Südzucker : Südzucker AG - Financial statements 2023/24

FINANCIAL STATEMENTS

SÜDZUCKER AG

DATED 29 FEBRUARY 2024 GERMAN GAAP - HGB

The annual report is also available in German. This translation is provided for convenience only and should not be relied upon exclusively. The German version of the annual report is definitive and takes precedence over this translation.

CONTENT

The Management's Report of Südzucker AG is combined with the Management's Report of the Südzucker Group for the first time for the 2023/24 business year. The annual financial statements and combined management report of the Südzucker Group and Südzucker AG for the financial year 2023/24 will be submitted to the body maintaining the company register and are accessible via the company register's website.

FINANCIAL STATEMENTS	4
Balance sheet as of 29 February 2024	4
Income statement 1 March 2023 to 29 February 2024	5
Notes to the financial statements	6
Application of German GAAP (HGB)	6
Accounting policies	6
FIXED ASSETS	6
CURRENT ASSETS	8
PREPAID EXPENSES	9
SUBSCRIBED CAPITAL	9
SPECIAL UNTAXED RESERVES	9
PROVISIONS	.............................................................................................................................	9
LIABILITIES	10
DEFERRED TAX	10
RESEARCH AND DEVELOPMENT EXPENSES	10
CREATION OF VALUATION UNITS FOR HEDGING INSTRUMENTS	10
Notes to the balance sheet	12
(1)	FIXED ASSETS	12
(2)	INVENTORIES	14
(3)	RECEIVABLES AND OTHER ASSETS	15
(4)	SECURITIES	15
(5)	ACCRUED AND DEFERRED ITEMS	15
(6)	SHAREHOLDERS' EQUITY	16
(7)	SPECIAL UNTAXED RESERVES	17
(8)	PROVISIONS FOR PENSIONS AND SIMILAR OBLIGATIONS	17
(9)	OTHER PROVISIONS	18
(10)	LIABILITIES	19

1. CONTINGENT LIABILITIES, OTHER FINANCIAL COMMITMENTS AND DERIVATIVE FINANCIAL

INSTRUMENTS	20
Notes to the income statement	22
(12) SALES	22

1. CHANGE IN WORK IN PROGRESS AND FINISHED GOODS INVENTORIES AND INTERNAL COSTS

	CAPITALIZED	22
(14)	OTHER OPERATING INCOME	22
(15)	COST OF MATERIALS	23
(16)	PERSONNEL EXPENSES	23
(17)	OTHER OPERATING EXPENSES	23
(18)	INVESTMENT INCOME/EXPENSE	24
(19)	DEPRECIATION OF FINANCIAL ASSETS AND MARKETABLE SECURITIES	24
(20)	INTEREST INCOME/EXPENSE	24
(21)	TAXES ON INCOME	25
Other disclosures	25
(22)	DISCLOSURES PURSUANT TO SECTION 160 (1) NO. 8 AKTG	25

1. TOTAL COMPENSATION OF THE EXECUTIVE BOARD AND SUPERVISORY BOARD AND

	FORMER EXECUTIVE BOARD AND SUPERVISORY BOARD MEMBERS	25
(24)	DISCLOSURES PURSUANT TO SECTION 160 (1) NO. 8 AKTG	27
(25)	EVENTS AFTER THE BALANCE SHEET	27
(26)	CONSOLIDATED FINANCIAL STATEMENTS	28
(27)	LIST OF SHAREHOLDINGS	28
(28)	SUPERVISORY BOARD AND EXECUTIVE BOARD	29
(29)	FEES FOR SERVICES BY THE COMPANY´S EXTERNAL AUDITORS	33
(30)	DECLARATION OF COMPLIANCE PER NOTE 161 AKTG	33
(31)	PROPOSED APPROPRIATION OF EARNINGS	34
SHAREHOLDINGS	35
RESPONSIBILITY STATEMENT	41
INDEPENDENT AUDITOR'S REPORT	42
APPENDIX TO THE INDEPENDENT AUDITOR'S REPORT: NON-AUDITED COMPONENTS OF THE
COMBINED MANAGEMENT REPORT	50

_____________________________

The numbers in parenthesis in the report represent the corresponding prior year´s figures or item.

4 Financial statements

FINANCIAL STATEMENTS

Balance sheet as of 29 February 2024

Assets

(€ '000)	Notes	29 February 2024	28 February 2023
Intangible assets		9,927	8,736
Property, plant and equipment		498,364	446,741
Financial assets		2,794,880	2,764,222
Fixed assets	1	3,303,171	3,219,699
Inventories	2	928,474	719,285
Receivables and other	3	826,862	610,755
assets
Securities	4	108,647	103,890
Cash and cash equivalents		58,021	5,737
Current assets		1,922,004	1,439,667
Accrued and deferred items	5	6,006	2,983
		5,231,181	4,662,349
Liabilities and shareholder's equity
(€ '000)	Notes	29 February 2024	28 February 2023
Subscribed capital		204,183	204,183
Less fair value of own shares		-76	-76
Outstanding subscribed capital		204,107	204,107
Capital reserve		1,620,579	1,620,579
Revenue reserves		89,389	89,389
Net earnings available for distribution		258,392	157,061
Shareholders' equity	6	2,172,467	2,071,136
Special items with an equity portion	7	27,663	27,805
Provisions for pensions and similar	8	873,963	852,424
obligations
Other provisions	9	262,335	256,689
Provisions		1,136,298	1,109,113
Liabilities	10	1,894,753	1,454,295
		5,231,181	4,662,349

Financial statements

5

Income statement 1 March 2023 to 29 February 2024

			1 March 2023-		1 March 2022-
	Notes		29 February 2024		28 February 2023
(€ '000)
Revenues	12		2,061,217		1,747,504
Change in work in progress	13		248,090		88,716
and finished goods and
internal costs capitalized
Other operating income	14		50,771		62,255
Cost of materials	15		-1,595,689		-1,241,920
Personnel expenses	16		-277,313		-305,703
Depreciation of			-65,842		-65,414
intangible assets
and fixed assets
Other operating expenses	17		-258,538		-250,563
Investment income/expense	18		330,827		147,677
Depreciation of financial	19		-225,700		-7,100
assets and marktetable
securities
Interest income/expense	20		-22,075		-22,229
Taxes on income	21		-1,542		-4,204
Profit after taxes/			244,206		149,019
Net earnings for the year
Profit brought forward from the			14,186		8,042
previous year
Net earnings available for distribution			258,392		157,061

6 Financial statements

Notes to the financial statements

Application of German GAAP (HGB)

The financial statements of Südzucker AG, Mannheim, (register court: district court of Mannheim HRB 0042) were prepared in accordance with the rules of the German Commercial Code (HGB) as well as the Stock Corporation Act (AktG).

The income statement has been prepared using the nature of expense method. Certain items in the balance sheet and income statement have been combined in order to improve the clarity of presentation. These items are shown separately and described in the notes to the financial statements.

The financial statements have been prepared in euros. Unless otherwise indicated, all amounts are disclosed in thousands of euros (€ '000) or millions of euros (€ million). The previous year's numbers are generally put in parentheses in the notes.

Accounting policies

With the exception of the valuation of work in progress and finished goods, the accounting and valuation methods have not changed compared to the previous year.

Transactions in foreign currencies are recognized at the historical exchange rate at the time of initial recognition.

Long-termforeign currency receivables are recognized at the asking price when the claim arises or at the lower fair value on the basis of the average spot exchange rate on the financial reporting date (imparity principle). Short-termforeign currency receivables (remaining term of one year or less) and cash or other current assets denominated in foreign currencies are translated at the average spot exchange rate at the balance sheet date.

Long-termforeign currency liabilities are measured at the bid price when the liability arises or at the higher closing rate on the basis of the average spot exchange rate on the financial reporting date (imparity principle). Short-termforeign currency liabilities (remaining term of one year or less) are translated at the average spot exchange rate at the balance sheet date.

Exchange gains or losses from different average spot exchange rates between the transaction date and the balance sheet date are reported under other operating income or expense.

Fixed assets

Intangible assets and fixed assets are measured at acquisition or production cost less depreciation and write-downs. In addition to the wear and tear of the fixed assets, production costs for internally- constructed equipment also include the production material, labor costs, and appropriate components of the overheads required.

Financial statements

7

Items subject to depreciation according to requirements of German commercial law are depreciated using the declining-balance or straight-line method.

Intangible assets are depreciated using the straight-line method.

Fixed assets acquired on or after 1 January 2001 were offset at a rate of maximum 20 percent when depreciated using the declining-balance method. Fixed assets acquired on or after 1 January 2006 to 31 December 2007 were offset pursuant to tax provisions at a rate of maximum 30 percent when depreciated using the declining-balance method.

Fixed assets acquired after 31 December 2008 were offset at a rate of maximum 25 percent when depreciated using the declining-balance method. The transition from the declining-balance to the straight-line method takes place at the date at which the remaining carrying amount distributed in equal annual amounts over the remaining useful life leads to higher depreciation rates.

The straight-line method was used exclusively for fixed assets acquired or produced on or after 1 March 2010. Südzucker AG exercises the option of using the reduced carrying amount (Beibehaltungswahlrecht) pursuant to note 67 (4) sentence 1 of the Introductory Act to the German Commercial Code (EGHGB).

Independently usable movable items of fixed assets subject to depreciation are fully depreciated in the year of initial recognition if their acquisition or production costs do not exceed € 250. Depreciable movable assets under fixed assets acquired or produced after 31 December 2007 whose acquisition or production costs are greater than € 250 but do not exceed € 1,000 were combined into compound items. Compound items are depreciated at the same rate over a period of five years. Depreciable movable assets under fixed assets acquired or produced after 1 March 2018 whose acquisition or production costs do not exceed € 800 are fully depreciated in the year of acquisition. There will no longer be a compound item for this after 1 March 2018.

Depreciation of fixed assets and of intangible assets is based on the following useful lives:

Intangible assets	2 to 9 years
Buildings	10 to 50 years
Technical equipment and machinery	5 to15 years
Factory and office equipment	3 to 10 years

Prepayments on intangible assets and on property, plant and equipment are recognised at nominal value.

Shares in affiliated companies and the participations are measured at acquisition cost or the lower fair value. The market price of the respective financial investment - if available - is used for the purpose of determining the fair value. In addition, the fair values of the material equity investments are calculated using discounted cash flow models as the present values of the expected future cash flows according to the planning projections prepared by the executive directors. Borrowings are recognized at their nominal amount.

Lower fair values of fixed assets are accounted for with write-downs if continued impairment is expected. Write-downs are reversed if the reasons for the write-downs no longer exist.

8 Financial statements

Current assets

Materials and other supplies are measured according to the principles of valuation on a separate or standard value basis at acquisition costs with due respect for the lower-of-cost-or-market principle. Merchandise is measured at acquisition cost with due respect for the lower-of-cost-or-market principle. Appropriate valuation reductions are made each time realizability is limited.

Finished goods and work in progress are measured in accordance with notes 253 to 256 HGB at production costs or at the recoverable net proceeds derived from the sale price with due respect for the principle of loss-free evaluation. The FIFO method is used in the measurement of finished goods. Valuation reductions are made if inventory risk arises from extended storage duration or reduced realizability.

In determining the cost of production, the consumption of fixed assets, the directly attributable material and production costs and appropriate portions of the necessary material and production overheads are taken into account. Interest on borrowed capital is not included. In contrast to previous years, the production costs also include appropriate portions of the costs of general administration as well as appropriate expenses for social facilities of the company, for voluntary social benefits and for the company pension scheme, insofar as these are attributable to the period of production.

Advance payments for inventories are recognized at their nominal value.

Receivables and other assets are measured either at nominal value with due respect for the lower-of cost or-market principle or at discounted value. Individual allowances are made in the estimated amount of default risk for doubtful receivables. General credit risk is accounted for with general allowances.

CO2 emission certificates allocated free of charge are capitalized with an acquisition value of zero; certificates acquired for a fee are recognized at their acquisition cost. Provisions are recognized in the amount of the acquisition cost for the certificates if CO2 emissions exceed the allocated certificates.

Short-termfinancial investments are reported at acquisition cost, less depreciation of the respective lower quoted or market price at the end of the financial year or based on financial mathematical models in which the fair value is regularly derived and determined via the benchmark return of a reference bond.

Cash and cash equivalents are recognized at their nominal value.

Financial statements

9

Prepaid expenses

Expenses paid prior to the balance sheet date are classified as an asset and recorded as prepaid expenses insofar as they represent expenses for a particular period after the reporting date.

Subscribed capital

Subscribed capital is recognized at nominal value.

The book value of the treasury stock acquired is deducted on the face of the balance sheet from the item "subscribed capital" in the preceding column. The difference between the book value and the acquisition costs for the treasury shares is offset against the available retained earnings. Acquisition- related costs are recognized as an expense for the fiscal year.

Special untaxed reserves

Special untaxed reserves for differences from increased depreciation permissible according to tax law and special depreciation as well as regular depreciation on a straight-line or declining balance basis were recognized until 28 February 2010.

Südzucker AG exercises the option of using the reduced carrying amount (continuation option) pursuant to note 67 (3) s. 1 of the Introductory Act to the German Commercial Code (EGHGB).

Provisions

Provisions for pensions and similar obligations are determined on the basis of biometric probabilities (Prof. Dr. Heubeck 2018 G) using the projected unit credit method. The future salary and income threshold increase rates were set at 2.75 (2.75) percent, of an income threshold trend ("Beitragsbemessungsgrenze") at 2.75 (2.75) percent, the future pension increase rate at 2.50 (2.50) percent and the average employee turnover rate at 1.00 (1.00) percent. An actuarial interest rate of 1.82 (1.79) percent was used as a basis for the discount rate for pension obligations as at 29 February 2024.

This corresponds to the average market interest rate from the past ten fiscal years as determined by Deutsche Bundesbank as of 29 February 2024 for an assumed time to maturity of 15 years. The impact on the result of changes to the discount rate that affect net income are reported under personnel expenses and fair value changes to fund assets in the financial results. For reinsured obligations from deferred compensation, the asset value of the reinsurance policy is recognized.

Provisions for pensions and similar obligations are offset with existing fund assets (pension liability) which were recognized at fair value. The fair value of fund assets is the actuarial asset value of the liability insurance, which corresponds to the historic acquisition costs.

For the measurement of provisions for partial retirement ("Altersteilzeit"), increases are treated as "payments with compensation character" according to the rules outlined in the latest applicable version of IDW RS HFA 3. The discount rate for provisions for part-time early retirement credits is 1.18 (0.73) %