Suedzucker Ag Unsp/Adr

Ladies and gentlemen, good morning from Mannheim. We welcome all of you to our conference call. The underlying presentation for this call has already been published this morning on our website. Today we released the statement for the first half of the financial year 25-26. We are going to present you the highlights of the period. We visit our full year group earnings guidance for the business year. which we adjusted on August 21st. Following the presentation, we are going to answer your questions. As already mentioned, a recording of this call will be available on our homepage shortly after the call. Now, let me hand over to our CFO, Dr. Stefan Mehler.

Thank you, Mathilde and Andreas, for the introductions. Ladies and gentlemen, also a warm welcome from my side, and thank you very much to all of you interest showing in , as mentioned. I would like to give you a brief overview about the business performance in the first six months of fiscal 25-26, and I would like to give you some more details about the confirmed earnings guidance for fiscal 25-26. So let me start with the highlights of the past six months of the fiscal. You will find this on page five. But before going into the details upfront, let me say a more general remark on where we stand as of today. So you can see in the figures that there is a weak performance in Q2. Yes, it came in as expected, but it's clear it's a weak performance. But on the other side, we confirm our full year financial guidance for the operating profit as of today. which stands at 100 to 200 million euros. So, when looking into the remainder of the year, we believe that from Q3 onwards, this should be the turning point to the positive, but the figures that I will continue to explain to you in the following for Q2 and H1 show a weak performance. So, going into the details. You can see that Q2 was performance was not able to match prior year's numbers for Q2, and the same is true for H1 compared to H1. And after six months, we have reached the following numbers. You can see group revenues came in at roughly 4.2 billion euros, which is significantly below prior year's level. Same is true for group EBITDA, which was significantly down by 55% to 189 million euros. And group operating profit also only reached 42 million euro versus 269 million euros in previous year's period. Same is true for cash flow, which decreased to 67 million euros. And when it comes to net financial debt, so net financial debt as of 31st of August this year came in 285 million euro below previous level and did remain stable compared to the end of fiscal 24-25, which is end of Feb 25. So, let me continue with the next stages. We have a look here on H1, so bringing H1 Historic context, you can see that especially for operating group results, this is a strong decline compared to previous year's periods. You can see that the decline is in revenues if they are in operating results. Particular affected in H1 are the segments of sugar, special products, crop energies, but we do see an increase in the food segment, and that is something important to note. We do this in each and every quarter. We know we are active in volatile markets, but what is good about Südsucker Group, that it is a strong and resilient portfolio, and we always have divisions who do also benefiting for the group with a strong performance. And overall this year, this is the food segment, but we also see a good development in the divisions of Benio and Freiberger. So on August 21st, we changed our group guidance for the fiscal 25-26. We now expect revenues to range between 8.3 and 8.7 billion for the full year, EBITDA between 470 and 570, and operating profit between 100 and 200 million euros. So further details for the outlook I will give on later. What we can see if we move on to what we will see on page 10 is there are persistently low sugar prices in the global market in general GPU market environment with continuous impact into autumn 2025. And we also do see continuous volatility going forward, which you cannot exclude due to geopolitical and global economic conditions. You are all fully aware of that. So let's move on to page nine. You can find it's a little bit difficult to read, but it's also a backup information for you. You can find the detailed results of the segments. And as already mentioned, after six months, the group revenues came in different levels. We do see revenues decline in the segments of sugar, special products, core energies, and starch, but revenues rose slightly in the food segment. And when it comes to the EBDR, as already stated, there's a decrease as well as in operating results. This is largely driven by the sugar segment. but was also significantly below prior year's level in special products, crop energy, starch segments, and positively to note the food segment, so an increase. So most important, or which is for H1, really important to discuss in more detail is development in the sugar segment, and to see the development in the sugar segment, we have also always have to have a close look what happens on the global sugar market, so I start with the global sugar market on page 10 because this has an impact on the European sugar market and the development of the European sugar market has an effect for the sugar segment development in . So let's have a look on the sugar market as told on the worldwide scale. You will find that as I said on page 10. Let's have first a look what is positively on the world market. You can see that consumption is still growing. So worldwide, on a worldwide scale, sugar market is still growing. You see this is the normal blue bars. You can see that consumption is going up. Dark blue is the production, and you can see that we have 24, 25, a market with a deficit, and deficit markets and commodity markets are beneficiary to the prices. That is the situation we started, but in 25, 26, sugar marketing year, and just a reminder, sugar marketing year always starts 1st of October and goes until end of September. So for sugar marketing years 25, 26, and 26, 27, it is expected that the market is in a surplus. That means production going over consumption, and in a commodity market, this is leading to a bearish sentiment on the prices. This is also, if you have a look on the sugar market prices, we do not have this in this presentation, but you can find this in our investor slide deck on our homepage. They have all the detailed price developments, and you can see that recently there is still a downward trend in market prices. And another factor also contributing to that compared then into Euro is the weakness of the U.S. dollar, which is also a bearish factor. So going from the global sugar market, coming to the European sugar market, so as a mid-summary, we can state that from the world market, we do not have a support. The contrary is true, so there's a bearish sentiment for sugar on the world market. and this translates also to the situation in Europe. So, here also the graph, you can see the dark blue is the productions, and the normal blue is the consumption. When it comes to consumption in Europe, you can see that there is a, it depends whether you start looking into the figure 22, 23. If you take this, you can see that it's rather stable consumption in Europe. If we take also into consideration 21, 22 as a starting point, we can also come to the conclusion that European market is rather in a slightly downward trend. So going into the details, for the recently started sugar marketing year 25-26, so which started 1st of October 25th, The EU Commission and also the analysts from market survey expect a significant decline in cultivation area for Europe, so less acres with sugar beets. So based on this production, including isoglucose is forecast to decrease to 15.9 million tons. That's the graph or the bars on the right-hand side in the graph. And as a result, the EU is expected to have a balance in export-import volumes. The sugar price, let's have a look on the sugar prices, but it's not on the graph, but let me explain to you the development for the sugar prices. So the sugar prices, which have been published by the EU Commission, fell significantly down from 619 euros per ton at the start of the 24-25 sugar marketing year in October 24, sharply, and since it has continued to fall, reaching 550 euros per ton at the start of the 25-26 fiscal in March 25, and in July 25, so this is the latest available publication, EU sugar prices stood at 534 euros per ton. So one aspect that we always have to put into consideration when we discuss sugar prices in Europe is what is happening with Ukraine. As we stated in the last conference calls, one factor which heavily weighed on European sugar prices was the Ukraine imports over the last years and months. So, at current state, the EU-Ukraine Association Agreement foresees that the import, allowed import, or the duty-free allowed import into the EU amount to 20,000 tons for this year, pro rata temporis. But the ongoing discussion is to increase those volumes to 100,000 tons as of 1st of January next year. So, for sure, we stand with Ukraine, but we heavily oppose to those additional duty-free imports, given the fact that the European market is well supplied. After having had this macro look on the world sugar market development, the European market development, how does this translate to the sugar group sugar segment? You can see in the graph on the right-hand side that the revenues significantly decreased. So in H1, 24, 25, we stood at 2.1 billion euros in turnover. So this has decreased to 1.4 billion euros. And when it comes to operating profit, it even turned to a loss situation. So, in H1-2425, we stood at as a operating profit for the group for the Shizuoka segment at 72 million euros. And this has turned to a loss situation of 89 million euros operating loss. Let's continue with the special product segment on page 13. Here you can see that after six months, revenue in the special product segment decreased moderately, which is mainly due to the disposal of the dressing and sauces business in the U.S. from Division Freiberger, which was executed in Q2 2425. So, all in all, revenues declined moderately from 1.14 billion to 1.1 billion euro in H1 2526. Coming to operating profit, we also do see a decrease. You can see from 108 to 71. So the operating profit decreased significantly to 71 billion euro in the first half of this fiscal. And this development is mainly due to the rising production cost that we see in these divisions, which could not fully be passed on to customers.

Going forward on page 14, here you can see the development of crop energy segments, so the ethanol business.