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Edited Transcript of AGRV.VI earnings conference call or presentation 14-Jan-21 9:00am GMT

·28 min read

Nine Months 2021 Agrana Beteiligungs AG Earnings Call Vienna Jan 14, 2021 (Thomson StreetEvents) -- Edited Transcript of Agrana Beteiligungs AG earnings conference call or presentation Thursday, January 14, 2021 at 9:00:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Fritz Gattermayer AGRANA Beteiligungs-Aktiengesellschaft - Chief Sales Officer & Member of Management Board * Hannes Haider AGRANA Beteiligungs-Aktiengesellschaft - Head of Corporate Communications & IR * Johann Marihart AGRANA Beteiligungs-Aktiengesellschaft - Chairman of Management Board & CEO * Norbert Harringer AGRANA Beteiligungs-Aktiengesellschaft - CTO & Member of Management Board * Stephan Buttner AGRANA Beteiligungs-Aktiengesellschaft - CFO & Member of Management Board ================================================================================ Conference Call Participants ================================================================================ * Baptiste de Leudeville Kepler Cheuvreux, Research Division - Equity Analyst * Stefan Maxian Raiffeisen CENTROBANK AG, Research Division - MD & Chief Analyst * Vladimira Urbankova Erste Group Bank AG, Research Division - CEE Pharma Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by. I am Emma, your Chorus Call operator. Welcome, and thank you for joining the AGRANA results for the first 3 quarters of 2020/2021 conference call. (Operator Instructions) I would now like to turn the conference over to Hannes Haider, responsible for Investor Relations. Please go ahead, sir. -------------------------------------------------------------------------------- Hannes Haider, AGRANA Beteiligungs-Aktiengesellschaft - Head of Corporate Communications & IR [2] -------------------------------------------------------------------------------- Yes. Good morning, ladies and gentlemen, and welcome to AGRANA's conference call presenting our results for the first 3 quarters of 2021. And first of all, a Happy New Year and all the best and good health for 2021. As announced in our invitation, a presentation is available in reference to our call. You can find this presentation in the IR section of our website. With us today are 4 out of 5 members of the management Board. Mr. Marihart, our CEO, will start the presentation with an overview on the results and highlights for the first 3 quarters; our CTO, Mr. Harringer, will provide you afterwards with an investment overview and CapEx outlook; Mr. Gattermayer, our CSO, will continue and give you more color then on all segments; afterwards, our CFO, Mr. Buttner, will report on the financial statements in detail; and finally, again, our CEO will conclude with an outlook for the remaining business year. The presentation will take about 30 minutes. And afterwards, the management Board will be glad to answer your questions. And now I may pass over to our CEO, who will start with the presentation. -------------------------------------------------------------------------------- Johann Marihart, AGRANA Beteiligungs-Aktiengesellschaft - Chairman of Management Board & CEO [3] -------------------------------------------------------------------------------- Good morning, ladies and gentlemen. Thank you for joining this call. We are pleased to present you our 9 months results. After 9 months, the revenue is 4.6% up versus prior year, with now EUR 1.965 billion. The EBIT is EUR 84.3 million. It's plus 20.8% versus the 9 months of the prior year. The EBIT margin is -- has improved from 3.7% to 4.3%. So the third quarter itself was, again, better year-on-year with EUR 28.5 million versus last year, EUR 18.1 million. And this was possible through a package of efficiency, costs and investment related measures. On the revenue side, we improved by 4.6% in total. This is based on increases in all our 3 segments: slightly on the Fruit side with 0.3%; up Starch side, 2.3% up; and most up is Sugar with 18.2%. And this changes slightly the percent of our turnover. So Sugar increases from 20% to 23% and Starch and Fruit decreased slightly because Sugar recovered so much turnover. On the EBIT side by segment, the most important change is the halvening the loss of the Sugar side from EUR 33.4 million minus the year before to EUR 15.5 million, still minus. But it's an improvement of 53.6%. The good results of the Starch in last year improved by 2.1% to EUR 58.5 million, and the decrease of 10% we see in the Fruit segment from EUR 45.9 million to EUR 41.3 million. And this is mainly due to the choice fruit juice concentrate side and not to the fruit preparation side. All in all, we improved from EUR 69.8 million to EUR 84.3 million by 20.8%, which makes an EBIT margin improvement from 3.7% to 4.3%. The (inaudible) margins, we now have minus 3.4% in Sugar. After 9 months, 9.4% EBIT margin in Starch and 4.6% in Fruit. So now I hand over to my colleague, Mr. Harringer to tell you on investments and projection. -------------------------------------------------------------------------------- Norbert Harringer, AGRANA Beteiligungs-Aktiengesellschaft - CTO & Member of Management Board [4] -------------------------------------------------------------------------------- Good morning, and a very warm welcome also from my side. I am pleased to give you now a short overview about our investment project of the current business year. In these 3 quarters, in these first 3 quarters, we invested EUR 23.9 million in our segment Fruit for a new wastewater treatment plant in Jacona in Mexico, for the extension of the warehouse for finished products in Chung-buk in South Korea and 2 additional production lines, one in Lysander in the United States and one in Central Mangrove in Australia. Further, we invested EUR 13.7 million in our segment Starch. The most important projects there were measures to increase the specialty corn processing in Aschach in Austria, a major overhaul of the spray dryers in Gmünd in Austria and improvement measures at both wheat starch plants in Pischelsdorf, also in Austria. Last but not least, we invested EUR 9.8 million in our segment Sugar. The most important project there was the switch from coal to natural gas at our sugar plant in Sered' , Slovakia. Our most important project, the new plant for the manufacturing of crystalline betaine was successfully commissioned in August 2020. It was done within a joint venture between AGRANA and the Amalgamated Sugar Company. The operation was ramped up over the past few months, and the processes are now continually being optimized. So with an investment sum of approximately EUR 37 million, we changed 16 new jobs. The production capacity for feed and food-grade per year will be 8,500 metric tonnes of crystalline betaine. Our outlook for the whole business here poses a total investment across the 3 business segments at approximately EUR 76 million. With this amount, we are significantly below both the capital expenditure of the last business year and current years budgeted depreciation of about EUR 120 million. We have entered an implementation phase after the completion of major projects and capacity expansion in the recent years. Now I'd also hand over to Mr. Gattermayer for his view on the market development. -------------------------------------------------------------------------------- Fritz Gattermayer, AGRANA Beteiligungs-Aktiengesellschaft - Chief Sales Officer & Member of Management Board [5] -------------------------------------------------------------------------------- Thank you very much. Good morning. I will start with the Fruit segment. And concerning the fruit prep, the main markets, yogurt is negatively affected by COVID-19. We see, concerning the Euromonitor figures, the decline in global growth (inaudible) is due to the COVID-19 impact in calendar year 2020. And due to the situation, consumers are focusing more on health issues. And there's a demand for lower-priced and simpler products, as it was in the past. Considering the juice concentrate business, it's mentioned -- it's worth to mention the apple quantities available for the 2020 campaign were significantly below the expectations due to recent conditions during springtime in Poland and Hungary, and associated higher raw material prices put only partly because due to this market environment. The demand situation was slow, and it can be the assumed that large international customers in the beverage industry have only partly covered their demand for the time being. The turnover of the Fruit segment is closely in line with the year before level. And in fruit prep, the turnover in sales volumes are more or less stable. The turnover in the juice concentrate business activities was moderate in case and due to the higher prices. The EBIT of the segment went down to 10% from 1 year earlier level. The deviation is mainly based in the juice concentrate business because our lower delivery volumes, coupled with lower contribution margins of the apple trees (inaudible) produced from the 2019 and the 2020 crops. And the margin are under pressure in the (inaudible) too, made from the 2020 crop. Concerning fruit prep business, the EBIT exceeded the year earlier period, and we had -- we were able to realize savings in administration above the salts in Mexico and North America. Continuing with Starch. The COVID-19, our situation is the main influential factor for this segment. The impact we had, we had to realize in the food and nonfood business, in the food business, high pressure on prices and volumes due to lower demand. And in the nonfood business, we had to see that many paper manufacturers cut their productions, and customers that use the contact call us. Concerning the bioehtanol business was very volatile. The demand for European fuel alcohol market decreased by 140% in March and April, when during the first lock on, quotation went down to around EUR 350 per cubic meter. The volume loss in the first quarter were largely offset by the maximizing of alcohol sales into the disinfection sector during this period. Later on, after the losing of the COVID restrictions, the ethanol demand went up significantly and combined, this delayed ethanol imports, mainly from United States. The shortage in Europe quotations were pushed to a historic high of over EUR 800 per cubic meter in August. Since autumn, early winter time due to the COVID-19 lockdown situation month again, the ethanol prices fell, again, once more. Concerning the ethanol, you see the chart on the next slide, more or less. When you see on the right side, you see that we have a very volatile quotation for ethanol. For [petrol,] it's less volatile, and we see what I mentioned before, going down in March and April, went up in the summertime till end of autumn and then starting with early winter, it's going down once more. And now we are around EUR 500 more or less per cubic meter. The turnover of the Starch segment went up 2.3% compared to the year before. This was due to volume and general increase achieved for which starch, thanks to capacity expansion business of in Austria. At the same time, the market demand for almost all our products eased relating to higher pressures on prices and margins. As the impact of the COVID-19 pandemic, ethanol sedations were highly volatile, as I said before, and the turnover with byproducts remained more or less stable. The EBIT was slightly above the year before level. The earnings increase was mid (inaudible) a high ethanol sales price, particularly in the third quarter between July and October. Margin of the other core products were down on lower market demand due to this COVID impact situation. And the contribution of the equity accounted from (inaudible) went up significantly due to higher ethanol prices. This was a key factor. Continuing with the Sugar segment. Concerning the world sugar market, the world market sugar (inaudible) lose in parallel with oil prices and more or less remained at low absolute levels in the first month of this efforting period. Towards the end of the period, the prices went up upwards despite the second wave of the COVID-19, and the expectation of high Indian and Brazilian sugar production in the sugar market in year 2021, mainly to lower expectations concerning volumes in European unit but also in Russians and other countries, too. Concerning the European sugar market, on the one hand, according to the European Commission, the European sugar production and sugar marketing year 2021 is seen to fall below the level of last year due to the infection in France and some other countries. On the other hand, given the COVID-19 [infection] decrease in consumption is projected, both for human nutrition and also in industrial use. The next chart shows you the super quotation. And when you see a side, then you see that more or less we have now a lot of which we had 1 year earlier too and also at the late 2016. And early 2017, the price was higher, and we expect that this development of the last weeks will continue. The next chart shows you the sugar pricing reporting of the European Union. The last number is October 2020. We expect that the next number, which will be -- partly, will be higher than the EUR 381 per ton due to the demand-supply situation in the European Union. And the last chart is the financial results for the Sugar segment. The turnover went up by 18% from the 1 year earlier level. This is due to higher sales, higher sugar selling prices and higher sugar sales volume from mainly retailers and resellers. The EBIT has improved, but it's still negative, as it was already mentioned by Mr. Marihart. EBIT in the first 9 months of 2020/'21 was negative at a deficit of around EUR 15.5 million. The EBIT improved compared to the period of the last year due to the higher sales prices and volumes. Thank you very much, and I hand over to Mr. Buttner. -------------------------------------------------------------------------------- Stephan Buttner, AGRANA Beteiligungs-Aktiengesellschaft - CFO & Member of Management Board [6] -------------------------------------------------------------------------------- Yes. Thank you. So good morning, ladies and gentlemen. We start with the consolidated income statement. The revenues in the first 3 quarters of the actual business year reached EUR 1.9653 billion; leading to an EBIT of EUR 84.3 million; EBIT margin, 4.3%; net financial items, minus EUR 13.4 million; and the profit for the period after sales amounted to EUR 53.8 million. The earnings per share were at EUR 0.68. The net financial items, net interest expense, minus EUR 5.8 million, slightly above the number of the last year due to higher gross financial debt. Currency translation difference is comparable to the first 3 quarters of the last year with minus EUR 5.1 million, so ended a total of EUR 13.4 million, minus of other financial items. The other financial items are higher due to additional loans that we took with the banks, so these are fees. The tax rate amounted to 24.1%. This is a normal tax rate, I would say, also comparable to the prior year. So we had a profit before tax of EUR 70.9 million and the income tax expense of minus EUR 70.1 million. The cash flow statement shows an operating cash flow before changes in working capital of EUR 169.7 million, mainly due improvement versus the prior year, mainly due to the better result; changes in working capital, minus EUR 33.5 million. So we end up with the net cash from operating activities of EUR 118.2 million. This is a good development when we look at the net cash used in investing activities with minus EUR 45 million. So we end up with a positive free cash flow of EUR 73.2 million. The consolidated balance sheet, so we had no significant deviations or development there. So total assets amount to EUR 2.5271 billion. So in the current assets, the main changes are coming from receivables of approximately plus EUR 53 million, mainly coming out of the Fruit segment in the core customer demand. And we had a slight decrease versus the end of the last year of EUR 20 million in the inventories. The equity shows a negative development and amounted to EUR 1.3485 billion. The main take there on one hand, positive development of the profit after tax of EUR 53.9 million, but we also had a dividend payout of EUR 48.1 million and negative currency translation differences of EUR 41 million. So therefore, we had a decrease in the equity. The equity ratio still amounts to 53.4%, which is a good number. The net debt of EUR 452.7 million, slight decrease in the gearing of 33.6%. Thank you very much. I hand over to Mr. Marihart for the outlook. -------------------------------------------------------------------------------- Johann Marihart, AGRANA Beteiligungs-Aktiengesellschaft - Chairman of Management Board & CEO [7] -------------------------------------------------------------------------------- So thank you, Mr. Buttner. Let me come to the news and outlook. The most important decision in the third quarter concerns the factory of the Leopoldsdorf in Austria, as stipulated, securing at least 38,000 hectares of wheat planting in Austria as a precondition for running 2 factories in Austria, with 110 days campaign each for '21 campaign was met. Consequently, on the 27th of November, the Supervisory Board of AGRANA approved to continue the operation of the sugar factory in Leopoldsdorf, at least in 2021. Yes, in 2021. Let me come to the outlook for the group full year. AGRANA still expects a group EBIT for the full year to at least match the prior year level. The group revenue is projected to show slight path. Of course, due to the ongoing COVID-19 pandemic and associated high volatility in all business segments, this forecast for the full year remains subject to very high uncertainty. More in detail concerning the segments, I start with the Fruit segment. There -- the revenue should slightly increase by 1% to 5%. And the EBIT -- while the EBIT should reduce -- be reduced moderately by 5% to 10%, quite similar as we had it after 9 months, just presented. For fruit preparations business, AGRANA is projecting a stable revenue despite all the negative COVID effects. And the EBIT is forecasted to be raised realized by smaller cost increases than '19/'20. The reason for the decrease on the segment level of the EBIT is the fruit juice concentrate business. In spite of an increase in revenue, the earnings situation will deteriorate significantly and more than expected by us due to lower margins in fruit juice concentrates and volume reductions in beverage bases so far. Of course, there are COVID-19 risk factors, especially in the Fruit segment, with its global production operations. We have 41 sites in 21 countries in each continent. The forecast is subject to substantial uncertainties with regards to the demand situation in many regions of the world, which change with the COVID-19. And for the Starch segment, we expect a slight increase of the revenue also, plus 1% to plus 5%. And we expect a moderate reduction of the EBIT of minus 5% to minus 10%. The reasons are sales prices for starch -- (inaudible) starches and vital wheat (inaudible) we do not expect it to be lower as a result of increased supply in the European market, the one side. The starch-based sacrification product, so syrups and (inaudible), there is no major recovery in prices to be expected, owing to the persistent challenging market environment. In the Starch segment, EBIT is projected to decrease moderately as a consequence, mainly, therefore, of lower selling prices. The EBIT performance in the Starch segment will especially continue to depend on the further trend line of ethanol prices also because bioethanol, and this is a COVID risk factor, is a core product in the Starch segment. Restrictions on mobility may have a negative impact on the European economic markets. Finally, the Sugar segment. Here, the revenue outlook is a significant increase, plus 10% to plus 50%. This means in our terminology. So AGRANA expect -- and on the EBIT side, we also expect a significant improvement. AGRANA expects a continued improvement in conditions in the EU sugar market. And as a result of the corona pandemic, there has been a shift in consumption from industrial to retail demand, both bad for AGRANA, with a higher retail share in our sugar sales on that side. On the sales side, sugar prices rose overall. While mainly caused by idle capacity costs, the Sugar segment EBIT in absolute terms will still be negative. But the positive trend in the sugar market environment, combined with rigorous cost management leads to expectation of a significant improvement in retail at least. COVID-19-related risk factors for the outlook, I have to mention the sales volume gains and revenue growth in the sugar segment. For this financial year-to-date is -- they were encouraging, especially in the first quarter due to the pulling forward of sugar purchases by many consumers at the start of the COVID-19 pandemic. It remains to be seen how the demand situation will unfold over the coming months, especially in the industrial sector. Yes. This is the end of our presentation. There is just a financial calendar to be mentioned. I'll hand over to Mr. Haider. -------------------------------------------------------------------------------- Hannes Haider, AGRANA Beteiligungs-Aktiengesellschaft - Head of Corporate Communications & IR [8] -------------------------------------------------------------------------------- Yes. Before we go on with the Q&A session, I just wanted to remind you that our annual results will be published on the 11th of May, and our annual General Meeting will take place on the 29th of June. So now the management board is glad to answer your questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) The first question comes from line with Vladimira Urbankova with Erste Bank. -------------------------------------------------------------------------------- Vladimira Urbankova, Erste Group Bank AG, Research Division - CEE Pharma Analyst [2] -------------------------------------------------------------------------------- Can you hear me? -------------------------------------------------------------------------------- Johann Marihart, AGRANA Beteiligungs-Aktiengesellschaft - Chairman of Management Board & CEO [3] -------------------------------------------------------------------------------- Yes, yes. -------------------------------------------------------------------------------- Vladimira Urbankova, Erste Group Bank AG, Research Division - CEE Pharma Analyst [4] -------------------------------------------------------------------------------- Yes. I have some problems with my phone today, so I apologize for the inconvenience. I would ask 2 questions, one of it is related to COVID cost containment or cost-cutting measures, whatever we call them. If you can say where you are focusing in which segment, in which business area, and if you can quantify impact of these measures on your result in the first 9 months? And second question would be related to the Sugar segment. Of course, it's encouraging to see that operating growth is narrowing. But do you think that we are moving towards the black territory possibly next year or how to judge the development? What were the idle costs for the current fiscal year? And if you expect them to get less with the guaranteed area of 38,000 hectares? Last but not least, related to Sugar segment would be, what is the share of the retail in your sales versus industrial segment? This will be it for the moment. -------------------------------------------------------------------------------- Johann Marihart, AGRANA Beteiligungs-Aktiengesellschaft - Chairman of Management Board & CEO [5] -------------------------------------------------------------------------------- So coming to the first question. So I think it was about the COVID-19 cost cutting measures I think in all the segments or on the group level. So of course, I mean, this is quite difficult to say what is really related to COVID-19 because we have continuous cost-cutting measures in the whole group, mainly, of course, in the Sugar segment as well as in the fruit preparation segment, always ongoing. So in Fruit, I would say that, of course, the travel costs were reduced significantly, I would say, by approximately EUR 4 million in the first 3 quarters. And additionally, we also had in the other divisions and on the holding level, we had savings there. So I would say the total savings are around EUR 5 million to EUR 6 million when we come to the travel expenses. On the other hand, we also had a reduction in headcount in the Fruit segment, but this is not related to the COVID pandemic, this is due to restructuring program that we started at the beginning of the year. So we had significant cost decrease of more than EUR 10 million in the first 3 quarters in the Fruit segment. And therefore, despite the fact that we also had negative impact in the in the foodservice business, we could improve the results in the fruit preparations business with EUR 4.5 million. Also, in the Sugar segment, we are constantly trying to save costs, also on the personal cost level, but also energy cost, et cetera. The second question was concerning the idle cost I think in sugar. So we had around EUR 10 million idle costs in the first 3 quarters. And we show -- when we look at the operating or, let's say, EBIT in the Sugar sales in production. So without the holding, we had a result of minus EUR 7.6 million, therefore, we can show a positive result when we deduct the idle cost of EUR 10 million of around EUR 2.5 million out of the operative business. And the share in retail. -------------------------------------------------------------------------------- Fritz Gattermayer, AGRANA Beteiligungs-Aktiengesellschaft - Chief Sales Officer & Member of Management Board [6] -------------------------------------------------------------------------------- Considering the last question, the share, more or less, in divisional level is 1/3, and it's going in mainly in the Eastern European countries. -------------------------------------------------------------------------------- Operator [7] -------------------------------------------------------------------------------- The next question comes from the Baptiste de Leudeville with Kepler Cheuvreux. -------------------------------------------------------------------------------- Baptiste de Leudeville, Kepler Cheuvreux, Research Division - Equity Analyst [8] -------------------------------------------------------------------------------- I have 2 questions on the, let's say, on the Sugar segment to start with. About the agreement you reached at the Leopoldsdorf site, my question is, are you willing to reconsider any -- every year, this agreement? Or should we understand that this agreement is a multiyear agreement where you are committed to continue the operations for several years? Or is it just 1 year, and you would be reconsider this, let's say, disagreement next year? The second question also is on the Sugar segment. So my question is about the contracted price, you get for the next sugar marketing year. Should we understand that you managed to have higher contracted price than last year? And if it's the case, what is the magnitude of the average increase in contracted prices you managed to have in the Sugar segment? That is the first 2 questions, and I have several others after that. -------------------------------------------------------------------------------- Fritz Gattermayer, AGRANA Beteiligungs-Aktiengesellschaft - Chief Sales Officer & Member of Management Board [9] -------------------------------------------------------------------------------- Yes. Concerning the Leopoldsdorf sugar factory and the contractor situation, that's a decision from year-to-year. So if there is not enough contracts the next year, the year after, then we are able to close in any stadium at any stage of this period. There is some -- maybe some conflicting information with a 3 years contract. But this 3 years contract with the farmers has a condition that as long as there is 2 factories in Austria, this 3 years contract is pending. If there is a closure, then this contract is invalid. If I got it right, the question was concerning the contracts period. Most of the contracts end at the end of September, the end of the (inaudible) year '21. And we have some contracts which are last till end of the calendar year, meaning end of December '21. And just a few we -- it's -- we have contracts which last till 2020. But the main conduct is always based from -- on the sugar marketing year period and therefore, most of the contracts will end with end of September '21. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- The next question comes from [Stefan Maxian] with Raiffeisen Bank International. -------------------------------------------------------------------------------- Stefan Maxian, Raiffeisen CENTROBANK AG, Research Division - MD & Chief Analyst [11] -------------------------------------------------------------------------------- One question with respect to your full year outlook. Your guidance on the EBIT level, including the association of HUNGRANA, you say you expect at least to reach the level of last years, given there's quite a performance in 1 to 3 Q, you are already there. So just touching on the operating -- your expectations on the operating EBIT for 4Q are reaching the guidance or hoping it slightly would leave only a higher single-digit EBIT number for the full -- for the fourth quarter of your financial year. I think you all do not hope that the operating EBIT would be that low to assume you with the guidance includes also some forward-thinking with respect to year-end measure some noncash valuation effects or whatever, meaning that the operating between 4Q would look better than the reiteration of the guidance is implied. -------------------------------------------------------------------------------- Stephan Buttner, AGRANA Beteiligungs-Aktiengesellschaft - CFO & Member of Management Board [12] -------------------------------------------------------------------------------- Yes. So of course, I mean, our guidance is at least the result of the previous year, which does not say that we will reach the level of the previous year. So it can also be higher. But as you see, currently, the developments, I mean, we have further lock down. So this also has an impact, as we already heard today on the ethanol prices. So there is a certain insecurity. This has a major impact on our profitability. Also, we see price pressure in other products in the starch segment. In Sugar, of course, we saw a constant reduction of production volumes due to the weather conditions. So that we also have to increase our ad cost versus our assumptions in Q3. So these are further expenses that we have to book in the last 3 months. In the fruit juice concentrate business, we also heard that the performance is not very good currently because we have problems to pass on the increasing raw material costs due to the lower demand of the customers currently. And in the fruit prep business, we have quite a normal development. But it will heavily depend on the performance of the Starch business. Of course, Sugar, we hope that we can reach more or less a balanced result. And of course, then, I mean, Fruit -- yes, fruit prepearation on is okay, and fruit concentrate is not so good. And therefore, we are very cautious. Of course, we can outperform our guidance and reach a result, I would say, of EUR 90 million, EUR 95 million, but it can also be a little bit lower. So this is our current expectation. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- (Operator Instructions) We have a follow-up question from Baptiste de Leudeville. -------------------------------------------------------------------------------- Baptiste de Leudeville, Kepler Cheuvreux, Research Division - Equity Analyst [14] -------------------------------------------------------------------------------- Yes, another question is on the working capital requirements. We have some reduction of the working capital requirements. Can you explain to detail why is it? -------------------------------------------------------------------------------- Stephan Buttner, AGRANA Beteiligungs-Aktiengesellschaft - CFO & Member of Management Board [15] -------------------------------------------------------------------------------- So on the working capital side, of course, I mean, we are now coming to the end of the production, let's say, campaigns, in Sugar and fruit juice concentrate business, which means that we should already have reached the peak. In these 2 divisions, then with the end of the production campaigns, we will start to reduce the inventories constantly until the new sugar market or the fruit juice concentrate production in July is starting over again. In Starch in the fruit prep business, we had quite a constant working capital. So therefore, I would see no significant deviation till the year-end. And then, of course, we should have a reduction until the new campaigns will start. But of course, everything depends on the raw material prices, especially in the fruit juice concentrate business, where we have the new prices for the berries starting from June onwards. And then for the sugar beet starting in September, October. So this is then also relevant what will happen in the next year. -------------------------------------------------------------------------------- Baptiste de Leudeville, Kepler Cheuvreux, Research Division - Equity Analyst [16] -------------------------------------------------------------------------------- I have another question on the Pischelsdorf site, the new wheat starch plant. Can you [explain] a contribution of the new Pischelsdorf facility in terms of revenue and profitability? -------------------------------------------------------------------------------- Stephan Buttner, AGRANA Beteiligungs-Aktiengesellschaft - CFO & Member of Management Board [17] -------------------------------------------------------------------------------- Yes. So with the new capacity, we had revenues as of around EUR 40 million and an EBIT contribution of EUR 1.5 million. This is significantly below our expectation and mainly due to the higher competition we are currently facing, of course, in connection with the lower demand also partly due to the corona pandemic and also increasing raw material prices. So we hope that this is a temporary development in then see an improvement of the margins in the coming years. -------------------------------------------------------------------------------- Baptiste de Leudeville, Kepler Cheuvreux, Research Division - Equity Analyst [18] -------------------------------------------------------------------------------- And I have a last question on the investments, the CapEx, the envelope. So we have significantly reduced the investment this year. You have an outlook on the (inaudible) on the (inaudible), should we expect it to be stable or to pick it up again? -------------------------------------------------------------------------------- Norbert Harringer, AGRANA Beteiligungs-Aktiengesellschaft - CTO & Member of Management Board [19] -------------------------------------------------------------------------------- Yes. Within the next years, we will invest on a stable level, that means below our depreciation level. -------------------------------------------------------------------------------- Operator [20] -------------------------------------------------------------------------------- Ladies and gentlemen, there are no further questions for you. I hand back to Hannes Haider for closing comments. -------------------------------------------------------------------------------- Hannes Haider, AGRANA Beteiligungs-Aktiengesellschaft - Head of Corporate Communications & IR [21] -------------------------------------------------------------------------------- Yes. Thank you. As there are no further questions, thank you for participating in our call. We wish you a nice remaining day and stay heathy. Bye. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.