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Consolidated financial statements
2019|20

Consolidated income statement

for the year ended 29 February 2020

€000 2019|20 2018|19 Change absolute Change %
Revenue 2,480,732 2,443,048 37,684 1.5%
Changes in inventories of finished and unfinished goods 64,764 -53,505 118,269 221.0%
Own work capitalised 1,898 1,120 778 69.5%
Other operating income 37,671 32,980 4,691 14.2%
Cost of materials -1,759,277 -1,647,491 -111,786 -6.8%
Staff costs -341,660 -323,717 -17,943 -5.5%
Depreciation, amortisation and impairment losses -110,333 -96,636 -13,697 -14.2%
Other operating expenses -303,472 -301,403 -2,069 -0.7%
Share of results of equity-accounted joint ventures 16,727 12,222 4,505 36.9%
Operating profit [EBIT] 87,050 66,618 20,432 30.7%
Finance income 22,851 25,464 -2,613 -10.3%
Finance expense -40,042 -40,836 794 1.9%
Net financial items -17,191 -15,372 -1,819 -11.8%
Profit before tax 69,859 51,246 18,613 36.3%
Income tax expense -18,567 -20,860 2,293 11.0%
Profit for the period 51,292 30,386 20,906 68.8%
- Attributable to shareholders of the parent 48,162 25,406 22,756 89.6%
- Attributable to non-controlling interests 3,130 4,980 -1,850 -37.1%
Earnings per share under IFRS (€) (basic and diluted) 0.77 0.41 0.36 87.8%

Revenue

The AGRANA Group’s revenue of € 2,480.7 million in the 2019|20 financial year marked a slight increase from the prior year. Revenue was steady in the Fruit segment (at € 1,185.4 million, up 0.5%), eased in the Sugar segment (at € 488.3 million, down 2.6%) and grew in the Starch segment (at € 807.0 million, up 5.8%).

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

Operating profit (EBIT) was € 87.1 million in 2019|20, a significant increase of 30.8% from the prior year. In the Fruit segment, EBIT decreased to € 55.9 million, a reduction of 27.7% driven primarily by a lower result in the fruit preparations business. In the Sugar segment, higher sugar sales prices than in the prior year led to an EBIT improvement, although in absolute terms, EBIT remained significantly negative at a deficit of € 44.0 million. The Starch segment expanded its EBIT substantially by 46.9% to € 75.2 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 2019|20 amounted to a net expense of € 17.2 million (prior year: net expense of € 15.4 million). The increase of € 2.9 million in net interest expense was attributable to an average increase of € 150 million in debt and the additional interest expense of about € 1.0 million resulting from the initial application of IFRS 16, Leases. At the same time, currency translation differences improved by € 1.4 million. In the prior year this item had included a high forex expense due to the depreciation of the Argentine peso, while in 2019|20 this effect was avoided thanks to the debt reduction of the Argentine subsidiary. The change in other financial items (down € 0.3 million) resulted from the issue of the Schuldscheindarlehen by AGRANA Beteiligungs-AG in August 2019 and the renewal of a syndicated credit line by AUSTRIA JUICE GmbH.

Profit before tax

Profit before tax increased from the prior year’s € 51.2 million to € 69.9 million. After an income tax expense of € 18.6 million based on a tax rate of 26.6% (prior year: 40.7%), the Group’s profit for the period was € 51.3 million (prior year: € 30.4 million). Profit for the period attributable to shareholders of AGRANA was € 48.2 million (prior year: € 25.4 million); earnings per share increased to € 0.77 (prior year: € 0.41).

Consolidated balance sheet

at 29 February 2020

€000 29 February 2020 28 February 2019 Change absolute Change %
Assets
A. Non-current assets
Intangible assets 275,108 276,740 -1,632 -0.6%
Property, plant and equipment 932,795 864,221 68,574 7.9%
Equity-accounted joint ventures 76,919 69,926 6,993 10.0%
Securities 19,599 18,843 756 4.0%
Investments in non-consolidated subsidiaries and outside companies 919 19 900 4,736.8%
Other assets 12,410 10,090 2,320 23.0%
Deferred tax assets 14,175 12,309 1,866 15.2%
1,331,925 1,252,148 79,777 6.4%
B. Current assets
Inventories 710,500 619,133 91,367 14.8%
Trade receivables 319,457 321,694 -2,237 -0.7%
Other assets 89,334 107,790 -18,456 -17.1%
Current tax assets 4,813 6,060 -1,247 -20.6%
Cash and cash equivalents 93,415 82,582 10,833 13.1%
1,217,519 1,137,259 80,260 7.1%
Total assets 2,549,444 2,389,407 160,037 6.7%
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 669,406 694,451 -25,045 -3.6%
Equity attributable to shareholders of the parent 1,323,697 1,348,742 -25,045 -1.9%
Non-controlling interests 63,435 61,186 2,249 3.7%
1,387,132 1,409,928 -22,796 -1.6%
B. Non-current liabilities
Retirement and termination benefit obligations 73,401 71,177 2,224 3.1%
Other provisions 29,756 23,505 6,251 26.6%
Borrowings 450,212 278,988 171,224 61.4%
Other payables 6,418 12,820 -6,402 -49.9%
Deferred tax liabilities 5,504 6,556 -1,052 -16.0%
565,291 393,046 172,245 43.8%
C. Current liabilities
Other provisions 20,789 31,221 -10,432 -33.4%
Borrowings 126,814 144,639 -17,825 -12.3%
Trade payables 311,771 292,914 18,857 6.4%
Other payables 131,553 110,713 20,840 18.8%
Tax liabilities 6,094 6,946 -852 -12.3%
  597,021 586,433 10,588 1.8%
Total equity and liabilities 2,549,444 2,389,407 160,037 6.7%

 

Total assets at 29 February 2020 were € 2,549.4 million, an increase of € 160.0 million from the year-earlier level.

Non-current assets increased by € 79.8 million, due mainly to the initial application of IFRS 16, Leases, and also reflecting a level of investment that exceeded depreciation. Inventories rose significantly for price and volume reasons. In combination with a rise in cash and cash equivalents, this led to an overall increase in current assets.

AGRANA’s equity ratio of 54.4% was 4.6 percentage points below that of one year earlier. On the other side of the balance sheet, non-current liabilities rose significantly, due primarily to an increase in long-term borrowings. Current liabilities increased slightly, which was attributable to a rise in trade payables and in other payables.

Balance sheet structure at 29 February 2020

Consolidated cash flow statement

for the year ended 29 February 2020

€000 2019|20 2018|19 Change absolute Change %
Profit for the period 51,292 30,386 20,906 68.8%
Depreciation, amortisation and impairment of non-current assets 110,362 96,636 13,726 14.2%
Reversal of impairment losses on non-current assets -28 0 -28  
(Gains) on disposal of non-current assets -1 -194 193 99.5%
Changes in non-current provisions 2,303 342 1,961 573.4%
Share of results of equity-accounted joint ventures -16,727 -12,222 -4,505 -36.9%
Dividends received from equity-accounted joint ventures 14,000 15,000 -1,000 -6.7%
Loss on net monetary position under IAS 29 912 1,302 -390 -30.0%
Non-cash expenses/income and other adjustments 25,718 46,296 -20,578 -44.4%
Operating cash flow before changes in working capital 187,831 177,546 10,285 5.8%
Changes in inventories -102,588 19,589 -122,177 -623.7%
Changes in receivables and current assets -296 -14,326 14,030 97.9%
Changes in current provisions -16,548 2,065 -18,613 -901.4%
Changes in payables (excluding borrowings) 66,450 -13,200 79,650 603.4%
Changes in working capital -52,982 -5,872 -47,110 -802.3%
Interest received 2,001 3,250 -1,249 -38.4%
Interest paid -8,814 -7,193 -1,621 -22.5%
Tax paid -17,940 -26,022 8,082 31.1%
Net cash from operating activities 110,096 141,709 -31,613 -22.3%
Dividends received 17 24 -7 -29.2%
Proceeds from disposal of non-current assets 1,971 3,241 -1,270 -39.2%
Purchases of property, plant and equipment and intangible assets, net of government grants -150,030 -161,190 11,160 6.9%
Proceeds from disposal of securities 6 1,374 -1,368 -99.6%
Proceeds from disposal of subsidiaries, net of cash 582 0    
Purchases of non-current financial assets -8,124 0 -8,124  
Purchase of subsidiaries, net of cash acquired 0 -5,336 5,336 100.0%
Net cash (used in) investing activities -155,578 -161,887 6,309 3.9%
Repayment of borrowings to affiliated companies in the Südzucker group -85,000 -65,000 -20,000 -30.8%
Repayment of Schuldscheindarlehen, or bonded loan 164,500 0 164,500  
(Outflows) from lease liabilities -6,437 0 -6,437  
Repayment of investment loan of the European Investment Bank -4,882 0 -4,882  
Proceeds from non-current loans 0 40,000 -40,000 -100.0%
Proceeds from syndicated loans 10,000 75,000 -65,000 -86.7%
Inflows/(outflows) from bank overdrafts and cash advances 42,344 1,219 41,125 3,373.7%
Proceeds from ceding of shares of subsidiary without loss of control 0 2,475 -2,475 -100.0%
Purchase of non-controlling interests 0 -411 411 100.0%
Dividends paid -63,203 -71,463 8,260 11.6%
Net cash from/(used in) financing activities 57,322 -18,180 75,502 415.3%
Net increase/(decrease) in cash and cash equivalents 11,840 -38,358 50,198 130.9%
Effect of movements in foreign exchange rates on cash and cash equivalents -511 -577 66 11.4%
Cash acquired in initial consolidation of subsidiaries 0 637 -637 -100.0%
Effect of IAS 29 on cash and cash equivalents -496 -81 -415 -512.3%
Cash and cash equivalents at beginning of period 82,582 120,961 -38,379 -31.7%
Cash and cash equivalents at end of period 93,415 82,582 10,833 13.1%

 

Operating cash flow before changes in working capital was up € 10.3 million year-on-year at a new total of € 187.8 million. After an inventory-driven significantly larger increase of € 53.0 million in working capital than a year ago (prior year: increase of € 5.9 million), net cash from operating activities decreased to € 110.1 million (prior year: € 141.7 million). Net cash used in investing activities was € 155.6 million, a decrease from the prior year as a result of lower outflows for purchases of property, plant and equipment and intangibles (prior year: net cash use of € 161.9 million). In 2019|20, an overall increase in borrowings (on a net basis across the current and non-current portions) and a lower dividend payment led to net cash from financing activities of € 57.3 million (prior year: net cash use of € 18.2 million). Free cash flow in the year under review decreased by more than 100% year-on-year.

Net debt

Net debt as of 29 February 2020 amounted to € 464.0 million, up € 141.8 million from the 2018|19 year-end level. The gearing ratio was thus 33.5% at the balance sheet date (28 February 2019: 22.9%).

To strengthen the long-term funding base and take advantage of the historic low interest rate environment, AGRANA Beteiligungs-AG at 1 August 2019 placed a € 200 million Schuldscheindarlehen (bonded loan) in tranches of five, seven and ten years. The weighted average term to maturity is six years. Approximately 75% of the Schuldscheindarlehen carries a fixed interest rate. As well, in November 2019, AGRANA Beteiligungs-AG raised a long-term bank loan with a seven-year term. Both the Schuldscheindarlehen and the bilateral facility were used for the repayment of a group debt to Südzucker AG and of the Schuldscheindarlehen issued in 2014.

Net debt and gearing ratio

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