living our values. creating growth
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Annual Report 2012/2013
Living our values. Creating growth.
Hartwig Fuchs, Chief Executive Officer, Nordzucker AG
Mission statement 1
Key figures 2
175 years of sugar production 4
Living our values. Creating growth. 6
Letter from the Executive Board 8
Four values – growing together 10
Responsibility 12
Dedication 20
Courage 26
Appreciation 32
Trends in agribusiness 38
Group management report 48
Nordzucker at a glance 50
Economic environment and market developments 53
Earnings, net assets and financial position 56
Employees 61
Opportunities and risks 61
Supplementary report 66
Forecast 66
Consolidated financial statements 68
Consolidated income statement 68
Statement of comprehensive income 68
Consolidated cash flow statement 69
Consolidated balance sheet 70
Consolidated statement of changes in shareholders’ equity 72
Notes to the consolidated financial statements 73
General remarks 73
Notes to the consolidated income statement 82
Notes to the consolidated balance sheet 86
Consolidated assets schedule for the previous year (2011/2012) 88
Consolidated assets schedule for the financial year 2012/2013 90
Notes to the consolidated cash flow statement 97
Other disclosures 97
List of investments 113
Auditors’ report 115
Corporate Governance 116
Corporate Governance Report 118
Statement of compliance with German Corp. Gov. Code 119
Report by the Supervisory Board 120
Glossary 124
Financial calendar
Contents
Annual Report Nordzucker 2012/2013
2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
Total operating profitability 1 % 15.2 9.7 16.6 18.4 22.8
Return on revenues 2 % 3.7 -0.7 4.8 10.1 14.4
Return on equity 3 % 6.1 -1.7 10.6 20.4 26.7
Interest coverage ratio 4 10.5 2.8 6.0 12.1 22.3
Redemption period 5 years 1.8 4.0 1.1 0.6 0.1
Cash flow from operating activities per share EUR 3.46 6.78 6.49 4.59 6.49
Earnings (Group) per share 6 EUR 0.91 -0.27 1.80 4.22 7.27
Dividend per share 7 EUR 0.22 – 0.46 1.00 1.80
Total dividend EUR m 10.6 – 22.2 48.3 86.9
1 EBITDA/total revenues2 Net income/revenues3 Net income/equity4 EBITDA/net interest
5 Net debt/EBITDA6 Net income/number of shares7 Total dividend/number of shares
2008/2009 2009/2010
1,192
1,806
2010/2011
1,815
2011/2012
2,018
in EUR m
2012/2013
2,443
Record high yield ratios
Continuous increase in revenues
2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
Revenues EUR m 1,192 1,806 1,815 2,018 2,443
of which abroad % 39 54 52 54 56
Total revenues EUR m 1,086 1,718 1,699 2,282 2,607
EBITDA EUR m 165 166 283 420 594
EBIT EUR m 79 66 188 315 507
Net income EUR m 44 -10 91 208 360
Cash flow for/from operating activities EUR m 167 328 313 222 313
Investments in property, plant and equipment and intangible assets EUR m 67 62 56 64 74
in EUR m
44
-10
91
208
360
2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
Operating success drives all key financial figures
Record high net income
Annual Report Nordzucker 2012/2013
Our Nordzucker values of responsibility, commitment, courage and
appreciation are an expression of what we stand for as a company.
We will use them as guidelines to influence our decisions and actions, to
put ourselves on a stable footing and focus on our core business. They
will help us to build on our position as a strong international company.
The values form a strong bond which links all Nordzucker employees;
they define our attitude, the way we present ourselves to others and our
dealings with business partners and stakeholders.
1
1 Cash and cash equivalents – financial liabilities
2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
Balance sheet total EUR m 1,879 2,456 1,982 2,262 2,393
Equity EUR m 718 744 819 999 1,316
Equity ratio % 38 30 41 44 55
Debt capital EUR m 1,160 1,712 1,163 1,263 1,077
Financial liabilities EUR m 497 778 364 256 71
Cash and cash equivalents EUR m 201 114 50 7 11
Net debt 1 EUR m 295 664 314 249 59
Sound equity ratio, with net debt nearly reduced to zero
Dividend per share reaches high level
1.80
in EUR
0.46
1.00
0.22
0.00
2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
2 Annual Report Nordzucker 2012/2013
2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
Beet farmers 11,430 16,292 16,091 15,379 14,981
Beet cultivation area ha 174,225 287,245 254,300 265,947 265,904
Beet processing t/day 98,681 143,392 133,192 143,520 138,797
Sugar production millions of tonnes 1.68 2.87 2.30 2.91 2.80
Sugar refi neries 2
Sugar factories 5
Liquid sugar factories 2
Sugar factories 5
Bioethanol plants 1
Average number of
employees for the year
1,504
1,242
Liquid sugar factory
Sugar factory
Sugar refi nery
Bioethanol plant
Growth and consolidation alternate
Sugar refi neries(combined withsugar factory) 1
Sugar factories 3
544
3Group figures and ratios
175 years of sugar production
The orientation towards Eastern Europe is a strategic focus for the years ahead. Zucker Aktiengesellschaft Uelzen-Braunschweig (ZAG) invests in the Czech sugar company Cukrovar a Rafinerie Cukru Dobrovice TTD (Thurn und Taxis Dobrovice) A.S.
The success story of 175 years of sugar production in Northern Germany and Northern Europe began in 1838 with the establishment of the sugar factory in Klein Wanzleben.
Start-up boom in the European sugar industry: Nordstemmen begins oper-ations in 1865, followed by the Arlöv factory, now part of Nordic Sugar, in Southern Sweden in 1869, and Culmsee in Pomerania (now Chelmza in Poland) in 1882.
Sugar is deemed “vital to the war effort”. Beet farmers and sugar factories are called on to engage in a “battle for production”.
Following a complete reconstruction on a greenfield site, the factory in Klein Wanzleben goes into operation. It is still one of the most modern plants in Europe today.
Nordzucker AG is created when ZAG transfers its assets to ZVN. This makes Nordzucker the third-largest sugar producer in Europe.
Pict
ure:
Arc
hive
s KW
S
Annual Report Nordzucker 2012/2013 4
Five sugar companies decide to transfer their assets to Zuckerverbund Nord AG (ZVN). This represents a milestone on the path to a common North German sugar company.
Zuckerfabrik Uelzen AG merges with Braunschweiger Zucker AG to form Zucker-Aktiengesellschaft Uelzen-Braunschweig (ZAG).
The sales company Norddeutsche Zucker GmbH & Co. KG is the first large-scale merger of sugar companies in Northern Germany.
Together with Union-Zucker, almost the entire North German sugar industry is united in Nordzucker AG.
Nordic Sugar joins the Nordzucker family, making it the second-largest sugar producer in Europe by a large margin.
Nordzucker’s most successful financial year to date ends with record earnings.
5175 years of sugar production
Living our values.Creating growth.
Hartwig Fuchs, Chief Executive Officer
Axel Aumüller, Chief Operating Officer
Annual Report Nordzucker 2012/2013 6
Dr Niels Pörksen, Chief Agricultural Officer
Dr Michael Noth, Chief Financial Officer
Mats Liljestam, Chief Marketing Officer
7Living our values. Creating growth.
175 years ago, the first sugar factory in Nordzucker’s current region began producing sugar in Klein Wanzleben, creating
the core of today’s company. Since then, the world of sugar has always had to adapt to changing political circumstances
and economic necessities. Technical progress and the associated productivity gains have a long tradition in our business,
as does the series of mergers that have formed ever larger entities. They have always been founded on close contact with
our partners – our shareholders and beet suppliers – as well as on the drive to become better and stronger. In September
of this year we will be celebrating this 175th anniversary accordingly.
We should also be proud that the financial year 2012/2013 will go down in the history of Nordzucker AG as the most
successful to date. We increased both revenues and earnings again significantly compared with the previous year, which
was already very good. We benefited from higher prices for quota sugar and higher sales volumes of non-quota sugar.
The long-term measures to increase efficiency throughout the Group again bolstered our successful performance. The joint
proposal by the Executive Board and Supervisory Board to pay a dividend of EUR 1.80 per share, which will be voted on at
the Annual General Meeting, has a twin focus: it ensures that you, our shareholders, receive a reasonable portion of these
outstanding earnings, and it strengthens the company financially, enabling it to respond to the challenges that lie ahead.
The figures in brief: We increased our revenues by EUR 424.8 million, from EUR 2,018.0 million in the previous year to
EUR 2,442.8 million and reported excellent net income of EUR 360.3 million. Equity came to EUR 1,316.0 million, exceed-
ing the EUR 1 billion mark for the first time. Although total assets were higher, the equity ratio went up to some 55 per cent.
Increasing the equity ratio was a target that we set ourselves three years ago. We also used last year to reduce our net debt
to around EUR 59 million, and so all in all we are in a very strong financial position. In view of the still volatile situation on
the financial markets, this is an important message for our owners. Our environment is changing rapidly, however. As stock
levels continue to rise and global sugar production exceeds overall consumption, we expect sugar prices on the world
market to stay at their currently much lower level. This may also affect EU prices, so we cannot rule out a decline in rev-
enues and earnings for 2013/2014. The high volatility of sugar prices remains a considerable challenge for our business.
The EU’s decision-making bodies are expected to decide on the future of the sugar market regime in June. Until beginning
2014, it has defined the framework within which at least 85 per cent of the EU sugar market is covered reliably, regularly and
predictably by sugar produced regionally at the social and production standards in force here. Our aim is to ensure that
the EU market continues to enjoy stable supplies of high-quality, domestically produced sugar in the future. On the one
hand, we have to keep improving our efficiency and competitiveness. And on the other, we are still campaigning for an
extension of the sugar market regime until 2020; not only to preserve beet cultivation in our regions, but also to strength-
en it. While doing so, we need time to prepare our company for market liberalisation.
The European sugar market is expected to undergo a further wave of consolidation by 2020. Given our market position,
we have a strong base from which to seize growth opportunities in the EU as they arise. Sugar consumption within the
EU will not go up, however, as growth in the demand for sugar is taking place outside Europe. We are currently looking
closely at how we can participate profitably in this growth. At the same time, we are absolutely convinced that long-term
success can only be secured by running a sustainable business, especially by including environmental protection and social
aspects in business decisions. In parallel, the aim is to increase efficiency along the entire value chain. The five-year efficiency
Annual Report Nordzucker 2012/2013 8
improvement programme ‘Profitability plus’ has been under way since 2009/2010 and has also delivered savings in all
areas of the company. More than three-quarters of the savings targets have been reached to date. Measures which make
a major contribution to sustainably boosting the company’s competitiveness include the harmonisation and optimisation
of business processes, the increasingly international organisation of sales and production structures, adjustments to
investment and maintenance budgets in line with the demands of longer campaigns and the integration of the Group’s
IT environment.
Alongside major investments to increase efficiency in the factories, sustainable success includes our activities to boost
yields in sugar beet cultivation. The 20 · 20 · 20 initiative aims to make sugar beet even more competitive in comparison
with other crops, so as to safeguard beet cultivation in our regions for the long term. It is vital to complete the integration
of Nordic Sugar and Nordzucker into one European company. The basis for the European corporate culture that we want
to develop across national borders and different languages is formed by the core values defined by our company staff:
responsibility, dedication, appreciation and courage. And we invest in our employees – not only financially, although this
year we were able to pay a performance bonus to all staff in the Group for the first time. With a wide range of programmes
and modules, we not only encourage integration with focused training, but also strengthen employees’ emotional identifi-
cation with the company.
Together with our dedicated colleagues, sustainability, customer focus and efficiency gains form the basis for strengthening
the company’s position and achieving further growth in its core business. We and our highly dedicated team can look
back on our past with pride and look to the future with optimism. Development continues. We thank you, our shareholders,
for accompanying Nordzucker on this journey.
Nordzucker AG
The Executive Board
Axel Aumüller Mats Liljestam
Dr Niels PörksenDr Michael Noth
Hartwig Fuchs
9Welcome
Annual Report Nordzucker 2012/2013 10
The pillars of our business: four values
Making connections by upholding common values
All employees within the Nordzucker Group have discussed the company’s values in the recent year
and questions such as:
Why are these values in particular important to me?
How do the values help us to achieve our aims?
What do the values mean in our dealings with colleagues, employees and managers?
Shortly after the acquisition of Nordic Sugar, employees of the Group had defined four common values:
responsibility, courage, appreciation and dedication. A broad discussion and introductory process
was then initiated in 2011. Employees from all regions talked about their understanding of the
values, how they experience them and how they put them into practice. The aim was primarily
to make the values known everywhere, but also to talk to one another and generate actions.
The four values will now be integrated into everyday working practices in the months ahead. Not
only minor activities that permanently bring the values to mind, but also broader topics such as
cultural diversity and collaboration across department, factory and national borders are now on
the agenda. The values are also to be linked to everyday work and will form the basis for guidelines
and standards within the Group. However, for the values to be successful, it is vital that they create
a connection between all employees, providing motivation as well as a sense of belonging. They help
when difficult decisions have to be taken and facilitate working relationships. In addition, the values
create a positive culture; a culture we are proud of – proud of a company that is valuable and that
adds value.
Hartwig Fuchs: “Our four corporate values constitute the pillars for the expansion and the integration
of our company. I am very proud of the great commitment with which the value process is being
driven forward by everyone involved, in all regions. The values have brought us a good deal closer
together and have given us much greater clarity about what we can expect from one another.
I believe that Nordzucker has made an exceptionally good choice!”
11Four values – growing together
© A
pel
öga
AB
Annual Report Nordzucker 2012/2013 12
“I am really very pleased that Nordzucker is investing such a large amount in Örtofta. It means a
great deal to us: for our factory but of course for the success of the whole company as well.”
Bengt Högberg, Director of the Örtofta sugar factory
For Nordzucker, taking responsibility means acknowledging the needs of our stakeholders and always finding new solutions.
Responsibility for the future
13Responsibility
Nordzucker equips additional factory with innovative technology
Great strides made towards sustainable effi-ciencyIt takes about an hour to drive from the Nordic Sugar
headquarters in Copenhagen via the Öresund
bridge and Malmö to Örtofta, which is home to a
14th-century castle, a church and 200 inhabitants.
At the edge of this small village, surrounded by fields
of rich, heavy soil, stands the largest factory operated
by the Nordzucker subsidiary Nordic Sugar. All round
the factory in the southern Swedish province of
Scania, 2,000 farmers successfully grow sugar beet
on an average of 19 hectares of arable land each.
Last October, some good news and new challenges
found their way across the Öresund to Örtofta:
Director Bengt Högberg and his factory team were
given the go-ahead for the most important energy-
saving project to be carried out at the Örtofta sugar
factory since it began operations in 1890.
Following the plants in Uelzen, Germany, and
Nakskov, Denmark, Nordzucker is now installing an
innovative evaporation dryer at an additional production site, in Örtofta. A vertical crystallisation tower
(VCT) is also being fitted at the same time. The company is investing a total of EUR 23.5 million in new
technology for Örtofta, which will permanently cut the energy consumption of one of its most pro-
ductive factories by 30 per cent. Furthermore, the new equipment will reduce annual CO2 emissions from production by 32,000 tonnes. The investment is another stride towards realising Nordzucker’s
biggest energy-saving project to date.
New technology saves 150 gigawatt hours a yearCapital expenditure of around EUR 17 million is planned for the installation of the new evaporation
dryer. The VCT is to cost another EUR 6.5 million, and both machines are to start operations in the
2014 campaign. The new technology will save the factory 150 gigawatt hours of energy per year.
“We will be saving roughly as much energy as 7,500 Swedish houses use in a year for heating”,
says Högberg, smiling.
Doing more with less energyThe Örtofta factory processes some 18,400 tonnes of sugar beet on every day of the campaign. “It is
an energy-intensive process, which we optimise continuously”, explains the director. “Crystallisation,
the evaporation plant and the pulp dryer are our main consumers of energy.” The new VCT dries
extracted pressed pulp, which the factory turns into high-grade animal feed pellets. The equipment
achieves most of its efficiency by the systematic reuse of steam in production. With the new VCT,
continuous crystallisation is possible at much lower temperatures than before. From 2014, the factory
will save 50 gigawatts a year in this operation alone. Högberg sums it up as follows, “These are great
strides, which bring our company closer to its demanding energy and climate targets while further
boosting our competitiveness.”
Örtofta: consistent energy savings
Good news and new tasks for Bengt Högberg (left) and the team of the Örtofta plant: beginning 2014, the plant will save one-third of its energy per year due to the new technology.
© A
pel
öga
AB
Annual Report Nordzucker 2012/2013 14
Meeting customer needs responsibly
“Their reactions are similar”, observes Marion Schaefer of customers visiting one of Nordzucker’s factor-
ies for the first time on a supplier audit. “Most of them are surprised by the unfamiliar dimensions and
the enormous volumes that our factories deal with.” The food chemist coordinates the company’s sus-
tainable development activities from her office in Copenhagen. Product quality and safety have top
priority, alongside occupational health and safety, environmental, climate and social matters, plus the
standards required for the corresponding inspections and certifications.
Customer audit: process quality under the microscopeRegular inspections by customers who trade or process Nordzucker products do not just consist of a
pleasant stroll through the factory. To answer all the customer’s questions, a competent team is available
on site, which includes the plant manager, product or quality manager, factory coordinator and an
engineer or foreman from the sugar house and service centre. Every audit entails the inspection of
documents by the customer, and an analysis of potential product contamination is part of that. It also
covers a concrete inspection of the steps that Nordzucker takes to minimise identified product risks,
for instance.
All Nordzucker sites are certified in accordance with FSSC 22000, an internationally recognised product
safety standard. “Our uniform, Group-wide product safety and product tracing systems are a key area
of every customer audit nowadays”, explains Marion Schaefer: “What precautions are taken to prevent
contamination of the products? How do we ensure the traceability of our supplies, in order to keep
risks for the customer and end consumers, as well as for ourselves, to a minimum because as manufac-
turers, we bear liability for the product?” During the audits, which can last for up to two days, critical
points are examined in detail in ongoing production, issues for improvement are noted, solutions dis-
cussed and implementation followed up. “Often, customers test our metal detectors to ensure they
are working properly. Of course, individual product specifications and service requests to Nordzucker
are also on the agenda – depending on the final product and the target market”, adds
Marion Schaefer.
For materials that are bought in or used as raw materials, such
as imported organic cane sugar or Fairtrade-certified prod-
ucts, Nordzucker is on the other side of the table and carries
out the same kind of audits at its own suppliers – but this
time as the customer.
Everyone bears responsibility“The standards of the food industry also increase the standards
of product safety and traceability for us and our customers”,
emphasises Marion Schaefer. This is an enormous challenge,
especially for food producers with international sourcing and
distribution systems. “We can only reach a solution by assum-
ing our responsibility together – by obtaining systematic
commitments from everyone involved in the manufacturing
process”, says Schaefer.
Keeping step with growing global demands
Marion Schaefer, Corporate Sustainable Development: “We all bear liability to secure sustainable product quality. Our customers honour this.”
15Responsibility
Interview with Prof. Uwe Tegtbur
What is the basis for a healthy, balanced diet and what role do
carbohydrates play in our diet? A conversation with Prof. Uwe
Tegtbur, MD, Director of the Institute of Sports Medicine at the
Hannover Medical School.
Professor Tegtbur, human beings need various nutrients: water, carbohydrates, proteins, fats, minerals and trace elements, just to name a few. What function do carbohy-drates fulfil in the human body?Carbohydrates are the main source of energy for human beings.
They supply energy for us to think and for our muscles to work.
Our brains can only metabolise carbohydrates, not fats or proteins.
Our muscles can also extract energy from fats and proteins. The
body only uses proteins as an energy source when its carbohydrate
reserves are exhausted. This puts a strain on the body, as a lack of
carbohydrates combined with physical activity leads to higher
adrenalin levels, which in turn results in higher blood pressure and
a faster heartbeat.
You said the body stores carbohydrates so that it can use them later for brain and muscle activity. Where are these
“storerooms” for carbohydrates and can we fill them up indefinitely?Our bodies store carbohydrates in the liver and the muscles. It varies from person to person, of course,
but on average you can say that an adult can store around 200 to 400 grams of carbohydrates, and
someone who is physically fit can store more than someone who isn’t. So that means that unfortunately
we can’t build up our reserves indefinitely. If too many carbohydrates are ingested, the body turns
the excess into fat and stores it in this form.
What does that mean in terms of having a balanced, healthy diet?In the first instance, it’s about having the right energy balance. In other words, our energy intake
and energy consumption must be in step. Over time, if we don’t use up enough energy, we put
on weight. Excess weight is more of an exercise problem than a dietary problem. It is also important
to consume carbohydrates when your body needs them, so before exercising or exposure to higher
levels of stress. If you want to lose weight, I believe it can make sense to eat carbohydrates if you can
actually burn them off.
We often hear about low-carb diets, in other words diets based on reducing carbohydrate intake. What do you think of these diets?As I said, carbohydrates supply our brains and our muscles with energy. With low-carb diets, I reduce
my body’s ability to perform. The important thing is when I eat the carbohydrates and whether I
have a good energy balance.
“Carbohydrates are the source of energy for us to think and for our muscles to work.”Prof. Uwe Tegtbur, MD, Hanover Medical School
Focus on health and nutrition
Annual Report Nordzucker 2012/2013 16
Nordzucker improves its safety culture
“Occupational health and safety are and always have been of the greatest importance for
Nordzucker”, emphasises Axel Aumüller, Chief Operating Officer. Last year, the Group upgraded
its efforts by another notch, focusing even more sharply on safe working conditions, accident
prevention and health care. The reason for the additional efforts was an increase in accidents
causing more than three sick days. A Group strategy has been adopted in consequence that
emphasises the vision of zero accidents.
“Our foremost goal is to get the number of accidents further down again, because we have respon-
sibilities – towards the employees and also as individuals for our own safety. Our renewed vision
of zero accidents is therefore closely related to our value process,” says Joachim Rüger, Senior Vice
President Production, Eastern Europe. Axel Aumüller adds, “We intend to lead the sugar industry
and similar industries in terms of occupational health and safety.” To achieve this goal, the “Health
& Safety Production Workgroup” has drawn up targets, responsibilities and an action plan. “We do
not accept unsafe working conditions. Safety has top priority for us, putting it ahead of production,
for example. Because we can only produce successfully when we offer a safe working environment”,
continues Rüger.
“Safety is a matter for everyone. That is basically our starting point. In our action plan, we have
called this “Talk Safety”. What we mean by that is that we should all make each other aware of risks
at work. Everyone, especially in production, both during the campaign and after it has finished,
should have an awareness of work processes that are potentially dangerous and should have the
courage to tell colleagues who are putting themselves
at risk”, says Iver Drabaek, coordinator of the working
group. The working group is looking in particular at
practical aspects: “Our aim is to establish a distinct
safety culture. We have formed three subgroups in
which safety experts from the factory contribute their
experience. This enables us to identify potential sources
of danger and therefore avoid accidents. Sharing experi-
ences within the group also lets us learn from examples
at other factories and identify measures which could
be implemented as a Group-wide standard”, adds
Drabaek.
These activities already had some initial success in the
last campaign: the number of accidents went down.
“Everyone knows this is just the beginning. It takes
time to improve the safety culture and raise individual
awareness, but we have got off to a good start”,
says Drabaek.
Safety first
Safety is a matter for everyone. Which is why Nordzucker makes every employee aware of risks at work.
17Responsibility
Far-sighted investment
Investments in logistics and replacement machinery will become more important
The Nordzucker campaign begins in autumn, when the lime
kilns are fired up in the 13 sugar factories. The factories op-
erated by Europe’s second-largest sugar producer are then
essentially expected to do one thing – run smoothly 24 hours
a day, seven days a week, for around four months a year. They
are also expected to do so cheaply, protecting the environ-
ment and conserving resources, as evenly as possible and
without interruptions – along the entire process chain, from
the incoming beet scales through to the sugar silo and on
to the customer. It sounds trivial at first, but this actually makes
a complex array of demands of the production managers at
the factories and Group headquarters.
When the Nordzucker production team prepares the annual
investment plan for 13 sugar factories, a large number of ex-
ternal voices make themselves heard indirectly: customers,
shareholders, farmers, the European Commission and national
governments in eight countries, local and regional regulatory
authorities. Internally, it is mainly the sales and beet manage-
ment teams that clamour for attention, as their demands
also have to be aligned with the investment strategy of the
production units. At the end of the day, there’s a whole
host of legitimate interests that have to be continuously
reconciled with production requirements, internal Group
performance indicators and development targets.
Rebalance, prioritise, invest“To ensure our factories stay productive in the long term,
we have to keep rebalancing internal and external demands
and also set priorities”, says Chief Operating Officer Axel
Aumüller. “How does Nordzucker make the most efficient
use of limited resources? That’s the key question.” The pro-
duction team provides the answers in a process of dialogue
organised across the Group. These answers lead to plans for
projects and budgets, which are agreed by the Executive Board
and are then discussed and approved by the Supervisory
Board. In the current financial year, around EUR 70 million is
available for capital expenditure in the factories.
Energy: making up for higher costsAbout EUR 30 million of the total is currently earmarked for
profitable investments: projects large and small that generally
When to invest where on which project? Set priorities today with investments focused on future needs.
Installation of new evaporation dryer at the plants in Uelzen, Nakskov and Örtofta is part of the biggest energy-saving project of Nordzucker.
Annual Report Nordzucker 2012/2013 18
have a fairly short payback period of four to five
years, save costs and make a positive contribution
to Group earnings. “Energy savings have indisput-
ably played the main role in this area for many
years now”, explains Aumüller. He is particularly
pleased that the Swedish plant in Örtofta is now
to follow those in Uelzen and Nakskov by starting
the 2014 campaign with a new evaporation dryer,
which will cut energy consumption there by a
good 25 per cent. What’s more, every kilowatt-
hour saved reduces carbon emissions and brings
Nordzucker another step closer to reaching its
ambitious reduction targets. “If we’re very good,
we will manage to recoup most of the increase in
energy and personnel expenses with the current
investment volume”, says the COO in summary.
Ensuring high environmental standardsThe bulk of the investment budget, amounting to
some EUR 40 million, is currently split between
replacement and compliance activities. The latter
consist of measures that are necessary to comply
with statutory requirements and environmental standards. Nordzucker is presently focusing on in-
novative technologies for efficient waste-water processing and on steps to reduce unpleasant smells.
“Here, too, we are investing continuously”, emphasises Aumüller. “It means we can maintain the
outstanding environmental standards at our factories going forward.”
New focal areasIn the years ahead, the production team expects a clear shift in capital expenditure towards replace-
ments, compliance and logistics. This will be prompted partly by the EU’s new Industrial Emissions Directive, which stipulates that environmental pollution is to be reduced further in future by using
the best available technology (BAT). “We will therefore need to, for example, renew the boilers for
generating energy at a number of sites over the next few years, or make substantial modifications to
them”, says Aumüller. The cost-cutting efforts that resulted from the sugar market reform have also
left their mark on the production units. “Our capital expenditure on property, plant and equipment
has not kept pace with depreciation for many years”, he stresses. At the same time, the campaign
run by the factories has been a third longer for five years now. “The increase in capacity utilisation
is good, but it also means the machines and components have a shorter useful life.” COO Aumüller
is also expecting the cost of logistics to increase. As part of the sugar market reform, Nordzucker closed
several sites and had to abandon some of the storage capacities available there. Today, production
is concentrated at the remaining sites, where the demand for storage space is correspondingly higher.
Nordzucker maintains outstanding environmental standards with innovative technologies for efficient waste-water processing.
19Responsibility
Annual Report Nordzucker 2012/2013 20
Dedication is an important part of our culture. A whole series of forward-looking projects, such as 20 · 20 · 20, are preparing our company and our beet farmers for future challenges.
Dedicated team
“It is our job to ensure that knowledge of improved cultivation methods reaches as many of our farmers
as possible. We at Nordzucker have the capacity to conduct trials and pass on the results.”
Markus Reiners, Beet Procurement Manager – Nordzucker, Clauen sugar factory
21Dedication
20 · 20 · 20 in practice
How can 20 per cent of the best-performing beet farmers in the whole of the Nordzucker Group pro-
duce 20 tonnes of sugar per hectare in the year 2020? Nordzucker and its farmers are busy finding
answers to just this question. Nordzucker has been pursuing this goal since 2011 with the 20 · 20 · 20
initiative, concentrating on five areas: plant strains, cultivation methods, harvesting, storage and cultiva-
tion structure.
Regional expert teams have been set up in the seven countries where Nordzucker grows sugar beet.
“Here in Trenčianska Teplá, we have chosen eight topics that we want to look at in detail and improve,
in order to boost the sugar yield. They include preparing the seed beds in the autumn with a prelim-
inary round of fertilisation. The advantage is that in autumn the ground is mostly dry, so it is worked
gently and not compacted unnecessarily. This gives us a soil which absorbs moisture evenly throughout
the winter and then has a homogeneous structure in the spring. In spring, the field then only has to be
harrowed lightly before it can be drilled. We can therefore maintain the capillarity of the undamaged
soil and achieve better crop emergence and very good root growth. This increases beet yields per
hectare. Our cultivation advisers use field trials to demonstrate the advantages of this practice, which
is widespread in Germany, and so help to spread knowledge of it”, says Richard Šulík, member of the
Board, Považský cukor.
Discussing practical cases and disseminating the resultsAnother focal area in Slovakia is mulch seeding: “The mulch-seeded portion currently accounts for
around 30 per cent of land under beet cultivation in Slovakia and we want to increase this to well over
50 per cent in the medium term. This improves the soil structure and offers active protection against
erosion and surface siltation”, adds Richard Šulík.
In the German growing areas too, the farmers are
busy fine-tuning their cultivation methods, to get
closer to the magic figure of 20 tonnes of sugar
per hectare. Here, too, the expert teams include
cultivation advisers and farmers, who discuss
practical situations and share their experience of
growing techniques. It is particularly exciting
when the yields vary considerably in a single
natural environment in spite of being subject to
similar conditions.
“In our 20 · 20 · 20 group, there are currently 20 to
25 farmers testing an app which adapts the
planned crop protection to the local weather fore-
cast. The app then determines the optimal time to
apply the pesticide within the next 48 hours. This
is partly to ensure and improve the effectiveness
of the spraying and partly to protect the beet”,
explains Markus Reiners, the beet procurement
manager in Clauen, Germany. He goes on to add:
Learning from the best
Close up: Nordzucker cultivation advisers make contact and prepare the ground for a broad sharing of knowledge.
Annual Report Nordzucker 2012/2013 22
“The fact that the app is now being tested in practice
is the result of a 20 · 20 · 20 workshop that we held
in March this year. We invited a Dutch expert to the
workshop, who gave a presentation on the influence
of the weather on crop spraying and showed us this
app. By the end of the talk, so many farmers were
interested in the app that we were able to organise
a trial run with some farmers in the Clauen area.”
Learning from one anotherThe 20 · 20 · 20 initiative has been under way in
the Nordzucker Group since 2011. As different as
the conditions are in all of Nordzucker’s growing
regions, one thing is the same: both sides learn
from one another. “We learn from the farmers’
knowledge too. They are the ones out in the fields
every day, looking for practical new solutions when
they are faced with challenges. And there are a
lot of lateral thinkers among them, who generate
innovative ideas. The latest example is a farmer who
considerably reduced the quantity of crop protec-
tion products he applied. By adjusting the spraying technique and the timing, he achieved substantial
savings here last year. Those are the projects where we at Nordzucker say, “Wow, we’d better have a
look at that”. We have the opportunity to examine the matter in trials and to boost the power of projects
like these by disseminating them widely when we see that they work”, explains Reiners.
Trials in Germany are currently focusing on cultivation and seeding. For example, we are looking at the
effect the choice of catch crop has on sugar yields or what the effects of mulch seeding and autumn
strip tilling are. In Sweden, the size of the trial area was extended from 12 to 22 hectares. As of last year,
trials at Granhill Øst are concentrating on cultivation techniques. An additional trial area for Northern
Europe has also been added in Denmark.
“At our trial area at Sofiehøj in Holeby, for instance, we have held trials with different varieties and
different cultivation methods. Our aim is to pass on our findings by sharing experience directly on
the ground”, says Claus Nordgaard, Manager of Agricenter Denmark, about the activities on the
eight-hectare plot.
The regional 20 · 20 · 20 interim results are also being shared throughout the Group. “In June, we will
be discussing the experience gained to date from the different initiatives within the project at a Group
conference of all Nordzucker cultivation advisers and trial participants. In this way, we can ensure that
the experience of different countries and natural environments is shared and can jointly decide on the
direction things should take going forward. Because together we learn from and with one another”,
says Dr Niels Pörksen, Chief Agricultural Officer.
With its 20 . 20 . 20 initiative, under way since 2011, Nordzucker is aiming for a yield of 20 tonnes of sugar per hectare.
23Dedication
Where does the sugar market regime go from here?
Interview with Marie-Christine Ribera
Marie-Christine Ribera, as CEFS Director General, could you explain a little bit about the organisation?CEFS stands for the Comité Européen des Fabricants de Sucre or the
European Association of Sugar Manufacturers, created in 1953. Based
in Brussels, we represent the activities of European sugar manufacturers
and refiners, approximately 60 companies across 20 EU Member States
plus Switzerland. Sugar is produced in 106 factories across the EU sup-
porting 180,000 direct and indirect jobs and 170,000 growers. We
are a small team, working on different issues of key importance to the
industry, from nutrition to the environment, from trade to agriculture.
And what is your biggest priority at the moment?As an organisation, but also as an industry, our biggest priority is the
reform of the Common Agricultural Policy (CAP). The Single Common Market Organisation (CMO) for sugar provides the rules for managing
the market and these rules are being reformed.
How are these rules being reformed?
In October 2011, the European Commission came forward with a legislative proposal to end the
current Single CMO for sugar on 30 September 2015, which foresees terms for buying sugar beet
and sugar cane and, perhaps most importantly, national quotas to be distributed among EU sugar
companies. It also includes mechanisms to monitor the market and withdraw sugar when there is a
surplus on the market.
And since 2011?
The proposal is now in the hands of the member states (brought together in the Council of the
European Union) and the European Parliament, which have the right and competence to decide on
the final outcome as co-decision makers. In March 2013, the Council decided to prolong the Single
CMO for sugar until 2017 and the Parliament until 2020.
What is CEFS’ position?
CEFS supports the prolongation of the current Single CMO for sugar until 2020. This will enable the
European sugar sector to continue to optimise its competitiveness and efficiency; to counter the
instability of the world sugar market, securing stable supply; and to provide LDC/ACP countries with
more time to invest in their infrastructure in accordance with the EU’s international commitments.
You must have been disappointed with the Council’s position to prolong the Single CMO for sugar until 2017 rather than 2020? Yes. The Parliament sent a clear message to the Council – prolong the Single CMO for sugar until
2020 – and we were deeply disappointed to see the Council did not take this on board. The 2006
reform resulted in the closure of 83 factories (one in two) and the loss of more than 22,000 direct
jobs – this should not have been in vain. We are becoming more competitive, but we need more
time. We are simply asking for stability and predictability for five more years. This is not a long time
in such a capital-intensive industry.
Marie-Christine Ribera, CEFS Director General (Comité Européen des Fabricants de Sucre, European Association of Sugar Manufacturers).
Annual Report Nordzucker 2012/2013 24
Are there any other issues, apart from the end date, which concern you?CEFS welcomed the Council and the Parliament’s maintenance of the current refiners’ privilege, as
well as the Council’s decision not to include an increase in the quotas. We do not support a reallo-
cation to those who relinquished their quota(s) in the previous reform, nor do we support an in-
crease in isoglucose quotas in certain member states. This would go against the 2006 reform which
aimed to balance the market. We also consider that the production charge the sector has to pay on
each tonne of quota sugar is unjustified and unfair. It should be eliminated when the current finan-
cial framework ends in 2014.
What is CEFS doing to make its position heard? CEFS and our members have been working hard to promote our position
and explain the reasons for the prolongation until 2020. We put forward three
main reasons detailed in our position from March 2012. We also have a joint
position with our partners in the sector, CIBE (the growers), EFFAT (the trade
unions) and the ACP/LDCs (least developed countries). As a coalition, we believe
prolonging the Single CMO for sugar until 2020 would go a considerable way
to guaranteeing decent employment, improving the sector’s sustainability and
providing sufficient sugar supplies at sustainable prices for farmers, processors,
suppliers, workers and consumers.
What is the timetable for the reform? As I said, the Council and the Parliament decided on their positions in March.
Since then, the two bodies have been negotiating with each other in so-called
trilogues in order to reach a common position. It is hoped that this will be done
before June under the Irish Presidency. As you can see, it is a long decision-
making process from October 2011 to June 2013: literally two years in the
best case scenario, let alone the discussions on implementing regulations.
The entry into force is foreseen in 2015.
What next for CEFS?We are following the negotiations. We recognise the hard work that has been
done and understand the need to ensure that the CAP is adopted and imple-
mented in a timely manner. Nonetheless, Europe’s sugar manufacturers need a workable and reli-
able solution, not an agreement for the sake of an agreement, and insist that the prolongation of the
Single CMO for sugar until 2020 with no change to the refiners’ privilege and no increase in quotas
is still feasible – for the sake of the sector as a whole.
One last question, what about after the end of the current Single CMO for sugar?In order to ensure the European market is balanced after the quota, it is of utmost importance that
the sector secures a commitment, such as a political declaration, that there should be no limit on
exports after the quota. It is stating the obvious so it should not be too difficult for our decision-
makers to find a proper way to express it. Similarly, there is a need for a crisis mechanism (market
clearing mechanism), i.e. a withdrawal from all sources so all players make adjustments to ensure the
market is balanced. This will enable the Commission to act before rather than after a crisis.
Dr Niels Pörksen: “Our declared aim remains to make beet farming in Europe even more competitive.”
25Dedication
Annual Report Nordzucker 2012/2013 26
Courage accompanies decisions and drives projects. Being open to new ideas makes development possible.
Courage as a motor
“Breaking new ground using innovative technology and going beyond national borders requires
a great deal of courage. Nordzucker is developing a culture that not only makes this possible, but
also encourages it.”
Aljoscha Kotulla, SAP Special Applications Specialist, Nordzucker, Braunschweig
Björn Windfall, Senior Consultant, Agri and Beet, Nordic Sugar, Copenhagen
27Courage
Making exemplary use of modern media
What distinguishes human beings from other
animals? There is the upright posture, which is a
requirement for agriculture because it frees your
hands to do other things. You could say it’s the
anatomical prerequisite for beet cultivation. Of
course, that’s not all: human beings can commu-
nicate in words; they can read and write. Modern
media make it possible to exchange information –
even in large quantities, over great distances and
with many people at the same time. Surveys among
our beet farmers have shown that they would like
Nordzucker to improve its communications. One
of the ways we are doing this is by redeveloping
our Agri-Portal.
For a number of years now, Nordzucker has pro-
vided its beet farmers with an information portal,
the contents and technology of which are continu-
ally refined. As part of the increasing integration
of the technologies and content used within the
Group, we are currently working flat out to en-
hance this Group-wide portal solution for the
beet farmers.
“With all the changes to the portal, our main aim is
to always see things from the farmers’ perspective”,
says Björn Windfall, Senior Consultant, Agri and
Beet, describing the objectives of the international Agri-Portal project. “First of all, we asked ourselves
what users really need and how we can provide this information in a user-friendly way, so that it is
easy to find”, explains Björn Windfall. “The main thing is to support farmers with their everyday
work. We provide the information that the farmers really need for their work and which can be
accessed simply, and always in the same way, from a standardised platform.”
A new, clearer page structure will guide the farmers better through the information on offer. “On
the one hand, we want to offer farmers and interested parties a freely accessible area and on the
other hand, it is important for us to have a password-protected page where we can exchange infor-
mation directly with our beet farmers. The public pages always have the latest information and news
about beet cultivation. In the private area, the farmers can find clearly structured, specific operating
information for their business, such as contract details and invoices. They can also carry out compari-
sons between farms and place orders, for seed, for instance. The focus is on rapid, direct access to
personal information. With the new design, the structure and the search function, users can find the
information they are looking for quickly and easily”, adds Aljoscha Kotulla, SAP Special Applications
Specialist.
Communication creates connections
Consistent, coordinated project planning is the foundation for successful implementation.
Annual Report Nordzucker 2012/2013 28
“In addition, we are currently working on making the
Agri-Portal mobile, i.e. compatible with smartphones
and tablet PCs. Then the farmer out in the field can
read tips on cultivation or the latest news”, points out
Björn Windfall.
From the company’s perspective, the new approach
also has huge advantages: “With the Agri-Portal, we are
pursuing a Group-wide approach. That means we have
a standard design for all country platforms. For the effi-
ciency of the IT environment, the decisive aspect is that
new developments and functionalities can be rolled out
more quickly to other countries. Altogether, this inte-
grated approach cuts maintenance costs and can be
managed better by the IT department”, says Aljoscha
Kotulla, describing the benefits from an IT perspective.
Another objective is to expand the Agri-Portal so that it
becomes the preferred information channel for our
beet farmers – the address where everything should
come together, without the need for complicated
searches.
For all the enthusiasm and the clear advantages of modern communication media, Nordzucker
nonetheless still puts personal contact and dialogue with the farmers at the heart of its strategy.
“The Agri-Portal doesn’t replace the personal conversation, it adds to it. We are positioning the
Agri-Portal as an important communications tool that expands the dialogue with our business
partners. A personal phone call and direct discussions with staff in the beet office are, and will
remain a vital part of our individual service”, says Gerald Dohme, Senior Manager Corporate
Communications.
Modern technology is changing communication.
This is how the Agri-Portal welcomes farmers in Germany today.
29Courage
Sharing experiences – setting trends
Nordzucker has production facilities in seven
countries. This means that different languages
and cultures are confronted with one another.
This can be a challenge for a pan-European com-
pany – especially if it has demanding objectives.
Four years ago, the three regional production
managers responsible for Northern, Eastern and
Central Europe decided on a joint initiative to
drive forward the development of products and
technology in the Nordzucker Group. Their aim is
to share the lessons drawn from past experience
and to intensify the exchange of information
across national borders. This exchange has proven
to be particularly effective since all are focused on
a common vision for the future. The initial meet-
ings were dominated by questions about future
technological developments and the demands
of our customers in terms of product innovation,
product quality and safety, and sustainable development. It quickly became apparent that an organi-
sational structure was required which would enable reciprocal learning and a common assessment
of trends throughout the Group.
A solution was soon found and there are now 13 cross-border Production Working Groups which pool
Group knowledge on topics relevant for the future and also keep developing it. In addition, all the experts,
plant managers and production managers meet with Executive Board member Axel Aumüller twice a
year for Global Production Meetings, to coordinate and optimise subjects such as the planning of in-
vestment and maintenance, energy conservation, technological development, production information
systems, customer-specific product developments, occupational health and safety, and sustainability.
“The important thing is that it’s not just about defining standards and guidelines, but about reaching
a common understanding of what we need in order to keep developing the production processes.
We can only get better if we all pull in the same direction. It is vital that we define and implement a
line of approach for the entire Group”, explains Dr Michael Gauss, Managing Director Central Europe
and Senior Vice President Production Central Europe.
“Planning concrete activities is one aspect of that, but equally important are joint discussions and the
exchange of knowledge. On the one hand, the technology used is the same everywhere, but on the
other, there is a wide range of experiences with different projects. Jointly drawing on this wealth of
experience promotes motivation and innovation ”, adds Achim Rüger, Senior Vice President Produc-
tion Eastern Europe.
Hand in hand towards greater productivity
Axel Aumüller and Zoltán Tóth in Clauen: exchanging know-how on all levels.
Annual Report Nordzucker 2012/2013 30
“Discussing specific topics with colleagues from other regions is an exceptional experience every time.
It gives you incredible impetus for your own work, in terms of the technology itself on the one hand,
of course, but also in terms of the workflows and processes at a production facility. An inspirational
atmosphere is generated in no time at all”, says Dr Jesper Thomassen, Senior Vice President Production
Northern Europe.
The Production Working Groups pool all of the production technology expertise available within the
company and also serve as important advisory and implementation teams. For example, the Energy
Focus Group evaluated all the evaporation dryer projects that were approved recently and provided
important implementation support. The Waste Stream Focus Group gave advice and support on the
dimensioning and operational launch of the new waste-water treatment reactors in Opalenica, Kėdainiai
and Klein Wanzleben. And an important contribution was made to our value process by the Health &
Safety Group, which created a link between our Nordzucker values and the guidelines and processes
for occupational health and safety.
All the teams have been focusing on their specific topics for more than three years. The exchange
of knowledge informs and inspires a variety of activities, be they investments, environmental topics,
occupational health and safety or the improvement of working practices. In this area, Nordzucker
benefits in many ways from its size and its European structure.
Joachim Rüger, Dr Michael Gauß and Dr Jesper Thomassen in discussion.
31Courage
32 Annual Report Nordzucker 2012/2013
“It’s the small everyday things that make a difference, for oneself and for others.”
Kristine Koppelhus, Assort Manager, Nordic Sugar, Copenhagen
Appreciation of each other is the basis for growth and progress.
Appreciation is the name of the game
33Appreciation
Human resources management of the future
Focus on people
Attracting and retaining qualified staff is the main
task for human resources at the Nordzucker Group.
Nordzucker has long practised a modern approach
to professional training and development and to
work–life balance.
“The success of our company is based on dedicated,
productive employees at the various sites in Europe.
We offer an international working environment and
wide-ranging development opportunities. We consider
the long-term loyalty of our employees to the company
to be particularly important. For this reason, we fill
vacancies from within the company wherever possible
and in doing so can offer excellent prospects for de-
velopment”, says Inga Dransfeld-Haase, Senior Vice
President Corporate Human Resources, explaining the
principle that applies throughout the Group.
Demographic changes will make it more difficult to
attract qualified professionals in future. Nordzucker
therefore counts on fostering talent from within wher-
ever possible. “For example, we encourage and support
colleagues, especially those working in a technical
field, to complete a part-time degree course in parallel
to their work”, adds Inga Dransfeld-Haase.
Succession planning is another key aspect of human resources work at Nordzucker. A precise analysis
of the age structure is carried out to determine when employees with specific qualifications will
reach retirement age. “We use a modern IT solution, which enables us to model changes in the staff
structure over the long term. This transparency is vital for succession planning and makes us less
dependent on competing for talent”, emphasises Inga Dransfeld-Haase.
In order to address important human resources issues in a systematic and structured way, Nordzucker
introduced HR conferences in 2010, which take place annually with managers at local, national and
Group level. The focus of the HR conferences is the continued development of employees. “The HR
conferences are an important part of our work. We consult with managers about individual staff
development activities across different sites and the Group as a whole. In Germany, for instance, staff
Inga Dransfeld-Haase, Senior Vice President Corporate Human Resources: “Nordzucker relies on professional training and long-term employee loyality.”
34 Annual Report Nordzucker 2012/2013
can systematically use the standardised training courses on offer at the Sugar Academy for their
personal development”, explains Inga Dransfeld-Haase.
Modern human resources management covers much more than professional training, however.
For many years, there has been an increasing focus on courses related to work–life balance. The
Nordzucker ‘Time Out’ was opened recently at the company headquarters in Braunschweig. This is
a separate area where staff can spend some time attending to their physical and mental well-being. It
provides specific opportunities for fitness and healthy living, among other things. Flexible working hours
and support with childcare have become a well-established feature of the Nordzucker culture, too.
“Nordzucker can therefore present itself as an all-round attractive employer, which is important for
recruiting new staff. The main thing, however, is that people are at the heart of what we do.” Inga
Dransfeld-Haase sums it up as follows, “We give our employees room to expand their abilities and to
identify with the company, and this creates the conditions for a successful working relationship in
which both sides can grow.”
Professional training, courses related to work–life balance and lived corporate values document: we focus on our employees.
35Appreciation
Surveys are the starting point for making far-reaching improvements
Success for us doesn’t just mean the number on the bottom line at the end of the year, but also
and equally the satisfaction of different interest groups. So surveys among different groups of stake-
holders are an important element of Nordzucker’s positioning and continued development. Because
it is only when we really know the expectations of our customers, shareholders and beet farmers
that we have the opportunity of fulfilling them and entering into a constructive dialogue that im-
proves our company.
“We carry out regular customer surveys in all regions and of course we are pleased when the feedback
is positive. But being told about dissatisfaction is just as valuable. So the most important thing after
the survey is to evaluate the results and start taking action”, says Mats Liljestam, Chief Marketing
Officer.
As well as great praise for food safety, product range and punctual deliveries, the last survey of
industrial customers in the Central Europe region revealed some areas where customers would like
Nordzucker to do better. They include the time it takes to deal with complaints or the desire for more
information on market developments, for example. “We started working on these topics immediately
There’s no such thing as a stupid question ...
Anja-Alexandra Horn, Sales Development Manager, is dedicated to customer satisfaction.
Annual Report Nordzucker 2012/2013 36
after the customer survey. Our process for
dealing with complaints was tightened up
straight away, for instance”, explains Ingo Saß,
Senior Vice President Sales Central Europe.
And it is not only our customers who are sur-
veyed regularly, however, but also the beet
farmers. “A close relationship with our beet
farmers, based on partnership, is a tradition
here and really is a matter of course for us. So
it’s all the more important that every now and
then we ask: What can we do better?”, says
Dr Niels Pörksen, Chief Agricultural Officer,
explaining the approach.
We are in close contact with our beet farmers
and offer them advice and services: via our
websites, in informal telephone conversa-
tions or on personal visits. In February and
March we asked all our farmers to evaluate
our contacts with them and Nordzucker as a
business partner. A total of 5,087 farmers from
seven countries took the opportunity to give their assessment and their comments. In most cases,
Nordzucker came out very well. Compared with the previous survey in 2011, the results were much
better – especially in Germany and Poland and in particular in the areas of cultivation advice and
communications. The steps taken in 2011 have obviously hit their mark.
A survey carried out last year with a selection of shareholders was particularly exciting. The main
focus was to find out how shareholders view the company’s strategy and to what extent they trust
the company and the Executive Board. “The results of this survey were very positive. However, we
did learn that we have to be even clearer and more candid in our communications on specific topics
– especially those concerning the future. As the operating environment is set for more change in fu-
ture, Nordzucker is in the process of becoming an international company. It is therefore all the more
important that we gain the support of our shareholders and make it clear why we have chosen this
strategy”, says Hartwig Fuchs.
Nordzucker will continue its policy of regular exchange with different interest groups in many areas.
Advice and communication with the farmers are particularly important.
37Appreciation
Annual Report Nordzucker 2012/2013 38
Agricultural trends affect our business. Preparing for change in good time ensures sustainable success.
Focused on the future
“Agriculture thinks, lives and works in long time frames. The trick now is to bring together
the speed of the markets with the long time frames of agriculture.“
Hartwig Fuchs, Chief Executive Officer
39Trends in agribusiness
Trends in agribusiness
A changing industry
Klaus Schumacher: Welcome to Nordzucker. I am delighted to welcome Carl-Albrecht Bartmer,
President of the German Agricultural Society (DLG), and Mark van Driel, Managing Director of
Rabobank, Germany, who will be taking part in our panel discussion today together with our CEO
Hartwig Fuchs and our CFO Dr Michael Noth. Today we want to talk about trends in agribusiness that
influence the entire agricultural industry and therefore also the sugar industry and beet cultivation.
Mr Bartmer, when we look at agriculture in Germany today, what are the trends that farmers
factor into their business decisions? Is it still the megatrends, so global population growth and
rising incomes, which will lead to sustained growth in demand for food in the years ahead?
Carl-Albrecht Bartmer: The familiar megatrends do still have a considerable influence. At the moment,
they also seem to be reflected in the relatively tight supply situation on global agricultural markets,
and in the resulting high prices for almost all agricultural raw materials. The mood in the farming
industry is therefore extremely upbeat. This is the case even though we are currently discussing a
U-turn in agricultural policy, aimed at reducing support for farmers and at the same time tying the
remaining payments much more closely to specific duties, especially concerning the environment.
The willingness of German agriculture to invest is currently at a record high, according to the latest
DLG-Trendmonitor publication. This also reflects the market conditions. So there is no reason to play
down the current global megatrends – they remain strong. However, we must recognise that there
are also particular dynamics in the EU and especially in Germany that affect how farmers run their
businesses.
The best example of this is bioenergy. This has become very important, accounting for nearly 20 per cent
of arable land use in Germany. We are seeing considerable shifts in the competitiveness of certain
Dr Michael Noth, Hartwig Fuchs and Klaus Schumacher organised a round-table discussion.
Annual Report Nordzucker 2012/2013 40
production lines, which are often caused or acceler-
ated by state intervention, as with Germany’s Renew-
able Energy Sources Act (EEG). I wouldn’t call that a
megatrend, but it is the result of political action that
will be with us for a good while and will continue to
affect business decisions in agriculture.
In Germany, we also have to deal with another trend:
we have a tendency here to see agriculture and the
rural environment more emotionally and expect them
to carry out all kinds of functions for urban centres.
Then there are the calls for the more extensive use of
land for other purposes. The keywords here are ecol-
ogy, sustainability and quality.
Klaus Schumacher: The development of agriculture
over the past 20 years is also closely related to the
creation of the common market in the EU, which
enabled a common agricultural policy to work. Is
the trend now going back to renationalisation?
Carl-Albrecht Bartmer: The EU became powerful
in agriculture because it strived for equal living and
working conditions, with a sensible division of labour. In
addition, the traditional safety nets of agricultural policy based on state intervention in markets have
been scaled back over the past two decades. This has indeed proved to be a great impulse for the
agriculture industry, in terms of qualifications and especially in the enterprising attitude of farm
managers. The farmers have developed their processes much more efficiently as businessmen. There
has been much greater technological progress in response to this environment, and more profitable
methods as a result. Today, the most competitive countries in the EU are those that decided largely
to uncouple production from subsidies very early on. Unfortunately, what we are seeing in discussions
about the current reform of agricultural policy is essentially a step backwards. We are amazed to see
political concepts being revived that we thought had been cast aside long ago, be it a philosophy
of keeping small family farms instead of growing companies, often also run by families, of regionalised
production systems instead of international trade, or of supposedly lost “traditional knowledge”
versus modern technological progress.
Klaus Schumacher: Mr Fuchs, how are these changes in the agricultural industry reflected in the
relations between Nordzucker and its beet farmers?
Hartwig Fuchs: There are various aspects that need to be considered. Here’s a small example of the
willingness to invest: after we had agreed on the final beet price for the 2012 campaign, ten farmers
and machinery syndicates here in Lower Saxony ordered new beet harvesters. In this case, there was
a direct connection between the beet price and the order placed.
Carl-Albrecht Bartmer: “The willingness of German farmers to invest is at a record high.”
41Trends in agribusiness
In other areas too, we see very clearly that our beet growers increasingly consider themselves to
be businessmen. The close, even emotional relationship with Nordzucker does still largely exist, of
course. But on the other hand, sugar beet increasingly has to compete with alternative crops. That
makes greater demands of us than it used to because we have to be much more competitive. Every
year, we have to fight for land to grow beet, and that brings us back to one of those megatrends:
the global supply of arable land is scarce. For us, that means we have to offer competitive prices for
beet compared with wheat and rapeseed every year, otherwise we won’t get our beet.
Klaus Schumacher: Mr van Driel, over the last few decades, Rabobank has become very closely
involved in farming, agriculture and the food industry. How do you see these trends?
Mark van Driel: My perspective is very similar. Global population growth naturally has an effect on
agriculture and prices. But that has been a topic for the last five years. What we are now seeing is
that agriculture is being linked more and more closely with the major global topics that are concerning
society. And, of course, with the world of finance too. For example, we see more and more investors
trading on futures markets. But I believe this will only affect prices in the short term. In the medium
to long term, prices will always be determined by supply and demand. Another topic is that many
suppliers have begun to finance the farmers. Traditionally, here in Germany, there were the coopera-
tives, of course, which financed the harvest, the seed and the fertiliser. But now we are seeing a new
dynamic worldwide, including in Africa, where funding is scarce. There are more and more links
Mark von Driel: “Population growth affects agriculture and prices.”
Annual Report Nordzucker 2012/2013 42
between seed and fertiliser companies, traders
and providers of financial services. Another import-
ant area is food quality and safety. Where food
comes from and how it is produced are increas-
ingly becoming matters of social concern.
Klaus Schumacher: Dr Noth, the financial and
agricultural markets are closely related. How does
that affect Nordzucker?
Dr Michael Noth: It is vital for us that we have a
business model which also stands up when markets
are volatile. If we expose ourselves to risks, we
must use the opportunities available to mitigate
those risks as far as possible. Of course, the best
thing is when we can share these risks with our
customers and suppliers. This will never be fully
possible, however, so we make use of the oppor-
tunities offered by banks and futures markets to
hedge market risks. Price movements on the sales
side cannot always be directly passed on to the
beet suppliers; we have to find compensation
mechanisms instead. The second aspect is that
we have to become more active in the area of
hedging. We are making intensive use of the
products on offer from the banks and the markets.
They are an indispensable part of our risk manage-
ment. We are therefore concerned to see that we
are being tied up with a good deal more red tape
as a reaction to the financial crisis. A financial trans-
action tax is also under discussion. All these things
make the necessary hedging of risk more difficult
and more expensive for companies like Nordzucker.
Klaus Schumacher: Does this high degree of
volatility also have consequences for our financing?
Dr Michael Noth: Financial markets now attach
greater importance to a sound business. This is a
result of the 2009 financial crisis and fits well with
Nordzucker’s approach: solid, reliable funding is
the basis of our business. The extreme volatility on
both our procurement and sales markets makes this solid funding all the more important. And we are
not just following a trend either, because this has always been our approach.
Dr Michael Noth: “It is vital for us to have a stable business model which also stands up when markets are volatile.”
Klaus Schumacher: “Finances and agricultural marketsare closely related.”
43Trends in agribusiness
Klaus Schumacher: We have already heard about
the “step backwards” being taken in agricultural
policy. Mr Fuchs, is that something that could
hold back Nordzucker’s future performance,
which has been very strong in recent years?
Hartwig Fuchs: There are certainly elements
that concern us. We are currently observing a
sharp change in the mood surrounding political
discussions about extending the sugar market regime. The positive aspects of the regime are
not being given enough weight. Let’s talk about
security of supply: the sugar market regime guar-
antees that the European market is supplied reli-
ably and regularly with at least 85 per cent of its
sugar requirements from regional production,
at the social and production standards in force
here. Reliability also means that if the quota re-
gime is abolished, a price hedging mechanism
must be created – and this is an option that we
in the EU sugar industry simply do not have at
present.
Dr Michael Noth: Exactly, that is a very important
point. At Nordzucker, we have to negotiate prices
with our farmers at a very early stage – generally
before the winter wheat is sown – in order to
secure the land for beet. Our beet prices then
have to compete with a wheat futures price, for
example. So we guarantee the farmer a minimum
price for his next harvest today, but only find out the price at which we will be able sell the sugar
ourselves 18 months later.
Klaus Schumacher: Mr van Driel, has Rabobank thought much about what would happen in the EU
sugar sector if the quota regime really was allowed to expire?
Mark van Driel: As soon as the sugar market regime comes to an end, the ones to profit will be those
who can produce the most efficiently and who exploit available growth opportunities. Sugar prices
will become more volatile, and we have already given some thought to whether sugar producers
could hedge themselves using grain futures.
Klaus Schumacher: Of course, that raises the question of whether it would not be more sensible to
think right away about creating a European futures exchange for sugar.
Mark van Driel: If the sugar market regime and the quota system are abolished, then this price hedging
instrument must be set up. Because while there is no hedgeable market price, our funding possibilities
are limited. We would certainly support the introduction of this kind of futures exchange. Because
Intense discussions on the future of agriculture.
Annual Report Nordzucker 2012/2013 44
the shortages in the European market which would probably arise at times if the quotas were no
longer there would have to be countered. Hedging raw materials from different parts of the world is
becoming more and more important.
Dr Michael Noth: But I also think that the structure of the European sugar industry will undergo
further changes, just as it has over the past decades. It needs to become more efficient and adjust to
the market, especially where growing conditions and proximity to the market are more difficult to
predict. So we have to keep on doing our homework, become more efficient and keep fighting to
improve our processes, in order to hold our own against the competition and to grow.
Hartwig Fuchs: In principle, I don’t doubt that the sugar industry will continue to develop well in
the best sites and the best regions, even without the sugar market regime. But my main concern is
the time factor. Agriculture thinks, lives and works in long time frames. It is time to get the industry
ready for the global market. But at least Nordzucker’s sites are in the best regions. We will, however,
then have to do a great deal more in order to be able to ensure security of supply for our customers.
That will include importing cane sugar for refining. But once again, in everything we do, it’s vital
that we can hedge our risks. This will become more important than anything else. We at Nordzucker
have a very clear task: we produce sugar and have to ensure our competitiveness by continuously
becoming better, leaner and more efficient. Ultimately, we do all this to give our shareholders, i.e.
our beet growers, the opportunity to retain sugar beet in their crop rotation in future.
Klaus Schumacher: If a company like Nordzucker is thinking about becoming more international,
can it count on the support of its agricultural shareholders?
Dr Michael Noth: “We have to keep improving our efficiency and we have to adapt to the market”.
45Trends in agribusiness
Carl-Albrecht Bartmer: Well, I believe Nordzucker’s development in recent years does indeed reflect
a process of considerable development on the part of the shareholders. It’s a development that has
resulted in much greater recognition of the entrepreneurial role played by a food company that pro-
duces sugar and also in the realisation that sugar factories can no longer be seen as a mere appendix
to the farming business, whose job it is to process the beet so as to maximise the beet price. And I
believe there is a growing recognition that Nordzucker is a company which has to fight its corner
against other sugar manufacturers and has to seize its opportunities in a globalising market. This
evolution is a normal process, you could almost say of emancipation, from a processing company
founded by farmers to a self-confident business in which farmers hold shares. Ultimately, that is
lucrative for the farmers as shareholders and also ensures that beet processing takes place in their
home region.
Mark van Driel: Development and internationalisation are important for the future, certainly, but
Nordzucker also plays a pioneering role in the organisation and management of supply chains.
Given the trends we have just been talking about, this is an increasingly relevant skill.
Hartwig Fuchs: There is still a vast amount of potential in the idea of processing an agricultural
product from the region and producing something which really has this regional connection.
Consumers are making ever higher demands of traceability and transparency in the food supply
chain. With our approach, we can ensure this much more easily and thus differentiate ourselves
from competitors on the world market.
Carl-Albrecht Bartmer: I think the importance of the value chain will keep on growing. And one of
the reasons is something you just mentioned, Mr Fuchs: traceability. Another reason is: I believe that
processes can be organised much more efficiently within an overarching value chain.
Presenting a united front to change – round table at Nordzucker.
Annual Report Nordzucker 2012/2013 46
Mark van Driel: Customer loyalty can also be improved
with a tightly run value chain. The commodities markets,
where a piece of meat is bought here and a sack of
grain is sold there, will become less important, and
more established, longer-term economic relationships
will develop.
Klaus Schumacher: From a consumer perspective,
food safety and quality are currently major topics. How
do we deal with those?
Carl-Albrecht Bartmer: That is a very important issue.
We have a highly efficient agricultural and food pro-
cessing industry, in which quality assurance has never
been better. The communication channel for this is not
working properly, however. In my opinion, the local
farmer must become a much more vocal ambassador
for their industry, as they enjoy the highest level of
trust in their locality, and this would put agriculture in
general and, of course, the farmer’s own work into a
much better light.
Hartwig Fuchs: Absolutely, that is also one of our most important communication tasks. The aim
must be to express the strength and the benefit of agriculture for society and our economy.
Mark van Driel: In my opinion, the answer to this problem is that we have to communicate the sub-
ject of sustainability much more and also more clearly. The only way we can cope with the increas-
ing demand for food as a result of population growth and higher incomes while the amount of avail-
able land remains unchanged is by means of larger structures, which have to be organised better
and more efficiently – not necessarily organic agriculture, but certainly sustainable farming. And
these subjects will have to be communicated more clearly in future.
Klaus Schumacher: Mr Fuchs, we have a sustainability debate, we have a communications debate
and, looking at the sugar market regime, we are probably also going to see severe changes in our
operating environment. Taken as a whole, does this represent more of an opportunity for Nordzucker
than a threat?
Hartwig Fuchs: Well, it’s certainly a challenge. We will have to adapt in order to stay in touch with the
market. I believe it represents an opportunity because we are convinced that we will be capable of
competing with the world market – if we are given enough time to adapt. That requires certain
things, such as functioning price hedging mechanisms. But I can certainly envisage the EU continu-
ing to regularly export sugar to countries in the future which are dependent on larger import vol-
umes. With a combination of attractive pricing, product quality and first-class services, the European
sugar industry will be able to thrive on the world market. It’s therefore also a huge opportunity.
Hartwig Fuchs: “With a combination of attractive pricing, product quality and first-class services, the European sugar industry will be able to thrive on the world market.”
47Trends in agribusiness
Annual Report Nordzucker 2012/2013 48
Facts and figures on the course of the financial year 2012/2013.
Group management report of Nordzucker AG
“Transparency in the the figures is the most important prerequisite for initiating the right
measures.”
Sven Jansen, Senior Vice President Corporate Finance and Controlling, Nordzucker Braunschweig
49Management report
Group management report of Nordzucker AG
Corporate structure of the Nordzucker Group
Nordzucker AG Braunschweig, Germany
Norddeutsche Flüssigzucker GmbH & Co. KG, Braunschweig, Germany, 70 %
fuel 21 GmbH & Co. KG,Klein Wanzleben, Germany, 100 %
Nordic Sugar A/S, Copenhagen, Denmark, 100 %
Nordzucker Polska S.A., Przeżmierowo, Poland, 99.87 %
Region Northern Europe (NE) Region Eastern Europe (EE)
Považský Cukor a.s., Trenčianska Teplá, Slovakia, 96.80 %
Tereos TTD a.s., Dobrovice, Czech Republic, 35.38 %
Sucros OY, Säkylä, Finland, 80 %
Suomen Sokeri OY, Kantvik, Finland, 80 %
Nordic Sugar AB, Malmö, Sweden, 100 %
AB Nordic Sugar Kėdainiai, Vilnius, Lithuania, 70.60 %
Nordzucker Ireland Ltd., Dublin, Ireland, 100 %
Region Central Europe (CE)
Nordzucker Group
Nordzucker at a glance
Business activitiesNordzucker is the second-largest sugar producer in the European
Union, with a market share of more than 15 per cent. In the last
financial year, the company produced around 2.8 million tonnes
of sugar from sugar beet at 13 sites in seven European countries.
On average over the year, the Group had 3,290 employees.
Our customers include the confectionery industry as well as
producers of dairy and bakery products, jams, ice cream and
drinks. Nordzucker sells some 80 per cent of its sugar to manu-
facturers of food and beverages. Around 20 per cent of our sugar
is sold via retailers. Nordzucker distributes most of this sugar
under the product brands SweetFamily and Dansukker. The
portfolio includes other products of the sugar-making process,
especially dried pulp pellets and pressed pulp as animal feed
and molasses for the yeast and alcohol industries.
Group structureThe Nordzucker Group consists of three regions: Central,
Northern and Eastern Europe.
Central EuropeNordzucker AG operates five sugar factories in Germany, which
account for the major share of business in Central Europe. The
factories in Lower Saxony and Saxony-Anhalt produce around
one million tonnes of quota sugar a year for customers in the
food and food retail industries – primarily for the German market.
Nordzucker AG also sells other products of the sugar-making
process, such as animal feed and molasses.
A wholly owned subsidiary of Nordzucker AG, fuel 21 GmbH
& Co. KG based in Klein Wanzleben produces and markets bio-ethanol from intermediate products of the sugar-making process
(raw juice, thick juice) and molasses.
Furthermore, Nordzucker AG holds a majority stake in Norddeutsche
Flüssigzucker GmbH & Co. KG (NFZ), which operates two liquid
sugar factories, in Nordstemmen and Groß Munzel.
An average of 1,242 employees worked in the Central Europe
region in the financial year 2012/2103.
Central European business accounted for around 44 per cent of
Group revenues.
Northern EuropeIn the Northern Europe region, Copenhagen-based Nordic Sugar
produces and processes sugar in five factories and two refineries in
Denmark, Sweden, Finland and Lithuania. The company markets a
broad range of sugar products, above all in the Nordic countries,
the Baltic states and Ireland. The Dansukker brand enjoys a high
level of recognition in the region. Nordic Sugar is the market leader
Annual Report Nordzucker 2012/2013 50
823
25
26
27
28
29
30
3114
16
20 21
17
13
12
155
7
622
419
18
9
31
11102
24
Eastern Europe
Central Europe
Northern Europe
Group headquartersD 1 Braunschweig
Regional head offi ce DK 2 Nordic Sugar, Copenhagen
Sugar plants and refi neriesD 3 Clauen 4 Nordstemmen 5 Uelzen 6 Klein Wanzleben 7 Schladen DK 8 Nakskov 9 NykøbingS 10 Arlöv 11 Örtofta FIN 12 Porkkala 13 SäkyläLT 14 KėdainiaiPL 15 Chełmża 16 OpalenicaSK 17 Trenčianska TepláD 18 Liquid sugar plant Groß Munzel 19 Liquid sugar plant Nordstemmen
Sugar plants – non-consolidated minority stakeCZ 20 Dobrovice 21 České Meziříčí
Other locationsD 22 fuel 21, bioethanolS 23 Köpingebro (Fibrex)DK 24 NP Sweet, CopenhagenB 25 Offi ce Brussels
Sales offi cesLV 26 RigaLT 27 VilniusEE 28 TallinnIS 29 ReykjavikNO 30 OsloIE 31 Dublin
Locations in Europe
Nordzucker at a glance
51Management report
in Northern Europe and its 1,504 employees contributed around
40 per cent to Nordzucker’s consolidated revenues in 2012/2013.
NP Sweet is also based in Copenhagen. The joint venture be-
tween Nordzucker and PureCircle develops and distributes
products based on the sweetener stevia (steviol glycosides) in
collaboration with its customers.
Eastern EuropeThe Eastern Europe region includes two sugar factories in Poland,
one of which is also used as a sugar refinery, and one in Slovakia.
Furthermore, Nordzucker has a 35 per cent stake in Tereos TTD
a.s., a sugar producer in the Czech Republic. The Eastern Europe
sales area also includes other Eastern European states. Nordzucker
had an average of 544 employees in the Eastern Europe region in
2012/2013. It accounted for around 16 per cent of consolidated
revenues in 2012/2013.
StrategySince the company was founded in 1997, Nordzucker has f ocused
on growth in its core sugar market. Expansion in Northern Germany
was followed by several acquisitions in Eastern Europe. Nordzucker
pursued its growth strategy with the purchase of Nordic Sugar in
2009 and is now the second-largest sugar producer in Europe.
After radically restructuring its investment portfolio in 2010 and
2011, the Group now initially intends to concentrate on its core
business: the production and distribution of sugar. The Nordzucker
Group benefits from its strong market position in the EU. Developing
this position remains its foremost corporate objective. In addition,
the company reviews growth opportunities outside Europe.
Sustainable activities are important for work processes through -
out the company. Long-term success can only be secured by
running a sustainable business, especially by including envir-
onmental protection and social aspects in business decisions.
Pro duct safety as well as occupational health and safety are other
important factors in this context. Steps to achieve defined sustain-
ability targets are taken continuously in all these areas.
Customer focus and product safety are at the heart of our com-
pany policy. Nordzucker therefore sets great store by certified
quality standards, great flexibility and dependability of supplies.
The Group has a wide product range, which includes custom-
ised solutions and a broad assortment of speciality products.
Continuous efficiency improvements along the entire value chain
are driven by various projects throughout the Group. In addition
to major investments to increase efficiency, these include activities
aimed at achieving sustainable yield increases in beet cultivation.
The 20 · 20 · 20 initiative aims to make sugar beet even more
competitive in comparison to other crops, so as to safeguard
beet cultivation in our regions for the long term.
The five-year efficiency improvement programme “Profitability
plus” has been under way since 2009/2010 and has also deliv-
ered savings in all areas of the company. More than two-thirds
of the savings targets have been reached to date. The harmon-
isation and optimisation of business processes and the integra-
tion of the IT environment throughout the Group are other vital
steps that make a major contribution to sustainably boosting
the company’s competitiveness.
Sustainability, customer focus and efficiency gains form the basis
for strengthening the company’s position and achieving further
growth in its core business.
Company managementThe company is managed by an Executive Board made up of
five members. It reports to the Supervisory Board, which has
21 members, of which 14 represent the shareholders and seven
the employees. The internal management of the company is
carried out by means of financial indicators. The following targets
have been set: a return on sales of 5 per cent, total operating
profitability of 15 per cent, a return on equity of 10 per cent and
an equity ratio of 30 per cent.
Shareholder structure of Nordzucker AGThe shares in Nordzucker AG are held by Nordzucker Holding
Aktiengesellschaft (76.2 per cent), Union-Zucker Südhannover
Gesellschaft mit beschränkter Haftung (10.8 per cent) and
Nord harzer Zucker Aktiengesellschaft (7.8 per cent). A small
portion of capital (5.2 per cent) is held by other shareholders.
The Nordzucker AG share is not traded on the stock exchange.
Shareholders are to a large extent also active beet suppliers of
Nordzucker AG.
Shareholders’ structure Nordzucker AGEUR 123.7m share capital
Nordharzer Zucker Aktiengesellschaft 7.83 %, EUR 9.7m
Union-Zucker Südhannover Gesellschaft mit beschränkter Haftung 10.82 %, EUR 13.4m
Direct shareholders’5.12 %, EUR 6.3m
Nordzucker Holding Aktiengesellschaft 76.23 %, EUR 94.3m
Annual Report Nordzucker 2012/2013 52
Economic environment and market developments
Macroeconomic situationEconomic output declined slightly in Europe in 2012 as a result
of the sovereign debt crisis. The downhill trend accelerated
over the course of the year. The macroeconomic performance
was slightly positive in Nordzucker’s main markets, however,
despite slowing over the year. Economic output contracted
sharply in Europe’s southern member states.
Sector developmentsWorld sugar marketWorld market prices for sugar fell in the financial year 2012/2013.
They nevertheless remained high from a long-term perspective.
As in recent years, prices were subject to great volatility. At the
beginning of the 2012/2013 financial year, the sugar price on the
London Futures Exchange (white sugar No. 5, free-on-board, earli-
est delivery) was USD 645 per tonne. It declined successively
over the following months to reach a low of USD 562 in May
2012. In July 2012 the sugar price rebounded to a peak of USD
636, before falling back to USD 497 per tonne in February 2013.
The sugar market in the EUIn the past, the EU sugar market was largely decoupled from the
global market by the European sugar market regime. As a result, it
was characterised by very stable volumes and prices, with its sur-
pluses being exported to the world market.
All this changed with the reform of the sugar market regime in
2006. The quotas for producing sugar for human consumption
in the EU were reduced to around 80 to 85 per cent of market
demand. Since then, it has therefore been necessary to import
sugar from ACP countries and LDC to make up for the now missing
EU production. The non-quota sugar produced in excess of the
quotas is sold to customers outside the food industry in the EU
or can be exported to non-EU markets up to a total volume of
1.35 million tonnes.
If the import volumes provided for by preferential agreements are
not sufficient, the European Commission can respond to these
market developments within the framework of the sugar market regime to guarantee a stable supply of sugar. To cover demand
for sugar from the food industry, it can both approve non-quota
sugar for human consumption and enable additional imports at
300
400
500
600
700
White sugar EUR/t FOB
White sugar USD/t FOB
Jan.04
July04
Jan.05
July05
Jan.06
July06
Jan.07
July07
Jan.08
July08
Jan.09
July09
Jan.10
July10
Jan.11
July11
Jan.12
July12
Jan.13
200
100
800
900
World market prices for sugar, 2004 – 2013
Source: LIFFE white sugar trading, London No. 5, as of May 2013
53Management report
Nordzucker at a glance | Economic environment and market developments
reduced import duties. The European Commission takes these
decisions on the basis of supply balances for each sugar market-
ing year, which in the EU runs from 1 October to 30 September
of the following year. This means the financial year for Nordzucker
AG straddles two sugar marketing years.
In the last two financial years, the imported volumes were not
sufficient to meet demand in the EU sugar market without add-
itional measures. The European Commission therefore approved
650,000 tonnes of non-quota sugar for human consumption in
two stages in the sugar marketing year 2011/2012. This was sup-
plemented by 399,000 tonnes of additional imports at reduced
rates of duty.
For the current sugar marketing year 2012/2013, the European
Commission has announced that it will allow up to 1.2 million
tonnes of additional import sugar and non-quota sugar onto the
market. Of these 1.2 million tonnes, the Commission has so far
approved 300,000 tonnes of non-quota sugar for use in food and
awarded contracts for imports of 285,000 tonnes at reduced rates
of duty.
Market for animal feed and molassesThe prices for dried pulp pellets stayed high from February to
August 2012 due to low stocks and a sharp rise in the prices
for feed grain. Alternative sources of animal feed were also un-
available, which contributed to the price rise. Prices continued to
go up well into the campaign and only stabilised once it became
clear that good yields could be expected from the beet harvest.
Although beet volumes remained high in the 2012/2013 campaign,
the good beet quality meant that there was no increase in molasses production. In addition, imports of cane molasses to Europe
decreased. Lower availability and the ensuing price rise for cane
molasses made beet molasses competitive again and ensured that
prices remained high overall in the molasses market.
Market for sweeteners The market for stevia and products sweetened with stevia has
developed steadily since stevia (steviol glycosides) was approved
by the EU for food and beverages in 2011. Numerous products
are now on the market and many others are still in the development
phase. These activities will successively boost market volumes,
which are still low.
Market for bioethanolDemand for bioethanol from sustainable production remains
stable in the EU. In Germany, the market share of E10 fuel as a
proportion of total petrol sales is growing slowly but steadily,
accounting for about 15 per cent in the third quarter of 2012.
At the same time, US exports to the EU sank due to the lower
maize harvest in the USA and because of EU action against puta-
tive price dumping. This drove up prices for bioethanol in Europe,
especially from late spring. Price developments for crude oil and
petrol also contributed to the increase. However, the price for
bioethanol varied considerably over the course of the year.
Market developments in the sugar business Market developments: Central Europe regionThe Central Europe region mainly serves the German sugar
market – around 80 per cent of sugar sales by volume go to
the food industry and 20 per cent to consumers via retailers.
Altogether, the sugar market in Germany can be said to be
balanced in terms of volumes of production and demand.
However, imports from neighbouring countries are increasing
competition.
In the financial year 2012/2013, sales in the Central Europe region
were affected by cool, rainy weather in the summer months.
Manufacturers of drinks, ice cream and barbecue sauces in par-
ticular suffered from lost revenue and sales in the summer, and
Nordzucker’s sugar sales were therefore also below expectations.
Sales of preserving sugar were also down since the bad weather
reduced the amount of fruit harvested.
Nordzucker’s customers export a large proportion of their products.
In the financial year 2012/2013, these exports were hampered
by the effects of the euro crisis, above all in Southern Europe. The
export-driven German food industry was partly able to make up
for this drop in sales by opening up new markets outside the EU.
In 2012/2013, Nordzucker sold around 1,000,000 tonnes of
quota sugar in the Central Europe region, which was a slight in-
crease on the previous year. Sales prices remained largely stable
over the year, but were much higher than the previous year on
average.
Sales of non-quota sugar were slightly higher than the previous
year’s figure of approximately 60,000 tonnes.
Market developments: Northern Europe regionThe Northern Europe region consists essentially of Finland, Sweden,
Denmark, Norway, Iceland, Ireland and the Baltic states. Sugar
from internal production is supplemented by world market im-
ports of raw cane sugar for refining.
Nordic Sugar maintained its strong position in the Northern Europe
region, once again selling around 770,000 tonnes of quota sugar
to industrial and retail customers, as it did in the previous year.
High yields in 2011/2012 enabled Nordic Sugar to sell an add-
itional 320,000 tonnes of non-quota sugar, supplying customers
Annual Report Nordzucker 2012/2013 54
from the chemical industry and markets outside the EU (previous
year: 225,000 tonnes).
Market developments: Eastern Europe regionThe Eastern Europe region is characterised by a heterogeneous
market structure; both purchasing power and the proportion of
sugar sales destined for industrial and retail customers vary widely
from one country to another. Local beet sugar production is not
sufficient to cover demand, so this is a classic import market.
In Eastern Europe, both food retailers and industrial customers
now attach greater importance to securing availability by means
of longer-term contracts.
The Nordzucker Group strengthened its position in the Eastern
Europe region last year and actively seized market opportunities.
The region’s own sugar quota of 200,000 tonnes was far exceeded
by quota sugar sales of 450,000 tonnes. The difference is explained
by purchases of sugar from within the Group, a stronger position
in white sugar trading and activities to refine raw cane sugar.
Beet cultivation and campaignVery good weather conditions from the sowing period through
to the harvest resulted in a high beet and sugar yield in most
regions. Processing conditions were also mostly positive, which
meant that 2012/2013 was a very positive beet year overall for
Nordzucker.
Copenhagen
Braunschweig
Group campaign results
Sweden 2012 2011
Beet yield (t/ha) 59.3 62.9
Sugar content (%) 17.1 16.8
Sugar yield (t/ha) 10.2 10.6
Campaign length (d) 126 129
Denmark 2012 2011
Beet yield (t/ha) 68.2 73.3
Sugar content (%) 18.1 16.9
Sugar yield (t/ha) 12.3 12.4
Campaign length (d) 136 138
Germany 2012 2011
Beet yield (t/ha) 69.1 71.2
Sugar content (%) 18.3 18.1
Sugar yield (t/ha) 12.7 12.9
Campaign length (d) 133 130
Finland 2012 2011
Beet yield (t/ha) 34.8 48.0
Sugar content (%) 16.1 15.7
Sugar yield (t/ha) 5.6 7.5
Campaign length (d) 58 89
Lithuania 2012 2011
Beet yield (t/ha) 62.9 51.2
Sugar content (%) 17.1 17.3
Sugar yield (t/ha) 10.7 8.9
Campaign length (d) 129 115
Poland 2012 2011
Beet yield (t/ha) 72.0 64.1
Sugar content (%) 17.6 18.1
Sugar yield (t/ha) 12.7 11.6
Campaign length (d) 114 102
Slovakia 2012 2011
Beet yield (t/ha) 47.8 63.5
Sugar content (%) 16.8 18.7
Sugar yield (t/ha) 8.0 11.9
Campaign length (d) 80 111
55
Economic environment and market developments
Management report
During the 2012/2013 campaign, Nordzucker produced 2.8 million
tonnes of sugar from beet (previous year: 2.9 million tonnes).
As in the previous year, the campaign lasted for an average of
125 days.
The mostly fine weather was responsible for high yields only
just short of those of the previous year. The average beet yield
for the Group was 65.2 tonnes per hectare (previous year:
67.3 tonnes). The sugar content came to 17.9 per cent (previous
year: 17.6 per cent), which represented an average sugar yield
of 11.7 tonnes per hectare (previous year: 11.9 tonnes).
Beet processing in the Nordzucker factories mostly went smoothly
thanks to targeted investments and forward-looking maintenance.
However, weather conditions towards the end of the campaign
required some additional efforts in order to maintain process-
ing. In Denmark, a small quantity of poor-quality beet could not
be processed.
Excellent cooperation between beet deliveries, production and
sugar logistics also ensured that the campaign went off smoothly
all round. Weather conditions during the processing period only
caused minor temporary disruptions in certain areas.
Earnings, net assets and financial position
Earnings positionGroup earnings again developed very well in the financial year
2012/2013. This was mainly thanks to the prices for quota sugar,
which on average were much higher than the previous year. In
addition to higher prices, greater sales of non-quota sugar and
additional steps to boost efficiency made a major contribution to
the earnings increase.
Nordzucker reported an operating result (EBIT) of EUR 506.7
million in 2012/2013, which was well above EBIT for the previous
year of EUR 315.0 million. After deducting interest and taxes, this
resulted in net income before minority interests of EUR 360.3
million (previous year: EUR 208.3 million). After deduction of
minority interests, this resulted in consolidated net income of EUR
351.0 million compared with EUR 203.9 million the previous year.
The return on sales, calculated as net income (after minority inter-
ests) divided by annual revenue, came to 14.4 per cent in the
reporting year compared with 10.1 per cent the previous year.
This was again well above the target of 5 per cent.
To calculate total operating profitability, EBITDA (earnings before
interest, taxes, depreciation and amortisation) is divided by total
output (revenues plus own work capitalised and changes in fin-
ished goods and work in progress). This year the figure was 22.8
per cent (previous year: 18.4 per cent), which was also well
above the target of 15 per cent.
Revenues came to EUR 2,442.8 million, an increase of EUR 424.8
million on the previous year’s figure of EUR 2,018.0 million. This
sharp increase was achieved mainly with sugar.
Revenue from quota sugar (including purchased sugar) amount-
ed to EUR 1,750.9 million, or EUR 291.9 million more than the
previous year’s EUR 1,459.0 million. Sales of quota sugar were
flat, but average prices were higher than the previous year.
Sales of non-quota sugar rose sharply year on year following the
good harvest in 2011, whereas average prices were lower than
2012/2013
11.7
2011/20122008/2009 2009/2010
9.610.6 10.9
11.9
2010/2011
Average sugar yieldtonnes per hectare
2.8
Sugar production Nordzucker Groupin millions of tonnes
1.7
2.9
2.3
2.9
2012/20132011/20122008/2009 2009/2010 2010/2011
Annual Report Nordzucker 2012/2013 56
the previous year. Overall, revenue rose to EUR 261.0 million
compared with EUR 162.6 million the previous year.
Bioethanol revenues from its own production at fuel 21 came to
EUR 86.8 million, an increase of EUR 17.5 million on the previous
year. Sales prices and, above all, sales volumes were higher than
a year earlier.
At slightly lower sales volumes, revenues from molasses went
down, despite slightly higher prices, to EUR 45.1 million (EUR 4.2
million less than the previous year). Higher sales volumes for animal
feed (pellets and cossettes) and roughly stable prices lifted revenue
by EUR 22.9 million to EUR 151.7 million.
Revenues from other traded goods (especially seeds) accounted
for EUR 108.7 million, slightly below the previous year (EUR
119.3 million).
Stocks of finished and unfinished goods went up as of the end of
the financial year by EUR 163.6 million (previous year: EUR 261.8
million). This increase in stocks was EUR 98.2 million lower than a
year ago, mainly as a result of much higher sales of non-quota sugar.
The aggregate of higher revenues, higher stocks and own work
capitalised resulted in total output of EUR 2,607.3 million, which
was well above the previous year’s figure of EUR 2,281.6 million.
Other operating income came to EUR 29.7 million and was thus
below last year’s figure of EUR 42.5 million. As in the previous
year, there were no non-recurring factors to report.
The cost of materials and services came to EUR 1,622.0 million,
or EUR 121.2 million more than the previous year (EUR 1,500.8
million). Above all, higher beet costs than the previous year were
responsible for this increase.
Personnel expenses rose from EUR 188.7 million the previous
year to EUR 201.5 million. The rise stemmed mainly from collect-
ive wage increases and higher performance-related payments to
the Group’s workforce.
Depreciation, amortisation and impairment (less write-backs) in
the reporting year came to EUR 87.6 million, compared with EUR
105.4 million the previous year. Impairment losses of EUR 20.0
million were recognised the previous year on the non-current
assets of fuel 21.
Other operating expenses rose slightly from EUR 214.2 million to
EUR 219.2 million. The increase was greatest for transport costs,
as a result of much higher sales.
In total, Nordzucker reported an operating result (EBIT) of EUR
506.7 million for the financial year 2012/2013, as against EUR
315.0 million the previous year. The operating result before
depreciation, amortisation and impairment (EBITDA) came to
EUR 594.3 million (previous year: EUR 420.4 million).
Net interest amounted to EUR -26.7 million as against EUR -34.7
million the previous year. It should be noted that actuarial losses
of EUR 14.0 million were recognised through profit or loss in the
reporting year due to the effect of interest-rate movements on
1,192
1,806 1,8152,018
Consolidated revenuesin EUR m
2,443
2012/20132011/20122008/2009 2009/2010 2010/2011
Total revenuesin EUR m
1,086
1,718 1,699
2,282
2,607
2012/20132011/20122008/2009 2009/2010 2010/2011
57
Economic environment and market developments | Earnings, net assets and financial position
Management report
pension provisions. Without this non-recurring effect, net interest
would have been EUR -12.7 million.
The improvement in net interest – without the non-recurring effect
– is largely due to further debt repayment and the favourable
terms of the new loan taken out last year.
The net financial result includes net interest as well as net income/
loss from investments and other net financial income/loss. These
items added up to an earnings contribution of EUR 1.4 million
(previous year: EUR 5.9 million). Overall, the net financial result
came to EUR -25.3 million compared with EUR -28.7 million the
previous year.
Tax expenses on pre-tax earnings of EUR 481.4 million (previous
year: EUR 286.3 million) totalled EUR 121.1 million (previous
year: EUR 78.0 million). This resulted in a tax rate of 25.2 per cent
for the Group in the reporting year (previous year: 27.2 per cent).
In total, Nordzucker reported net income before minority interests
of EUR 360.3 million, as against EUR 208.3 million the previous
year. After deducting minority interests of EUR 9.3 million, this
resulted in net income of EUR 351.0 million (previous year: EUR
203.9 million). This means that net income rose by more than
70 per cent compared with the previous year.
Net assets positionTotal assets for the Nordzucker Group amounted to EUR 2,393.2
million at the end of the reporting year, an increase of EUR 131.6
million on the previous year’s figure of EUR 2,261.6 million. In-
ventories went up sharply thanks to the past two good cam-
paigns. This was financed by a steep rise in equity following
strong earnings; net debt was reduced again.
Non-current assets accounted for EUR 1,058.5 million, roughly
the same as in the previous year (EUR 1,079.2 million).
Consolidated EBITin EUR m
79 66
188
315
507
2012/20132011/20122008/2009 2009/2010 2010/2011
Consolidated EBITDAin EUR m
165 166
283
420
594
2012/20132011/20122008/2009 2009/2010 2010/2011
Consolidated net incomein EUR m
44
91
208
-10
360
2012/20132011/20122008/2009 2009/2010 2010/2011
Annual Report Nordzucker 2012/2013 58
Intangible assets of EUR 165.3 million (previous year: EUR 174.1
million) include the goodwill on the acquisition of Nordic Sugar
as well as capitalised sugar quotas and software/licences.
Property, plant and equipment came to EUR 853.1 million (previ-
ous year: EUR 861.1 million). Capital expenditure in the reporting
year was slightly below the level of depreciation, amortisation
and impairment.
Financial investments were slightly up on the previous year at
EUR 26.6 million. There were no significant transactions to report
in this area. Deferred tax assets went down year on year from EUR
11.9 million to EUR 7.8 million.
Current assets came to EUR 1,332.2 million, after EUR 1,180.5
million the previous year. The change is due to the further in-
crease in inventories.
Inventories rose by EUR 129.6 million to EUR 1,027.8 million. The
good harvest in the last two campaigns and increased production
costs again drove up the value of sugar stocks considerably year
on year.
Current receivables and other assets were slightly higher year on
year at EUR 293.1 million, compared with EUR 274.9 million the
previous year.
Nordzucker’s equity went up to EUR 1,316.0 million, compared
with EUR 999.2 million the previous year. Net income boosted
equity by EUR 360.3 million, whereas dividends of EUR 51.3 million
paid to the shareholders of Nordzucker AG and minority interests
reduced the figure. Although total assets increased, the equity ratio
went up from 44.2 per cent the previous year to 55.0 per cent. This
figure was in turn well above the Group target of 30 per cent.
Non-current provisions and liabilities fell to EUR 343.6 million
(previous year: EUR 428.2 million). The total includes non-current
provisions of EUR 184.5 million (previous year: EUR 158.1 mil-
lion), mostly for pension obligations.
Non-current liabilities mainly consist of financial liabilities and de-
ferred tax liabilities. Financial liabilities fell year on year from EUR
83.9 million to EUR 4.6 million. Deferred tax liabilities stood at
EUR 136.2 million, as against EUR 153.9 million the previous year.
Current provisions and liabilities declined to EUR 733.6 million
(previous year: EUR 834.2 million). This is largely because current
debt of EUR 101.8 million was repaid, taking the total to EUR
66.1 million.
Overall, non-current and current financial liabilities were reduced
to EUR 70.7 million (previous year: EUR 256.3 million).
Cash and cash equivalents totalled EUR 11.3 million as of 28 February
2013, compared with EUR 7.4 million the previous year. Net debt (financial liabilities less cash and cash equivalents) was therefore
44%
13%
43%
Assets Equity &liabilities
Breakdown of the assets and liabilitiesmaking up the 2012/2013 balancesheet totalin EUR m
2,393 2,393
Non-currentassets
Inventories
Other currentassets
Equity
Non-currentliabilities
Currentliabilities
55%
31%
14%
Consolidated net debtin EUR m
-295
-664
-314-249
-59
2012/20132011/20122008/2009 2009/2010 2010/2011
59
Earnings, net assets and financial position
Management report
reduced sharply year on year by a total of EUR 189.5 million to
EUR 59.4 million.
Financial positionCash flow from operating activities of EUR 313.3 million was high-
er than in the previous year (EUR 221.8 million). It was boosted
in particular by earnings in the reporting period. The increase
was partly offset by increases in working capital, however.
Cash flow from investing activities improved from EUR -129.6 million
to EUR -72.2 million. This stems in particular from the payment of
the final purchase price instalment for Nordic Sugar of EUR 73.7
million, which was recorded as a financial investment in the pre-
vious year. Capital expenditure on intangible assets and property,
plant and equipment came to EUR 74.1 million, compared with
EUR 64.0 million the previous year.
Cash flow from financing activities of EUR -237.2 million was
made up of outflows for current loans (EUR -185.9 million) and
dividend payments (EUR -51.3 million).
As of 28 February 2013, cash and cash equivalents amounted to
EUR 11.3 million (previous year: EUR 7.4 million).
InvestmentsNordzucker invested EUR 74.1 million in property, plant and
equipment and intangible assets (previous year: EUR 64.0 mil-
lion). Key investments were the first construction phase for the
evaporation dryer in Nakskov, the second phase for the second
evaporation dryer in Uelzen, the construction of a sugar silo in
Kėdainiai and the improvement of the waste-water treatment
plants in Klein Wanzleben, Opalenica and Kėdainiai. As in the
previous years, capital expenditure was focused on increasing
efficiency, above all by saving energy, on compliance with regu-
latory requirements and on replacing existing assets.
Responsibilities and objectives of financial managementThe main responsibilities of Nordzucker’s financial management
are to manage and control flows of funds for the entire Group on
the basis of clearly defined criteria. The most important objective
is to maintain liquidity. This is followed by the optimisation of net
interest expense and the management of interest-rate and foreign-
exchange risks.
The financial management function is also responsible for defin-
ing and executing financing strategies. It also maintains close
contact with the banks.
Capital expenditure in property, plant and equipmentand intangible assetsin EUR m
6762
56
64
74
2012/20132011/20122008/2009 2009/2010 2010/2011
87
Total dividends, Nordzucker AGin EUR m
22
48
11
0
2012/20132011/20122008/2009 2009/2010 2010/2011
Cash flow from operating activitiesin EUR m
167
328313
222
313
2012/20132011/20122008/2009 2009/2010 2010/2011
Annual Report Nordzucker 2012/2013 60
CovenantsA number of financial covenants were agreed between the banking
consortium and Nordzucker AG as part of the syndicated loan
arranged in June 2011. These consist of obligations to maintain
certain financial ratios over the entire term of the loan.
The covenants are an essential component of the loan agreement.
Banks use them as a tool to identify and avoid risks at an early stage
by drawing conclusions from the figures about the company’s
financial position. The covenants have been defined for the
whole Group and not solely for Nordzucker AG.
Nordzucker AG is obliged to demonstrate that it meets the
covenants in the syndicated loan agreement on certain dates in
the reporting year. In the reporting year, all the financial criteria
were met on all test dates. On the basis of the planning currently
available for the Group, the Nordzucker Executive Board assumes
that the agreed limits will also be adhered to in future.
DividendA proposal will be put forward at the Annual General Meeting of
Nordzucker AG to distribute a dividend of EUR 1.80 per share of
share capital for the reporting year. This corresponds to a total
dividend distribution of EUR 86.9 million. A total of EUR 48.3 mil-
lion (EUR 1.00 per share) was paid out the previous year.
The much higher dividend than the previous year enables share-
holders to participate in the company’s strong performance. At
the same time, a substantial proportion of net income is retained
in the company to finance future profitable growth.
Employees
The Nordzucker Group had an average of 3,290 employees in
the reporting year, roughly the same as the previous year
(3,280). Of the total, 1,242 were employed in Central Europe,
544 in Eastern Europe and 1,504 in Northern Europe (including
Ireland).
Opportunities and risks
Risk managementBehaving entrepreneurially means seizing opportunities and
exposing a company to risk as a result. To identify these risks at
an early stage, to evaluate them and manage them consistently,
Nordzucker has introduced an integrated system of risk identifica-
tion and management for the entire Group. This ensures that risks
which could jeopardise the company’s business are identified and
evaluated at regular intervals. Individual steps to avert, limit or
transfer exposure to risks are defined for every risk that is identified.
Risk management constantly verifies the progress made on imple-
menting the defined activities and revises them as necessary.
All operating and strategic decision making always takes risk as-
pects into account. Scenario planning is used for example to exam-
ine the effects different market situations would have on the
company’s business. Descriptions of opportunities and risks high-
light alternative developments and encourage discussions of the
steps that need to be taken. Over the course of the year, the Group
reporting and controlling system provides all the responsible de-
cision-makers with continuous information on the actual business
performance.
Some of the risks are passed on to third parties, such as insurance
companies. The scope and amount of insurance coverage is re-
viewed regularly and adjusted as necessary.
Internal auditingInternal auditing examines and evaluates the business processes,
organisational structure, risk management and internal control
systems to ensure they are carried out correctly, are effective and
offer value for money. Once the individual audits have been com-
pleted, the implementation of the agreed recommendations and
Average number of employees in the Nordzucker Groupfor the yearby region
Northern EuropeRegion
Central EuropeRegion
Eastern EuropeRegion
2008/2009 2,8441,360 1,484
2009/2010 4,3461,350 1,302 1,694
2010/2011 3,5081,357 563 1,588
2011/2012 3,2801,211 548 1,521
2012/2013 3,2901,242 544 1,504
61
Earnings, net assets and financial position | Employees | Opportunities and risks
Management report
activities is systematically monitored. As well as audits carried out
on the basis of annual risk planning, the internal audit department
also carries out ad hoc checks.
It answers directly to the Chief Executive Officer and reports
regularly to the Executive Board and to the Supervisory Board’s
Audit and Finance Committee.
Political and legal risksSugar market regimeThe current sugar market regime forms the operating framework
for the sugar industry in the EU up to the end of the marketing
year 2014/2015 on 30 September 2015. As part of its proposals
to reform the Common Agricultural Policy (CAP), the European
Commission has suggested letting the quota regime for sugar
expire on 30 September 2015. This would mean the end not only
of the quota regime, but also of the minimum beet price. The
WTO export limit, currently set at 1.37 million tonnes, would also
be abolished. The European Commission also suggests maintaining
special rules in the form of national subsidies that Finland pays its
beet farmers (EUR 350 per hectare).
In late January 2013, the European Parliament’s Agriculture and
Rural Development Committee voted to extend the sugar market regime until the end of the sugar marketing year 2019/2020 on
30 September 2020. In mid March 2013, this position was also
adopted by the full European Parliament. For further details, we
refer to our report on events after the balance sheet date.
Nordzucker supports the call by national and European sugar industry
associations to prolong the sugar market regime until at least 2020.
Security of supply for the EU market can be ensured by means of a
production quota. Quotas and a minimum beet price also give beet
farmers a sufficient degree of certainty for their planning.
The abolition of the EU sugar market regime could have consider-
able effects on the EU sugar market. As the quotas for isoglucose
would be abolished along with those for sugar, this could lead
to ruinous competition with sugar. At present, it is impossible to
estimate with any degree of accuracy what the effects on market
supply and competitive structures in the EU market will be.
In order to prepare as well as possible for any changes in the legal
framework, Nordzucker continues to work steadily on making the
cultivation of sugar beet even more competitive with alternative
crops and will also seize all opportunities to increase the product-
ivity and efficiency of the company.
WTO negotiationsThe Doha round of WTO negotiations again made no progress in
the reporting year. The next round of talks is scheduled to take
place in Bali in December 2013. At this conference, the WTO
members will try to reach decisions for the agriculture sector in
the areas of export subsidies/competition, the administration of
preferential import quotas, and food security/public stockpiling of
agricultural products.
A decision may also be taken to reduce import duties in the agri-
culture sector. Over a period of seven years, this could lead to a
sharp reduction in import duties for sugar imports to the EU.
EU free trade agreementsFree trade agreements are becoming more and more important
for the European Union. Such agreements have already been
signed with nine states, including Ukraine, Singapore, Colombia
and countries in Central America, but have yet to take effect.
Negotiations are taking place with 20 other states. This group
includes sugar exporters such as Brazil together with the other
Mercosur states, the USA, Canada, India, Malaysia, Thailand and
Vietnam as well as the Gulf states. Additional regulations for existing
trade agreements are also under discussion, for example with the
Mediterranean countries or the Republic of South Africa.
An agreement has already been reached allowing Colombia, Peru
and the Central American states to export up to 246,000 tonnes
a year (with annual increases) to the EU, duty free. Negotiations
with the South American members of the Mercosur customs union
have come to a standstill at present. In particular, as one of the
largest sugar exporters, Brazil is pressing for an import quota for
sugar and ethanol.
The large number of free trade negotiations currently taking
place clearly shows that import quotas and preferential duties will
become increasingly important for the European sugar market.
Additional costs of CO2 certificatesAs a company that emits carbon dioxide (CO2) from generating
its own electricity and heat, Nordzucker requires corresponding
certificates for its emissions. Some of these certificates are allocated
to the company free of charge; others have to be bought by
Nordzucker in CO2 certificate trading.
The third phase of the CO2 emissions trading scheme that has
been in place in the EU since 2005 begins in 2013. All compan-
ies subject to emissions trading have to buy all the certificates
Annual Report Nordzucker 2012/2013 62
needed for power generation at auction. Nordzucker receives
certificates for heat generation based on natural gas free of charge
until 2015, as the European Commission has listed the entire
industry as being at risk of carbon leakage. For the industries on
this list, the assumption is that the additional costs of CO2 certi fi-
cates could result in production being outsourced to non-EU
countries.
It can be assumed that emissions trading will represent an increasing
financial burden for the company in future, as the drying facilities
and other equipment not previously taken into account will also
be subject to emissions trading as of 2013. The carbon leakage list
is to be reviewed in 2015.
Under these circumstances, a major focus of capital expenditure
is on steps to reduce energy consumption, such as the installation
of modern evaporation dryers, which use less energy to dry the
cossettes and reduce CO2 emissions at the same time. Furthermore,
Nordzucker monitors the market for certificates in order to purchase
the necessary allowances in good time.
Legal risksAs reported in prior years, competition authorities are carrying
out investigations into possible breaches of competition law in
the sugar industry. Generally speaking, breaches of competition
law can give rise to risks for companies in the sugar industry in
the form of fines or claims for compensation by third parties.
Nordzucker nevertheless still assumes that no adverse effects
on the company are to be expected from the proceedings.
Nordzucker is also subject to various statutory regulations, which
can give rise to liability risks. They include in particular the sugar market regime in connection with the relevant provisions of customs
and licensing law as well as food and animal feed law. Further
risks can also arise from tax regulations in the various countries in
which Nordzucker operates.
Market risksSugarSince the reform of the sugar market regime in 2006, fluctuations
in the world market price have had a considerable impact on
markets in the EU. To cover its supply, the EU is dependent on
imports from world markets. World market prices fell once again
over the course of the past financial year. With world market prices
being lower, there was once again greater incentive for ACP countries and LDCs to export their sugar to the EU, and imports
therefore picked up. This could put pressure on market prices in
the EU in future, which could diminish Nordzucker’s profitability
considerably.
As a foodstuff, sugar has repeatedly been presented as unhealthy
or even harmful. Individual scientists believe that the rising number
of certain diseases can be linked to higher sugar consumption. In
its twelfth Nutrition Report published in December 2012, the German
Nutrition Society (DGE) found that annual sugar sales in Germany
have been constant at around 34 kilograms per capita for years.
It is therefore the change towards a less active lifestyle that leads
to excess weight and obesity. Public and media debates may affect
consumers’ eating habits and thus influence demand for sugar.
The German Sugar Trade Association (WVZ) has launched an
information campaign to present the relationship between sugar
and health objectively, in order to provide a counterweight to
the negative media reporting and the negative public perception.
Nordzucker AG explicitly supports these efforts.
Securing raw materialsFor farmers, sugar beet competes with other arable crops. The
decision whether to plant sugar beet or other crops depends to
a large extent on relative price levels for different crops and on
the yield that can be obtained regionally. Attractive conditions
for growing other crops also increase the cost pressure for pur-
chases of sugar beet.
To secure its volumes of raw materials, Nordzucker always signs
supply contracts with the beet farmers in advance. The company
buys some of its industrial beet on one-year contracts and some
on multi-year contracts. All contracts offer attractive terms com-
pared with alternative crops.
For the existing multi-year industrial beet contracts the company
has agreed on a number of different pricing models. In Germany,
farmers can choose between fixed beet prices and a variable
price for industrial beet that is indexed to prices for wheat and
rapeseed. Similar options for contracts are available in all the
Group’s regions, indexing the beet prices to those for wheat or
sugar, for example, or to local company performance. These
mechanisms ensure that the beet prices paid in each instance
are competitive.
Another vital element of securing raw materials in the years ahead
is the 20 · 20 · 20 programme to increase yields. Nordzucker has
63
Opportunities and risks
Management report
set itself the Group-wide target of achieving a sugar yield of 20
tonnes per hectare with 20 per cent of farmers in 2020. This pro-
gramme is very important for safeguarding the relative attractive-
ness of sugar beet cultivation compared with other arable crops,
especially given the volatility of agricultural markets. To reach this
target, Nordzucker is working closely with farmers, agricultural as-
sociations and other companies in the value chain.
Energy pricesThe tense situation on the commodities markets once again posed
challenges for Nordzucker last year. Crude oil and its derivatives
climbed to historic highs, spurred on by exchange rate movements.
Political conflicts in the Middle East and economic fluctuations
can have a considerable effect on energy prices.
To mitigate the effects of swings in energy prices, Nordzucker is
investing in specific measures to reduce its energy consumption.
Examples include the new evaporation dryers in Uelzen and Nak-
skov. The effect of potential price movements is also limited by
specific hedging activities.
Dependence on individual suppliers and purchase price increasesThe reduction of sugar production capacities in the course of the
sugar market reform in 2006 led to a process of concentration
among suppliers. This has often resulted in a monopoly among
providers of equipment made especially for the sugar industry,
with correspondingly high prices.
To counter this trend, a global sourcing programme has been
launched to identify potential alternative suppliers. A marketing
campaign also aims to attract engineering companies to sugar
technology.
The standardisation of the technologies used often also leads to
dependence on suppliers. Nordzucker therefore relies on long-
term partnerships and signs contracts for periods of several years.
Nordzucker has been able to largely avoid price increases for the
purchase of components by means of long-term framework agree-
ments. The company will also achieve additional savings with its
“Profitability plus” programme, by qualifying European competitors
for selected products and by standardising aspects of maintenance
and packaging.
Operating risksLonger campaignsThe length of the campaign has been increased gradually in the
factories to raise productivity. A campaign now lasts for an average
of more than 120 days. This means that the production phase
generally continues into January. Longer campaigns entail two
risks. One is that the onset of winter weather can severely ham-
per beet harvesting, logistics and processing. The other is that
longer campaigns make production downtime more likely.
Nordzucker has therefore taken wide-ranging precautions both in
the field and in the factory to minimise these risks. They include
covering beet clamps with a sheet of fleece to protect the beet
from frost.
New production processes help us to deal better with extreme
changes in weather conditions and beet which has begun to thaw
or decompose. One example is the optimisation of juice purifica-
tion, which is vital for processing even frost-damaged beet.
Longer campaigns increase the risk of production downtime. In
some regions the beet flows can be diverted to alternative sites,
but this also leads to longer campaigns at those factories and
much greater logistical expense. Risk-oriented maintenance has
been introduced to reduce the risk of production downtime.
All the essential machinery in a factory is examined closely and
repaired or replaced as necessary in the phase between two cam-
paigns. Nordzucker has also taken out production downtime
insurance to reduce its exposure further.
EnvironmentThe production of sugar has an impact on the environment. It
includes emissions, waste, waste water and smells. There is a risk
that permitted limits may be exceeded.
The Nordzucker factories have been inspected in accordance with
the applicable national and international legislation and standards.
This includes certification in line with the environmental manage-
ment system DIN EN ISO 14001 and the EU Environmental Audit
Regulation (EC) 1221/2009 (EMAS II).
Nordzucker has also taken numerous steps to reduce unpleasant
smells that affect neighbouring residents, particularly from water
purification.
Annual Report Nordzucker 2012/2013 64
Product safetyAs a food producer, Nordzucker is responsible for the quality and
safety of its products.
Regular inspections and product safety certifications are carried
out to manage these risks. All sites comply with DIN EN ISO 9001
and the product safety standards DIN EN ISO 22000 in conjunction
with PAS 220 (FSSC 22000).
As a result of different local requirements, some sites are also
certified under the following standards and norms: occupational
health and safety management system OHSAS 18001, energy
management system DIN EN ISO 50001, German biofuels sustain-
ability by-law (Biokraft-NachV – the transposition of Directive
2009/28/EC to promote the use of energy from renewable sources),
IFS standards (International Food Standard for food retailing) and
the standard GMP B2 for quality control in raw materials for animal
feed. Organic products are grown and inspected in line with the
applicable legislation.
All processes relating to product safety are reviewed regularly
as part of the certification mentioned above and are adapted as
necessary.
IT risksThe comprehensive use of IT systems gives rise to risks regarding
unauthorised access to sensitive company data and the unavail-
ability of these systems as a result of operating incidents or disas-
ters.
Nordzucker addresses the risk of unauthorised access to company
data by using virus scanners and firewalls. IT security is also in-
creased by granting defined and restricted access to systems and
information, and by backing up data. Proven, market-based tech-
nologies are used throughout the company on the basis of defined
standards. Nordzucker hedges against the risks that would ensue
in the event of operating incidents or disasters by means of redun-
dant IT infrastructures.
Financial risksFinancial risks relate to unrecoverable receivables, currency, raw
materials and interest-rate risks and liquidity risk. Risk exposure
may also arise from the investment strategy and the availability
of loan finance.
Default on receivablesReceivables from customers or other parties may become unrecov-
erable. This risk rises at times of economic crisis or when extreme
swings in the price of raw materials put pressure on customers.
To address these risks, Nordzucker establishes a customer’s credit
standing before signing a contract and generally takes out trade
insurance. The sales team maintains close contact with the cus-
tomer and defaults are limited by active receivables management.
Currency, raw materials and interest-rate risksThe increasing volatility of interest rates and exchange rates and
fluctuations in the price of raw materials give rise to operating
risks, which are pooled by the Group treasury department and
covered in accordance with rules drawn up by the risk manage-
ment department.
To limit these risks, they are analysed thoroughly before contracts
are signed. Standard financial instruments available from banks
and exchanges are also used. Financial derivatives such as for-
ward contracts, swaps and futures are used to hedge the Group’s
open risk positions.
This exposes the Nordzucker Group to a normal measure of
counterparty risk, in the sense that a partner to a contract may
not perform their contractual obligations. To minimise this coun-
terparty risk, financial derivatives are only transacted with first-
class international financial institutions, whose economic perform-
ance is monitored regularly, partly by analysing the financial
ratings issued by international rating agencies. The risk exposure
to a given counterparty is also limited by dividing business volume
between several providers.
All the financial derivatives used serve solely to hedge operating
sales and purchase transactions and financial transactions that are
necessary for the company’s business.
The margins required for exchange-traded derivatives are also held
exclusively on separate margin accounts with first-class international
financial institutions.
As of 28 February 2013, the Nordzucker Group had exchange-
rate derivatives with a notional net volume of EUR 49.9 million.
At the end of the financial year, derivative transactions with a
65
Opportunities and risks
Management report
notional value of EUR 1.5 million were open to hedge against price
movements for raw materials. These existing hedges generally
run for less than one year and match the maturity profile of the
hedged transactions.
Liquidity riskThe seasonality of the Group’s business means that its capital
requirements vary widely over the course of a financial year. The
quality of the harvest and developments in market prices also have
a considerable effect on the company’s funding requirements.
If the company cannot draw on sufficient liquidity – either if there
is a default on its investments or if borrowing is not available – its
continued existence is at risk.
Short- and medium-term liquidity forecasts for the subsidiaries and
the entire Group are therefore regularly drawn up on the basis of
a standardised process. Financing strategies are then prepared
and implemented on the basis of these forecasts.
Availability of creditNo negative effects on the Nordzucker Group’s access to liquidity
have been felt to date, despite the ongoing economic crisis in
the EU and the evolving situation on lending markets due to the
increasing regulation of banks. One important reason for this is
the continued improvement in the Group’s credit rating.
For the period until 2016, the main source of financing will be
a syndicated loan that the company took out in 2011 from 14
banks. In the opinion of the company management, this medium-
term syndicated loan to finance its operating business, together
with its available liquidity, covers the company’s capital needs.
From a current perspective, its cash reserves and unused lines
of credit enable Nordzucker to meet its payment obligations at
all times. Based on current assessments, sufficient funds are also
available to ensure the financing of solid growth. On the basis
of existing corporate planning for the Group, the company as-
sumes that the terms of the loan agreement will be met in sub-
sequent years as well.
The guarantees needed for current operations can also be pro-
vided at any time, as needed, by means of the syndicated loan
and bilateral lines of credit. The Group is not directly dependent
on individual lenders.
Investment policy Errors in investment strategy can result in the loss of financial
assets. Nordzucker has a conservative investment policy with
regard to its cash and cash equivalents. The Group’s free liquidity
is only invested in the money market products of first-class Euro-
pean financial institutions, taking national deposit insurance regu-
lations and the credit rating of counterparties into account.
Potential default risks are also addressed by spreading the invest-
ment of free liquidity across various counterparties.
Supplementary report
Reform of EU agricultural policy The continued existence of the sugar market regime is also being
discussed in the course of reforms to the European Union’s Com-
mon Agricultural Policy (CAP). The European Commission has
proposed not to extend the sugar market regime beyond the
end of its current phase, which expires on 30 September 2015.
With regard to the “trialogue” negotiations between the three
European institutions, the European Parliament is in favour of an
extension until 2020, while the Council of Agriculture Ministers is
backing an extension until 2017.
In addition to the question of how long the sugar market regime is
to continue after October 2015, discussions are also taking place
on issuing new sugar quotas to member states who had returned
theirs after the 2006 reform and on other advantages for traditional
refinery operations.
Forecast
The financial year 2012/2013 was the best in the history of
Nordzucker AG to date. Compared with the previous year, stable
prices and higher sales of non-quota sugar were responsible for
a substantial increase in revenues and earnings. In addition, the
company’s efficiency improvement measures continued to pay
off. The company’s strong performance in 2012/2013 was no longer
held back by the European economic and financial crisis or the
decline in world market prices for sugar towards the end of the
financial year.
Annual Report Nordzucker 2012/2013 66
In the current 2013/2014 financial year, we expect world mar-
ket prices to remain at their present, substantially lower level,
since stocks are still rising and global sugar production exceeds
consumption overall. Over the course of the financial year, this
will tend to have an effect on the EU sugar market too and we
therefore expect revenues and earnings for 2013/2014 to be
lower.
The fundamental assumption is that sugar prices will remain highly
volatile. Since the political framework for the industry is also un-
certain, it is difficult to provide forecasts for subsequent years.
Nonetheless, the assumption is that earnings for 2014/2015 and
thereafter will flatten out at a lower level than in 2012/2013.
Increasing the efficiency and productivity of sugar production
therefore remains vital.
This also includes examining potential growth options in order to
build on Nordzucker’s strong position in the EU sugar market and
to participate in the growing sugar market outside the EU.
Braunschweig, Germany, 26 April 2013
The Executive Board
Axel Aumüller Mats Liljestam
Dr Niels PörksenDr Michael Noth
Hartwig Fuchs
67
Opportunities and risks | Supplementary report | Forecast
Management report
Consolidated income statement Nordzucker AG, Braunschweig, Germany, for the period from 1 March 2012 to 28 February 2013
Statement of comprehensive income
Further details in Note
1/3/2012- 28/2/2013
TEUR
1/3/2011 - 29/2/2012
TEUR
Revenues 5 2,442,840 2,018,017
Increase in finished goods and work in progress 163,603 261,834
Own work capitalised 814 1,815
Total revenues 2,607,257 2,281,666
Other operating income 6 29,676 42,477
Cost of materials and services 7 1,621,968 1,500,803
Personnel expenses 8 201,454 188,681
Depreciation of property, plant and equipment,amortisation and impairment of intangible assets
9 87,562 106,945
Appreciation of intangible assetsand property, plant and equipment 0 1,537
Other operating expenses 10 219,245 214,231
Operating result (EBIT) 506,704 315,020
Net interesta) Interest income and similar income
11 437 3,806
b) Interest expenses and similar expenses 27,088 38,472
-26,651 -34,666
Net income/loss from investmentsa) Net income/loss from associated companies and joint ventures
accounted for under the equity method
12 -822 76
b) Other net income from investments 4,713 3,471
3,891 3,547
Other net financial income/lossa) Other financial income
13 10,808 12,342
b) Other financial expenses 13,390 9,955
-2,582 2,387
Net financial income/loss -25,342 -28,732
Earnings before taxes 481,362 286,288
Income taxes 14 121,104 77,997
Consolidated net income 360,258 208,291
Consolidated net income attributable to minority interests 9,294 4,348
Consolidated net income attributable to shareholders of the parent company 350,964 203,943
Consolidated net income 360,258 208,291
Currency conversion for foreign operations 6,568 -1,484
Net result of cash flow hedges 930 -2,587
Income taxes -279 769
651 -1,818
Other net income/loss after taxes 7,219 -3,302
Total net income/loss after taxes 367,477 204,989
Consolidated total net income attributable to minority interests 9,294 4,348
Consolidated total net income attributable to shareholders of the parent company 358,183 200,641
Consolidated financial statements Nordzucker AG
Annual Report Nordzucker 2012/2013 68
Consolidated cash flow statementNordzucker AG, Braunschweig, Germany, for the period from 1 March 2012 to 28 February 2013
1/3/2012- 28/2/2013
EUR m
1/3/2011- 29/2/2012
EUR m
Earnings before taxes 481.4 286.3
Interest and similar income -0.4 -3.8
Interest and similar expenses 27.1 38.5
Net depreciation, amortisation and impairment on non-current assets 87.6 105.4
Changes in non-current provisions 26.3 4.8
Other non-cash expenses -14.1 3.5
Net loss/income from associated companies 0.8 0.0
Changes in finished goods and work in progress -163.6 -261.8
Changes in current provisions 5.6 15.0
Proceeds on disposal of non-current assets 1.6 -1.8
Changes in inventories, trade receivables and other assetsnot attributable to investing or financing activities 13.5 -96.9
Changes in trade payables and other liabilitiesnot attributable to investing or financing activities -16.9 215.7
Interest received in the financial year 0.4 3.8
Interest paid in the financial year -7.7 -23.8
Taxes paid in the financial year -128.3 -63.1
Cash flow from operating activities 313.3 221.8
Proceeds on disposal of property, plant and equipment 1.9 7.1
Payments for investments in property, plant and equipment -69.3 -56.4
Proceeds on disposal of intangible assets 0.0 0.1
Payments for investments in intangible assets -4.8 -7.6
Proceeds from the saleof consolidated companies and other business units 0.0 0.9
Payments for the acquisitionof consolidated companies and other business units 0.0 -73.7
Cash flow for investing activities -72.2 -129.6
Payments to shareholders (dividends) -51.3 -24.9
Proceeds from borrowing 41.7 88.3
Loan repayments -227.6 -198.1
Cash flow from financing activities -237.2 -134.7
Changes in cash and cash equivalents 3.9 -42.5
Cash and cash equivalents at the beginning of the period 7.4 50.3
Additions through mergers/other changes 0.0 -0.4
Cash and cash equivalents at the end of the period 11.3 7.4
69
Consolidated income statement | Statement of comprehensive income | Consolidated cash flow statement
Consolidated financial statements
Consolidated balance sheet as of 28 February 2013, Nordzucker AG, Braunschweig, Germany
AssetsFurther details
in Note28/2/2013
TEUR29/2/2012
TEUR
Non-current assets
Fixed assets
Intangible assets 15 165,337 174,066
Property, plant and equipment 16 853,050 861,059
Investment property 18 5,676 6,785
Financial investments Shares in associated companies and joint ventures accounted for under the equity method
19
19.1 3,068 3,593
Other financial investments 19.2 23,536 20,428
26,604 24,021
1,050,667 1,065,931
Receivables and other assets
Financial assets 23 0 7
Other assets 24 9 1,369
9 1,376
Deferred taxes 14 7,827 11,883
1,058,503 1,079,190
Current assets
Inventories 20
Raw materials, consumables and supplies 46,885 44,451
Work in progress 50,491 43,373
Finished goods and merchandise 930,387 810,414
1,027,763 898,238
Receivables and other assets
Trade receivables from external companies 21 212,425 194,423
Receivables from related parties 22 4,263 233
Receivables from current income tax 14 1,470 5,084
Financial assets 23 12,597 13,185
Other current assets 24 62,376 61,971
293,131 274,896
Cash and cash equivalents 11,297 7,406
Current assets 1,332,191 1,180,540
Assets held for sale 25 2,497 1,867
1,334,688 1,182,407
2,393,191 2,261,597
Annual Report Nordzucker 2012/2013 70
Shareholders’ equity and liabilitiesFurther details
in Note28/2/2013
TEUR29/2/2012
TEUR
Shareholders’ equity 26
Subscribed capital 26.1 123,651 123,651
Capital reserves 26.2 127,035 127,035
Retained earnings 26.3 954,501 653,603
Other comprehensive income 26.4 58,901 51,682
Equity attributable to shareholders of the parent company 1,264,088 955,971
Minority interests 26.5 51,880 43,260
1,315,968 999,231
Non-current provisions and liabilities
Provisions for pensions and similar obligations 27 151,944 134,727
Other provisions 28 32,541 23,415
Financial liabilities 29 4,575 88,473
Liabilities towards related parties 31 5,500 5,500
Other financial liabilities 32 294 1,181
Other liabilities 33 12,555 20,985
Deferred taxes 14 136,238 153,917
343,647 428,198
Current provisions and liabilities
Provisions for pensions and similar obligations 27 5,283 5,281
Other provisions 28 73,683 68,059
Financial liabilities 29 66,108 167,852
Current income tax liabilities 14 62,882 60,000
Trade payables 30 465,425 455,122
Liabilities towards related parties 31 16,245 11,498
Other financial liabilities 32 6,383 15,900
Other liabilities 33 37,567 50,456
733,576 834,168
2,393,191 2,261,597
71
Consolidated balance sheet
Consolidated financial statements
Consolidated statement of changes in shareholders’ equity Nordzucker AG, Braunschweig, Germany
Subscribed capital
Capital reserves
Retained earnings
Other compre-hensive income
Equity attributable
to share-holders of the parent
companyMinority interests
Total equity
TEUR TEUR TEUR TEUR TEUR TEUR TEUR
As of 1/3/2011 123,651 127,035 471,569 54,984 777,239 41,497 818,736
Net income 203,943 203,943 4,348 208,291
Other net income/loss -3,302 -3,302 -1 -3,303
Other comprehensive income
203,943 -3,302 200,641 4,347 204,988
Dividend payment -22,219 -22,219 -2,691 -24,910
Others 311 311 106 417
As of 29/2/2012 123,651 127,035 653,604 51,682 955,972 43,259 999,231
Net income 350,964 350,964 9,294 360,258
Other net income/loss 7,219 7,219 7,219
Other comprehensive income
350,964 7,219 358,183 9,294 367,477
Dividend payment -48,301 -48,301 -2,949 -51,250
Others -1,766 -1,766 2,276 510
As of 28/2/2013 123,651 127,035 954,501 58,901 1,264,088 51,880 1,315,968
Annual Report Nordzucker 2012/2013 72
General remarks
1. Accounting principles
The consolidated financial statements as of 28 February 2013 for
Nordzucker AG (Küchenstrasse 9, 38100 Braunschweig) have been
prepared in accordance with Sec. 315a HGB (German Commercial
Code) in accordance with the International Financial Reporting Standards (IFRS) adopted and published by the International Accounting Standards Board (IASB) as applicable in the European
Union and with supplementary provisions of German commercial
law. The financial statements comply fully with IFRS and give a
true and fair view of the earnings and financial position and net
assets of Nordzucker AG and its consolidated subsidiaries, associated
companies and joint ventures (hereinafter known as “Nordzucker Group” or “Group”).
The consolidated financial statements have generally been pre-
pared using the historic cost convention. This does not apply to
the derivative financial instruments or the available-for-sale finan-
cial instruments, which are measured at fair value.
Individual line items of the income statement and the balance
sheet have been aggregated to improve readability. These items
are listed in the notes. The income statement has been classified
according to the total cost method.
The consolidated financial statements have been prepared in
Euros. Unless otherwise stated, all amounts are given in thousands
of Euros (EUR ‘000).
The consolidated financial statements will be approved by the
Executive Board of Nordzucker AG on 23 May 2013 for presenta-
tion to the Supervisory Board.
2. Consolidation
2.1. Principles of consolidationPrinciples of consolidation from 1 January 2010The consolidated financial statements of the Nordzucker Group in-
clude the domestic and foreign subsidiaries in which Nordzucker
AG has direct or indirect control of financial and operating policy.
Subsidiaries are fully consolidated from the acquisition date, i.e.
the date on which the Group obtains control. Consolidation ends
once the parent company no longer exercises control. The finan-
cial statements of the subsidiaries are prepared for the same report-
ing period as the financial statements for the parent company using
uniform accounting methods. All intra-Group balances, trans actions,
unrealised gains and losses from intra-Group transactions and
dividends are eliminated in full.
Losses from a subsidiary are attributed to non-controlling interests
even if this results in a negative net carrying amount. A change in
the equity interest in a subsidiary that does not result in a loss of
control is accounted for as an equity transaction.
Principles of consolidation up to 1 January 2010 items were dealt with on the basis of the previous principles of
consolidation:
The purchase of non-controlling interests was accounted for be-
fore 1 January 2010 using the parent-entity extension method.
This entails the recognition as goodwill of the difference between
the purchase price and the carrying amount of the pro rata inter-
est in the net assets.
Losses were attributed to non-controlling interests until their
carrying amount was reduced to zero. Additional losses were
attributed to the parent company, except in cases in which the
non-controlling interests had undertaken to make good the
losses. The attribution of losses incurred before 1 January 2010
between the non-controlling interests and the shareholders of
the parent company was not revoked.
In the event of a loss of control, the Group recognised the re-
maining interest at the amount of the corresponding share of net
assets at the time control was lost. The carrying amount of these
investments was not adjusted as of 1 January 2010.
2.2. Business combinations and goodwillBusiness combinations from 1 March 2010Business combinations are presented using the purchase method.
The acquisition costs of a business combination are defined
as the total consideration paid, measured at fair value as of the
acquisition date and the non-controlling interests in the ac-
quired entity. For every business combination, the purchaser
measures the non-controlling interests in the acquired entity
either at fair value or at their pro rata share of the identified net
assets of the acquired entity. Costs incurred in the course of the
business combination are recognised in profit and loss and
shown under administrative expenses.
Notes to the consolidated financial statements for the financial year 2012/2013for Nordzucker AG, Braunschweig, Germany
Notes 73
If the Group acquires an entity it determines the appropriate
classification and designation of the financial assets and liabilities
assumed in accordance with the terms of the contract, econom-
ic circumstances and the conditions at the acquisition date. This
also includes separating embedded derivatives from their host
contract.
For business combinations in stages, the fair value of the equity
interest held by the purchaser in the acquired entity is meas-
ured as of each acquisition date and the resulting gain or loss is
recognised in the income statement.
The agreed contingent consideration is recognised at fair value
as of the acquisition date. Subsequent changes in the fair value
of a contingent consideration that constitutes an asset or a li-
ability are recognised either in the income statement or in other
comprehensive income in accordance with IAS 39. Contingent
consideration that is classified as equity is not revalued and its
subsequent settlement is accounted for within equity.
Goodwill is initially recognised at cost, which is defined as the
excess of total consideration transferred and the amount of any
non-controlling interest over the identifiable assets acquired
and the liabilities assumed. If this consideration is below the fair
value of the net assets of the subsidiary, the difference is recog-
nised in the income statement.
Following initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purposes of impair-
ment testing, the goodwill acquired in a business combination
is allocated to the cash-generating units or groups of cash-gen-
erating units which benefit from the synergies of the business
combination as of the acquisition date. This applies irrespective
of whether other assets or liabilities of the acquiring company
are assigned to those units or groups of units. Each unit or
group of units to which the goodwill is allocated represents the
lowest level within the entity at which the goodwill is moni-
tored for internal management purposes.
If goodwill has been allocated to a cash-generating unit (group
of cash-generating units) and the entity disposes of an oper-
ation within that unit, the goodwill associated with the operation
disposed of shall be included in the carrying amount of the
operation when determining the gain or loss on disposal. The
value of the goodwill disposed of is measured on the basis of
the relative values of the operation disposed of and the portion
of the cash-generating unit retained. If a cash-generating unit
is disposed of, the difference between the sale price and the
net assets plus accumulated foreign-exchange differences and
goodwill without impairment is recognised in profit and loss.
Business combinations before 1 March 2010The method used previously for accounting for business com-
binations applied the following principles instead of those de-
scribed above:
Business combinations were presented using the purchase method.
Transaction costs directly attributable to the business combin-
ation were part of the acquisition costs. Non-controlling interests
(previously known as minority interests) were measured at their
pro rata share in the identifiable net assets of the acquired entity.
For business combinations achieved in stages, the individual ac-
quisitions were accounted for separately. The acquisition of an
additional interest did not affect the goodwill from a previous
acquisition.
If the Group acquired an entity, the embedded derivatives ac-
counted for separately from the host contract by the acquired
entity were only revalued at the acquisition date if the business
combination led to a change in the terms of the contract result-
ing in significantly different cash flows to those that would other-
wise have resulted from the contract.
A contingent consideration was only recognised if the Group
had a current obligation, if an outflow of resources embodying
economic benefits was more likely than not and if a reliable esti-
mate was possible. Subsequent adjustments to the contingent
consideration were recognised as part of goodwill.
2.3. Group of consolidated companiesThe consolidated companies in the Nordzucker Group are as
follows:
Group of consolidated companies
28/2/2013 29/2/2012
Fully consolidated companiesDomestic 4 4
Foreign 19 18
Companies accounted for under the equity method
Domestic 2 2
Foreign 2 2
Annual Report Nordzucker 2012/2013 74
The list of investments is filed electronically with the operator of
the electronic German Federal Gazette (Elektronischer Bundes-
anzeiger).
All the companies included in the consolidated financial state-
ments have 28 February 2013 as their reporting date.
Associated companies and joint ventures are accounted for in the
consolidated financial statements under the equity method. Asso-
ciated companies are defined as companies in which the Nord-
zucker Group can exercise a significant influence over financial
and operating policy. A company is defined as a joint venture if
an agreement exists between the partners on joint management
of the economic activities of the company. In applying the equity method, the IFRS financial statements of these companies are
used. Losses from associated companies which exceed the carry-
ing amount or other non-current receivables from financing these
companies are not recognised unless there is an obligation to
provide further capital.
2.4. Conversion of financial statements in foreign currencies
Assets and liabilities of subsidiaries whose functional currency
is not the Euro are converted at the exchange rate applicable
on the balance sheet date. Items in the income statement are
converted at the weighted average rate for the relevant year.
Equity components of subsidiaries are converted at the histor-
ical rate for the date first recognised. Exchange differences
arising from the conversion are recognised as equalisation
amounts within other comprehensive income or in non-
controlling interests.
The rates for the conversion of key financial statements in for-
eign currencies into Euros have changed as follows:
Foreign currency Average rate Spot rate
for EUR 1.00 2012/2013 2011/2012 28/2/2013 29/02/2012
Polish Zloty (PLN) 4.16353 4.18113 4.15150 4.12120
Hungarian Forint (HUF) 288.25639 283.62660 295.80000 288.71000
Danish Crown (DKK) 7.44799 7.44754 7.45600 7.43560
Swedish Crown (SEK) 8.65947 9.02575 8.44750 8.80880
Norwegian Crown (NOK) 7.43935 7.75952 7.48700 7.44050
Lithuanian Litas (LTL) 3.45280 3.45280 3.45280 3.45280
3. Explanation of accounting methods
3.1. Recognition of income and expenseRevenues are recognised when the goods or services are de -
livered if the amount of revenue can be estimated reliably and
the flow of economic benefit is probable. Revenues are reduced
by sales discounts.
Operating expenses are recognised when the service is used or
as of the date they arise.
Interest is recognised as an expense or as income in the period
in which it arises. The Group only capitalises interest expense
arising in connection with the purchase or production of certain
assets if they are qualifying assets.
Dividends are recognised in profit and loss when the legal entitle-
ment is vested.
3.2. Intangible assetsInternally generated intangible assets are recognised at the
costs arising in the development phase after technical and
economic feasibility has been determined and up to completion.
Capitalised production costs consist of the costs directly attribut-
able to the development phase.
Separately acquired intangible assets are recognised at cost.
Internally generated and separately acquired intangible assets
which have a finite useful life are amortised from the time the
asset is available for use on a straight-line basis over the expected
useful life of the asset as follows:
Notes 75
Intangible assetsUseful life
in years
Production quotas acquired against payment 9
ERP licences 20
Other software 3–15
Useful lives are reviewed regularly to ensure they are appropriate.
If necessary, they are adjusted accordingly.
Goodwill is not subject to amortisation (see Note 2.2 above).
Gains or losses on the disposal of intangible non-current assets
are recognised under other operating income or expenses.
3.3. Property, plant and equipmentItems of property, plant and equipment are recognised at cost
and depreciated on a straight-line basis over their expected use-
ful lives. The costs of internally generated items of property, plant
and equipment include all direct costs as well as all indirect costs
incurred in connection with the production process. Borrowing
costs are capitalised when the internally generated items of
property, plant and equipment constitute qualifying assets. Gains
or losses on the disposal of non-current assets are recognised in
other operating income or expenses.
Rented or leased assets which are economically owned by Group
companies (finance leases) are capitalised at the lower of the
pres ent value of the rental or lease payments and fair value of the
leased asset. They are depreciated on a straight-line basis. The
present value of payment obligations for future rental and lease
payments is recognised as a liability.
Depreciation takes place on a uniform basis for the Group over
the following useful lives:
Property, plant and equipmentUseful life
in years
Buildings 20–60
Technical plant and machinery 4–60
Railway tracks 70
Vehicles 4–15
Trailers and rolling stock 25
Other operating and office equipment 3–25
Useful lives are reviewed regularly to ensure they are appropriate.
If necessary, they are adjusted accordingly.
As a rule, depreciation begins when the asset is made ready for
operation. Production-related technical plant and machinery
only used during the campaign are depreciated for the full year.
For assets under finance leases where the transfer of title to Group
companies at the end of the lease term is sufficiently certain,
scheduled depreciation takes place over the useful life of the
assets.
Investment subsidies and public grants for the purchase or pro-
duction of items of property, plant and equipment are accounted
for by recognising an item of deferred income under other liabil-
ities. The deferred income item is then reversed through profit
and loss over the useful life of the subsidised asset.
3.4. Investment propertyProperties classified by the Nordzucker Group as available for let
to third parties are carried at historical cost in accordance with the
classification option defined in IAS 40. These properties are depre-
ciated on a straight-line basis over a useful life of 20 – 60 years.
3.5. Impairment of intangible assets and property, plant and equipment
The Group assesses at each reporting date whether there is any
indication that non-financial assets may be impaired. If any such
indication exists or if an annual impairment test is required for
an asset, the Group estimates the recoverable amount for the
respective asset (“impairment test”).
Impairment losses are recognised for intangible assets and items
of property, plant and equipment if, due to particular events, the
carrying amount of the asset is no longer covered by the antici-
pated proceeds of disposal or the discounted net cash flows from its continued use. If the recoverable amount cannot be
measured for individual assets because the cash flows depend
on other assets, the cash flow is determined for the next higher
group of assets (reporting unit, cash-generating unit) for which
such a cash flow can be determined. The cash flows of the report-
ing units are discounted at a rate which reflects current market
assessments of the time value of money and the specific risks of
the asset. An impairment loss is recognised when the present
value of the cash flows is less than the carrying amount of the
non-current and net current assets of the reporting unit.
An assessment is made as of each reporting date whether there
is any indication that an impairment recognised in prior periods
may no longer exist or may have decreased. Impairment losses
are reversed if the value in use has increased in subsequent periods.
The increased carrying amount of an asset attributable to
a reversal of an impairment loss shall not exceed the carrying
amount that would have been determined (net of amortisation
or depreciation) had no impairment loss been recognised for the
asset in prior years.
Annual Report Nordzucker 2012/2013 76
3.6. Investment subsidies and grantsClaims for investment subsidies and grants are recognised from
the time the Nordzucker Group is sufficiently certain that they
will be granted and that the conditions for receiving them will
be met. Grants and subsidies for purchasing assets are carried
as liabilities and reversed through profit and loss over the useful
life of the subsidised assets.
3.7. Emissions rightsThe Nordzucker Group does not recognise emissions rights
received free of charge. The Nordzucker Group recognises the
corresponding obligations at cost if the emissions rights held
by the Group are not sufficient.
3.8. Financial instrumentsThe Nordzucker Group accounts for financial instruments in
accordance with IAS 39. All purchases or disposals of financial
assets within the Group are recognised on acquisition, i.e. as
of the settlement date, irrespective of their classification.
Financial assets and financial liabilities are initially recognised at
fair value. The transaction costs directly attributable to the acqui-
sition are also recognised and amortised over the duration for all
financial liabilities which are not subsequently measured at fair
value through profit and loss. The fair values carried in the bal-
ance sheet are normally equivalent to the market prices of the
financial instruments. If these are not directly available from an
active market, measurement is made using the discounted cash flow method (DCF method), i.e. based on expected future cash flows using the reference interest rates applicable at the balance
sheet date.
IAS 39 stipulates that financial instruments are to be classified as
loans and receivables (L&R), available for sale (AFS), held to maturity (HTM), held for trading (HFT), fair value option (FVO) or financial liabilities measured at amortised cost (FLAC).
The Nordzucker Group has not used the option of designating
financial assets or financial liabilities upon initial recognition as at
fair value through profit and loss (FVO).
The Group measures financial assets and liabilities classified as
held for trading at fair value. Changes in fair value are recognised
in profit and loss.
Available-for-sale financial instruments are initially recognised at
fair value. The result of subsequent measurement at fair value is
recognised without effect on profit and loss in other comprehen-
sive income, having accounted for the effects of tax. When the
financial asset is sold, the accumulated results of measurement
changes recognised in equity are reversed and the realised gain
or loss is recognised in profit and loss. If the asset is impaired, the
revaluation surplus is corrected for the amount of the impairment
and the resulting amount recognised in profit and loss.
If the fair value of financial instruments cannot be measured or
derived using appropriate valuation methods, they are carried
at amortised cost. For cash and other current primary financial in-
struments, fair value is equivalent to the carrying amount on each
balance date.
Assets held to maturity are carried at amortised cost using the
effective interest method. An impairment loss is recognised on
these assets if the recoverable amount using the effective interest
originally determined is below the carrying amount.
In the financial year, no financial assets were reclassified from be-
ing available for sale to being held to maturity. Available-for-sale
financial instruments carried at fair value were also not reclassified
as being held at amortised cost. Reclassifications in the opposite
direction were also not applicable for the Nordzucker Group.
The Nordzucker Group also made no disposals of financial assets
without derecognising them, either in the reporting period or in
the previous year.
The Nordzucker Group carries out regular impairment tests on
financial assets held in the balance sheet in the categories loans and receivables, available for sale and held to maturity. These are
based on past experience and individual risk assessments. The
risk assessments include criteria such as severe financial difficulties
of the issuer or debtor, breach of contract, concessions made to
debtors for economic or legal reasons in connection with the
debtor’s financial difficulties and an increased probability of the
debtor’s insolvency. Other criteria are the disappearance of an
active market for the asset in question or observable data which
indicates a measurable reduction in expected future cash flows from a group of financial assets since their initial recognition.
Further information on financial instruments is given in Note 36.
3.9. Financial investments and securitiesOther financial investments and securities are categorised in line
with IAS 39 according to type and purpose and classified either
as available for sale or as held to maturity.
3.10. Assets held for sale
Non-current assets are classified as held for sale if the disposal of
the asset within the next twelve months is highly probable. This
classification is only made when the asset is available for sale in its
present condition and the marketing of the asset has already begun.
Assets held for sale are carried at the lower of amortised cost and
fair value less costs to sell. No further depreciation or amortisa tion is
Notes 77
recognised for assets from the time they are classified as held for
sale. If no sale has taken place within twelve months, the assets
concerned are reclassified to the relevant balance sheet items and
the necessary depreciation or amortisation is made good.
3.11. InventoriesInventories are recognised at cost.
Costs are determined using weighted averages. Costs include all
direct costs attributable to producing the asset as well as indirect
costs attributable to production.
Measurement of inventories at the reporting date is made at the
lower of cost and net realisable value. Net realisable value is the
estimated selling price less estimated costs to sell.
The net realisable value of work in progress is inferred from the
net realisable value of finished goods and services less the out-
standing costs of completion.
Semi-finished goods from production processes are measured
using their respective full cost approach. Indirect costs are allocated
according to production volume and the amount of production
work carried out in-house. If the recognised amounts for finished
products and goods are higher than fair value as of the reporting
date, the inventories are written down to net realisable value.
Sugar stocks from internal production disclosed under finished
products are recognised at cost, unless they are recognised at
lower net realisable value in view of sales opportunities. Costs in-
clude production costs, indirect costs attributable to the produc-
tion department and straight-line depreciation for wear and tear.
The production costs of quota sugar also include the factory por-
tion of the production levy of EUR 6.00 per tonne.
Borrowing costs are not included in costs as the Group’s prod-
ucts are not qualifying assets.
An impairment loss for inventories is reversed if the reasons for
recognising the loss no longer exist.
3.12. Receivables and other assetsTrade receivables and other assets are initially recognised at
fair value plus transaction costs. Subsequent recognition is at
amortised cost. For current financial assets in the loans and receiv-ables category, fair value is approximately equal to the carrying
amount.
Default risks are recognised by appropriate write-downs based
on past experience and individual assessments of risk.
3.13. Cash and cash equivalentsCash and cash equivalents include bank balances and cash in
hand. Carrying amounts are equal to fair value.
3.14. Pension provisionsProvisions for pension obligations are determined in line with IAS 19
using the projected unit credit method and taking future develop-
ments in salaries and pensions into account. The measurement of
the pension obligations is made on the basis of actuarial opinions
and includes the assets available to cover these obligations (plan
assets). The present value of defined benefit obligations is deter-
mined by discounting the estimated future cash outflows. The
discount rate is based on the rate paid by high-quality corporate
bonds which match the underlying pension obligations in terms
of currency and maturity.
If the actuarial gains and losses resulting from changes in the
actuarial parameters exceed 10 per cent of the greater of the pen-
sion obligations and plan assets at the beginning of the financial
year, the amount exceeding the 10 per cent threshold is recog-
nised through profit and loss for the remaining term of service of
the entitled staff (corridor method). As the actuarial parameters
changed sharply during the reporting year (lower interest rates)
and provoked an actuarial loss, the Nordzucker Group made use
of the option to recognise actuarial losses through profit or loss
over a shorter period.
The interest component of pension expenses and the expected in-
come from plan assets is disclosed as part of the net financial result.
3.15. Other provisionsOther provisions include all identifiable legal and constructive
obligations of the Group towards third parties if their settlement
is probable and the amount can be reliably estimated. Provisions
are recognised in line with IAS 37 as the best estimate of the
amount required to settle the obligation. Non-current provisions
are recognised as the present value of the amount required to
settle the obligation, discounted using appropriate market inter-
est rates.
Provisions for restructuring are only recognised if the planned
measures have been developed in sufficient detail as of the
reporting date and if the measures have been announced.
3.16. LiabilitiesLiabilities are recognised initially at fair value including transaction
costs and any premiums and discounts. Subsequent recognition
is at amortised cost using the effective interest method.
3.17. Deferred taxesDeferred taxes are recognised for future tax assets and liabilities
resulting from temporary differences between the value of assets
Annual Report Nordzucker 2012/2013 78
and liabilities for tax purposes and their carrying amount in the
IFRS financial statements, and for tax loss carry-forwards. Deferred
taxes are measured on the basis of the fiscal legislation enacted at
the end of each financial year for the financial years in which the
differences are expected to reverse or in which it is likely that tax
loss carry-forwards will be used. Deferred tax assets for tax loss
carry-forwards are only recognised if it is sufficiently likely that
they will be realised in the near future.
Deferred tax assets and liabilities are netted out if the conditions
for doing so are met.
3.18. Derivative financial instruments and hedge accounting
Due to the nature of its business, the Nordzucker Group is
exposed to interest-rate, exchange-rate and other market risks.
Derivative financial instruments are used as a means of managing
these risks.
As a rule, derivative financial instruments are recognised at fair
value. The fair value of derivatives can be both positive and nega-
tive. If a market value is not available, fair value is determined
using net present value and option pricing models. The input
parameters for these models are the relevant market prices and
interest rates observed on the balance sheet date as derived from
recognised sources.
Changes in the fair value of derivative financial instruments are
recognised in equity without effect on profit or loss (for cash flow
hedges) or with effect on profit or loss (for fair value hedges) if
they form part of an effective hedging relationship (hedge ac-counting). The principles of hedge accounting are intended to
capture as much as possible the offsetting effects on profit or loss
of changes in the fair values of the hedging instrument and the
hedged item. In addition to documentation on the hedging rela-
tionship, IAS 39 requires that the hedge be shown to be highly
effective in order for hedge accounting to be applied. The effect-
iveness of the hedge is demonstrated by its ability to achieve
offsetting changes to alterations in the hedged item’s fair value
in the case of fair value hedges or to cash flows attributable to
the hedged risk in the case of cash flow hedges.
Changes in the fair value of derivatives used to hedge future cash flows (cash flow hedges) and which are considered effective are
recognised directly in other comprehensive income after ac-
counting for tax effects. The amounts recognised in other com-
prehensive income are derecognised when the hedged item is
recognised in the balance sheet or in profit and loss.
Derivatives which despite their effect as economic hedges do not
fulfil the criteria of IAS 39 for recognition as hedging instruments
are classified as held for trading and carried at fair value through
profit and loss.
When closing hedging transactions, the Nordzucker Group classi-
fies interest-rate derivatives solely as cash flow hedges for hedge accounting purposes. Furthermore, the Group uses derivatives
not designated exclusively as such to hedge exchange-rate and
market risks.
3.19. Foreign currency transactionsPurchases and sales in foreign currencies are converted at the
exchange rate applicable at the time of the transaction. Assets
and liabilities in foreign currencies are translated into the func-
tional currency at the exchange rate on the reporting date. For-
eign currency gains and losses resulting from the conversion are
recognised in profit and loss.
3.20. Use of estimatesPreparing the consolidated financial statements in line with IFRS
requires the use of estimates and assumptions which affect the
carrying amounts of assets and liabilities, the disclosure of contin-
gent liabilities as of the reporting date and the recognition of in-
come and expenses. In particular, key estimates and assumptions
have been made in defining uniform periods of depreciation and
amortisation for the Group, the amount of write-downs on receiv-
ables and the actuarial parameters for measuring pension provi-
sions. For deferred tax assets, the main estimates relate to the tax-
able profits that will be generated in future. Other significant esti-
mates have been made in performing the impairment test in ac-
cordance with IAS 36 concerning the determination of cash flows in the forecast period and the selection of a suitable capitalisation
rate. The actual amounts may vary from the amounts derived from
the estimates and assumptions. We refer to the corresponding
notes to the consolidated balance sheet for the carrying amounts
of balance sheet items affected by significant estimates.
4. Recently published IASB accounting regulations
The present financial statements for the financial year 2012/2013
have been prepared on the basis of the uniform application of
and in compliance with all International Financial Reporting Stand-ards (IFRS) applicable in the European Union as of the reporting
date 28 February 2013. Nordzucker does not apply standards al-
ready published and interpretations by the International Financial Reporting Interpretations Committee (IFRIC) for which application is
not yet mandatory for the reporting year.
The accounting methods applied are the same as those applied
the previous year, with the exception of the following new and
revised standards and interpretations.
Notes 79
4.1. Mandatory application of new and amended standards in the reporting year:
Amendment to IFRS 7 – Disclosures on the Transfer of Financial
Assets: The amendment to IFRS 7 was published in October
2010 and was applicable for the first time in the financial year
2012/2013. The amendment defines extensive new qualitative
and quantitative disclosures on transfers of financial assets that
have not been derecognised and on the continuing involvement
in transferred financial assets as of the reporting date.
The application of the amended standard described in this sec-
tion had no significant effect on the presentation of the Group’s
earnings and financial position and net assets, as the circum-
stances referred to did not exist.
4.2. IFRS endorsed by the EU as of 28 February 2013 but not mandatorily applicable in the reporting year:
The following new and amended standards and interpretations
have already been endorsed by the EU, but were not applied in
the reporting year as their application was not mandatory:
IFRS 10 Consolidated Financial Statements: IFRS 10 was pub-
lished in May 2011 and is applicable for the first time in the finan-
cial year beginning on or after 1 January 2014. The new standard
replaces the provisions of IAS 27 Consolidated and Separate Finan-cial Statements on consolidated accounting and the interpretation
SIC-12 Consolidation – Special Purpose Entities. IFRS 10 defines a
uniform concept of control, which is applied to all companies
including special purpose entities.
IFRS 11 Joint Arrangements: IFRS 11 was published in May 2011
and is applicable for the first time in the financial year beginning
on or after 1 January 2014. The standard replaces IAS 31 Interests in Joint Ventures and the interpretation SIC-13 Jointly Controlled Entities – Non-monetary Contributions by Venturers. IFRS 11 abolish-
es the previous option of accounting for joint ventures using the
proportional consolidation method. In future they are only to be
consolidated using the equity method.
IFRS 12 Disclosure of Interests in Other Entities: IFRS 12 was pub-
lished in May 2011 and is applicable for the first time in the finan-
cial year beginning on or after 1 January 2014. The standard de-
fines uniform rules for mandatory disclosures in the area of con-
solidated accounting and consolidates the disclosures on subsid-
iaries that were previously governed by IAS 27, the disclosures on
joint ventures and associated companies previously defined in IAS
31 and IAS 28 respectively and those for structured entities.
IFRS 13 Fair Value Measurement: IFRS 13 was published in May
2011 and is applicable for the first time in the financial year be-
ginning on or after 1 January 2013. The standard provides guide-
lines for fair value measurement and defines comprehensive
quantitative and qualitative disclosures for fair value measure-
ment. However, the standard does not cover the question of
when assets or liabilities may or must be measured at fair value.
IFRS 13 defines fair value as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Amendment to IAS 1 – Presentation of Components of Other
Comprehensive Income: The amendment to IAS 1 was published
in June 2011 and is applicable for the first time in the financial
year beginning on or after 1 July 2012. The amendment to IAS 1
relates to the presentation of components of other comprehen-
sive income. Components which are intended to be reclassified
into profit or loss in future (“recycled”) must be presented sep-
arately from those components that will remain in equity.
Amendment to IAS 12 – Deferred Tax: Recovery of Underlying
Assets: The amendment to IAS 12 was published in December 2010
and is applicable for the first time in the financial year beginning
on or after 1 January 2013. The amendment to IAS 12 simplified
the standard. It introduced the (rebuttable) presumption that for
the purpose of measuring deferred tax on investment property
measured at fair value, the recovery of the carrying amount will
normally be through sale. A sale should always be assumed for
items of property, plant and equipment not subject to wear and
tear that are measured using the revaluation model.
IAS 19 Employee Benefits (revised 2011): The revised standard
IAS 19 was published in June 2011 and is applicable for the first
time in the financial year beginning on or after 1 January 2013.
The alterations range from fundamental changes such as to the
calculation of forecast returns on plan assets and the elimination
of the corridor method, which served to smooth volatility result-
ing from pension obligations over time, to simple clarifications
and rewording, and also include new and amended disclosure
requirements. The standard is to be applied retroactively.
Nordzucker had previously used the corridor method in the
course of accounting for pension provisions. The elimination of
the accounting method used to date is expected to have a signifi-
cant effect on Nordzucker’s future consolidated financial state-
ments. Changes of some EUR 23 million in equity and of some
EUR 33 million in pension provisions are expected on the basis of
the new rules. Fluctuations in actuarial assumptions, especially for
the interest rate, will result in greater volatility in shareholders’
Annual Report Nordzucker 2012/2013 80
equity in future. The amendments to the accounting of phased
early retirement obligations will not have a significant effect on the
earnings and financial position and net assets of the Nordzucker
Group.
IAS 27 Separate Financial Statements (revised 2011): The re-
vised standard IAS 27 was published in May 2011 and is applic-
able for the first time in the financial year beginning on or after
1 January 2014. Following the adoption of IFRS 10 and IFRS 12,
the scope of IAS 27 is limited to accounting for subsidiaries, joint ventures and associated companies in separate financial state-
ments.
IAS 28 Investments in Associates and Joint Ventures (revised
2011): The revised standard IAS 28 was published in May 2011
and is applicable for the first time in the financial year beginning
on or after 1 January 2014. Following the adoption of IFRS 11 and
IFRS 12, the scope of IAS 28 has been extended to cover the ap-
plication of the equity method to joint ventures as well as to associ-
ated companies.
Amendment to IAS 32 and IFRS 7 – Offsetting Financial Assets
and Financial Liabilities: The amendment to IAS 32 and IFRS 7
was published in December 2011 and is applicable for the first
time in the financial year beginning on or after 1 January 2014
and 1 January 2013 respectively. The amendment is intended to
remove existing inconsistencies by extending the application
guidelines. The existing basic rules on offsetting financial instru-
ments are maintained, however. The amendment also defines
additional disclosures.
Apart from the effects caused by the revision of IAS 19 and de-
scribed above, the application of the amendments in this section
would not have had any significant effect on the presentation of
the Group’s earnings and financial position and net assets.
4.3. IFRS still to be endorsed by the EU:The following new and amended standards and interpretations
are still to be endorsed by the EU and have not been applied in
advance:
IFRS 9 Financial Instruments: Classification and Measurement:
The first part of phase I for the preparation of IFRS 9 Financial In-
struments was published in November 2009. The standard in-
cludes new rules on classifying and measuring financial assets. It
provides for debt instruments to be accounted for either at amort-
ised cost or at fair value through profit or loss, depending on
their characteristics and the business model. Equity instruments
must always be carried at fair value. Fluctuations in the value of
equity instruments may be recognised in other comprehensive
income, however, subject to an option specific to the individual
instruments that can be exercised when the financial instrument
is recognised. In this case, only certain dividend income from the
equity instruments is recognised in profit or loss. An exception is
made for financial assets held for trading, which must be meas-
ured at fair value through profit or loss. The IASB completed the
second part of phase 1 of the project in October 2010. This add-
ed provisions on financial liabilities to the standard and retains
the existing rules on classification and measurement of financial
liabilities with the following exceptions: effects of changes in the
entity’s own credit rating on financial liabilities classified as at fair
value through profit or loss must be recognised without effect
on profit or loss and derivative liabilities on unquoted equity in-
struments may no longer be held at cost. IFRS 9 is applicable for
the first time in the financial year beginning on or after 1 January
2015.
Improvements to IFRS (2009–2011)
The 2009–2011 improvements to IFRS are a collection of
amendments published in May 2012, which are binding for
financial years beginning on or after 1 January 2013. The Group
has not yet applied the following amendments:
● IFRS 1: Clarifies that a company is able to apply IFRS 1 again if
it stops reporting in line with IFRS and subsequently decides
or is obliged to resume the use of these accounting stand-
ards. If the company does not apply IFRS 1 again, it must pre-
sent its financial statements retroactively as if it had never
ceased to apply IFRS.
● IAS 1: Clarifies the difference between voluntary additional
comparative information and obligatory comparative informa-
tion, which generally covers the preceding reporting period.
● IAS 16: Clarifies that essential spare parts and servicing equip-
ment that qualify as items of property, plant and equipment
are not to be treated as inventories.
● IAS 32: Clarifies that income taxes on distributions to holders
of equity instruments fall within the scope of IAS 12 Income
Taxes.
● IAS 34: Aligns disclosures on segment assets with disclosures
on segment liabilities in interim reports and aligns disclosures
for interim reports with those for annual financial reporting.
No substantial effects on the presentation of the Group’s earn-
ings and financial position and net assets are expected from the
application of the amendments described in this section.
Notes 81
Notes to the consolidated income statement
5. Revenues
Revenues are made up as follows:
Revenues
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Sugar revenues from own production 1,763,234 1,392,187
Other 679,606 625,830
2,442,840 2,018,017
Regions
Central Europe 1,059,303 940,840
Northern Europe 946,949 800,762
Eastern Europe 436,588 276,415
2,442,840 2,018,017
Miscellaneous revenues include sales of merchandise, bioethanol and other products such as animal feed.
6. Other operating income
Other operating income is made up as follows:
Other operating income
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Proceeds from disposal of non-current assets 861 3,806
Reversals of write-downs (or write-backs) on receivables 104 2
Income from the reversal of provisions 7,714 13,597
Insurance and other compensation for damages 5,249 3,455
Income from the reversal of invest-ment subsidies, grants and other receivables 689 1,032
Rental and leasing income 1,248 1,598
Foreign-exchange gains 2,893 2,167
Miscellaneous operating income 10,918 16,820
Other operating income 29,676 42,477
Foreign-currency gains and the foreign-currency losses disclosed
under other operating expenses are mainly due to the movement
of the relevant national currencies against the Euro.
7. Cost of materials and services
The cost of materials and services is made up as follows:
Cost of materials and services
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Cost of raw materials, consumables and supplies and of purchased merchandise 1,517,620 1,417,629
Cost of purchased services 104,348 83,174
Cost of materials and services 1,621,968 1,500,803
8. Personnel expenses
Personnel expenses are made up as follows:
Personnel expenses
TEUR1/3/2012
-28/2/20131/3/2011
29/2/2012
Wages and salaries 181,179 170,063
Social security contributions and other social expenses 11,389 11,037
Expenses for defined benefit plans 2,281 1,845
Expenses for defined contribution plans 6,604 5,737
Personnel expenses 201,453 188,682
Expenses for defined benefit and defined contribution plans re-
late to Group expenses for defined benefit and defined contribu-
tion pension plans and similar obligations. The interest portion of
defined benefit obligations relating to pension expenses is recog-
nised in the net financial result.
In 2012/2013 and in the previous year, the average number of
employees in the Group was as follows:
Average number of employees
1/3/2012 -28/2/2013
1/3/2011 -29/2/2012
Central Europe 1,242 1,211
Northern Europe (including Ireland) 1,504 1,521
Eastern Europe 544 548
Average number of employees 3,290 3,280
Annual Report Nordzucker 2012/2013 82
9. Depreciation, amortisation and impairment
Depreciation, amortisation and impairment are made
up as follows:
Depreciation, amortisation and impairment
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Depreciation and amortisation of intangible assets and property, plant and equipment 86,767 85,709
Impairment of intangible assets and property, plant and equip-ment 795 21,236
Depreciation, amortisation and impairment
87,562 106,945
Impairment losses on items of property, plant and equipment
and intangible assets with finite useful lives are recognised in line
with IAS 36 if the recoverable amount for an asset is lower than
the carrying amount, whereby the recoverable amount is defined
as the higher of net realisable value and value in use.
The impairment losses in the previous year were primarily due to
write-downs on non-current assets for the Nordzucker Group’s
bioethanol activities.
10. Other operating expenses
Other operating expenses are made up as follows:
Other operating expenses
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Cost of sales 131,160 112,888
Research and development expenses 3,110 3,340
Expenses for leasing, rent, land leases and other hire costs 11,486 5,161
Administrative expenses 47,478 53,965
Other taxes 1,815 3,799
Foreign-exchange losses 2,657 6,467
Miscellaneous expenses 21,539 28,612
Other operating expenses 219,245 214,232
11. Net interest
Net interest is made up as follows:
Net interest
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Interest and similar income Interest income on bank balances 329 1,166
Income from securities and loans 26 3
Other interest and similar income 82 2,637
437 3,806
Interest and similar expenses Interest expense on bank balances 5,234 23,552
Interest expense on pension provisions (net) 19,873 5,972
Other interest and similar expenses 1,981 8,948
27,088 38,472
Net interest -26,651 -34,666
Net interest includes interest income and interest expense from finan-
cial instruments not held at fair value through profit and loss. Further
details can be found in Note 36.
Net interest expense on pension provisions includes EUR 14,000,000
from the recognition through profit or loss of actuarial losses outside
the 10 per cent corridor. The actuarial losses are recognised within a
shorter period than the remaining term of service of the employees
covered by the pension plan, which is also an option.
12. Net income/loss from investments
Net income/loss from investments is made up as follows:
Net income/loss from investments
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Net income/loss from associated companies
-822 76
Net income/loss from other investments
4,713 3,471
Net income/loss from investments
3,891 3,547
Additional information on the earnings contributions of financial
instruments can be found in Note 36.
Notes 83
13. Other net financial result
Other net financial result consists largely of price effects from fi-
nancing arrangements and net gains/losses on futures transac-
tions and derivatives.
14. Income taxes
Income taxes include taxes on income paid or owed in the indi-
vidual countries and deferred taxes. Income taxes consist of trade
tax, corporation tax, solidarity surcharge and the equivalent for-
eign income taxes.
Income tax expense is made up by origin as follows:
Income taxes
TEUR1/3/2012
-28/2/20131/3/2011
-29/2/2012
Current taxes Current domestic taxes 69,107 45,333
Current foreign taxes 67,400 44,027
136,507 89,360
Deferred taxes Deferred domestic taxes -3,346 -5,988
Deferred foreign taxes -12,057 -5,375
-15,403 -11,363
Income taxes 121,104 77,997
Income taxes include tax expenses from other periods of
EUR 4,909,000 (previous year: EUR 5,057,000).
As of the reporting date, Nordzucker had a long-term tax asset of
EUR 957,000 (previous year: EUR 1,153,000) from the reimburse-
ment of corporation tax. The distribution of potential dividends to the shareholders of Nordzucker does not have any income tax
consequences at the level of Nordzucker.
The expected income tax expense, which would have been
payable if the tax rate for the parent company Nordzucker AG
of 29 per cent (previous year: 29 per cent) were applied
to the consolidated net income under IFRS before taxes and
minority interests, can be reconciled with the income taxes in
the income statement as follows:
Tax reconciliation
TEUR1/3/2012
-28/2/20131/3/2011
-28/2/2012
IFRS net profit before income taxes 481,363 286,288
Group tax rate in % 29.00 29.00
Expected tax expense 139,595 83,024
Differences due to different foreign and domestic tax rates -14,970 -10,649
Change in Group tax rate -8,825 -738
Non-capitalised deferred tax assets on tax loss carry-forwards -126 0
Taxes for prior years 4,909 5,057
Tax loss carry-forwards used 0 -611
Tax-free income -2,169 -1,743
Non-deductible operating expenses for tax purposes 1,285 3,220
Non-offsettable income tax 0 301
Additions/deductions for trade tax 119 497
Other effects 1,286 -361
Tax expense 121,104 77,997
The corporation tax rate for stock corporations based in Germany
is 15 per cent plus 5.5 per cent solidarity surcharge on the corpor-
ation tax liability.
Companies based in Germany are also liable for trade tax at a rate
determined by multipliers set by the local council.
The effects of differences between foreign tax rates and the
Group tax rate for Nordzucker AG (29 per cent) are shown in
the reconciliation statement under tax rate differences between
Germany and abroad.
Deferred tax assets and liabilities result from the capitalisation of
tax loss carry-forwards and primarily from temporary valuation dif-
ferences between the IFRS financial statements and the financial
statements of the individual Group companies for local tax pur-
poses for the following items:
Annual Report Nordzucker 2012/2013 84
Of the total change in deferred taxes recognised in the consoli-
dated balance sheet as of the reporting date, EUR 15,403,000
was recognised in profit or loss and EUR -279,000 in equity with-
out effect on profit or loss.
Deferred tax assets and liabilities are netted out for each com-
pany or taxable entity. To the extent that deferred taxes relate to
private partnerships, netting out only takes place at the level of
Nordzucker AG for corporation tax purposes. Deferred trade tax-
es are netted out at the level of the individual private partner-
ships.
The recognition of deferred taxes resulted in the following re-
statements of balance sheet items with effect on profit and loss:
Deferred taxes 28/2/2013 29/2/2012
TEUR
Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
Intangible assets 443 10,202 59 12,067
Investment property 0 0 2 0
Other property, plant and equipment 2,490 124,278 8,423 134,532
Financial investments 0 0 61 323
Inventories 3,179 9,574 3,593 9,631
Receivables and other assets 459 1,991 2,438 1,082
Pension provisions 8,658 0 4,784 -508
Other provisions 9,221 -2,098 7,188 -2,569
Liabilities to banks 329 458 8 264
Other liabilities 185 11,676 5,061 21,544
Deferred taxes on temporary differences 24,964 156,081 31,617 176,367
Deferred tax assets on tax loss carry-forwards 2,706 0 2,716 0
Gross amount 27,670 156,081 34,333 176,367
Netting -19,843 -19,843 -22,450 -22,450
Carrying amount 7,827 136,238 11,883 153,917
Deferred taxes 1/3/2012 – 28/2/2013 1/3/2011 – 29/2/2012
TEUR
Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
Intangible assets -384 -1,865 34 -39
Investment property 2 0 6 103
Other property, plant and equipment 5,933 -11,715 1,046 -8,123
Financial investments 61 -323 0 210
Inventories 413 -57 -2,399 1,655
Receivables and other assets 1,980 589 -1,719 1,924
Pension provisions -3,873 508 1,089 537
Other provisions -2,033 471 -1,223 -865
Liabilities to banks -321 194 509 270
Other liabilities/leasing 4,876 -9,869 -1,467 -4,359
Deferred taxes on temporary differences 6,654 -22,067 -4,124 -8,687
Deferred tax assets on tax loss carry-forwards 10 1,448
Total 6,664 -22,067 -2,676 -8,687
Notes 85
The deferred tax liabilities include EUR 1,097,000 (previous year:
EUR 366,000) for temporary differences from derivatives in cash
flow hedges. As these items are not recognised in profit and loss,
the corresponding deferred taxes are also recognised directly in
other comprehensive income.
With regard to the surplus of deferred tax assets over deferred tax
liabilities in the balance sheet and the capitalised tax loss carry-
forwards at the level of individual Group companies, the value
of the deferred tax assets is considered to be sufficiently certain,
based on the current earnings situation and/or business planning.
Deferred tax assets of EUR 2,706,000 were recognised for domes-
tic trade tax loss carry-forwards of EUR 19,603,000 (previous year:
EUR 20,517,000). Under current legislation, tax losses in Germany
can be carried forward indefinitely.
In the financial year, no deferred tax assets were recognised for
foreign tax loss carry-forwards of EUR 4,594,000 (previous year:
EUR 3,479,000) and domestic trade tax loss carry-forwards of EUR
16,706,000 (previous year: EUR 18,269,000) as no positive tax-
able income is expected in the near future. Furthermore, no de-
ferred tax assets were recognised for tax loss carry-forwards of
EUR 297,000 (previous year: EUR 297,000) that arose before the
consolidated tax group was formed, as these may not be used
for the duration of the consolidated tax group.
No deferred taxes were recognised for retained earnings and
exchange-rate differences of subsidiaries and the resulting tem-
porary differences between the net assets of the subsidiaries in the
IFRS consolidated financial statements and the carrying amount of
the interests in the subsidiaries for tax purposes. As of the balance
sheet date, the temporary differences for which deferred tax lia-
bilities could be recognised came to EUR 364,353,000 (previous
year: EUR 170,223,000). If deferred taxes were to be recognised
for these temporary differences, only 5 per cent of the gain on
disposal or of the dividends, plus any foreign withholding tax,
would be relevant for their measurement under German tax law.
Notes to the consolidated balance sheet
15. Intangible assets
Changes in the individual items of intangible assets are shown in the
statement of changes in non-current assets.
With the exception of goodwill, there were no intangible assets with
an indefinite useful life in the reporting period. Goodwill of EUR 89.0
million comes from the acquisition of the Nordic Sugar Group.
In the financial year 2012/2013, intangible assets purchased for EUR
3,972,000 (previous year: EUR 4,252,000) were still in use, although
they had already been fully amortised.
16. Property, plant and equipment
We refer to the statement of changes in non-current assets for the
Nordzucker Group for changes in property, plant and equipment.
Assets which fulfil the criteria of IAS 17 for a finance lease are
mainly a storage reservoir in Stöcken and various lease agree-
ments for IT equipment.
As of 28 February 2013, items of property, plant and equipment
with acquisition and/or production costs of EUR 245,843,000
(previous year: EUR 238,737,000) were in use although they had
already been fully depreciated.
In the reporting period, expenses of EUR 814,000 (previous year:
EUR 1,816,000) were capitalised for internally generated items of
property, plant and equipment.
In the financial year 2012/2013, the Nordzucker Group received
compensation of EUR 1,824,000 (previous year: EUR 1,522,000)
for the loss or impairment of items of property, plant and equip-
ment from third parties, e.g. insurance companies.
Net carrying amounts of capitalised leased items are as follows:
Finance leases
TEUR 28/2/2013 29/2/2012
Technical plant and machinery 607 711
Finance leases 607 711
Annual Report Nordzucker 2012/2013 86
17. Impairment test for intangible assets and items of property, plant and equipment
Impairment tests for intangible assets and items of property, plant
and equipment are mainly performed on the basis of the values
in use for cash-generating units. The cash-generating units have
been determined according to the business activities of the
Nordzucker Group and taking regional aspects into account.
An impairment test was carried out for the goodwill of the Nordic
Sugar Group recognised in the consolidated balance sheet (cal-
culation of value in use). The cash flows for this cash-generating
unit were calculated for the next five years based on financial
forecasts. The pre-tax interest rate used to discount the cash flows for this cash-generating unit was around 8.96 per cent (previous
year: 8.74 per cent). A growth rate of 0 per cent (previous year:
0 per cent) was assumed for the long-term earnings component
of the discounted cash flow calculation. No impairment charges
were necessary for this goodwill.
In addition to the impairment tests at the level of the reporting
units, individual items of property, plant and equipment were
written down to their recoverable amount, e.g. in the case of fac-
tory closures, and written back if the reasons for the impairment
ceased to exist. There were no reversals of impairment losses in
the reporting year (previous year: EUR 1,537,000).
18. Investment property
Investment property in the Nordzucker Group mainly consists of
flats and land not required for operating purposes.
In the financial year 2012/2013, rental income of EUR 133,000 (pre-
vious year: EUR 74,000) was generated and offset by expenses
of EUR 171,000 (previous year: EUR 228,000). There were also
expenses of EUR 9,000 (previous year: EUR 11,000) for which
there was no corresponding rental income.
The fair value of the property is EUR 9,502,000 as of 28 February
2013 (previous year: EUR 10,991,000). Fair value was determined
on the basis of internal estimates of market values using compar-
able properties.
No acquisition costs were capitalised retroactively in the financial
year 2012/2013 or in the previous year.
19. Financial investments
There were no significant changes in the Nordzucker Group’s
financial investments in the reporting period.
19.1. Companies accounted for under the equity methodIn the financial year, associated companies and joint ventures accounted for under the equity method reported total net in-
come of EUR 8,000 (previous year: EUR 152,000), revenues of
EUR 1,976,000 (previous year: EUR 0), assets of EUR 17,820,000
(previous year: EUR 14,547,000) and liabilities of EUR
12,546,000 (previous year: EUR 9,314,000) in their financial
statements.
The Nordzucker Group’s share of the profit/losses of the associat-
ed companies was EUR -821,000 in the reporting period (previ-
ous year: EUR 76,000), because an impairment loss of EUR
825,000 was recognised for one joint venture in addition to its
current earnings contribution.
In applying the equity method, losses from an associated company
that exceed the carrying amount of the investment or other non-
current receivables relating to the financing of the associated
company are not recognised as there is no requirement to invest
further equity.
The Nordzucker Group received no dividends in the reporting year.
19.2. Other financial investmentsAvailable-for-sale financial instruments included in other non-cur-
rent financial assets are carried at fair value at the reporting date
or at amortised cost if fair value cannot be reliably determined by
other valuation methods or because there is no active market.
In the reporting year, the company SWEETGREDIENTS GmbH &
Co. KG, which had previously been consolidated pro rata, was
deconsolidated as it was considered insignificant. The carrying
amount of EUR 3,122,000 is now included in other financial in-
vestments.
The shares in Tereos TTD a.s. are disclosed here, despite a stake
of 35.38 per cent, because the company’s articles do not permit
the Group to exercise significant influence over its operating and
financial policy.
The Nordzucker Group received dividends of EUR 4,713,000 in
the reporting year (previous year: EUR 3,763,000).
Notes 87
Consolidated assets schedule for the previous year (2011/2012) Nordzucker AG, Braunschweig, Germany
Cost or fair value Accumulated depreciation, amortisation and impairment Carrying amounts
As of 1/3/2011
Currency effects
Additions Reclassifi-cations
Disposals As of 29/2/2012
As of 1/3/2011
Currency effects
Depreciation, amortisation
Impairment Reversals of impairment
Reclassifi-cations
Disposals As of 29/2/2012
As of 29/2/2012
As of 28/2/2011
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Intangible assets
Purchased rights and licences 147,182 -431 7,533 358 1,775 152,867 57,184 -232 13,174 358 250 0 1,666 68,568 84,299 89,998
Internally produced software 4,447 -1 0 0 0 4,446 3,912 0 114 0 82 0 0 3,944 502 535
Goodwill 89,072 216 0 0 0 89,288 38 -1 0 0 0 0 0 37 89,251 89,034
Advance payments made 330 2 61 -324 55 14 0 0 0 0 0 0 0 0 14 330
241,031 -214 7,594 34 1,830 246,615 61,134 -233 13,288 358 332 0 1,666 72,549 174,066 179,897
Property, plant and equipment
Land and buildings 481,058 -1,584 1,195 -1,198 18,069 461,402 231,648 421 11,822 1,675 504 -1,430 15,737 227,895 233,507 249,410
Technical plant and machinery 1,491,616 -1,254 19,410 22,983 17,831 1,514,924 849,084 757 57,658 19,092 76 -712 16,529 909,274 605,650 642,532
Other plant, operating and office equipment 45,799 -307 1,699 2,272 3,108 46,355 36,152 -485 2,904 56 0 991 2,905 36,713 9,642 9,647
Advance payments made and plant under construction 4,614 -204 34,104 -26,026 80 12,408 147 1 0 0 0 0 0 148 12,260 4,467
2,023,087 -3,349 56,408 -1,969 39,088 2,035,089 1,117,031 694 72,384 20,823 580 -1,151 35,171 1,174,030 861,059 906,056
Investment property 14,568 0 2 1,986 4,075 12,481 6,052 -1 37 55 624 1,151 974 5,696 6,785 8,516
2,278,686 -3,563 64,004 51 44,993 2,294,185 1,184,217 460 85,709 21,236 1,536 0 37,811 1,252,275 1,041,910 1,094,469
Annual Report Nordzucker 2012/2013 88
Cost or fair value Accumulated depreciation, amortisation and impairment Carrying amounts
As of 1/3/2011
Currency effects
Additions Reclassifi-cations
Disposals As of 29/2/2012
As of 1/3/2011
Currency effects
Depreciation, amortisation
Impairment Reversals of impairment
Reclassifi-cations
Disposals As of 29/2/2012
As of 29/2/2012
As of 28/2/2011
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Intangible assets
Purchased rights and licences 147,182 -431 7,533 358 1,775 152,867 57,184 -232 13,174 358 250 0 1,666 68,568 84,299 89,998
Internally produced software 4,447 -1 0 0 0 4,446 3,912 0 114 0 82 0 0 3,944 502 535
Goodwill 89,072 216 0 0 0 89,288 38 -1 0 0 0 0 0 37 89,251 89,034
Advance payments made 330 2 61 -324 55 14 0 0 0 0 0 0 0 0 14 330
241,031 -214 7,594 34 1,830 246,615 61,134 -233 13,288 358 332 0 1,666 72,549 174,066 179,897
Property, plant and equipment
Land and buildings 481,058 -1,584 1,195 -1,198 18,069 461,402 231,648 421 11,822 1,675 504 -1,430 15,737 227,895 233,507 249,410
Technical plant and machinery 1,491,616 -1,254 19,410 22,983 17,831 1,514,924 849,084 757 57,658 19,092 76 -712 16,529 909,274 605,650 642,532
Other plant, operating and office equipment 45,799 -307 1,699 2,272 3,108 46,355 36,152 -485 2,904 56 0 991 2,905 36,713 9,642 9,647
Advance payments made and plant under construction 4,614 -204 34,104 -26,026 80 12,408 147 1 0 0 0 0 0 148 12,260 4,467
2,023,087 -3,349 56,408 -1,969 39,088 2,035,089 1,117,031 694 72,384 20,823 580 -1,151 35,171 1,174,030 861,059 906,056
Investment property 14,568 0 2 1,986 4,075 12,481 6,052 -1 37 55 624 1,151 974 5,696 6,785 8,516
2,278,686 -3,563 64,004 51 44,993 2,294,185 1,184,217 460 85,709 21,236 1,536 0 37,811 1,252,275 1,041,910 1,094,469
Notes 89
Consolidated assets schedule for the financial year 2012/2013 Nordzucker AG, Braunschweig, Germany
Cost or fair value Accumulated depreciation, amortisation and impairment Carrying amounts
As of 1/3/2012
Currency effects
Additions Reclassifi-cations
Disposals As of 28/2/2013
As of 1/3/2012
Currency effects
Depreciation, amortisation
Impairment Reclassifications
Disposals As of 28/2/2013
As of 28/2/2013
As of 29/2/2012
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Intangible assets
Purchased rights and licences 152,867 881 3,826 177 2,127 155,624 68,568 197 13,979 2 10 2,110 80,646 74,978 84,299
Internally produced software 4,446 0 0 0 0 4,446 3,944 0 109 0 0 0 4,053 393 502
Goodwill 89,288 -214 0 0 0 89,074 37 0 0 0 0 0 37 89,037 89,251
Advance payments made 14 0 929 -14 0 929 0 0 0 0 0 0 0 929 14
246,615 667 4,755 163 2,127 250,073 72,549 197 14,088 2 10 2,110 84,736 165,337 174,066
Property, plant and equipment
Land and buildings 461,402 1,042 3,668 -2,451 2,740 460,921 227,895 -78 11,704 230 -6,455 1,722 231,574 229,347 233,507
Technical plant and machinery 1,514,924 5,066 35,499 25,340 11,053 1,569,776 909,274 1,764 57,536 555 8,904 9,731 968,302 601,474 605,650
Other plant, operating and office equipment 46,355 56 2,669 1,573 4,673 45,980 36,713 9 3,405 5 218 4,428 35,922 10,058 9,642
Advance payments made and plant under construction 12,408 -2 27,462 -27,500 49 12,319 148 0 0 0 0 0 148 12,171 12,260
2,035,089 6,162 69,298 -3,038 18,515 2,088,996 1,174,030 1,695 72,645 790 2,667 15,881 1,235,946 853,050 861,059
Investment property 12,481 0 6 -1,263 62 11,162 5,696 0 34 3 -244 4 5,485 5,677 6,785
2,294,185 6,829 74,059 -4,138 20,704 2,350,231 1,252,275 1,892 86,767 795 2,433 17,995 1,326,167 1,024,064 1,041,910
Reclassifications to net carrying amounts of EUR 1,705,000 relate to assets of Nordzucker AG and the Hungarian subsidiary which are held for sale.
Annual Report Nordzucker 2012/2013 90
Cost or fair value Accumulated depreciation, amortisation and impairment Carrying amounts
As of 1/3/2012
Currency effects
Additions Reclassifi-cations
Disposals As of 28/2/2013
As of 1/3/2012
Currency effects
Depreciation, amortisation
Impairment Reclassifications
Disposals As of 28/2/2013
As of 28/2/2013
As of 29/2/2012
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Intangible assets
Purchased rights and licences 152,867 881 3,826 177 2,127 155,624 68,568 197 13,979 2 10 2,110 80,646 74,978 84,299
Internally produced software 4,446 0 0 0 0 4,446 3,944 0 109 0 0 0 4,053 393 502
Goodwill 89,288 -214 0 0 0 89,074 37 0 0 0 0 0 37 89,037 89,251
Advance payments made 14 0 929 -14 0 929 0 0 0 0 0 0 0 929 14
246,615 667 4,755 163 2,127 250,073 72,549 197 14,088 2 10 2,110 84,736 165,337 174,066
Property, plant and equipment
Land and buildings 461,402 1,042 3,668 -2,451 2,740 460,921 227,895 -78 11,704 230 -6,455 1,722 231,574 229,347 233,507
Technical plant and machinery 1,514,924 5,066 35,499 25,340 11,053 1,569,776 909,274 1,764 57,536 555 8,904 9,731 968,302 601,474 605,650
Other plant, operating and office equipment 46,355 56 2,669 1,573 4,673 45,980 36,713 9 3,405 5 218 4,428 35,922 10,058 9,642
Advance payments made and plant under construction 12,408 -2 27,462 -27,500 49 12,319 148 0 0 0 0 0 148 12,171 12,260
2,035,089 6,162 69,298 -3,038 18,515 2,088,996 1,174,030 1,695 72,645 790 2,667 15,881 1,235,946 853,050 861,059
Investment property 12,481 0 6 -1,263 62 11,162 5,696 0 34 3 -244 4 5,485 5,677 6,785
2,294,185 6,829 74,059 -4,138 20,704 2,350,231 1,252,275 1,892 86,767 795 2,433 17,995 1,326,167 1,024,064 1,041,910
Reclassifications to net carrying amounts of EUR 1,705,000 relate to assets of Nordzucker AG and the Hungarian subsidiary which are held for sale.
Notes 91
20. Inventories
Inventories are made up as follows:
Inventories
TEUR 28/2/2013 29/2/2012
Raw materials, consumables and supplies
46,885 44,451
Work in progress 50,491 43,373
Finished goods and merchandise 930,387 810,414
Inventories 1,027,763 898,238
Unfinished goods mainly consist of the thick juice required to pro-
duce bioethanol.
Inventories of EUR 3,025,000 (previous year: EUR 1,258,000) are
carried at net realisable value. Write-downs on inventories
amounted to EUR 2,949,000 (previous year: EUR 2,306,000).
21. Trade receivables
Trade receivables are made up as follows:
Trade receivables
TEUR 28/2/2013 29/2/2012
Gross trade receivables 214,483 197,963
Write-downs on trade receivables 2,059 3,540
Trade receivables from external companies 212,424 194,423
Information on the default risks and the term structure of trade re-
ceivables is given in Note 37. Write-downs on trade receivables
in the financial year amounted to EUR 562,000 (previous year:
EUR 905,000).
22. Receivables from related parties
Receivables from related parties are made up as follows:
Receivables from related parties
TEUR 28/2/2013 29/2/2012
Receivables from associated companies and joint ventures 132 102
Receivables from other related parties 4,132 131
Receivables from related parties 4,264 233
The receivables from related parties remaining after consolidation
are classified as financial assets and other receivables. Details on
the default risks and the term structure for this category can be
found in Note 37.
23. Financial assets
Financial assets are made up as follows:
Financial assets
TEUR 28/2/2013 29/2/2012
Claims for damages 3,260 711
Positive fair value of derivatives 5,033 7,695
Available-for-sale securities 0 10
Other financial assets 4,304 4,776
Financial assets 12,597 13,192
Of total financial assets, EUR 0 (previous year: EUR 7,000) are
non-current.
With the exception of positive fair values of derivatives and
available-for-sale securities, the financial assets have been classi-
fied in the financial assets and other receivables category of finan-
cial instruments. Details of the default risks and term structure for
this category can be found in Note 37.
Current financial assets are included in the financial investments class, which is part of the available-for-sale category, and are all
held at fair value.
24. Other assets
Other assets are made up as follows:
Other assets
TEUR 28/2/2013 29/2/2012
Receivables from other taxes 50,092 31,510
Miscellaneous other assets 12,293 31,830
Other assets 62,385 63,340
Of total other assets, EUR 9,000 (previous year: EUR 1,369,000)
are non-current. From this reporting year onwards, claims for the
reimbursement of energy taxes are presented in receivables from
other taxes. In the previous year, receivables of EUR 12,854,000
were shown in miscellaneous other assets.
Annual Report Nordzucker 2012/2013 92
25. Assets held for sale
Assets classified as held for sale in accordance with IFRS 5 con-
sist of land and buildings held at EUR 2,497,000 (previous year:
EUR 1,867,000).
26. Shareholders’ equity
Changes in Group shareholders’ equity are shown in the state-
ment of changes in shareholders’ equity.
Capital management at the Nordzucker Group is founded on a
strong equity base and a sustainable dividend policy in order to
secure current operations on the one hand and to enable a rea-
sonable dividend yield for the shareholders on the other. As of
28 February 2013, the equity ratio came to 55 per cent (previous
year: 44 per cent). The Executive Board will put forward a pro-
posal at the Annual General Meeting to distribute a dividend of
EUR 1.80 per share (previous year: EUR 1.00 per share).
Nordzucker AG’s Articles of Association do not require any particu-
lar amount of equity. The Executive Board manages the Group
with the aim of generating a profit. It does this by means of cap-
ital market-oriented targets for the company which are measured
in terms of specific financial indicators. The main financial indica-
tors for the Group are total operating profitability, return on sales, equity ratio and return on equity, for which targets have been set.
26.1. Subscribed capitalAs of 28 February 2013, subscribed capital (ordinary share cap-
ital) remained unchanged at EUR 123,651,328.00 and was div-
ided into 48,301,300 registered common shares.
The ordinary share capital is fully paid in and, as in the previous
year, has a nominal share of subscribed capital of EUR 2.56 per
share.
As of the reporting date, Nordzucker Holding Aktiengesellschaft,
Braunschweig, Germany, had provided evidence that it held
more than 50 per cent of the shares, with 76.23 per cent.
26.2. Capital reserves The capital reserves have been formed from share premiums
paid in the course of capital increases by Nordzucker AG.
26.3. Retained earningsRetained earnings are made up of the net income earned in
prior financial years and the current period by the companies
included in the consolidated financial statements. Goodwill
arising on acquisitions made by the Group before 1 March 2004
has been offset against reserves. In the IFRS opening balance
sheet, the balancing item from the conversion of financial state-
ments prepared in foreign currencies was offset against retained
earnings.
Retained earnings include statutory reserves of 10 per cent of
subscribed capital, amounting to EUR 12,365,000 which, in line
with statutory regulations (Sec. 150 AktG [German Stock Corpor-
ation Act]), are not available for distribution to shareholders.
26.4. Other comprehensive incomeOther comprehensive income is made up as follows:
Other comprehensive income
TEUR 28/2/2013 29/2/2012
Fair value adjustment to derivatives in cash flow hedges 897 246
Currency differences from the con-solidation of foreign subsidiaries 58,004 51,436
Other comprehensive income 58,901 51,682
As of 28 February 2011, the reserve for fair value adjustments
to derivatives in cash flow hedges came to EUR 2,064,000 and
exchange-rate differences from the consolidation of foreign
subsidiaries recognised in equity to EUR 52,920,000.
26.5. Non-controlling interestsMinority interests exist primarily in the following companies:
Non-controlling interests
TEUR 28/2/2013 29/2/2012
Sucros OY 29,844 26,924
AB Nordic Sugar Kėdainiai 16,929 14,278
Norddeutsche Flüssigzucker GmbH & Co. KG
2,458
0
Považský cukor a.s. 2,272 1,708
Cukrownia Melno S.A., i.L. 210 211
Other companies 167 139
Non-controlling interests 51,880 43,260
In the reporting year, 30 per cent of the interests in Nord-
deutsche Flüssigzucker GmbH & Co. KG were sold. The state-
ment of changes in shareholders’ equity shows this transaction
in the row “Other”.
Notes 93
27. Pension obligations
Provisions for pension obligations are made for accrued and cur-
rent benefits of both currently active and former members of staff
of the Nordzucker Group and their surviving dependents.
Benefit obligations are structured in line with the legal, fiscal and
economic conditions in each country.
The Group has both defined contribution plans and defined benefit plans. Pension commitments are based on collective agreements
and in a few cases on individual agreements with fixed benefit
amounts. The defined benefit plans have commitments both
covered by provisions and funded by plan assets.
Pension provisions are determined in accordance with IAS 19 on
the basis of actuarial assumptions. The following weighted vari-
ables were used in the financial year 2012/2013 and the previous
year:
Parameters of pension obligations
28/2/2013 29/2/2012
Discount rate (%) 3.45 4.75
Salary increase (%) 2.50 2.50
Pension increase (%) 1.50 1.50
For domestic companies in the Nordzucker Group, the assumptions
for life expectancy are taken from the actuarial tables 2005 G by
Dr Klaus Heubeck.
Expenses of EUR 22,635,000 (previous year: EUR 7,818,000) were
incurred in 2012/2013 for defined benefit plans, which are made
up as follows:
Expenses for pensions
TEUR 28/2/2013 29/2/2012
Service cost 2,816 2,058
Effects of curtailments and cancella-tions of pension plans 0 -2
Amortisation of unrealised actuarial gains (-) and losses (+) 13,877 -209
Interest expense for provisions for pension obligations in the financial year 9,043 8,832
Return on plan assets -3,170 -2,861
Effects of changes in exchange rates 68 0
Expenses for pensions 22,635 7,818
Provisions for pensions and similar obligations disclosed in the
balance sheet changed as follows:
Net pension obligations
TEUR 28/2/2013 29/2/2012
Change in present value of pension entitlements Present value of pension entitlements at the beginning of the financial year 188,076 179,250
Service cost in the financial year 2,816 2,058
Interest expense for pensions in the financial year 9,043 8,832
Pension payments -10,898 -10,885
Transfers of pension obligations to other companies 0 -71
Effects of curtailments and cancellations of pension plans -2 -2
Actuarial gain (-)/loss (+) in the financial year 32,612 8,751
Effects of changes in exchange rates 2,022 143
Present value of pension entitlements at the end of the financial year 223,670 188,076
Change in plan assets
Present value of plan assets for funded pension obligations at the beginning of the financial year 35,685 38,223
Contributions to pension funds/ plan assets 1,524 152
Income from plan assets -5,039 -3,682
Return on plan assets 1,516 992
Present value of plan assets for funded pension obligations at the end of the financial year 33,686 35,685
Net pension obligations 189,984 152,391
Unrealised actuarial gains (+)/losses (-) -32,756 -12,383
Pension provisions 157,227 140,008
The forecast return on pension plan assets is EUR 3,170,000
(previous year: EUR 2,861,000); the variation based on past
experience for the reporting year was EUR -1,654,000 (previous
year: EUR -1,868,000). As of 28 February 2011, the variation
based on past experience was EUR -760,000 (28 February 2010:
EUR 496,000; 28 February 2009: EUR -620,000).
As of 28 February 2011, the present value of pension obligations
was EUR 179,250,000 (28 February 2010: EUR 177,181,000;
28 February 2009: EUR 137,657,000), the present value of plan
assets was EUR 38,223,000 (28 February 2010: EUR 39,335,000;
28 February 2009: EUR 41,667,000), the unrealised actuarial gains
(+) and losses (-) amounted to EUR -1,633,000 (28 February
2010: EUR -2,542,000; 28 February 2009: EUR +10,942,000) and
the pension provisions to EUR 139,394,000 (28 February 2010:
EUR 135,304,000; 28 February 2009: EUR 106,932,000). No
un realised gains or losses were reported on plan assets in this
period.
Annual Report Nordzucker 2012/2013 94
28. Other provisions
Other provisions are made up as follows:
Of total other provisions, EUR 32,540,000 (previous year:
EUR 23,415,000) are non-current.
Provisions for recultivation obligations include the forecast ex-
penses for the demolition of buildings and recultivation of land
used for operations as well as demolition obligations at former
production sites.
The provision for early retirement and severance payments covers
the Group’s forecast obligations under existing collective early
retirement agreements as part of a redundancy settlement in
connection with changes to the sugar market regime that will
come into effect in subsequent years. This item also includes
obligations under other individual agreements.
Miscellaneous other provisions were made for bonuses and
commissions, onerous contracts, outstanding invoices and other
anticipated expenses. In the reporting year, EUR 10,939,000
was reclassified to this item from other liabilities. This relates to
Other provisions
TEURAs of
29/2/2012Exchange-
rate effects Addition Utilisation ReversalAs of
28/2/2013
Recultivation obligations 6,615 53 0 252 100 6,316
Expenses for anniversaries 2,253 23 644 108 0 2,812
Partial early retirement 5,878 0 1,688 754 0 6,812
Profit sharing, bonuses and other gratuities 11,113 7 13,668 10,823 297 13,668
Early retirement, severance pay 4,639 0 109 1,670 33 3,045
Miscellaneous other provisions 60,976 -151 48,280 28,250 7,284 73,571
Other provisions 91,474 -68 64,389 41,857 7,714 106,224
provisions made in prior years for probable production levy
payments.
29. Financial liabilities
Financial liabilities are made up as follows:
Financial liabilities
TEUR 28/2/2013 29/2/2012
Liabilities to banks 70,050 255,577
Liabilities from finance leases 634 748
Financial liabilities 70,684 256,325
As of 28 February 2013, liabilities to banks have the following
term structure:
Liabilities to banks
TEURRemaining term of up to one year
Remaining term of one to five years
Remaining term of more than five years Total
28/2/2013 66,013 0 4,037 70,050
29/2/2012 167,741 81,008 6,828 255,577
Interest on bank loans partly depends on certain financial indica-
tors, such as the equity ratio and EBITDA in relation to debt and
interest expense.
On 17 June 2011 a syndicated loan was taken out for a period of
five years to secure Nordzucker AG’s access to liquidity.
Notes 95
The syndicated loan is available to fund short-term operating
business and includes a revolving credit for EUR 465,000,000, of
which EUR 395,892,000 (previous year: EUR 365,000,000) had
not been used in the reporting year.
Further bilateral credit lines were also available as of the reporting
date, of which EUR 47,727,000 (previous year: EUR 44,957,000)
had not been used.
In the financial year, Nordzucker did not pledge any financial
assets within the meaning of IFRS 7.14 as collateral for financial
liabilities.
30. Trade payables
Trade payables are made up as follows:
Trade payables
TEUR 28/2/2013 29/2/2012
Liabilities towards sugar beet suppliers 393,530 326,752
Other trade payables 71,895 128,370
Trade payables 465,425 455,122
31. Liabilities towards related parties
Liabilities towards related parties are made up as follows:
Liabilities towards related parties
TEUR 28/2/2013 29/2/2012
Liabilities towards associated companies and joint ventures 5,500 5,500
Liabilities towards other related parties 16,246 11,498
Liabilities towards related parties 21,746 16,998
EUR 5,500,000 of the item (previous year: EUR 5,500,000) is non-
current.
Liabilities towards related parties have been classified under other financial liabilities and liabilities towards related parties.
32. Other financial liabilities
Other financial liabilities are made up as follows:
Other financial liabilities
TEUR 28/2/2013 29/2/2012
Negative fair value of derivatives 2,615 13,002
Miscellaneous financial liabilities 4,061 4,079
Other financial liabilities 6,676 17,081
Of total other financial liabilities, EUR 294,000 (previous year:
EUR 1,181,000) are non-current.
With the exception of derivatives, the other financial liabilities are
classified as other financial liabilities and liabilities towards related parties. The negative fair values of derivatives are carried in the
derivatives class of financial instruments.
33. Other liabilities
Other liabilities are made up as follows:
Other liabilities
TEUR 28/2/2013 29/2/2012
Outstanding social security contributions 23,279 19,700
Investment grants, subsidies and other support payments 11,584 16,897
Deferrals 3,852 5,452
Advance payments received for orders 95 222
Miscellaneous other liabilities 11,312 29,170
Other liabilities 50,122 71,441
Of total other liabilities, EUR 12,555,000 (previous year:
EUR 20,985,000) are non-current.
Liabilities from investment grants, subsidies and other support
payments derive from public subsidies in connection with the
purchase or production of subsidised property, plant and equip-
ment. They are reversed through profit and loss over the useful
life of the subsidised assets.
Miscellaneous other liabilities mainly consist of liabilities towards
staff for outstanding wages and salaries.
Annual Report Nordzucker 2012/2013 96
Notes to the consolidated cash flow statement
34. Components of cash and cash equivalents
The components of cash and cash equivalents are the same as in
the balance sheet. They consist of liquid funds that are available
at any time.
No cash or cash equivalents disclosed in the consolidated cash flow statement were used for bank guarantees or escrow pay-
ments for warranties.
35. Non-cash transactions
No significant non-cash transactions took place for financing and
investing purposes in the reporting year and the previous year.
Other disclosures
36. Other disclosures on financial instruments
Financial instruments are defined as contracts that give rise to a
financial asset for one entity and a financial liability or equity in-
strument for the counterparty.
In this context, financial assets include cash and cash equivalents,
contractual rights to receive cash or other financial assets such
as trade receivables, derivative financial instruments and equity
instruments of another company. Financial liabilities include con-
tractual obligations to deliver cash or other financial assets. These
include borrowing, current loans, trade payables and derivatives.
The following presentation provides information about the carry-
ing amounts of the individual measurement categories. It also
shows the fair value for each class of financial instrument. The
presentation enables a comparison between carrying amounts
and fair values.
For cash and other current primary financial instruments, i.e. trade
receivables, financial assets, derivative financial instruments, and
other receivables and liabilities, the fair value and the carrying
amount on each balance sheet date are the same.
The Nordzucker Group does not make use of the fair value
option. As of the balance sheet date, there are also no financial
instruments in the category “held to maturity”.
Net income from financial instruments – classified under the
measurement categories defined in IAS 39 and listed under Note
3.8 – results from changes in fair value, write-downs, write-backs
and disposals. Also included are interest income and expense and
other earnings components from financial instruments not held at
fair value through profit and loss.
Net interest includes interest income of EUR 411,000 (previous
year: EUR 1,826,000) and interest expense of EUR 7,174,000
(previous year: EUR 30,289,000) from financial instruments not
measured at fair value through profit and loss.
In the reporting period there was no interest income from im-
paired financial assets.
37. Risk management
37.1. General remarksNordzucker has a comprehensive system in place throughout
the company for the early identification and permanent moni-
toring of risk as well as for risk measurement and limitation. The
integrated risk management system is used to identify risks and
the appropriate steps fully and to include them in operational
and strategic planning. Potential risks such as default and credit
risks, liquidity, exchange-rate and interest-rate risks are assessed
permanently as part of risk management, whereby appropriate
steps are developed and implemented. Operating and strategic
decision making always takes risk aspects into account. The
Group-wide reporting and controlling system ensures that all
the responsible decision-makers are continually informed.
By the nature of its business, the Nordzucker Group is exposed
to default and credit risks, liquidity and exchange-rate risks and
interest-rate risks. These are controlled by means of suitable risk
management processes. The Nordzucker Group uses derivative
financial instruments to hedge against interest- and exchange-rate
fluctuations and to hedge costs of raw materials. The use of these
derivatives is governed by Group guidelines and restricted to the
hedging of existing transactions or those which are sufficiently
likely to take place. The guidelines define the individuals respon-
sible, the limits and reporting, and stipulate a strict separation be-
tween trading and clearing. This transparent and functional man-
ner of organising risk management processes applies to all types
of risk.
37.2. Default riskCredit or default risk is the risk that business partners do
not meet their contractual payment obligations, causing the
Nordzucker Group to suffer a loss as a result. As part of credit
risk management, business partners are subject to a credit scor-
ing in order to reduce credit risk. Identifiable default risks are
Notes 97
Assets
Valuation Total 29/2/2012 Nominal value Amortised cost Fair value
Valuation categoryCash & cash equivalents/
cash reserve Loans and receivablesAvailable-for-sale
financial assets (AFS)Held for trading
(FVTPL-HFT) Derivatives in hedging
relationships under IAS 39
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial investments 20,429 10 0 0 70 0 20,359 10 0 0 0 0
Financial assets and other receivables 5,721 0 0 0 5,721 0 0 0 0 0 0 0
Trade receivables 194,423 0 0 0 194,423 0 0 0 0 0 0 0
Derivatives 0 7,695 0 0 0 0 0 0 0 5,910 0 1,785
Cash and cash equivalents 7,407 0 7,407 0 0 0 0 0 0 0 0 0
Total 227,980 7,705 7,407 0 200,214 0 20,359 10 0 5,910 0 1,785
Equity and liabilities
Valuation Total 29/2/2012 Amortised cost Fair value
Valuation categoryFinancial liabilities valued at
amortised costDerivatives in hedging
relationships under IAS 39Held for trading
(FVTPL-HFT)Fair value option
(FVTPL-FVO)
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial liabilities 256,325 0 256,325 0 0 0 0 0 0 0
Trade payables 455,122 0 455,122 0 0 0 0 0 0 0
Other financial liabilities and liabilities towards related parties 21,077 0 21,077 0 0 0 0 0 0 0
Derivatives 0 13,002 0 0 0 1,228 0 11,774 0 0
Total 732,524 13,002 732,524 0 0 1,228 0 11,774 0 0
Overview by category and by class of financial instruments for the previous year (2011/2012) Nordzucker AG, Braunschweig, Germany
Annual Report Nordzucker 2012/2013 98
Assets
Valuation Total 29/2/2012 Nominal value Amortised cost Fair value
Valuation categoryCash & cash equivalents/
cash reserve Loans and receivablesAvailable-for-sale
financial assets (AFS)Held for trading
(FVTPL-HFT) Derivatives in hedging
relationships under IAS 39
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial investments 20,429 10 0 0 70 0 20,359 10 0 0 0 0
Financial assets and other receivables 5,721 0 0 0 5,721 0 0 0 0 0 0 0
Trade receivables 194,423 0 0 0 194,423 0 0 0 0 0 0 0
Derivatives 0 7,695 0 0 0 0 0 0 0 5,910 0 1,785
Cash and cash equivalents 7,407 0 7,407 0 0 0 0 0 0 0 0 0
Total 227,980 7,705 7,407 0 200,214 0 20,359 10 0 5,910 0 1,785
Equity and liabilities
Valuation Total 29/2/2012 Amortised cost Fair value
Valuation categoryFinancial liabilities valued at
amortised costDerivatives in hedging
relationships under IAS 39Held for trading
(FVTPL-HFT)Fair value option
(FVTPL-FVO)
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial liabilities 256,325 0 256,325 0 0 0 0 0 0 0
Trade payables 455,122 0 455,122 0 0 0 0 0 0 0
Other financial liabilities and liabilities towards related parties 21,077 0 21,077 0 0 0 0 0 0 0
Derivatives 0 13,002 0 0 0 1,228 0 11,774 0 0
Total 732,524 13,002 732,524 0 0 1,228 0 11,774 0 0
Notes 99
Assets
Valuation Total 28/2/2013 Nominal value Amortised cost Fair value
Valuation categoryCash & cash equivalents/
cash reserve Loans and receivablesAvailable-for-sale
financial assets (AFS)Held for trading
(FVTPL-HFT)Derivatives in hedging
relationships under IAS 39
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial investments 23,537 0 0 0 64 0 23,473 10 0 0 0 0
Financial assets and other receivables 16,125 0 0 0 16,125 0 0 0 0 0 0 0
Trade receivables 212,425 0 0 0 212,425 0 0 0 0 0 0 0
Derivatives 0 5,033 0 0 0 0 0 0 0 2,038 0 2,995
Cash and cash equivalents 11,297 0 11,297 0 0 0 0 0 0 0 0 0
Total 263,384 5,033 11,297 0 228,614 0 23,473 10 0 2,038 0 2,995
Equity and liabilities
Valuation Total 28/2/2013 Amortised cost Fair value
Valuation categoryFinancial liabilities valued at
amortised costDerivatives in hedging
relationships under IAS 39Held for trading
(FVTPL-HFT)Fair value option
(FVTPL-FVO)
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial liabilities 70,684 0 70,684 0 0 0 0 0 0 0
Trade payables 465,424 0 465,424 0 0 0 0 0 0 0
Other financial liabilities and liabilities towards related parties 25,806 0 25,806 0 0 0 0 0 0 0
Derivatives 0 2,615 0 0 0 7 0 2,608 0 0
Total 561,914 2,615 561,914 0 0 7 0 2,608 0 0
Overview by category and by class of financial instrumentsfor the financial year 2012/2013 Nordzucker AG, Braunschweig, Germany
Annual Report Nordzucker 2012/2013 100
Assets
Valuation Total 28/2/2013 Nominal value Amortised cost Fair value
Valuation categoryCash & cash equivalents/
cash reserve Loans and receivablesAvailable-for-sale
financial assets (AFS)Held for trading
(FVTPL-HFT)Derivatives in hedging
relationships under IAS 39
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial investments 23,537 0 0 0 64 0 23,473 10 0 0 0 0
Financial assets and other receivables 16,125 0 0 0 16,125 0 0 0 0 0 0 0
Trade receivables 212,425 0 0 0 212,425 0 0 0 0 0 0 0
Derivatives 0 5,033 0 0 0 0 0 0 0 2,038 0 2,995
Cash and cash equivalents 11,297 0 11,297 0 0 0 0 0 0 0 0 0
Total 263,384 5,033 11,297 0 228,614 0 23,473 10 0 2,038 0 2,995
Equity and liabilities
Valuation Total 28/2/2013 Amortised cost Fair value
Valuation categoryFinancial liabilities valued at
amortised costDerivatives in hedging
relationships under IAS 39Held for trading
(FVTPL-HFT)Fair value option
(FVTPL-FVO)
TEUR At cost Fair value At cost Fair value At cost Fair value At cost Fair value At cost Fair value
Financial liabilities 70,684 0 70,684 0 0 0 0 0 0 0
Trade payables 465,424 0 465,424 0 0 0 0 0 0 0
Other financial liabilities and liabilities towards related parties 25,806 0 25,806 0 0 0 0 0 0 0
Derivatives 0 2,615 0 0 0 7 0 2,608 0 0
Total 561,914 2,615 561,914 0 0 7 0 2,608 0 0
Notes 101
29/2/2012 From subsequent valuation
TEUR From interest
From dividends
At fair value
Currency conversion Write-down Write-back Disposal
Net income/loss 2011/2012
Cash and cash equivalents/cash reserve 1,167 0 0 0 0 0 0 1,167
Loans and receivables 659 0 0 -773 -907 2 0 -1,019
Available-for-sale financial assets (AFS) -613 3,471 -2,587 0 0 0 0 271
Held-for-trading financial instruments (FAHFT and FLHFT) 0 0 2,116 0 0 0 0 2,116
Financial liabilities held at amortised cost (FLAC) -29,676 0 0 0 0 0 0 -29,676
Total -28,463 3,471 -471 -773 -907 2 0 -27,141
28/2/2013 From subsequent valuation
TEUR From interest
From dividends
At fair value
Currency conversion Write-down Write-back Disposal
Net income/loss 2012/2013
Cash and cash equivalents/cash reserve 329 0 0 0 0 0 0 329
Loans and receivables 82 0 0 236 -562 104 0 -140
Available-for-sale financial assets (AFS) 3 4,713 930 0 0 0 0 5,646
Held-for-trading financial instruments (FAHFT and FLHFT) 0 0 -2,582 0 0 0 0 -2,582
Financial liabilities held at amortised cost (FLAC) -7,213 0 0 0 0 0 0 -7,213
Total -6,799 4,713 -1,652 236 -562 104 0 -3,960
Overview of the net earnings from financial instruments Nordzucker AG, Braunschweig, Germany
Annual Report Nordzucker 2012/2013 102
29/2/2012 From subsequent valuation
TEUR From interest
From dividends
At fair value
Currency conversion Write-down Write-back Disposal
Net income/loss 2011/2012
Cash and cash equivalents/cash reserve 1,167 0 0 0 0 0 0 1,167
Loans and receivables 659 0 0 -773 -907 2 0 -1,019
Available-for-sale financial assets (AFS) -613 3,471 -2,587 0 0 0 0 271
Held-for-trading financial instruments (FAHFT and FLHFT) 0 0 2,116 0 0 0 0 2,116
Financial liabilities held at amortised cost (FLAC) -29,676 0 0 0 0 0 0 -29,676
Total -28,463 3,471 -471 -773 -907 2 0 -27,141
28/2/2013 From subsequent valuation
TEUR From interest
From dividends
At fair value
Currency conversion Write-down Write-back Disposal
Net income/loss 2012/2013
Cash and cash equivalents/cash reserve 329 0 0 0 0 0 0 329
Loans and receivables 82 0 0 236 -562 104 0 -140
Available-for-sale financial assets (AFS) 3 4,713 930 0 0 0 0 5,646
Held-for-trading financial instruments (FAHFT and FLHFT) 0 0 -2,582 0 0 0 0 -2,582
Financial liabilities held at amortised cost (FLAC) -7,213 0 0 0 0 0 0 -7,213
Total -6,799 4,713 -1,652 236 -562 104 0 -3,960
Notes 103
accounted for by write-downs, whereby the risk of default on
receivables is in part limited by trade credit insurance.
The Nordzucker Group does not see itself as exposed to a signifi-
cant credit risk from any individual counterparty. As the customer
structure for the Nordzucker Group is diverse, there is only a limit-
ed concentration of credit risk. There is therefore no special moni-
toring and management on the basis of specific risk categories to
avoid a concentration of risk.
The maximum default risk is equal to the carrying amounts for the
individual categories of financial assets, less all write-downs, and
irrespective of any agreements to reduce risk. (See overview of
classes and categories of financial instruments.)
In the reporting period there were no financial assets which
would have become overdue and/or impaired had the contrac-
tual terms not been renegotiated.
For the portion of the receivables portfolio which has neither
been written down nor is overdue, there is no indication as of
the reporting date that the Nordzucker Group’s debtors will not
fulfil their payment obligations.
The following table shows total carrying amounts, the carrying
amounts for financial assets which are neither overdue nor im-
paired and the term structure of financial assets which are not
impaired but overdue, for the relevant classes of financial instru-
ments:
The total carrying amount of financial instruments in the classes
financial investments, financial assets, and other receivables and
trade receivables before impairment is EUR 254,145,000 (previ-
ous year: EUR 224,122,000). Write-downs of EUR 2,059,000
(previous year: EUR 3,540,000) were made.
In the current and previous reporting period the Nordzucker
Group has neither pledged nor sold collateral within the meaning
of IFRS 7.15.
37.3. Liquidity riskLiquidity risk is the risk that the company cannot meet its pay-
ment obligations at the contractually agreed time. To ensure the
Nordzucker Group’s liquidity, the liquidity needs are monitored
and planned centrally. Sufficient cash is held to be able to meet
all obligations when they are due. Current lines of credit, which
can be drawn down as needed, provide additional liquidity.
The following table shows contractually agreed (undiscounted)
interest and capital repayments for the primary financial liabilities
and for derivative financial instruments.
Term structure of financial assetsNot written down as of the reporting date
and overdue as follows:
TEUR
As of 28/2/2013
Total carrying amount
Neither written down nor over-
due as of the reporting date
Less than 30 days
Between 31 and 60
days
Between 61 and 90
days
Between 91 and 180
daysMore than
181 days
Financial investments 23,537 23,537 0 0 0 0 0
Financial assets and other receivables 16,125 16,125 0 0 0 0 0
Trade receivables 212,424 191,083 15,143 1,535 1,316 1,271 2,076
Total 252,086 230,745 15,143 1,535 1,316 1,271 2,076
As of 29/2/2012
Financial investments 20,439 20,439 0 0 0 0 0
Financial assets and other receivables 5,721 5,721 0 0 0 0 0
Trade receivables 194,422 157,703 23,524 830 1,957 9,866 542
Total 220,582 183,863 23,524 830 1,957 9,866* 542
*) The receivables are offset by corresponding liabilities, which were applied after the reporting date.
Annual Report Nordzucker 2012/2013 104
The term-to-maturity analysis includes all instruments held for
which payments have been contractually agreed as of the report-
ing date. Forecast payments on expected future liabilities are not
included. Floating-rate interest payments on financial instruments
are determined using the last interest rates set before the balance
sheet date. Financial liabilities repayable at any time are categor-
ised according to their estimated repayment dates.
37.4. Market risksMarket risks arise from potential changes in risk factors, which
lead to fluctuations in market values or alterations in future cash flows. The relevant risk factors for the Nordzucker Group are
exchange-rate and interest-rate fluctuations.
a. Exchange-rate riskDue to its business operations in different countries which are
not part of the Eurozone, the Nordzucker Group is exposed to
an exchange-rate risk.
IFRS 7 requires the disclosure of a sensitivity analysis to illustrate
the dimensions of exchange-rate risks. A sensitivity analysis shows
the effects which changes in given exchange rates would have on
profit and loss and equity for the Nordzucker Group as of the re-
porting date. The effects are determined by applying a hypothet-
ical change of 10 per cent in the exchange rates to the amount
of the relevant items in foreign currencies (the net risk position in
the foreign currency) as of the reporting date. It is assumed that
the exposure at year-end is representative of the whole year.
The net risk position is adjusted for planned transactions within
the next twelve months and for existing hedging instruments
(even if no hedge accounting takes place in accordance with
IAS 39).
Foreign currency positions in Danish Crowns and Lithuanian Litas
are only exposed to an insignificant exchange-rate risk as these
states are part of the European Union’s exchange-rate mecha-
nism. The exchange-rate risk from foreign currency positions in
US Dollars is also insignificant as the amounts are minor and are
hedged directly.
Furthermore, the Nordzucker Group hedges a large proportion
of actual currency risks using the natural hedge approach and by
using derivatives, so that the remaining net risk exposure is insig-
nificant.
b. Interest-rate riskDue to its borrowing activities, the Nordzucker Group is exposed
to interest-rate risk. Financing is arranged in various currency areas,
although the most frequent currency is the Euro. Interest-rate
risks from financing activities denominated in Hungarian Forints,
Swedish Crowns, Lithuanian Litas, Polish Zloty or Danish Crowns
are insignificant as the amounts involved are minor.
As of the reporting date, Group companies hold a total of EUR
65.2 million (previous year: EUR 256.3 million) in interest-bearing
or interest-rate-sensitive instruments. They consist exclusively of
Term to maturity
TEUR
As of 28/2/2013Carrying amount
Gross inflow/ outflow
Term to maturity up to one year
Term to maturity from one to 5 years
Term to maturity more
than 5 years
Financial liabilities 70,684 -71,359 65,284 0 6,075
Trade payables 465,425 -465,425 465,425 0 0
Other financial liabilities and liabilities towards related parties 25,806 -25,806 20,306 5,500 0
Derivative financial liabilities 2,615 -2,615 2,615 0 0
Derivative financial assets 5,033 5,033 5,033 0 0
Total 569,563 -560,172 558,663 5,500 6,075
As of 29/2/2012
Financial liabilities 256,325 -265,666 172,998 84,871 7,797
Trade payables 455,122 -455,122 455,122 0 0
Other financial liabilities and liabilities towards related parties 21,077 -21,077 15,577 5,500 0
Derivative financial liabilities 13,002 -13,002 13,002 0 0
Derivative financial assets 7,695 7,695 7,695 0 0
Total 753,221 -747,172 664,394 90,371 7,797
Notes 105
accounting purposes in line with IAS 39. As of the reporting
date, the Nordzucker Group had not taken out any interest-
rate derivatives, since based on its financial planning it could
not identify any exposure to interest-rate risk as of this date.
The previous year, interest-rate swaps with a total nominal value
of EUR 196.6 million were in place to hedge the interest-rate
risk. The corresponding market value the previous year was
EUR -1,228,000.
It is generally assumed that the hedged transactions will
actually take place. If a hedging transaction is cancelled, the
amounts accumulated in other comprehensive income during
the term of the transaction are reversed when the hedged item
is recognised in profit and loss or if it no longer takes place.
In addition to the natural hedge approach for Poland and Sweden,
the gross positions are hedged to reduce exchange-rate risk.
Exchange-rate risks are also hedged by means of appropriate
derivatives such as currency futures – including for periods of
less than a year.
As of the balance sheet date, the Group holds derivatives
aimed at hedging currency risks and price risks for sugar
and energy (CO2). The following table provides an overview
of the derivative financial instruments used in the Group
and their market values:
floating-rate instruments (previous year: EUR 244.6 million). The
previous year, an additional EUR 11.7 million related to fixed-rate
instruments.
In accordance with IFRS 7, interest-rate risks are illustrated using
sensitivity analyses. The sensitivity analysis determines the effect
of a change in market interest rates on profit and loss and equity
as of the reporting date.
In contrast to the previous year, the Nordzucker Group had no
cash flow hedges to hedge the interest-rate risk of floating-rate
instruments as of the reporting date, since these funds are sched-
uled to be repaid shortly and no further loans are to be taken out
at floating rates of interest thereafter. In view of the remaining
duration of the derivatives, a hypothetical change in the
relevant interest rates for floating-rate instruments of +/- 50 basis
points would therefore not have a significant effect in relation
to the Group’s equity and net interest.
c. Hedging transactionsThe Nordzucker Group uses derivative financial instruments
solely to hedge interest-rate and exchange-rate risks as well
as price risks for raw materials.
As a rule, the existing interest-rate risk for floating-rate loans is
reduced by means of interest-rate derivatives. All interest-rate
derivatives are designated as cash flow hedges for hedge
In the reporting period, EUR 930,000 (previous year: EUR
-2,587,000) was recognised in equity.
A fair value hierarchy is to be established for the measurement of
financial instruments at fair value, which categorises the inputs into
three levels. Measurement at level 1 is based on quoted prices on
active markets, which are used directly. Measurement at level 2
uses prices derived from quoted prices on active markets. Indi-
vidual measurement parameters are used for measurement at
Derivative financial instruments 2012/2013
TEURNominal
value
Total market
value
Market value assets
Market value
liabilities
Currency-related transactionsforward exchange contracts 186,388 -125 982 -1,107
Currency swaps 321,293 2,747 2,995 -248
Commodity price-related transactionsSugar future 41,520 -455 1,056 -1,511
Total 549,201 2,167 5,033 -2,866
All derivatives mature within one year.
Derivatives with market values of EUR 2,995,000 (assets) and EUR
7,000 (liabilities) are not held for trading. A sensitivity analysis
for the market values in the balance sheet would not produce a
significant effect in relation to the Group’s equity and earnings.
The effective portion of changes in the market value of cash flow
hedges is recognised in equity without effect on profit and loss.
Annual Report Nordzucker 2012/2013 106
39. Related party transactions
For the Nordzucker Group, related parties within the meaning of IAS 24
are individuals and companies which control the Group or exercise
significant influence over it or are controlled or significantly influenced
by the Group. The first category includes the active members of the
Executive Board and Supervisory Board of Nordzucker AG and its
majority shareholder Nordzucker Holding Aktiengesellschaft. The
subsidiaries, parent company, associated companies and joint ven-tures in the Nordzucker Group are also defined as related parties.
Receivables from and liabilities towards related parties are based
on arm’s length transactions.
The following commercial relationships existed with related parties
in addition to those existing with fully consolidated subsidiaries:
Related party transactions
TEUR 28/2/2013 29/2/2012
Balance sheet Receivables from related parties 4,263 233
Liabilities towards related parties 21,745 16,997
TEUR1/3/2012-
28/2/20131/3/2011- 29/2/2012
Income statement Services provided to related parties 391 107
Net financial income/loss -822 -216
Receivables from related parties of EUR 4,105,000 (previous year:
EUR -5,693,000) were owed almost exclusively by Nordzucker
Holding Aktiengesellschaft, Braunschweig.
Liabilities towards related parties consist mainly of EUR 5,500,000
(previous year: EUR 5,500,000) owed to MEF Melasse-Extraktion
Frellstedt GmbH, Frellstedt, EUR 6,150,000 (previous year: EUR
3,628,000) to Union-Zucker Südhannover Gesellschaft mit be-
schränkter Haftung, Nordstemmen, EUR 3,542,000 (previous
year: EUR 1,966,000) to Nordharzer Zucker Aktiengesellschaft,
Schladen, and for the first time, EUR 3,339,000 to SWEETGREDI-
ENTS GmbH & Co. KG, Nordstemmen.
Nordzucker Holding Aktiengesellschaft, Union-Zucker Südhannover
Gesellschaft mit beschränkter Haftung and Nordharzer Zucker Aktien-
gesellschaft are shareholders of Nordzucker AG; the liabilities relate
to current accounts. The remaining liabilities relate to other related
parties and stem largely from loans and trade in goods and services.
The provision of services for related companies concerns Nord-
zucker Holding Aktiengesellschaft, Braunschweig, and the net
financial result is from associated companies and joint ventures.
level 3. The Nordzucker Group measures financial instruments on
the basis of level 2 inputs.
The Group does not measure the derivatives itself. The fair value
calculation (mark to market) is carried out by the contracting
banks using recognised mathematical models and existing market
data (measurement level 2).
38. Significant subsidiaries and joint ventures
Significant subsidiaries and joint ventures Group stake
Central Europe region
NORDZUCKER GmbH & Co. KG, Braunschweig 100 %
fuel 21 GmbH & Co. KG, Klein Wanzleben 100 %
Norddeutsche Flüssigzucker GmbH & Co. KG, Braunschweig 70 %
Northern Europe region
Nordic Sugar A/S, Copenhagen, Denmark 100 %
Nordic Sugar AB, Malmö, Sweden 100 %
Suomen Sokeri OY, Kantvik, Finland 80 %
Sucros OY, Säkvlä, Finland 80 %
AB Nordic Sugar Kėdainiai, Vilnius, Lithuania 71 %
Nordzucker Ireland Limited, Dublin, Ireland 100 %
Eastern Europe region
Považský cukor a.s., Trenčianska Teplá, Slovakia 97 %
Nordzucker Polska S.A., Przeżmierowo, Poland 99 %
Joint ventures
NP Sweet A/S, Copenhagen, Denmark 50 %
MEF Melasse-Extraktion Frellstedt GmbH, Frellstedt, Germany 50 %
The list of Nordzucker AG’s and the Group’s equity investments
is filed with and published in the electronic edition of the Ger-
man Federal Gazette (Elektronischer Bundesanzeiger).
The following trading companies, structured as limited partner-
ships (GmbH & Co. KG),
● NORDZUCKER GmbH & Co. KG, Braunschweig ● fuel 21 GmbH & Co. KG, Klein Wanzleben ● Norddeutsche Flüssigzucker GmbH & Co. KG, Braunschweig
are exempt from the obligation to prepare annual financial state-
ments in accordance with the regulations applicable to compan-
ies with limited liability pursuant to Sec. 264b HGB (German
Commercial Code).
Notes 107
41. Other financial obligations
The Group’s other financial obligations are made up as follows:
Other financial obligations
TEUR 28/2/2013 29/2/2012
Purchase commitments for property, plant and equipment
21,463 15,448
Maintenance obligations 0 0
Finance leases 815 985
Operating leases/rent 12,614 7,594
Other financial obligations 34,892 24,027
As of 28 February 2013, total future payment obligations from
rental and lease contracts are made up as follows:
40. Contingent liabilities
The Group has the following contingent liabilities:
Contingent liabilities
TEUR 28/2/2013 29/2/2012
Liabilities for securities 1,395 1,288
As of 28 February 2013, items of property, plant and equipment
held at EUR 0 (previous year: EUR 42,214,000) have been
pledged as collateral for liabilities.
Rental and leasing agreements
TEURRemaining term
of up to one yearRemaining term
of one to five years
Remaining term of more
than five years Total
Future payments for finance leases 152 558 105 815
Future payments for operating leases 3,903 7,740 971 12,614
Finance leases
TEURRemaining term
of up to one yearRemaining term
of one to five years
Remaining term of more
than five years Total
Principal 123 495 103 721
Interest 29 63 2 94
Payment 152 558 105 815
As of 28 February 2013, future payments under finance leases are
as follows:
42. Auditors’ fees
Companies in the Nordzucker Group purchased services for EUR
352,000 from Ernst & Young GmbH in connection with the statu-
tory audit of financial statements for the Nordzucker Group and
Nordzucker AG, as well as tax advisory services for EUR 136,000
and other services for EUR 412,000.
Annual Report Nordzucker 2012/2013 108
Ulf Gabriel, electrician, Banteln
Dieter Woischke, electrician, Algermissen, Vice Chairman
Marina Strootmann, Industrial clerk, Chair of the Works Council, Nordzucker AG, Braunschweig
The members of the Executive Board in the financial year
2012/2013 were as follows:
Hartwig Fuchs, Hamburg, Chief Executive Officer
Axel Aumüller, Oelber a.w.W., Chief Operating Officer
Mats Liljestam, Höllviken, Sweden, Chief Marketing Officer
Dr Niels Pörksen, Limburgerhof, Chief Agricultural Officer
Dr Michael Noth, Braunschweig, Chief Financial Officer
44. Remuneration report
In the following section the principles of remuneration for
members of the Executive Board and Supervisory Board will be
explained together with disclosures on shares held by members
of the Executive Board and Supervisory Board.
44.1. Remuneration of the Executive BoardThe structure and amount of Executive Board remuneration are
determined and regularly reviewed by the full Supervisory
Board following a proposal from the Human Resources Commit-
tee of the Supervisory Board.
The criteria for determining the remuneration of individual
Executive Board members are their responsibilities, personal
performance, the economic situation, business success, future
prospects, sustainable corporate development and also the ex-
tent to which the remuneration is generally accepted considering
the sphere of comparison and remuneration structures applicable
elsewhere in the company.
The total remuneration of Executive Board members includes
monetary payments, benefit commitments and other commit-
ments such as the provision of a company car. The monetary
remuneration components consist of a fixed annual salary, paid
in twelve equal monthly instalments, as well as an earnings and
performance-related payment. The variable bonus can be up to
a maximum of 50 per cent of total compensation (total compen-
sation is made up of fixed annual salary and the variable bonus).
43. Supervisory Board and Executive Board
In the financial year 2012/2013 the Supervisory Board was made
up as follows:
As shareholder representatives
Hans-Christian Koehler, farmer, Barum-Eppensen, Chairman
Helmut Meyer, farmer, Betheln, Vice Chairman
Dr Harald Isermeyer, farmer, Vordorf
Gerhard Borchert, farmer, Brome
Michael Gerlif, CFO of Lekkerland AG & Co. KG, Frechen
Rainer Knackstedt, farmer, Dedeleben
Matts Eskil Rosendahl, consultant, Huddinge, Sweden
Hans-Heinrich Prüße, farmer, Lehrte-Ahlten (until 12 July 2012)
Hans Jochen Bosse, farmer, Ohrum
Dr Karl-Heinz Engel, Managing Director of Hochwald Nahrungsmittel-Werke GmbH, Riol
Dr Clemens Große Frie, CEO of AGRAVIS RAIFFEISEN AG, Münster, Hanover
Dr Hans Theo Jachmann, Managing Director of Syngenta Agro GmbH and Syngenta Germany GmbH, Maintal
Jochen Johannes Juister, farmer, Nordhastedt
Andreas Scheffrahn, farmer, Cramme
Helmut Bleckwenn, farmer, Garmissen (since 12 July 2012)
As employee representatives
Rolf Huber-Frey, businessman, Freiburg (until 12 July 2012)
Wolfgang Wiesener, metalworker, Uelzen, Vice Chairman (until 12 July 2012)
Olaf Joern, mechatronics engineer, Uelzen (since 12 July 2012)
Gerd von Glowczewski, metalworker, Schladen
Marie Lohel, energy electronics engineer, Magdeburg (since 12 July 2012)
Sigrun Krussmann, laboratory technician, Seelze
Notes 109
The structure of Executive Board remuneration is aligned with the
company’s sustainable development, as recommended by the
German Corporate Governance Code (GCGC). In consequence,
45 per cent of variable remuneration is paid as a short-term in-
centive (STI) linked to the achievement of targets for the given
financial year. The remaining 55 per cent is paid as a long-term
incentive (LTI), calculated on the basis of average performance
against targets for the past three years.
Benefit commitments made to Executive Board members in the
event that their appointment to the Executive Board ends prema-
turely are limited to the value of the remaining term of their
contract.
This results in the following remuneration for individual members
of the Executive Board for the financial year 2012/2013:
Remuneration of members of the Management Board 2011/2012
Cash payments Pensions Other1) Total
EUR SalaryVariable
annual bonus
Hartwig Fuchs 450,000 430,962 160,000 15,926 1,056,888
Axel Aumüller 341,667 327,212 125,000 28,298 822,177
Mats Liljestam 342,235 327,756 108,000 26,812 804,803
Dr Niels Pörksen 362,500 347,163 125,000 14,663 849,326
Dr Michael Noth 380,000 363,923 125,000 16,273 885,196
Total 1,876,402 1,797,016 643,000 101,972 4,418,390
1) Non-cash benefit for tax purposes, e.g. for company car etc.
Remuneration of members of the Management Board 2012/2013
Cash payments Pensions Other1) Total
EUR SalaryVariable
annual bonus
Hartwig Fuchs 460,417 455,403 160,000 15,996 1,091,816
Axel Aumüller 350,000 346,188 125,000 27,958 849,146
Mats Liljestam 350,000 346,188 108,000 26,933 831,121
Dr Niels Pörksen 380,000 375,861 125,000 14,733 895,594
Dr Michael Noth 380,000 375,861 125,000 16,172 897,033
Total 1,920,417 1,899,501 643,000 101,792 4,564,710
1) Non-cash benefit for tax purposes, e.g. for company car etc.
For the financial year 2011/2012 the members of the Executive
Board were remunerated as follows:
The pension commitments given to members of the Executive
Board are solely defined contribution commitments.
Former Executive Board members received pension payments
of EUR 752,000. Nordzucker AG has recognised provisions of
EUR 10,728,000 (previous year: EUR 9,463,000) for pension
commitments to former Executive Board members.
In the financial year 2012/2013 members of the Executive Board
received neither loans nor advances from the company.
Annual Report Nordzucker 2012/2013 110
above 5 per cent. Subject to approval at the Annual General
Meeting, the dividend for the financial year 2012/2013 will be
EUR 1.80 (previous year: EUR 1.00) per share, or 70.31 (previous
year: 39.06) per cent. The Chairman of the Supervisory Board
receives treble the fixed remuneration for a normal member while
the two Deputies and the Chairman of the Audit and Finance
Committee each receive one-and-a-half times the amount. In
addition, each member of the Supervisory Board receives EUR
300 per meeting for attendance at meetings in their capacity as
members of the Supervisory Board.
Subject to the approval of the dividend proposal at the Annual
General Meeting, the following payments will be made for the
financial year 2012/2013:
44.2. Remuneration of the Supervisory BoardThe remuneration of the Supervisory Board is based on the size
of the company, the duties and responsibilities of the members
of the Supervisory Board and the economic situation of the
company. The remuneration includes a dividend-related compo-
nent and an attendance fee, in addition to a fixed payment. The
Chairman and Deputy Chairman and the Chairman of the Audit
and Finance Committee receive additional remuneration.
The remuneration of the Supervisory Board is defined in Sec. 14
of the Articles of Association of Nordzucker AG.
According to these rules, members of the Supervisory Board re-
ceive a fixed remuneration of EUR 13,000 and a dividend-related
payment of EUR 500 for every per cent of dividend distributed
Remuneration of members of the Supervisory Board 2012/2013
EURFixed
remuneration1Variable
remuneration1Attendance
fee1 TotalTotal
previous year
Hans-Christian Koehler 39,000.00 32,656.25 16,200.00 87,856.25 62,711.58
Helmut Meyer 19,500.00 32,656.25 3,600.00 55,756.25 41,331.25
Dieter Woischke 19,500.00 32,656.25 6,900.00 59,056.25 42,831.25
Andreas Scheffrahn 19,500.00 32,656.25 9,300.00 61,456.25 41,458.03
Dr Harald Isermeyer 13,000.00 32,656.25 6,600.00 52,256.25 48,424.14
Gerhard Borchert 13,000.00 32,656.25 3,900.00 49,556.25 35,731.25
Hans Jochen Bosse 13,000.00 32,656.25 2,400.00 48,056.25 32,131.25
Dr Clemens Große Frie 13,000.00 32,656.25 2,400.00 48,056.25 33,631.25
Sigrun Krussmann 13,000.00 32,656.25 4,800.00 50,456.25 34,231.25
Dr Karl-Heinz Engel 13,000.00 32,656.25 1,500.00 47,156.25 31,231.25
Dr Hans Theo Jachmann 13,000.00 32,656.25 3,300.00 48,956.25 33,031.25
Jochen Johannes Juister 13,000.00 32,656.25 5,400.00 51,056.25 32,431.25
Gerd von Glowczewski 13,000.00 32,656.25 2,400.00 48,056.25 32,431.25
Rainer Knackstedt 13,000.00 32,656.25 3,300.00 48,956.25 33,031.25
Michael Gerlif 13,000.00 32,656.25 4,200.00 49,856.25 33,031.25
Marina Strootmann 13,000.00 32,656.25 5,100.00 50,756.25 34,231.25
Ulf Gabriel 13,000.00 32,656.25 4,800.00 50,456.25 23,133.67
Matts Eskil Rosendahl 13,000.00 32,656.25 4,500.00 50,156.25 21,328.52
Rolf Huber-Frey 4,772.60 11,988.87 1,200.00 17,961.47 31,831.25
Wolfgang Wiesener 4,772.60 11,988.87 1,800.00 18,561.47 33,931.25
Hans-Heinrich Prüße 4,772.60 11,988.87 2,400.00 19,161.47 35,731.25
Olaf Joern 8,227.40 20,667.38 1,800.00 30,694.78 -
Marie Lohel 8,227.40 20,667.38 1,800.00 30,694.78 -
Helmut Bleckwenn 8,227.40 20,667.38 1,800.00 30,694.78 -
Total 318,500.00 685,781.25 101,400.00 1,105,681.25 747,855.94
1 Does not include the VAT paid on behalf of Supervisory Board members for their work.
Notes 111
46. Events after the reporting date
The continued existence of the sugar market regime is also being
discussed in the course of reforms to the European Union’s Com-
mon Agricultural Policy (CAP). The European Commission has
proposed not to extend the sugar market regime beyond the end
of its current phase, which expires on 30 September 2015. With
regard to the “trialogue” negotiations between the three European
institutions, the European Parliament is in favour of an extension
until 2020, while the Council of Agriculture Ministers is backing
an extension until 2017.
In addition to the question of how long the sugar market regime
is to continue after October 2015, discussions are also taking
place on issuing new sugar quotas to member states who had
returned theirs after the 2006 reform and on other advantages
for traditional refinery operations.
Braunschweig, Germany, 26 April 2013
Executive Board
Hartwig Fuchs
Axel Aumüller Mats Liljestam
Dr Michael Noth Dr Niels Pörksen
Furthermore, the members of the Supervisory Board are reim-
bursed for all out-of-pocket expenses incurred in the exercise
of their duties as well as for the VAT payable on their remuner-
ation and on the reimbursed expenses. The total amount of these
reimbursements, including VAT, was EUR 38,000 (previous year:
EUR 37,000).
In the financial year 2012/2013 members of the Supervisory
Board received neither loans nor advances from the company.
44.3. Shares held by members of the Executive Board and Supervisory Board
Members of the Executive Board hold no shares.
As of 28 February 2013, members of the Supervisory Board and
related parties held under 1 per cent of the issued share capital of
Nordzucker AG. The shares bear no relation to the remuneration
of the Supervisory Board.
44.4. MiscellaneousBoard members of Nordzucker AG are indemnified by Nordzucker AG
against third-party liability as allowed by law. For this purpose,
the company has taken out D&O insurance for members of the
Boards of Nordzucker AG. The insurance policy is taken out or
renewed annually and covers the personal liability of Board
members for claims for damages arising in the course of their
work. It includes an excess in accordance with Sec. 3.8 of the
German Corporate Governance Code.
45. Dividend proposal
The dividends that can be distributed to shareholders are defined
in the German Stock Corporation Act (AktG) as the net balance
sheet profit as determined under German commercial law and
disclosed in the annual financial statements of Nordzucker AG.
The annual financial statements for the financial year 2012/2013
show a net distributable profit of EUR 90,562,352.13. The Execu-
tive Board proposes to use this net distributable profit to pay a
dividend for the financial year 2012/2013 (EUR 1.80 per share
with dividend entitlement).
Annual Report Nordzucker 2012/2013 112
Shareholding
direct indirect
Shortened form % % via subsidiaries
Consolidated subsidiaries
fuel 21 GmbH & Co. KG (Stadt Wanzleben-Börde, Germany) fuel 21 100
Norddeutsche Flüssigzucker GmbH & Co. KG (Braunschweig, Germany) NFZ KG 70
NORDZUCKER SPEZIAL GmbH (Braunschweig, Germany) NZ SPEZIAL 100
NORDZUCKER GmbH & Co. KG (Braunschweig, Germany) NZ KG 100
Nordzucker Eastern Europe GmbH [in liquidation] (Vienna, Austria) NZ EE 100
Nordzucker Polska S.A. (Opalenica, Poland) NZ Polska 99.87
Cukrownia Melno S.A. [in liquidation] (Opalenica, Poland) Melno 84.32
Považský cukor a.s. (Trenčianska Teplá, Slovakia) Povazsky 96.798
Matra Cukor z.r.t. (Hatvan, Hungary) Matra 99.89
Nordic Sugar Holding A/S (Copenhagen, Denmark) NSH AS 100
Nordic Sugar A/S (Copenhagen, Denmark) NS AS 100 NSH AS
Titoconcerto AB (Malmö, Sweden) Titoconcerto 100 NSH AS
Nordic Sugar AB (Malmö, Sweden) NS AB 100 Titoconcerto
Nordic Sugar Services AB [as of 28/02/2013: Gold Cup 8590 AB] (Malmö, Sweden) NSS AB 100 NS AB
AB Nordic Sugar Kėdainiai (Kėdainiai, Lithuania) NS Kėdainiai 70.6 NS AS
Nordic Sugar UAB [in liquidation] (Vilnius, Lithuania) NS UAB 100 NS AS
Nordic Sugar Oy (Kantvik, Finland) NS Oy 100 NS AS
Sucros Oy (Säkylä, Finland) Sucros Oy 80 NS Oy
Suomen Sokeri Oy (Kantvik, Finland) Suomen Oy 80 Sucros Oy
SIA Nordic Sugar (Riga, Latvia) NS SIA 100 NS AS
Ingolf Wesenberg & Co. AS (Oslo, Norway) IW AS 50 NS AS
Nordzucker (Ireland) Limited (Dublin, Ireland) NZ Ireland 100
SugarPartners Holdings Limited [in liquidation] (Dublin, Ireland) SP Holdings 100 NZ Ireland
List of investments Nordzucker AG, Braunschweig, as of 28 February 2013
Notes 113
List of investments
Shareholding
direct indirect
Shortened form % % via subsidiaries
Associated companies accounted for using the equity method in accordance with Sec. 312 HGB
MEF Melasse-Extraktion Frellstedt GmbH (Frellstedt, Germany) MEF 50 NZ KG
Norddeutsche Zucker-Raffinerie Gesellschaft mit beschränkter Haftung (Frellstedt, Germany) NZR 50 NZ KG
NP Sweet A/S (Copenhagen, Denmark) NP Sweet 50 NSH AS
Eurosugar S.A.S. (Paris, France) ES 50
Subsidiaries not consolidated in accordance with Sec. 296 paragraph 2 German Commercial Code (HGB)
Bioethanolgesellschaft Klein Wanzleben mbH (Stadt Wanzleben-Börde, Germany) Bioethanol KW 100
Norddeutsche Flüssigzucker Verwaltungs-GmbH (Braunschweig, Germany) NFZ GmbH 70
Nordzucker Verwaltungs-GmbH (Braunschweig, Germany) NZ GmbH 100 NZ KG
SWEETGREDIENTS GmbH & Co. KG (Nordstemmen, Germany) SG KG 100 NZ NZ SPEZIAL
SWEETGREDIENTS Verwaltungs GmbH (Nordstemmen, Germany) SG GmbH 100 SG KG
NZ Erste Vermögensverwaltungsgesellschaft mbH (Braunschweig, Germany) NZ 1. VVG 100
NZ Zweite Vermögensverwaltungsgesellschaft mbH [as of 28/2/2013: Nordwestdeutsche Zucker Handelsge-sellschaft mbH] (Braunschweig, Germany) NZ 2. VVG 100
Associated companies not consolidated in accordance with Sec. 311 paragraph 2 German Commercial Code (HGB)
Nordzucker Bioerdgas GmbH & Co. KG (Braunschweig, Germany) NZ BEG KG 50
Nordzucker Bioerdgas Verwaltungs-GmbH (Braunschweig, Germany) NZ BEG GmbH 50
Other non-consolidated investments
Tereos TTD, a.s. (Dobrovice, Czech Republic) TTD 35.38
Annual Report Nordzucker 2012/2013 114
We issued the following opinion on the consolidated financial
statements and the group management report:
”We have audited the consolidated financial statements prepared
by Nordzucker AG, Braunschweig, comprising the balance sheet,
the income statement, statement of consolidated income, the
notes to the consolidated financial statements, the cash flow
statement and the statement of changes in shareholders’ equity,
together with the group management report for the fiscal year
from 1 March 2012 to 28 February 2013. The preparation of the
consolidated financial statements and the group management
report in accordance with IFRS as adopted by the EU, and the
additional requirements of German commercial law pursuant to
Sec. 315a (1) HGB are the responsibility of the parent company’s
management. Our responsibility is to express an opinion on the
consolidated financial statements and on the group management
report based on our audit.
We conducted our audit of the consolidated financial statements
in accordance with Sec. 317 HGB and German generally
accepted standards for the audit of financial statements promul-
gated by the Institut der Wirtschaftsprüfer [Institute of Public
Auditors in Germany] (IDW). Those standards require that we
plan and perform the audit such that misstatements materially
affecting the presentation of the net assets, financial position and
results of operations in the consolidated financial statements in
accordance with the applicable financial reporting framework and
in the group management report are detected with reasonable
assurance. Knowledge of the business activities and the eco-
nomic and legal environment of the Group and expectations as
to possible misstatements are taken into account in the determin-
ation of audit procedures. The effectiveness of the accounting-
related internal control system and the evidence supporting the
disclosures in the consolidated financial statements and the
group management report are examined primarily on a test basis
within the framework of the audit. The audit includes assessing
the annual financial statements of those entities included in con-solidation, the determination of entities to be included in consoli-dation, the accounting and consolidation principles used and sig-
nificant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements
and the group management report. We believe that our audit
provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated
financial statements comply with IFRSs as adopted by the EU, the
additional requirements of German commercial law pursuant to
Sec. 315a (1) HGB and give a true and fair view of the net assets,
financial position and results of operations of the Group in accord-
ance with these requirements. The group management report is
consistent with the consolidated financial statements and as a
whole provides a suitable view of the Group’s position and suitably
presents the opportunities and risks of future development.”
Hanover, 29 April 2013
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Hentschel Janze
Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
Auditors’ report
Notes 115
List of investments | Auditors’ report
Annual Report Nordzucker 2012/2013 116
Good corporate governance is a vital pillar of our business.
Corporate Governance
“We on the Supervisory Board of Nordzucker accompany the path chosen by our company
as a critical partner and support it fully. In addition to the ongoing dialogue with the Execu-
tive Board in matters of strategic development, we focus on monitoring the integration of
Nordic Sugar, the programme to boost efficiency and sustained maintenance and investment
in the Group’s factories.”
Hans-Christian Koehler, Chairman of the Supervisory Board
117Corporate Governance
Corporate governance covers the system of managing and moni-
toring a company, including its organisational structure, its corpor-
ate policies and guidelines as well as the internal and external
mechanisms of control and monitoring. Nordzucker AG attaches
great importance to well-structured, authentic corporate govern-
ance as it ensures that the management of the company is carried
out in the spirit of long-term value creation. It fosters the confi-
dence of shareholders, financial markets, business partners, staff
and the general public in the management and monitoring of
the Nordzucker Group.
Corporate governance is the foundation for the decision-making
and controlling processes at Nordzucker AG. The activities of
Nordzucker AG are carried out in accordance with clearly defined
guidelines. These guidelines ensure that the company’s actions
are systematically aligned with the interests and expectations
of shareholders, customers, business partners and staff.
For publicly traded companies the principles of good company
management are laid down in the German Corporate Governance Code (hereafter known as the Code). The Code consists of rec-
ommendations and suggestions for good company management
and also describes statutory obligations for publicly listed compan-
ies. Section 161 of the German Stock Corporation Act (AktG) stip-
ulates that publicly traded companies must issue an annual state-
ment on compliance with the Code’s recommendations. This
declaration relates to both past and future periods. As Nordzucker
AG is not listed on a stock exchange, it is not legally obliged to
issue a statement in accordance with Sec. 161 AktG. The Code
is intended for listed companies, but non-listed companies are
also well advised to follow its recommendations. Nordzucker AG
therefore studies the Code’s recommendations closely on a volun-
tary basis and reports at regular intervals, generally annually, on
the company’s own corporate governance. This includes making
a declaration on the recommendations of the Code, which re-
flects the contents of the statement of compliance required under
Sec. 161 AktG. To the extent that the Code refers to statutory ob-
ligations of publicly quoted companies outside the scope of its
recommendations, these are not applicable to Nordzucker AG. The
company also assumes no voluntary obligation to adhere to them.
The actions of all our staff are aimed at earning an appropriate and
sustainable profit, continually generating growth and increasing
our market share. Continuous improvement of all business pro-
cesses by competent, well-managed staff earning performance-
related pay secures the existence and the systematic long-term
Corporate Governance Report for the financial year 2012/2013development of the company in an ever-changing competitive
environment.
Meeting high standards for food and animal feed quality and safety,
conserving resources, continuously minimising and preventing
environmental damage as well as safeguarding health and safety
at work are an integral part of all Nordzucker’s activities. Particular
importance is attached to avoiding and preventing errors.
The Executive Board of Nordzucker AG is responsible for deter-
mining company policy. It sets corporate strategy, plans and ap-
proves company budgets, decides on the allocation of resources
and monitors company development. The Executive Board is also
responsible for preparing the quarterly and annual financial state-
ments for Nordzucker AG and the consolidated financial statements.
The Supervisory Board of Nordzucker AG has 21 members. Two-
thirds of the Supervisory Board members represent the share-
holders and one-third represents the workforce. The Super visory
Board monitors the Executive Board and advises it on the manage-
ment of the company. The Supervisory Board regularly discusses
the course of business and company planning as well as corporate
strategy and its implementation. It examines and approves the
annual financial statements of Nordzucker AG and the consolidated
financial statements for the Group, giving due regard to the audi-
tors’ report and the results of the examination by the Audit Com-
mittee. Major Executive Board decisions are subject to its approval.
In order to reflect recommendation 5.4.1 of the German Corporate Governance Code, the Supervisory Board decided on 10 March
2011 to take the following elements relating to its composition
into account:
l at least three Supervisory Board seats for people with a particu-
larly international background (e.g. from having worked
abroad or holding foreign citizenship);
l at least three Supervisory Board seats for people who hold no
functions at customers, farmers’ associations or other business
partners;
l at least two Supervisory Board seats for women.
At present these targets have been met.
According to the rules of procedure for the Supervisory Board,
an age limit of 65 years applies to proposals for election to the
Supervisory Board.
Annual Report Nordzucker 2012/2013 118
Declaration by Nordzucker AG on the German Corporate Governance Code in line with Sec. 161 AktG (German Stock Corporation Act)
The Executive Board and Supervisory Board of Nordzucker AG,
Braunschweig, have examined the recommendations of the German Corporate Governance Code as amended on 15 May 2012 in detail.
Although the German Corporate Governance Code is not binding
for Nordzucker AG, which is not publicly listed, the company has
complied and continues to comply with the recommendations it
contains, with the following exceptions:
1. In view of the shareholder structure, the invitation to the Annual
General Meeting and the relevant documentation are not sent
electronically (Number 2.3.2).
2. Beyond the requirements for companies that are not publicly
listed, the Supervisory Board includes two members who are
financial experts within the meaning of Sec. 100 paragraph 5
AktG. Neither of these financial experts chairs the Audit Com-
mittee, but both are members of it (Number 5.3.2).
3. Given the particular significance of agricultural expertise for the
company, conflicts of interest to which Supervisory Board mem-
bers may be subject are of secondary importance (Number 5.5.3).
4. The provision on performance-related pay for Supervisory Board
members, which has formed part of the Articles of Association
since Nordzucker AG was established, is based on the dividend
payment for a given year. It therefore does not comply with the
recommendation of the Code introduced in May 2012, by which
performance-related pay for Supervisory Board members should
be aligned with the long-term performance of the company
(Number 5.4.6). The Executive Board and Supervisory Board are
reviewing amendments to this provision and will put them for-
ward for adoption at the Annual General Meeting as appropriate.
5. As Nordzucker AG is included in the consolidated financial
statements of Nordzucker Holding Aktiengesellschaft, the latter
has a particular need for information (Number 6.3).
To the extent that the Code refers to statutory obligations of publicly
quoted companies outside the scope of its recommendations, these
are not applicable to Nordzucker AG. The company also assumes
no voluntary obligation to adhere to them. Otherwise, we refer to
the comments in the Corporate Governance Report.
Braunschweig, March 2013
Hartwig Fuchs Hans-Christian Koehler
Chief Executive Chairman of the
Officer Supervisory Board
119Corporate Governance
Corporate Governance Report
In the financial year 2012/2013, the Supervisory Board continu-
ously monitored the work of the Executive Board and advised the
Executive Board on its management of the company. The Execu-
tive Board fulfilled its obligations and informed the Supervisory
Board regularly, both orally and in writing, promptly and compre-
hensively about events of importance for the company. This in-
cluded information on matters of strategy, company planning
and any divergence between actual performance and these
plans, the course of business, the current state of the company,
its strategic development, the risk position, risk management and
transactions of particular significance. The Supervisory Board held
five ordinary meetings in the financial year to discuss the com-
pany’s operating and strategic development. Furthermore, all
matters requiring the authorisation of the Supervisory Board were
presented to us for approval. After thorough review and discussion
the Supervisory Board gave its approval to the Executive Board
proposals.
In addition to the Supervisory Board meetings, the Chairman of
the Supervisory Board was in regular contact with the Executive
Board. He was informed of the current state of business and
major transactions and discussed matters of strategy, planning,
corporate development, risk exposure, risk management and
compliance affecting the company. All of the Supervisory Board’s
discussions and decisions were aimed at protecting and increasing
the company’s assets.
In the financial year 2012/2013, the Supervisory Board focused on
providing support for the company’s continued strategic devel-
opment. The Supervisory Board was kept abreast of European
and global developments and prospects for the sugar market and
their importance for Nordzucker by the Executive Board. Based
on this, the Executive Board reported to the Supervisory Board
regularly and in detail regarding Nordzucker AG’s strategic activ-
ities and initiatives, in particular at a strategy meeting held in
November 2012.
In addition, the Supervisory Board prepared the proposal put to
the Annual General Meeting on amending the Articles of Associ-
ation with respect to the remuneration of the Supervisory Board
from the financial year 2013/2014. The proposal stipulates that
a maximum of two attendance fees per day may be charged for
meetings of the Supervisory Board and its committees and that
fees may no longer be charged for other meetings. The proposed
increase in fixed remuneration for Supervisory Board members is
Report by the Supervisory Board of Nordzucker AGFinancial year 2012/2013
Hans-Christian KoehlerChairman of the Supervisory Board
Annual Report Nordzucker 2012/2013 120
intended to make up for the second part of the amendment.
Variable remuneration for Supervisory Board members is to be
aligned with sustainable company development as recommend-
ed by the German Corporate Governance Code in May 2012 and
will therefore henceforth be linked to the average dividend paid
over the previous three years. A further proposal is to cap the vari-
able remuneration at the amount of fixed salary and at the same
time to set the hurdle for obtaining the maximum variable remu-
neration sufficiently high that it is not paid as a matter of course.
Other proposals include paying members of committees, apart
from the Nomination Committee, a premium of 20 per cent on
their fixed and variable remuneration. The Chairman of the Super-
visory Board shall receive a premium of 150 per cent and the
Chairman and Deputy Chairman of the Audit and Finance Com-
mittee shall each receive a premium of 40 per cent on their fixed
and variable remuneration. This proposal is based on an analysis
of remuneration following broad market research, which includes
data from nearly 1,000 companies. Overall, the new regulations
would reduce the remuneration of the Supervisory Board com-
pared with that paid for the financial year 2012/2013.
The topics of cost-effectiveness and efficiency remain a high pri-
ority given the further adjustments that are due to be made to
the sugar market regime. The Supervisory Board therefore also
heard regular reports on the implementation of cost-cutting
measures taken as part of the company’s long-term efficiency
improvement programme and discussed these activities with the
Executive Board. The targets for the financial year 2012/2013
were met, so that the programme has again resulted in cost
savings in all areas of the company. The Supervisory Board will
continue to accompany and monitor the implementation of the
efficiency programme closely.
The Supervisory Board dealt thoroughly with Group planning for
the financial year 2012/2013, including planned capital expenditure,
mid-term planning and regular earnings forecasts for the last
financial year.
Furthermore, we discussed compliance with the recommenda-
tions and suggestions of the German Corporate Governance Code.
The Executive Board and Supervisory Board have issued an up-
dated statement of compliance in accordance with Sec. 161 AktG
(Stock Corporation Act), which has been made permanently
available to shareholders on Nordzucker AG’s website. In this
context, we report that the Supervisory Board again carried out
a review of its efficiency in accordance with 5.6 of the German Corporate Governance Code in the financial year 2012/2013.
The result of the review was that the efficiency of the Supervisory
Board’s work had been further improved by the steps taken
following the efficiency review in the financial year 2010/2011.
The Supervisory Board aims to perpetuate this trend and achieve
further efficiency gains.
The Supervisory Board welcomes the request addressed to the
Executive Board of Nordzucker AG by Nordzucker Holding
Aktien gesellschaft and Nordharzer Zucker Aktiengesellschaft
in accordance with Sec. 122 paragraph 2 (AktG) to include a
resolution on the agenda of the ordinary Annual General Meeting
of Nordzucker AG not to pursue claims against members of the
Supervisory Board of Nordzucker AG for receiving attendance fees
inconsistent with the Articles of Incorporation. In the opinion of
the Supervisory Board, it is vital for the judgement of this matter
that over a period of many years, those involved assumed that the
attendance fees were a justified and legitimate compensation for
the services those members of the Supervisory Board provided,
which in some cases were complex and required a considerable
amount of time. On this understanding, attendance fees were only
charged for meetings which actually took place, were in connec-
tion with the activity of the Supervisory Board and which were
therefore in the interest of Nordzucker AG. The great dedication
of the Supervisory Board members on this basis has made a major
contribution to the company’s strong position throughout Europe
today.
Supervisory Board committeesThe Supervisory Board has set up committees to discharge its
duties efficiently. The committees prepare the Supervisory Board
resolutions and matters for discussion by the full Supervisory
Board. The committee chairs report to the Supervisory Board on
the work of the committees at the following Supervisory Board
meeting.
The Executive Committee of the Supervisory Board met four
times in the reporting period. The Executive Committee dealt
with Nordzucker AG’s statement on the German Corporate Govern-ance Code in accordance with Sec. 161 AktG, the preparation and
analysis of the efficiency review, proposed amendments to the
Articles of Association relating to the remuneration of Supervisory
Board members and other important topics, and also prepared
the subsequent Supervisory Board meetings.
The Audit and Finance Committee met five times during the re-
porting period. The Audit and Finance Committee examined the
financial statements and management reports for Nordzucker AG
and the Group for the financial year 2011/2012 in the presence of
the auditors. Furthermore, the Audit and Finance Committee
121Corporate Governance
Report by the Supervisory Board
made a recommendation to the Supervisory Board for its proposal
to the Annual General Meeting on the election of auditors for
the financial year 2012/2013. Its work also included appointing
the auditors for the financial year 2012/2013, verifying their inde-
pendence and setting their remuneration. The Audit and Finance
Committee also dealt with Group and investment planning, quar-
terly reports and the interim financial statements for Nordzucker
AG and the Group, earnings forecasts for the financial year
2012/2013, the risk management system, the effectiveness, cap-
acities and findings of the internal audit department, and the
internal control system. The examination and approval of the sep-
arate and consolidated financial statements for the past financial
year as well as the proposal for election of the auditors for the
financial year 2013/2014 were prepared at an additional meeting
outside the period under review. Separate meetings took place
between the Chairman of the Audit and Finance Committee, the
Chairman of the Supervisory Board and the auditors.
The Human Resources Committee met four times in the reporting
period. The Human Resources Committee looked at the system
of Executive Board remuneration and in particular at the arrange-
ments for the long-term performance component. Based on this,
the Human Resources Committee prepared the Supervisory Board
decisions on variable remuneration for the Executive Board members.
The Human Resources Committee also prepared the renewed
appointment of Hartwig Fuchs as Chief Executive Officer of
Nordzucker AG and the renewed appointment of Axel Aumüller as
a member of the Executive Board of Nordzucker AG.
The Supervisory Board also formed a Nomination Committee
responsible for selecting suitable candidates for the Supervisory
Board to put forward for election as shareholder representatives
at the Annual General Meeting.
Financial statements 2012/2013The Executive Board presented the financial statements for
2012/2013 and the management report for Nordzucker AG to
the Supervisory Board in good time. This also applies to the con-
solidated financial statements in accordance with IFRS, the Group
management report and the proposal for the appropriation of net
profit. Under Sec. 315a of the German Commercial Code (HGB),
these IFRS consolidated financial statements exempt the company
from the obligation to prepare consolidated financial statements
in line with German law.
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Hanover,
audited the 2012/2013 financial statements for Nordzucker AG
and its management report, the consolidated IFRS financial state-
ments and the Group management report. It issued each with an
unqualified audit opinion and presented the auditors’ reports to
the Supervisory Board in good time. These were examined thor-
oughly by the Audit and Finance Committee and the Supervisory
Board, and were discussed in detail in the presence of the auditors
following their report on the main findings of the audit. The Super-
visory Board concurs with the result of the audit and concluded
from its own examination that it has no objections to make. The
Supervisory Board approved the annual financial statements as
prepared by the Executive Board, which are thereby adopted.
The Supervisory Board also approved the Executive Board’s pro-
posal for the use of distributable profit.
Executive Board report on related partiesThe Executive Board presented the Supervisory Board with its
report on related parties (dependent company report) in the
financial year 2012/2013 in good time. The auditors audited the
dependent company report and gave the following opinion:
“On the basis of our audit and our professional judgement, we
confirm that
1. the report is factually correct,
2. the consideration paid by the company for the transactions
listed in the report was not inappropriately high.”
The dependent company report and the corresponding audit
report were sent to all the members of the Supervisory Board in
good time. They were examined thoroughly by the Supervisory
Board and discussed in detail in the presence of the auditors fol-
lowing their report on the main findings of the audit. The Super-
visory Board came to the conclusion that it approves the result of
the audit and has no objections to make in relation to the Executive
Board’s declaration on the dependent company report.
Personnel matters concerning the Supervisory BoardOn 12 July 2012, Hans-Heinrich Prüße left the Supervisory Board
of Nordzucker AG as his age prevented him from standing for re-
election. The Supervisory Board would like to thank Hans-Heinrich
Prüße for his work on the Board over many years. At the Annual
General Meeting held on 12 July 2012, farmer Helmut Bleckwenn
was elected to the Supervisory Board in place of Hans-Heinrich
Prüße, until the close of the Annual General Meeting that votes
on discharging the boards for the financial year 2016/2017. On
Annual Report Nordzucker 2012/2013 122
12 July 2012, the Annual General Meeting also re-elected farmer
Hans-Christian Koehler, farmer Rainer Knackstedt and farmer
Andreas Scheffrahn to the Supervisory Board until the close of
the Annual General Meeting that votes on discharging the boards
for the financial year 2016/2017.
Rolf Huber-Frey and Wolfgang Wiesener also stepped down from
the Supervisory Board of Nordzucker AG as of 12 July 2012. The
Supervisory Board would also like to thank Rolf Huber-Frey and
Wolfgang Wiesener for their work on the Board over many years.
On 19 June 2012, Ulf Gabriel, Gerd von Glowczewski, Sigrun
Krussmann, Marina Strootmann and Dieter Woischke were re-elected
and Olaf Joern and Marie Lohel were elected anew to the Supervisory
Board as employee representatives for a period of five years.
In its constitutive meeting on 12 July 2012 the Supervisory Board
elected Hans-Christian Koehler as its Chairman. The shareholder
representative Helmut Meyer and the employee representative
Dieter Woischke were elected as Deputy Chairmen. At its consti-
tutive meeting the Supervisory Board also elected Michael Gerlif,
Dr Harald Isermayer, Jochen Johannes Juister, Andreas Scheffrahn,
Sigrun Krussmann and Dieter Woischke as members of the Super-
visory Board Executive Committee. The Supervisory Board elected
Dr Harald Isermeyer and Dieter Woischke to the Human Resources
Committee. The Supervisory Board appointed Gerhard Borchert,
Dr Harald Isermeyer, Dr Hans Theo Jachmann and Helmut Meyer
to the Nomination Committee. Hans-Christian Koehler is Chairman
of the Supervisory Board and therefore a member and Chairman
of the Supervisory Board Executive Committee, the Human Re-
sources Committee and the Nomination Committee. In addition,
the Supervisory Board elected Michael Gerlif, Matts Eskil Rosen-
dahl, Andreas Scheffrahn, Ulf Gabriel and Marina Strootmann to
the Audit and Finance Committee. Andreas Scheffrahn was elected
as Committee Chairman.
The Supervisory Board would like to thank the Executive Board
and all the staff for their personal and highly successful commit-
ment.
Braunschweig, Germany, 23 May 2013
Hans-Christian Koehler
Chairman of the Supervisory Board
123Corporate Governance
Report by the Supervisory Board
FinanceCash flow Net inflow of funds. Difference between receipts and spending expenses within one accounting period. For the sake of simplicity, the cash flow is determined on the basis of net income, plus non-spending expenses, in particular write-downs and changes in non-current pro visions . The cash flow is available to the company for investment, repayment of liabil ities and distribution of profits.
Consolidation The Group accounts are drawn up as if all Group mem-ber companies formed one uniform company in law. All expenditures and earnings as well as all interim trade results and other transactions between the Group members are eliminated by way of offsetting (expense and result as well as interim result consolidation). Stakes held in Group companies are set off against their equity capital (capital consolidation), and all intra-Group receivables and liabilities are elim-inated (debt consolidation) because such legal relationships do not exist within a legal entity. Summation and consolidation of the remain-ing items of the annual financial statements result in the consolidated balance sheet and the consolidated income statement.
Declaration of compliance Annual declaration made and published by the Executive and Supervisory Boards of listed companies in accordance with Sec. 161 AktG (German Stock Corporation Act), stating to which extent the company management complies with the recommen dations of the Commission of the German Corporate Governance Code and which recommendations are not applied.
Dividend The amount of a stock corporation’s net income apportioned to each individual share. Dividends are either expressed as a percent-age of the par value or as a currency amount per share (earnings per share). The Annual General Meeting votes on the distribution of the dividends. Dividends are paid out on an annual basis in Germany.
EBIT (earnings before interest and taxes) This figure supplies informa-tion on the results of current operations. Differences in capitalisation are not accounted for, therefore the general interest-rate level and tax rates are not considered.
EBITDA (‚earnings before interest, taxes, depreciation and amortisati-on‘) This key indicator is a way of measuring operating performance before capital expenditure.
Equity method An accounting method in which shares in a company are initially recognised at cost and subsequently adjusted to reflect the shareholders’ interest in the net assets of the investee company.
Equity ratio A financial indicator describing the relationship between shareholders’ equity and total assets.
Finance lease In contrast to an operating lease, the lessor transfers the risk of the investment and thereby the economic ownership of the asset to the lessee.
German Corporate Governance Code Guidelines formulated in 2002 on the management and supervision of German companies listed on the stock exchange. The German Corporate Go v ernance Code out-lines nationally and inter nationally accepted standards of responsible business management, which primarily aim at transparency and clar-ity. The Code defines the responsibility of Executive and Supervisory Boards and sets forth or makes recommendations on how to protect
the rights of shareholders, how executive and supervisory bodies should be filled and how their members should be remunerated . Non-listed companies are also recommended to comply with the Corporate Governance Code.
Hedge accounting under IAS 39 Refers to the way in which two or more contracts (or financial instruments) between which hedging relationships exist are recognised in the balance sheet. This method differs from conventional accounting methods.
IFRS (International Financial Reporting Standards) and IAS (International Accounting Standards) are accounting standards that render balance sheet and disclosure methods comparable on a global scale. These accounting standards have been compulsory for listed companies in Germany and throughout the EU since the beginning of 2005.
Impairment test This test must be conducted regularly according to IFRS in order to verify the valuation of non-current assets. It may result in the recognition of impairment.
Interest-rate swap Contractual agreement on the swap of interest cash flows at specific points in time according to a basic notional principal. Interest -rate swaps enable variable interest-rate agreements to be converted to fixed interest rates.
International Accounting Standards Board (IASB) is an independent international committee of accounting experts that develops and revises International Financial Reporting Standards (IFRS) as needed.
International Financial Reporting Interpretations Committee (IFRIC) is the name of a group within the International Accounting Standards Committee Foundation (IASC). The job of IFRIC is to publish interpret-ations of IFRS and IAS accounting standards in cases where it becomes apparent that the standard is capable of being interpreted differently or incorrectly or when new circumstances emerge which have not been dealt with fully in the previous standards.
Joint venture A cooperation between companies in which a new, legally independent business unit is created in which the founding companies (two or more) invest capital. In addition to capital, the founding com-panies generally contribute a sig nificant amount of technology, intellectual property rights, technical or other expertise and operating equipment.
Natural hedge approach Minimising currency risks by financing foreign-currency investments in the same currency, for example.
Net debt Financial liabilities minus cash and cash equivalents.
Operating lease A lease is classified as an operating lease under IFRS if it does not transfer essentially all the risks and rewards of ownership of the leased asset.
Registered share The subscribed share capital of Nordzucker AG is divided into registered shares with a nominal value of EUR 2.56 each.
Return on equity A figure which shows the profitability of capital employed and is calculated by dividing net income for the year by shareholders’ equity.
Return on revenues A financial indicator obtained by dividing net in-come for the year by revenues and enabling an analysis of a com-pany’s profitability .
Glossary
Annual Report Nordzucker 2012/2013 124
Syndicated loan Lending by several banks (syndicate) on the basis of standardised contract documents and identical terms and conditions.
Total profitability This indicator is calculated by dividing EBITDA (earnings before interest, taxes, depreciation and amortisation) by total output (revenues plus changes in inventories).
Volatility (‘unpredictable, liable to change’) A market is volatile if it is subject to major price fluctuations. Volatility is the statistical means of measuring market fluctuations.
Sugar and bioethanolBioethanol Ethanol produced from biomass (renewable substances containing carbon). Starch (e.g. from wheat or maize) is broken down by enzymes into glucose. Yeast is then added and the glucose is fermented to create ethanol. When sugar beet is used to produce ethanol, the raw juice or thick juice created as a by-product of sugar extraction is fermented directly. Unlike fossil fuels, bioethanol is CO2-neutral and has long-term economic benefits. In Germany, the Biofuel Quota Act has been in force since 2007, which stipulates the amount of bioethanol to be blended with petrol.
Carbohydrates or saccharides, which mainly consist of sugars and starches, form the largest usable and unusable (dietary fibre) share of the human diet, along with fats and proteins. Carbohydrates are the main source of energy for the human organism.
CO2 (carbon dioxide, ‘greenhouse gas’) Chemical compound consist-ing of carbon and oxygen which, like carbon monoxide, is a carbon oxide. This colourless and odourless gas is a natural component of air. It is created when substances containing carbon are burnt, and during cellular respiration. Plants and some bacteria convert CO2 into biomass.
Cossettes Pressed beet chippings are a by-product of the sugar pro-duction process. They are used as animal feed.
Crystal sugar The term for standard grade sugar used in industry and the home for a variety of purposes, particularly for making desserts and cakes. In a second processing step the crystal sugar is turned into caster sugar, which retails under the name of household sugar for instance.
Emission The release of substances into the environment.
Isoglucose Sugar made primarily from corn starch and used in bever-ages and preserved fruit. Isoglucose is a regulated market product.
Molasses Syrupy by-product of sugar production. Used to manufacture yeasts and animal feed.
Mulch seeding Mulch seeding is a ploughless sowing method in which the remains of a catch crop or the stubble of the preceding crop cover the soil before and after sowing and protect it from erosion and siltation.
Pellets By-product of sugar production. These extracted, dried sugar beet pellets are sold molassed or unmolassed as animal feed.
Raw cane sugar Sugar made from sugar cane. This can then be refined to convert it into white sugar.
Raw juice Sugary juice extracted from sugar beet which can be processed to make sugar or bioethanol.
Refining Used in a general sense to describe a process of cleaning or purifying raw materials. For sugar this means bleaching brown raw sugar (from sugar cane or sugar beet) by a (repeated) series of different processes.
Strip tilling In some cases beet has also been sown recently using the strip tilling method. This is a special method of sowing individual seeds in which the soil is only tilled in the seed row to a depth of 25 cm. This is done by chisel coulters attached in front of the drilling machine. Initial findings suggest that the advantages compared with conven-tional mulch seeding with seed bed preparation in the spring include greater energy efficiency and reduced work intensity per hectare, the conservation of ground water and good protection against soil erosion.
Thick juice Concentrated, purified sugar juice containing some 70 to 75 per cent solid material. Thick juice is produced at the end of the steam dryer unit before the sugar undergoes the actual crystallisation process in the sugar factory’s juice boilers.
White sugar is normal household sugar and is made from raw sugar.
Sugar industryACP countries (Africa, Caribbean and Pacific) This encompasses 77 states, most of them former French or British colonies. The EU has granted these countries preferential access to the European market and duty-free imports of 1.3 million tonnes of raw sugar since 1975 by means of the Cotonou Agreement. As of 2008, the EU wants to re-place this treaty with Economic Partnership Agreements (EPA) with the ACP countries. In terms of sugar, this should place the countries on an equal footing with the least developed countries (LDC).
CEFS Comité Européen des Fabricants de Sucre, the European Committee of Sugar Manufacturers represents all European sugar manufacturers and refiners among the European institutions (Council of Ministers, European Commission, European Parliament, Economic and Social Committee, etc.) and among different international organisations (FAO, WTO, etc.).
CIBE (Confédération Internationale des Betteraviers Européens) International Confederation of European Beet Growers
Dansukker Nordic Sugar, part of the Nordzucker Group, offers con-sumers a wide range of sweet sugar products from sugar beet and sugar cane under the brand name of Dansukker. The assortment is refined continuously in keeping with the needs of modern house-holds and includes for example various types of granulated sugar, sugar cubes and icing sugar, brown sugar and syrups as well as organic and Fairtrade products.
Doha development round is the name for a package of activities that the economic and trade ministers of the WTO member states were supposed to work through at the fourth World Trade Conference in Doha (capital of Qatar) in 2001 and complete by 2005. The main topics of negotiations included the liberalisation of agricultural trade, improved market access for developing countries and matters relating to intellectual property. Negotiations were suspended as no agreement was reached at the WTO conference in Cancun in 2003. They were resumed in July 2004 and again suspended unresolved in late July 2006 by the WTO General Director Pascal Lamy.
EFFAT European Federation of Food, Agriculture and Tourism Trade Unions
125Glossary
Fairtrade The heart of the Fairtrade standard is the payment of a guaranteed minimum price above the level of the world market price that covers the cost of living and production of the producers.
LDC (Least developed countries) LDC relate to an EU resolution of 2001 according to which the 50 least developed countries in the world may import any goods except arms into the EU free of any duty. Sugar falls under a special transitional arrangement until 2009. As of 1 July 2009, sugar can also be imported into the EU free of duty and with no restriction of quantities.
Sugar market regime A common market organ isation for sugar found-ed in 1968 (active in the EEC/EC/EU) which regulates prices for sugar and sugar beet, maximum production quantities for sugar, and import safeguards. The previous regulation (EC) No. 1260/2001 was replaced on 1 July 2006 by regulation (EC) No. 318/2006, which was passed by the ministers of agriculture of the EU member states on 20 February 2006.
Sugar quota Sugar quotas were introduced in the EU to limit sugar production and prevent surpluses. Volumes produced within these quotas benefit from a sales and price guarantee.
SweetFamily SweetFamily is the Nordzucker Group’s international umbrella brand. Beet sugar products for end consumers, bakers and the food industry have been marketed in Germany, Poland, Slovakia and Hungary under the SweetFamily brand since November 2004.
WTO (World Trade Organisation) Multinational organisation located in Geneva, in which 150 member states negotiate world trade liberali sation.
Certification, quality assurance and consumer protectionDIN EN ISO 9001 This standard is part of the EN ISO 9000 series, which documents the principles of quality management activities. EN ISO 9001 deals in particular with requirements of quality man-agement systems for which organ isations must show that they are capable of supplying products which conform to customer and regulatory demands.
DIN EN ISO 14001 This internationally valid standard lays down globally acknowledged specifications for environmental management.
DIN EN ISO 22000 Covers rules for internationally accepted food safety management standards.
DIN EN ISO 50001 An ISO (International Organisation for Standard-isation) certifiable standard that specifies requirements for establishing, implementing, maintaining and improving an energy management system.
EMAS II (Eco-Management and Audit Scheme) Voluntary system used by the EU as an environmental management instrument and to promote environmental action.
FSSC 22000 is the first global food safety norm covering food production. The norm was developed specially for companies producing or pro-cessing animal or plant-based products or ingredients.
GMP B2 (Good Manufacturing Practice B2) Dutch standard of quality control for animal feed from non-resident suppliers.
IFS (International Food Standard) This standard is a means of safe-guarding food safety and consumer protection.
OHSAS 18001 (Occupational Health and Safety Assessment Series) is not a norm, but can be used as a certification basis for management systems relating to health and safety at work. The structure of OHSAS is oriented towards DIN EN ISO 14001. This makes it suitable for use as an integrated management system.
PAS 220 (Publicly Available Specification 220) Certification standard developed to define basic requirements for the certification of production processes with the food supply chain and intended to assist in con-trolling food safety standards. It is intended to be used in conjunction with DIN EN ISO 22000. ISO 22000 and PAS 220 are generally known as FSSC 22000.
Q&S Standard German feed standard established by Q&S-GmbH, Bonn, Germany, to guarantee feed quality.
Work-life balance The term work-life balance refers to a situation in which people give equal priority to their professional and private lives. It assumes that an equilibrium can be reached between two opposing demands.
Annual Report Nordzucker 2012/2013 126
Important dates
Financial calendar
Annual General Meetings 2 July 2013 9 a.m. Union-Zucker Südhannover Gesellschaft mit beschränkter Haftung,
Atrium at the country estate Gräflicher Landsitz Hardenberg, Nörten-Hardenberg
9 July 2013 10 a.m. Nordharzer Zucker Aktiengesellschaft, city hall Braunschweig
10 July 2013 10 a.m. Nordzucker Holding Aktiengesellschaft, city hall Braunschweig
11 July 2013 10 a.m. Nordzucker AG, city hall Braunschweig
Online publications
The following publications can be downloaded from www.nordzucker.de
• Annual reports and interim reports
• Declaration of compliance
• Letter to shareholders
Latest publication
• Sustainability Report 2012/2013 – „Follow us“
A deep-rooted approach
Our focus on sustainability builds on a long-standing tradition in our company and is a
natural priority for us. As a business dependent on nature’s resources and stable climates,
our environmental and climate consciousness is deeply rooted.
Nordzucker AGKüchenstrasse 938100 BraunschweigGermanyTelephone: +49 (0)531 2411 0Fax: +49 (0)531 2411 100info@nordzucker.dewww.nordzucker.de
Corporate CommunicationsKlaus SchumacherTelephone: +49 (0)531 2411 366pr@nordzucker.de
Investor RelationsBianca Deppe-LeickelTelephone: +49 (0)531 2411 335ir@nordzucker.de
Shares registerClaus-Friso GellermannTelephone: +49 (0)531 2411 118aktien@nordzucker.de
Printed copies of this Annual Report for the Nordzucker Group are also available in German.
Alternatively, the report can be downloaded online as a PDF in German or English at
www.nordzucker.de from the Download Centre.
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