SUGAR. STARCH. FRUIT. - Agrana

PREFACE BY THE CHAIRMAN OF THE BOARD OF MANAGEMENTTHE AGRANA GROUP4PREFACE BY THE CHAIRMANOF THE BOARD OF MANAGEMENTDear Sir or Madam,Dear Shareholder,The purpose of this preface is to give you a concentrated overview of the key developmentsduring the AGRANA Group’s 2003/04 financial year as well as looking forward to its probablefuture development.PROFIT IN 2003/04The financial year was affected by poor harvests in Central and Eastern Europe. It closed withslightly lower profit than 2002/03, when extraordinary factors such as the 14-month financialyears of the AGRANA International companies came to bear. The fact that our profit in2003/04 came close to that of the previous year was the reward for the exceptional efficiencywith which we dealt with the short campaigns and rise in raw material costs caused by poorharvests.Revenues came to € 866.4 million, which was 1.1 per cent down on the year. Profit fromoperating activities was 4.5 per cent down on the previous year’s figure of € 80.5 million at€ 76.8 million. Consolidated earnings for the year were significantly down on the previousyear’s figure of € 65.4 million at € 56.5 million, but one must bear in mind that earnings in2002/03 were boosted by sales of interests.SHAREWe have systematically invigorated the AGRANA share over the past few years. It has gainedwell-earned respect thanks to our listing in the Prime Market segment (following the conversionof our preference shares into ordinary shares), thanks to the potential of Eastern Europethat became clear to many as EU enlargement approached, and thanks to our diversificationinto our new fruit juice concentrates and fruit preparations segment.Consequently, we were able to follow up a price gain of 37 per cent in 2002/03 with a gainof another 55 per cent in the 2003/04 financial year. As a result, the price of the AGRANAshare has risen from € 20 to over € 60 in a little over two years. As of 29 February 2004,we had a P/E ratio of 12.0 and our share delivered a planned distribution yield of 2.9 per centfrom an unchanged distribution proposal of € 1.80 per share. The continuing growth that theAGRANA Group will be striving for will sustain the share’s potential.PREVAILING CONDITIONSEnlargement of the European UnionThe events of 1 May of this financial year finally justified the investments undertaken in ourcore sugar and starch segments in Central and Eastern Europe since 1990 in anticipation ofthe new EU accessions.