AGRANA Beteiligungs-Aktiengesellschaft (AGR) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call operator. Welcome, and thank you for joining the AGRANA Annual Results 2020/'21 Conference Call. [Operator Instructions] I would now like to turn the conference over to Hannes Haider, responsible for Investor Relations. Please go ahead.

Yes. Good morning, ladies and gentlemen, and welcome to AGRANA's conference call presenting our annual results for the 2020/2021 financial year. You already got some insights in our figures when we published 2 ad hoc announcements end of March and beginning of May. Today, we will provide you with further details on all segments and the audited financial statements. 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 of 2021. Our CTO, Mr. Harringer, will present an investment overview and ESG outlook; Mr. Gattermayer, our CSO, will continue and give you more color on the market environment in the 3 segments. Afterwards, our CFO, Mr. Büttner, will report on the financial statements in detail. And finally, again, our CEO will conclude with an outlook for the ongoing financial year '21, '22. 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. The presentation will take about 35 to 40 minutes. And afterwards, the management Board will be glad to answer your questions. And now I may pass over to our CEO, Mr. Marihart, who will start with the presentation.

So thank you, Mr. Haider. Good morning, ladies and gentlemen. Thank you for joining our meeting. On the cover of our annual report, we printed what really counts and what really counted in the last year, finally, was the flexibility, the home office, remote teamwork, and our employees have shown a tremendous dedication this past financial year with their flexibility. What really counts was keeping the supply of the basic goods flowing. And this was not only an economic necessity, but also our responsibility as part of the critical infrastructure. And finally, 100% of our factories, we are fully operating, no stop, and we had 0 short-time work, which was possible by the request of products of our customers. Having said that, let me come to the profit and loss account, the overview. Our revenue was EUR 2.547 billion, plus 2.7% versus the prior year. The EBIT was EUR 78.7 million, plus 17.6% compared to the restated 66.9% of last year. Then the EBIT margin then turned out with 3.1%. The COVID-19 pandemic was the defining factor for all AGRANA segments. As mentioned above, prior year's operating profit was adjusted to reflect the goodwill impairment expense in the Sugar segment and the EBIT target for 2021 of EUR 87.1 million originally could not be reached as a result of onetime effects in the financial -- in the final quarter, especially in the fruit preparations division. Let me start with the Fruit segment. The revenue was slightly below the year earlier level, minus 1.6%, and it was EUR 1.185.4 million. Fruit preparations' revenue easing somewhat for a sales volume reason. We had increased sales in Europe and North America region, while other regions experienced a slight decrease. The fruit juice concentrate revenue remains steady as higher apple juice concentrate prices from the crop '19 and '20 were offset by lower sales volumes. But we faced an EBIT decrease of 26.3% from 1 year earlier. Main reasons of the deterioration lay in the fruit juice concentrate business, reduced delivery volumes coupled with lower contribution margin of apple juice concentrate produced from '19 and '20 crop as well as idle capacity costs were the reasons for that. The fruit preparations business overcame numerous changes, challenges, significantly surpassed its year-earlier profitability in terms of operating profit. Achieved, amongst others, by savings in administration and an improvement in Mexico and North America. At EBIT level, remains only a moderate increase due to the next exceptional -- net exceptional items expense of EUR 10.9 million. The Starch segment, revenue rose slightly by 1.8% to EUR 822 million. Volume and revenue growth achieved for wheat starch full capacity expansion -- through capacity expansion in Pischelsdorf in Austria. Market demand for almost all core products eased, leading to higher pressure on prices. Reflecting the impact of the COVID-19 pandemic, especially on mobility, ethanol quotations were highly volatile. Revenue with byproducts increased slightly because of higher wheat gluten sales. The EBIT came in 13.8% below that of the previous year. Margins on the core products narrowed amid reduced market demand, purchase prices for raw materials and energy on prior year level. Depreciation and personnel costs also increased because of the larger investments in the last several financial years. Earnings contribution of the equity-accounted HUNGRANA Group rose from EUR 16.3 million to EUR 19.4 million. The Sugar segment revenue was 14.4%, up to EUR 559 million. Higher sugar selling prices and increased sugar sales volumes led to this growth. Sales to resellers, there, the prices were up moderately from the prior financial year and sales to industry also rose, thanks to new contracts with customers. Byproduct revenue also exceeded prior year level. The EBIT improved but remains still negative. Substantial improvement, thanks to a better sales price environment and higher quantities sold was achieved. But 2020 campaign once more entailed higher idle capacity costs as the beet harvest was again poor last year. The EBIT contribution of the equity-accounted AGRANA-STUDEN Group was EUR 0.2 million; the year before, EUR 0.6 million. And that of Beta Pura, our joint venture for the production of crystalline betaine, was a deficit of EUR 2.1 million because of the start-up process in the first production year. The EBIT in 2020/2021 also included a net exceptional items expense of EUR 0.2 million in the prior year, net exceptional items expense of EUR 20.9 million due to primarily to a retroactive goodwill write-down. Now the total picture on the revenue by segment. The 2.7% increase of AGRANA's revenue to EUR 2.547 billion by EUR 67 million was driven by the increase in sugar, plus 14.4%; of starch, plus 1.8%; and there was a small reduction in fruit of minus 1.6%. The sugar share rose by 2%. The fruit share decreased by 2%. On the EBIT side, it shows a COVID-impacted picture. It is a decrease of -- in fruit of minus 26.3% to EUR 41.2 million; in Starch from EUR 75.2 million, by minus 13.8% to EUR 64.8 million; and in Sugar, significant improvement from minus EUR 64 million to minus EUR 27.3 million, totaling in EUR 66.9 million last year. It's the restated figure, an improvement to EUR 78.7 million by 17.6% this year. Overall, an EBIT margin of 3.1%. Now I hand over to Mr. Harringer for the investments.

Ladies and gentlemen, a very warm welcome also from my side. Now a few words about investments during the last business year. In 2020, '21, we invested group-wise EUR 72.3 million. We are EUR 34.2 million in our segment Fruit. For example, for a new wastewater treatment plant in Jacona in Mexico; for the expansion of the warehouse for finished product in Chung-buk in South Korea; and in 2 additional product lines, 1 in Lysander in the United States and 1 production line in Central Mangrove in Australia. EUR 22.2 million were invested in our segment Starch. Here, we continued the measures to increase specialty corn processing in Aschach in Austria. We did a major overhaul of our spray drying equipment in Gmünd in Austria. We continued our optimization work at the wheat starch plant in Pischelsdorf, and we finalized the project expansion of the starch derivatives plant in Asia. In our Sugar segment, we invested EUR 15.9 million, almost for efficiency and product quality projects. For example, we began the switch from coal to natural gas at the Sered' sugar plant in Slovakia. Now a few words about our biggest project in the last business year, the manufacturer of crystalline betaine. We did this in a joint venture between AGRANA and The Amalgamated Sugar Company. The new betaine plant was successfully commissioned in August 2020. And afterwards, operation was ramped up over the past number of months, and the processes are continually being optimized. With an investment of approximately EUR 37 million, we gained 16 new jobs. The production capacity of this new facility is of around 8,500 metric tonnes of crystalline betaine per year. Ladies and gentlemen, now a short overview about our investment plans for the new business year '21, '22. We are planning a total investment across the 3 business segments at approximately EUR 91 million. This will be, again, significantly below the budgeted depreciation of about EUR 121 million. We will continue with the implementation phase after the completion of major projects and capacity expansions in the recent years. Let's have a short view at our CapEx evolution and our investments for sustainable growth. AGRANA invested between 2010 and 2019 at about EUR 1.2 billion each year significantly over depreciation and started the mentioned implementation phase in the last business year. Ladies and gentlemen, let's come now to AGRANA's efforts to meet the climate challenge. AGRANA is committed to decarbonizing its value chain by 2050 and works on a staged approach to reach this target. We are targeting by 2040 carbon dioxide-neutral production, and we will have to invest approximately EUR 400 million group-wise to reach this target. In a further step, AGRANA is targeting by 2050 carbon dioxide neutrality. But let me say, AGRANA products like bioethanol, bioplastics and feed stuff, substituting products from fossil origin or products made in a manner consistent with the principles of the circular economy are already contributing to climate protection. Our intermediate target till 2025 is a reduction of our carbon dioxide emissions by 25%. To reach this goal, we have to invest approximately EUR 10 million annually. Following measures are planned: the use of electricity from renewable sources. The phaseout of coal as an energy source at the last 2 coal-fired sugar production sites in Sered', in Slovakia, I've talked about it, and in Opava in the Czech Republic in 2025. We will implement a broad range of energy efficiency measures in all business segments, and biomass utilization will increasingly become a focus of further decarbonization from 2025 onwards. Ladies and gentlemen, beginning with 2026, we will also focus on energy recovery from low protein raw materials. For example, AGRANA's sugar factory in Kaposvár in Hungary could cover approximately 70% of primary energy consumption in the beet sugar campaign with biogas produced from beet pulp and other beet residues. And that should be a role model for all our other factories. But there are challenges. As biomass utilization for energy recovery cuts into feedstuff revenue, the right business conditions are required for it to be implemented economically. That means we need a comprehensive ETS, including an appropriate price for carbon dioxide. We have now started structured gathering of data on scope 3 emissions. By 2030, AGRANA will also seek to implement structured measures developed in collaboration with suppliers and partners to reduce the greenhouse gas emissions generated in its whole supply chain to be able to offer carbon dioxide-neutral products. Now I'm glad to hand over to Mr. Gattermayer for his view on the development of the markets and raw materials. Thank you.

Thank you very much, ladies and gentlemen, a welcome from my side, too. I want to give you some information concerning the market environment, sales and raw materials. Starting with the Food segment. Concerning the main market, we have to say it's negatively affected by the COVID-19 pandemic. And on the other side, we see that the current estimates of Euromonitor predicts an annual -- an average annual volume growth of just under 1% until 2024. Concerning ice cream and bakery, they are significant product categories in the diversification of our activities in this business. And for the time being, it's difficult to achieve our goals. The market environment for yogurt is determined by consumer plans in the global markets like health, convenience and sustainability. Concerning the fruit juice concentrates, the demand of the European food retail sector for apple juice declined in the summer months due to the COVID impact. Customers were slow in their contracting during the 2020 campaign. And in the food service market for juice and concentrates, in general, sharp slumps in demand during the '20/'21 financial year. The apple quantities available for the 2020 harvester campaign were below expectations, and higher raw material price could only partially be passed over to the market. Concerning Starch, starting with the food sector. There's a clear shift away from foodservice in tourism orientation towards specifically B2C/retail demand. Sweetener products remained under heavy volume and price pressure in the reporting period due to the uncertain situation and new impetus for the market were absent. We just had a different development starting with the new business here. Concerning technical starches, the sales to the packaging paper industry went up, mainly in the fourth quarter of the financial year. Demand went up as a result of growth in online commerce. On the other hand, demand for graphic paper was down. Concerning bioethanol, the volatility of the Dutch business is well shown by the example of one of our core products, ethanol. Prices went down in March 2020, below EUR 400 down to EUR 350 per cubic meter. Afterwards, the prices went up to EUR 700 to EUR 800 per cubic meter in summertime. And at the end of the calendar year, it declined below EUR 500 per cubic meter. The next chart shows you the ethanol and petrol prices. When you see on the right side, you see that the gap between the ethanol prices and the petrol prices is widening. The ethanol prices are around EUR 620 now. We had, in the past, as I mentioned, in March, EUR 350, but normally, it's between EUR 450 and EUR 800 per cubic meter. But what we have to see and realize is that the petrol market and ethanol market are totally different markets -- were different market in the last years and had different developments. The next chart shows you the raw material price -- commodity prices for corn and wheat. And on the right side, you see that corn prices are after wheat prices. Normally, wheat prices with the European Union, the quotations are lower than the corn -- are higher. The wheat quotations are higher than the corn quotations. But during the demand and supply ratio, we see a different development during the last weeks and months, and corn prices went up. Also wheat prices followed due to the fact that 60% of the total corn and wheat are used for feeding issues. And therefore, if one goes up, the other one have to follow, too. The next is Sugar -- concerning Sugar, starting with the world sugar market. The world sugar market, sugar quotation remained at low levels during the first quarters of the financial year. And towards the end of the reporting period, the prices went up despite the COVID impact and the expectation of a higher Indian sugar production for the sugar market in year 2020, '21. The stock-to-use ratio for the sugar marketing year 2020, '21, based on latest forecast is now below the 30% threshold, but well above the 25% threshold in other markets. Concerning the European sugar market, the production expectations for the sugar marketing year 2020, '21 are lower as a result of the lower yields in the Western part and also mainly France and Germany, but also in Poland and the main beet-growing regions within the European Union. The production is estimated by the European Commission at 15.4 million tonnes, and it's well below the record production in 2017, '18, when it was above 20 million tonnes. The next chart shows you the development of the world sugar production and consumption. More or less, you see that we had during the last years the deficit and -- for 2 years. And for this year, there's estimated that there will be -- the production will be higher than the consumption. But very important, it's also the stock ending. The ending stocks we achieved, the gray line, and you see that we -- it's more or less around 70 million tonnes. And if it's going down below 6, then it will be an issue [ whereby the stocks ] are significantly as it was in 2008 and '09. The next chart shows you the sugar quotation. The raw sugar and the white sugar, you see the charts for the last 10 years. And you see now that we are -- raw sugar is around EUR 310 to EUR 320 per tonne and white sugar between EUR 370 to EUR 390 per tonne. And that higher than, of course, it was during the last 12 months, but we are still below of 2016. And the last -- the next chart shows you the sugar price reporting of European Union. You see that's always the EU reference price and you see also the quotation of London #5 and the European average price for white sugar. And you see now that we have -- more or less, they are on the same level. It's around EUR 380 per tonne. And the last chart concerning the sugar segment and our raw material situation, mainly in Austria. As the amount of sugar beet crop area in Austria was very low in 2020 due to the drought and pests, the continued operation of the sugar factory in Leopoldsdorf was discussed in the summer of 2020. The contract area target of 38,000 hectares for the beet planting of 2 plants in Austria in 2021, meaning 2.7 million to 2.9 million tonnes of beets, which should be processed in these 2 plants. We were able to get this and was secured. And the Leopoldsdorf plant will, therefore, operate in the coming campaign as well. Important thing now is to ensure that the planting area is brought to harvest. And for the time being, we are optimistic and sure that we will get the beet [ around ], which we are going forward due to our plans. Thank you very much. I will hand over to Mr. Büttner.

Thank you, Mr. Gattermayer. So let's have a look at the consolidated financial statements. First of all, we want to draw your attention again to the fact that in 2020, the enforcement audit of Austrian Financial Reporting Enforcement Panel and enforcement audit was held. And the recoverability of the goodwill from their point of view of an amount of EUR 20.1 million allocated to the cash-generating unit could not be demonstrated. As a result, the earnings in the '19/'20 financial year and shareholders' equity at the 29th February of 2020 had been overstated. And so as a consequence, AGRANA considered a net expense of EUR 20.1 million in exceptional items in the '19/'20 financial year. And we want to point out that all the numbers that we present in the following from the financial year '19/'20 are corrected, respectively, with that amount. The consolidated income statement shows revenues of EUR 2.547 billion. This is an increase of 2.7% versus the prior year. The EBIT amounted to EUR 78.7 million. And the profit for the period after tax to EUR 55 million, leading to earnings per share of EUR 0.96. The net financial items, so we had a net financial result of minus EUR 18.5 million. The interest expense improved by EUR 0.4 million. We had a negative impact on the currency translation differences due to weakening currencies in foreign countries. And a change of EUR 1.3 million in other financial items, mainly driven by higher commitment fees for committed but undrawn credit facilities and by annualized fees for renewals of syndicated and bilateral loans. The exceptional items had a big impact on the financial results. So we show exceptional items of both minus EUR 11.9 million. Thereof, in the fruit preparations business, minus EUR 10.9 million; and in the juice business, minus EUR 0.8 million. In the fruit preparations, we had one-off effects of minus EUR 10.9 million, which consisted of expenses related to a cost-saving program; a property, plant and equipment write-down in Egypt, which amounted to EUR 2.2 million; and provisions for a product complaint in [ Europe ] with an amount of EUR 5.5 million. In the juice concentrate business, we had this minus EUR 0.8 million are related to a closure of 1 of 5 production plants in Hungary. It's a smaller plant due to the lack of raw material supply. The tax rate amounted to 8.7%. The main explanations for this low tax rate, well, tax loss carryforwards that can now be utilized in Romania due to the implemented work bench model in the Sugar division. So this led to deferred tax assets of EUR 5.4 million in 2021. And therefore, a significant reduction of the tax quota in 2021, also with a tax refund of EUR 1 million from a tax audit in Romania, and this also reduced the tax quota accordingly. The high tax quarter of the year '19/'20 is also influenced by a tax audit in Romania, where provision was booked of EUR 2 million in '19/'20. And also now we showed this retroactive goodwill write-down in the prior year in the Sugar segment of EUR 20.1 million with no tax effect in '19/'20. And this also led to an increase of the tax quota in '19/'20. The consolidated cash flow statement. So we had an operating cash flow before changes in the working capital of nearly EUR 200 million. The net cash from operating activities amounted to EUR 163.6 million. This is a positive development and an increase of 48.6% versus the prior year. With the net cash, you will see in investing activities, you'll see the decreased capital expenditures versus the prior year. And it's a very good development after 2 or 3 years. Now we turned to a free -- positive free cash flow of EUR 84 million in the prior year. This amounted to minus EUR 45.5 million. The consolidated balance sheet shows no significant changes. So in the noncurrent assets, the main deviation comes from the lower capital expenditures and the higher depreciation. Equity was influenced by the profit after tax of EUR 55 million. We had a dividend payout of EUR 48.8 million. And also, we had currency translation difference of approximately minus EUR 45 million. And therefore, we have a decrease in equity to EUR 1.3291 billion. This is a minus of 2.8% versus the prior year. The equity ratio, very stable with still 53.8%. The net debt at the end of the year amounted to EUR 443.5 million, leading to a gearing of 33.4%. Also, there is no significant change versus the prior year. The financing structure is very solid. So you see the EUR 443.5 million net debt, gross financial debt of EUR 573.9 million and our credit lines amounting to EUR 1 billion, due within 1 year from that, EUR 116.4 million; and due after more than 1 year, EUR 883.5 million. Our dividend proposal, which was already communicated, so the management Board of AGRANA decided to propose a dividend payout in the amount of EUR 0.85 per share for the 2020/'21 financial year. And in the last slide, you see the historical development of the dividend and earnings per share. You'll see that we come down from a higher dividend payout ratio in the last year to a dividend payout ratio of 89% in the year 2021. So this means that we pay out EUR 0.85 per share from earnings of EUR 0.96 per share, which means a dividend yield of 4.8%. Thank you very much. I hand over to Mr. Marihart.

Thank you, Mr. Büttner. So finally, some news on the outlook. I'll start with our Japanese fruit preparation slide. We reported end of March, the acquisition of the fruit preparations business of the local food producer Taiyo Kagaku Ltd. AGRANA Fruit Japan has started its production of fruit preparations on 1st of April then. AGRANA now runs 6 sites in 4 Asian countries: 3 in China, and in India, South Korea and Japan, each 1 production site. So the new fruit preparation plant is located in Yokkaichi in Southern Japan, around 100 kilometer east of Osaka. From there, it will supply customers in Japan's bakery, dairies and ice cream sector. Japan's 60,000 tonnage market for fruit preparations is constantly growing with about 2% to 3% by year. So it's important to be in this market for us. Now let me announce a personal change in the management Board of AGRANA. Mrs. Ingrid-Helen Arnold has been appointed by the Supervisory Board of AGRANA to become a member of the management Board of AGRANA for a term in office from 1st of June 2021 to 30th April of 2024, so a 3 years' period. Originating from Munich. Mrs. Arnold is Südzucker Board member and will assume responsibility for this -- for the area of internal audits in AGRANA. She will replace Mr. Thomas Kölbl in this role, who is stepping down from the management Board of AGRANA on the 31st of May to focus fully on his position as CFO of Südzucker. We thank Mr. Kölbl warmly for his 15 years serving AGRANA. Let me come to the outlook for the current business year '21, '22. Despite the continuing substantial challenges as a result of the COVID-19 pandemic, the group's EBIT is expected to increase significantly in the '21, '22 financial year, while the group revenue is projected to show moderate growth. But due to the ongoing COVID-19 crises and the associated strong volatility in all business segments, the forecast for the full year is subject to very high uncertainty. Now the outlook for the segments in detail. The Fruit segment, here, AGRANA expects for the '21/'22 financial year to bring growth in revenue and EBIT. The fruit preparations, there is a positive trend in revenues predicted with the full utilization of the capacity created and the progressive further diversification in the nondairy business. The EBIT is also expected to increase further. The fruit juice concentrates are projected with stable revenue in '21, '22, but with a significantly improved earnings situation compared to the prior year. For the Starch segment, we are careful, expecting -- by expecting a stable revenue situation. But then EBIT result significantly below the prior year level. Why? For as long as economic output remains below the pre-pandemic levels, demand is not expected to rise and price increases are unlikely to be feasible. On the cost side, the segment expects significantly higher grain prices for the 2020 crop as well as rising energy prices. So costs are higher and prices are expected not to rise. For the Sugar segment, '21-'22 should bring a continual improvement in conditions in the EU sugar market. AGRANA anticipates being able to significantly boost capacity utilization, especially at the 2 Austrian sugar factories as it has initiated various measures designed to ensure a significant increase in beet supply. On the distribution side, sugar sales volumes in the EU are expected to rise and the EU sugar prices are forecast to be stable at least or to increase. This positive trend in the EU sugar market environment, combined with the rigorous cost management, implies a very significant improvement in EBIT. And finally, I want to remind us that on the 10th of July 2021, AGRANA is listed for 30 years at the Vienna Stock Exchange. Listed was a cultural change for the young AGRANA company at that time to be transparent, and it was fueling the growth, the internationalization and the diversification of AGRANA. We thank very much to our shareholders. The total return, including dividends, is roughly 400%. And our IPO and our 2 secondary offerings fueled AGRANA with EUR 500 million. Now before I hand over to Mr. Haider for the financial calendar, I want to say goodbye. This was my last presentation to you, and I will retire end of the month. So I wish my colleagues and my successor good luck and a successful future. Thank you very much. And now I hand over to Mr. Haider for the financial calendar.

Thank you, Mr. Marihart. Before we go on with the Q&A session, I just want to remind you that our Annual General Meeting for 2021 will take place on the 29th of June. The official invitation for this important event will be published end of May. And now the management Board is glad to answer your question.

[Operator Instructions] The first question is from the line of Vladimira Urbankova from Erste Bank.

I would have a few questions, if possible. My first question would be related to your guidance. And I would be interested if you could comment on what are the key commodity prices assumptions for your guidance, in particular, prices of sugar and ethanol. Next question would be also related to the Sugar segment. And I'm just wondering if you expect any impact of the current pandemic situation in India on the sugar market conditions? Then again to the Sugar segment, you say that you expect some capacity utilization improvement. What were the idle costs in the sugar segment? And do you still expect some idle cost to continue in '21, '22? And last but not least, what do you expect as effective tax rate in '21, '22?

Thank you very much for the question concerning the development of the ethanol and sugar prices as it was mentioned. Concerning sugar price, we expect due to the balance demand and supply within the European Union, also the situation in the world market, the sugar prices will be stable at least. We expect it will go up, mainly till the end of the sugar marketing year, but also it depends how the harvest situation will be at the end of September in the western part of European Union. To sum it up, we expect stable prices which will go up partly. Concerning ethanol, it's a very volatile market, as I said and I mentioned. And our experience through the last 2 years, we expect [ fuel ] now in summertime that -- and the lockdowns will be reduced, and all those impacts will come in, that we will have higher demand and also higher prices as we have for the time being. But even for the time being, the prices, from my perspective, are very good. And India, you mentioned India. India is an issue. Of course, the news showed us that sugar production will go up. And sugar production within India is a very political issue because a lot of people, of the 1.2 billion people of India are living outside in the rural areas and they're fortunate that they have the industry keep them there and have also job opportunities, and therefore, the government is always supporting the sugar marketing policy. And the COVID situation, I think, is the main issue in the cities. It's less in rural areas. But of course, it will have an impact, too. But to sum it up, I expect that the Indian sugar policy will be strongly in favor of the Indian sugar policy, and therefore, the production will go up.

The next question was about the idle costs in the financial year 2021. So the idle cost amounted to minus EUR 13.7 million, mainly driven by the lower production volumes in Austria. For the business year '21, 22, we are not sure yet. So this really depends on the weather conditions in the summer and the volumes that will be harvested and processed. So what we already know is that we lost some acreage in the Eastern European countries during the seeding period. So currently, we expect from that idle costs took around EUR 2 million. But hopefully, this will not increase further, but it really depends on the further developments in Austria. And the tax rate that we expect for '21, '22, I would say it should be between 20% and 25%. So kind of normal year.

[Operator Instructions] Next question is from the line of Bernd Maurer from Raiffeisen Bank.

Some questions from my side, please. First, on -- also on your guidance, which I rate for our communication is encouraging and positive. And for clarification, adjusting reported EBIT for the one-off of around about EUR 11 million, we have based adjusted and clean and the EBIT line at around EUR 90 million. Would you guide with AGRANA terminology also a significant EBIT increase for the current business year, basically adjusted figure as a base. This would be question number one. Question number two, Q4, operating results rather weak with EBIT only in single digits. Can you point out here what especially harmed the fourth quarter development from the operating side, in addition to what you highlighted in the last conference call from Q1 to 3? So what was additionally burdening the operating performance in Q4? And yes, third question, if it isn't already made, in the last call since the release, you stated that in the fruit juice concentrate business, customers contracted with some prudence. How did this dynamic develop in the last weeks and months? Did you see an uptick here.

Yes. Thank you very much for the questions. So I will answer the first question concerning the guidance, yes. So if we do not consider in the year 2021 the exceptional items of around EUR 12 million, then this would increase our EBIT to around EUR 90 million. And if we start from this basis, we still expect, by our definition, a significant improvement of our EBIT, which means more than 10%. So what was your second question?

Operating insights.

Yes. 4Q operating performance, the main burdening sectors are just single-digit EBIT was rather weak. What came from current operating performance in addition in the fourth quarter to the 1 to 3Q development?

Yes. If I got it right, I think you asked concerning the future the next 6 and 9 months. We expect from the sales side, growing turnover and, of course, growing prices and therefore, growing turnover, mainly in the starch business. We expect that these higher raw material prices from the springtime will -- we are able -- we were able, we are able and we'll be able to pass this over, and therefore, the prices will go up. And therefore, we expect an improvement of turnover and the margin situation, both and also on the fruit prep business, too. And on the other side, we expect in the juice concentrate business due to the situation and the raw material, that we expect no cost damages like in the last 2 years. Therefore, we expect a higher volume, and therefore, higher turnover also due in the juice business due to higher production volumes.

Yes. And coming back to the weak performance of the Q4 results in 2021. So this was already, I think, again, driven by this corona pandemic. So we saw a decrease in the ethanol prices, which was not expected in that range. We also had problems in the juice business, where we saw that we had a bad harvest, and therefore, idle costs in the fruit juice business of around EUR 4 million, which impacted Q4 negatively. We also had lower sales volumes also due to the corona pandemic in Q4 in the fruit juice business. The food preparations business was somehow stable, I would say. And yes, sugar also influenced by the idle cost. So therefore, we had overall the negative development in Q4, and corona, I think, was also a contributor to that.

There are no more questions at this time, and I would like to turn the call back to Hannes Haider for any closing comments. Please go ahead.

Yes. Then thanks for your questions. Of course, you can also contact me later on. And just as a reminder, we also published our annual report in this morning. So you can, of course, also read through the financial statements there. Thank you for your interest and participation in our call. Have a nice day, and goodbye.

Thank you. Bye.

Thank you. Bye.