Living Our Values. Creating Growth
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Living our values. Creating growth. Annual Report 2012/2013 Hartwig Fuchs, Chief Executive Officer, Nordzucker AG Annual Report Nordzucker 2012/2013 Contents Mission statement 1 Key figures 2 175 years of sugar production 4 Living our values. Creating growth. 6 Letter from the Executive Board 8 Four values – growing together 10 Responsibility 12 Dedication 20 Courage 26 Appreciation 32 Trends in agribusiness 38 Group management report 48 Nordzucker at a glance 50 Economic environment and market developments 53 Earnings, net assets and financial position 56 Employees 61 Opportunities and risks 61 Supplementary report 66 Forecast 66 Consolidated financial statements 68 Consolidated income statement 68 Statement of comprehensive income 68 Consolidated cash flow statement 69 Consolidated balance sheet 70 Consolidated statement of changes in shareholders’ equity 72 Notes to the consolidated financial statements 73 General remarks 73 Notes to the consolidated income statement 82 Notes to the consolidated balance sheet 86 Consolidated assets schedule for the previous year (2011/2012) 88 Consolidated assets schedule for the financial year 2012/2013 90 Notes to the consolidated cash flow statement 97 Other disclosures 97 List of investments 113 Auditors’ report 115 Corporate Governance 116 Corporate Governance Report 118 Statement of compliance with German Corp. Gov. Code 119 Report by the Supervisory Board 120 Glossary 124 Financial calendar Continuous increase in revenues in EUR m 2,443 2,018 1,806 1,815 1,192 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Record high yield ratios 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Total operating profitability 1 % 15.2 9.7 16.6 18.4 22.8 Return on revenues 2 % 3.7 -0.7 4.8 10.1 14.4 Return on equity 3 % 6.1 -1.7 10.6 20.4 26.7 Interest coverage ratio 4 10.5 2.8 6.0 12.1 22.3 Redemption period 5 years 1.8 4.0 1.1 0.6 0.1 Cash flow from operating activities per share EUR 3.46 6.78 6.49 4.59 6.49 Earnings (Group) per share 6 EUR 0.91 -0.27 1.80 4.22 7.27 Dividend per share 7 EUR 0.22 – 0.46 1.00 1.80 Total dividend EUR m 10.6 – 22.2 48.3 86.9 1 EBITDA/total revenues 5 Net debt/EBITDA 2 Net income/revenues 6 Net income/number of shares 3 Net income/equity 7 Total dividend/number of shares 4 EBITDA/net interest Annual Report Nordzucker 2012/2013 Record high net income in EUR m 360 208 91 44 -10 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Operating success drives all key financial figures 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Revenues EUR m 1,192 1,806 1,815 2,018 2,443 of which abroad % 39 54 52 54 56 Total revenues EUR m 1,086 1,718 1,699 2,282 2,607 EBITDA EUR m 165 166 283 420 594 EBIT EUR m 79 66 188 315 507 Net income EUR m 44 -10 91 208 360 Cash flow for/from operating activities EUR m 167 328 313 222 313 Investments in property, plant and equipment and intangible assets EUR m 67 62 56 64 74 1 Our Nordzucker values of responsibility, commitment, courage and appreciation are an expression of what we stand for as a company. We will use them as guidelines to influence our decisions and actions, to put ourselves on a stable footing and focus on our core business. They will help us to build on our position as a strong international company. The values form a strong bond which links all Nordzucker employees; they define our attitude, the way we present ourselves to others and our dealings with business partners and stakeholders. 2 Annual Report Nordzucker 2012/2013 Dividend per share reaches high level in EUR 1.80 1.00 0.46 0.22 0.00 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Sound equity ratio, with net debt nearly reduced to zero 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Balance sheet total EUR m 1,879 2,456 1,982 2,262 2,393 Equity EUR m 718 744 819 999 1,316 Equity ratio % 38 30 41 44 55 Debt capital EUR m 1,160 1,712 1,163 1,263 1,077 Financial liabilities EUR m 497 778 364 256 71 Cash and cash equivalents EUR m 201 114 50 7 11 Net debt 1 EUR m 295 664 314 249 59 1 Cash and cash equivalents – financial liabilities Group figures and ratios 3 1,504 Sugar factories 5 Sugar refi neries 2 Sugar factory Liquid sugar factory Sugar refi nery Bioethanol plant Average number of employees for the year Sugar factories 3 Sugar factories 5 Sugar refi neries Liquid sugar factories 2 (combined with Bioethanol plants 1 sugar factory) 1 544 1,242 Growth and consolidation alternate 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 Beet farmers 11,430 16,292 16,091 15,379 14,981 Beet cultivation area ha 174,225 287,245 254,300 265,947 265,904 Beet processing t/day 98,681 143,392 133,192 143,520 138,797 Sugar production millions of tonnes 1.68 2.87 2.30 2.91 2.80 4 Annual Report Nordzucker 2012/2013 175 years of sugar production The success story of 175 years of sugar Start-up boom in the European sugar Sugar is deemed “vital to the war production in Northern Germany and industry: Nordstemmen begins oper- effort”. Beet farmers and sugar Northern Europe began in 1838 with ations in 1865, followed by the Arlöv factories are called on to engage the establishment of the sugar factory factory, now part of Nordic Sugar, in a “battle for production”. in Klein Wanzleben. in Southern Sweden in 1869, and Culmsee in Pomerania (now Chelmza in Poland) in 1882. Picture: Archives KWS Following a complete reconstruction The orientation towards Eastern Europe is a Nordzucker AG is created when on a greenfield site, the factory in strategic focus for the years ahead. Zucker ZAG transfers its assets to ZVN. This Klein Wanzleben goes into operation. Aktiengesellschaft Uelzen-Braunschweig makes Nordzucker the third-largest It is still one of the most modern (ZAG) invests in the Czech sugar company sugar producer in Europe. plants in Europe today. Cukrovar a Rafinerie Cukru Dobrovice TTD (Thurn und Taxis Dobrovice) A.S. 175 years of sugar production 5 The sales company Norddeutsche Zuckerfabrik Uelzen AG merges with Five sugar companies decide to transfer Zucker GmbH & Co. KG is the first Braunschweiger Zucker AG to form their assets to Zuckerverbund Nord AG large-scale merger of sugar companies Zucker-Aktiengesellschaft Uelzen- (ZVN). This represents a milestone on in Northern Germany. Braunschweig (ZAG). the path to a common North German sugar company. Together with Union-Zucker, Nordic Sugar joins the Nordzucker’s most successful almost the entire North Nordzucker family, making financial year to date ends with German sugar industry is it the second-largest sugar record earnings. united in Nordzucker AG. producer in Europe by a large margin. 6 Annual Report Nordzucker 2012/2013 Living our values. Creating growth. Hartwig Fuchs, Chief Executive Officer Axel Aumüller, Chief Operating Officer Living our values. Creating growth. 7 Mats Liljestam, Chief Marketing Officer Dr Michael Noth, Chief Financial Officer Dr Niels Pörksen, Chief Agricultural Officer 8 Annual Report Nordzucker 2012/2013 175 years ago, the first sugar factory in Nordzucker’s current region began producing sugar in Klein Wanzleben, creating the core of today’s company. Since then, the world of sugar has always had to adapt to changing political circumstances and economic necessities. Technical progress and the associated productivity gains have a long tradition in our business, as does the series of mergers that have formed ever larger entities. They have always been founded on close contact with our partners – our shareholders and beet suppliers – as well as on the drive to become better and stronger. In September of this year we will be celebrating this 175th anniversary accordingly. We should also be proud that the financial year 2012/2013 will go down in the history of Nordzucker AG as the most successful to date. We increased both revenues and earnings again significantly compared with the previous year, which was already very good. We benefited from higher prices for quota sugar and higher sales volumes of non-quota sugar. The long-term measures to increase efficiency throughout the Group again bolstered our successful performance. The joint proposal by the Executive Board and Supervisory Board to pay a dividend of EUR 1.80 per share, which will be voted on at the Annual General Meeting, has a twin focus: it ensures that you, our shareholders, receive a reasonable portion of these outstanding earnings, and it strengthens the company financially, enabling it to respond to the challenges that lie ahead. The figures in brief: We increased our revenues by EUR 424.8 million, from EUR 2,018.0 million in the previous year to EUR 2,442.8 million and reported excellent net income of EUR 360.3 million. Equity came to EUR 1,316.0 million, exceed- ing the EUR 1 billion mark for the first time. Although total assets were higher, the equity ratio went up to some 55 per cent. Increasing the equity ratio was a target that we set ourselves three years ago. We also used last year to reduce our net debt to around EUR 59 million, and so all in all we are in a very strong financial position.