Third quarter: sustained positive business development

13 January 2017

Third quarter: sustained positive business development

Significant improvements in Nordzucker revenues and net income

The Nordzucker Group significantly improved its revenues and net income again in the first nine months of the 2016/2017 financial year. This development was driven by stable market prices, higher sugar sales and improvements in efficiency. The outlook for the last three months of the financial year remains positive.

Up to the end of the first nine months of the current financial year, Nordzucker generated revenues of EUR 1,307 million, a figure 9 per cent higher than in the previous year (previous year: EUR 1,204 million). The net income for the period likewise increased significantly overall, from EUR 0.4 million in the previous year to EUR 81.7 million.

The main causes behind this positive development of business were greater sales volumes and stabilising market prices for quota and non-quota sugar.

Extensive cost reduction and efficiency measures also had an increasing impact on earnings. Overall, Nordzucker remains on target to achieve savings of at least EUR 50 million, among other things by means of optimized sales and production planning and a streamlined product range.

Income from animal feed and bioethanol remained below expectations.

CEO of Nordzucker AG, Hartwig Fuchs, emphasizes: 'Our endeavours to eliminate costs throughout the value chain while boosting our competitiveness are paying off.' Fuchs continues: '1 October 2017 will be a turning point for us. We will achieve success in a world without quotas too.'

Approximately 15 million tonnes of beet have been processed in the 2016/2017 campaign, which is now almost over. Sugar yields were above the long-term average in most of the countries in which the Group operates, with record results being achieved in a number of regions. The 13 plants were operating for an average of 104 days, a figure that was once again higher than in the previous year.

Outlook

The company expects to see a sustained upward trend in the last three months of the financial year and is therefore also expecting a good net profit for the year. The upcoming significant changes to the European sugar market make it difficult to give a forecast for the following 2017/2018 financial year. When the quota regime expires, the market will have to find a new equilibrium characterized by imports, exports and potential capacity expansions on the part of our competitors.

'We do not believe that overproduction in the EU is the right way to go, because we want to continue to achieve predictable planning together with our farmers in the future and therefore also adequate beet prices,' says Hartwig Fuchs.

Nordzucker's financial year begins on 1 March and closes at the end of February. The interim report for the first nine months covers all commercial activities from 1 March 2016 to 30 November 2016. The full interim report for the first nine months can be found in the download centre at www.nordzucker.de.

Third quarter: sustained positive business development

Background

The Nordzucker Group, based in Braunschweig, is Europe's second-largest sugar producer. The Group also produces bioethanol and animal feed from sugar beet. Eighteen production and refinery facilities across Europe form the technical, logistical and geographic basis for continued success. The Group's 3,200 employees strive towards providing excellent products and Services.

For queries please do not hesitate to contact Tanja Schneider-Diehl via phone or mail.
Fon: [phone]
Mail: Tanja.schneider-diehl{@}nordzucker[.]com

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