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Thank you, and good morning, ladies and gentlemen. We welcome all of you to our conference call this morning. The underlying presentation for the call has been published this morning at 7:00 a.m. CET on our website. Today, we released the statement for the first 3 months of financial year '23, '24. We are going to present the highlights of this period and revisit our full year guidance for business year '23, '24 that has been raised again today. Following the call, we are going to answer your questions. A recording of the call will be available on our home page shortly after the call. Now let me hand over to Südzucker's CFO, Thomas Kolbl.
Thank you, Nikolai. Ladies and gentlemen, also a warm welcome from my side to all of you. As mentioned, I would like to give you a brief overview about the strong performance in the first 3 months of financial year 2024 and details about the increased guidance for fiscal '23, '24. Let me start with the highlights of the first 3 months results on Page 5. We are happy to report a very good start into fiscal '23, '24. Having stated that, it's important to add that there are still 9 months to go. I will also take this up again later when explaining the forecast. In the first quarter, group revenue showed an increase of about EUR 250 million or 11% and EBITDA was up by EUR 120 million to EUR 356 million or 51% and group operating result by EUR 119 million to EUR 282 million or 73%. Cash flow increased by 61% and reached EUR 295 million. EPS after 3 months came in at EUR 0.80 against EUR 0.43 last year. Net financial debt end of May '23 came in working capital improvement of EUR 594 million, above prior year's level and EUR 88 million higher against end of business year '22 '23. Standard & Poor's holds a long-term issuer credit rating of BBB- and Moody's of Baa3. In light of the continued improvement of financial ratios over the last year and the favorable guidance for fiscal '23, '24, both rating agencies have decided to increase the rating outlook from stable to positive in June '23. Now let's have a first look into the segmented performance on Page 6 before we get into more detail segment by segment. Group revenues increased significantly to -- by EUR 243 million to EUR 2.5 billion, mainly driven by the sugar, special products and fruit segments. Group operating result increased by EUR 119 million to EUR 282 million. This increase was driven by the sugar and special products segment. Let's continue with segment sugar on Page 8. First of all, let me revisit our view on the global sugar market. In its latest update in April 23, Standard & Poor Global has changed from expecting a surplus, expecting a balanced market for the current sugar marketing year '22, '23. The stock-to-use ratio stays low at 35%. For the next sugar marketing year '23, '24, the forecast shows a rather small surplus of only 0.7 million tons with no impact on the low stock-to-use ratio remaining at the level of 35%. This confirms a stable fundamental global market environment for the next 12 months.
Let's have a look at the European sugar market environment on Page 9. The European market has changed to a net importer since campaign 2018, which has led already to several steps of price increases in the last 3 sugar marketing years. Looking at the significant further price increase on the spot markets in the last 12 months, we monitored several reasons. First, the developed market price as the fundamental pricing starting point has increased. Second, another year of limited EU acreage combined with continued difficult weather conditions, leads to uncertainty about the expected output in Autumn '23. And third, it is still important to mention that the overall cost inflation leads to higher procurement prices for the whole industry and alongside the whole value chain. Now let's have a look into the concrete development in segment sugar in the first 3 months on Page 10. Revenues in the sugar segment increased significantly despite declining sales volumes as a result of the poor 2022 harvest due to significantly higher prices. Operating result shows a very strong performance. The drastic increase in costs, particularly for raw materials and energy was offset by higher revenues since the end of the last fiscal year. Let me continue with the segment special products on Page 11. Also segment special products had an excellent start in the new fiscal year. In the first quarter, revenues increased significantly due to higher prices, while volumes showed a mixed picture. The operating result showed a significant increase reflects higher margins overall. In quarter 1, we were more successful in covering the burdens of significantly higher raw materials, packaging and energy costs through higher selling prices. Let me now turn to segment CropEnergies on Page 12. Revenues in segment CropEnergies were down sharply in addition to significantly lower sales volumes due to scheduled maintenance shutdowns in 2 factories. This was also due to a marked decline in ethanol prices. Operating results followed the development of sales volumes and selling prices and fell significantly short of the exceptional strong prior year quarter. CropEnergies was still able to benefit from the positive effect of early price hedging for raw materials in the prior year quarter. The price increase on the markets in the meantime was now also reflected in the net raw material costs. Higher coal products revenues couldn't fully compensate for the significant increase in raw material cost, so our net raw material costs had a negative impact. The average ethanol price in the first quarter was at EUR 843 again EUR 1,155 per cubic meter in the last quarter, '22, '23. The average ethanol price in June was around EUR 775 per cubic meter against EUR 1,274 per cubic meter in June '22. In July, we see so far a price level of about EUR 750 per cubic meter. Let's move on to segment starch on page 13. Revenues in segment starch were stable. The significant overall price increase largely offset the substantial decline in volumes. Operating result was moderately down overall, significantly higher raw material and energy costs, declining sales volumes and higher other costs could not be fully offset by substantial price increases. Let's move on to the segment fruit on Page 14. Revenues in segment fruit showed a significant increase. The increase in sales was price driven for both fruit preparations and fruit juice concentrates. The slight decline in volumes for fruit preparations and the significant drop in sales volume for fruit juice concentrates were offset.
Operating result came in significantly above prior year's level. The profit contribution from food preparations increased despite a slight decline in volumes and higher costs due to significantly higher margins. The profit contribution from fruit juice concentrates also increased. Higher prices more than offset higher costs and the significant decline in volumes. Let me now turn to the main point in the P&L on page 16 and 17. The results from restructuring and special items was marginal. Equity result was almost exclusively driven by the sugar and starch segments. Financial result came in at minus EUR 27 million. It contains the net interest expense of minus EUR 23 million and the other financial result of minus EUR 4 million. Let's continue on Page 17. Taxes on income came in at EUR 56 million after EUR 38 million in the same period last year with no change in the underlying tax rate. Earnings per share came in at EUR 0.80 against EUR 0.43 in the prior year. Let me now turn to the cash flow, working capital and investment development on Page 19. Cash flow increased in the first 3 months by EUR 112 million to EUR 295 million. The cash flow against revenues ratio improved after 3 months to 11.7% against 8% in the last year. Cash outflow from increase in working capital of EUR 296 million was mainly due to the reduction in liabilities, in particular, as a result of beet cash payments in March 23 and the further increase in rate receivables which was only partially offset by the cash inflow from the sale of sugar inventories. Investments in fixed assets reached EUR 79 million against EUR 65 million in the last year. Investments in financial assets and acquisitions were marginal. Let me now move forward looking at the balance sheet on page 21. As explained, the cash outflow from operating activities of EUR 3 million includes a cash flow of EUR 295 million and an increase in working capital with a cash outflow of EUR 296 million. The financing of investments in property, plant and equipment and financial assets totaling EUR 80 million and profit distribution of EUR 6 million resulted in an increase in net financial debt of 88 million from EUR 1.86 billion end of February '23 to EUR 1.95 billion, end of May '23 million or EUR 594 million higher compared to end of May '22. Gearing is at 45% against 33% last year. Equity ratio is at 45% against 48% 1 year ago. Let me now turn to the outlook on Pages 23 to 27. After a very good performance in quarter 1, we adjust once more our full year forecast upwards today. Ladies and gentlemen, as stated at the beginning of the presentation, that we put the adjusted forecast in general context. As it might be rather calm in our private or business environment and one or the other negative scenario has not set in. We all have to remind ourselves again and again that there's still a war in Europe. Also the situation around topics such as energy and inflation or the poor economic development is far from being solved. So we continue to hold a comprehensive disclaimer. This is not an overcautious approach but a well-considered and justified decision can only urge everyone to remain equally attentive and prepared and not to take anything for granted.
Having said that, let me now continue to the concrete numbers on Page 23. The group's forecast for fiscal '23, '24 was published for the first time on December 22, increased on April '23, and is now being raised again today. For fiscal year '23, '24, we continue to expect group revenues to come in between EUR 10.4 billion and EUR 10.9 billion. For group operating profit, we now expect a range between EUR 850 million and EUR 950 million. This means we increased the midpoint by EUR 100 million from the old range. It reflects the increase of the expected earnings range of segment sugar, which is raised by EUR 100 million too. The segment sugar, we expect now an earnings range between EUR 500 million and EUR 600 million. The old range was EUR 400 million to EUR 500 million. No adjustments were made in the other segments. Segment special products operating result is expected to come in significantly above the prior year's level. Segment CropEnergies's operating result is expected to range between EUR 95 million to EUR 145 million. Segment starch should be significantly lower in operating results. Segment fruit earnings should come in on prior year's level. Let me continue with Page 24. Group EBITDA range has been raised to EUR 1.2 billion and EUR 1.4 billion, reflecting the increase in the operating result expectations. CapEx is expected to increase to about EUR600, mainly driven by measures to achieve sustainability targets, especially in the sugar special products and CropEnergies segment, for example, as within the SBTI framework. Let me continue with Page 25. Net financial debt is expected to come in above the prior year's level. However, it must be clearly marked here that the degree of uncertainty is still high. as working capital requirements, for example, can fluctuate strongly. Let us now come to the end of the presentation on page 27. Ladies and gentlemen, the presented figures clearly underpin that Südzucker Group is back on track, delivering strong and well-diversified structured cash flows on high levels. Last year, we explained that we want to increase the headroom by improving earnings and thus freeing up funds to proactively shapes into the future. Sooner than expected, we have reached this milestone with an expected EBITDA of EUR 1.2 billion to EUR 1.4 billion in fiscal '23, '24. Well considered and continuing to keep a clear eye on reducing debt. We want to take advantage of the opportunities to systematically pursue our strategic goals. In this way, we can safeguard what we have achieved, prepare the company even better for the situations of the future and thus contribute to sustainable profitability increase, creating value over time. Ladies and gentlemen, thank you all for your attention. We are looking forward to your questions. Thank you.
[Operator Instructions] Our first question today is from Oliver Schwarz from Warburg Research.
First of all, gentlemen, congratulations for the good results. Happy to see that. But obviously, some questions remain. I will try to ask them one by one. First of all, related to the strong increase in working capital, can you sell out how much of that is volume related and how much of that is basically function or results of the higher costs incurred?
The main driver Oliver for the working capital increase are the higher costs, some volume effects, but the main driver are the higher costs.
Okay. Understood. Second, can you please elaborate a bit more on the situation with Ukrainian imports to the EU. I found, let's say, a statement in the quarterly report referring to that issue, citing that a lot of -- a lot more than originally anticipated sugar has been imported into the EU last year on -- basically on a non toll agreement. And there seems to be also an expansion of that, let's say, agreement with the EU into this year and probably also into next year. Could you please elaborate on that and the likely impact on European sugar prices from that?
Yes. For the whole auditorium, I'd like to widen a little bit the story. Until '22, the Ukraine had a duty-free import quota of about 20,000 tonnes per year into the EU. And in '22 the EU granted unlimited duty-free imports rights to Ukraine. And initially until June '22, now extended until June '24. In the meantime, imports from Ukraine increased to almost 350,000 tonnes in the current sugar market year '22, '23. And the Ukraine prohibits exports since 15th of June until mid of September to secure food supply in Ukraine. And coming to the market situation in EU in the current tight market, the additional imports are absorbed by European market and are needed to supply the European market, and imports from Ukraine are expected to remain at least on the current level or maybe even increase from September '23 onwards. And this will then reduce the need for other imports as from refining or make additional exports reasonable in particular in Eastern Europe. So this is, I think the answer.
Okay. And perhaps lastly and then I go back into the line. Can you elaborate on the decline in sugar volumes. Is that, let's say, discuss a specific topic. Is there more to it? Or is that just a function of the overall market conditions in the EU. So is that more, let's say, a market thing?
I think overall in Europe, we had a really poor harvest '22. So the volumes for sold are substantially lower than in the past. And this is the main driver for the lower sales volumes we have seen in the first quarter.
The next question is from sadhu [Indiscernable] from Barclays. Please go ahead.
So my first question is about the sugar prices. Like why shouldn't you achieve more than the EUR 300 per tonne uplift in sugar prices for the next marketing year and in sugar given you have a tight EU supply and a strong world prices backdrop, particularly with El Nino. And my second question is like about the starch costs, like why are you able to pass on the production cost for starch. Has the supply-demand conditions materially changed here? And does this reflect ethanol or weaker industrial starch demand?
Okay. To the first question relating to pricing. We've reached a substantial price increase in October '22 for the sugar marketing year '22, '23. And our assumption going forward for the next sugar marketing year '23, '24 is, let me say, more or less stable pricing environment. And that will, let me say, then bring the average price up, as you mentioned. And so far, we have no, downside or the upside in the pricing. So we stick to the old guidance for the price increase. And the starch segment, we have a mixed picture from the volume side here. The recession in Europe kicks in, in some of the businesses we deliver, for example, the construction industry, paper industry, et cetera. So volumes are going down. And then we have the second negative influence on the business field. This is the significant drop in ethanol prices.
Just a follow-up, like what is the ethanol prices assumption you are expecting for the next -- for this year in your guidance?
Yes, slightly above EUR 800.
We have a follow-up question from Mr. Schwarz. Mr. Schwarz, please go ahead.
Firstly, I've been trying to get my head around what you said about volume development and also about the Ukrainian import parts. Let's just say, from here onwards, there is no more, let's say, changes to the sugar price for the current and probably also for the next fiscal year. If volumes continue to be weak, but the global markets is, let's say, again, back into a well supplied/probably even oversupplied situation despite, let's say, inventories being on a very low level. Is in the medium and longer term, let's say, the low volumes that you are able to sell based on the, disappointing harvest volumes. Might that be a threat to the overall guidance? Or is that something that you can handle by just sticking to, the current price level.
That would be by first and last, basically volume-related questions. And then I have 2 additional ones. Can you please elaborate a bit about the development on the rating side? It seems like the rating agencies have become more positive on the [ sugar ] following the favorable business development and also in relation to energy hedging. Obviously, energy costs related to the spot market for example, natural gas, have come down quite materially. Have you locked in those prices? Or are you basically more in a wait and see approach and are hoping for the current price level to, let's say, decline even further before going into the market and trying to secure your energy costs for the oncoming periods.
I will start with the last one. With the energy side, as you know, is running a long-term strategy on the energy side, and we have locked in for the next 3 years, let me say, hedging rates starting with 80%, 70%, 60% group right. And therefore, we've monitored the market development, spot prices very carefully. But for the campaign 2023, it is too early, let me say, to fix the open volumes of 20% because we need them more stable figures for the campaign that we still very early to make here assumptions for buying energy. But we have a robust hedging rate to very low prices, and it will help the company going forward on the energy costs.
Rating agency, clearly, they see over time strong development of the financial ratios. And this is for us in a first positive sign that they increased the outlook to positive. And we are on a good run. We have now today improved guidance for '23, '24. Let me say that will help us is not included in their last assessment from June. So we are on a good run and hope that we see a further improvements on our journey. And volume side, Oliver, it is difficult in a very volatile business framework. We'll be elaborating in our presentation, the global market. What we have is that's what analysts are guiding. And they are guiding, let me say, for '23, '24, this is really starting from October. Stable, let me say, stock-to-use ratio, and this is really the important ratio on a global market. So therefore, we see from the fundamental perspective, and really a good ground and we don't foresee here many changes and that should help also that prices, we will stay on this good level on the global market. In Europe, let me say, we have three drivers, this is, let me say, the consumption. Here now we're, given in the middle in the summer months. We have to see how the customers are demanding. The other side is the production, the European production and here is much too early to how will be the final outcome. What we see is a slight increase in acreage may be assuming higher [ AGs ] than in the last year, taking the average, maybe the output then could be 10% higher than the last year, but that would not be enough to cover the European demand. And therefore, we need those imports. And then the open point is how will be the development of the Ukraine imports from September onwards. So putting all points together, we are still confident that we can keep prices from October 23 onwards. No signs that we can -- that we have to adapt it. It's a good pricing environment. And that -- if that would work, then we would have really also a strong fundament in the sugar business for next fiscal '24, '25.
[Operator Instructions] It seems to be no further questions at this time, and I hand back to Nikolai for closing comments.
Yes. Thank you, ladies and gentlemen, for joining today's call. And we're happy also to take your questions should you have additional ones following today's publication and in our call today. Thank you, and goodbye.
Bye-bye.