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Consolidated financial statements
2018|19

Consolidated income statement

for the year ended 28 February 2019

€000 2018|19 2017|18 Change absolute Change %
Revenue 2,443,048 2,566,317 -123,269 -4.8%
Changes in inventories of finished and unfinished goods -53,505 -26,771 -26,734 -99.9%
Own work capitalised 1,120 1,528 -408 -26.7%
Other operating income 32,980 32,990 -10 0.0%
Cost of materials -1,647,491 -1,716,654 69,163 4.0%
Staff costs -323,717 -308,082 -15,635 -5.1%
Depreciation, amortisation and impairment losses -96,636 -90,014 -6,622 -7.4%
Other operating expenses -301,403 -298,081 -3,322 -1.1%
Share of results of equity-accounted joint ventures 12,222 29,395 -17,173 -58.4%
Operating profit [EBIT] 66,618 190,628 -124,010 -65.1%
Finance income 25,464 41,212 -15,748 -38.2%
Finance expense -40,836 -55,682 14,846 26.7%
Net financial items -15,372 -14,470 -902 -6.2%
Profit before tax 51,246 176,158 -124,912 -70.9%
Income tax expense -20,860 -33,513 12,653 37.8%
Profit for the period 30,386 142,645 -112,259 -78.7%
- Attributable to shareholders of the parent 25,406 140,071 -114,665 -81.9%
- Attributable to non-controlling interests 4,980 2,574 2,406 93.5%
Earnings per share under IFRS (€) (basic and diluted) 0.41 2.241 -1.83 -81.7%

1 The prior-year value has been adjusted in accordance with IAS 33.64 (after the four-for-one stock split performed in July

Revenue

The AGRANA Group’s revenue of € 2,443.0 million in the 2018|19 financial year was off slightly from the prior year. While revenue rose slightly in the Fruit segment (to € 1,179.1 million, up 1.5%) and Starch segment (to € 762.7 million, up 1.4%), revenue declined significantly in the Sugar segment (to € 501.2 million, down 23.2%) due mainly to the further decline in sugar selling prices.

Operating profit (EBIT, or earnings before interest and tax)

Operating profit (EBIT), at € 66.6 million, was very significantly (65.1%) below the prior year. In the Sugar segment, as expected, EBIT deteriorated very significantly, to a deficit of € 61.9 million (prior year: profit of € 34.8 million), owing to lower selling prices than one year earlier as well as adverse effects of the drought-related smaller harvest in Austria. In the Starch segment, EBIT decreased significantly to € 51.2 million, a reduction of 36.2% driven above all by a weaker performance in the ethanol and saccharification products business. The Fruit segment raised its EBIT by 2.2% to € 77.3 million. Details on the share of results of equity-accounted joint ventures and on exceptional items can be found in the segment reports and the consolidated financial statements.

Net financial items

Net financial items in 2018|19 amounted to a net expense of € 15.4 million (prior year: net expense of € 14.5 million). The prior year’s optimisation of the credit and interest rate structure led to a further improvement of € 2.3 million in net interest expense. At the same time, currency translation differences deteriorated by about € 4.1 million, due primarily to negative movements in foreign currency financings in Argentina, Brazil, China, Mexico and Romania (euro and US dollar financings). As a result of lower ancillary expenses, other financial items improved by € 0.9 million.

Profit before tax

Profit before tax decreased from the prior year’s € 176.2 million to € 51.2 million. After an income tax expense of € 20.9 million based on a tax rate of 40.7% (prior year: 19.0%), the Group’s profit for the period was € 30.4 million (prior year: € 142.6 million). Profit for the period attributable to shareholders of AGRANA was € 25.4 million (prior year: € 140.1 million); earnings per share decreased to € 0.411 (prior year: € 2.241).

1 After the four-for-one stock split performed in July 2018. The value is thus based on the new number of shares outstanding at 28 February 2019, which was 62,488,976.

Consolidated balance sheet

at 28 February 2019

€000 28 February 2019 28 February 2018 Change absolute Change %
Assets
A. Non-current assets
Intangible assets 276,740 276,815 -75 0.0%
Property, plant and equipment 864,221 768,881 95,340 12.4%
Equity-accounted joint ventures 69,926 73,228 -3,302 -4.5%
Securities 18,843 18,703 140 0.7%
Investments in non-consolidated subsidiaries and outside companies 19 894 -875 -97.9%
Receivables and other assets 10,090 8,816 1,274 14.5%
Deferred tax assets 12,309 13,664 -1,355 -9.9%
1,252,148 1,161,001 91,147 7.9%
B. Current assets
Inventories 619,133 654,537 -35,404 -5.4%
Trade receivables and other assets 429,484 415,568 13,916 3.3%
Current tax assets 6,060 4,310 1,750 40.6%
Securities 0 44 -44 -100.0%
Cash and cash equivalents 82,582 120,961 -38,379 -31.7%
1,137,259 1,195,420 -58,161 -4.9%
Total assets 2,389,407 2,356,421 32,986 1.4%
Equity and liabilities
A. Equity
Share capital 113,531 113,531 0 0.0%
Share premium and other capital reserves 540,760 540,760 0 0.0%
Retained earnings 694,451 742,752 -48,301 -6.5%
Equity attributable to shareholders of the parent 1,348,742 1,397,043 -48,301 -3.5%
Non-controlling interests 61,186 56,954 4,232 7.4%
1,409,928 1,453,997 -44,069 -3.0%
B. Non-current liabilities
Retirement and termination benefit obligations 71,177 68,704 2,473 3.6%
Other provisions 23,505 21,607 1,898 8.8%
Borrowings 278,988 310,572 -31,584 -10.2%
Other payables 12,820 10,832 1,988 18.4%
Deferred tax liabilities 6,556 7,712 -1,156 -15.0%
393,046 419,427 -26,381 -6.3%
C. Current liabilities
Other provisions 31,221 29,337 1,884 6.4%
Borrowings 144,639 61,629 83,010 134.7%
Trade and other payables 403,627 378,220 25,407 6.7%
Tax liabilities 6,946 13,811 -6,865 -49.7%
  586,433 482,997 103,436 21.4%
Total equity and liabilities 2,389,407 2,356,421 32,986 1.4%

 

Total assets at 28 February 2019 were € 2,389.4 million, an increase of € 33.0 million from the year-earlier level.

An expansion of € 91.1 million in non-current assets was driven especially by a level of investment in property, plant and equipment that exceeded depreciation. Inventories declined for volume and price reasons, by € 35.4 million. In combination with a reduction of € 38.4 million in cash and cash equivalents, this led to a decrease in current assets.

AGRANA’s equity ratio of 59.0% was 2.7 percentage points below that of one year earlier. Non-current liabilities declined, due primarily to a reduction of € 31.6 million in long-term borrowings. Current liabilities rose, reflecting an increase in current borrowings (up € 83.0 million) as well as higher trade payables (up € 25.4 million).

Balance sheet structure at 28 February 2019

Consolidated cash flow statement

for the year ended 28 February 2019

€000 2018|19 2017|18 Change absolute Change %
Profit for the period 30,386 142,645 -112,259 -78.7%
Depreciation, amortisation and impairment of non-current assets 96,636 90,021 6,615 7.3%
Reversal of impairment losses on non-current assets 0 -7 7 100.0%
Gains/Losses on disposal of non-current assets -194 348 -542 -155.7%
Changes in non-current provisions 342 1,123 -781 -69.5%
Share of results of equity-accounted joint ventures -12,222 -29,395 17,173 58.4%
Dividends received from equity-accounted joint ventures 15,000 30,000 -15,000 -50.0%
Loss on net monetary position under IAS 29 -1,302 0 -1,302 -
Non-cash expenses/income and other adjustments 46,296 68,010 -21,714 -31.9%
Operating cash flow before changes in working capital 177,546 302,745 -125,199 -41.4%
Changes in inventories 19,589 16,749 2,840 17.0%
Changes in receivables and current assets -14,326 14,845 -29,171 -196.5%
Changes in current provisions 2,065 -18,748 20,813 111.0%
Changes in payables (excluding borrowings) -13,200 -55,967 42,767 76.4%
Changes in working capital -5,872 -43,121 37,249 86.4%
Interest received 3,250 4,225 -975 -23.1%
Interest paid -7,193 -10,788 3,595 33.3%
Tax paid -26,022 -39,199 13,177 33.6%
Net cash from operating activities 141,709 213,862 -72,153 -33.7%
Dividends received 24 33 -9 -27.3%
Proceeds from disposal of non-current assets 3,241 627 2,614 416.9%
Purchases of property, plant and equipment and intangible assets, net of government grants -161,190 -132,528 -28,662 -21.6%
Proceeds from disposal of securities 1,374 162 1,212 748.1%
Purchases of non-current financial assets 0 -1,640 1,640 100.0%
Purchase of subsidiaries, net of cash acquired -5,336 0 -5,336 -
Net cash (used in) investing activities -161,887 -133,346 -28,541 -21.4%
Repayment of current borrowings to affiliated companies in the Südzucker group -65,000 -100,000 35,000 35.0%
Repayment of Schuldscheindarlehen, or bonded loan 0 -83,500 83,500 100.0%
Repayment of non-current loans 0 -25,500 25,500 100.0%
Inflows from investment loan of the European Investment Bank 0 41,500 -41,500 -100.0%
Proceeds from non-current loans 40,000 100,000 -60,000 -60.0%
Proceeds from syndicated loans 75,000 0 75,000 -
Inflows/(outflows) from bank overdrafts and cash advances 1,219 -16,385 17,604 107.4%
Proceeds from ceding of shares of subsidiary without loss of control 2,475 0 2,475 -
Purchase of non-controlling interests -411 0 -411 -
Dividends paid -71,463 -69,808 -1,655 -2.4%
Net cash (used in) financing activities -18,180 -153,693 135,513 88.2%
Net (decrease) in cash and cash equivalents -38,358 -73,177 34,819 47.6%
Effect of movements in foreign exchange rates on cash and cash equivalents -577 -4,291 3,714 86.6%
Cash acquired in initial consolidation of subsidiaries 637 0 637 -
Effect of IAS 29 on cash and cash equivalents -81 0 -81 -
Cash and cash equivalents at beginning of period 120,961 198,429 -77,468 -39.0%
Cash and cash equivalents at end of period 82,582 120,961 -38,379 -31.7%

 

Operating cash flow before changes in working capital decreased by € 125.2 million year-on-year to a new total of € 177.5 million. After a significantly lower increase of € 5.9 million in working capital (prior year: increase of € 43.1 million) and a lower income tax expense and interest expense, net cash from operating activities decreased to € 141.7 million (prior year: € 213.9 million). Net cash used in investing activities was € 161.9 million. This significant increase from one year earlier came as a result of higher outflows for purchases of property, plant and equipment and intangibles (prior year: net cash use of € 133.3 million in investing activities). An overall increase in borrowings in 2018|19 (on a net basis across current and non-current borrowings) meant that, despite a higher dividend payment to AGRANA shareholders, net cash used in financing activities was reduced to € 18.2 million (prior year: net cash use of € 153.7 million). Free cash flow in the year under review decreased by more than 100% year-on-year.

Net debt

Net debt as of 28 February 2019 amounted to € 322.2 million, up € 89.7 million from the 2017|18 year-end level. The gearing ratio was thus 22.9% at the balance sheet date (28 February 2018: 16.0%).

In November 2018, AGRANA raised a long-term loan of € 40 million with a seven-year term and a fixed interest rate of 1.48%. The proceeds were used for the repayment of maturing bank financings and Schuldscheindarlehen.

Net debt and gearing ratio

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