Sustainable management Annual Financial Report 2018 | 19 Contents 3 Group management report 4 Organisational structure 8 Non-financial information statement 18 Financial results 26 Fruit segment 33 Starch segment 40 Sugar segment 47 Research and development 53 AGRANA’s people 56 Risk management 62 Capital, shares, voting rights and rights of control 63 Outlook 65 Consolidated financial statements 66 Consolidated income statement 67 Consolidated statement of comprehensive income 68 Consolidated cash flow statement 69 Consolidated balance sheet 70 Consolidated statement of changes in equity 72 Notes to the consolidated financial statements 139 List of members of AGRANA’s boards 140 Statement by the members of the Management Board 141 Independent auditor’s report 146 Parent company management report1 173 Parent company financial statements 174 Parent company income statement 175 Parent company balance sheet 177 Notes to the parent company financial statements1 198 Statement by the members of the Management Board 199 Independent auditor’s report 202 Proposal for the appropriation of profit 1 In German only. FRUIT. STARCH. SUGAR. Annual Financial Report 2018 | 19 of AGRANA Beteiligungs-AG for the year ended 28 February 2019 2 Group management report 2018 | 19 4 Organisational structure 33 Starch segment 4 Business segments and 33 Revenue and earnings procurement models 34 Market environment 7 Sustainability targets of AGRANA’s 35 Raw materials and production business segments 39 Investment 7 Workplace safety targets of the AGRANA Group 40 Sugar segment 40 Revenue and earnings 8 Non-financial 41 Market environment information statement 42 Raw materials and production 8 AGRANA’s understanding of sustainability 46 Investment 9 Formats of AGRANA’s engagement with stakeholders in 2018|19 47 Research and development 9 Material non-financial 47 Fruit segment matters/sustainability topics 48 Starch segment 10 Organisational boundaries of reporting 49 Sugar segment 11 Management approaches for material non-financial matters, and resulting 51 AGRANA’s people content boundaries 51 Human resources management 13 Employee matters, including 53 Staff development and training working conditions and human rights, 54 Workplace health and safety in respect of AGRANA employees 55 Balancing work and family 18 Financial results 56 Risk management 18 Changes in the scope of consolidation 56 Risk policy 18 Revenue and earnings 57 Significant risks and uncertainties 20 Investment 57 Operational risks 21 Cash flow 58 Regulatory risks 21 Financial position 59 EU Renewable Energy Directive 23 Segment financial results 59 Legal risks 25 Events after the balance sheet date 59 Financial risks 60 Non-financial risks 26 Fruit segment 60 Aggregate risk 26 Revenue and earnings 61 System of internal control and 27 Market environment of risk management 28 Raw materials and production 32 Investment 62 Capital, shares, voting rights and rights of control 63 Outlook 64 Sustainability outlook for 2019|20 3 Organisational structure AGRANA is a globally operating processor of agricultural raw materials, with its Fruit, Starch and Sugar segments manufacturing high-quality foods and many intermediate products for the down- stream food industry as well as for non-food applications. With about 9,200 employees (in FTE ) at 58 production sites on six continents, the Group generated revenue of approximately € 2.4 billion in the 2018|19 financial year. AGRANA was established in 1988 and has been quoted on the Vienna Stock Exchange since 1991. AGRANA Beteiligungs-AG 58 production sites 9,230 employees1 € 2,443.o million revenue Fruit segment Starch segment Sugar segment AGRANA Internationale AGRANA Stärke GmbH AGRANA Zucker GmbH Verwaltungs- und 5 production sites 10 production sites Asset-Management GmbH 1,025 employees1 2,064 employees1 43 production sites € 762.7 million revenue € 501.2 million revenue 6,141 employees1 € 1,179.1 million revenue Business segments and procurement models The Fruit segment custom-designs and produces fruit preparations (fruit ingredients) and fruit juice concentrates. AGRANA is the world’s leading manufacturer of fruit preparations for the dairy, bakery, ice cream and food service industries. The fruit used in the fruit preparations is sourced largely from primary processors, in frozen or aseptic form. In some countries, AGRANA operates its own primary processing plants where fresh fruit (in some cases from contract growers) is received and readied for processing into fruit preparations. In the fruit juice concentrate business, at production sites located mainly in Europe, AGRANA produces apple and berry juice concentrates, not-from-concentrate juices, fruit wines, beverage bases and aromas. AGRANA seeks to achieve the most sustainable and complete utilisation of raw materials possible. While fruit preparations production generates very little usable residue, the press cake from apple juice production, known as apple pomace, is utilised by the pectin industry and as a feedstuff. In the Starch segment, AGRANA processes and refines raw materials grown by contract farmers or purchased in the open market – mainly corn (maize), wheat and potatoes – into premium starch products. These products are sold both into the food and beverage industry and the paper, textile, cosmetics and building materials sectors and other non-food industries. The starch operations as well produce fertilisers and high-quality animal feeds. The production of climate-friendly bioethanol for blending with petrol is also part of the Starch segment’s activities. 4 1 Average number of full-time equivalents in the financial year. Organisational structure In the Sugar segment, AGRANA processes sugar beet from contract growers and also refines raw sugar pur- chased worldwide. The products are sold into downstream industries for use in, for example, sweets, non-alcoholic beverages and pharmaceutical applications. Under country-specific sugar consumer brands, AGRANA also markets a wide range of sugars and sugar specialty products to consumers through food retailers. In addition, in the interest of the most complete possible utilisation of its agricultural raw materials, AGRANA produces a large number of fertilisers and animal feedstuffs. These not only help the economic bottom line but also ecologi- cally close the material cycle by returning minerals and other nutrients to the land and the food chain. In all three business segments, AGRANA also processes certified organic crops. In line with its business activities and its sustainability priorities in the areas of energy efficiency, complete raw material utilisation, attention to environmental and social criteria in procurement, and business ethics, AGRANA supports especially the Sustainable Development Goals (SDGs) 8, 13, 15 and 16 adopted in September 2015 by the General Assembly of the United Nations. For the first time, these UN goals also engage the private sector in furthering the achievement of development goals. In addi- tion, AGRANA contributes to the attainment of Goals 2 to 7, 12 and 14. 5 Group management report The sustainable AGRANA value chain1 in 2018|19 Procurement of agricultural raw materials AGRANA processing: Adding value Primary 1 processing FRUIT SEGMENT Fruit growers Fruit Primary preparations processing plants Fruit growers 2 Fruit juice concentrate Primary plants processing 1 72% of processed fruit volume 2 17.6% of raw material Fruit preparations: • Energy management system assessed using social criteria volume assessed using social • Total energy use2: 1.93 GJ per tonne at 31.7% of sites1 is certified (SEDEX); see from page 28 and environmental criteria • Water use2: 4.50 m³ per tonne to ISO 50001 (SAI FSA); see from page 28 Fruit juice concentrates: • Sustainability assessment • Total energy use2: 3.80 GJ per tonne covering all fruit juice • Water use2: 3.68 m³ per tonne plants (EcoVadis) confirms gold rating; see page 32 3 Bee conservation project Potato at all Austrian sites (see page 12) growers 5 Grain growers STARCH SEGMENT STARCH 4 5 5 Starch factories Grain Grain growers trading 3 100% of Austrian potato 4 60% of raw material volume • Total energy use2: • Social criteria assessed (SEDEX) growers assessed using social assessed using social and environ- 4.63 GJ per tonne and externally audited and environmental criteria mental criteria (ISCC or AACS at 75% of sites1; see page 12 • Water use2: 5.02 m³ per tonne (SAI FSA); see page 36 certification); see page 36 • Sustainability assessment • Energy management system 5 100% of raw material volume of Starch segment (EcoVadis) at 75% of sites1 is certified meets the EU cross compliance confirms gold rating; to ISO 50001 sustainability requirements see page 39 6 7 Sugar beet growers SUGAR SEGMENT 7 7 7 Sugar cane Raw sugar growers trading Sugar Raw sugar factories, sugar production refineries 6 100% of sugar beet volume 7 Offering Bonsucro • Direct energy use2: • Social criteria assessed assessed using social “Chain of Custody” sustain- 2.76 GJ per tonne (SEDEX) and externally and environmental criteria ability certification audited at 100% of • Total energy use2: 3.08 GJ per tonne (SAI FSA); see page 43 (social and environmental sugar plants1; see page 14 criteria) for raw sugar • Water use2: 2.33 m³ per tonne • Sustainability assessment for refining; see page 43 • Energy management system of Sugar segment (EcoVadis) at 100% of sites1 is certified confirms silver rating; to ISO 50001 see page 46 1 Within the GRI reporting boundaries (see page 10). 6 2