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Thanks to the sugar segment, Suedzucker astounded the market by again raising its FY 2024 operating result outlook. The consensus warrants an upward revision. Amidst a challenging landscape, the sugar segment continues to command attention. The prevailing macroeconomic challenges firmly position volumes at the heart of numerous discussions
Suedzucker AG
The sugar segment and prices were in the spotlight during the impressive first quarter. The operating results rose by +73% yoy, and the margin stood at a high level of 11.2%. The market warmly welcomed (stock price up by c.+6.50% in the early afternoon) the upward revision of the outlook, which comes as no surprise to us, as we had discussed a few weeks ago.
While last month’s trading update was warmly received by the market, this time it has been a cold shower for the stock price, with a significant decline of 7.20%. Despite the elevated price level, we are concerned about the possibility of Suedzucker back-pedaling on its outlook.
A strong performance in sugar drove the Q3 figures (finally!). The FY22/23 guidance was reiterated on the back of an improving environment despite the obvious cost pressure.
The Q2 continued to show an overall improvement in the group’s business, even prompting SZU to revise up its revenue guidance. On the other hand, costs are starting to weigh. No upgrade to the EBIT and EBITDA guidance.
The recovery is still on track in a sugar market which has been and will continue to be favourable for the company.
Sugar’s on-track recovery boosted (and will continue) the top line, leading to a FY21/22 sales guidance upgrade. However, as it is not immune from cost inflation (especially energy) and having less-pricing power than other consumer staples, Sueduzcker maintains its previous operating profit guidance.
No major surprise as the group confirmed the preliminary figures, as well as the FY21/22 guidance. No update about the 2026 strategy, which is not expected for now, and this makes the stock somewhat boring at the moment.
The turnaround in the sugar business is firm which is expected to drive the top and bottom line positively in the coming years. However, the strategy up to 2026 given today does not seem clear and needs to be clarified in the future, especially in quantitative terms.
