Südzucker (ETR:SZU) reported a challenging first nine months of fiscal 2025-26 but said results improved meaningfully in the third quarter and reiterated its full-year guidance, with management emphasizing continued pressure in the sugar business and the stabilizing role of its non-sugar segments.
Chief Financial Officer Dr. Stephan Meeder described the group’s nine-month performance as a “mixed picture.” While third-quarter earnings improved versus both the prior-year quarter and the first half of the year, the nine-month totals remained well below the prior year due primarily to the sugar segment’s sharp decline.
EBITDA: EUR 367 million (down from EUR 502 million a year earlier)
Operating result: EUR 95 million (down from EUR 236 million)
Cash flow: EUR 179 million (down from EUR 368 million)
Meeder also highlighted a rise in net financial debt, calling it a key management focus alongside restructuring. Net financial debt increased by EUR 181 million versus the end of fiscal 2024-25 to EUR 1.835 billion as of the end of November, with management pointing to seasonal effects from beet payments during the campaign as a factor in third-quarter net debt movements.
Management confirmed its fiscal 2025-26 guidance, expecting:
Meeder said the company remained “slightly below midpoint” of the operating profit range, consistent with prior commentary at the second-quarter update.
He also referenced an update provided on Dec. 16, when Südzucker issued initial expectations for fiscal 2026-27: slightly lower group revenue year over year, with EBITDA expected to increase moderately to a range of EUR 480 million to EUR 680 million.
The sugar segment remained the primary contributor to the year-on-year decline. Over the first nine months, the segment reported an operating loss of minus EUR 136 million versus minus EUR 23 million in the prior-year period, which management attributed mainly to sharply lower sugar prices and reduced volumes. Lower manufacturing costs from the 2024 campaign were not sufficient to offset the price and volume decline.
Meeder outlined global and European market dynamics. On the global market, he said sugar consumption continues to rise by about 1 million tons per year, but production remains cyclical. Based on GlobalData’s December 2025 forecast, the company cited a projected global deficit of 1.5 million tons for 2024-25, followed by a projected surplus of 3.3 million tons for 2025-26, driven by increased production mainly in India and Thailand. He said high ending stocks have weighed on prices, adding that world market white sugar prices fell during summer 2025 to roughly EUR 350 per ton before ending November at EUR 377 per ton, with a weaker U.S. dollar also cited as a contributor.
In Europe, management said consumption has edged down and the region has experienced three years of surplus, leading to elevated stocks and continued pressure on pricing. Südzucker expects a reduction in European cultivation of roughly 9%-10% for 2025-26 and around 5%-10% for 2026-27, based on press releases and market intelligence sources. In Q&A, management clarified the forecast relates to upcoming plantings, with sugar beets typically sown in March.
Executives also discussed trade developments. Meeder described the finalized EU-Ukraine Association Agreement in October as negative due to an increase in the sugar tariff quota from 20,000 tons to 100,000 tons. On the Mercosur agreement signed Jan. 9, management said it was still evaluating details but viewed it as negative for Südzucker and as “unfair competition” due to differences in sustainability standards and associated costs. In Q&A, Meeder said Brazil would receive a duty-free quota of 180,000 tons under the agreement (with Paraguay receiving 10,000 tons), which he equated to the output of a medium-sized European sugar factory and said could add pricing pressure by removing tariffs previously applied to imports.
Asked directly whether sugar’s challenges are structural, Meeder agreed with an analyst’s assessment that the situation is tough across the industry and “each and everybody is in a loss situation” at current price levels. He said the company is pursuing an “Optimum Program” to address plant and administrative costs, while also reviewing and prioritizing capital expenditures.
Beyond sugar, management said performance varied by segment:
Special Products: Nine-month revenue declined slightly, attributed to Freiberger’s prior-year disposal of a dressings and sauces business in the U.S. and to lower prices and volumes. Operating result decreased, with management citing reduced prices and volumes and rising production costs that could not be fully passed on to customers.
CropEnergies: Revenue was down significantly due mainly to lower volumes stemming from scheduled and unscheduled maintenance tied to technical issues, which management emphasized was not driven by weaker market demand. Operating result was EUR 3 million versus EUR 8 million a year earlier. Management reiterated expectations that fiscal 2025-26 operating result would be on par with last year, noting improved ethanol prices during Q3 and lower agricultural raw material costs.
Starch: Revenue declined slightly to EUR 704 million amid lower prices and volumes, while operating result fell significantly, driven by lower prices and volumes and higher raw material costs. The segment benefited from an insurance compensation related to flood damage at the Pischelsdorf, Austria plant in autumn 2024.
Food: The food segment showed improvement, with nine-month revenue rising to EUR 1.245 billion and operating result significantly above the prior year. Management said stable volumes helped improve earnings contribution.
On CropEnergies, Meeder said the company remains in “very good discussions” with the U.K. government regarding a support package for Ensus, though he said details could not be disclosed due to confidentiality. He also broke down restructuring and special items: group restructuring/special items totaled minus EUR 55 million for nine months, including EUR 35 million in sugar and EUR 13 million in CropEnergies, with the CropEnergies amount described as a mix including bio-based chemicals costs, Ensus-related charges, and an impairment for the Wilton plant.
Regarding bio-based chemicals, Meeder said the company was “on track,” with start of operations expected toward the end of the next fiscal year. He also argued the group intends to position its “green” ethyl acetate as a product with a distinct value proposition rather than as a fossil-based equivalent plus a premium, noting customer interest in a fossil-free solvent used in applications such as paints, glue, and nail products.
Management tied the decline in cash flow to lower operating results, while noting working capital decreased by EUR 83 million. Capex for the nine months totaled EUR 322 million, nearly EUR 100 million below the prior-year period, with Meeder stressing vigilance on investment spending given net debt levels.
Below operating profit, the company reported restructuring and special items of minus EUR 55 million and equity-accounted results of minus EUR 6 million. The financial result was minus EUR 97 million, including a net interest result of minus EUR 77 million, which management attributed to higher average interest rates (3.6% versus 3.4%) on average net debt of roughly EUR 1.8 billion, and other financial results of minus EUR 20 million tied mainly to exchange rate losses on foreign-currency loans at non-euro companies, particularly related to the weak U.S. dollar.
Taxes on income were reported as plus EUR 12 million, and earnings per share came in at minus EUR 0.40 versus EUR 0.01 a year earlier.
Looking ahead, management said it expects another operating loss in the sugar segment in the fourth quarter and continues to anticipate a difficult environment for sugar into fiscal 2026-27, while pointing to contributions from non-sugar segments as an important stabilizer for the group.
Südzucker AG produces and sells sugar products in Germany, rest of the European Union, the United Kingdom, the United States, and internationally. It operates through five segments: Sugar, Special Products, CropEnergies, Starch, and Fruit. The Sugar segment produces and sells sugar, sugar specialty products, glucose syrup, and animal feed to food industry, retailers, and agriculture markets, as well as offers by-products of sugar. The Special Products segment produces functional ingredients, including dietary fibers, sugar substitutes, sugar, rice starches, barley/rice flours, texturized wheat protein, and vegetable texturates for food, animal feed, non-food, and pharmaceutical industries.
