Südzucker with significant increase in earnings in financial year 2023/24
Südzucker AG had already published the preliminary figures for fiscal 2023/24 (1 March 2023 to 29 February 2024) on 15 April 2024. Today's publication of the annual report now includes the final figures.
Group consolidated revenues in fiscal 2023/24 rose moderately to EUR 10,289 (previous year: 9,498) million. The sugar segment’s significant increase and a moderate rise in the special products and fruit segments contrasted with a significant decline in the CropEnergies and starch segments.
Group EBITDA improved significantly to EUR 1,318 (previous year: 1,070) million.
The Group’s consolidated operating result also rose significantly to EUR 947 (previous year: 704) million. The significant decline in the CropEnergies and starch segments was more than offset by significant growth in earnings in the sugar, special products and fruit segments.
Capital employed rose to EUR 7,187 (previous year: 7,095) million; the main reason for the increase was the rise in fixed assets. ROCE improved to 13.2 (previous year: 9.9) percent as a result of the disproportionately high increase in operating result.
Executive board and supervisory board propose dividend increase
The executive board and supervisory board propose to the annual general meeting a dividend of EUR 0.90 (previous year: EUR 0.70) per share for fiscal 2023/24. The annual general meeting will take place virtually on 18 July 2024.
Operating result in the sugar segment more than doubled
The sugar segment’s revenues rose significantly to EUR 4,162 (previous year: 3,216) million. The increase was achieved despite declining sales volumes thanks to significantly higher annual average prices during the financial year. The price level in the EU in the 2023/24 sugar marketing year, which has been running since October 2023, is on a par with the 2022/23 sugar marketing year.
The operating result more than doubled to EUR 558 (previous year: 230) million. The sharp rise in costs in the 2022 campaign, particularly for raw materials and energy, was offset by higher prices since the end of the last financial year. In particular, the further significant increase in production costs in the new 2023 campaign led to a result in the fourth quarter that was significantly below the previous year.
Special products segment with significant improvement in earnings
The special products segment’s revenues rose moderately to EUR 2,414 (previous year: 2,217) million thanks to higher prices. At EUR 196 (previous year: 102) million, the operating result improved significantly compared to the previous financial year. Here, the negative impact of the increase in raw material, packaging, energy and personnel costs, particularly in the previous year, was better compensated overall by higher prices on the market, albeit with a time lag.
CropEnergies with significant decline in earnings after strong previous year
CropEnergies segment revenues fell significantly to EUR 1,091 (previous year: 1,390) million. On the one hand, this was due to significantly lower sales volumes following scheduled maintenance shutdowns and, on the other hand, significantly declining prices. The ethanol prices, which reached record levels in fiscal year 2022/23, thus dropped to a significantly lower level since November 2023.
Compared to an exceptionally strong previous year, the operating result dropped significantly to EUR 60 (previous year: 251) million, in line with the development of sales volumes and prices. Given the very low price level in the final months of the 2023/24 financial year, only a balanced result was achieved in the fourth quarter.
Significant decline in earnings in the starch segment
A moderate decline in both sales volumes and prices caused revenues in the starch segment to fall significantly to EUR 1,056 (previous year: 1,193) million. Higher prices in other product groups were unable to fully compensate for significantly lower ethanol and native starch prices.
The significant decline in operating result to EUR 48 (previous year: 70) million was attributable to lower prices with lower sales volumes and higher other costs, particularly personnel costs, which could not be offset by lower raw material costs. Furthermore, a significant decline in ethanol quotations had a negative impact on earnings in the final months of fiscal 2023/24.
Fruit segment with significant increase in earnings
Revenues in the fruit segment rose moderately to EUR 1,566 (previous year: 1,482) million. The increase in revenues was driven by fruit preparations, which grew in terms of both price and volume. In contrast, fruit juice concentrates achieved revenues moderately below the previous year’s level; here, higher prices were unable to offset the decline in volumes.
At EUR 85 (previous year: 51) million, the operating result improved significantly. The earnings contribution from fruit preparations showed clear signs of recovery. This was achieved through considerably higher margins with a slight increase in volume – despite higher costs. The earnings contribution from fruit juice concentrates increased slightly, despite a marked decline in volumes, thanks to significantly improved margins.
Group forecast 2024/25
The ongoing war in Ukraine continues to exacerbate the already high volatility on the sales and procurement markets. The future impact of the negative influences stemming from the EU’s extended duty-free access for agricultural imports from Ukraine, which is now limited in terms of volume, remains uncertain. The implications of the war that broke out in the Middle East last October are likewise difficult to assess.
Overall, the economic and financial impact as well as the duration of these temporary exceptional situations are difficult to estimate.
The consolidated group forecast for fiscal 2024/25 was published for the first time on 15 April 2024 and is confirmed here. Südzucker expects consolidated group revenues in fiscal 2024/25 between EUR 10.0 and 10.5 (2023/24: 10.3) billion. A moderate increase in revenues is expected in the sugar segment and a slight increase in the special products segment, while revenues in the starch and fruit segments are expected to decline slightly. Revenues in the CropEnergies segment are expected to remain at the previous year's level (2023/24: EUR 1.1 billion).
Südzucker predicts the consolidated group operating result to be between EUR 500 and 600 (2023/24: 947) million. Operating result in the sugar segment is expected to be between EUR 200 and 300 (2023/24: 558) million. A moderate decline in operating result is expected in the special products segment and a significant decline in the starch and fruit segments. CropEnergies forecasts an operating result of between EUR 20 and 60 (2023/24: 60) million.
Group EBITDA is anticipated between EUR 0.9 and 1.0 (2023/24: 1.3) billion. Südzucker expects capital employed to decline slightly. Based on the expected deterioration in the operating result, a significant decline in ROCE (2023/24: 13.2 percent) is anticipated.