Release Date: July 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Suedzucker AG (SUEZF, Financial) has confirmed its full-year earnings guidance for fiscal 2025-2026, maintaining expectations for group revenues between EUR8.7 billion and EUR9.2 billion.
- The food segment showed positive development in Q1, with revenues increasing from EUR415 million to EUR444 million, driven by good volumes and pricing.
- The company successfully issued a new EUR700 million hybrid bond, demonstrating strong commitment and confidence from the capital markets.
- Suedzucker AG (SUEZF) is implementing substantial cost-saving initiatives expected to yield a high double-digit million-euro amount in savings for fiscal 2025-2026.
- The company is optimistic about its new plant for bio-based chemicals, with production expected to start in summer 2026, aligning with the growing demand for sustainable products.
Negative Points
- Q1 performance was weak, with group revenues at EUR2.2 billion, significantly below previous year's levels, and operating results dropping to EUR22 million from EUR155 million.
- The sugar segment experienced a downturn, with operating losses due to a sharp decline in prices and reduced acreage, impacting overall profitability.
- Net financial debt increased to EUR1.755 billion, with a higher debt level compared to the previous year.
- The crop energy segment faced significant challenges, reporting a loss due to lower ethanol prices and higher raw material costs.
- Suedzucker AG (SUEZF) anticipates a weaker Q2, with expectations for lower earnings compared to the previous year, and ongoing volatility in the sugar market.
Q & A Highlights
Q: How is the weaker US dollar impacting Suedzucker's group revenues, and what is the company's stance on the current dividend expectations?
A: Stephan Meeder, CFO, explained that the weaker US dollar primarily affects the import pressure on ethanol, as it makes imports more attractive. Regarding dividends, the proposal is EUR0.20, significantly lower than the previous year's EUR0.90, reflecting the current financial framework and increased net financial debt.
Q: Can you elaborate on the expected sugar market tightening and the basis for your EBITDA guidance?
A: Stephan Meeder clarified that the expected tightening is due to reduced acreage in Europe, with a 15% decrease in sugar beet planting. This, combined with potential adverse weather conditions, could lead to lower sugar availability, supporting higher prices. The EBITDA guidance considers these factors.
Q: Given the weaker Q2 outlook, are there any new cost-cutting initiatives planned?
A: Stephan Meeder stated that the current measures are in execution and align with expectations. The company anticipates a turning point in Q3 and Q4, with ongoing initiatives expected to account for a high double-digit million amount in savings.
Q: What is Suedzucker's position on the proposed new agreement with Ukraine regarding sugar imports?
A: Stephan Meeder expressed concerns about the proposed 100,000-ton quota, emphasizing the need for imports to meet the same sustainability criteria as EU products. While imports are necessary due to a deficit, they should not undermine local sustainability efforts.
Q: How is Suedzucker addressing the challenges in the crop energies segment, particularly in the UK?
A: Stephan Meeder noted that the UK-US agreement on tariff-free ethanol imports could impact the UK bioethanol industry. However, these volumes cannot be re-exported to the EU duty-free. The company is monitoring the situation closely.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
