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Outlook 2020|21


This outlook is issued with the proviso that the economic and financial impacts and the duration of the COVID-19 pandemic are not yet clear at the time of preparation of this annual report in April 2020. In view of the dynamic nature of the pandemic, assumptions about its economic and financial impacts would be largely speculative. AGRANA has therefore chosen not to incorporate such assumptions in this outlook and instead publishes here a “forecast before COVID-19” based on the budget originally planned for 2020|21. Although negative impacts of COVID-19 on revenue and operating profit (EBIT) are expected in all business segments, these effects are not yet quantifiable. However, this outlook provides an assessment of COVID-19 risk factors that may affect the pre-COVID-19 forecast.

With its diversified business model and sound balance sheet and financing structure, AGRANA considers itself well positioned for the future.

Depending on the trajectory of the COVID-19 pandemic, a more specific forecast will be provided in the course of the financial year, possibly already in connection with the publication of the results for the first quarter of 2020|21.

Fruit segment

In the Fruit segment, before COVID-19 effects, AGRANA expects the 2020|21 financial year to bring growth in revenue and EBIT. The fruit preparations business is projecting revenue growth, which is to be achieved through the full utilisation of the capacity created and by further diversification in the non-dairy business1. Through higher margins, which are to be realised partly thanks to smaller cost increases than in 2019|20, EBIT is to be raised significantly. In the fruit juice concentrate business, revenue is projected to rise significantly this financial year, with a solid earnings situation.

COVID-19 risk assessment: Especially in the Fruit segment with its global production operations (42 sites in 22 countries), the pre-COVID-19 forecast is fraught with high uncertainty. In March 2020 (the first month of the 2020|21 financial year), business was nonetheless still very good both in the fruit preparations and the fruit juice concentrate activities, particularly in terms of sales volumes. Risks are currently seen above all in the food service product segment, where fruit preparations and fruit products are sold into the quick service industry among other sectors. This business accounted for about 3% of total fruit preparations revenue in 2019|20.

1 The non-dairy product segments are ice-cream, bakery, and food service.

Fruit segment 2019|20 Actual 2020|21 Forecast before COVID-19
Revenue €m 1,185.4 Moderate increase
EBIT €m 55.9 Significant increase
Investment2 €m 56.5 38

2 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.

Starch segment

For the Starch segment, before COVID-19 effects, a slight increase in revenue is forecast for the 2020|21 financial year. For native starches and wheat gluten, however, selling prices are coming under pressure through increased supply volumes. No major recovery in prices should be expected for starch-based saccharification products, due to the persistently challenging market environment. The revenue trend in the Starch segment overall will again be shaped by ethanol price volatility. Consistently positive impetus for growth is anticipated in organic and GMO-free products. Starch segment EBIT is projected to decrease due to foreseeable margin reductions resulting from lower sales prices.

COVID-19 risk assessment: Bioethanol is a major core product in the Starch segment (at almost 25% of segment revenue in 2019|20), and the business performance in 2020|21 will thus again be largely determined by prices in the European ethanol markets. The fundamentally positive market sentiment, which was driven by the climate debate, is strained by the temporary restrictions on mobility imposed across Europe to contain the COVID-19 pandemic. The impacts on the whole ethanol value chain cannot be predicted until later in the financial year.

Starch segment 2019|20 Actual 2020|21 Forecast before COVID-19
Revenue €m 807.0 Slight increase
EBIT €m 75.2 Significant reduction
Investment1 €m 73.6 22

1 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.

Sugar segment

In the Sugar segment, before COVID-19 effects, AGRANA anticipates a continual improvement in conditions in the EU sugar market. AGRANA expects that the capacity utilisation of the sugar beet factories can be increased significantly again, as it has initiated various measures together with the beet farmers to ensure an adequate beet supply. On the distribution side, sugar sales volumes and sugar prices in the EU are expected to rise. This positive trend in the EU sugar market environment, combined with rigorous cost management, implies a significantly better EBIT result.

COVID-19 risk assessment: In March 2020 the trend in sales volumes was very positive, particularly with the reseller sector. Whether and to what extent the COVID-19 pandemic will affect the expectations for the 2020|21 sugar marketing year (SMY) cannot be predicted at present. Thus, among other factors, the effect which the current erosion in world market prices for sugar will have on EU prices in the coming SMY 2020|21 cannot be projected meaningfully.

Sugar segment 2019|20 Actual 2020|21 Forecast before COVID-19
Revenue €m 488.3 Significant increase
EBIT €m (44.0) Significant improvement
Investment1 €m 19.6 20

1 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.


Based on the segments’ forecasts before COVID-19, a significant increase in EBIT before COVID-19 effects is expected for the AGRANA Group in the 2020|21 financial year. Group revenue before COVID-19 effects is also projected to grow significantly.

COVID-19 risk assessment: The still rapid evolution of the impacts from the COVID-19 pandemic currently prevents any specific determination of parameters and thus presently does not allow a realistically quantified “post-COVID-19” forecast to be made for 2020|21.

AGRANA-Group 2019|20 Actual 2020|21 Forecast before COVID-19
Revenue €m 2,480.7 Significant increase
EBIT €m 87.1 Significant increase
Investment1 €m 149.7 80

1 Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill.

Investment Outlook 2020|21

Total investment across the three business segments in this new financial year, at approximately € 80 million, is to be significantly below both the 2019|20 capital expenditure and this year’s budgeted depreciation of close to € 120 million. This investment plan was already determined before the COVID-19 crisis and is to remain unchanged.

Investment in the Fruit segment this year is budgeted at approximately € 38 million, which is about 10% less than the expected level of depreciation. The intended main focus is on replacement and maintenance investment as well as production optimisation.

The budgeted investment volume in the Starch segment for this year is about € 22 million and, after the major projects of the prior years, will thus be very significantly below the level of depreciation. The largest single portion of this spending is for the completion of the derivatives manufacturing facility in Aschach, Austria.

Capital expenditure of approximately € 20 million is planned for the Sugar segment, focusing mainly on asset replacement and maintenance investment.

Sustainability outlook for 2020|21

In the 2019|20 financial year, AGRANA began to deal in depth with the topic of decarbonising its production activities. As early as 2014|15 and 2015|16, the Group progressively set goals and targets for further improving environmental and social performance in its own production facilities and for sustainability in its supply chain, with a target period running to the end of the 2020|21 financial year. The performance against targets has been reported annually. However, the energy targets were framed primarily as energy efficiency objectives and did not yet reflect the targets of the Paris climate accord. In the 2020|21 financial year, AGRANA will continue to develop its decarbonisation strategy and formulate specific intermediate targets towards its goal of achieving CO2 neutrality by 2040.