The financial year 2013/2014 was closed with a satisfying result. In line with the previous year’s forecast, earnings fell sharply, however, particularly in the last two quarters of the reporting year. Revenues and earnings declined sharply, as world market prices were low and stock levels in the EU high. As in previous years, the steps taken to increase efficiency made a significant contribution to earnings. They were not able to make up for the fall in prices by a long way, however.
Pressure on prices will persist in the financial year ahead. Stocks of quota and non-quota sugar in the EU remain high, and world market prices are still very low in a long-term comparison, even though they have recovered slightly recently. The months ahead will show whether a further recovery materialises. Following the EU decision to let the current sugar market regime expire on 30 September 2017, all sugar companies have already begun intensive preparations for the new commercial environment. The battle for market share has intensified as a result. As in previous years, Nordzucker is working consistently to keep improving its competitiveness. In 2014/2015, the focus will be on realigning organisational structures and processes, which will be of great help to the company in pursuing its continued development in the years ahead.
Despite these steps, revenues and earnings will fall again sharply in the 2014/2015 financial year. In terms of the company’s key performance indicators, total operating profitability is not expected to achieve the target of 15 per cent. The return on sales (target: five per cent) will be met, and the equity ratio (target: 30 per cent) will again be exceeded by a large margin.
Nordzucker is also examining growth opportunities outside Europe. These projects will not have any significant effect on revenues and income in 2014/2015, but may result in considerable additional capital expenditure. At the same time, Nordzucker will again increase its investment in its European core business. Its very solid financing arrangements will enable the company to cope well with these additional tasks.
The current assumption is that these factors will not only define the financial year 2014/2015, but also the year thereafter. As the markets are so volatile, all medium-forecasts are subject to considerable uncertainty, however.
Braunschweig, Germany, 25 April 2014
The Executive Board
Dr Lars Gorissen
Dr Michael Noth