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1. Company Snapshot

1.a. Company Description

Südzucker AG produces and sells sugar products in Germany 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 food ingredients, including dietary fibers, sugar substitutes, sugar, rice starches/flours, and functionalized wheat protein for food, animal feed, non-food, and pharmaceutical industries.This segment also offers frozen and chilled pizzas, pasta, baguette, and sauces and dressings; and portion packed foods and non-food products to hotels, caterers, food retailers, and restaurants.The CropEnergies segment produces fuel-grade ethanol, rectified spirits, protein-based food and animal feed, and liquid CO2 to oil companies and traders, industrial and pharmaceutical companies, food and animal feed producers, and beverage and cosmetics producers.


The Starch segment offers starches, saccharification products, ethanol, and byproducts which includes animal feed and fertilizers to food, paper, textiles, industrial chemicals, pharmaceuticals, cosmetics, petroleum, and animal feed industries.The Fruit segment produces fruit preparations for the dairy, ice cream, baked goods, and food service industries; and fruit juice concentrates, pure juices, fruit wines, natural aromas, and beverage bases for beverage industry.It is also involved in agricultural activities; and cultivation of wheat, sugar beet, corn, chicory, rapeseed, soybean, and other products.


The company was founded in 1837 and is headquartered in Mannheim, Germany.Südzucker AG is a subsidiary of Süddeutsche Zuckerrübenverwertungs-Genossenschaft eG.

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1.b. Last Insights on SZU

Südzucker AG's recent performance was negatively impacted by a reduction in its dividend payout to €0.20, a decrease from previous levels. The company's Q4 2025 earnings call highlighted market challenges, including sugar market volatility and rising energy costs, which affected its revenue stability. Additionally, Südzucker's non-sugar segments showed strategic growth, but this was not enough to offset the negative impact of these market challenges. Furthermore, the company's estimated fair value is €21.04, suggesting it may be undervalued, but this is based on a 2-stage free cash flow to equity model.

1.c. Company Highlights

2. Südzucker's H1 '25/'26 Earnings: Weak Sugar Business Weighs on Results

Südzucker's financial performance for the first half of the fiscal year '25/'26 was marked by a significant decline in group revenues to EUR 4.2 billion, down from the prior year's level. Group EBITDA was EUR 189 million, a 55% decrease from the previous year, and group operating profit was EUR 42 million, compared to EUR 269 million in the same period last year. The actual EPS came out at '-0.62', in line with estimates. The weak performance in Q2 was as expected, but the company confirms its full-year financial guidance for operating profit, which stands at EUR 100 million to EUR 200 million.

Publication Date: Oct -27

📋 Highlights
  • Group Revenue Decline:: Revenues fell to EUR 4.2 billion in H1 '25/'26, down from the prior year, with sugar segment revenues dropping to EUR 1.4 billion.
  • EBITDA and Operating Profit Drop:: Group EBITDA plunged 55% to EUR 189 million, and operating profit fell to EUR 42 million from EUR 269 million in H1 '24/'25.
  • Sugar Segment Losses:: Sugar business incurred an EUR 89 million operating loss due to low prices, with expected losses of EUR 850–250 million for the full year.
  • Cost-Saving Initiatives:: Targeting EUR 200 million in savings (EUR 80 million in FY '25), including EUR 100 million from OPTIMUM and EUR 80–100 million from NEXT LEVEL programs.
  • Financial Stability:: Net financial debt remained stable at EUR 1.674 billion, with a solid equity ratio of 45%, and full-year guidance maintained at EUR 100–200 million operating profit.

Segment-wise Performance

The sugar business saw a significant decline in revenues to EUR 1.4 billion and an operating loss of EUR 89 million, due to low sugar prices. The special products segment reported a moderate decline in revenues to EUR 1.1 billion and an operating profit of EUR 71 million. The CropEnergies segment saw revenues decline to EUR 402 million and an operating loss of EUR 13 million. The starch segment reported a decline in revenues to EUR 474 million and an operating profit of EUR 5 million. The fruit segment showed a positive development, with revenues increasing to EUR 858 million and an operating profit of EUR 68 million.

Outlook and Guidance

The company expects a surplus in the global sugar market for the '25/'26 and '26/'27 marketing years, leading to a bearish sentiment on prices. European sugar prices have fallen significantly, and the company is opposed to additional duty-free imports from Ukraine. The company revised its operating profit guidance downwards in August '25 due to a challenging market environment in the sugar segment. The current guidance expects group revenues to be between EUR 8.3 billion and EUR 8.7 billion and an operating result between EUR 100 million and EUR 200 million.

Valuation and Metrics

With a P/E Ratio of -10.61 and an EV/EBITDA of 2.49, the market is pricing in a challenging environment for Südzucker. The Net Debt / EBITDA ratio is 1.57, indicating a manageable debt position. Analysts estimate next year's revenue growth at -11.8%, indicating a continued challenging environment. As management noted, "sugar prices have not increased as much as anticipated, and volumes have decreased across all markets," highlighting the difficulties faced by the company.

Cost-Saving Initiatives

The company has initiated cost-saving initiatives, targeting EUR 200 million in savings for the Südzucker Group, with EUR 80 million expected this fiscal year, split 50/50 between AGRANA and Südzucker. The cost-saving programs, OPTIMUM and NEXT LEVEL, aim to achieve EUR 100 million and EUR 80-100 million in savings, respectively.

3. NewsRoom

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Südzucker AG (ETR:SZU) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Oct -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.61%)

6. Segments

Sugar

Expected Growth: 4.5%

Growing demand for non-GMO and eco-friendly products, increasing adoption in industrial and consumer applications, and rising health consciousness drive the growth of Südzucker AG's sugar market.

Special Products

Expected Growth: 4.5%

Growing demand for natural ingredients, increasing focus on health and wellness, and rising adoption in pharmaceutical and cosmetic industries drive growth in Südzucker AG's Special Products segment.

Fruit

Expected Growth: 4.5%

Growing demand for natural and healthy food products, increasing popularity of fruit-based beverages, and expanding use of fruit preparations in bakery and dairy industries drive the growth of Südzucker AG's Fruit segment.

CropEnergies

Expected Growth: 5.5%

Growing demand for renewable energy, increasing adoption of biofuels, and favorable government policies drive the growth of the bioethanol market, positioning CropEnergies as a leading European producer.

Starch

Expected Growth: 4.5%

Growing demand for plant-based ingredients, increasing adoption in food, paper, and textile industries, and rising consumer preference for sustainable products drive the growth of starch from Südzucker AG.

7. Detailed Products

Sugar

Südzucker AG is one of the largest sugar producers in Europe, offering a range of sugar products for food and beverage manufacturers, as well as for retail and industrial customers.

Bioethanol

Südzucker AG produces bioethanol, a sustainable and renewable energy source, used as a biofuel for transportation and as a raw material for the chemical industry.

Animal Feed

Südzucker AG offers a range of animal feed products, including molasses, beet pulp, and other by-products from sugar production, used as nutritious feed for livestock.

Specialty Sugars

Südzucker AG produces a range of specialty sugars, including organic sugars, fair-trade sugars, and sugar specialties for the food and pharmaceutical industries.

Molasses

Südzucker AG produces molasses, a thick, dark liquid derived from sugar production, used as an ingredient in food, animal feed, and biofuels.

8. Südzucker AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Südzucker AG is medium due to the availability of alternative sweeteners such as honey, maple syrup, and stevia. However, sugar remains a widely used and cost-effective sweetener, limiting the impact of substitutes.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fragmented nature of the sugar market, with many small and medium-sized buyers. Additionally, Südzucker AG's strong brand recognition and wide distribution network reduce the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the concentration of sugar beet suppliers in Europe. However, Südzucker AG's vertical integration and long-term contracts with suppliers mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the sugar industry, including significant capital investments and regulatory hurdles. Additionally, Südzucker AG's established brand and distribution network create a high barrier to entry for new competitors.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the sugar industry, with several large players competing for market share. Additionally, the industry is subject to fluctuations in sugar prices and demand, increasing the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 49.63%
Debt Cost 5.72%
Equity Weight 50.37%
Equity Cost 5.72%
WACC 5.72%
Leverage 98.52%

11. Quality Control: Südzucker AG passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.73$

Current Price

9.73$

Potential

-0.00%

Expected Cash-Flows