424 | 2,882 | 24,306 |
| Dividends paid | (46,867) | (1,190) | (48,057) |
| At 31 August 2022 | 1,199,117 | 58,674 | 1,257,791 |
For the first six months ended 31 August 2023 (unaudited)
| For the first six months (1 March – 31 August) |
H1 2023 24 |
H1 2022 23 |
|---|---|---|
| €000 | ||
| Total revenue | ||
| Fruit | 791,640 | 727,921 |
| Starch | 622,820 | 661,040 |
| Sugar | 571,137 | 420,309 |
| Group | 1,985,597 | 1,809,270 |
| Inter-segment revenue | ||
| Fruit | (569) | (441) |
Operating profit/(loss) [EBIT]1
| Fruit | 0 | 0 |
|---|---|---|
| Starch | (3,100) | 7,167 |
| Sugar | 948 | 6,350 |
| Group | (2,152) | 13,517 |
| Group | (26,102) | (16,928) |
|---|---|---|
| Sugar | (17,541) | (10,738) |
| Starch | (7,992) | (5,749) |
| Fruit | (569) | (441) |
| 553,596 | 409,571 |
|---|---|
| 614,828 | 655,291 |
| 791,071 | 727,480 |
| Fruit | 43,728 | 29,805 |
|---|---|---|
| Starch | 39,259 | 49,540 |
| Sugar | 29,694 | 7,135 |
| Group | 112,681 | 86,480 |
| Sugar | 31,038 | 14,384 |
|---|---|---|
| Group | 110,925 | 11,079 |
| Group | 41,963 | 35,728 |
|---|---|---|
| Sugar | 11,929 | 17,120 |
| Starch | 14,335 | 7,669 |
| Fruit | 15,699 | 10,939 |
| Group | 9,003 | 8,937 |
|---|---|---|
| Sugar | 1,821 | 1,763 |
| Starch | 1,167 | 1,141 |
| Fruit | 6,015 | 6,033 |
| Group | 396 | (88,918) |
|---|---|---|
| Sugar | 396 | 899 |
| Starch | 0 | 0 |
| Fruit | 0 | (89,817) |
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 2023 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 2023 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 28 September 2023.
The AGRANA Group's annual report 2022|23 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 109 to 111 of the annual report 2022|23 in the notes to the consolidated financial statements, section 2, "Basis of preparation".
Uncertainty in assumptions and judgements arises from a volatile market environment with regard to the costs of raw materials, energy, transport and other items. In addition, macroeconomic conditions are characterised by high interest rates and rapid inflation whose trajectories going forward are unclear.
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 2023 (the latest full financial year).
The notes to those 2022|23 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.
In the reporting period, the fully consolidated AGRANA AGRO S.r.l. in Roman, Romania, was liquidated.
At the half-year balance sheet date, in total in the consolidated financial statements, 54 companies besides the parent were fully consolidated (28 February 2023 year-end: 55 companies) and 13 companies were accounted for using the equity method (28 February 2023: 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").
Revenue increased moderately to € 1,959.5 million (prior year: € 1,792.3 million). This revenue growth was attributable primarily to significantly higher sugar selling prices in the Sugar segment and, to a lesser extent, to upward price adjustments in the Fruit segment.
The Group's operating profit (EBIT) in the first half of 2023|24 was € 110.9 million (H1 prior year: € 11.1 million). The rise in EBIT resulted largely from the base effect of the prior-year comparative period's net exceptional items expense of € 88.9 million, which was due mainly to impairment losses on goodwill and property, plant and equipment in the Fruit segment. In the Fruit segment, EBIT increased thanks to the non-recurrence of the above impairment and to a better operating performance in both the fruit juice concentrate and the fruit preparations business. The marked improvement in EBIT of the Sugar segment was driven mostly by significantly higher sugar sales prices. In the Starch segment, a considerable decline in Platts quotations and hence in earnings from ethanol sales led to a significant EBIT reduction compared to one year earlier.
Net financial items amounted to an expense of € 24.3 million (H1 prior year: expense of € 10.2 million). The negative change resulted above all from a sharp deterioration in net interest expense (due to the rising interest rates), and in currency translation differences.
The Group realised profit for the period of € 64.3 million (H1 prior year: loss for the period of € 17.0 million).
From the beginning of March to the end of August 2023, cash and cash equivalents decreased by € 3.5 million to € 114.8 million.
Net cash from operating activities was € 11.7 million (H1 prior year: net cash used in operating activities of € 43.6 million), a very significant improvement of € 55.3 million. This was powered mainly by a strong upturn in profit for the period – thanks in part to the base effect of the prior year's non-cash exceptional effects from the impairment charges on goodwill and property, plant and equipment – and by a much smaller increase in working capital than a year ago.
Net cash used in investing activities was € 40.5 million (H1 prior year: net cash use of € 29.3 million), an increase of € 11.2 million in net outflows year on year. The higher cash outflow was due primarily to greater investment.
Net cash of € 34.5 million from financing activities (H1 prior year: net cash inflow of € 93.0 million) was attributable mainly to the repayment of syndicated credit lines of € 35.0 million for working capital financing, offset by incurred bank overdrafts and cash advances of € 132.4 million. The dividend payment to the shareholders of AGRANA Beteiligungs-AG in 2023 increased from € 46.9 million in the prior year to € 56.2 million.
Total assets declined moderately from 28 February 2023, by € 194.4 million to € 2,808.6 million.
On the assets side, the decrease in the balance sheet total was driven largely by the net effect of significantly higher trade receivables, significantly lower inventories and a reduced carrying amount of property, plant and equipment. In the liabilities section, the decline resulted from a substantial reduction in trade payables that outweighed a significant increase in borrowings.
With shareholders' equity of € 1,248.3 million (28 February 2023: € 1,256.6 million), the equity ratio at the end of August was 44.4% (28 February 2023: 41.8%).
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 2023 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| €000 | ||||
| Securities (non-current) | 10,722 | 7,206 | 0 | 17,928 |
| Investments in non-consolidated subsidiaries and outside | ||||
| companies (non-current) | 0 | 0 | 280 | 280 |
| Derivative financial assets at fair value through other | ||||
| comprehensive income (hedge accounting) | 0 | 3,600 | 0 | 3,600 |
| Derivative financial assets at fair value through profit and loss | 133 | 3,066 | 0 | 3,199 |
| Financial assets | 10,855 | 13,872 | 280 | 25,007 |
| Liabilities from derivatives at fair value through other | ||||
| comprehensive income (hedge accounting) | 6,238 | 17,327 | 0 | 23,565 |
| Liabilities from derivatives at fair value through profit and loss | 0 | 6,729 | 0 | 6,729 |
| Financial liabilities | 6,238 | 24,056 | 0 | 30,294 |
| 31 August 2022 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| €000 | ||||
| Securities (non-current) | 10,940 | 0 | 6,795 | 17,735 |
| Investments in non-consolidated subsidiaries and outside | ||||
| companies (non-current) | 0 | 0 | 280 | 280 |
| Derivative financial assets at fair value through other | ||||
| comprehensive income (hedge accounting) | 731 | 1,453 | 0 | 2,184 |
| Derivative financial assets at fair value through profit and loss | 67 | 4,649 | 0 | 4,716 |
| Financial assets | 11,738 | 6,102 | 7,075 | 24,915 |
| Liabilities from derivatives at fair value through other | ||||
| comprehensive income (hedge accounting) | 365 | 897 | 0 | 1,262 |
| Liabilities from derivatives at fair value through profit and loss | 0 | 16,127 | 0 | 16,127 |
| Financial liabilities | 365 | 17,024 | 0 | 17,389 |
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 2023 | amount | value |
| €000 | ||
| Bank loans and overdrafts, and other loans from non-Group entities | 881,007 | 863,103 |
| Lease liabilities | 31,357 | – |
| Borrowings | 912,364 | 863,103 |
| Carrying | Fair | |
| 31 August 2022 | amount | value |
| €000 | ||
| Bank loans and overdrafts, and other loans from non-Group entities | 770,850 | 752,025 |
| Lease liabilities | 32,465 | – |
| Borrowings | 803,315 | 752,025 |
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 190 to 193 of the annual report 2022|23, in section 11.3, "Additional disclosures on financial instruments".
In the first half of 2023|24 the AGRANA Group employed an average of 9,003 full-time equivalents (H1 prior year: 8,937). The slight increase in personnel represented mainly the filling of vacant positions, and also hiring in step with the pace of business, in the Starch and Sugar segments.
There were no material changes in related party relationships since the year-end balance sheet date of 28 February 2023 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 2022|23 (from page 201).
No significant events occurred after the interim balance sheet date of 31 August 2023 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, 28 September 2023
Markus Mühleisen Chief Executive Officer Strategy and Business Policy, Sales Coordination, Public Relations, Human Resources, Corporate Secretariat (line authority), and Sugar Segment
Stephan Büttner Member of the Management Board Finance, Mergers & Acquisitions/Equity Investments, Information Technology & Organisation, Legal, Compliance, Purchasing Coordination, Investor Relations, and Fruit Segment
Ingrid-Helen Arnold Member of the Management Board Internal Audit
Norbert Harringer Member of the Management Board Production Coordination & Investment, Raw Materials, Research and Development, Sustainability, Quality Management, 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.
| The quantitative statements and direction arrows in the "Outlook" section of this report are based on the following definitions: | |||||
|---|---|---|---|---|---|
| -- | ---------------------------------------------------------------------------------------------------------------------------------- | -- | -- | -- | -- |
| Modifier | Visualisation | Numerical rate of change |
|---|---|---|
| Steady | | 0% up to +1%, or 0% up to –1% |
| Slight(ly) | or | More than +1% and up to +5%, or more than –1% and up to –5% |
| Moderate(ly) | or | More than +5% and up to +10%, or more than –5% and up to –10% |
| Significant(ly) | or | More than +10% and up to +50%, or more than –10% and 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 228 of the annual report 2022|23.
AGRANA strives for gender-sensitive language in all its internal and external written documents, including in this interim report. In the interest of readability, this document may occasionally use language that is not gender-neutral. Any gender-specific references should be understood to equally include all genders 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.
| 12 January 2024 | Results for first three quarters of 2023 24 |
|---|---|
| 14 May 2024 | Results for full year 2023 24 (annual results press conference) |
| 25 June 2024 | Record date for participation in Annual General Meeting |
| 5 July 2024 | Annual General Meeting in respect of 2023 24 |
| 10 July 2024 | Ex-dividend date |
| 11 July 2024 | Results for first quarter of 2024 25 |
| 11 July 2024 | Record date for dividend |
| 15 July 2024 | Dividend payment date |
| 10 October 2024 | Results for first half of 2024 25 |
| 14 January 2025 | Results for first three quarters of 2024 25 |
Friedrich-Wilhelm-Raiffeisen-Platz 1 1020 Vienna, Austria www.agrana.com/en
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 12 October 2023 by AGRANA Beteiligungs-AG Friedrich-Wilhelm-Raiffeisen-Platz 1 1020 Vienna, Austria
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