Ad-hoc | 19 March 2007 21:41
Südzucker AG Mannheim/Ochsenfurt / Miscellaneous
Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Sales and operating profit forecast for FY 2006/07 confirmed -
Impairment write-down within French sugar segment in light of sugar market
reform
Based on group sales of € 5.7 (5.3) bln and an expected group operating
profit of about € 420 (450) mln in FY 2006/07, Südzucker group has shown
relative strength within a tough environment. Group accounts (IFRS) will
reflect the current development within the EU sugar regime with an
extraordinary write-down on Goodwill (impairment loss) within the sugar
segment of € 0.5 bln. As a consequence the net loss for FY 2006/07 (FY end
28th of February) is expected to reach € 0.2 bln. The individual financial
statement of Südzucker AG (HGB) will show a write-down of book value for
Saint Louis Sucre S.A. (SLS), Paris,; the ability to pay dividends will not
be effected by this measure.
The write-down does not lead to a liquidity drain and therefore no
reduction in cash flow (around € 500 mln for FY 2006/07) is expected. With
an equity ratio exceeding 40%, solid financial ratios will be maintained.
To underpin this fact, net financial debt of Südzucker group (excl. hybrid
bond) will be reduced (as of 28th of February 2007) to a level of about €
0.8 billion from € 1.2 billion in the previous year.
The reform of the sugar market regime and the subsequent change of the
framework has already led to the closure of the refinery site in Marseille
(France). Beyond our consistent structural improvements over the last
years – e.g. pre-campaign 2006 closure of 3 sugar factories (Austria,
Poland and Slovakia) – we currently elaborate on a substantial
restructuring concept across the group to improve the sustainable
profitability of the sugar segment.
Additional Information:
With a volume of 2.2 million tons until the end of marketing year 2007/08
(1st of October to 30th of September), the voluntary return of sugar quota
to the EU restructuring fund has not reached the EU Commissions target of 5
million tons and therefore is insufficient and clearly below expectations.
Consequently, to reflect the emerging quota excess within the marketing
year 2007/08 the EU Commission has decided – depending on the quota
reduction so far – to temporarily reduce the production of quota sugar
(pre-emptive temporary withdrawal). The temporary withdrawal for member
countries not having returned quota to the restructuring fund will amount
for 13.5%. In the event of doubts about a balanced market until October
2007, EU Commission has announced a further volume reduction for the
marketing year 2007/08 (additional temporary withdrawal).
In the event of a continued EU Commission policy to levy a restructuring
charge for non-produced quota sugar, profitability for the European sugar
industry (in the next two years, but especially in 2007/08) will be
significantly effected. This development will also effect Südzucker group.
Against this background and in combination with an additional high
withdrawal in October 2007, we expect a circa break-even result (FY
2007/08) within the sugar segment.
On the other hand Südzucker group expects within its dynamic development of
the segments special products – especially driven by the bioethanol and
functional food divisions – as well as fruit profitability to increase
substantially.
Südzucker Aktiengesellschaft Mannheim/Ochsenfurt
The Executive Board
Nikolai Baltruschat
Investor Relations
+49 621 421 843
DGAP 19.03.2007
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Language: English
Issuer: Südzucker AG Mannheim/Ochsenfurt
Maximilianstr. 10
68165 Mannheim Deutschland
Phone: +49 (0)621 - 421-437
Fax: +49 (0)621 - 421-463
E-mail: investor.relations@suedzucker.de
www: www.suedzucker.de
ISIN: DE0007297004, DE0008461021 DE0001780807 DE000A0AABH1 XS0222524372
WKN: 729700, 846102, 178080, A0AABH, A0E6FU,
Indices: MDAX
Listed: Amtlicher Markt in Berlin-Bremen, Frankfurt (Prime Standard),
Düsseldorf, Hamburg, München, Stuttgart; Freiverkehr in
Hannover
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