Südzucker AG (SZU) Earnings Call Transcript & Summary

Thank you, and good afternoon, ladies and gentlemen. We are all welcoming you, and we thank you for participation in today's conference call of Südzucker AG. As mentioned in the invitation, the underlying presentation has been published this afternoon on our homepage. Mr. Pörksen and Mr. Kolbl will make reference to the respective pages of this presentation. Today, we released a report for the financial year ending 28th of February 2022. We're going to explain the highlights of the year, and give details about the guidance for the current financial year 2022, 2023. We're happy to take your questions following the presentation of our CEO and CFO. A recording of this call will be available on our homepage for those who are not able to participate. Now I would like to hand over to Pörksen. Please go ahead, sir.

Thank you, Nikolai, and good day, good afternoon, ladies and gentlemen. On behalf of the entire executive team, I am pleased to welcome you to this year analyst and investors conference. For reasons of our protection, we have once again decided to hold it virtually. Let's start by taking a brief look back at the past fiscal year on Page 3. It was an interesting and an exciting, but unfortunately, also another pandemic year. And just before it ended, just that the corona situation was beginning to ease, the attack of Ukraine dashed any hope of the situation returning to normal. The ongoing Ukraine was more presence -- that presents us with challenges, and will also have an impact on the rest of the current fiscal year. But I will come back to that a little later, more in detail. Over the past 12 months, we have further developed the group Strategy 2026 PLUS, which we first presented to you at last year's conference, and started implementing it. It will give you a detailed update on the progress made later. At this point, I would like to emphasize, in particular, that we, as the Management Board, are very proud on what we all achieve together, especially through the high level of commitment shown by our employees. During the corona pandemic, in specific. At every stage of this pandemic, we were able to fulfill our obligations as a producer of food, and supply our customers and, therefore, consumers with our products. We are aware that there have been, and continue to be, high level of stress individually as a result of corona. Our employees have managed their professional and private challenges extraordinary well. We would, therefore, like to take this opportunity as we did last year to express our sincere thanks to everyone commitment in this difficult situation. In the meantime, the effect of this pandemic are increasingly losing the impact both on our lives and on the group's operating business. Nevertheless, the food sales are still being felt. But now on Page 5 to the topic that was kept us all on tender hooks since February 2022, the war in Ukraine. The attack on Ukraine has brought the war back to Europe. On behalf of the entire Executive Board team, I would like to clearly emphasize here that Südzucker expressly condemned this belligerent aggression. As the company, Südzucker stands for serenity, diversity, respect and human rights and is committed to the United Nations charter. Within the scope of possibilities, we also assume responsibility and contribute with numerous measures to improving the humanitarian situation on the ground, and in many European countries where Ukrainian refugees are seeking protection and refuge. Also, Südzucker's Group overall direct exposure is low, the Ukraine war with all its direct and indirect effects represent a new and very serious challenge. Firstly, directly because AGRANA, specifically in the fruit segment, operates locations in both Ukraine and Russia and secondly, indirectly through the drastic impact on example, energy and raw material prices and their availability. For us, one of the most urgent task at the moment is to monitor the situation very closely, to be prepared for the various scenarios, to protect our employees and to navigate the company through this crisis. Let me make it clear at this point that this year's forecast had to be determined under considerable uncertainty. We have based our forecast on the assumptions that the war will remain temporary and regionally limited, that energy and raw material supplies will be secured, and that it will be possible to pass on the increased cost in new customers' contracts. Mr. Kolbl will later explain the group forecast and the figures for the fiscal year 2021, 2022 in detail. But in addition, it will also show our medium-term growth with an ambition level to achieve an EBITDA of more than EUR 1 billion. Let us, therefore, take just a brief look at the figures of fiscal year 2021, 2022 on Page 7. At the group level, we posted a significant increased revenue to EUR 7.6 billion. While revenues in the special products segment were slightly higher than last year, they rose moderately in the fruit segment and significantly in the sugar crop and CropEnergies and starch segments. I would particularly like to point out that we were able to continue the turnaround in the sugar segment, and achieved an improvement in earnings of more than EUR 100 million. As a result of this, but also due to the improvements in the CropEnergies and starch segments, consolidated operating profit rose significantly to EUR 332 million. As already mentioned, Mr. Kolbl will go into the financial details later on. Let's move to the overview of the individual segments. I would like to start on Page 10 with the Sugar segment. In 2019, we adopted a restructuring plan with the aim to focus on the European sugar market. This made it necessary to adjust our factory and administrative structures. On the one hand, this enabled us to reduce the structural surplus in the EU sugar market. On the other hand, our measures were aimed to reducing our costs. We have now successfully implemented this restructuring plan. On its basis, we have also added further measures that are now being implemented and expanded on an ongoing basis. The measures mentioned on our group Strategy 2026 PLUS, built on each other a logical next step in the realignment was, therefore, also the organizational adjustment of the sugar division, which we carried out in fiscal year 2021, 2022. This has made us more agile and faster, which is a major advantage in what continues to be a very volatile sugar market, even at the beginning of the corona pandemic, the sugar market environment in the global market and in the EU was positive. However, the lockdown measures, some of which were very extensive, temporarily undermined this development. As a result, the expected price increase have been delayed. They have now only gradually materialized from summer 2021, with an acceleration of this upward trend being observed recently. Combined with a good harvest in fall 2021, we were already able to benefit from this to some extent in the past fiscal year. This trend should continue in 2022, 2023, and contribute to the expected further improvement in earnings. Let's also take a look at the development of our specialty segment. I would like to start on Page 12 with the BENEO division. BENEO primarily produces functional ingredients, has a global presence, and is therefore also a distribution partner for other Südzucker Group companies. This creates an excellent starting position for further synergies within the group. The trend towards healthy nutrition continued 2021/2022. BENEO serves it, for example, with sugary based dietary fiber, texturizing rice ingredients and vegetable proteins. These ingredients, which are derived from natural raw materials are used in a wide variety of foods, such as dairy product, cereal, baked goods and in baby food and spreads. The trend towards plant-based nutrition is providing additional impetus for BENEO, more and more consumers want to eat flexitarian, vegetarian or even vegan diet. Another significant growth area is enrichment of pet food dysfunctional ingredients. To follow this trend, we have made capacity expansion at almost all our sites. I will discuss investments in the segment, in the strategy update. On Page 13, I would now like to present the business development in the Freiberger division. During the lockdown phases at the beginning of the corona pandemic, demand for convenience products such as frozen pizza was above average. But subsequently, also had a very positive effect on fiscal year 2020 to 2021. In the past fiscal year 2021, 2022, this effect also weakened with the corona pandemic, which is why declines in sales volumes were to be expected. However, these temporary distortions do not change the fundamentally continuing growth trend in this market. Freiberger has, therefore, invested in further capacity expansion as planned. In addition, Freiberger improved the product mix, particularly in the specialties area, and pressed ahead with the establishment of new types of distribution partnerships begun in 2021 and 2022, and expanded regionally to France and the U.K. Let us now turn to Page 14 to the smallest unit within the Specialties segment, PortionPack Europe. PortionPack is focused on the so-called Horeca sector, which includes hotels, restaurants and catering. Because the sector was hit hardest by the corona pandemic, PortionPack continue to operate in a difficult environment in the past financial year. Although PortionPack was able to record a significant increase in sales compared to the first corona year, it was not yet possible to completely close the gap, the pre-corona period. Since the start of the corona pandemic, PortionPack has therefore placed increased emphasis on cost management. In addition, the portfolio expansion and the development of new customer group were accelerated. Those measures were continued in fiscal year 2021, 2022. This also includes the re-bundling of production capacities at the Telford site in the U.K. Let's move on to Page 16, and the CropEnergies segment. As the leading European producer of renewable ethanol for the fuel sector, CropEnergies makes a significant contribution to greenhouse gas savings and to road transports. Our subsidiary products portfolio also includes the production of neutral alcohol, protein in food and animal feed products, and liquid CO2. Since the beginning of the pandemic, CropEnergies has also used its neutral alcohol production for the disinfection market, thus making an important contribution to health protection. In society's perception first, the corona pandemic, and now additionally, the Ukraine war, have overshadowed many other issues. Nevertheless, the fight to limit global warming also remains an urgent social goal. Here, the use of ethanol in the transport sector is already making an important contribution to more climate friendly mobility while at the same time, providing high-quality fruit and animal feed. The specific development of CropEnergies has been, and continues to be, strongly influenced by mobility behavior. Within the last 12 months, a normalization can be observed despite the significant increase in cost of energies has succeeded in improving on the already excellent results of the previous year, and achieving a new record level. In addition, CropEnergies is looking into the construction of a plant to produce renewable ethyl acetate, a basic material for the chemical industry. This will not only significantly further diversify the CropEnergies portfolio, but also contribute to the achievement of our goal within the group Strategy 2026 PLUS. We continue with the starch segment on Page 18. The starch's saccharification products, ethanol bioproducts, products that produced from various raw materials are used for various technical applications in both the food and animal sectors. The corona pandemic also had an impact on the demand situation for starch products in the past fiscal year. Overall, sales volumes developed positively, although trends in the subsectors were heterogeneous. Demand for corn starch, saccharification products, animal feed in the specialty and organic sectors was encouraging. Sales volumes of native and modified starches in the food sector were stable. We conclude the segment overview with a look at the fruit segment on Page 20. The Ukraine were directly affects the fruit segment the most as AGRANA has production facilities in both Ukraine and Russia. The outbreak of war shortly before the end of the financial year led to mandatory impairment test as part of the 2021, 2022 financial statements. The necessary adjustments were made. In addition, the ongoing operating business is also affected. The charges are included in our forecast for fiscal year 2022, 2023. Let's now turn to the political framework conditions that are important for our business model, on Page 2022 (sic) [ 22 ]. This starts with the availability of the agricultural raw materials we process. The basic prerequisite for this is a well-functioning and competitive agriculture sector close to our sites. In the context that EU's Green Deal will set an important course in the coming years. For example, with regards to plans to reduce the use of crop protection products and fertilizers. In principle, we welcome measures for even greater sustainability in agriculture. However, it is important that the adjustments are practical, and can be implemented. Another issue is the extensification of agriculture that has been decided on, which entails the elimination of considerable areas for the cultivation of crops. Against the backdrop of current development due to the Ukraine war, reassessment is necessary here at least temporarily. In addition to agriculture policy, we are also closely following developments in the food policy. Here, the European Food Safety Authority, EFSA, published its scientific opinion on the maximum permitted intake of sugar in February this year. The core statement is that based on the current data situation, it is not possible to set the scientifically sound maximum level. Nevertheless, the authority advocates ingesting a little sugar -- as little sugar as possible. In our view, it is not [ expedient ] for an authority to issue recommendations without the necessary scientific basis. Also under discussion at European level are the introduction of nutrient profiles and the setting of maximum limits for individual ingredients in foods. We are very critical of both of these. In our view, it is also neither the right approach to introduce excise taxes for individual foods nor to have the state control, how much taste and enjoyment food may contain. Such taxes, as experienced in various countries shown ultimately do not lead to the desired goal of weight reduction in the population. We continue to educate that nutritional policy measures should really only be taken on the basis of a high level of scientific certainty. This also applies to the new version of the strategy for reducing fat, salt and sugar in convenience food, which is expected to be published by the German Federal Ministry of Food and Agriculture at the end of 2022. Ladies and gentlemen, I would now like to give you an update on the group Strategy 2026 PLUS, starting on Page 24, and the following pages. Since its presentation in May 2021, we have continued to work systematically on this. Today, I will concentrate on 4 key areas, on which we are currently focusing our intention. These 4 lighthouses are part of a whole series of focus initiatives that we identified as strategic topics in the past fiscal year. My presentation will focus in particular on how we have mapped out the relevant playing field for us, and how against this background, the concrete implementation of our plant -- plans is taking place. I also highlight the project, we have already decided on the achieve of our goal of further development Südzucker Group from a large-scale processor of agricultural raw materials into a leading partner of plant-based solutions for livable, healthy and sustainable world. Let's start on Page 25, where the main topic of projects. It is our goal to shape Südzucker into a fully integrated company for plant-based foods along the entire value chain. For example, from raw materials through research, production, marketing and distribution to the consumer. This integration can be achieved through investments, organic growth or strategic partnerships. We have derived our concrete approach for the main topics of proteins along this frame. We focus primarily on the market segment of plant-based need and fish substitutes. In terms of raw materials, our focus is on legumes such as field beans or peas. For their cultivation, we are able to involve our existing pharma network, and are thus able to fulfill our claim of sustainable and regionality. We see our main target markets for our protein products in Europe, and in the future also in North America. On Page 26, I would like to illustrate what has already been implemented. Südzucker has been -- has a protein business through its BENEO subsidiary, which provides us with know-how and the basis for further developing this business area. This existing business must be expanded through new product developments and further developed regionality. In addition, we will make greater use of the opportunities for corporations already mentioned. We expect to gain further impetus for possible investments by joining the EIT Food Accelerator program for the European Institute of Innovation and Technology, which gives us insight into the access of innovative founders and startups. We can already present you with the first concrete measures. We invested in the construction of a production plant of protein concentrate from field beans for the food and feed industry in [ Aschach ] and start regional cultivation of field beams as raw material. We also acquired the Dutch company, Meatless. Meatless already successfully and profitably produces texture rates from vegetable flowers for use as fish and meat substitutes. Further details can be found in the press release on the transaction, which was also published today. Overall, we expected -- we expect, sorry, that our total investment of just under EUR 100 million on the potential available in Südzucker Group will significantly increase the sales of our entire protein business in the medium term. Further details can be found in the press release on the transaction, which was also published today. Let us now turn to Page 27, where we focus on bio-based chemicals. Here too, we are well on track with promising projects. We already have extensive expertise within the carbohydrates platform in sucrose, starches, ethanol and CO2. This gives us an excellent starting point to further develop existing technologies, to develop and use new technologies ourselves or to acquire them. Bio-based chemicals are obtained from renewable raw materials. For the production, we use the carbon that is bound in CO2 in plant, or is generated in our production processes, for example, in the ethanol production. At the same time, we thus ensure further and longer-term sequestration of the greenhouse gas, CO2. One of the chemical industry's paths sustainably -- to sustainability is that of de-fossilization, which has already been initiated in transport and energy generation. We, therefore, see a growing potential in this technology as well. Page 28 shows our progress in this business segment. As the processor of renewable raw materials, such as beet, chicory, rice, corn, potatoes and wheat, Südzucker sits at the raw material source and has a wide selection of renewable carbon sources. Due to existing facilities and technical expertise, Südzucker has an outstanding starting base. As in the protein area, we can already present the first forward-looking project here. CropEnergies is evaluating investing in the construction of a production plant to manufacture renewable ethyl acetate for the chemical industry on the basis of ethanol. Renewable, for example, green hydrogen is produced as a by-product. The potential investment volume will amount to approximately EUR 80 million to EUR 100 million over the next few years. On Page 29, we now come to the update on digitalization, and our digitalization strategy. A year ago, we established the topic of digitalization and IT directly in the Executive Board with its own department because we see digitization as a decisive competitive differentiator. An important element here is the broad knowledge about the opportunities and requirements of digital business at Südzucker. In addition to teaching digital skills, it is also about using information technology as an opportunity for growth and the driving force for transformation. In partnership with our division and functions, this means supporting business models digitally. In terms of implementation, however, we are focusing, first and foremost, on building the technological foundation. Here, we are increasingly relying on agile methods and building our capabilities in the areas of data and processing and artificial intelligence. The strategic framework of our work in the areas of digitalization and IT is based on 3 pillars. Our first focus area is modernization, and building the foundation. We see opportunities here in the use of group-wide solutions, and would like to fully exploit cross-divisional synergies. One CRM project marked the beginning of this and laid the foundation for digitizing our sales and marketing processes on a uniform technological base. The platform has been available to Südzucker Group since the beginning of the year. Sales activities can be evaluated across divisions, and cross-selling potential can be optimally supported. Another core aspect where we are striving for a group-wide solution is protection against cyberattacks. This topic is becoming increasingly explosive which is why we are also pooling our expertise in this area, and have already increased the number of staff in the cyber team. In addition, we are investing in the digitization of our plants. Our Internet-of-Things initiative pursues the concept of the network factory, based on the overarching IT infrastructure, important information from production steps is collected and production process is optimized. Creating added value through innovation is our second focus area. Our beet2Go mobile app which we developed some time ago got off to a good start, and we have consistently developed it further since then. The app gives beet growth in digital overview and digitizes the end-to-end process in the truest sense of the world from contract to yield. With the [ planet beet ] project, we are setting another important software course. This comprehensive digital concept aim to link back our business with food production on the basis of new technologies, thus laying the foundation for new digital business models in a changing agriculture environment. Our third focus area is to create efficient process that are lean, fast and simple. These will be process automation and application for day-to-day work, such as spare parts management, maintenance or predictive maintenance. All in all, we are in the process of expanding the group data focus many times over. We see the efficient use of data as a fundamental prerequisite for designing intelligent processes and digital services. Let us now turn to the fourth focus area on Page 30, a topic that concerns us all, sustainability. Sustainability has always been a cornerstone of Südzucker's DNA and is, therefore, a logical addition focus area within our 2026 PLUS strategy. The projects and goals mentioned at this point last year were all successfully implemented and form a very good basis for the planned next steps. First, in the past fiscal year, we once again significantly upgraded the area of sustainability with the realignment of the corporate function sustainability and its firm establishment in the company. The next step was to develop a group-wide sustainability strategy in the course of which the i -- 8 topic just shown were identified. For 3 of the topics, emission, occupational safety and diversity, we have already developed targets and defined measures. In this fiscal year, we will develop the content of the remaining focus areas and decide on measures to implement them. In February 2022, we also joined the Science-Based Targets Initiative, SBTI. Another major topic this year will, therefore, be the determination of our climate targets by SBTI in terms of our plans to reduce CO2 emission and achieve climate neutrality. I would like to take this opportunity to thank you very much for your attention, and hand over to my colleague on the Executive Board, Thomas Kolbl.

Thank you, Niels. Ladies and gentlemen, just from my side, a warm welcome to all of you. Let me save enough time for the following Q&A session. I'll refer only to selected page of this presentation, but I will guide you through marking the respective page number I'm talking about. Let me start with the executive summary on Page 32. As you can see on this slide, we have reached all of our communicated targets for business year '21, '22 with strong increases in revenues and earnings against last fiscal year, 2021. This is all the more important as we have not adjusted the target since the beginning of the fiscal year, has merely tightened the origin operating growth range somewhat towards the end of the business. Let's move on to Page 33. Cash flow increased in parallel to the earnings development. Net financial debt was reduced by about EUR 50 million, and the equity ratio was capped at a solid level of 44%. Let's move on to Page 34. Business year 2021 marked expected turning point regarding the financial ratios. This journey was continued in the last fiscal '21, '22. EBITDA has been significantly further improved to around EUR 700 million, while CapEx spending was dilutive. As a result, structural cash flow was confirmed at the level strongly above EUR 300 million. Again, the overall improvement was led by segment sugar, a very strong positive earnings delta of more than EUR 100 million, supported by earnings improvements in segments CropEnergies and starch. Our nonsugar activities showed again enormous revisions in a strongly challenging corona pandemic and cost inflation environment, confirming the high EBITDA level of around EUR 560 million. All this has led to both rating agencies, improving their rating outlook from negative to stable in '21, '22. We're also happy with our solid and very sound liquidity and debt maturity profile. Let's move on to Page 35, and the outlook for fiscal '22, '23. Also, in fiscal '22, '23, we continue to build on a strong profitable months for the business as reliable [ fundamentals ]. In addition to this, segment sugar will continue its turnaround with an expected significant increase in operating result. This opens up the possibility for the group operating result to be higher against fiscal '21, '22. The expected earnings range is EUR 300 million to EUR 400 million. Certainly, the development of the Ukraine war will play an important role in this context as Niels described. Structural cash flow should develop positively in parallel despite the budgeted growth investments. As of now, ladies and gentlemen, despite an environment strongly characterized by cost inflation and a reinforcement of the already high volatility, we record a very good start to the new business year. Let's move on to Page 37, and the segmental overview for fiscal year '21, '22. As already mentioned, the turnaround in segment sugar was continued, helped by higher sugar prices from October '21 despite additional pressure from cost inflation. Our nonsugar activities have confirmed the already achieved high earnings level, more details later segment-by-segment. Let's move on to Page 38, and the most notable items in the income statement and balance sheet. The result from restructuring and special items was mainly affected by the Ukrainian war due to impairment in connection with the plant location in the fruit segment. The equity result reported by the sugar and starch segments related mainly to charges from the investment in ED&F Man. The losses accumulated in fiscal '21, '22 completely consumed the carrying amount of the investment in ED&F Man. As for fiscal '22, '23, ED&F Man will be recognized as another investment with a current amount of EUR 0. In addition, the joint venture, Beta Pura, suffered losses due to the Ukrainian conflict. Because of the current uncertainties surrounding its future business development, the remaining investment carrying amount of the equity consolidated company was also written down in full. Both burdens restructuring result as well as the equity result with together EUR 100 million were not cash flow [ level ]. Let's take the next stop on Page 39. The financial result totaled minus EUR 37 million, including net interest result of minus EUR 30 million, and result from other financing activities of minus EUR 7 million. The foreign exchange result included in other financial results improved significantly. In addition, the previous year's other financial results reflected the expense from the complete write-down of minority interest in a French sugar factory subsequently sold in the last fiscal 2021. The taxes paid related mainly to the taxation of the positive result contribution of the non-sugar segment, where deferred taxes were not capitalized for the losses in the sugar segment. Let's continue on Page 40. Cash flow per share rose significantly. Reported earnings per share reached EUR 0.32, and underlying earnings per share came in close to EUR 0.80. Dividend proposal rose from EUR 0.20 to EUR 0.40 per share. Let's continue on Page 50, starting the segmental development with special products. Segment special products revenues grew by 4%, mainly due to an overall positive sales revenue development. Operating results fell substantially compared to the previous year. The negative impact of rising raw materials, energy, logistics and other costs could not be covered by higher sales revenues as costs being passed on to customers only in a part, and the time lag is reflected in the operating margin. Let's continue on Page 51 with the outlook for special products. We expect significantly higher revenues driven in particular by higher sales revenues. We do not expect to be able to offset the jump in raw material and energy cost to higher sales revenue in the first half of fiscal '22, '23. This will have to wait until the second half of the fiscal year. Overall, we therefore expect the full '22, '23 fiscal year operating results to decline significantly. Let's continue on Page 53, with CropEnergies. Revenues in the CropEnergies segment rose significantly driven by both substantially higher sales revenues and increased volumes. Operating result was, therefore, once again, higher than last year's strong figures, reaching a record of EUR 127 million. Higher volumes and substantially increased sales revenues more than offset the significant rise in raw material and energy costs. Let's continue on Page 54, with the outlook of -- with the price development in the ethanol markets. On this graph on Page 44 (sic) [ Page 54 ], we illustrate 2 things. First, the continuous positive underlying upward trend in ethanol pricing over time; and second, the increase in price volatility in the corona pandemic and cost inflation environment. Mobility restrictions had an impact mainly in the first corona year. Now we see a good ethanol price level, but we've also faced elevated grain prices. Now let's continue on Page 55 of the CropEnergies outlook for '22, '23. As said, the mobility situation is expected to normalize in fiscal '22, '23, in view of the expected weakening of the corona pandemic. However, at the same time, the impact of the Ukraine war is difficult to assess. We are assuming that energy and raw materials for ethanol production will continue to be available for the full year. We further assume that the member states will largely comply with biofuel blending rules, which will lead to continued high-capacity utilization. We also expect that higher energy and raw material costs will continue to be offset by higher selling prices for ethanol, food and animal feed. Accordingly, we expect another strong year revenues to range between EUR 1.3 billion and EUR 1.4 billion, and an operating result ranging between EUR 105 million and EUR 155 million. Let's continue on Page 57, with segment starch. The starch segment was able to significantly boost revenues to EUR 940 million driven by raising sales revenues and more than satisfactory volume growth. The higher volume and sales revenues drove the operating result up sharply for the reporting period to EUR 57 million. Substantially higher raw material and energy costs were more than offset by sales revenue and volume growth. Rising ethanol prices, in particular, had a positive impact, especially in the second half of the fiscal year. Let's continue on Page 58 with the outlook of segment starch. We expect the starch segment to post revenue significantly above the previous year. However, the anticipated significantly higher sales revenues will not be sufficient to completely offset sharply higher raw material and energy costs. We, therefore, anticipate the operating results to decline moderately. Let's continue with segment food on Page 60. Group segment revenue rose moderately from the previous year. This was due to the increase in selling price for fruit preparation as well as higher sales volumes and revenues for fruit juice concentrates. The operating result was slightly below last year. In the fruit preparations division, higher sales revenues, we are unable to fully compensate for higher costs. The fruit juice concentrate division, both sales volumes and margins were up, resulting overall in a positive earnings contribution. Let's continue on Page 61 with the outlook for '22, '23. We are expecting the fruit segment revenues to raise moderately, and that both divisions will contribute. Even so, we expect the fruit juice concentrates additional results to improve. The immediate impact of the production plants in Ukraine and Russia will likely cause the fruit segment's operating result to drop significantly. Let's continue with segment sugar on Page 64. Revenues in the sugar segment increased significantly due to both higher sugar sales revenues and higher volumes. The price increase achieved in the past 2021 sugar marketing year took effect at the beginning of fiscal '21, '22. And since October '21, the additional price increases at the beginning of the new '21, '22 sugar marketing year. The sugar segment was able to cut its operating loss substantially to minus EUR 21 million in '21, '22. At the beginning of the fiscal year, the higher sugar sales revenues and sales volume were offset in particular by higher production costs from 2020 campaign due to raw material prices as well as in some cases, sharp cost increases for energy, packaging materials and raw materials since the third quarter. The substantial cost increases in sales volumes at the end of the fiscal year that were higher than in the previous year, but below expectation meant that despite improved capacity utilization in the 2021 campaign, the target of an operating profit was, at the end, not achieved. Let's continue on Page 65. A revisit of our view on the global sugar market. In its latest update in March 2022, IHS Markit has confirmed its deficit outlook for running sugar market near '21, '22 with 1.5 million tonnes, which confirms another deficit year. The stock-to-use ratio is expected to drop from 39% to 38%. For the next sugar marketing year '22, '23, the forecast shows the almost balanced market with a stable stock-to-use ratio down to 38%. This confirms a positive fundamental market environment for the -- for at least the next 12 months. Let's have a look at the European sugar market environment on Page 66. EU has changed into a net importer status since campaign 2018, which has led to already 3 steps of price increase in the last 3 sugar marketing year. Looking at the significant further price increase in the last 6 months, we monitor several reasons. First, the market price as the fundamental pricing starting point has increased. Second, we expect another year of decreasing EU acreage. And third, overall cost inflation leads to higher procurement price for the whole industry. In this environment, close to 100% of our volume of the campaign 2022 is up for negotiation. Let's take a look at the sugar outlook for '22, '23 on Page 67. As said, another world market deficit is expected for the current '21, '22 sugar marketing year, resulting in a further reduction in inventories. This world sugar production consumption balance in the '22, '23 sugar marketing year and inventories remaining at a low level. Clearly, the world market environment should remain positive. In Europe, the higher price of alternative feed crops, led to a further reduction in cultivation. New sugar production is expected to be less than last year. Südzucker expects a positive market environment in which it should be enabled to pass on sharply high raw material and energy costs to the market by significantly rising (sic) [raising] prices for sugar effective October 2022. With production and sales volumes slightly lower, we anticipate a significant increase in sales revenues to rise sharply on average over the year. We expect the sugar segment's operating result to range between EUR 0 and EUR 100 million. For the first half of '22, '23, we expect a roughly balanced result as higher prices since October '21 will be offset, among other things, by higher raw material and energy costs. Starting October '22, we expect the already significantly higher spot prices to enable us to conclude substantially improved customer contracts. Let me now summarize the overall outlook in the presentation on the following pages, starting with Page 69. Ukraine war that started at the beginning of fiscal '22, '23 and continues to these days, which further reinforce the already existing high volatility in the target markets and price increase in the procurement market. The resulting economic and financial ramifications and duration of this temporary exceptional situation on top of the corona pandemic are very difficult to assess. There are also further risks related to the corona pandemic. Our outlook assumes that Ukraine war will be temporary and remain regionally contained, that physical supplies of energy and raw material will be guaranteed and that the target and procurement markets will at least partly return to more normal conditions over the course of fiscal '22, '23. In this context, the expected pass-through of significantly higher prices, particularly in the raw materials and energy sector into new customer contracts will be of decisive importance. Ladies and gentlemen, having said that, let me now move on with the concrete figures. Group revenues should come in at EUR 8.7 billion to EUR 9.1 billion, and operating result in a range between EUR 300 million and EUR 400 million. Let me also repeat that we have seen a promising start into business year '22, '23, which we already shared with the markets. Segment sugar should see a slightly positive H1 and an increase in H2 operating performance. On a full year basis, we expect an earnings range between EUR 0 million and EUR 100 million. Segment Special Products operating result is expected to come in significantly below the BENEO level. Segment Group Energy's operating result is expected to range between EUR 105 million and EUR 155 million, that means a confirmation of the strong last year results. Segment starch see a moderate earnings decrease and segment fruit should be burdened by the charges from the Ukraine war and therefore report significantly lower earnings. Let me continue with Page 70. Group EBITDA should follow the positive operating result development. CapEx is expected to stay on a modest level. Net financial debt is expected to be above previous year level, reflecting higher working capital needs in light of the inflationary environment. Let me summarize the overall outlook and the presentation of reference to Pages 73 and 74. As you can see on Page 73, the diversified correction EBITDA and cash flow increases our scope for action going forward. Despite the expected increase in CapEx, there is still headroom to act in the upcoming years. Let me finish the presentation with Slide 74. Ladies and gentlemen, to wrap up our presentation, I would like to share with you our ambition to lead Südzucker back to creating value. We want to continue growing with the business areas of our company, Niels described it very clearly. However, our goal must be to achieve a return on capital employed that substantially exceeds the cost of capital of around 7%. We have, therefore, already covered part of the distance. We want to show the direction and clarify our aspiration, which is already partly backed up by [ industry ] measures, but also still needs to be fleshed out in terms of additional content further developed and elaborated. For this reason, it does not make sense to break down the overall goal in 2 individual parts. This is now being done instead of our strategy implementation. In the areas of proteins and bio-based chemicals, we have shown new examples of where we stand, the draft we are pursuing that we are already in the concrete implementation stage but also that there is still some way to go to achieve our level of ambition. Finally, I would like to summarize my presentation with four statements. First, turnaround sugar is due to continue driving group earnings improvement; second, our diversified portfolio will be able to help managing the additional challenges crossed by the Ukraine war; third, structural cash flow opens up new opportunities to shape Südzucker future; fourth, we are not hiding to share our ambitions with you and to realize them stepper step in the next years despite today's challenging -- challenges and those still ahead of us. Thank you all for your attention, and I give back to Nikolai.

Thank you, gentlemen. We would now like to open up the floor for your questions and hand back to the operator.

[Operator Instructions] First question is from the line of Oliver Schwarz from Warburg Research.

I've got several, but I will limit myself to three for my first try, and I will ask them one by one, so we can get a detailed discussion going here. Firstly, I was surprised by the lack of comments on the plan of German Environmental Minister Steffi Lemke, who fleshed out that she wanted to reduce the admixture of biofuels in gasoline and in diesel and phase them out completely by 2030. Your subsidiary CropEnergies in the reporting yesterday were at least in the press release, quite vocal in regard what they think about that. And I guess they take the threat their business model quite seriously. So I was just wondering why you did not comment on that topic at all. Is that a risk that is not worth discussing in your view because it is unlikely to become reality? Or do you think the impact of such a change in regulation would be so minimal that the impact on Südzucker Group would be eligible or whatever? Is it that prompted you not to comment on those plans? That would be my first question.

Oliver, thanks for this opening. First of all, we had yesterday the CropEnergies call and in this call, you were on the call, I think there was a long and good discussion about. And I think that the CropEnergies processing to that was very clear. Therefore, we only described this topic in our presentation now to the, let me say, to the core, to the financial economics we've been behind that. Clearly, there is a discussion and especially in Germany, we have this discussion. And -- but clearly, there are several, let me say, views you can have on this topic and one view's the view of Ms. Lemke and clearly, as we also are aware, so far, there is no, let me say, unified position within the German government. And so let me say there's a long way to come to here to imposition then it is open, what will be the outcome, which may be a confirmation due to the decisions the government took from 1.5 year ago or maybe a slightly decrease of the cap. And so far, what we see, what we know, this is really today a German discussion, and it is not a European-wide discussion. And CropEnergies is, let me say, a European rice producer, and has clearly a strong foothold when we would measure it with turnover. We talk about a share of 25% in Germany from CropEnergies' perspective alone. So that gives you, let me say, a view on the risk position for CropEnergies, if there would be a reduction from the crop -- by 1% or 2%, this is limited, and it is also limited from group perspective. But clearly, this is a risk -- and the -- let me say, the guidance of CropEnergies for the current fiscal '22, '23, does not assume that there will be a change in the regulation.

Okay. Very clear. Secondly, I'd like to discuss a bit if you don't mind, the Südzucker outlook for the current fiscal year. Looking at the segmental split, obviously, specialty products, starch, fruit, all expected down year-on-year, CropEnergies at least at the midpoint of the current guidance more or less unchanged. So basically, the implied improvement from the EUR 332 million to midpoint of guidance, EUR 350 million is to be contributed by sugar. The target for sugar, which resembles the original target of last year of EUR 0 to EUR 100 million implies that there might be, at least at the midpoint of the guidance, a swing of EUR 70 million in the current fiscal year based on higher prices. Looking at the -- how prices develop, as you provided a chart on Page 66 of your presentation, it seems that especially spot prices have gone up quite substantially. And so the, let's say, earnings increase that you supply seems to be a bit disconnected from the strong increase in the sugar price as such. Given that your farmers receive a formula-based contribution of the earnings on the sugar beet derived by the sugar production, the projected increase in your sugar results seem to be a bit conservative when looking at those price charts here, can you elaborate why that might be the case?

To clarify for all people in the group, first of all, your calculation for the underlying earnings delta in the sugar segment to reach the group outlook is EUR 70 million, yes. Taking the minus EUR 20 million last year, taking the midpoint. We talk about EUR 70 million delta, first point. Second point, you refer that this might be conservative looking on the -- on our price chart. Looking on that, that we see on the screens, and we are looking on world market prices, spot prices, that seems to be right. But there are some points we have to be cared about. First of all, we are talking so far about the spot price development. And we have to assume that we save an average pricing for all our contracts, all contacts are open. So it is difficult to assess. I mean it's different if we are talking about limited volumes in the spot price market or if sugar, fruit sell EUR 3 million, EUR 3.5 million or there it's in this parameter, more than 4 million tonnes in the market, first point. Second point is that -- and we are going to be clearly for a big price step, which is clear. But this price increase, we will reach -- will only be effective for 5 months in fiscal '22, '23, and -- first effect. Second effect, we perceive in that environment, strong increase in the pricing for our raw material costs. And the third point, we have a really good hedging position in energy for the campaign 2020. But clearly, still, there are open positions we have to fulfill and therefore, we have to pay the extreme high market price. And that together, let me say, has negative impact and in addition, only 5 months impact of higher prices. So with that altogether, we say this is a realistic approach for the sugar business. And clearly, I think, as I said in the speech, H1 is more or less breakeven with the knowledge we have today. And H2 should show the way with increase in earnings bring us down to this positive EUR 50 million if we use the midpoint, and that will open room clearly for '23, '24, but this is very early and we have to really talk about '23, '24. I hope this helps.

Okay. Just to clarify, the original goal for the last fiscal year was also breakeven to EUR 100 million contribution -- earnings contribution from the segment sugar. Obviously, that didn't materialize with a result of minus EUR 20 million by the end of the year. Could you just highlight what prevented you from reaching your original goal? Was that only a higher cost in regards to logistics and energy that was not anticipated? Or was there something else that contributed to the results?

Let me say, Oliver, there are two main points. First point was we reached a volume increase in '21, '22, but not to that extent we assumed at the beginning, also due to lower final campaign output. And we've reached our pricing goals. More or less, we said at the beginning of the fiscal '21, '22, but that means we couldn't cover then the strong increase in the cost base due to inflation which we see then in the second half of the year. And clearly, that were the main points and for all in the call, we couldn't profit from the strong price increase, we have seen then starting from autumn 2021. Oliver, I think then we are clear.

Next question is from the line of John Ennis from Goldman.

I have a question on the sugar business, and I'll give you both parts and then you can tackle them one by one. But if I think about the current spot prices that look to be from your chart EUR 900, that's almost double your contracting rate in the September, October of 2021. I appreciate in answer to your previous question, you said that the lack of volumes distort this current spot price a little bit. But embedded within your guidance, have you assumed a price that is closer to the current world price of EUR 550 million or somewhere between the world price of EUR 550 million and the spot prices in Europe of EUR 900 million? A little bit of context there would be helpful. And then the second part of this question, and I appreciate it's difficult to give guidance for FY '24, but if we take the higher sugar prices that seem to be on Slide 66, this would imply a major uplift to sugar profitability in FY '24. So can you help in quantifying how we should think about that uplift? If the price you negotiate is, let's say, 100 euros higher than the last contracting round, what is the implied EBIT drop-through for 2024? And then, of course, we can make our own assumption on where the price lands for that fiscal year, but some sort of sensitivity, I think, would be beneficial for the group. There are my two parts.

Thanks for your two parts of the question. To give some light to know, we don't disclose absolute pricing numbers. But clearly, framework we have today, we are going from price increase for the next sugar marketing year starting from October of more than EUR 200 a tonne. And as I said before, let me say, when you take the average then, which is going in the fiscal year '22, '23, we're talking about, let me say, around EUR 100 increase. These are the main underlying parameters. And clearly, as said before, we, in addition to negotiate the [ beet ] pricing. Many open points. We don't know how the energy pricing development will develop, et cetera. there are a lot of uncertainties behind. And clearly, we have to see that the upcoming negotiations with the farmers because they have the same cost increases in their cost structure as the factors have, that will be a hefty one, which is clear. And so we have to be here very, very conservative in our assumptions. But clearly, to confirm, there will be then -- if pricing will stay on that level, if we would reach this EUR 200 in October '22 if we could confirm this EUR 200 -- this increase was in October '23, then we would have then a 12-month effect in fiscal '23, '24. But this is only thing which had behind. There are a lot of open pieces.

No, I understand. But just to follow up. The base case you're working with implicit within your guidance is that you can increase your contracting price by around EUR 200, which is effectively somewhere in the range of EUR 600 per tonne, low 600s is what you're going for. Can I confirm that?

It is -- if you look on the European rice reporting, then it is higher than the EUR 600 million.

Next question is from the line of Michael Schaefer from ODDO BHF.

Sticking to sugar and back in January, we discuss basically for the Sugar segment cost inflation coming from raw mats and also energy bill of around EUR 100 million plus back then in January, you were saying basically the 2/3 is coming through only in the new fiscal year we are currently in. So I read basically that, obviously, since then, a lot of things have changed to the worst from a cost perspective for you. So maybe you can update us on the overall cost bill, how this looks like now compared to the EUR 100 million you projected back in January. And maybe making a reference to this one, one of your competitors in the North just recently indicated the kind of agreement with the farmers basically on the -- for sugar beet contract price quite a substantial increase. So the question is, what have you baked in, essentially on the beet cost side for the new sugar marketing year, which is then coming up? So this would be the first question.

Yes, Michael, thanks. Let me say we have two, let me say, parameters, which are the biggest one with the highest influence. This is other raw material costs, and these are the Energy costs, yes, let me say, the pricing for campaign '21, '22 are now locked in. And we make clearly assessment for the next campaign year, October '22 to September '23. Taking into account our sales price assumptions, taking into account our own cost structure and taking into account, let me say, the cost structure of our farmers and assess that. And I think we have here a conservative approach of the pricing, the raw material costs for the next campaign '22, '23. Another point is, let me say, our energy costs here, we have the situation as said before. that we have, first of all, at the end of the day, higher campaign costs as we assume in our quarterly call in January due to higher raw material costs. And at the end of the day, higher energy prices. These were, let me say, the production cost of the volumes we sell now in the first half year. And that are, let me say, the main points in this higher energy price than in January, we have also put in, in the calculation for the production costs for the next campaign, '22, '23. And one important point is we have also to have to look on are, let me say, the extreme high prices, Michael, you know it, for alternative crops. This is also one assessment we made that in times with beet prices of EUR 350 million to EUR 400 million that lift, let me say, also the beet price is up.

Okay. Can you just -- on this one, a quick follow-up. I mean this -- you now -- I recall back in January, you targeted flood acreage. So now you're suggesting basically, a decline in your acreage and also production given average yields, which obviously is lowering your campaign length further down the road. So how should we read basically your targeted acreage? So is this a kind of a 5% decline or anything? So it would be helpful as well.

Yes. Let me say the latest figure is around 5% -- 5%, 6%. And additionally, let me say, also development we see overall Europe that also our competitors have faced lower acreage, which, on the other side, clearly helps the market.

Okay. So switching topics. The second question would be on BENEO. I mean we have seen a lot of action from you guys from the intended production of alternatives with the EUR 550 million CapEx, which you have just reported a couple of weeks ago in mid-May or mid-April, so it was today's announcement with the EUR 100 million. Can you just put this into perspective what this may mean in terms of revenue and earnings potential we should read from this one? And maybe as a related question on BENEO. In your prepared remarks, basically, you indicated on the capacity expansion you have initiated across all the various subsegments of BENEO. So maybe an indicator where are we there now? What's the kind of growth potential you have now locked in with the higher capacity, which we should assume basically going forward? And maybe another related question on the pet part of the pet food part of this business. any indication what kind of share this is contributing to the overall activity of the BENEO?

So Niels speaking here. So let's try to start and the colleagues first of all react if I'm not answering all details here. So first of all, I think the investment we have done now, some of them are in implementation. So the production capacity, for example, is an investment which is going over a couple of years to get full capacity. But anyhow, this will help us really to bring certain parts together where we can add new technology to what we have already in BENEO, where we can add also know-how from different parts of our business into, let's say, one hub where we are creating new products, new innovations into it and supplying more customers and more territories. The investment in Meatless we have done is helping out to bring a new technology into it, mainly in fish substitutes and meat substitutes as well. What we are going to do is to increase our business. So we have a business in protein at the moment, which is on a 3-digital basis, but we have to be very, very careful how to count it because only a part of this is really pasteurized products, which is on a double digit at the moment, turnover. And we see that with these investments we have done over time, we are really getting this business up to a 3-digit turnover business within the next years. And therefore, I think it's a substantial part of the BENEO business and it is also an interesting add-on to the entire business of our Südzucker Group. What we see is Meatless is just starting. It's a small company, which is just growing over a year, it's growing fast at the moment with good profitability, double-digit points there in percentage, which helps us also to contribute here. But at the beginning, I think we have to be very clear. It is a starting point. It's a good add-on to what we are doing. And we are hoping bringing this up to a substantial part of our business over the next years. I think I'm just looking around if someone can add to it.

I would add to the figures to the second part of Michael's question, let me say, the additional potential of -- I understand rightly, you asked for the additional potential of really CapEx in the existing structure and additional, what is the potential for the protein sector, right?

Yes, that's true.

Yes. And let me say with the investments we decided and which are underway, we foresee midterm clearly more than EUR 100 million turnover. And with the [ broader in ] investments we did is explained clearly, midterm also strong scale up to triple-digit revenue from close to scale up.

Okay. And the pet food and animal feed share in BENEO, just a rough indication that we're getting here on.

I think a rough estimate, but Nikolai should then double check that after the call, I think, is a good number, is 10%.

Okay. And then one final question, and then I'll go back in queue. Hopefully, a more simple one. On the CapEx side, I mean you're now going for EUR 400 million. So just looking more midterm, is this the new normal then basically? Or how should we think about EUR 400 million?

I would say, looking forward, if we're looking on the really big and great potentials out of the Strategy 2026 PLUS, the potential needs to show in bio-based chemicals, proteins. We are clear that is a very firm and good starting point. But we would like to add other, let me say, parts to it. We should, let me say, in midterm look on such a CapEx number or if there are, let me say, really if the market potential are so good as we say, then clearly, we would also go for higher investments, if it is necessary. But these are clearly moving targets depending on -- moving numbers depending on the targets.

[Operator Instructions] Next question is from the line of Alex Sloane from Barclays.

The first one, just in terms of the midterm ambition levels that you shared at high level. I appreciate you don't want to kind of go too much into the detail there, but over EUR 1 billion EBITDA implies around about EUR 300 million improvement from the midpoint of your guidance for fiscal '23. Is it fair to assume that over half of that improvement should be coming from segment sugar? That's the first question. And then just the second one, I was wondering if you could maybe help a little bit more on the outlook for special products. I mean you talked about BENEO and its kind of attractive structural positioning in B2B ingredients. I mean, that industry generally has quite good pricing power. So I'm kind of surprised in the outlook for kind of significant profit decline. Is that all coming from the pizza business? And is this kind of, I guess, a temporary decline? Yes. Any more color there would be great.

Yes. Thanks, let me start with the second part of your questions. This is -- let me say, first of all, you're right in the segment special products. The -- we guide and then further strong decrease in operating profit. And you are also right that this is mainly linked to Freiberger, as Niels explained in his presentation. We are facing still high comps in that deep frozen pizza area, but now we see the turning point in volumes. We see growth also at the start of the fiscal year '22, '23. But the main point why we are very conservative in our guidance is the phasing issue. It is not possible in all the areas to put the [ post on this ] dramatic price increases and it was not one step from one of the other day. It was a period over 6 months. And it is really difficult to assess here then the right pricing, price increase, the price -- the right momentum, et cetera. So it's a phasing issue. And as we said before, we are confident that starting with the second half of the fiscal '22, '23. We see a clear turning point, especially in the deep-frozen pizza in Europe as well as in the U.S. And the first question, ambition level, it is not half of the increase coming from sugar. It is clearly more than half coming from sugar.

That's very helpful. If I could maybe just squeeze in one more of a housekeeping one. Just in -- I think you talked about working capital outflow for the year, I mean, sorry if I missed it, but in terms of kind of just framing the size of that in terms of kind of a base case. I mean, is it fair to assume if we hold sort of inventory or hold working capital levels as a percentage of sales, it just reflects the higher sales? Or any color there?

Yes. This is a good one. This is difficult to assess due to the campaign characters of business. We have to take assumptions. Now we know the acreage in sugar business, but no will know how will be the final yield in autumn. And so this is -- this could swing between 10% and 15% plus or minus. So first of all, very difficult to assess. Second factor is, let me say, also the final pricing of all the products of all raw materials is they are also very difficult to assess. But clearly, what we know in this inflationary environment that the stock prices will go up. That is clear. And then looking on our guidance in revenues, we talked about an increase of EUR 1.2 billion, EUR 1.3 billion. So that means higher receivables at the closing date, yes. And so it's really difficult to assess. We clearly flagged it, yes. And this is, let me say, also the main driver that we are guiding higher net financial debt. And with the current status, a good number is EUR 150 million swing could be possible.

We have a follow-up question from the line of Oliver Schwarz from Warburg Research.

Firstly, I saw that short-term provisions came down year-on-year, were they cashed out or were they retained and helped to inflate earnings?

Short-term provision. I think we should, at the moment, come under the swing. Maybe we'll take the next one and the team is looking or maybe after the call...

Yes, no problem. Secondly, ED&F Man. I think I heard you correctly that the value of the equity value of the participation is now written down to EUR 0. Obviously, implying that the cash flow potential from that source is rather limited, to say the least. Do you envisage, let's say, any earnings potential in the equity results from that participation in the not-too-distant future? Or is that something that is basically solved and it might leave the company at some point in time? That would be my second question.

You are right. The remaining value is 0. We don't assume midterm cash returns from the underlying business of ED&F Man. That is our assumption. The only thing what we see is that we will have a final, let me say, currency gain between the equity of ED&F Man and the equity of the parent company Südzucker, that we have to recognize when we switch out from the equity accounting and it will be effective then in the first quarter. And the amount, Oliver, is around EUR 10 million. But this is not a cash-relevant number, this is only a booking number.

Okay. Can you elaborate perhaps a bit on your energy hedging for the current and the next fiscal year, given that prices have been quite volatile in the past? I guess you might have stopped, let's say, locking in energy costs or prices for this year or the next year. So if we're talking about the level you are hedged for this and next year, could you give an indication in that regard?

Yes. Clearly, we can give some indication. And then we are looking on the current fiscal year '22, '23, then we have, group-wide, across all the businesses which have a high energy cost tank, then we talk about a hedging rate close to 70%. And this is also, let me say, the hedging rate for our biggest energy consumer sugar, yes. And going forward, to '23, '24, this hedging rate on group level is going down then to 66% although still a comfortable hedging rate in that environment, especially when we are looking on the difference between the hedge price and the market price. One point I would like to add, we have to act Oliver and to cover the open, let me say, volumes due to the fact that we have to start, let me say, the campaign then in September, October in the different regions in Europe. And there we do everything. We have to secure the energy supply also to be prepared if there would be an interruption of energy supply from Russia. And so that we have to cover, maybe in some areas where the risk is higher, for example, in the Austrian factories or in the South German factories, then we are looking for alternatives, yes, which we then use, for example, instead of gas, yes?

Okay. And lastly, I apologize in advance, this might be a more esoteric question. But looking at your strategy and at least some of that in the midterm is, as we also learned today is also M&A based. Given that your track record for past M&A transactions has been, let's say, mixed and given that you seem to be mostly interested in assets that are, let's say, provided by companies that have a more start-up character and might have a different culture from what we have in Südzucker when compared to that start-up companies. How do you try to, let's say, make sure that the highly relevant part of the acquired company's personnel is willing to stay with Südzucker and provide their essential knowledge also to the new group and not hop into some other start-up from there? And how will you make sure that, let's say, the cultural fusion of those assets, those activities and your group goes rather smoothly? I mean in the past, you mostly acquired companies that, for example, like ED&F, which more or less has a connection to the sugar segment or the, let's say, the acquisition you did that you acquired assets in America that fit very well into Freiberger that didn't seem to be such, let's say, a cultural gap between those companies you acquired and your existing operations. But in the case of those M&A -- sorry, those M&A transactions that you are planning in regard to mostly, let's say, Yahoo! start-up companies that have like 10, 15, 20 years under their belt and have perhaps the double-digit sales number that they can provide initially to the group, how to make sure that those people that are crucial to those operations remain with Südzucker?

I think it's a very fair question with regard to the history some of our investments. And I think it's also -- we are very aware about the cultural difference between parts of our business. and the start-up company because we are not really a start-up culture here in this company, which probably also doesn't fit. But anyhow, looking at BENEO, I think there, we have a home where we have a slightly different way of doing our business and probably compared to the very old and traditional parts of our business. And what we're also doing -- so therefore, BENEO was the purchaser of this part of the business. That's the first thing. The second thing is that we are also giving these small teams, which are coming in a certain amount of freedom to go further on the path they have just started because we saw where they are going to. We saw what their planning are, and we are very pleased of what they are doing. So we don't want to disturb them on just achieving. One of the main reasons why Meatless was willing to join Südzucker, specifically BENEO, was because of the global sales team of BENEO, which was not with Meatless, which is mainly focused on parts of Europe. So we see also the synergies. But as you said, we should give them the room. We should give them the environment of not being a start-up as such, but keeping close to the culture of the start-up and we are trying to give this to these teams.

Oliver, to the open question, the reduction of short-term provisions. We use this is where provision from the restructuring programs, especially redundancy plans, for example. And we have to have then the cash out, for example, in the last fiscal year.

Okay. So ladies and gentlemen, thank you all for participating today. So I see there are no further questions. It seems to be that we have been quite extensive here and answered all of your questions. But as you know, there might be further questions as you digest our intense material. So we're happy to take them in the next days, today, tomorrow, whenever you want. We're always there. So thank you for participating today, and have a good day. Thank you. Goodbye.

Thank you all. Bye-bye.

Thank you.