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23 May 2024

Nordzucker: Second-best result in the Group’s history – extensive investments in further development

With an operating result (EBIT) of 421 million Euro, Nordzucker once again closed the past financial year very successfully. EBIT roughly doubled compared to the previous year. The Group sees itself strengthened and is continuing its investment and growth strategy. Over the next five years, Nordzucker will invest more than 300 million Euro in decarbonizing production and around 100 million in the construction of a new plant for plant-based proteins in Groß Munzel, Lower Saxony.

It was the second-best financial year in the history of Nordzucker AG. Compared to the previous year, revenues rose by 29.3 per cent to 2.9 billion Euro and EBIT by 210 million Euro to 421 million Euro. The Australian subsidiary Mackay Sugar Ltd. contributed 27 million Euro to operating results. Net profit before minority interests totalled 326 million Euro, compared to 182 million Euro in the previous year. The company was able to increase its EBIT profit margin to 14 per cent after 9 per cent in the previous year. “We can look back on a very successful year with an extraordinarily good result,” said CEO Lars Gorissen at the presentation of the annual results in Braunschweig. “The main reason for this is a higher price level for sugar compared to the previous year, which more than compensated for the significant cost increases for raw materials and energy supply as well as in logistics,” explained CFO Alexander Bott.

“The record year is also a reflection of our joint efforts,” says Gorissen. “Employees, farmers, logistics partners, suppliers and many other partners have contributed to the very good result with their extraordinary commitment – and benefit from the success.” Nordzucker employees received an inflation compensation bonus and shareholders will receive a record dividend. At the Annual General Meeting on 4 July 2024, the Executive Board and Supervisory Board will propose a dividend of 2.00 Euro per share after 1.20 Euro per share in the previous year. Beet growers benefit from very good beet prices and attractive contract offers for 2025. “Sugar beet is and remains attractive for our growers – both economically and agronomically,” underlines Gorissen.

“The extraordinarily good result gives us the momentum and stability to consistently continue our strategy of sustainability and growth,” emphasises Gorissen. One example of this is the new Plant Based Ingredients (PBI) business area. Nordzucker is investing more than 100 million Euro in the production of plant-based proteins. A new plant will be put into operation at the site in Groß Munzel, Lower Saxony, by mid-2026, creating approximately 60 new jobs.

Over the next five years, the company will invest more than 300 million Euro in the GoGreen sustainability programme. “This will enable us to lay the foundations for climate-neutral production by 2050,” explains COO Alexander Godow. The modernization of plants and the optimization of processes are aimed at reducing energy consumption in sugar production, using fossil fuels more efficiently and increasing the share of renewable energies in the energy mix.

Committed to sustainability – from the farmer to the consumer

“Alongside growth and excellence, sustainability is an essential part of our corporate strategy,” accentuates Gorissen. “We have strong ties in regional farming; we grow from sustainable roots. We consistently focus our thoughts and actions on sustainability and are constantly improving our environmental footprint along the entire value chain. To achieve this, we work hand in hand with our partners – employees, growers and customers – and make sustainability an integral part of our business.”

Volatile market

“The very good result is driven by positive price trends,” explains COO Alexander Godow. However, there are currently signs that sugar prices might fall. The reasons for this include increasing production capacities in the EU and imports from Ukraine. In addition, world market prices for sugar are expected to decline. “The market is and remains volatile,” emphasises Godow. Nevertheless, the developments on the global market are generally positive.

Despite the adverse weather conditions, the 2023/2024 campaign ran at a very good and stable processing level in all of the Group’s countries. The same applies to the maintenance and investment measures at the plants. The new liquid sugar production facility at the Örtofta site in Sweden, for example, can start up in August as planned.

Challenging campaign jointly led to success

The recent beet campaign was characterized by high volumes, comparatively low sugar content and a long campaign duration. Due to the weather conditions, the campaign at the European sites was one of the longest and most challenging in recent years, lasting an average of 135 days. “Considering the difficult circumstances, it was still very successful,” underscores CEO Lars Gorissen. “We would like to thank everyone involved for their great commitment and cooperation; this was the only way to process the extraordinarily high beet volume.”

The success of cane sugar: investment pays off

The sugar cane business with its Australian subsidiary Mackay Sugar Ltd. also successfully completed cane processing despite persistently heavy rainfall. A total of around 5.2 million tonnes of sugar cane were processed in the three mills. Mackay Sugar achieved a profit contribution of 27 million Euro and thus a historically high result. “It’s a success story. The investment is paying off,” emphasises Gorissen. So far, Mackay Sugar has made a continuously growing positive contribution to the overall result every year.

Markets are normalizing – outlook for 2024/2025 remains positive

“However, another record year is not to be expected in view of declining prices and volatile markets,” says CFO Alexander Bott. The markets are normalizing. “We currently do not expect results at this level to be achievable in the coming years.” Nevertheless, the outlook is positive. “We expect to see an EBIT of over 200 million Euro this financial year.” Bott believes Nordzucker is well positioned for the future: “Our investments are measured and prudent. With our excellence initiatives to optimize the entire value chain, Nordzucker will successfully continue on its path to becoming an even more sustainable and equally profitable company.”

You can find the current Annual Report “Nordzucker.Together.Sustainable.” HERE.

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