Südzucker - Q3 results: modest upside to FY17/18; approaching the first year of EU sugar market liberalisation

Davy Research
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In a challenging environment, Sudzucker (SZU) has delivered a respectable Q3 performance, with group operating profit (down 13% yoy) ahead of company-compiled consensus. Significant headwinds remain, however, as EU sugar prices continue to align with world benchmarks and the market digests record yields. We see modest upside to FY17/18 operating profit forecasts, driven by the acquisition of Richelieu, with downside risk to EPS driven by the challenges at EDF & Man. The focus of investors remains on FY18/19, the first full year post EU sugar market liberalisation