AGRANA BETEILIGUNGS-AG H1 2023|24
REPORT ON THE FIRST HALF OF 2023|24
AGRANA Beteiligungs-AG | First half of 2023|24
First half of 2023|24 at a glance
- Revenue: € 1,959.5 million (+9.3%; H1 prior year: € 1,792.3 million)
- EBIT: € 110.9 million (+899.1%; H1 prior year: € 11.1 million)
- EBIT margin: 5.7% (H1 prior year: 0.6%)
- Profit for the period: € 64.3 million (+478.2%; H1 prior year: loss of € 17.0 million)
- Equity ratio: 44.4% (28 February 2023: 41.8%)
- Gearing ratio1: 62.5% (28 February 2023: 54.5%)
- Number of employees (FTE)2: 9,003 (H1 prior year: 8,937)
- Ratio of net debt to total equity.
- Average number of full-time equivalents in the reporting period.
Contents
- Letter from the Management Board
- Group management report
AGRANA Group results for the first half of 2023|24 |
- AGRANA capital market developments
- Fruit segment
11 | Starch Segment |
13 | Sugar Segment |
15 | Management of risks and opportunities |
15 | Number of employees |
15 | Related party disclosures |
- Significant events after the interim reporting date
- Outlook
18 Interim consolidated financial statements
- Consolidated income statement
- Consolidated statement of comprehensive income
- Consolidated cash flow statement
- Consolidated balance sheet
- Consolidated statement of changes in equity
- Notes to the interim consolidated financial statements
- Management Board's responsibility statement
- Other information
2
AGRANA Beteiligungs-AG | First half of 2023|24
Letter from the Management Board
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 |
1 EBIT in the first half of 2022|23 included an impairment charge on assets and goodwill in the Fruit segment of € 91.2 million. | 3 |
2 Also see the Outlook section on page 16 (including the disclaimer). | |
AGRANA Beteiligungs-AG | First half of 2023|24
Group management report
AGRANA Group results for the first half of 2023|24
Revenue and earnings
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) |
Consolidated income statement | Q2 | Q2 |
(condensed) | 2023|24 | 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) |
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
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).
Sugar segment | Sugar segment | ||
Fruit segment | Fruit segment | 22.8% | |
28.2% | |||
40.4% | (€ 553.6m) | 40.6% | (€ 409.5m) |
(€ 791.1m) | (€ 727.5m) |
H1 2023|24 | H1 2022|23 |
Revenue by | Revenue by |
segment | segment |
Starch segment | |
Starch segment | 36.6% |
31.4% | (€ 655.3m) |
(€ 614.8m) |
41 EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, and operating depreciation and amortisation.
Investment1
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:
H1 | H1 | |||
Investment | 2023|24 | 2022|23 | Change | |
€m, except % | ||||
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:
Fruit segment
- Expansion of raw material storage in Jacona, Mexico
- Replacement of various refrigeration units in Centerville, Tennessee, USA
- New wastewater treatment plant in Ostrołęka, Poland
Starch segment
- Measures to increase specialty corn (maize) processing in Aschach, Austria
- Expansion of the company wastewater treatment plants in Aschach and Gmünd, Austria
- Upgrading of cooling performance in Pischelsdorf, Austria
AGRANA Beteiligungs-AG | First half of 2023|24
Sugar segment
- Modernisation of the distributed control system in Leopoldsdorf, Austria
- Production process optimisation by replacing the filter presses in Sereď, Slovakia
- Optimisation of the evaporator station in Kaposvár, Hungary
Additionally in the first half of 2023|24, € 13.5 million (H1 prior year: € 8.2 million) was invested in the equity- accounted 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).
Energy
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.
1 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill. | 5 |
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Disclaimer
AGRANA Beteiligungs AG published this content on 10 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 October 2023 07:10:09 UTC.
