agrana.pdf

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2012|13ANNUAL REPORT

RESULTSAND

RESPONSIBILITY


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0220AGRANA AT A GLANCE02 Letter rom the CEO04 Supervisory Boards report06 AGRANAs Management Board08 Corporate governance report16 AGRANAs strategy18 AGRANA in the capital market

2142RESULTS AND RESPONSIBILITY

SUSTAINABILITY FEATURE SECTION

4376GROUP MANAGEMENT REPORT44 Organisational structure

46 Financial results50 Sugar segment54 Starch segment58 Fruit segment62 Sustainability


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HIGHLIGHTS OF 2012|13 RESULTS

Record highs in revenue andpre-exceptionals operating profit

Revenue growth o 18.9% to 3,065.9 million

Increase o 1.9% in operating profitbeore exceptional items, to 236.9 million

Operating margin o 7.7% (prior year: 9.0%)

Net exceptional items expense o 19.1 millionin Fruit segment (prior year: 1.4 million)

Earnings per share o 10.52 (prior year: 10.73)

Stronger equity ratio o 47.0% (prior year: 45.4%)

Gearing o 39.9% (prior year: 43.7%)

Dividend proposal o 3.60 per share, as in prior year

Merger o AGRANA Juice and Ybbstalerinto AUSTRIA JUICE

f CONTENTS


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2012|13 2011|12 2010|11 2009|10 2008|09

FINANCIAL PERFORMANCE

Revenue m 3,065.9 2,577.6 2,165.9 1,989.2 2,026.3

EBITDA m 318.3 309.0 207.8 176.2 119.2

EBITDA margin % 10.4 12.0 9.6 8.9 5.9

Operating profit beore exceptional items m 236.9 232.4 128.6 91.9 37.8

Operating margin beore exceptional items % 7.7 9.0 5.9 4.6 1.9

Operating profit ater

exceptional items [EBIT] m 217.8 231.0 128.6 86.9 34.6

Profit/(loss) beore tax m 190.2 206.3 109.7 87.4 (32.4)

Profit/(loss) or the period m 156.5 155.7 87.1 72.7 (15.9)Attributable to shareholders of the parent 149.4 152.4 84.9 72.2 (11.6)

Attributable to non-controlling interests 7.1 3.3 2.2 0.5 (4.3)

Operating cash flow beore

change in working capital m 256.3 250.1 169.0 149.6 97.2

Purchases o property, plant and

equipment and intangibles m 149.8 97.1 55.9 48.4 73.8

Purchases o non-current financial assets m 0.1 1.7 0.1 0.9 1.7

Staf count 8,449 7,982 8,243 7,927 8,244

Return on sales % 6.2 8.0 5.1 4.4 (1.6)

Return on capital employed % 13.4 14.4 9.3 6.9 2.8

SHARE DATA AT LAST DAY OF FEBRUARY

Closing price 101.50 83.95 79.20 71.56 47.50

Earnings per share 10.52 10.73 5.98 5.08 (0.82)Dividend per share 3.60 3.60 2.40 1.95 1.95

Dividend yield % 3.5 4.3 3.0 2.7 4.1

Dividend payout ratio % 34.2 33.6 40.1 38.4 neg.

Price/earnings ratio 9.6 7.8 13.2 14.1 neg.

Market capitalisation m 1,441.5 1,192.3 1,124.8 1,016.3 674.6

FINANCIAL STRENGTH

Total assets m 2,578.2 2,362.1 1,992.7 1,888.4 1,996.2

Share capital m 103.2 103.2 103.2 103.2 103.2

Core non-current assets m 1,045.8 956.5 937.0 962.2 978.0

Equity m 1,212.1 1,073.0 964.2 898.5 825.9

Equity ratio % 47.0 45.4 48.4 47.6 41.4Net debt m 483.7 469.2 382.4 376.6 470.1

Gearing (net debt to total equity) % 39.9 43.7 39.7 41.9 56.9

Restated in the 2011|12 financial year to reflect a retrospective change in accounting policy related to IAS 19 (Employee Benefits). Detailed inormation concerning the calculation method o individual perormance indicators can be ound on page 160. Beore exceptional items. Excluding goodwill. The staf count represents the average number o employees or the financial year. Profit beore tax, divided by revenue. Dividend proposal to the Annual General Meeting on 5 July 2013. Non-current assets excluding deerred tax assets and the item receivables and other assets.

KEY FINANCIALS(UNDER IFRS)


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To speak o sustainability today is to speak o responsibility in three dimensions: From

an ecological point of view, the responsibility for nature, the environment and natural

resources. From a people perspective, the responsibility to staf, to ellow citizens

and personal and cultural identities. And from an economic standpoint, the responsibility

or healthy growth and a secure uture.

These three dimensions should not be considered in isolation rom one another. Only

by seeing them as an interrelated whole can the principle o sustainability be meaning-

ully honoured. At AGRANA as a leading processor o agricultural raw materials, thisintegrated approach has consistently been central to our way o doing and seeing things,

based on a harmonious balance between nature, society and economic success.

This harmony o ecology, humanity and economy also inorms the motto o this years

AGRANA annual report: Results and Responsibility. Two actors that are inseparable

and interdependent: They orm a closed cycle which is thus a defining aspect not just

o our technology but also o our philosophy. And importantly, they ofer a powerul

vision o innovative, integrated management fit or the uture. For it is by aithully

living up to our responsibility of today that we build a solid foundation for the rewarding

results o tomorrow.

RESULTSAND

RESPONSIBILITY


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02

Ater the previous years leap in revenue and earnings, it seemed di cult at first to repeat thatperormance. It thereore gives me all the more pleasure to report that, in a very demandingmarket environment, we achieved a new all-time high o 3,066 million in revenue. This was alsohelped by the first-time consolidation o AUSTRIA JUICE GmbH, the company which resulted romlast years merger o AGRANA Juice with the Ybbstaler group. Crop-related high raw material costsand passing those costs through to the market, as well as dealing with a competition-distortingmarket pattern o widespread evasion o high sales taxes in some Central and Eastern Europeancountries, were among the major challenges that we rose to. Through pro-active hedging we werealso able to work efectively with the short-term volatility in the raw material markets. Operatingprofit beore exceptional items was thus high again: at almost 237 million, it even slightlyimproved on the prior years record result. However, non-recurring efects led to a reduction in

operating profit to about 218 million.

In the financial year AGRANA placed its first Schuldscheindarlehen, or bonded loan, o 110 mil-lion with maturities o five, seven and ten years. This has achieved our goal, set two years ago, olengthening the traditionally short-term unding maturity profile. Moreover, through a syndicatedloan we secured multi-year credit acilities totalling 450 million to ensure the e cient bufer-ing o short-term fluctuations in liquidity. AGRANAs debt-equity gearing urther improved to 39.9%and the strengthened equity ratio o 47.0% likewise underscores our continuing conservativebalance sheet.

2013|14 financial yearThe new financial year too will be a very exciting one or us:

It will bring important decisions in the arena o European Union agriculture policy, and by themiddle o 2013 there should be clarity as to the terms on which the EU sugar regime will beextended beyond the year 2015.

The wheat starch plant in Pischelsdor, Austria, will be brought on-stream beore summer2013, with a total investment o about 70 million and only around one year ater the layingo the oundation stone. In the course o the year its output will be ramped up to approximately90% o nominal capacity. The bioethanol production plant, downstream rom the wheat starchactory in the process flow, will continue to run at ull capacity.

Our ruit preparations business in Europe is conronted with stagnating markets, high productdiversity, intense competition and high raw material costs. We will press ahead with a numbero measures designed to ensure our continuing competitiveness in this activity in the uture.

At the same time, we are very pleased with the growth in North and South America and Asia.

Especially the US market is doing so well that we have decided to build a ourth US plant,in Lysander in New York State. In Dachang, China, a state-o-the-art plant was completed at theend o 2012 to supply the local market optimally. The acility is designed on a generous scaleand has room or expansion, leaving us well-placed to respond to the rising local demand in thecoming years.

In total this year, AGRANA will invest about 143 million, or almost as much as last year and onceagain well above the rate o depreciation. Besides our large projects, 4 million will be used toexpand our research acilities in Tulln, Austria. As well, in spring 2013 the Group headquarters inVienna moved to a new o ce building that accommodates the growing need or space.

LETTER FROM THE CEO

AGRANAs evolution over

the past 25 years can be

summed up as embracing

the need or Results and

Responsibility. We have

not only grown as a profit-

able and sound business,

but have also consistently

respected our environ-

ment, natural resources,

staf and ellow citizens.


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0325-year anniversary or AGRANA

The current new financial year is a special one or us:AGRANA will celebrate 25 years in business. What started aquarter century ago as a purely Austria-ocused sugar andstarch producer with seven locations, has grown into a globalgroup with currently 56 sites in 26 countries on six conti-nents and about 8,500 employees, including around 2,000in Austria, 4,000 in the rest o Europe and 2,500 in the resto the world. For AGRANA, established as a holding companyo the Austrian sugar and starch industry, the emphasisinitially was on integration o the business activities. Butimmediately ater its ounding, the company received a keyimpetus rom the all o the Iron Curtain in 1989 and the

associated opening o the countries to the East. AGRANAseized the opportunity and invested in the new markets the first step in a progression o international expansion. Thegoing public in 1991 brought a cultural change or the Grouptowards greater transparency and stronger structures andprocesses. For urther diversification, AGRANA began in 2003to add the third segment, Fruit, with the ruit preparationsand ruit juice concentrates businesses. This ultimately sawthe company develop into todays global player.

Since its beginnings 25 years ago, AGRANA has been growingboth organically and through acquisitions and partnerships.Over the two and a hal decades, revenue went rom about

300 million to more than 3 billion. That translates toaverage annual growth o close to 10%. This trajectory surelyhas a lot to do with our sustainable business model andentrepreneurial thinking.

SustainabilityTrue to the motto o this annual report, Results and Respon-sibility, the subject o sustainability will remain exceedinglyimportant or AGRANA in the uture. As staf development isa crucial activity or us, we will step up investment in train-ing and developing our people. In a rapidly growing inter-national organisation, we need flexible employees who think

entrepreneurially and globally and who take the long view.That is why we will continue to work on greater connectivityand openness between the various business segments anddepartments. We already launched internal developmentprogrammes several years ago to allow the diversity o ourglobal business activities to be reflected in the managementtiers o the organisation.

In manuacturing and product terms, AGRANA has madegreat strides in the last ew years. Thus, at our productionsites, we do everything to achieve energy-e cient processesand the most complete possible utilisation o all rawmaterials, residues and by-products. For process additives,

we rely mainly on natural substances.

As to our financial results, we plan to continue our soundlong-term growth trend. AGRANA is a complex internationalconcern with numerous local operating units. This startingposition and the mounting requirements in the areas oIFRS, enorcement, compliance, competition rules, etc., posebig challenges in managing the Group. We thereore mustcontinue to harmonise and streamline internal processesand work flows and urther optimise structures.

Regulatory environment and Group strategyThe reorganisation o the European sugar market will beo considerable significance or AGRANA. We believe we

are well-positioned or the uture. In the near term,the ocus o our growth eforts in the Sugar segment is onthe Western Balkans region. Our activities in the Starchsegment will also be stepped up in Southeastern Europeand the e ciency o our production there is to be urtherheightened. In the Fruit segment, we want to remainthe world market leader and continually improve ourposition in the growth markets.

Share perormanceAGRANAs share price remained on its long-term rising trendin the past financial year, or the first time breaking the

100 mark. For us, despite the currently relatively low reefloat, being a publicly traded company is o great importance.With a policy o open and transparent communication, weaim to saeguard investors confidence in the Group andmake our business perormance and management decisionspredictable and easy to understand.

On behal o the whole Management Board, let me thankeveryone who has contributed to AGRANAs successul year,particularly our employees or their loyalty and dedication,and our commercial partners and shareholders or theirconfidence and trust.

Sincerely

Johann MarihartChie Executive O cer

AGRANA

BETEI

LIGUNGS-AG

2012|

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AGRANA AT A GLANCELETTER FROM THE CEO


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04

SUPERVISORY BOARDS REPORT

The Supervisory Board was actively involved in and supported AGRANAs perormance in the2012|13 financial year and ulfilled its responsibilities and exercised its powers under the law andthe Articles o Association while observing the provisions o the Austrian Code o Corporate Govern-ance. In a total o five meetings, o which all its members attended at least hal, the SupervisoryBoard, through the reports o the Management Board and detailed written material, inormeditsel about the companys business situation and financial position, about all relevant matters con-cerning the business results, financial situation, investment plans and exceptional business trans-actions as well as the corporate strategy, and discussed these subjects with the Management Board.

The thorough deliberations in the meetings o the Supervisory Board and its committees centredon the corporate strategy and opportunities or the urther development o the Group, as well asthe current challenges o the general economic environment. The Supervisory Board was brieedin a timely and comprehensive manner about measures requiring its approval. In accordancewith the provisions o the Austrian Code o Corporate Governance, the Supervisory Board commis-

sioned an external evaluation o its activities, the findings o which it thoroughly discussed.

Regular key agenda items o the Supervisory Boards deliberations were the strategic orientationand urther development o the Group, the business trend in all segments and the optimisation ocorporate financing. In addition, the Chairman o the Supervisory Board was in regular contactwith the Chie Executive O cer to discuss ongoing developments in the Groups environment, theirimpact on current business results, and the risk situation.

In its meeting on 11 May 2012, the Supervisory Board dealt with the audit o the parent companyand consolidated financial statements or the year ended 29 February 2012 and the nominationo the independent auditor or election or the 2012|13 financial year, and approved a strategicequity investment. The independent auditor attended this meeting and reported on the ocal pointsand results o the audit, which also included the accounting-related portion o the internal control

system. The Supervisory Board adopted the parent company financial statements and approved theconsolidated financial statements.

By circular resolution, a strategic equity investment project was approved on 22 June 2012.

The meeting on 2 July 2012 primarily discussed medium-term planning and a prospective strategicequity investment. The reconstitution o the Supervisory Board required as a result o its re-electionby the Annual General Meeting on 2 July 2012 was efected in a meeting immediately ater the AGM.

On 10 October 2012 the Supervisory Board, by circular resolution, approved a Group debt financ-ing measure.

The meeting on 16 November 2012 discussed the reporting on the orecast financial results or

2012|13, the renewal o the Management Board term o Johann Marihart by another five yearsater it expires at the end o September 2013, the subject o corporate governance and the approvalo construction o a new plant or ruit preparations in the USA.

In its meeting on 7 February 2013, the Supervisory Board deliberated on the planning and invest-ment projects or the 2013|14 financial year. The meeting discussed the sel-evaluation under the

Austrian Code o Corporate Governance and two strategic investment projects. The SupervisoryBoard also resolved to renew the Management Board term o Fritz Gattermayer, which expires atthe end o December 2013, by another five years.


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05

AGRANA

BETEI

LIGUNGS-AG

2012|

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The Audit Committee convened or two meetings in the2012|13 financial year. With the independent auditorin attendance, the Audit Committee dealt exhaustively withthe 2011|12 parent company and consolidated financialstatements o AGRANA Beteiligungs-AG and discussed theManagement Boards proposal or the appropriation oprofit. The Committees deliberations also covered the audito the corporate governance report and dealt with the report

rom Internal Audit and the risk management system.

The Committees deliberations also covered the report romInternal Audit and the risk management system.

Both the Supervisory Board and the Audit Committeereceived detailed reports on the irregularities at AGRANAFruit Mxico, S.A. de C.V., the investigation into the acts othe case, and the measures taken in response.

The Nomination and Remuneration Committee met twicein the reporting period and discussed the renewal othe Management Board terms o Johann Marihart and FritzGattermayer.

The committee chairmen regularly reported to the Super-visory Board on the work o the respective committees.

Changes in Supervisory Board membershipChristian Teufl retired rom the Supervisory Board at theend o the Annual General Meeting on 2 July 2012. TheSupervisory Board would like to thank Mr. Teufl sincerely orhis many years o valuable service to the company. JosePrll was newly elected to the Supervisory Board by the AGM.

Parent company and consolidated financial statementsThe consolidated financial statements, group managementreport, parent company financial statements and parentcompany management report o AGRANA Beteiligungs-AG

or the 2012|13 financial year presented by the ManagementBoard, as well as the accounting records, were audited byand received an unqualified audit opinion rom the indepen-dent auditor appointed by the Annual General Meeting,KPMG Austria AG, Wirtschatsprungs- und Steuerberatungs-gesellschat, Vienna. The compliance review o the corporategovernance report under section 243b Austrian CommercialCode and the review o AGRANAs compliance in the 2012|13

financial year with the Austrian Code o Corporate Gover-nance (the Code) were perormed by Univ. Pro. DDr. Walde-mar Jud Corporate Governance Forschung CGF GmbHand ound that AGRANA complied with the provisions o theCode in 2012|13, to the extent that the provisions werecovered by the declaration o compliance. The SupervisoryBoard endorses the results o the audit and o the compli-ance reviews.

The Audit Committee has reviewed the parent companyfinancial statements and reported to the Supervisory Boardin the presence o the independent auditor. The SupervisoryBoard has reviewed the consolidated financial statements,

group management report, parent company financial state-ments and the parent company management report andcorporate governance report o AGRANA Beteiligungs-AG orthe 2012|13 financial year as well as the Management Boardsproposal or the appropriation o profit. The final results oall o these reviews did not give rise to any reservations.

The Supervisory Board has approved the consolidated finan-cial statements and parent company financial statementsor the 2012|13 financial year prepared by the ManagementBoard, which are thus adopted or the purposes o section96 (4) Austrian Stock Corporation Act. The Supervisory Boardendorses the group management report and parent company

management report or the 2012|13 financial year and is inagreement with the proposed appropriation o profit.

The Supervisory Board extends its sincere appreciation andthanks to the Management Board and all employees or theircommitment and the work so successully accomplished.

Vienna, May 2013

Christian KonradChairman o the Supervisory Board

AGRANA AT A GLANCESUPERVISORY BOARDS REPORT


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AGRANASMANAGEMENT BOARD

JOHANN MARIHARTChie Executive Of cer

Chie Executive Of cer since 1992

First appointed: 19 September 1988Appointed until: 30 September 2018

Born 1950. Studied chemical engineeringat Vienna University o Technology, majoringin biotechnology and ood chemistry. Aterproessional experience in a pharmaceuticalcompany, began his career with AGRANAin 1976 at the starch actory in Gmnd (heado research and development, plant manager,managing director o starch activities).Member o the Management Board o AGRANABeteiligungs-AG since 1988. Appointed CEO

o AGRANA Beteiligungs-AG in 1992. Presentresponsibilities: Business Strategy, Production,Quality Management, Human Resources,Communication, Research & Development,and Starch Segment.

06

CORPORATEGOVERNANCEREPORT


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THOMAS KLBL

Member o the Management Board

First appointed: 8 July 2005

Appointed until: 7 July 2015

Born 1962. Trained in industry, then studied business administrationat Mannheim University. Held various positions in the Sdzucker groupsince 1990; was Director in charge o strategic corporate planning,group development and investments prior to his appointment to theExecutive Board o Sdzucker AG Mannheim/Ochsenurt. Responsibilityon the Management Board o AGRANA: Internal Audit.

WALTER GRAUSAMMember o the Management Board

First appointed: 1 January 1995

Appointed until: 31 December 2014

Born 1954. Studied business administration at Vienna University

o Economics and Business Administration. Worked in tax advisory andaudit services, then in a ood group in the controlling department and,rom 1987, as a member o management. From 1989 to 1994 heldmanagement positions in an Austrian media group. Appointed to theManagement Board o AGRANA Beteiligungs-AG in 1995. Presentresponsibilities: Finance, Controlling, Treasury, Inormation Technologyand Organisation, Mergers & Acquisitions, Legal, and Fruit Segment.

FRITZ GATTERMAYERMember o the Management Board

First appointed: 1 January 2009

Appointed until: 31 December 2018

Born 1957. Studied agricultural economics at University o NaturalResources and Applied Lie Sciences, Vienna, and history and political

science at University o Vienna. In 1995 was appointed head othe Group-level Business Strategy and Raw Materials departmentat AGRANA Beteiligungs-AG, with Prokura (ull commercial powerso attorney). In 2000 became a management board member o

AGRANA Zucker und Strke AG. From 2004 to 2008 was a member

o the senior management o the Sugar segment and Starch segment.In 2008 became CEO o the Sugar segment. Member o the AGRANAManagement Board since 2009. Present responsibilities: Sales, RawMaterials, Purchasing and Sugar Segment.

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08AGRANA is committed to the Austrian Code o Corporate Governance. The Code, a voluntarysel-regulatory initiative o private industry, is a comprehensive set o best practices thatstipulates equal treatment o all shareholders and transparency o corporate governance. TheCode can be viewed on the website o the Austrian Working Group or Corporate Governanceat www.corporate-governance.at.

The Code consists o binding so-called L rules (these are based on legal requirements); o C rules(comply-or-explain rules), which are expected to be adhered to, with deviations to be explainedin order to achieve compliance with the Code; and o R rules (recommendations), non-compliancewith which requires neither disclosure nor explanation.

In the 2012|13 financial year the Austrian Code o Corporate Governance was applied by AGRANAin the version o January 2012. At its meetings on 16 November 2012 and 7 February 2013,

the Supervisory Board o AGRANA Beteiligungs-AG discussed matters o corporate governanceand unanimously adopted the statement o compliance with the Code.

By providing the ollowing explanations, AGRANA is also in conormity with all o the CodesC rules:

Rule 49 (contracts requiring approval)Under section 95 (5)(12) o the Austrian Stock Corporation Act, the approval o the SupervisoryBoard is required or contracts with members o the Supervisory Board by which membersundertake, outside their role on the Supervisory Board, to provide a service to the Companyor a subsidiary or a material consideration. This also applies to contracts with companies inwhich a Supervisory Board member has a significant economic interest. For business policy andcompetition reasons, the object and terms o such contracts are not published in the Annual

Report as stipulated in rule 49.

Rule 54 (appointment o an independent Supervisory Board member)AGRANA Beteiligungs-AG has a ree float o more than 20%. From this threshold upward,rule 54 o the Austrian Code o Corporate Governance stipulates the election o an independentmember o the Supervisory Board who is neither a holder o more than 10% o the Companysshare capital nor represents the interests o such a shareholder. The Supervisory Board o

AGRANA Beteiligungs-AG does not have such a ree-float representative.

The business culture o the AGRANA Group has always involved open and constructive teamworkbetween the Management Board and Supervisory Board, which together ensure that the Codesrequirements are ulfilled. The Management and Supervisory Boards o AGRANA, and especially theirchairmen, are thus engaged in ongoing dialogue regarding the Groups perormance and strategic

direction, both at and between Supervisory Board meetings.

To saeguard open and transparent communication with shareholders and the interested public,inormation given to investors during conerence calls and road shows is simultaneously madeavailable to all other shareholders via the Group website (www.agrana.com).

External evaluationIn accordance with rule 62 o the Austrian Code o Corporate Governance, AGRANA commissionedan external evaluation o compliance with the Code, which was perormed by Univ. Pro. DDr.Waldemar Jud Corporate Governance Forschung CGF GmbH. The evaluation was conducted usingthe questionnaire issued or this purpose by the Austrian Working Group or Corporate Governanceand is available to the public on the AGRANA website at www.agrana.com. The report confirms that

AGRANA complied with the Code in the 2012|13 financial year.

CORPORATE GOVERNANCE REPORT

For us, Results and

Responsibility means

being committed to the

principles o respon-

sible, transparent and

sustainable company

direction and control.


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09

AGRANA AT A GLANCECORPORATE GOVERNANCE REPORT

AGRANAS BOARDS

Management BoardThe Management Board o AGRANA Beteiligungs-AG has our members.

Name Year Date first End o

o birth appointed current term

Johann Marihart

Chie Executive O cer since 1992 1950 19 Sep 1988 30 Sep 2018

Fritz Gattermayer

Management Board member since 2009 1957 1 Jan 2009 31 Dec 2018

Walter Grausam

Management Board member since 1995 1954 1 Jan 1995 31 Dec 2014

Thomas Klbl

Management Board member since 2005 1962 8 Jul 2005 7 Jul 2015

The members o the Management Board hold supervisory board or similar positions in the ollow-ing domestic and oreign companies not included in the consolidated financial statements:

Johann MarihartAs a result o the syndicate agreement between Sdzucker AG Mannheim/Ochsenurt,Mannheim, Germany (Sdzucker) and Zucker-Beteiligungsgesellschat m.b.H., Vienna, JohannMarihart serves as a member o the management board o Sdzucker and as a membero the supervisory boards o its subsidiaries Ra nerie Tirlemontoise S.A., Brussels, Belgium,Saint Louis Sucre S.A., Paris, France, and BENEO GmbH, Mannheim, Germany.

In Austria he serves as supervisory board chairman o TV Austria Holding AG, Vienna, andSpanische Horeitschule, Vienna; vice-chairman o the supervisory boards o BundesbeschafungGmbH, Vienna, and sterreichische Forschungsrderungsgesellschat mbH, Vienna; member othe supervisory board o Ottakringer Getrnke AG, Vienna, and member o the General Council(the supervisory board) o Oesterreichische Nationalbank, Vienna.

Thomas KlblThomas Klbl holds the ollowing positions: Member o the supervisory boards o Baden-Wrttembergische Wertpapierbrse GmbH, Stuttgart, Germany; BENEO GmbH, Mannheim,Germany; CropEnergies AG, Mannheim, Germany; Freiberger Holding GmbH, Berlin, Germany;Ra nerie Tirlemontoise S.A., Brussels, Belgium; Saint Louis Sucre S.A., Paris, France; andSdzucker Polska S.A., Wrocaw, Poland. He is also supervisory board chairman o Mnnich

GmbH, Kassel, Germany; PortionPack Europe Holding B.V., Oud-Beijerland, Netherlands; andSdzucker Versicherungs-Vermittlungs-GmbH, Mannheim, Germany.

The Management Board o AGRANA Beteiligungs-AG manages the Companys business in accor-dance with principles o modern governance and with the legal requirements, the Articleso Association and the Management Board terms o reerence (the Management Board charter).The members o the Management Board are in ongoing communication with each other and, inManagement Board meetings held at least every two weeks, discuss the current course o business

and take the necessary inormal and ormal decisions. The Group is managed on the basis oan open exchange o inormation and regular meetings with the segment heads and other seniorsegment management.

The terms o reerence set out the division o responsibilities and the cooperation within the

Management Board and its duties in respect o communication and reporting, and list the typeso actions which require the approval o the Supervisory Board.

AGRANA

BETEI

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10The remits o the Management Board members are as ollows:

Name Responsibilities

Johann Marihart Business Strategy, Production, Quality Management,

Human Resources, Communication (including

Investor Relations), Research and Development,

and Starch Segment

Fritz Gattermayer Sales, Raw Materials, Purchasing,

and Sugar Segment

Walter Grausam Finance, Controlling, Treasury, Inormation Technology

and Organisation, Mergers & Acquisitions, Legal,

and Fruit Segment

Thomas Klbl Internal Audit

Supervisory BoardThe Supervisory Board o AGRANA Beteiligungs-AG has twelve members, o whom eight are share-holder representatives elected by the Annual General Meeting and our are employee representa-tives rom the staf council. All Supervisory Board members elected by the Annual General Meetingwere re-elected on 2 July 2012 or a term ending at the conclusion o the General Meeting thatconsiders the results o the 2016|17 financial year.

Name, Year Date first End o

and Supervisory board positions o birth appointed current term

in listed domestic and oreign companies

Christian Konrad, Vienna, independent

Chairman o the Supervisory Board 1943 19 Dec 1990 30th AGM (2017)

Vice-Chairman o the Supervisory Board

o Sdzucker AG Mannheim/Ochsenurt,

Mannheim, Germany


o BAYWA AG, Munich, Germany

Member o the Supervisory Board

o DO & CO Restaurants & Catering AG, Vienna

Chairman o the Supervisory Board

o UNIQA Versicherungen AG, Vienna,

until 29 May 2012

Wolgang Heer, Ludwigshaen, Germany,independent

First Vice-Chairman o the Supervisory Board 1956 10 Jul 2009 30th AGM (2017)

Erwin Hameseder, Mhldor, Austria,

independent

Second Vice-Chairman o the Supervisory Board 1956 23 Mar 1994 30th AGM (2017)


o Flughaen Wien AG, Vienna

First Vice-Chairman o the Supervisory Board

o Raifeisen Bank International AG, Vienna


o STRABAG SE, Villach, Austria

Second Vice-Chairman o the Supervisory Board

o UNIQA Versicherungen AG, Vienna Member o the Supervisory Board


Mannheim, Germany

AGRANA AT A GLANCE | SUSTAINABILITY FEATURE SECTION | GROUP MANAGEMENT REPORT | CONSOLIDATED FINANCIAL STATEMENTS | OTHER INFORMATION


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Name, Year Date first End oand Supervisory board positions o birth appointed current term

in listed domestic and oreign companies

Jochen Fenner, Gelchsheim, Germany,

independent

Member o the Supervisory Board 1952 1 Jul 2011 30th AGM (2017)



Mannheim, Germany

Hans-Jrg Gebhard, Eppingen, Germany,

independent




Mannheim, Germany


o VK Mhlen AG, Hamburg, Germany


o CropEnergies AG, Mannheim, Germany

Ernst Karpfinger, Baumgarten/March, Austria,

independent


Thomas Kirchberg, Ochsenurt, Germany,

independent


Jose Prll, Vienna, independentMember o the Supervisory Board 1968 2 Jul 2012 30th AGM (2017)


o VK Mhlen AG, Hamburg, Germany

Employee representatives

Thomas Buder, Tulln, Austria

Chairman o the Group Staf Council

and the Central Staf Council 1970 1 Aug 2006

Gerhard Glatz, Gmnd, Austria 1957 1 Jan 2010

Stephan Savic, Vienna 1970 22 Oct 2009

Peter Vymyslicky, Leopoldsdor, Austria 1952 22 Dec 1997

In the 2012|13 financial year the composition o the Supervisory Board changed as ollows:

Christian Teufl, Vienna

Appointed 10 July 2003, retired 2 July 2012

Vice-Chairman o the Supervisory Board o VK Mhlen AG, Hamburg, Germany

Member o the Supervisory Board o Raifeisen Bank International AG, Vienna

Jose Prll, Vienna

Appointed 2 July 2012 as an independent member

Member o the Supervisory Board o VK Mhlen AG, Hamburg, Germany

Jose Prll inormed himsel appropriately about the structure and activities o AGRANA and thetasks and responsibilities o supervisory board members.

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12Supervisory Board independence

The Supervisory Board o AGRANA Beteiligungs-AG applies the guidelines or the definition osupervisory board independence in their orm set out in Annex 1 to the Austrian Code o CorporateGovernance:

A Supervisory Board member shall not, in the past five years, have been a member o theManagement Board or other management staf o the Company or a subsidiary o the Company.

A Supervisory Board member shall not have a business relationship, o a size significant tothe member, with the Company or a subsidiary o the Company, and shall not have had such abusiness relationship in the past year. This also applies to business relationships with companiesin which the Supervisory Board member holds a significant economic interest, but does notapply to board positions held within the Group.

The approval o individual transactions by the Supervisory Board under L rule 48 does notautomatically imply a members designation as non-independent.

A Supervisory Board member shall not, in the past three years, have been an external auditoro the Company or a partner or employee o the external auditing firm.

A Supervisory Board member shall not be a management board member o another companyin which a member o the Companys Management Board is a supervisory board member.

A Supervisory Board member shall not serve on the Supervisory Board or more than 15 years.This does not apply to Supervisory Board members who are shareholders with a strategic share-holding in the Company or who represent the interests o such a shareholder.

A Supervisory Board member shall not be a close relative (direct descendant, spouse, common-law spouse, parent, uncle, aunt, sibling, nephew or niece) o a Management Board member oro persons holding any o the positions reerred to in the oregoing points.

Committees and their membersWhere the importance or specialist nature o a particular subject matter makes it appropriate, theSupervisory Board also exercises its advisory and supervisory unctions through the ollowing threecommittees:

The Nomination and Remuneration Committee deals with the legal relationships between theCompany and the members o the Management Board. The Committee is responsible or succes-

sion planning in respect o the Management Board and approves the compensation schemesor the Management Board members. In the 2012|13 financial year the Nomination and Remu-neration Committee met twice. In its meeting on 16 November 2012, it considered the renewal othe Management Board term o Johann Marihart, which expires at the end o September 2013, andproposed to the Supervisory Board to renew his appointment or the legal maximum term o fiveyears, ending 30 September 2018. In the meeting on 7 February 2013 the Committee consideredthe renewal o the Management Board term o Fritz Gattermayer, which expires at 31 December 2013,and proposed the renewal o his appointment or the legal maximum period rom 1 January 2014

to 31 December 2018.



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The Strategy Committee prepares strategic decisions o the Supervisory Board by providing decisionsupport, and makes decisions in urgent matters.

TheAudit Committee prepares or transaction by the Supervisory Board all matters related tothe Companys separate financial statements and to the auditing o the accounting records and othe consolidated financial statements and Group management report, including the corporategovernance report. It monitors the efectiveness o the internal control system, audit system andrisk management system and verifies the independence and qualifications o the external auditors.In the 2012|13 financial year the Audit Committee met twice. Its meetings ocused particularly onthe audit o the 2011|12 financial statements, the preparation o the audit o the 2012|13 financialstatements, and the supervision o the risk management system.

The Supervisory Board terms o reerence include the procedures or the committees; an excerpt

o the terms o reerence is available on the AGRANA website at www.agrana.com.

Supervisory Board committees consist o the Supervisory Board Chairman or a Vice-Chairman,and o as many Supervisory Board members as the Supervisory Board shall determine. The onlyexception is the Nomination and Remuneration Committee, which consists o the SupervisoryBoard Chairman and two members appointed rom among the Supervisory Board members electedby the Annual General Meeting. I the Supervisory Board has two Vice-Chairmen, they shall beappointed as these two other members o the Nomination and Remuneration Committee.

Name Position on committee

Nomination and

Remuneration Committee

Christian Konrad Chairman (and expert advisor on compensation)Wolgang Heer Member

Erwin Hameseder Member

Strategy Committee

Christian Konrad Chairman

Wolgang Heer Member

Erwin Hameseder Member

Hans-Jrg Gebhard Member

Thomas Buder Employee representative

Gerhard Glatz Employee representative

Audit Committee

Erwin Hameseder Chairman (and expert advisor on finance)Wolgang Heer Member

Thomas Buder Employee representative

In the reporting period the Supervisory Board convened or five meetings. The Supervisory Boardwas re-elected at the Annual General Meeting on 2 July 2012. At its constituting meeting imme-diately ater the AGM, the Supervisory Board elected Christian Konrad as its Chairman, WolgangHeer as its First Vice-Chairman and Erwin Hameseder as its Second Vice-Chairman. No SupervisoryBoard member attended ewer than hal o the Boards meetings in the 2012|13 financial year.

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14COMPENSATION REPORT

Compensation o the Executive BoardThe total compensation o the Management Board members consists o a fixed and a variable,perormance-based component. The perormance-based pay component is contractually tied tothe amount o the dividend paid.

The compensation paid in the 2012|13 financial year to the individual members o the Manage-ment Board was as ollows:

Fixed Variable Total

compensation compensation 2012|13

or 2012|13 or 2011|12

Johann Marihart (Chie Executive O cer) 550,000 562,401 1,112,401

Fritz Gattermayer 400,000 409,019 809,019

Walter Grausam 525,000 536,837 1,061,837

Thomas Klbl

The fixed compensation o the Management Board members remained unchanged compared tothe prior year. Post-employment benefits granted to the Management Board under the Companysplan are pension, disability insurance and survivor benefits. The pension becomes available whenthe pension eligibility criteria o the Austrian public pension scheme (ASVG) are met. The amounto the pension is calculated as a percentage o a contractually agreed assessment base. For the2012|13 financial year, pension und contributions o 684 thousand (prior year: 690 thousand)were paid, while 848 thousand (prior year: 783 thousand) was added to provisions or pension

obligations within the balance sheet item other provisions.

In the event o retirement below the age determined under the ASVG, the amount o the pensionis reduced. The retirement benefit obligations in respect o the Management Board are adminis-tered by an external pension und. An amount o 3,285 thousand (prior year: 2,437 thousand)was recognised in the balance sheet at 28 February 2013. In the event that a Management Boardappointment is withdrawn, severance pay has been agreed in accordance with the provisionso the Employees Act.

No compensation agreements in the event o a public takeover ofer exist between the Companyand its Management Board, Supervisory Board or other staf.

AGRANA maintains directors and o cers liability insurance coverage or management staf. This

D&O insurance covers certain personal liability risks o the persons acting as legal representativeso the AGRANA Group. The cost is borne by AGRANA.

Transactions o members o the Management Board in financial instruments are notified to theFinancial Market Authority (FMA) in accordance with section 48d (4) Stock Exchange Act andpublished on the website o the FMA. During the reporting period there were no such transactions.

Compensation o the Supervisory BoardOn 2 July 2012 the Annual General Meeting approved an annual aggregate remuneration or theSupervisory Board o 200,000 (prior year: 200,000) or the 2011|12 financial year and delegatedto the Supervisory Board the responsibility or allocating this sum among its members. The amountpaid to the individual Supervisory Board members is tied to their unction on the Board. No meet-

ing ees were paid.

The Management Board member o AGRANA Beteiligungs-AG appointed on the basis o the syndicate agreement between Sdzucker AGMannheim/Ochsenurt, Mannheim, Germany, and Zucker-Beteiligungsgesellschat m.b.H, Vienna, does not receive compensation orserving in this capacity.



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The compensation o the individual members o the Supervisory Board was as ollows:

Compensation

or 2012|13

Christian Konrad (Chairman) 50,000

Wolgang Heer (First Vice-Chairman o the Supervisory Board) 30,000

Erwin Hameseder (Second Vice-Chairman o the Supervisory Board) 30,000

Jochen Fenner 18,000

Hans-Jrg Gebhard 18,000

Ernst Karpfinger 18,000

Thomas Kirchberg 18,000

Christian Teufl 18,000

In accordance with section 110 (3) o the Austrian Labour Act, the Supervisory Board memberswho are employee representatives do not receive Supervisory Board compensation.

MEASURES TO PROMOTE EQUITY FOR WOMEN

Equality o opportunity in the workplace and equal treatment o employees without regard togender are principles that AGRANA has adopted also in its Code o Conduct. Any orm o discrimi-nation is resolutely conronted. The aim o AGRANAs diversity management is to create a workenvironment where employees eel integrated, respected and connected so that the breadth anddepth o their abilities, experience and viewpoints can be harnessed synergistically.

To support its core business activity o processing agricultural raw materials into high-qualityoods and intermediate products or downstream industries, AGRANA regularly seeks people withvocational education and training. However, in Austria and other countries where AGRANA oper-ates, the proportion o women with vocational training or technical academic degrees is ar lowerthan that o men. The much lower percentage o emale technicians in the labour market is alsoreflected in the share o emale applicants or technical positions at AGRANA and thus in the overall

staf gender mix.

As a long-term measure to help increase the percentage o women among staf and managers,AGRANA in 2012|13 held a Daughters Day to raise young girls interest in the technical tradesand proessions. And since April 2013, staf o AGRANA Beteiligungs-AG have access to a companyday-care centre at the Groups new o ce location in Vienna to make work and amily lie morecompatible.

Vienna, 29 April 2013

Johann Marihart Fritz GattermayerChie Executive O cer Member o the Management Board

Walter Grausam Thomas KlblMember o the Management Board Member o the Management Board


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As an Austrian industrial group with an international ocus, AGRANAs Sugar and Starch segmentsoperate in Europe and its Fruit segments operations are global. In these markets, AGRANA seeksor already commands a leading position in the industrial processing o raw materials. The Grouppursues a growth strategy oriented to the respective local market opportunities. Long-lasting,

stable customer and supplier relationships, respectul treatment o all stakeholders and continualgrowth in the companys value are major cornerstones o the corporate strategy, which is guidedby the principles o sustainable management. AGRANAs aim is to provide both its globallyoperating and its regional customers worldwide with high product quality, optimum service andinnovative product development ideas and expertise.

AGRANA controls and manages the value chain rom the purchase o agricultural raw materialsto the production o the resulting intermediate goods or industrial customers (and end productsor consumers in the case o the Sugar segment). AGRANA utilises the Groups strategic know-howacross segment boundaries. This pertains especially to agricultural grower contract managementand raw material procurement, the knowledge o customer requirements and markets, the oppor-tunities or the development o inter-segment products, and synergies in logistics, purchasing, salesand finance. These commonalities orm the basis or AGRANAs good market position in relation

to competitors in all product groups, and underpin its innovative strength and lean cost position.

SUGAR SEGMENT STRATEGY

The strategic goal: Customer- and market-oriented growth.

In the Sugar segment, AGRANA is very well positioned as a supplier in the Central, Eastern andSoutheastern European countries. Through high standards o quality, an extensive sugar productportolio and the building o the Groups regional brands, AGRANA diferentiates itsel rom thecompetition. In addition to the goal o positioning sugar as a regional brand-name product, AGRANAcontinues to strive or ull capacity utilisation everywhere and an intensification o marketingactivities in Southeastern Europe. AGRANAs Sugar segment is also working to urther expand the

reselling and refining activities.

At AGRANA we have a shared vision: quality leadership in turning agricultural rawmaterials into value-added sugar and starch products, and in the processing of fruit.

With our attention to quality and ef ciency and our 56 locations around the world,

we are the preerred supplier or companies worldwide in the ood industry and

or non-ood applications.

AGRANAS STRATEGY

For us, Results and

Responsibility

means deriving strategic

advantage and risk

diversification rom the

balance between the

three business segments.


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AGRANA AT A GLANCEAGRANAS STRATEGY

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GMO-ree or GM-ree: Not derived rom genetically modified organisms.

STARCH SEGMENT STRATEGY

The strategic goals: Organic (non-acquisitive) growth, and

the creation o value-added in custom-made products.

In the Starch segment, AGRANA ocuses on highly refinedspecialty products. Innovative, customer-driven productssupported by application advice and continuous productdevelopment, combined with relentless cost optimisa-tion, are the key to the segments success. Examples are theleading position in organic and in GMO-ree starches orthe ood industry and, in the non-ood sector, the leader-ship role in specialty starches or the paper, textile, cosmetics,

pharmaceutical and building materials industries. AndAGRANAs essential core competency processing agricul-tural raw materials into industrial products is also thebasis or the bioethanol business. In Austria, AGRANA is theleading vendor o this climate-riendly uel. Through thenew wheat starch plant, AGRANA wants to both urtheroptimise the product portolio and make urther advancestowards the ideal o complete raw material utilisation.

FRUIT SEGMENT STRATEGY

The strategic goal: Customer- and market-oriented

global growth.

In the Fruit segment, the Groups business activities areruit preparations (AGRANA Fruit, about 75% o segmentrevenue) and ruit juice concentrates (AUSTRIA JUICE, about25% o segment revenue):

AGRANA Fruit, acting as a partner to ood manuacturers,produces custom ruit preparations or the dairy, ice-cream and baking industries. With local production unitsclose to customers, AGRANA is the world leader in thisglobal market and intends to urther expand its presenceand ollow its internationally operating customers into

new markets.

AUSTRIA JUICE is a producer and reseller mainly o juiceconcentrates rom apples, red ruits and berries. Manu-acturing locations near the ruit growing areas allow

AGRANA to ensure the high quality o its products andsaeguard the global sales to the beverage industry aswell as to urther expand them, including in not-rom-concentrate juices and in ruit wines.

Through organic growth and with the help o acquisitionsand cooperative new ventures, the Group aims to con-solidate and steadily add to its strong worldwide marketposition.

SYNERGY STRATEGY

The strategic goal: Use inter-segment synergies to ensure

the Groups ideal positioning amid the volatile operatingenvironment in the business segments.

The synergy strategy encompasses the strategies o the three

individual segments and also includes the sustainabilitydimension. For AGRANA, sustainability has an environmen-tal, a social and an economic aspect and takes priority overshort-term financial gain. AGRANA aims or the careul,prudent use o natural resources, achieves almost 100%utilisation o its raw materials and employs highly e cienttechnologies to protect the environment.

CAPITAL MARKET STRATEGY

The strategic goal: A long-term partnership with share-holders.

The Groups sound equity base gives AGRANA strategicflexibility. For its overall financing needs, in addition to theability to sel-finance, AGRANA has access to committedcredit lines and also placed a Schuldscheindarlehen (a loanwith some bond-like characteristics, sometimes translatedas bonded loan or promissory note loan) in the financialyear. AGRANA sees its shareholders as long-term partnersin realising the Groups goals and ofers them an attractive,long-run return on investment at a reasonable level orisk even in a volatile environment. With a policy o openand transparent communication, AGRANA aims to saeguardinvestors confidence in the Group and make its business

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The 2012 calendar year brought a powerul rise in share prices on international exchanges. Inlarge part the upward surge was driven by the historic low interest rates, which made equitiesmore attractive investments than bonds, and by the easing o the European government debt crisis.However, the price gains were achieved on low trading volumes, especially in Europe. The keyAustrian benchmark index, the ATX, largely tracked the European and global economic issues anddrivers.

AGRANA started the 2012|13 financial year at an opening share price o 83.95. On an averagetrading volume o almost 1,500 shares per day (based on double counting, as published by the

Vienna Stock Exchange), AGRANAs share price proved very firm, passed the 100 mark or the firsttime in its history on 15 February 2013 and closed at 101.50 on the balance sheet date. In the

financial year under review AGRANAs share price thus gained 20.91%, substantially outperormingthe ATX, which rose by 12.32% over the same period.

The market capitalisation at 28 February 2013 was 1,441.5 million, with an unchanged14,202,040 shares outstanding (prior year: 1,192.3 million).

AGRANA is listed in the Prime Market segment o the Vienna Stock Exchange and is also quotedin the VNIX, the Austrian Sustainability Index. This equity index comprises those exchange-traded

Austrian companies that are leading in social and environmental perormance.

AGRANA IN THE CAPITAL MARKET

AGRANA SHARE PERFORMANCE

100

190

180

170

160

AGRANA ATX indexed to AGRANA

Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13

18AGRANA SHARE DATA 2012|13 2011|12 2010|11

Closing price at year-end 101.50 83.95 79.20

High 102.90 86.43 79.89

Low 80.00 72.30 56.88

Earnings per share 10.52 10.73 5.98

Price/earnings ratio (year-end) 9.65 7.82 13.24

Book value per share (year-end) 79.29 73.19 65.88

Market capitalisation (year-end) (m) 1,441.5 1,192.3 1,124.8

Restated in the 2011|12 financial year to reflect a retrospective changein accounting policy concerning IAS 19 (Employee Benefits).

For us, Results and

Responsibility means

that our shareholders

can rely on a sound

business model,

a strong equity base

and a ar-sighted policy

o sustained dividends.


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KEY SHARE INFORMATION FOR AGRANA

ISIN code: AT0000603709

Market segment: Prime Market on VSE

Share class: Ordinary shares

Number o shares: 14,202,040

Reuters code: AGRV.VI

Bloomberg code: AGR AV

Ticker symbol: AGR

19ACTIVE CAPITAL MARKET COMMUNICATION

AGRANAs investor relations and public relations activitiesare based on the key principles o providing comprehensiveinormation, high transparency and ongoing communica-tion with investors and analysts. At the press conerencespresenting the annual and hal-year results, the financialand industry media were provided with detailed inormation

on the financial results and business perormance. In addi-tion, the Management Board gave numerous one-on-oneinterviews to financial, agricultural and other trade journal-ists and kept the public inormed on current developmentsthrough press releases. Journalists were also invited on tours

o acilities in Austria.

In the year under review, AGRANA Beteiligungs-AG or the

first time placed a Schuldscheindarlehen in the euro capitalmarket (a promissory note loan, or type o loan with bond-like characteristics). In response to the strong demand or thesignificantly oversubscribed issue, the initially planned dealsize was expanded to 110 million. The proceeds wasused or general corporate financing. The issue also helpedto urther diversiy the investor and unding mix.

At several road shows and investor conerences in Austriaand abroad, the Management Board o AGRANA provided

Austrian and international institutional investors and analystswith inormation on the perormance and prospects o the

AGRANA Group. This dialogue was supplemented bynumerous individual conversations and by conerence callson quarterly and ull-year results. At open houses held atselected Austrian plants, private shareholders had the oppor-tunity to learn about new developments in current projectsand business operations.

AGRANAs financial market communication again wondistinction last year, once more placing third in the ViennaStock Exchange Awards small and mid cap category.

An important channel o investor relations activities is theAGRANA website (www.agrana.com), where all financial

reports, financial news items, ad-hoc announcements, votingrights notifications, directors dealings disclosures and inves-tor presentations are available as soon as they are published.

AGRANA endeavours to make the same inormation avail-able to all market participants at the same time.

The ollowing national and international investment housespublished research on AGRANA in the 2012|13 financialyear (in alphabetical order): Berenberg Bank, Goldman Sachs,Raifeisen Centrobank and Westend Brokers (ormerly SilviaQuandt Research). At the balance sheet date o 28 February2013, the investment houses had three buy recommenda-tions on AGRANA and one hold rating. A detailed overview

can be ound on the Internet at www.agrana.com > InvestorRelations > The AGRANA Share > Research.

AGRANA AT A GLANCEAGRANA IN THE CAPITAL MARKET


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20STEADY DIVIDEND POLICY

2012|13 2011|12 2010|11

Dividend per share 3.60 3.60 2.40

Dividend yield 3.55% 4.29% 3.03%

Dividend payout ratio 34.22% 33.55% 40.13%

AGRANA is committed to a long-term policy o sustained

dividends, with the objective o annually paying out approxi-mately one-third o profit or the period. Given the similarlypositive financial results as in the prior year, the Manage-ment Board will propose to shareholders at the AnnualGeneral Meeting on 5 July 2013 to pay a dividend o 3.60per share. Over the 14,202,040 shares, this would againamount to a distribution o about 51.1 million, represent-ing a dividend yield o 3.55% (prior year: 4.29%) based onthe share price o 101.50 at the end o February 2013. Thedividend payment date is 10 July 2013.

SHAREHOLDER STRUCTURE AT 28 FEBRUARY 2013

Z&S Zucker undStrke Holding AG

75.5%

Free float24.5%(of which

Prudential plc held

more than 60%)

STABLE SHAREHOLDER STRUCTURE

In Z&S Zucker und Strke Holding AG (Z&S), Vienna,which is indirectly co-owned by Zucker-Beteiligungsgesell-schat m.b.H. (ZBG), Vienna, and Germanys Sdzucker AGMannheim/Ochsenurt, Mannheim, Germany (Sdzucker),

AGRANA has a long-standing, stable principal shareholderthat continues to hold an unchanged 75.5% o the sharecapital o AGRANA Beteiligungs-AG. The other 24.5% o theshare capital is ree float, with more than 15% o the totalowned by London, England-based financial group Prudentialplc and some o its subsidiaries. The shareholder structureis presented in detail in the section Capital, Shares, Voting

Rights and Rights o Control on page 74.

Under a syndicate agreement between Sdzucker and ZBG(in which Austrias Raifeisen-Holding Niedersterreich-Wien registrierte Genossenschat mit beschrnkter Hatungholds an indirect ownership interest), the partners in thesyndicate have mutual rights to appoint members o eachothers management board and supervisory board. Thus,Johann Marihart has been appointed by ZBG as a manage-ment board member o Sdzucker AG, and Thomas Klbl hasbeen appointed by Sdzucker AG as a management boardmember o AGRANA Beteiligungs-AG. Neither individualreceives compensation or serving in this respective capacity.

Restated in the 2011|12 financial year to reflect a retrospective changein accounting policy concerning IAS 19 (Employee Benefits).

Proposal to the Annual General Meeting. Based on the closing share price at the balance sheet date.



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SUSTAINABILITY

AT AGRANA2012|13

FEATURE SECTION


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RESULTS AND RESPONSIBILITY

Sustainability to AGRANA means business management thatis economically sound, resource-saving and energy-ef cientwhile respecting both internal and external stakeholders.

Consistent, with the nature o its business the value-addedprocessing o agricultural raw materials in the Sugar, Starchand Fruit segments and its close proximity to agriculturalprimary production, striving or sustainability has alwaysbeen a vital and integral pillar o AGRANAs business model.

ECOLOGY ANDECONOMYIN HARMONY

22

OURSUSTAINABILITYPRINCIPLE


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Sustainability at AGRANA begins with the very sourcing o raw materials and encom-

passes environmental and energy aspects, labour practices and human rights, productresponsibility, compliance and business conduct, and social engagement. Priorities

or action in the sustainability sphere are set on an as-needed basis, in accordance

with regulatory and sociocultural conditions and as required by the dierent business

activities in the three segments and 26 countries.


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26 COUNTRIES,56 PRODUCTION SITES

Sugar segment

Starch segment

Fruit segment

Countries

Employees (as o 28 February 2013)

Revenue

NORTH AMERICA

4 ruit plants

Mexico, USA

Employees

401 551

Revenue251.1 million

SOUTH AMERICA

2 ruit plants

Argentina, Brazil

Employees

115 158

Revenue

27.9 million

EUROPE EU-27

9 sugar plants

5 starch plants

20 ruit plants

Austria, Belgium,

Czech Republic,

Denmark, France,

Germany, Hungary,

Poland, Romania,

Slovakia

Employees

1,282 3,380

Revenue

2,513.9 million


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In the 2012|13 financial year, AGRANA, the processor o agri-

cultural raw materials with the three segments Sugar, Starch

and Fruit (ruit preparations and ruit juice concentrates),

operated 56 production sites in 26 countries worldwide. The

Groups core markets, however, are in the European Union

and other European countries.

Within the EU, in 2012|13 AGRANA employed an average o

4,906 people in 34 locations. AGRANA on average sources about

90% o its agricultural raw materials in the EU and generated

approximately 82% o its revenue in this region in the reporting

year. Given the stringent regulatory standards and the socio-

cultural setting in the EU, many important aspects o corporate

responsibility regarding raw material procurement, environ-

mental and energy management, labour practices and human

rights are already largely satisfied by the Groups compliance

with legal and regulatory norms.

The production sites and data on this world map represent

all AGRANA Group companies, including those outside the GRI

report boundary (see page 27).

ASIA

3 ruit plants

China, South Korea

Employees

71 177

Revenue

42.1 million

AFRICA

5 ruit plants

Egypt, Morocco,

South Arica

Employees

1,169 221

Revenue

22.2 million

EUROPE NON-EU-27

1 sugar plant

5 ruit plants

Bosnia-Herzegovina,

Russia, Serbia, Turkey,

Ukraine

Employees

419 498

Revenue

168.4 million

AUSTRALIA &

OCEANIA

2 ruit plants

Australia, Fiji

Employees

37 65

Revenue

40.4 million


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SUSTAINABILITY:A MATTER OF BALANCE

By the nature o the Groups business the processing o agricultural raw materials inthe Sugar, Starch and Fruit segments and its closeness to agricultural production,

sustainability has always been an integral aspect o the AGRANA way. Sustainability is thereorenot a project with a specific end point, but a daily aspiration and continuous practice.

n its business activities,

AGRANA defines sustainability

as a harmonious combination

o economically sound, resource-

saving and energy-ef cient production

and social responsibility. Only the

balanced pursuit o the triple bottom

line can ensure the Groups sustained

success. In the 2012|13 financial year

AGRANA thereore continued to press

ahead with the initiative (started inthe prior year) to put in place a uniorm,

integrated, ISO 26000-based sustain-

ability management system across the

three business segments, Sugar, Starch

and Fruit. By the autumn o 2012,

a sustainability core team o ten sta

members rom various relevant depart-

ments perormed an expanded analysis

o core subjects and issues along the

companys value chain. The ollowing

core subjects were identified as being

o material importance: sourcing o raw

materials, environmental and energy

aspects, labour practices and human

rights, product responsibility and sustain-

able products, compliance and business

conduct, and social engagement.

As regards the issues o interest in the

Sugar, Starch and Fruit segments, dierent

weightings and priorities are required in

each segment because o the dierences

A consistently structuredapproach to sustainability

in business activities and in national

regulatory and sociocultural environ-

ments in the 26 countries where AGRANA

maintains acilities.

AGRANAs sustainability management

orms the umbrella under which

the existing reporting o sustainability

perormance in the business segments as

well as ongoing sustainability measuresare now structured and combined. As

its reporting standard, the Group has

chosen that o the Global Reporting Initia-

tive (GRI version 3.1), including relevant

considerations rom the GRIs ood pro-

cessing sector supplement.

On this basis, uniormly defined sustain-

ability perormance data was or the

first time collected or all three business

segments in 2012|13. The insights gained

rom this sustainability assessment,

which rom now on will be conducted

annually, are used as a basis or uture

improvement activities that are devised

and implemented by the unctionally

responsible departments with help rom

the sustainability core team. In all

projects, the goal or the measures taken

is to achieve an improvement in at least

two o the three dimensions o sustain-

ability economic, environmental and

social.

I

PLANET

PEOPLE

PROFIT PLA

AGRANAs Core

Sustainability Subjects

Labour Practices andHuman Rights

Environmental andEnergy Aspects

Sourcing o Raw Materials

Product Responsibilityand Sustainable Products

Compliance andBusiness Conduct

Social Engagement


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ABOUT

THE NUMBERSIN THIS FEATURE SECTIONOrganisational and content boundarieso the report

erormance data presented in this sustainability

section o the 2012|13 annual report, based on GRI 3.1

and its ood processing sector supplement, were

compiled or the Sugar, Starch and Fruit segments, excludingjoint ventures.

The 2012|13 sustainability figures thus do not include data

or the AGRANA-Studen joint ventures or or Instantina (both

in the Sugar segment), or Hungrana (Starch segment) or

or AUSTRIA JUICE GmbH, the company ormed in the second

financial quarter o 2012|13 through the merger o AGRANA

Juice Holding GmbH and Ybbstaler Fruit Austria GmbH (Fruit

segment). In terms o content, sustainability aspects that

are outside AGRANAs direct control or that are regarded as

non-material were not considered or the time being. In total,operations excluded rom the sustainability data or 2012|13

represented revenue o 718.0 million and an average o

1,139 employees.

P

Three guiding principleso sustainability

In developing the Group-wide sustainability

management system, AGRANA ormulated three

principles that sum up its concept o sustain-

ability and reflect its six core subjects.

At AGRANA we

Utilise almost 100% o our raw materials

and employ low-emission technologies

to protect the environment

Respect all our stakeholders and the societies

in which we operate

Engage in long-term partnerships

In 2012|13 these three principles were also

incorporated into AGRANAs mission statement,

lending urther weight to the already entrenched

principle o sustainability. The short three-partstatement is to serve management and employ-

ees as a practical, intuitive guide and reminder

to work with sustainability in mind.

SUSTAINABILITY

WHAT AGRANAMEANS BY


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CLEAN ANDGREEN FOR ABRIGHT FUTURE

PLANET: RESULTSAND ENVIRONMENTALRESPONSIBILITY

28

With its close dependence on agricultural crops, AGRANA ispassionately committed to the careul use and conservationo natural resources. The company achieves this primarily

through unparalleled, near-total utilisation o its agriculturalraw materials and the use o energy-ef cient, low-emissionproduction technologies. This naturally reduces the environ-mental ootprint, and demonstrates compellingly that eco-logical and social responsibility make good economic sense.



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Investment in energy ef ciency improvement and the associated reduction o emissions

rom production operations are a particularly important way in which AGRANA exer-

cises responsibility or the environment. Adding a third ermenter to the biogas plant

at the sugar actory in Kaposvr, Hungary, yielded impressive results: In the 2012 |13

processing campaign, at ull capacity utilisation, 80% o the acilitys primary energy

need was met with biogas produced on site, and on average the figure was about 65%.

Thanks to the use o more biogas, approximately 5,200 tonnes o CO equivalent was

saved in emissions.


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30

ZERO WASTE:ULTRA-EFFICIENT USE OF

RAW MATERIALSAs a processor o agricultural crops into high-quality intermediate products especially or

the ood industry, AGRANA is daily conronted with questions around the physical availabilityo raw material supply and with price volatility in its procurement markets. The societal

backdrop to this includes controversy around ood scarcity or high ood prices and (particularly

in industrialised countries) the sometimes careless use o precious ood.

gricultural raw materials

have always been much too

valuable or AGRANA not

to utilise them to the ullest.

The Group-wide principle o zero waste

is beneficial in two dimensions: First,

AGRANAs business success depends on

the ef cient use o the agricultural inputs,such as sugar beet, grain, potatoes and

ruit. And second, wasting nothing is

also consonant with the high standard

o corporate responsibility that AGRANA

strives to honour in all its plants world-

wide. AGRANA works hard to convert

all valuable parts o the raw materials

used carbohydrates, proteins, lipids,

fibres and minerals into marketable,

desirable products, thus adding

maximum value. The more eectively

this is done, the less residual materialand waste is let to dispose o and the

better the financial perormance. The

results are eloquent proo that environ-

mental and social responsibility are

compatible with business logic, and

show how AGRANA has internalised this

undamental principle o sustainability

in its day-to-day operations.

The zero waste principle is illustrated

by an annual input-output analysis or

AGRANAs corn starch plant in Aschach,

Austria, which compares the quantities

o the acilitys raw material inputs

and its outputs. The values below are

based on dry weight.

At the Aschach starch actory, 356,000

tonnes o guaranteed non-GMO corn o

many varieties (including 11,000 tonnes

purchased on the open market) and

about 3,000 tonnes o consumables were

turned into 228,000 tonnes o market-

able starch and saccharification pro-

ducts, 82,000 tonnes o eedstus andertilisers, 24,000 tonnes o corn germ

or the production o corn oil, and

18,000 tonnes o intermediate products

or urther processing in the potato starch

plant in Gmnd, Austria. In addition,

AGRANAs ef cient use o rawmaterials is both an economicimperative and a way o prac-ticing corporate responsibility

2,000 tonnes o corn cobs, corn dust

and other organic residuals were used as

sources o energy in the nearby biogas

acilities. Overall, 359,000 tonnes o

input materials were thus converted

into 354,000 tonnes o valuable products,

amounting to 98.6% utilisation o theinput actors. The other 1.4% represented

process-related unavoidable losses, which,

through various purification steps, were

ultimately carried to the biological waste

water treatment plant and separated out.

The resh water used or corn processing

is reused both as process and processing

water and or the generation o energy.

The process water is reused in several pro-

cess steps. When no longer pure enough

or urther use, it is cleaned in the on-site

biological treatment plant and discharged

to the receiving water.

Depending on the business segment,

site and product portolio, the utilisation

o input materials in the 2012|13 finan-

cial year in the AGRANA Group ranged

rom 98.6% to 99.9%. This very high

degree o utilisation made possible

by AGRANAs extremely ef cient use o

agricultural raw materials and driven

by the Group's technological innovative

power and product development capa-

bilities does justice to a high standardo financial, environmental and social

responsibility.

A

98.6% 99.9%

UTILISATION

OF RAWMATERIALSHigh utilisation ratereflects technologicalinnovativeness andproduct developmentcapabilities.


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he almost complete utilisation

o agricultural inputs (made

possible partly by starting with

careully selected raw materials o excel-

lent quality) is the basis or the Groups

low volume o waste.

Per tonne o product (counting both

core and by-products), the Sugar segment

generated about 178 kg o waste in

2012|13. It is important to note that

this comparatively high value, ar rom

being meaningul, is merely the result

o local legislation. Waste quantities

shown in the reuse category primarily

represent pressed beet pulp and beet

residue sold as animal eed as well as

dewatered carbonation mud marketed as

ertiliser in Romania, which must locally

be reported as waste despite being

reused. Similarly, much o the landfill

quantity consists o non-hazardous soil

How AGRANA manages waste remnants cleaned rom beet at a sugarplant in Slovakia.

Per tonne o product, the Starch seg-

ment generated 10 kg o waste requiring

disposal and the Fruit segment, 59 kg.

The Fruit segment waste sent to recycling

consisted largely o cartonboard and

plastic packaging materials. Waste sent

to the landfill was primarily ruit matter

and reject product.

T

MINIMISES WASTE

PRODUCTION OFFEEDSTUFFSAND FERTILISERS

CLOSES THEECOLOGICAL LOOP

HIGH UTILISATION RATE

in the Sugar and Starch segments. For each tonne

o sugar, approximately one tonne o by-products

is also generated, and the Starch segment produces

about 0.6 tonnes o co-products per tonne o

starch. These by-products make a substantial con-

tribution to the Groups profitability while also

ulfilling an ecological unction. Widely used as eedand ertiliser, they ensure that important minerals

and other nutrients return to the natural environ-

ment, thus establishing a desirable closed loop.

Virtually complete utilisation throughconversion into valuable by-products

In parallel with the well-known, high-quality oods

and intermediate products or the downstream

processing industry, AGRANA pursues the mostsustainable, complete possible utilisation o all its

agricultural raw materials by manuacturing a very

extensive range o valuable by-products, especially

2012|13 financial year Sugar segment Starch segment Fruit segment

Waste disposal, in tonnes 377,942 9,683 29,795

O which hazardous waste, in tonnes 212 42 301

% waste per tonne o product 17.8% 1.0% 5.9%

% hazardous waste per tonne o product 0.009% 0.004% 0.060%

Disposal methods Waste disposal, Waste disposal, Waste disposal,

in tonnes in tonnes in tonnes

Composting 970 7,775 7,465

Energy recovery 239 1,095 433

Reuse 242,792 23 3,732

Recycling 54,116 459 11,506

Landfill 79,778 0 4,527

Other 47 331 2,132

Source: Reports by waste management contractors, AGRANA calculations


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32

the total energy costs o 115.7 million in the

2012|13 financial year or all companies within the

report boundary, the energy-intensive Sugar and

Starch segments accounted or about 86%. In view

o the inherent high energy requirement, energy ef ciency

has always been a key economic interest or the Group. Although

aced with the need to optimise profitability, AGRANA draws

the line at compromises that are bad or the environment. Con-

trary to the trend in energy-intensive industries, or enviromen-

tal reasons AGRANAs investment decisions avour low-emission

primary energy sources. In 2012|13 about 80% o direct total

energy consumption represented natural gas. Seven percent

o direct total energy used came rom renewable sources, thanks

to energy recovery through the production o biogas rom other-

wise no longer usable agricultural residues in the final stage

o a sustainable utilisation chain.

AGRANA processes crops such as sugar beet, grain, potatoes

and ruit whose quantity, sugar and starch content, and quality

are all subject to annual fluctuation as a result o changing

influences during the growing season and harvest. Product

quantities manuactured at each site thus vary rom one report-

ing season to the next. Presenting non-specific total consump-

tion and total emissions is thereore not meaningul. AGRANAconsequently reports specific energy consumption and specific

emissions associated with the production o each tonne o

product (core and by-products), as well as total savings rom

energy ef ciency and emission reduction activities.

O

Environmental responsibility that pays dividends

Average specific direct energy consumption in processing

operations at AGRANA plants in gigajoules (GJ)

per tonne o core products only and per tonne o core

and by-products combined

7.0

6.0

5.0

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0Sugar6.4%

Starch2.2%

Fruit4.5%

2011|

12

2011|

12

2011|

12

2012|

13

2012|

13

2012|

13

GJ per tonne o product

Specific consumption of non-renewable energyper tonne o core products

Specific consumption o renewable energyper tonne o core products

Specific consumption of non-renewable energyper tonne o core and by-products

Specific consumption o renewable energyper tonne o core and by-products

1 Percentage change based on

average specific total energy consumption

per tonne o core and by-products.

NO ECONOMYWITHOUT ECOLOGY


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n 2012|13 AGRANA saved approxi-

mately 60,000 tonnes o CO

equivalent in emissions compared

to 2011|12, with most o the reduction

(57,000 tonnes) achieved in the Sugar

segment. To highlight the major projects:

In order to cut energy consumption

in eedstu production at its Austrian

sugar actories in Tulln and Leopolds-

dor, in the 2012|13 campaignAGRANA or the first time used so-

called low-temperature dryers. These

installations, erected or 23.5 mil-

lion, allow the especially gentle

pre-drying o desugared, pressed beet

pulp beore its processing into pelleted

dried beet. By capturing waste heat

rom earlier process steps and har-

nessing it in the low-temperature

dryers, emissions rom drying in the

two plants were reduced by about

24,000 tonnes o CO equivalent

compared to 2011|12.

At the sugar plant in Sered, Slovakia,

the expansion o the evaporator

station or 1.5 million in the report-

ing period saved emissions o about

13,000 tonnes o CO equivalent

relative to the prior year.

The investment o 3.0 million ina third ermenter or the biogas plant

attached to the sugar actory in

Kaposvr, Hungary, which produces

biogas primarily rom beet tips, rem-

nant leaves and pressed beet pulp,

urther improved the sites level o

energy sel-suf ciency. At ull capacity

utilisation, 80% o the acilitys pri-

mary energy need during the 2012|13

campaign was met with biogas pro-

duced on site, and the average was

about 65%, compared with 50% in the

year beore. Thanks to the use o more

biogas, approximately 5,200 tonnes

o carbon dioxide equivalent was saved

in emissions.

I

SETTING UP AN ENERGYMANAGEMENT SYSTEM

ENERGETICALLY RESPONSIBLE

In the 2013|14 financial year AGRANA intends to intro-

duce an ISO 50001 energy management system in

the energy-intensive Sugar and Starch segments in Austria,

where these businesses account or the lions share o energy

consumption. The first step is a stock-taking o the companys

energy-related status quo. Building on this, specific recommen-

dations or energy conservation measures will be developed

and their implementation initiated and monitored on a

continuous improvement basis. Other major eatures are the

ormulation o an energy strategy/policy, training or employees

in energy matters, development o internal control mecha-

nisms, and a review by top management.

The EMS thus provides the organisational ramework or

continually attending to the optimisation o energy flows in

the company and hence is an important aid in sustainable

management.

I

An energising outlook

EMISSIONS IN THE SUGAR SEGMENTFROM THEPRIOR YEAR

DOWN 8.8%

1

1 Measured by specific emissions

per tonne o core and by-products

Average specific emissions (rom direct

and indirect energy use) rom processing,

in kg o CO equivalent per tonne o

core product or o core and by-products

700

600

500

400

300

200

100

0

Sugar Starch Fruit

2011|

12

2011|

12

2011|

12

2012|

13 2

012|

13

2012|

13

kg o CO equivalentper tonne o product

kg of CO2 equivalentper tonne ocore product

kg of CO2 equivalentper tonne ocore and by-products


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34

A companys people are a resource crucial to its success. AGRANAoers its sta interesting work in an international setting, oppor-tunities or proessional development, advancement and personalgrowth, and a work climate where employees eel integrated,respected and connected. Their diversity o abilities, experienceand perspectives is thus mobilised or the good o the business.


OUR

FUTUREHASMANY FACES

PEOPLE: RESULTSAND SOCIALRESPONSIBILITY


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Highly trained, motivated employees with an international outlook are essential to

AGRANAs success as a company. With this in mind, the Group invests readily in

training and development, including the ostering o young management talent. In2012|13 a number o such programmes were completed and, encouraged by the

positive experiences, many new initiatives were launched. Pictured are participants

in the Purchasing (Raw Materials) and Sales trainee programme; rom let to right:

Opher Ben-Zvi, Elisabeth Schnaubelt, Christopher Gabriel.

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