agrana lage E_2105 21.05.2006 10:47 Uhr Seite 1 ANNUAL REPORT 2005|06 AGRANA BETEILIGUNGS- AG Austria France Czech Republic Germany Sugar Hungary Mexico Denmark Slovakia Poland USA Starch Romania China Russia Ukraine Fiji South Africa Serbia Belgium Fruit Australia Morocco South Korea Turkey Argentina agrana lage E_2105 21.05.2006 10:47 Uhr Seite 2 CONTENTS 2 The 2005|06 financial year 4 Vision and mission 7 AGRANA’s strategy 11 Preface by the Chairman of the Board of Management 14 The structure of the AGRANA Group 15 The AGRANA share 17 Corporate governance 19 Group Management Report 2005|06 20 Financial state and profit position 24 The Sugar Segment — Sugar Division 32 The Specialties Segment — Starch Division 38 The Specialties Segment — Fruit Division 44 Environmental protection and sustainability 46 Research and development 50 Staff Report and Social Report 52 Risk Report 56 Outlook for 2006|07 59 Consolidated Financial Statements 2005|06 60 Consolidated Income Statement 61 Consolidated Cash Flow Statement 62 Consolidated Balance Sheet 63 Consolidated Statement of Changes in Equity 64 Notes to the Consolidated Financial Statements 102 Group interests 105 The Company’s boards and officers 106 Auditors’ Report and Opinion 108 Performance indicators 109 Annual Financial Statements 2005|06 110 Balance Sheet 111 Income Statement 112 Auditors’ Opinion 113 Proposed appropriation of profit 114 Supervisory Board’s Report 116 Contacts agrana lage E_2105 22.05.2006 5:05 Uhr Seite 3 REVENUES €mn 1,500 1,250 1,000 750 01|02 02|03 03|04 04|05 05|06 OPERATING PROFIT €mn 100 80 Income from operations 60 (after restruc- turing) 40 01|02 02|03 03|04 04|05 05|06 NET CASH FROM PROFIT €mn 150 125 100 75 01|02 02|03 03|04 04|05 05|06 FINANCIAL CALENDAR 2006|07 May 22, 2006 Press conference to present the Balance Sheet July 13, 2006 Publication of results for Q1 2006|07 July 14, 2006 Shareholders’ Meeting July 19, 2006 Dividend ex-day and dividend pay-day October 12, 2006 Publication of results for H1 2006|07 January 11, 2007 Publication of results for Q1–Q3 2006|07 agrana lage E_2105 21.05.2006 10:47 Uhr Seite 4 Key data in accordance with IFRS 2005|06 2004|05 2003|04 2002|03 2001|02 CORPORATE DATA Revenues €mn 1,499.6 981.0 866.4 875.7 842.8 EBITDA €mn 165.3 138.6 116.8 120.4 115.1 EBITDA margin % 11.0 14.1 13.5 13.7 13.7 Operating profit €mn 99.5 90.8 76.8 80.5 76.0 Operating margin % 6.6 9.3 8.9 9.2 9.0 Income from operations (after restructuring) €mn 75.0 90.8 76.8 75.1 70.3 Profit before income tax €mn 71. 7 93.2 70.7 87.2 64.1 Consolidated earnings for the year €mn 64.7 84.3 57.5 67.3 43.6 Of which attributable to shareholders of AGRANA Beteiligungs-AG €mn 62.7 79.9 56.5 65.4 44.3 Of which minority interests €mn 2.0 4.4 1.0 1.9 (0.7) Net cash from profit €mn 144.6 115.6 100.9 105.0 90.4 Capital expenditure on tangible fixed assets1 €mn 91.2 52.1 28.5 34.0 29.0 Staff 8,130 4,958 3,841 3,916 4,463 ROS % 4.8 9.5 8.2 10.0 7.6 ROCE % 8.4 11.2 14.7 15.3 14.8 Gearing % 34.7 14.4 4.6 (3.2) 9.3 PERFORMANCE ON THE STOCK EXCHANGE AS OF FEBRUARY 28, 2006 Close € 78.00 79.85 61.50 39.60 29.45 Earnings per share € 4.42 7.18/5.622 5.08 5.93 4.02 Dividend per share € 1.953 1.95 1.80 1.80 1.30 Dividend yield % 2.5 2.4 2.9 4.6 4.4 P/E ratio 17.6 11.1 12.1 6.7 7.3 Market capitalization €mn 1,107.8 1,134.0 678.2 436.7 44.2 BALANCE SHEET DATA Assets €mn 1,855.1 1,500.4 935.2 897.1 868.6 Share capital €mn 103.2 103.2 80.1 80.1 80.1 Fixed assets €mn 905.0 642.3 415.5 346.3 367.2 Equity €mn 885.8 835.9 515.8 475.0 422.9 Equity ratio % 47.8 55.7 55.2 52.9 48.7 Net financial debt €mn 307.4 120.1 23.6 (15.3) 39.1 1 Includes intangible fixed assets. 2 Earnings per share in relation to the number of shares outstanding on February 28, 2005. 3 Proposed to the Shareholders’ Meeting. agrana lage E_2105 21.05.2006 10:47 Uhr Seite 1 ANNUAL REPORT 2005|06 of AGRANA Beteiligungs-Aktiengesellschaft for the financial year from March 1, 2005 through February 28, 2006 ADDING VALUE TO NATURE’S GIFTS. SUGAR. STARCH. FRUIT. agrana lage E_2105 21.05.2006 10:56 Uhr Seite 2 The 2005|06 financial year Mar Apr May Jun Jul Aug S 7/7/2005 The Shareholders’ Meeting approves 3/21/2005 the distribution The AGRANA of an increased share is dividend added to the € 1.95 per share Austrian 5/12/2005 (compared Traded Index AGRANA decides with € 1.80 in (ATX). to build a bio- previous year). ethanol plant in Austria with an annual capacity 9/23/2005 of 200,000 cubic Following meters (158,000 successful trials, 4/29/2005 tonnes). Steirerobst AG The WTO rejects opens the new the EU appeal fruit prepara- against the tions facility Panel ruling on in Serpuchov, C sugar exports Russia. and ACP sugar re-exports. agrana lage E_2105 21.05.2006 10:57 Uhr Seite 3 g Sep Oct Nov Dec Jan Feb 12/8/2005 German compe- tition regulator 10/5/2005 approves AGRANA’s 2/3/2006 Steirerobst acquisition of DSF. AGRANA finalizes removed from acquisition of the Vienna stock 12/15/2005 remaining 44% exchange list. AGRANA’s of Steirerobst AG acquires remain- as of the end ing 37.5% of the of February 2006. Atys Group. Remaining 50% of Atys Austria and Atys Turkey 1/23/2006 also acquired. In response to changed con- 11/24/2005 ditions, AGRANA EU Council comes announces to an agreement closure of two on reform of the sugar factories. sugar CMO: Continued Beet prices cuts use of entire by 39%, sugar EU sugar produc- reference price tion quota. by 36%. agrana lage E_2105 21.05.2006 10:47 Uhr Seite 4 VISION AND MISSION THE AGRANA GROUP 04 VISION AND MISSION AGRANA is a multinational enterprise headquartered in Austria. AGRANA’s Sugar and Starch divisions are active in Europe. Its Fruit Division is global. In those markets, AGRANA’s goal is to be a leader in the industrial refining of agricultural raw materials. Strategy Growth and efficiency ensure a sustained increase in enterprise value. We aim to be the best and most dependable partner to our customers in our core businesses, which are sugar, starch and fruit processing. Service to the market We refine natural products into high-grade foods and technical products for industrial use. Our activities range from the manufacture of industrial intermediate products to the provision of advisory services. We supply industry and trading enterprises. Customer orientation We offer our customers products and services that address their needs. We aim to stand out from our competitors through high quality and exceptionally high standards of service. We are creative, flexible and dedicated. Our innovative power and research and development work set trends in the market. Organization Our organization is decentralized and close to the market. It is founded on operating com- panies in the Sugar, Starch and Fruit divisions that are individually responsible for their results, and on a powerful network that ensures a constant exchange of information and expertise. agrana lage E_2105 21.05.2006 10:47 Uhr Seite 5 VISION AND MISSION THE AGRANA GROUP 05 Finance Profit constitutes the basis for the economic sustainability of our enterprise’s activities. We ensure AGRANA’s increasing enterprise value and ability to distribute dividends through growth and rising productivity. They are achieved by optimizing value added. We endeavor to even out risks by maintaining a balanced global portfolio. Management and staff We see ourselves as a multinational companies group. We are united by integrity, dedication and social awareness. We encourage our workforce to be willing and able to think and act with entrepreneurial spirit. Our style of work and leadership is founded on cooperation and trust. Management personnel are rewarded on the basis of their performance. We promote the exchange of information, communication, training and human resources development. Flexibility and teamwork are the bedrock of our structures and internal dealings with one another. The environment Our actions are shaped by respect for nature and the environment. Our products are natural in origin and developed in the light of the latest ecological research. They are bio- degradable and environmentally friendly. The health and safety of the workforce are especially important to us. Product safety The strict certified manufacturing standards to which we adhere guarantee the safety of our products. We attach especial importance to continually raising the quality and hygiene standards of the foods we make. We see it as our duty to guarantee our customers the traceability of our products back to their natural sources. Public relations and transparency We keep our shareholders, our workforce, the media, our customers, our partners in the marketplace and the general public regularly informed about our goals, activities and results.