Q1 INTERIM REPORT FIRST QUARTER 2016/17

Q1 INTERIM REPORTFIRST QUARTER 2016/17

1 March to 31 May 2016

Publication date 7 July 2016

C O N S O L I D A T E D G R O U P R E V E N U E S

down 1.3 % from last year

at € 1,608 [1,629] million.

C O N S O L I D A T E D O P E R A T I N G R E S U L T

increases to € 110 [57] million.

F U L L- Y E A R F I S C A L 2 0 1 6 / 1 7 F O R E C A S T U N C H A N G E D :

consolidated group revenues expected to come in

at about € 6.4 to € 6.6 [2015/16: 6.4] billion

and operating result to range between

€ 250 and € 350 [2015/16: 241] million.

CO

NT

EN

TS

Financial calendar

ANNUAL GENERAL MEETING FOR FISCAL 2015/1614 July 2016

Q2 1ST HALF YEAR REPORT 2016/1713 October 2016

Q3 1ST TO 3RD QUARTER REPORT 2016/1712 January 2017

PRESS AND ANALYSTS’ CONFERENCE FISCAL 2016/1718 May 2017

Q1 1ST QUARTER REPORT 2017/1813 July 2017

ANNUAL GENERAL MEETING FOR FISCAL 2016/1720 July 2017

Q21ST HALF YEAR REPORT 2017/1812 October 2017

This interim report is available in German and English. This

translation is provided for convenience and should not be

relied upon exclusively. PDF files of the interim report can be

downloaded from the company’s website at:

www.suedzucker.de/de/Investor-Relations/ or

www.suedzucker.de/en/Investor-Relations/

Südzucker AG’s fiscal year is not aligned with the calendar year.

The first quarter period extends from 1 March to 31 May.

On the following pages, the numbers in brackets represent the

corresponding previous year’s figures or items. Numbers and

percentages stated are subject to differences due to rounding.

Typing and printing errors reserved.

INTERIM MANAGEMENT REPORT

02 Economic report

16 Events after the balance sheet date

16 Risks and opportunities

16 Outlook

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

18 Comprehensive income

20 Cash flow statement

22 Balance sheet

24 Changes in shareholders’ equity

NOTES TO THE INTERIM FINANCIAL STATEMENTS

26 Segment report

28 (01) Principles of preparation of the interim consolidated financial statements

29 (02) Companies included in consolidation

29 (03) Earnings per share

30 (04) Inventories

30 (05) Trade receivables and other assets

31 (06) Other provisions and accruals

31 (07) Trade payables and other liabilities

32 (08) Financial liabilities, securities and cash and cash equivalents (net financial debt)

33 (09) Additional disclosures on financial instruments

35 (10) Related parties

CONTENTS

1st quarter

2016/17 2015/16 + / – in %

Revenues and earnings

Revenues € million 1,608 1,629 – 1.3

EBITDA € million 159 107 49.1

EBITDA margin % 9.9 6.6

Depreciation € million – 49 – 50 – 1.2

Operating result € million 110 57 93.1

Operating margin % 6.8 3.5

Net earnings € million 77 41 88.0

Cash flow and investments

Cash flow € million 125 102 23.4

Investments in fixed assets 1 € million 59 73 – 18.6

Investments in financial assets / acquisitions € million 1 0 –

Total investments € million 60 73 – 17.5

Performance

Fixed assets 1 € million 2,875 2,864 0.4

Goodwill € million 1,145 1,145 – 0.0

Working capital € million 1,895 2,051 – 7.6

Capital employed € million 6,028 6,173 – 2.3

Capital structure

Total assets € million 7,963 8,197 – 2.9

Shareholders‘ equity € million 4,540 4,515 0.6

Net financial debt € million 742 829 – 10.5

Equity ratio % 57.0 55.1

Net financial debt as % of equity (gearing) % 16.3 18.4

Shares

Market capitalization on 31 May € million 3,597 2,899 24.1

Total shares issued as of 31 May Millions of shares 204.2 204.2 0.0

Closing price on 31 May € 17.62 14.20 24.1

Earnings per share on 31 May € 0.26 0.10 > 100

Average trading volume / day Thousands of shares 740 2,013 – 63.2

MDAX® closing price on 31 May Points 20,762 20,450 1.5

Performance Südzucker share 1 March to 31 May % 26.9 4.2

Performance MDAX® 1 March to 31 May % 6.9 1.8

Employees 17,922 18,298 – 2.11 Including intangible assets.

TABLE 01

KEY FIGURES

to 31 May 2016

OVERVIEW

Revenues by segment 1st quarter 2016/17

1st quarter

€ million 2016/17 2015/16 + / – in %

Sugar 694 712 – 2.4

Special products 457 445 2.6

CropEnergies 149 181 – 17.6

Fruit 308 291 5.8

Group total 1,608 1,629 – 1.3

TABLE 02

Operating result by segment 1st quarter 2016/17

1st quarter

€ million 2016/17 2015/16 + / – in %

Sugar 22 – 13 –

Special products 46 37 23.7

CropEnergies 19 14 41.6

Fruit 23 19 22.1

Group total 110 57 93.1

TABLE 03

OVERVIEW

First quarter 2016/17

- Consolidated group revenues down 1.3 % from last year at

€ 1,608 (1,629) million.

- Consolidated group operating result rises to € 110 (57) mil-

lion. The higher result is mainly attributable to the sugar

segment, but the other segments also contribute.

- Sugar segment revenues decline on lower volumes, due to

lacking product availability. Moderately higher quota sugar

sales revenues lead to positive operating result:

- Revenues: – 2.4 % to € 694 (712) million

- Operating result: € 22 (– 13) million

- Special products segment reports sharply higher revenues

and operating result due to increased volumes:

- Revenues: + 2.6 % to € 457 (445) million

- Operating result: € 46 (37) million

- CropEnergies segment records substantially improved oper-

ating result despite revenues decline as a result of lower

net material and energy costs:

- Revenues: – 17.6 % to € 149 (181) million


- Fruit segment reports higher revenues and operating result

due to higher volumes:

- Revenues: + 5.8 % to € 308 (291) million


Forecast for full fiscal 2016/17

- Consolidated group revenues still expected at € 6.4 to € 6.6

(2015/16: 6.4) billion.

- Increasing operating result still expected within a range of

between € 250 and € 350 (2015/16: 241) million.

- Capital employed rises; ROCE improves.

1OVERVIEW

Revenues and operating result

1st quarter

2016/17 2015/16 + / – in %

Revenues € million 1,608 1,629 – 1.3


Depreciation on fixed assets and intangible assets € million – 49 – 50 – 1.2


Result from restructuring / special items € million – 7 – 5 17.5

Result from companies consolidated at equity € million 11 9 18.3

Result from operations € million 114 61 88.8






Shares in companies consolidated at equity € million 337 317 6.1



TABLE 04

ECONOMIC REPORT

Südzucker Group business development – Results of operations

REVENUES AND OPERATING RESULT

Consolidated group revenues for the first three months of

fiscal 2016/17 were slightly lower than last year at € 1,608

(1,629) million. The sugar and CropEnergies segments’ reve-

nues declined, while the special products and fruit segments

reported an increase.

As expected, first-quarter consolidated group operating result

was significantly higher than last year at € 110 (57) million.

The higher result was mainly attributable to the sugar seg-

ment, but all other segments also contributed.

RESULT FROM OPERATIONS

Result from operations of € 114 (61) million comprises an oper-

ating result of € 110 (57) million, the result from restructuring

and special items of € – 7 (– 5) million and the earnings con-

tribution from companies consolidated at equity of € 11 (9)

million.

RESULT FROM RESTRUCTURING AND SPECIAL ITEMS

The special products segment’s result from restructuring and

special items of € – 7 (– 5) million was driven by expenses re-

lated to the test phase and/or trial runs of various compo-

nents at its wheat starch plant in Zeitz. CropEnergies’ ex-

penses are for the fixed costs of the temporarily closed

bioethanol factory in Wilton, the same as last year.

RESULT FROM COMPANIES CONSOLIDATED AT EQUITY

Result from companies consolidated at equity was € 11 (9)

million. The sugar segment’s total of € 5 (3) million related

mainly to its share of earnings from British trading company

ED&F Man Holdings Ltd., Studen Group and the Italian

joint-venture distributor Maxi S.r.l. The special products seg-

ment’s total includes € 6 (6) million for its share of earnings

from Hungrana Group’s starch and bioethanol businesses.

2INTERIM MANAGEMENT REPORTECOnOmIC REpORT

Income statement

1st quarter

€ million 2016/17 2015/16 + / – in %

Revenues 1,608 1,629 – 1.3

Operating result 110 57 93.1

Result from restructuring / special items – 7 – 5 17.5

Result from companies consolidated at equity 11 9 18.3

Result from operations 114 61 88.8

Financial result – 12 – 5 > 100.0

Earnings before income taxes 102 56 82.1

Taxes on income – 25 – 15 66.4

Net earnings 77 41 88.0

of which attributable to Südzucker AG shareholders 55 20 > 100

of which attributable to hybrid capital 3 7 – 47.7

of which attributable to other non-controlling interests 19 14 42.2

Earnings per share (€) 0.26 0.10 > 100

TABLE 05

FINANCIAL RESULT

The financial result in the first quarter declined to € – 12

(– 5) million. The net interest result improved to € – 6 (– 8)

million. The change in the financial result to € – 6 (3) million is

due mainly to an impairment charge on a current financial

asset at AGRANA Fruit in Ukraine.

TAXES ON INCOME

Earnings before taxes were reported at € 102 (56) million and

taxes on income totaled € – 25 (– 15) million. The group’s tax

rate was 25 (27) %.

CONSOLIDATED NET EARNINGS

Of the consolidated net earnings of € 77 (41) million, € 55 (20)

million were allocated to Südzucker AG shareholders, € 3 (7)

million to hybrid bondholders and € 19 (14) million to other

non-controlling interests, mainly the co-owners of AGRANA

Group and CropEnergies Group.

EARNINGS PER SHARE

Earnings per share came in at € 0.26 (0.10) for the first quar-

ter of 2016/17. The calculation was based on the time-

weighted average of 204.2 (204.2) million shares outstanding.

3INTERIM MANAGEMENT REPORT

ECOnOmIC REpORT

Cash flow statement

1st quarter

€ million 2016/17 2015/16 + / – in %

Cash flow 125 102 23.4

Increase (–) / decrease (+) in working capital – 253 – 271 – 6.6

Investments in fixed assets

Sugar segment 24 32 – 24.4

Special products segment 29 29 1.8

CropEnergies segment 3 8 – 67.9

Fruit segment 3 4 – 20.9

Total investments in fixed assets 1 59 73 – 18.6

Investments in financial assets / acquisitions 1 0 –

Total investments 60 73 – 17.5

Dividends paid – 5 0 –1 Including intangible assets.

TABLE 06

Investments and financing – financial position

CASH FLOW

Cash flow reached € 125 million, compared to € 102 million

during the same period last year. This translates into 7.8

(6.3) % of revenues.

WORKING CAPITAL

Cash outflow from working capital of € – 253 million was

mainly to settle beet liabilities from the 2015/16 campaign,

which were only partly covered by proceeds from the sugar

inventory selloff.

INVESTMENTS IN FIXED ASSETS

Investments in fixed assets (including intangible assets) to-

taled € 59 (73) million. The sugar segment invested € 24 (32)

million, mainly for replacements, but also on efficiency and

logistics improvements in preparation for expanded produc-

tion after expiry of the minimum beet price and quota regula-

tions on 30 September 2017. The special products segment’s

investments of € 29 (29) million are mainly for construction of

the starch plant in Zeitz, expanding the capacity of the starch

plant in Aschach, Austria, optimizing the BENEO plant in

Oreye, Belgium, and expanding the capacity of the Freiberger

plant in Westhoughton, Great Britain. The Crop Energies seg-

ment invested € 13 (8) million to further optimize its produc-

tion systems. The fruit segment invested € 3 (4) million,

mainly to expand production capacity in the fruit preparations

division.

DEVELOPMENT OF NET FINANCIAL DEBT

The seasonal cash outflow of € – 253 million from working

capital could only be partly financed by the cash inflow of

€ 125 million. This resulted in the typical seasonal increase in

net financial debt, which went from € 555 million on 29 Feb-

ruary 2016 to € 742 million on 31 May 2016, up € 187 million,

taking into consideration total investments of € 60 million and

the distribution of € 5 million.


Balance sheet

€ million 31 May 2016 31 May 2015 + / – in %

Assets

Intangible assets 1,186 1,185 0.1

Fixed assets 2,834 2,825 0.3

Remaining assets 518 508 2.0

Non-current assets 4,538 4,518 0.5

Inventories 1,614 1,777 – 9.1

Trade receivables 941 998 – 5.7

Remaining assets 870 904 – 3.8

Current assets 3,425 3,679 – 6.9

Total assets 7,963 8,197 – 2.9

Liabilities and equity

Equity attributable to shareholders of Südzucker AG 3,205 3,161 1.4

Hybrid capital 653 684 – 4.5

Other non-controlling interests 682 670 1.8

Total equity 4,540 4,515 0.6

provisions for pensions and similar obligations 800 824 – 2.9

Financial liabilities 716 771 – 7.2

Remaining liabilities 276 292 – 5.5

Non-current liabilities 1,792 1,887 – 5.1

Financial liabilities 627 681 – 7.9

Trade payables 403 467 – 13.7

Remaining liabilities 601 647 – 7.1

Current liabilities 1,631 1,795 – 9.1

Total liabilities and equity 7,963 8,197 – 2.9

net financial debt 742 829 – 10.5

Equity ratio in % 57.0 55.1

net financial debt as % of equity (gearing) 16.3 18.4

TABLE 07

NON-CURRENT ASSETS

Since last year’s record date, non-current assets have risen

€ 20 million to € 4,538 (4,518) million. Thus, the carrying

amounts of fixed assets rose € 9 million to 2,834 (2,825) due

to investments. The € 10 million increase in assets to € 518

(508) million relates mainly to the increase of € 337 (317) mil-

lion in shares of at equity consolidated companies. Goodwill

was unchanged and intangible assets were about the same as

last year at € 1,186 (1,185) million.

Balance sheet – assets


ECOnOmIC REpORT

Employees by segment

1st quarter

31 May 2016 2015 + / – in %

Sugar 7,013 7,215 – 2.8

Special products 4,602 4,401 4.6

CropEnergies 405 429 – 5.7

Fruit 5,903 6,253 – 5.6

Group 17,922 18,298 – 2.1

TABLE 08

CURRENT ASSETS

Current assets were down € 254 million to € 3,425 (3,679)

million, driven mainly by the reduction of € 163 million in

inventories, especially in the sugar segment. The total is now

€ 1,614 (1,777) million. Trade receivables were down € 57

million to € 941 (998) million. The decline of € 34 million in

other assets to € 870 (904) million is mainly due to a re-

duced cash position.

EQUITY

Equity increased to € 4,540 (4,515) million. The equity ratio

came in higher than last year at 57 (55) % as total assets

fell. Südzucker AG shareholders’ equity rose € 44 million to

€ 3,205 (3,161) million. In parallel, other minority interests

rose € 12 million to € 682 (670) million. Hybrid bond hold-

ings fell to € 653 (684) million in the second half of fiscal

2015/16 due to the buyback of hybrid bonds with a face

value of € 32 million.

NON-CURRENT LIABILITIES

Non-current liabilities declined € 95 million to € 1,792 (1,887)

million. Provisions for pensions and similar obligations were

down € 24 million to € 800 (824) million due to a higher dis-

count rate, which rose from 1.75 % on 31 May 2015 to 1.95 %

on 31 May 2016. Financial liabilities were cut € 55 million to

€ 716 (771) million. Other liabilities fell € 16 million to € 276

(292) million.

CURRENT LIABILITIES

Current liabilities were down € 164 million to € 1,631 (1,795)

million. This development followed the decline of € 54 million

in current financial liabilities to € 627 (681) million. In addi-

tion, trade payables dropped € 64 million to € 403 (467).

Other debt, consisting of other provisions, taxes owed and

other liabilities, was reduced by € 46 million to € 601 (647)

million.

NET FINANCIAL DEBT

Net financial debt as of 31 May 2016 were down € 87 million to

€ 742 (829) million, which corresponds to 16 (18) % of equity.

Employees

The number of persons employed by the group (full-time

equivalent) after the end of the first quarter of fiscal 2016/17

was slightly lower than at the same time last year at 17,922

(18,298).


EU price reporting sugar

1 May 2013 to 30 April 2016€/t white sugar

700

600

500

400

300

2013 2014 2015 2016

Source: EU commission, Directorate-General for Agriculture and Rural Development.

D I AG R A M 02

Global market sugar prices

1 June 2013 to 31 May 2016London, nearest forward trading month

650

600

550

500

450

400

350

300

250

200

2013 2014 2015 2016

D I AG R A M 0 1

t Ww. in €/t

t Ww. in USD/t

Sugar segment

Market developments, economic policy, general framework

WORLD SUGAR MARKET

In its world sugar balance estimate released in June 2016,

German market analyst F. O. Licht predicts a deficit in sugar

production for the 2015/16 sugar marketing year (1 October

to 30 September), the first in six years. The shortfall is due to

increased consumption, which will rise to 181.3 (179.0) mil-

lion tonnes, while sugar production will shrink to 174.3 (181.2)

million tonnes, back under 180 million tonnes for the first

time since 2012/13. The result will be a reduction in invento-

ries to 70.4 (80.0) million tonnes of sugar or 38.9 (44.7) % of

one year’s consumption, for the first time in six years.

For the 2016/17 marketing year too, F. O. Licht expects inven-

tories to fall further despite higher production – to 63.7 mil-

lion tonnes or 35 % of one year’s consumption, a level last

seen in the 2010/11 marketing year.

At the beginning of the fiscal year, the world market price for

white sugar went from € 375 €/t to over 400 €/t amid high vol-

atility. At the end of the reporting period, the world market

price for white sugar was 434 €/t, the highest it has been since

2012. Since then the world market price has risen further and

has at times been above 470 €/t.

EU SUGAR MARKET

Following last year’s record harvest, Südzucker substantially

cut back the cultivation area throughout the EU for the current

2015/16 sugar marketing year on account of the re-strictions

on selling non-quota sugar. At the same time, yields from the

2015 campaign were below last year’s record level and in

many parts of Europe even less than the perennial average. As

a result, sugar production in the EU (including isoglucose)

shrank considerably, to about 15.6 (20.3) million tonnes,

which will cause non-quota sugar stocks to contract. Export

licenses for 1.35 million tonnes of non-quota sugar were

granted for the 2015/16 sugar marketing year, the same as

last year.

The EU is a net importer of quota sugar. For preferential im-

ports to rise, the EU price level would have to be at least high

enough to cover the costs of the imported sugar. Quota sugar

inventories are expected to fall further at the end of the

2015/16 sugar marketing year.

According to EU price reporting, the average price for quota

sugar rose slightly in April 2016, to 428 €/t for bulk sugar

(ex works). Last year prices had stagnated at a low level.

Typical practice in the EU is to sign annual contracts for each

sugar marketing year. The current prices reported in the EU

Price Reporting thus mainly reflect the summer 2015 market

price level. The sharply higher world market prices seen since

then – recently even higher than EU prices – has also affected

a minor volume on the spot markets, but the impact on EU

Price Reporting is at the moment minimal.


ECOnOmIC REpORT

Business performance – Sugar segment

1st quarter

2016/17 2015/16 + / – in %

Revenues € million 694 712 – 2.4

EBITDA € million 35 0 > 100

Depreciation on fixed assets and intangible assets € million – 13 – 13 3.0

Operating result € million 22 – 13 –

Result from restructuring / special items € million – 1 0 –

Result from companies consolidated at equity € million 5 3 54.3

Result from operations € million 26 – 10 –


Operating margin % 3.1 – 1.8







TABLE 09

ENERGY MARKET

After the price of oil dropped to a fourteen-year low of 25

USD/barrel in mid-January 2016, prices trended higher for

several weeks during the first quarter 2016/17 reporting pe-

riod. The markets increasingly priced in supply risks; mainly

significantly declining production in the United States. In ad-

dition, demand remained robust, as manifested by record

crude oil imports in China. The devaluation of the US dollar

and a massive decline of 60 % in short sales since the begin-

ning of the year were ultimately the main price drivers.

For the first time in a long time, the steady decline in Ameri-

can crude oil production to September 2014 levels caused

market players to believe that oil market supply and demand

would be balanced no later than 2017. Oil was trading at 49

USD/barrel on 31 May 2016.

At the beginning of the first quarter of 2016/17, the price of

gas trended sideways at a very low level. However, relatively

low temperatures in Western Europe and global geopolitical

crises caused the price to increase sharply within a few days

toward the middle/end of May. Prices were supported by main-

tenance activities in North Sea gas fields, as well as higher

crude prices, which also impacted other energy sources.

EU SUGAR POLICIES, WTO NEGOTIATIONS AND FREE

TRADE AGREEMENTS

There were no material changes during the first quarter to

the legal and political general conditions related to EU sugar

policies, WTO negotiations and free trade agreements than

those outlined on pages 61 and 62 of the 2015/16 annual

report (consolidated management report, business report,

sugar segment).


Business performance


The sugar segment’s revenues fell to € 694 (712) million dur-

ing the reporting period. The lower revenues were driven

mainly by lower non-quota sugar volumes due to the reduced

harvest in 2015. Quota sugar sales revenues were moderately

higher than last year.

In the first quarter of fiscal 2016/17, the sugar segment re-

ported an operating result of € 22 million, which compares to

an operating loss of € – 13 million during the same quarter

last year. This was mainly driven by a moderate increase in

quota sugar sales revenues at the beginning of the 2015/16

sugar marketing year in October 2015, and was further rein-

forced since the beginning of the year by an overall positive

marketing environment and still higher spot market quota

sugar sales revenues.


The result from companies consolidated at equity in the sugar

segment was € 5 (3) million, most of which relates to the

earnings contribution from the British trading company ED&F

Man Holdings Ltd., but also the earnings contributions from

Studen Group and Italian joint-venture distributor Maxi S.r.l.

BEET CULTIVATION AND CAMPAIGN

Südzucker Group expanded its beet cultivation area by almost

10 % in 2016, to about 384,000 (350,259) ha. Last year, many

beet growers had to limit production because of a carryover.

This year, planting began for the most part as early as in pre-

vious years, amid average to excellent planting conditions.

Thanks to adequate rain starting in the second half of May,

beet development was excellent in most regions.


Investments of € 24 (32) million in the first three months were

mainly for replacements, efficiency improvements – for ex-

ample the beet yard projects at the French Roye and Etrépagny

factories –, product development, such as nibs sugar in Tie-

nen, Belgium and jam sugar concentrate in Rain. These initia-

tives are also key components of preparations for the expiry

of minimum beet price and sugar quota regulations effective

30 September 2017. Other important investments were for

energy savings; for example, the steam turbine in Zeitz and

the sugar drying system in Tienen, as well as environment-

related investments for wastewater treatment and exhaust

gas scrubbing systems at locations such as Cagny, France, and

Tienen. Also noteworthy are logistics and infrastructure pro-

jects such as the ones at the Plattling and Rain factories, as

well as in Tienen.


Economic rEport

Business performance – Special products segment

1st quarter

2016/17 2015/16 + / – in %

Revenues € million 457 445 2.6




Result from restructuring / special items € million – 3 0 > 100

Result from companies consolidated at equity € million 6 6 – 3.4




Investments in fixed assets 1 € million 29 29 1.8


Total investments € million 29 29 1.8


Capital employed € million 1,461 1,423 2.7

Employees 4,602 4,401 4.61 Including intangible assets.

TABLE 10

Special products segment


The special products segment’s revenues rose from € 445 to

457 million during the first quarter 2016/2017. This was attrib-

utable to the continuing positive volume developments, al-

though overall sales revenues were weaker.

The segment’s operating result also extended its positive

trend from the second half of the previous fiscal year. Rising

volumes in all divisions and steady low raw material costs

more than offset lower sales revenues and led to an improved

operating result of € 46 (37) million.


The result from restructuring and special items in the amount

of € – 3 (0) million included expenses from the test phase and/

or trial operation of individual components at the wheat

starch plant in Zeitz.


Result from companies consolidated at equity totaling € 6

(6) million was primarily attributable to the share of earnings

from starch and bioethanol activities of Hungrana Group.


The special products segment invested € 29 (29) million. The

BENEO division’s capital spending was mainly on efficiency

improvements e.g. the production process at Orafti in Oreye,

Belgium. The starch business unit’s investments were mostly

for construction of the wheat starch plant in Zeitz and the

capacity expansion in Aschach, Austria. The Freiberger divi-

sion focused its investments on expanding the production ca-

pacity at the site in Westhoughton, Great Britain.


EU bioethanol volume balance

million m3 2016e 2015 2014

Opening balance 2.1 2.0 2.0

production 7.4 7.3 7.3

Import 0.7 0.7 0.7

Consumption – 7.6 – 7.7 – 7.8

Export – 0.2 – 0.2 – 0.2

Closing balance 2.4 2.1 2.0

Source: F. O. Licht. Data estimated of EU biothanol volume balance, June 2016.

TABLE 11

Price trend for European ethanol and gasoline

1 June 2013 to 31 May 2016€/m3

700

600

500

400

300

200

2013 2014 2015 2016

Source: Reuters Thomson Eikon.

D I AG R A M 03

200

300

400

500

600

700

800

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Premium gasoline Ethanol

CropEnergies segment


ETHANOL MARKET

Global bioethanol production rose 3.4 % to 117.5 million m³

in 2015. The increase was driven by higher fuel grade ethanol

production, which is up 3.9 % to 98.3 million m³. Global

bioethanol production in 2016 is expected to remain nearly

constant at 117.6 million m³. Of the total produced, 99.0 mil-

lion m³ is expected to be fuel grade ethanol.

Bioethanol production is expected to come in at 58.0 million m³

in the United States in 2016, and net exports are forecast to

jump 12.2 % to 3.0 million m³. One-month futures for ethanol

on the Chicago Board of Trade (CBOT) was 390 USD/m³ at

the end of May 2016, thus significantly below the level of

€ 330 million m³ at the beginning of March 2016. The sharp

rise in the price of oil helped boost prices. At the end of May

2016, American West Texas Intermediate (WTI) was trading at

almost 50 USD/barrel, over 40 % higher than at the beginning

of March 2016.

In sugar marketing year 2016/17, it is expected that Brazilian

bioethanol production will fall about 1.6 % to 30.0 million m³.

Despite domestic demand falling 4.6 % to 28.7 million m³, it

is expected that net exports will plunge 36.7 % to 1.0 million

m³. Last year during the same period inventories were

sharply lower. Brazilian ethanol prices have largely adjusted

to the US level, trading at the equivalent of about 400 €/m³ at

the end of May 2016. But with the recent renewed strength of

the Brazilian real, they are significantly below the 490 €/m³

level seen at the beginning of March 2016. The decline is at-

tributable to the beginning of the new cane sugar harvest,

which has progressed quite well to date.

In Europe, ethanol prices rose sharply during the reporting

period and at the end of May 2016, ethanol was trading at

about 560 €/m³ FOB Rotterdam, significantly higher than at

the beginning of March 2016, when the price was about

490 €/m³. This development is attributable to a seasonal in-

crease in demand. Speculation about reduced supply due to

the shutdown of several European bioethanol plants also con-

tributed to the rising prices.

In view of falling gasoline consumption and a lack of stimulus

from higher blending requirements, expectations are that the

EU’s fuel grade ethanol consumption will fall a further 2.8 %

to 5.1 (5.2) million m³ in 2016. This demand should be largely

covered by European production, which is expected to reach

about 5.2 (5.1) million m³.


ECOnOmIC REpORT

1 One bushel is equal to 27.261 kg.

2016 due to reduced supplies. In euro terms, the price rose

from 290 to 360 €/t. Rapeseed meal prices followed this trend

and rose from 180 €/t at the beginning of March 2016 to 240

€/t at the end of May 2016.

MANDATORY BLEND RATIOS IN BELGIUM

In Belgium, mandatory blend ratios are slated to rise from the

current 4 % by volume to 8.5 % by volume of bioethanol ef-

fective 1 January 2017. A notice regarding the introduction of

E10 is expected to be published in Belgium’s official journal

shortly.

MANDATORY BLEND RATIOS IN GREAT BRITAIN

It is especially important that the Renewable Transport Fuels

Obligation be enacted soon and that higher blend ethanol

(E10) be introduced in Great Britain, if the plant in Wilton is to

operate full-time. Regardless of the EU referendum, CropEner-

gies expects that Great Britain will raise the blend ratio tar-

gets for renewable energies in order to accelerate the decar-

bonization of the transport sector and protect local jobs and

investments.

RENEWABLE ENERGY DIRECTIVE, FUEL QUALITY DIREC-

TIVE, EUROPEAN CLIMATE AND ENERGY PACKAGE 2030

There were no material changes in the legal and political

general conditions associated with the renewable energy di-

rective, fuel quality directive, and the climate and energy

package 2030 during the reporting period. They remain as de-

scribed on pages 75 to 76 of the 2015/16 annual report (con-

solidated management report, business report, Crop Energies

segment).


REVENUES AND OPERATING

The CropEnergies segment’s revenues were down € 32 million

year-over-year to € 149 (181) million in the first quarter of

2016/17. In addition to lower ethanol sales revenues, the

Ensus volumes that were still included last year factored into

this development.

Operating profit on the other hand rose sharply, to € 19 (14)

million. Lower ethanol sales revenues were also offset by lower

raw material and energy costs. In addition, charges from the

scheduled maintenance at the factory in Wanze, Belgium, were

included during last year’s first quarter.

Fuel grade ethanol consumption in Germany is expected to

decline 6.3 % in 2016 to 1.4 million m³. This is caused by the

continuing slight decline in gasoline consumption, as well as

the current less-than-ambitious greenhouse gas reduction

target of only 3.5 % by weight. In fact however, preliminary

consumption data for January to March 2016 shows a 3.0 %

rise in volume to about 0.3 million m³ of fuel grade ethanol.

During the same period, gasoline volume rose 1.6 % to 4.2

million tonnes. The volume of E10 in the gasoline market fell

to 0.6 million tonnes, which is equivalent to a market share

of 13.1 (14.6) %.

GRAIN MARKET

In its 10 June 2016 estimate, the US Department of Agricul-

ture (USDA) forecast that world grain record production (ex-

cluding rice) will reach 2,034 million tonnes in 2016/17

(+ 2.3 %). Grain consumption is expected to come in at 2,022

million tonnes (+ 2.9 %), while inventories are expected to rise

further to 497 (486) million tonnes.

The EU Commission is forecasting that the EU’s grain harvest

will rise about 0.8 % to € 313 million for the 2016/17 grain

marketing year. The volume of grain harvested is expected to

remain above average, once again significantly exceeding

consumption of 284 million tonnes. At 61 %, the lion’s share

of grain consumption is attributable to feeding animals. The

EU continues to be a major contributor to world market grain

supplies with net exports of 27 (26) million tonnes. It is ex-

pected that only 12 million tonnes of grain will be used to pro-

duce bioethanol, and about one-third of this volume will again

flow back to the market as food and animal feed thus reduc-

ing soya imports from South America.

European wheat prices on the Euronext in Paris slipped from

about 145 €/t at the beginning of March 2016 to about 170 €/t

at the end of May 2016. This is mainly due to stronger export

demand and a relatively high premium for the new 2016/17

wheat harvest.

The USDA is forecasting another record harvest of 324 (313)

million tonnes of soybeans for the 2016/17 marketing year.

However, due to the significant rise in global consumption to

328 (318) million tonnes, global inventories are expected to

shrink to 66 (72) million tonnes. One-month futures for soy-

beans on the CBOT rose from 8.50 USD/bushel 1 at the begin-

ning of March 2016 to about 11 USD/bushel at the end of May


Business performance – CropEnergies segment

1st quarter

2016/17 2015/16 + / – in %

Revenues € million 149 181 – 17.6


Depreciation on fixed assets and intangible assets € million – 9 – 9 1.2


Result from restructuring / special items € million – 3 – 5 – 26.0

Result from companies consolidated at equity € million 0 0 –








Capital employed € million 500 519 – 3.6

Employees 405 429 – 5.71 Including intangible assets.

TABLE 12


The result from restructuring and special items of € – 3 (– 5)

million was, as already in the previous year, primarily related

to the fixed costs of the temporarily closed bioethanol factory

in Wilton, Great Britain.


The segment invested in the first quarter € 3 (8) million,

mainly to broaden its product portfolio and to improve pro-

duction efficiencies and logistics processes at its Belgian and

German sites.


ECOnOmIC REpORT

Fruit segment


TARGET MARKETS

While EU markets remain a challenge for fruit preparations,

non-European markets – especially Asia, Latin America, North

Africa and the Middle East – are reporting strong growth. In

saturated markets such as the EU and the United States, there

is a noticeable increase in consumption of yogurt without fruit

preparations. The ice cream, food services and baked goods

consumer markets should be growth markets in the medium

to long-term. The Asian markets, especially China, are show-

ing strong growth due to numerous product developments.

The market environment in the Latin American region is also

robust.

Over the past few weeks, apple juice concentrate prices in

Europe have stabilized thanks to strong demand for the

transition period from summer to fall 2016, combined with

supply shortages. The increased customer demand indicates

that most bottlers are likely experiencing shortages and will

barely have enough product to last until the beginning of the

new 2016 harvest. Due to reduced volumes in the world’s

largest market, North America, Chinese prices are under pres-

sure. The ability of Europe to compete in the North American

market during the new processing season will be largely de-

termined by the rate of exchange between the US dollar and

the euro.

Berry juice concentrates for the major fruits from the 2015

harvest are completely sold out. There are currently no note-

worthy marketing or price risks. The new berry juice concen-

trates season began in the second week of June as work

started on processing strawberry juice concentrates. Volumes

were somewhat low.

RAW MATERIALS MARKETS

In the fruit preparations division, harvested volumes at the

beginning of the year in Mexico, Morocco and Egypt for the

primary fruit strawberries were excellent, although prices

varied from region to region.

In general, it is expected that relevant fruit prices will decline,

since harvests are expected to be excellent and the weak

global economy will likely exert pressure on the markets.

The US dollar to euro exchange rate has stabilized over the

past few months and will therefore play a less important role

this year.

The dry spell during the summer months in 2015 in Europe led

to lower quality and volumes for berry fruits, which impacted

the fruit juice concentrates division. Due to a scarcity of raw

materials in spring 2015 berry prices rose continually, both in

the processing area and for fresh fruits.

Toward the end of the 2015 apple processing season, apple

prices fell sharply, a trend that continued in spring 2016. Strict

monitoring of the trade embargo that prohibits the export of

Polish apples to Russia caused significant price pressure in the

European market.

A frost in May 2016 in the Steiermark, Austria, Western Hun-

gary and Slovenia regions will probably significantly reduce

the availability of raw materials in these regions; however, an

exact estimate cannot be made until completion of the June

fruit assessment.

Currently apple prices are about half what they were during

the 2015 processing season.



The fruit segment’s revenues also rose during the reporting

period, to € 308 (291) million. In addition to a recovery in

sales revenues for fruit juice concentrates, the steady positive

volume trend for fruit juice preparations were contributing

factors.

The operating result also rose, to € 23 (19) million. Margins for

fruit juice concentrates recovered due to the positive sales

revenue developments. For fruit juice concentrates, lower

sales revenues were more than offset by a corresponding

slight decline in costs and steadily growing volume.


Business performance – Fruit segment

1st quarter

2016/17 2015/16 + / – in %

Revenues € million 308 291 5.8




Result from restructuring / special items € million 0 0 – 100.0

Result from companies consolidated at equity € million 0 0 –







Shares in companies consolidated at equity € million 0 0 –

Capital employed € million 828 816 1.5


TABLE 13


Investments in fixed assets in the first quarter totaled € 3 (4)

million. The fruit preparations division invested and carried

out replacement investments in capacity expansions, which

included among other things the installation of another pro-

duction line at the new fruit preparations plant in the United

States. The fruit juice concentrates division prioritized re-

placement investments as well as investments deriving from

market requirements.


ECOnOmIC REpORT

EVENTS AFTER THE BALANCE SHEET DATE

There have been no significant events since 31 May 2016 that

would have a material impact on the company’s assets, finan-

cial position or results.

RISKS AND OPPORTUNITIES As an international company, Südzucker Group is exposed to

macroeconomic, industry-specific and business opportunities

and risks. Information about the group’s risk management

system, risks and potential opportunities is provided in the

2015/16 annual report under “Risk management” on pages 86

to 97, and in the “Business report” as part of segment reporting.

The vote by the majority of the British population for Great

Britain to exit the European Union (Brexit) harbors additional

risks for Südzucker. These relate to sugar volumes associated

with the distributor Südzucker United Kingdom Limited as

well as production and sales at Freiberger and PortionPack

Europe in Great Britain. We are currently unable to assess the

indirect consequences of future economic developments, ei-

ther in Great Britain or the EU, nor the risks related to

amended legal and political general conditions.

Taking into account all known facts, we have not identified

any risks, either individually or as a whole, that threaten the

continued existence of Südzucker Group.

OUTLOOK

Group performance

We continue to expect group consolidated revenues of € 6.4 to

6.6 (2015/16: 6.4) billion in fiscal 2016/17. We expect the

sugar segment’s revenues to remain the same as last year.

The special products segment’s revenues are expected to be

slightly higher. We expect the CropEnergies segment’s reve-

nues to range between € 565 and 625 (2015/16: 658) million

and the fruit segment’s to rise significantly.

We expect the operating result to increase further. It should

range between € 250 and 350 (2015/16: 241) million, driven

mainly by better sugar segment results. After the records set

in 2015/16, the company expects a significant retreat in the

special products and CropEnergies segments. We expect a

year-over-year increase in the fruit segment.

We expect capital employed to rise slightly. Based on the in-

creased operating result, we expect ROCE to improve

(2015/16: 4.2 %).

Total investments for fiscal 2016/17 are expected to be € 300

to 350 (2015/16: 371) million.

The operating result for the second quarter of the current

2016/17 fiscal year is expected to be significantly higher than

last year at the same time.

16INTERIM MANAGEMENT REPORTEVEnTS AFTER THE BAL AnCE SHEET DATE | RISKS AnD OppORTUnITIES | OUTLOOK

Sugar segment

We are expecting the sugar segment’s revenues to stabilize.

Average sugar sales revenues for the full fiscal year should be

higher than last year. This should offset the missing revenue

contributions resulting from cancellation of the joint sales

venture with Mauritius and termination of raw sugar refining

at the site in Marseille, France.

Following an operating loss in fiscal 2015/16, we are expect-

ing a positive operating result for the current fiscal year be-

cause of the anticipated higher sales revenues that will be

generated over the course of the year. Here we also expect a

contribution from higher loading of the sugar factories during

the 2016 campaign in the second half of the fiscal year. Cost

saving programs will continue to be executed as planned.

Capital employed is expected to remain stable, and after the

operating loss last year, ROCE is expected to be positive again

(2015/16: – 2.6 %).


We expect the special products segment’s revenues to rise

slightly. Our forecast predicts a significant decline in the oper-

ating result compared to last year’s very high level. This takes

into consideration among other things the expected decline in

ethanol average sales revenues during the year, as well as

charges from the startup of the new starch plant in Zeitz,

which will start operations in the second quarter of 2016/17.

ROCE (2015/16: 11.9 %) will go down as capital employed rises

slightly and the operating result contribution remains low.


CropEnergies firmed up its revenue forecast to a range of

€ 565 to 625 (2015/16: 658) million. The bioethanol market

price situation has improved considerably since May 2016;

nevertheless, wide fluctuations are still expected. Assuming

average bioethanol prices that are lower than last year’s ex-

cellent levels, CropEnergies now expects an operating result

in a range from € 50 to 80 (2015/16: 87) million in fiscal

2016/17. In addition, a result of restructuring and special

items of up to € – 16 million is expected.

On 17 May 2016, CropEnergies announced that it would re-

start the bioethanol plant in Wilton, Great Britain, in July

2016. The factory has been shut down since February 2015.

How long the plant operates and the result it generates will

also impact revenues and earnings. However, the correspond-

ing impact on the forecast has not yet been considered.

Capital employed will remain steady and the operating result

will decline, so ROCE (2015/16: 17.7 %) is expected to drop.

Fruit segment

For the fruit segment, we expect revenues to rise sharply and

a higher operating result than last year. We expect the fruit

preparations division’s revenues to increase due to rising vol-

umes. The excellent supply situation for fruits will result in a

stable operating result development. In the fruit juice concen-

trates division, higher revenues will be driven by the expected

sales revenue increase, which will also generate a higher oper-

ating result.

Capital employed is expected to rise moderately, and the oper-

ating result is also expected to increase, so ROCE (2015/16:

7.5 %) is expected to be higher than last year.


OUTLOOK

1st quarter

€ million 2016/17 2015/16 + / – in %

Income statement

Revenues 1,608.2 1,628.8 – 1.3

Change in work in progress and finished goods inventories and internal costs capitalized – 323.4 – 379.1 – 14.7

Other operating income 19.0 15.8 20.3

Cost of materials – 775.9 – 759.9 2.1

Personnel expenses – 196.2 – 203.0 – 3.3

Depreciation – 50.8 – 51.0 – 0.4

Other operating expenses – 177.7 – 200.4 – 11.3

Result from companies consolidated at equity 11.0 9.3 18.3

Result from operations 114.2 60.5 88.8

Financial income 12.7 9.4 35.1

Financial expense – 24.9 – 13.9 79.1

Earnings before income taxes 102.0 56.0 82.1

Taxes on income – 25.3 – 15.2 66.4

Net earnings 76.7 40.8 88.0

of which attributable to Südzucker AG shareholders 54.1 20.8 > 100

of which attributable to hybrid capital 3.4 6.5 – 47.7

of which attributable to other non-controlling interests 19.2 13.5 42.2

Earnings per share (€) 0.26 0.10 > 100

COMPREHENSIVE INCOME


18INTERIM CONSOLIDATED FINANCIAL STATEMENTSCOmPRehenSive inCOme

1st quarter

€ million 2016/17 2015/16 + / – in %

Statement of other comprehensive income

Net earnings 76.7 40.8 88.0

market value of hedging instruments (cash flow hedge) after deferred taxes 1.6 – 3.5 –

market value of securities (available for sale) after deferred taxes 0.0 – 0.1 – 100.0

exchange differences on net investments in foreign operations after deferred taxes – 0.3 – 0.2 50.0

Foreign currency translation differences – 2.3 20.0 –

Share from companies consolidated at equity – 5.4 3.3 –

Income and expenses to be recognized in the income statement in the future – 6.4 19.5 –

Remeasurement of defined benefit pension plans and similar obligations after deferred taxes 0.0 0.0 –

Income and expenses to not be recognized in the income statement in the future – 0.0 – 0.0 –

Other comprehensive income / loss – 6.4 19.5 –

Comprehensive income 70.3 60.3 16.6

of which attributable to Südzucker AG shareholders 46.5 36.4 27.7

of which attributable to hybrid capital 3.4 6.5 – 47.7

of which attributable to other non-controlling interests 20.4 17.4 17.2

TABLE 14

19INTERIM CONSOLIDATED FINANCIAL STATEMENTS

COmPRehenSive inCOme

1st quarter

€ million 2016/17 2015/16 + / – in %

net earnings 76.7 40.8 88.0

Depreciation and amortization of intangible assets, fixed assets and other investments 50.8 51.0 – 0.4

Decrease (–) / increase (+) in non-current provisions and deferred tax liabilities and increase (–) / decrease (+) in deferred tax assets 5.5 6.5 – 15.4

Other income (–) / expenses (+) not affecting cash – 7.7 3.2 –

Cash flow 125.3 101.5 23.4

Gain (–) / Loss (+) on disposal of items included in non-current assets and of securities 0.1 0.8 – 87.5

Decrease (–) / increase (+) in current provisions – 4.3 – 8.4 – 48.8

increase (–) / Decrease (+) in inventories, receivables and other current assets 166.0 244.3 – 32.1

Decrease (–) / increase (+) in liabilities (excluding financial liabilities) – 414.5 – 506.5 – 18.2

Increase (–) / Decrease (+) in working capital – 252.8 – 270.6 – 6.6

I. Net cash flow from operating activities – 127.4 – 168.3 – 24.3

investments in fixed assets and intangible assets – 59.1 – 72.6 – 18.6

investments in financial assets – 0.8 0.0 –

Investments – 59.9 – 72.6 – 17.5

Cash received on disinvestments 6.5 0.0 –

Cash received on disposal of non-current assets 0.5 0.6 – 16.7

Cash paid (–) / received (+) for the purchase / sale of other securities 0.1 – 0.3 –

II. Cash flow from investing activities – 52.8 – 72.3 – 27.0

CASH FLOW STATEMENT


20INTERIM CONSOLIDATED FINANCIAL STATEMENTSCASh FLOw STATemenT

1st quarter

€ million 2016/17 2015/16 + / – in %

Dividends paid – 5.0 0.0 –

Repayment (–) / issuance (+) of commercial papers 94.0 135.0 – 30.4

Other repayment (–) / refund (+) of financial liabilities 90.1 45.5 98.0

Repayment (–) / Refund (+) of financial liabilities 184.1 180.5 2.0

III. Cash flow from financing activities 179.1 180.5 – 0.8

Change in cash and cash equivalent (total of I., II. and III.) – 1.1 – 60.1 – 98.2

Change in cash and cash equivalents

due to exchange rate changes – 1.3 2.2 –

due to changes in entities included in consolidation 0.0 0.0 –

Decrease (–) / Increase (+) in cash and cash equivalents – 2.4 – 57.9 – 95.9

Cash and cash equivalents at the beginning of the period 459.4 535.7 – 14.2

Cash and cash equivalents at the end of the period 457.0 477.8 – 4.4

Dividends received from companies consolidated at equity / other participations investments 2.3 15.6 – 85.3

interest receipts 2.5 8.2 – 69.5

interest payments – 20.5 – 21.5 – 4.7

income taxes paid – 21.2 – 22.9 – 7.4

TABLE 15


CASh FLOw STATemenT

€ million 31 May 2016 31 May 2015 + / – in % 29 February 2016 + / – in %

Assets

intangible assets 1,186.1 1,184.5 0.1 1,188.9 – 0.2

Fixed assets 2,834.4 2,824.7 0.3 2,824.7 0.3

Shares in companies consolidated at equity 336.7 317.2 6.1 333.3 1.0

Other investments 22.6 21.9 3.2 21.8 3.7

Securities 18.7 20.1 – 7.0 18.6 0.5

Other assets 12.7 15.8 – 19.6 13.6 – 6.6

Deferred tax assets 127.2 133.8 – 4.9 133.2 – 4.5

Non-current assets 4,538.4 4,518.0 0.5 4,534.1 0.1

inventories 1,614.3 1,776.6 – 9.1 1,897.2 – 14.9

Trade receivables 941.1 998.3 – 5.7 782.8 20.2

Other assets 245.6 255.4 – 3.8 298.2 – 17.6

Current tax receivables 40.9 45.1 – 9.3 36.0 13.6

Securities 125.7 125.7 0.0 125.7 0.0

Cash and cash equivalents 457.0 477.8 – 4.4 459.4 – 0.5

Current assets 3,424.6 3,678.9 – 6.9 3,599.3 – 4.9

Total assets 7,963.0 8,196.9 – 2.9 8,133.4 – 2.1

BALANCE SHEET

31 May 2016

22INTERIM CONSOLIDATED FINANCIAL STATEMENTSBAL AnCe SheeT

€ million 31 May 2016 31 May 2015 + / – in % 29 February 2016 + / – in %

Liabilities and shareholders’ equity

equity attributable to shareholders of Südzucker AG 3,204.9 3,161.3 1.4 3,158.4 1.5

hybrid capital 653.1 683.9 – 4.5 653.1 0.0

Other non-controlling interests 681.7 669.5 1.8 661.4 3.1

Total equity 4,539.7 4,514.7 0.6 4,472.9 1.5

Provisions for pensions and similar obligations 799.6 823.7 – 2.9 797.9 0.2

Other provisions 98.9 109.9 – 10.0 103.0 – 4.0

Financial liabilities 715.7 771.1 – 7.2 733.8 – 2.5

Other liabilities 15.9 20.4 – 22.1 15.5 2.6

Tax liabilities 98.9 79.3 24.7 98.6 0.3

Deferred tax liabilities 62.7 83.0 – 24.5 62.0 1.1

Non-current liabilities 1,791.7 1,887.4 – 5.1 1,810.8 – 1.1

Other provisions 204.6 222.0 – 7.8 208.7 – 2.0

Financial liabilities 627.3 681.2 – 7.9 424.6 47.7

Trade payables 402.7 466.6 – 13.7 801.1 – 49.7

Other liabilities 338.0 335.3 0.8 354.7 – 4.7

Current tax liabilities 59.0 89.7 – 34.2 60.6 – 2.6

Current liabilities 1,631.6 1,794.8 – 9.1 1,849.7 – 11.8

Total liabilities and equity 7,963.0 8,196.9 – 2.9 8,133.4 – 2.1

net financial debt 741.6 828.7 – 10.5 554.7 33.7

equity ratio 57.0 55.1 55.0

net financial debt as % of equity (gearing) 16.3 18.4 12.4

TABLE 16


BAL AnCe SheeT

Other equity accounts

€ million

Outstanding subscribed capital

Nominal value own shares Capital reserve Other reserves

Market value of hedging

instruments (cash flow

hedge)

Market value of securities

(available for sale)

Exchange differences on

net investments in foreign

operations

Accumulated exchange

differcences

Share from companies

consolidated at equity

Equity of Südzucker

shareholders Hybrid capital

Other non-controlling

interests Total equity

1 March 2015 204.2 0.0 1,614.9 1,330.7 – 1.5 2.2 – 10.4 – 19.5 4.1 3,124.7 683.9 652.2 4,460.8

net earnings 20.8 20.8 6.5 13.5 40.8

Other comprehensive income / loss before taxes 0.0 – 3.1 – 0.1 – 0.2 13.7 4.1 14.4 3.3 17.7

Taxes on other comprehensive income 0.0 1.2 0.0 0.0 1.2 0.6 1.8

Comprehensive income 20.8 – 1.9 – 0.1 – 0.2 13.7 4.1 36.4 6.5 17.4 60.3

Distributions 0.0 0.0 – 6.5 0.0 – 6.5

Capital increase / decrease 0.0 0.0 0.0 0.0 0.0 0.0

Buyback of hybrid capital 0.0 0.0 0.0 0.0

Other changes 0.2 0.2 – 0.1 0.1

31 May 2015 204.2 0.0 1,614.9 1,351.7 – 3.4 2.1 – 10.6 – 5.8 8.2 3,161.3 683.9 669.5 4,514.7

1 March 2016 204.2 0.0 1,614.9 1,424.2 – 5.1 1.6 – 14.2 – 67.4 0.2 3,158.4 653.1 661.4 4,472.9

net earnings 54.1 54.1 3.4 19.2 76.7

Other comprehensive income / loss before taxes 0.0 – 0.4 – 0.1 – 0.4 – 2.0 – 5.1 – 8.0 1.9 – 6.1

Taxes on other comprehensive income 0.0 0.3 0.0 0.1 0.4 – 0.7 – 0.3

Comprehensive income 54.1 – 0.1 – 0.1 – 0.3 – 2.0 – 5.1 46.5 3.4 20.4 70.3

Distributions 0.0 0.0 – 3.4 0.0 – 3.4



Other changes 0.0 0.0 – 0.1 – 0.1

31 May 2016 204.2 0.0 1,614.9 1,478.3 – 5.2 1.5 – 14.5 – 69.4 – 4.9 3,204.9 653.1 681.7 4,539.7

TABLE 17

CHANGES IN SHAREHOLDERS’ EQUITY


24INTERIM CONSOLIDATED FINANCIAL STATEMENTSChAnGeS in ShARehOLDeRS’ equiT y

Other equity accounts

€ million

Outstanding subscribed capital

Nominal value own shares Capital reserve Other reserves

Market value of hedging

instruments (cash flow

hedge)

Market value of securities

(available for sale)

Exchange differences on

net investments in foreign

operations

Accumulated exchange

differcences

Share from companies

consolidated at equity

Equity of Südzucker

shareholders Hybrid capital

Other non-controlling

interests Total equity

1 March 2015 204.2 0.0 1,614.9 1,330.7 – 1.5 2.2 – 10.4 – 19.5 4.1 3,124.7 683.9 652.2 4,460.8

net earnings 20.8 20.8 6.5 13.5 40.8

Other comprehensive income / loss before taxes 0.0 – 3.1 – 0.1 – 0.2 13.7 4.1 14.4 3.3 17.7

Taxes on other comprehensive income 0.0 1.2 0.0 0.0 1.2 0.6 1.8

Comprehensive income 20.8 – 1.9 – 0.1 – 0.2 13.7 4.1 36.4 6.5 17.4 60.3

Distributions 0.0 0.0 – 6.5 0.0 – 6.5



Other changes 0.2 0.2 – 0.1 0.1

31 May 2015 204.2 0.0 1,614.9 1,351.7 – 3.4 2.1 – 10.6 – 5.8 8.2 3,161.3 683.9 669.5 4,514.7

1 March 2016 204.2 0.0 1,614.9 1,424.2 – 5.1 1.6 – 14.2 – 67.4 0.2 3,158.4 653.1 661.4 4,472.9

net earnings 54.1 54.1 3.4 19.2 76.7

Other comprehensive income / loss before taxes 0.0 – 0.4 – 0.1 – 0.4 – 2.0 – 5.1 – 8.0 1.9 – 6.1

Taxes on other comprehensive income 0.0 0.3 0.0 0.1 0.4 – 0.7 – 0.3

Comprehensive income 54.1 – 0.1 – 0.1 – 0.3 – 2.0 – 5.1 46.5 3.4 20.4 70.3

Distributions 0.0 0.0 – 3.4 0.0 – 3.4



Other changes 0.0 0.0 – 0.1 – 0.1

31 May 2016 204.2 0.0 1,614.9 1,478.3 – 5.2 1.5 – 14.5 – 69.4 – 4.9 3,204.9 653.1 681.7 4,539.7

TABLE 17


ChAnGeS in ShARehOLDeRS’ equiT y

1st quarter

€ million 2016/17 2015/16 + / – in %

Südzucker Group

Gross revenues 1,699.4 1,715.7 – 1.0

Consolidation – 91.2 – 86.9 4.9

Revenues 1,608.2 1,628.8 – 1.3

EBITDA 159.2 106.8 49.1

eBiTDA margin 9.9 % 6.6 %

Depreciation – 49.3 – 49.9 – 1.2

Operating result 109.9 56.9 93.1

Operating margin 6.8 % 3.5 %

Result from restructuring / special items – 6.7 – 5.7 17.5



investments in fixed assets 1 59.1 72.6 – 18.6

investments in financial assets / acquisitions 0.8 0.0 –

Total investments 59.9 72.6 – 17.5

Shares in companies consolidated at equity 336.7 317.2 6.1

Capital employed 6,028.3 6,172.6 – 2.3

Number of employees 17,922 18,298 – 2.1

Sugar segment

Gross revenues 749.0 767.8 – 2.4

Consolidation – 53.9 – 55.4 – 2.7

Revenues 695.1 712.4 – 2.4

EBITDA 35.1 0.4 > 100


Depreciation – 13.8 – 13.4 3.0

Operating result 21.3 – 13.0 –

Operating margin 3.1 % – 1.8 %

Result from restructuring / special items – 0.0 0.0 –


Result from operations 26.7 – 9.5 –





Capital employed 3,238.8 3,414.7 – 5.2

Number of employees 7,013 7,215 – 2.81 including intangible assets.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

Segment report

26NOTES TO THE INTERIM FINANCIAL STATEMENTS

1st quarter

€ million 2016/17 2015/16 + / – in %


Gross revenues 475.1 459.2 3.5


Revenues 456.5 444.8 2.6

EBITDA 64.3 56.4 14.0


Depreciation – 18.3 – 19.2 – 4.7



Result from restructuring / special items – 3.0 – 0.5 > 100

Result from companies consolidated at equity 5.6 5.8 – 3.4


investments in fixed assets 1 29.0 28.5 1.8


Total investments 29.0 28.5 1.8


Capital employed 1,461.4 1,423.1 2.7

Number of employees 4,602 4,401 4.6


Gross revenues 167.5 197.8 – 15.3


Revenues 149.0 180.8 – 17.6

EBITDA 28.1 22.3 26.0


Depreciation – 8.7 – 8.6 1.2



Result from restructuring / special items – 3.7 – 5.0 – 26.0

Result from companies consolidated at equity 0.0 0.0 –






Capital employed 499.9 518.8 – 3.6

Number of employees 405 429 – 5.71 including intangible assets.


1st quarter

€ million 2016/17 2015/16 + / – in %

Fruit segment

Gross revenues 307.8 290.9 5.8


Revenues 307.6 290.8 5.8

EBITDA 31.7 27.7 14.4


Depreciation – 8.5 – 8.7 – 2.3



Result from restructuring / special items 0.0 – 0.2 – 100.0

Result from companies consolidated at equity 0.0 0.0 –





Shares in companies consolidated at equity 0.0 0.0 –

Capital employed 828.2 816.0 1.5

Number of employees 5,903 6,253 – 5.61 including intangible assets.

TABLE 18

(1) Principles of preparation of the interim consolidated financial statements

Südzucker Group’s interim financial statements as of 31 May 2016 were prepared in accordance with the rules on interim

financial reporting pursuant to IAS 34 (Interim Financial Reporting), in conformance with the International Financial Reporting

Standards (IFRS) published by the International Accounting Standards Board (IASB). Südzucker AG’s interim consolidated

financial statements dated 31 May 2016 have been condensed as per IAS 34. The consolidated interim statements dated

31 May 2016 were not subject to any inspection or audit review. Südzucker AG’s board of directors prepared these interim

financial statements on 27 June 2016.

As presented in the notes to the financial statements of the 2015/16 annual report under item (1) “Principles of preparation of

the consolidated financial statements” on pages 115 to 118, there were new and / or amended standards and interpretations

that came into effect and were applied for the first time in preparing these interim financial statements.

A discount rate of 1.95 % was applied to material plans on 31 May 2016 unchanged as of 29 February 2016 to calculate

provisions for pensions and similar obligations. The discount rate applied on 31 May 2015 was 1.75 %.

Income taxes were calculated on the basis of local corporate income tax rates in consideration of the income tax forecast for the

entire fiscal year. Material special items are fully recognized neglecting the determination of the annual tax rate in the respective

quarter in which they occur.


Sugar is primarily produced from September to January. This is why depreciation on systems used for the campaign is predom-

inantly applied during this period. Any material, personnel and other operating expenses incurred in preparation for production

prior to the next sugar campaign are capitalized during the fiscal year via changes in inventories and recognized on the balance

sheet under inventories as work in progress. These are then taken into account during subsequent sugar production when

determining the production costs of the sugar produced and thus recognized under inventories as part of finished goods.

The same accounting and valuation methods as those used to prepare the group annual financial statements dated 29 Febru-

ary 2016 were applied for the remainder of this interim report. The relevant explanatory notes under item 5, “Accounting

policies”, pages 124 to 129 of the 2015/16 annual report, thus also apply here.

Südzucker Group’s 2015/16 annual report can be viewed or downloaded at www.suedzucker.de/de/Investor-Relations/ and / or

www.suedzucker.de/en/Investor-Relations/.

(2) Companies included in consolidation

As of the end of the first quarter of 2016/17, the scope of consolidation included 152 companies in addition to Südzucker AG

(end of fiscal 2015/16: 153 companies). The Belgian Herentals site owned by PortionPack has now been sold. It was put up for

sale at the end of the 2015/16 fiscal year. The associated cash inflow is reported in the cash flow statement under proceeds from

divestments. In total, 16 companies (end of fiscal 2015/16: 16 companies) were consolidated at equity.

In June 2016, Südzucker Verwaltungs GmbH, a 100 % subsidiary of Südzucker AG, signed an agreement to acquire 100 % of the

shares of the agricultural cooperative Terra eG. Terra eG will be fully consolidated into the consolidated financial statements as

of the second quarter of 2016/17.

Terra eG is headquartered in Sömmerda, Thuringia, and operates about 2,700 ha of agricultural land in the districts of Brotterode,

Sömmerda, Straussfurt and Weissensee (Erfurt Basin).

The acquisition of the agricultural cooperative is expected to generate synergies and offset continuous area losses, especially

in western Germany. It is also expected to generate economies of scale, and thereby sustainably safeguard and improve the

structure of and result from the agricultural division.

The purchase price of about € 30 million is attributable almost entirely to the purchased agricultural lands, farmstead including

large storage facilities as well as train of machines. The market values for the individual asset and liability items for Terra eG at

the time of acquisition are currently being calculated.

(3) Earnings per share

The calculation of earnings per share according to IAS 33 from 1 March to 31 May 2016 was based on a time-weighted

average of 204.2 million shares outstanding. Earnings per share came in at € 0.26 (0.10) for the first quarter and were not

diluted.


€ million 31 May 2016 2015

Raw materials and supplies 394.6 391.7

work in progress and finished goods

Sugar segment 804.3 964.9

Special products segment 165.4 178.7

Cropenergies segment 32.1 29.2

Fruit segment 131.5 106.0

Total of work in progress and finished goods 1,133.3 1,278.8

merchandise 86.4 106.1

1,614.3 1,776.6

TABLE 19

€ million

2016

Remaining term

2015

Remaining term

31 May to 1 year over 1 year to 1 year over 1 year

Trade receivables 941.1 941.1 0.0 998.3 998.3 0.0

Receivables due from the eu 0.2 0.2 0.0 9.6 9.6 0.0

Positive market value derivatives 3.7 3.7 0.0 2.7 2.7 0.0

Remaining financial assets 86.1 73.4 12.7 78.6 62.8 15.8

Other taxes recoverable 95.1 95.1 0.0 95.3 95.3 0.0

Remaining non-financial assets 73.2 73.2 0.0 85.0 85.0 0.0

Other assets 258.3 245.6 12.7 271.2 255.4 15.8

TABLE 20

(4) Inventories

The carrying amount of inventories was lower than the year prior at € 1,614.3 (1,776.1) million, mainly due to lower stock

quantities in the sugar segment.

(5) Trade receivables and other assets

Faces with declining revenues, trade receivables were lower than the year prior, especially in the sugar segment, and came in at

€ 941.1 (998.3) million. Other financial assets of € 86.1 (78.6) million include mainly receivables from non-consolidated

companies, shareholdings and employees and other third parties. Non-financial assets of € 73.2 (85.0) million are largely related

to advances made and accruals/deferrals.


€ million 31 May 2016 Short-term Long-term 2015 Short-term Long-term

Personnel-related provisions 84.4 20.7 63.7 105.1 36.4 68.7

Provisions for litigation risks and risk precautions 154.5 145.1 9.4 123.3 114.9

8.4

Other provisions 64.6 38.8 25.8 103.5 70.7 32.8

Total 303.5 204.6 98.9 331.9 222.0 109.9

TABLE 21

€ million

2016

Remaining term

2015

Remaining term

31 May to 1 year over 1 year to 1 year over 1 year

Liabilities to beet growers 11.6 11.6 0.0 34.2 34.2 0.0

Liabilities to other trade payables 391.1 391.1 0.0 432.4 432.4 0.0

Trade payables 402.7 402.7 0.0 466.6 466.6 0.0

Liabilities for production levy 0.0 0.0 0.0 0.0 0.0 0.0

negative market value derivatives 18.4 18.4 0.0 19.2 19.2 0.0

Remaining financial liabilities 148.0 133.1 14.9 157.3 137.7 19.6

Liabilities for personnel expenses 100.3 99.3 1.0 100.5 99.7 0.8

Liabilities for other taxes and social security contributions 66.9 66.9 0.0 59.9 59.9 0.0

Remaining non financial liabilities 20.3 20.3 0.0 18.8 18.8 0.0

Other liabilities 353.9 338.0 15.9 355.7 335.3 20.4

TABLE 22

(6) Other provisions and accruals

Personnel-related provisions in the amount of € 84.4 (105.1) million primarily represent non-current provisions for long-service

awards, provisions for part-time early retirement and largely short-term provisions for termination benefit plans.

The provisions for litigation risks and risk precautions of € 154.5 (123.3) million include provisions for market regulation

procedures, operational contract procedures and antitrust risks (fines and damage claims from customers).

The other provisions in the amount of € 64.6 (103.5) million mainly represent non-current provisions for restoration obligations,

together with current and non-current provisions for recultivation and environmental obligations largely related to sugar

production. Provisions for the temporary closure of the bioethanol factory at the Wilton, Great Britain site are also included.

(7) Trade payables and other liabilities


€ million Remaining term Remaining term

31 May 2016 to 1 year over 1 year 2015 to 1 year over 1 year

Bonds 656.4 257.6 398.8 771.9 361.9 410.0

of which convertible 0.0 0.0 0.0 0.0 0.0 0.0

Liabilities to banks 683.8 369.4 314.4 680.2 319.2 361.0

Liabilities from finance leasing 2.8 0.3 2.5 0.2 0.1 0.1

Financial liabilities 1,343.0 627.3 715.7 1,452.3 681.2 771.1

Securities (non-current assets) – 18.7 – 20.1

Securities (current assets) – 125.7 – 125.7

Cash and cash equivalents – 457.0 – 477.8

Investments in securities and cash and cash equivalents – 601.4 – 623.6

Net financial debt 741.6 828.7

TABLE 23

Trade payables fell to € 402.7 (466.6) million. The remaining financial liabilities fell to € 148.0 (157.3) million and include

interest payment obligations. Liabilities for personnel expenses totaling € 100.3 (100.5) million mainly represent commitments

for bonuses, premiums, vacation and overtime pay. Other non-financial liabilities totaling € 20.3 (18.8) million mainly include

accrued and deferred items and advances received on orders.

(8) Financial liabilities, securities and cash and cash equivalents (net financial debt)

Financial liabilities fell € 109.3 million to € 1,343.0 (1,452.3) million despite a smaller portfolio of securities, cash and cash

equivalents totaling € 601.4 (623.6) million. As a result, net financial debt was down € 87.1 million to € 741.6 (828.7) million. An

impairment charge of € 4.7 million was created for a short-term financial asset at AGRANA Fruit in Ukraine.

HYBRID BOND

Information on the hybrid bond is provided in the notes to the financial statements on page 158 of the 2015/16 annual report

under item (30) “Financial liabilities, securities and cash and cash equivalents (net financial debt)”. The subordinated bond has

a variable coupon of the 3 month Euribor interest rate plus 3.10 % p. a. effective June 30, 2015. The interest rate was set at

2.858 % p. a. for the period from 31 March 2016 to 30 June 2016 exclusively (91 days). For the period from 30 June 2016 to 30

September 2016 exclusively (92 days), an interest rate of 2.819 % p. a. was applied.

Südzucker’s current ratings are Baa2/P-2 (Moody’s) with a stable outlook and BBB-/A-3 (Standard & Poor’s) with a positive

outlook. The hybrid bond ratings are Ba3 (Moody’s) and B+ (Standard & Poor’s).


31 May

IAS 39 measurement category

2016 2015

€ million Carrying amount Fair value Carrying amount Fair value

BondsFinancial liabilities measured at armotised cost 656.4 684.5 771.9 808.9

Liabilities to banksFinancial liabilities measured at armotised cost 683.8 695.1 680.2 688.9

Liabilities from finance leasing n/a 2.8 2.8 0.2 0.2

Gross financial liabilities 1,343.0 1,382.4 1,452.3 1,498.0

TABLE 24

(9) Additional disclosures on financial instruments

CARRYING AMOUNTS AND FAIR VALUES

The following table shows the changed carrying amounts and applicable fair values of Südzucker’s gross financial liabilities.

According to the definition of IFRS 13 (Fair Value Measurement), fair value is the price that would be received for the sale of an

asset; that is, the price that would be paid for the transfer of a liability in an orderly transaction between market participants at

the measurement date.

The carrying amount of cash and cash equivalents, trade receivables and other financial receivables, trade payables and other

financial liabilities is considered a reasonable estimate of the fair value.

Fair values cannot be determined for securities measured at amortized cost since market values or exchange prices were not

available in the absence of an active market.


€ million Fair value hierarchy

31 May 2016Evaluation

level 1Evaluation

level 2 2015Evaluation

level 1Evaluation

level 2

Securities - Available for Sale 19.4 19.4 0.0 60.8 20.8 40.0

Positive market values – derivatives without hedge accounting 3.4 2.9 0.5 2.4 0.5 1.9

Positive market values – hedge accounting derivatives 0.3 0.1 0.2 0.3 0.0 0.3

Financial assets 23.1 22.4 0.7 63.5 21.3 42.2

negative market values – derivatives without hedge accounting 11.0 2.2 8.8 12.9 0.0 12.9

negative market value – hedge accounting derivatives 7.4 6.8 0.6 6.3 5.3 1.0

Financial liabilities 18.4 9.0 9.4 19.2 5.3 13.9

TABLE 25

MEASUREMENT LEVELS

The following table shows the carrying amount and fair value of financial assets and liabilities by measurement level.

- Level 1: Measurement based on unadjusted prices determined on active markets.

- Level 2: Measurement using prices derived from prices determined on active markets.

- Level 3: Measurement method that considers influencing factors not exclusively based on observable market data; currently

not applied by Südzucker Group.

For more details on how the fair value of each financial instrument is determined and their allocation to measurement levels,

please refer to the notes to the consolidated financial statements in the 2015/16 annual report under item (32) “Additional

disclosures on financial instruments” on pages 169 to 172.


(10) Related parties

There have been no material changes to the related parties described in the notes to the 2015/16 annual report under item (36)

on pages 174 to 175.

Mannheim, 27 June 2016

Südzucker AG

The executive board

Dr. Wolfgang Heer Dr. Thomas Kirchberg Thomas Kölbl Johann Marihart

(Chairman)


Forward looking statements / forecasts

This report contains forward looking statements. The statements are based on current assumptions and estimates made by the executive board

and information currently available to its members. The forward looking statements are not to be viewed as guarantees of the future developments

and results presented therein. Future developments and results are in fact dependent on a variety of factors and are subject to various risks and

imponderables. They are based on assumptions that could in fact prove to be invalid. The risk management report in the 2015/16 annual report

on pages 86 to 97 presents an overview of the risks. We accept no obligation to update the forward-looking statements contained in this report.

36

SÜDZUCKER AG

Contacts

Investor Relations

Nikolai Baltruschat

[email protected]

Phone: +49 621 421 - 240

Fax: +49 621 421 - 449

Financial press

Dr. Dominik Risser

[email protected]

Phone: +49 621 421 - 428

Fax: +49 621 421 - 425

Südzucker on the Internet

For more information about Südzucker Group

please go to our website:

www.suedzucker.de

Published by

Südzucker AG

Maximilianstraße 10

68165 Mannheim, Germany

Phone: +49 621 421 - 0

© 2016

Q1 INTERIM REPORT FIRST QUARTER 2016/17

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