Integrated Annual Report 2019|20 #HELLO TOMORROW Ready for the future. Start digital experience with NFC smartphone or scan QR code. Contents 10 AGRANA at a glance 10 Key figures 12 Letter from the CEO 16 Supervisory Board’s report 18 AGRANA’s Management Board 20 Corporate governance report 30 Global presence 32 AGRANA’s strategy 34 AGRANA in the capital market 37 Group management report 38 Organisational structure 39 Non-financial information statement 53 Financial results 61 Fruit segment 67 Starch segment 74 Sugar segment 81 Research and development 85 AGRANA’s people 91 Risk management 99 Capital, shares, voting rights and rights of control 100 Outlook 103 Consolidated financial statements 104 Consolidated income statement 105 Consolidated statement of comprehensive income 106 Consolidated cash flow statement 107 Consolidated balance sheet 108 Consolidated statement of changes in equity 112 Notes to the consolidated financial statements 176 List of members of AGRANA’s boards 177 Statement by the members of the Management Board 178 Independent auditor’s report 183 Independent assurance report 185 Other information 186 Parent company income statement 187 Parent company balance sheet 188 Proposal for the appropriation of profit 189 Glossary of industry and trade terms 195 Contacts 196 GRI content index 202 TCFD content index 204 Performance indicators and their meaning f Contents 2019|20 at a glance █ Revenue: € 2,480.7 million (+1.5%; prior year: € 2,443.0 million) █ Operating profit (EBIT): € 87.1 million (+30.8%; prior year: € 66.6 million) █ EBIT margin: 3.5% (prior year: 2.7%) █ Profit for the period: € 51.3 million (+68.8%; prior year: € 30.4 million) █ Earnings per share: € 0.77 (+87.8%; prior year: € 0.41) █ Equity ratio: 54.4% (prior year: 59.0%) █ Gearing ratio1: 33.5% (prior year: 22.9%) █ Dividend proposal of € 0.77 per share (dividend in prior year: € 1.00 per share) █ Number of employees (FTE)2: 9,342 (+1.2%; prior year: 9,230) Quick facts about AGRANA █ World market leader in the production of fruit preparations █ Largest manufacturer of fruit juice concentrates in Europe █ Major European producer of custom starch products and bioethanol █ The leading sugar manufacturer in Central, Eastern and Southeastern Europe █ 57 production sites3 in 25 countries around the world Financial calendar for 2020|21 23 Jun 2020 Record date for participation in Annual General Meeting 3 Jul 2020 Annual General Meeting in respect of 2019|20 8 Jul 2020 Ex-dividend date 9 Jul 2020 Results for first quarter of 2020|21 9 Jul 2020 Record date for dividend 10 Jul 2020 Dividend payment date 8 Oct 2020 Results for first half of 2020|21 14 Jan 2021 Results for first three quarters of 2020|21 1 Debt-equity ratio (ratio of net debt to total equity). 2 Average number of full-time equivalents in the reporting period. 3 Number of sites as of 29 February 2020; also see “Global presence”, from page 30. Ready for the future. Dear Investor, In this integrated report we look back at the 2019|20 financial year. At the same time, we take the opportunity to look ahead, as AGRANA’s long-term success will be determined by how we position ourselves in the future. In this annual report we would thus also like to highlight why we feel well equipped and “Ready for the future”. Bringing the slogan of this year’s annual report to life, we also invite you to launch the digital experiences on the image pages of our report. Sincerely Johann Marihart Chief Executive Officer #HELLOTOMORROW Ready for the future. Start digital experience with smartphone camera. reports.agrana.com/en/videos.html #HELLO TOMORROW Ready for the future. Vision. Future. Strength. Ready for the future today through the biorefinery of tomorrow. Utilising all parts of the raw material efficiently, we model a bioeconomy and circular economy. 02 The digitalisation of our manufacturing. Ready for the future through the digital networking of our production plants. Achieving higher yields with lower production losses and reduced energy consumption. 04 Powered by people. Ready for the future with motivated and highly skilled employees. Our people drive innovation and growth at AGRANA. 06 Progress through research. Ready for the future through continual investment in leading-edge lab and application technology. Maintaining and expanding market leadership through research and development. 08 Ready for the future. 02 Vision. Future. Strength. #HELLOTOMORROW The biorefinery of tomorrow, today. The Pischelsdorf facility represents an innovative and forward-looking biorefinery concept. At this site, we make many high-quality products from a single raw material. With the second wheat starch plant at this location, we have taken an important step to cement our market position in the Starch segment and continued to invest in our showpiece facility for the complete utilisation of raw materials. All parts of the grain are efficiently used, thus modelling a bioeconomy and circular economy. Start digital experience with smartphone camera. reports.agrana.com/en/videos.html 03 Ready for the future. The digitalisation of our manufacturing. #HELLOTOMORROW Start digital experience with smartphone camera. reports.agrana.com/en/videos.html 04 Proven know-how meets high tech. AGRANA is constantly working to optimise operational and the digital integration of operational expert and business processes. Through the digital net- knowledge, we increase our efficiency and generate working of our production plants, the programming higher yields while lowering production losses of automatic startup and shutdown logic for plant and energy use. Our employees are experts in their processes, the optimisation of fermentation for field and make AGRANA what it is – a company with bioethanol production using advanced control loops, long tradition and a high-tech heart. 05 Ready for the future. 06 Powered by people. #HELLOTOMORROW The engine of our performance. Our employees are the lifeblood of the company. Their expertise, their ideas and their skills ensure AGRANA’s competitive edge. Their ability and commitment drive innovation and growth and form our foundation for the future. As a global player with operations in 25 countries, we embrace cultural diversity and attach great importance to respectful and collaborative relations with one another. We view and support the ability to balance family and career as a basic requirement for employee motivation. Start digital experience with smartphone camera. reports.agrana.com/en/videos.html 07 Ready for the future. Progress through research. #HELLOTOMORROW Start digital experience with smartphone camera. reports.agrana.com/en/videos.html 08 A step ahead, worldwide. 300 R&D employees and annual R&D spending Besides the ARIC facility, AGRANA also operates of about € 20 million underline the importance of 17 new-product development centers worldwide research and development for the AGRANA Group. for the fruit preparations business, which To safeguard and expand our market leadership, work closely with customers on new recipes, we are focusing even more strongly on innovations. special ingredients and raw materials, and new That is why we are continually investing in state-of- applications for existing products. For example, the-art lab and application technology. in Mitry-Mory, France, where we strive to be first movers in bringing new development trends Our AGRANA Research & Innovation Center (ARIC) to the regional market as early as possible. in Tulln, Austria, the Group’s central research and development organisation, is currently being expanded. 09 Key figures 2019|20 2018|19 2017|18 2016|17 2015|16 2014|15 Financial performance1 Revenue €m 2,480.7 2,443.0 2,566.3 2,561.3 2,477.6 2,493.5 EBITDA2 €m 183.1 147.7 254.2 235.2 192.0 181.9 Operating profit before exceptional items and results of equity-accounted joint ventures €m 73.1 51.1 164.1 150.8 107.5 102.0 Share of results of equity-accounted joint ventures €m 16.7 12.2 29.4 30.6 24.5 25.4 Exceptional items €m (2.8) 3.3 (2.9) (9.0) (3.1) (5.7) Operating profit [EBIT]3 €m 87.1 66.6 190.6 172.4 129.0 121.7 EBIT margin % 3.5 2.7 7.4 6.7 5.2 4.9 Profit before tax €m 69.9 51.2 176.2 154.5 104.4 116.5 Profit for the period €m 51.3 30.4 142.6 117.9 80.9 84.6 Attributable to shareholders of the parent €m 48.2 25.4 140.1 111.3 82.7 80.9 Attributable to non-controlling interests €m 3.1 5.0 2.5 6.6 (1.8) 3.7 Operating cash flow before changes in working capital €m 187.8 177.5 302.7 258.0 225.9 208.1 Investment4 €m 149.7 183.8 140.9 114.7 116.0 91.2 Return on sales5 % 2.8 2.1 6.9 6.0 4.2 4.7 Return on capital employed6 % 3.9 2.9 9.7 9.0 6.7 6.7 Non-financial metrics Number of employees7 9,342 9,230 8,678 8,638 8,510 8,550 Injury rate8 1.6 1.8 2.3 2.5 2.0 2.5 Energy consumption (Scope 1+2) GJ million 14.2 14.4 14.9 15.7 14.7 16.1 Emissions (Scope 1+2) Tonnes of CO2e⁹ 929,635 918,818 917,999 948,840 879,282 969,564 Water consumption10 m³ million (0.9) (1.5) (1.8) (3.2) (2.5) (3.2) Share data at last day of February Closing price11 € 17.56 17.40 99.10 106.00 80.50 80.51 Earnings per share11 12 € 0.77 0.41 8.97 7.13 5.82 5.70 Dividend per share11 12 € 0.7713 1.00 4.50 4.00 4.00 3.60 Dividend yield % 4.413 5.7 4.5 3.8 5.0 4.5 Dividend payout ratio % 100.013 243.9 50.2 56.1 68.7 63.2 Price/earnings ratio 22.8 42.4 11.0 14.9 13.8 14.1 Market capitalisation €m 1,097.3 1,087.3 1,548.2 1,656.0 1,143.3 1,143.4 Number of shares ’000 62,489.0 62,489.0 15,622.2 15,622.2 14,202.0 14,202.0 Financial strength Total assets €m 2,549.4 2,389.4 2,356.4 2,481.4 2,243.2 2,406.9 Share capital €m 113.5 113.5 113.5 113.5 103.2 103.2 Core non-current assets14 €m 1,305.3 1,229.8 1,138.5 1,113.8 1,002.2 1,093.4 Equity €m 1,387.1 1,409.9 1,454.0 1,411.9 1,200.1 1,194.4 Equity ratio % 54.4 59.0 61.7 56.9 53.5 49.6 Net debt €m 464.0 322.2 232.5 239.9 405.8 330.3 Gearing ratio15 % 33.5 22.9 16.0 17.0 33.8 27.7 1 Detailed information concerning the calculation methods of individual performance indicators can be found on page 204.