Südzucker - FY results: sugar market challenges weigh on FY2019 profit outlook

Davy Research
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EU sugar market liberalisation (and global pricing alignment) has taken its toll on SZU’s equity (down c.31% LTM). The group’s material reduction in FY2019 profit guidance – previously announced on March 26th – reflects capitulation in the Sugar segment with an expected loss of €100-200m. Consequently, non-Sugar segments will step up to be key drivers of profits and cash through FY2018/2019. The duration of EU sugar market instability, and the inflection point for recovery, remains a key focus for investors – at present not yet in sight.