Ideas
Growth
Consolidated key figures in EUR million 2010 2009 2008 2007 Earnings Situation Sales 44.9 32.2 26.4 15.3 Organic farming 7.1 5.9 3.3 1.2 Conventional farming 21.5 12.1 7.6 4.7
Energy production /Biogas 14.2 12.7 9.1 3.3
Complementary agricultural activities 2.0 1.6 6.4 6.1
Total output 70.8 59.7 48.2 31.6
EBITDA 17.6 12.5 10.0 6.1
EBIT 13.4 9.2 7.5 4.0
Result from ordinary activities 10.6 6.9 5.3 2.1
Consolidated net income 2.4 5.6 4.,3 1.7
Financial Situation
Equity 64.3 51.7 39.2 29.1
Liabilities 122.9 98.6 66.5 53.0
Non current assets 88.6 69.1 48.9 39.7
Current assets 99.0 80.0 57.8 44.4
Balance sheet total 191.3 152.7 108.0 84.5
CONSOLIDATED KEY FIGURES
(HGB – GERMAN COMMERCIAL CODE)Total farmland
(as at 31-12-2010 in hectares) Germany Lithuania Total
Leased 23,200 2,900 26,100
Owned 2,500 3,900 6,400
+ 39%
SALES
+ 19%
TOTAL OUTPUT
+ 41%
EBITDA
+ 46%
EBIT
+ 54%
RESULT FROM ORDINARY ACTIVITIES
+ 23%
EQUITY
+ 25%
BALANCE SHEET TOTAL
CHANGE 2010 – 2009
(HGB – GERMAN COMMERCIAL CODE)4
6 Letter by the Management Board
10 Dished up – the results of the KTG products
18 The integrated business model of KTG Agrar AG
20 The locations of KTG Agrar AG
22 KTG Agrar in the capital market
24 Supervisory Board report
28 Business activity and business environment
29 Business development in 2010
30 Earnings situation
31 Financial and asset position
32 Opportunities and risks
33 Supplementary report
34 Outlook
39 Consolidated cash flow statement
40 Consolidated statement of equity changes
66 Consolidated fixed assets
68 Auditors` report
LETTER BY THE MANAGEMENT BOARD 6
“Ideas planting – Growth picking” - these four words aptly describe the past, present and future of KTG Agrar.
They drive our business.
For almost two decades, our ideas have resulted in sustainable profitable growth - also in the record year 2010.
Total output rose by 18.5% to EUR 70.8 million. The operating result increased by a disproportionate 46.2% to
EUR 13.4 million, while the result from ordinary activities soared by 69.0% to EUR 11.6 million. We want to
give you, dear shareholders, a share in this performance in the form of a higher dividend. At the next Annual
General Meeting, the Management Board and the Supervisory Board will therefore propose a 50% dividend
increase to EUR 0.15 per share. But 2010 was a successful year not only in operational terms. We have
expanded our farmland to 32,500 hectares and are now growing grain, vegetables and rapeseed on a total
area the size of 45,000 soccer pitches. Moreover, we operate biogas plants with a total output of roughly 16
megawatts, which is sufficient to supply green energy for 27,000 households all year long. As you can see, the
seeds for a successful year 2011 have already been sown.
But even the best idea cannot thrive without a strong team. We would therefore like to thank all employees for
their commitment in 2010. 250 people at KTG Agrar work for our shared success. They are the very heart of our
company. Our thanks also go to our shareholders and business partners for their confidence and support. We
are looking forward to a joint future full of ideas.
We set out 17 years ago, driven by the idea of “healthy food at a fair price”. At the time, organic food was still
the domain of traditional health food stores and weekly markets. Only large-scale cultivation made it possible
to offer large quantities of consistently high quality; it was the precondition for the nation-wide supply of
organic produce. A lot has happened since then and organic products have become a regular fixture on
supermarket shelves. While consumers prefer products from their regions, locally grown produce is no longer
sufficient to meet the high demand. Accordingly, organic grain imports have increased by 65.0% over the past
three years and imports of fresh vegetables have even doubled. Large quantities do not come from our
European neighbours but from countries such as Argentina or Egypt. As you can see, there is still huge market
potential for our regional products.
“Healthy food and clean energy from the same field” was another milestone in the year 2007. As a farming
company, we were aware from the very beginning that the medium-term question cannot be “food or fuel”.
LETTER BY THE MANAGEMENT BOARD 8
Needless to say, food production must have priority, and this is something we are working on. After all, biogas
can do both. We use not only residues such as grass and straw but also intercrops. We first cultivate grain for
food production and then, in July, we grow millet to feed for our biogas plants. Today, intercrops already
account for as much as roughly 50% of this feedstock. Thanks to consistent improvements to this still young
technology, which are achieved in cooperation with universities, we will increase this percentage even further.
The result: food and fuel.
We have successful ideas not only for growth but also for financing growth. We were the first agricultural
company to go public in 2007 to strengthen our equity base. In 2010, we were a pioneer when we issued a
bond in the Bondm segment of the Stuttgart Stock Exchange. The bond issue not only means that we have
tapped an important third source of corporate funding but also helped to further accelerate our investments in
farmland – which meanwhile represents considerable hidden reserves in our balance sheet – and biogas.
All this shows that KTG Agrar has got what it takes to support continued strong growth. We intend to expand
our farmland continuously in the coming years. We want to increase our biogas production capacity to 25 to 30
megawatts by the end of 2011. The first months of the year 2011 have shown that we will not run short of
ideas in future. The takeover of frozen food manufacturer Frenzel Tiefkühlkost marks our entry into a new and
exciting market. We will expand the product range significantly, especially in the organic segment. Following
this year’s integration process, Frenzel is expected to contribute to our profitable growth already next year.
Dear readers, we hope that we have been able to give you an idea of what drives our business. The following
pages will show you even more ideas as to where you can get in touch with KTG on a daily basis – at breakfast,
lunch and dinner time. Thank you for your support.
Dr. Thomas R.G. Berger
Siegfried Hofreiter
Muesli is a popular breakfast food based on rolled oats and other cereals as well as fruit. The dish is served with milk, yoghurt or fruit juice. Muesli originated in Switzerland where it is also eaten as a light evening meal. Along with chocolate and cheese fondue, muesli is one of the Swiss specialities which are today enjoyed by people around the world. In particular, muesli has become a breakfast staple in Europe. Around the year 1900 Maximilian Oskar Bircher-Benner, a physician and pioneer in nutritional research, developed the original muesli recipe as a healthy diet supplying the body with “vital forces”.
As part of a healthy diet and lifestyle, breakfast has a positive effect on health and well-being. The
situ-ation, time and duration but above all the size and the components of the breakfast differ considerably
around the world. In Asia, for instance, sweet breakfasts are largely unknown. In Northern and Central
Europe, especially in the UK, breakfast is often considered to be the most important meal of the day.
KTG products form part of nearly every breakfast - especially in cereals, where quality plays a particularly
important role, as these are mostly whole grain products, which means that the germ and outer bran of
the grain are processed as well, as they contain precious fibres and minerals. Needless to say, this requires
the grain to meet the highest quality standards. As a pioneer in organic produce, KTG has adopted many
cultivation and processing methods from the organic to the conventional sector and specialises in
high-quality products. And if you’d like fruits with your cereals, no problem; in our berry gardens near Berlin,
strawberries, blueberries and raspberries are available for self-picking.
Breakfast
Grain is vitality
The average German consumer eats just under 220 eggs per year in fresh or processed form. This means that total egg consumption amounts to some 18 billion, 14 billion of which are laid in Germany. Rich in valuable and easily digested nutrients, eggs are full of goodness - valuable proteins which are high in essential amino acids, fats with unsaturated fatty acids, vital dietary minerals and all vitamins with the exception of vitamin C. Moreover, eggs are a source of many minerals such as calcium, selenium and dietary iron.
In Central and Northern Europe, lunch between 11:30 am and 2 pm is regarded as the warm and filling
main meal of the day, while a cold dish is usually served for dinner. In southern countries such as France,
Italy or Spain, lunch tends to be smaller and the warm main meal is eaten in the evening.
Which came first, the egg or the chicken? We will not answer this question here. But there is hardly
another food product which symbolises the success of organic farming as well as the organic egg, which
has become a permanent fixture on supermarket shelves, not least thanks to KTG. As we specialise in
growing grain and produce, we do not breed chicken. But we are well aware that the chicken can be only
as good as its feed. Only organically grown maize, triticale, lupine or broad beans make a chicken an
organic chicken. By the way, we also supply organic spinach and potatoes, and our takeover of Frenzel
Tiefkühlkost means that you will increasingly find our food products in the frozen food section in future.
Lunch
The egg is energizer
Grain was milled north of the Alps as early as 30,000 years ago although grain farming started only some 10,000 years ago. Originally the milled grain was stirred into water and eaten as a mash. Later people began to bake flat bread on hot stones and in embers. Major changes in bread making resulted from two inventions. The first was the design of ovens which allowed baking thick loaves. The second was the use of leavening agents which trigger a fermentation process in the dough, resulting in a much tastier product.
Dinner is a meal of any kind that is eaten late in the day. The time and size of this meal are very much
influenced by cultural customs and individual habits. In Germany, the warm main meal of the day is
usually eaten for lunch, while the last meal of the day, which typically consists of bread with cheese or
sausage, is eaten in the early evening.
A baker needs four things to bake bread: flour, water salt and a leavening agent to rise the dough. The
diversity of German bread is legendary throughout the world and already starts with the seeds. Farmers
can choose from over 100 wheat and some 30 rye types. Bread is not only a source of energy but also
contains precious nutrients. Whole grain breads, in particular, contain vitamins, minerals and fibres of the
whole grain and thus contribute to a healthy diet. KTG supplies mills with some 35,000 tons of grain per
year, which is sufficient to produce roughly 840 million rolls. Incidentally, our products can also be found
in margarine and pasta
Dinner
Bread is life
Biogas is a combustible gas produced by the fermentation of biomass. Both organic waste and plants are suitable as feedstock for biogas plants; KTG Agrar uses both options. The biogas produced can be used to generate electricity and heat or to power vehicles. Alternatively it can also be fed into the national gas grid. The decisive factor in the utilisation of biogas is its methane content, given that methane combustion releases energy. In 2010, German biogas plants generated 20.4 billion kilowatts hours of electricity and heat.
No matter how diverse our lifestyles and what aspirations we hold as individuals, wellbeing and
happiness are essential to our daily lives. To feel at ease, we depend on energy in the firm of heat and
electricity – and as recent events have once more demonstrated, clean energy is clearly preferable.
In 2006, we had the idea to produce agricultural resources and energy on the same field. Today, we
produce energy from biomass in what is probably a unique integrated concept. Our biogas plants are
located in the direct vicinity of our farms, allowing for fast and efficient supplies of feedstock. A growing
percentage of our biogas feedstock is grown as intercrop; after the grain harvest in the summer, millet or
clover grass are sown and harvested in November. We also use agricultural waste such as grass and straw.
This way, we not only produce healthy food but also supply 30,000 households with green electricity. We
deliver reliable and CO
2neutral – pure eco.
Well being
Happiness comes first
Business
Production of organic food crops and
Europe-wide distribution to trader and
processors like mills and producers of
animal feed. Production according to EU
regulations on organic farming. Moreover,
many of our farms meet the server rules of
notable organisations like GMP and USDA
organic. Our clients can order more than
one year in advance and get the goods just
in time.
Market
Organic farming benefits from the trend
towards healthy diet. In Europe and
especially in Germany the demand for
organic food is rising since many years.
Products
Corn maize, wheat, rye, spelt, oats,
triti-cale, lupines, potatoes
Business
In the conventional farming we also rely
on high quality standards. Thereby, we use
the know-how from the organic cultivation.
We guarantee genetic engineering
free-dom and dry our products without bumt
gas. With this premium quality we step up
from competitors. These products are
distributed to processors as well. Our
clients can order more than one year in
advance and get the goods just in time.
Market
The demand for agricultural commodities
is driven by megatrends: Growing world
population, economic growth in the
emer-ging countries and energy from renewable
raw materials.
Products
Corn maize, wheat, rye, barley, rape
Business
Consultancy services
of agricultural mach
Acquisition, develop
cases) sale of farms.
grows berries for pe
selves.
Market
Efficient cultivation o
farmland.
Products
Farm management
purchase, sale of ma
services
BUSINESS SEGMENTS 18Organic farming
Organic farming
Complem
Complem
agricultura
agricultura
Conventional farming
Conventional farming
The integrated business model of KTG Agrar AG
Renewable resources
Agricultural products
Agricultural products
, purchased and sale
ines and equipment.
pment and (in some
. Around Berlin, KTG
eople to pick
f the limited resource
, special cultures,
achinery, agricultural
Business
In March 2011, KTG subsidiary FZ-Foods
acquired the operations of Frenzel
Tiefkühl-kost at Ringleben, thereby adding food
manufacturing to the business model. Frenzel
Tiefkühlkost is considered Germany’s
third-largest supplier of frozen vegetables. The
firm also offer potato specialities and
conve-nience food. Going forward, the organic
range will be expanded, in particular.
Market
Per-capita consumption of frozen food
exceeded 40 kilograms in 2010 for the first
time. Offering the best way to keep food
fresh, deep-freezing allows to offer products
high in vitamins all year long.
Products
Peas, carrots, potatos, convenience food
Business
Operation of biogas plants with self
produced renewable resources for the
production of electricity, heat and
bio-natural gas. We use the thereby incurred
digestate as natural fertiliser on our
farmland. As at April 2011 biogas plants
with power of 16 megawatts were on the
grid.
Market
Shortage of fossil energy paves the way for
renewable energy. Biogas has many pros:
It is easily storable, available 24/7 and it
cannot only be used to generate electricity,
heat and fuel but also as a substitute
for natural gas.
Products
Electricity, heat, organic fertiliser,
bio-natural gas (currently planned)
Energy production, biogas
Energy production, biogas
Foodstuff
Foodstuff
mentary
mentary
al activities
al activities
LOCATIONS 20
The locations of KTG Agrar AG
7
12
8 9 10 21 22 23 111
2
Acreage and biogas production
1
Putlitz
2
Flechtingen
3
Altdöbern
4
Seelow
5
Dersewitz
6
Wuthenow
Acreage
7
Starsiedel
8
Quesitz
9
Altjeßnitz
10
Körbelitz
11
Lübs
12
Wegenstedt
13
Nonnendorf
14
Podelzig
15
Marxdorf
16
Waldsieversdorf
30Headquarters
Hamburg
14
17
29
28
27
26
15
16 24 25 19 133
4
5
6
Acreage
17
Schönfließ
18
Oranienburg
19
Letschin
20
Breydin
21
Marienfließ
22
Karft
23
Grabowhöfe
24
Neubrandenburg
25
Brenkenhof
26
Görke
27
Pauliai
28
Raseiniai
29
Mazeikiai
Headquarters
30
Hamburg
20 18Administrative center
Oranienburg
KTG IN THE CAPITAL MARKET
The Management Board placed a strong focus on communication with the capital market in 2010. KTG Agrar successfully completed a capital increase and a bond issue to finance its growth. Transparency and continuity form the basis of our communication with the capital market. Besides comprehensive information on our website and regular publications, we attach great importance to personal contacts with existing and potential investors. The Management Board attended numerous investor conferences to report on the company’s operating performance and its sustainable business model. Moreover, we talked to investors throughout Europe to convince them of the future potential of KTG Agrar. In 2010, we organised road shows in Frankfurt, Munich, London, Geneva, Luxembourg, Vienna, Zurich and, for the first time, in New York. The analysts from GBC AG and Montega AG started their coverage of KTG Agrar in 2010 and published studies just like Berenberg, equinet and Independent Research.
The winner 2010: German stocks
Compared to other European stock markets, German shares were among the clear winners in the year 2010. While the DAX blue-chip index climbed 16% to 6,914 points, the EuroStoxx 50 lost about 6%, primarily due to the weak performance of the more heavily weighted bank stocks, and closed the year at 2,793. In 2010, German companies benefited to an above-average extent from the recovery in the world economy, which was primarily marked by high demand for German export goods from Asian emerging markets.
Second-tier stocks showed a very disparate performance. While the SDAX gained 46%, the TecDax climbed only 4%. The Entry Standard, in which the KTG share is listed, closed the year 2010 almost unchanged.
22
KTG Agrar AG poised to accelerate growth
The KTG share gained 6.3% in 2010 and outperformed the Entry Standard. The year saw two pioneering steps
taken to accelerate the company’s growth. In March KTG completed a capital increase and in September the
company marked another milestone when it issued a corporate bond in the Bondm segment of the Stuttgart
Stock Exchange.
KTG Agrar AG Entry Standard
KTG share gains 6.3%
The KTG share started the year at EUR 13.90. In contrast to the general weakness of the market, the share price picked up in the first few months of the year and reached a high of EUR 17.82 in March. This level was not maintained, however, and the price dropped to a low of EUR 13.40 in August. The share recovered somewhat and closed the year at EUR 14.77. The share thus gained 6.3% in 2010 and outperformed the Entry Standard.
Successful capital increase
On 24 March 2010, KTG Agrar increased its share capital by 10%. The 516,000 bearer shares were placed with German and international investors by DZ Bank. The offering price was EUR 16.0 per share, which resulted in gross proceeds of around EUR 8.3 million. As a result, the free float increased to 54%.
Annual General Meeting
approves first profit distribution
The ordinary Annual General Meeting of KTG Agrar was held in Hamburg on 2 July 2010. The attending shareholders very much appreciated the performance in 2010 and the positive outlook. The acts of the Management Board and the Supervisory Board were approved by over 99% of the shareholders. The KTG shareholders also approved the proposed dividend of EUR 0.10 per share. From the point of view of the Management Board, this was only the first step for a sustainable dividend policy. As the next step, the Management Board and the Supervisory Board will propose a 50% dividend increase to EUR 0.15. The 2011 Annual General Meeting will be held in Hamburg on 1 July.
Corporate bond accelerates growth
KTG Agrar is rich in ideas also when it comes to financing its growth. In September 2010, the company’s sustainable financing strategy was complemented by a corporate bond.
The issue was the first ever in the Bondm segment of the Stuttgart Stock Exchange. With a term of five years, a fixed interest rate of 6.75% p.a. and a minimum investment of EUR 1,000 the “KTG Biowertpapier“ met with a very good response from both private and institutional investors.
Due to the strong demand, the original amount of EUR 25 million was doubled to EUR 50 million, with part of the proceeds used for to refinance the company’s debt to reduce its interest expenses.
Share data
ISIN DE000A0DN1J4
Stock market symbol 7KT
Segment Entry Standard
Designated sponsors DZ Bank, Equinet
52-week high EUR 17.82
52-week low EUR 13.40
Year-end price EUR 14.77
Market capitalisation at year-end EUR 83.8 million Number of shares at year-end 5,676,000
Proposed dividend per share EUR 0.15
Bond data
ISIN DE000A1ELQU9
Amount EUR 50,000,000
Interest rate 6.75%
Interest payment 15 September (annually)
Stock market segment Bondm, Stuttgart
Term 5 years
REPORT OF THE SUPERVISORY BOARD
The Supervisory Board advised the Management Board on guiding the company and supported and supervised its management activities. KTG Agrar looks back on a very success-ful fiscal year. We are therefore pleased to propose to the Annual General Meeting 2011 a dividend increase from last year’s EUR 0.10 to EUR 0.15 per share. The expansion of our farmland and our biogas capacity means that we have already laid the basis for 2011.
Supervision and advice in a constant
dialogue with the management
In the fiscal year 2010, the Supervisory Board again fulfilled its legal and statutory controlling and advisory tasks. We monitored the economic and financial performance of the company and its strategic positioning. The Supervisory Board was involved in all material decisions. Our cooperation with the Management Board was characterised by intensive and open dialogue. Oral and written reports on all aspects of material importance to the company were provided by the Management Board regularly, promptly and comprehensively. Accordingly, we were informed about the business and financial situation of the company.
We regularly liaised with the Management Board also outside the meetings of the full Supervisory Board. We obtained information on important developments and decisions. In addition, regular telephone conversations were held by the Chairmen of the Supervisory Board and the Management Board. Matters requiring our approval were submitted for resolution by the Management Board.
In 2010 there were again no conflicts of interest on the Management Board or the Supervisory Board requiring immediate disclosure to the Supervisory Board and reporting
to the Annual General Meeting. We satisfied ourselves of the lawfulness of the company’s and the Group’s actions.
We also satisfied ourselves of the fact that the Management Board has taken measures in line with the company’s size to ensure compliance with legal requirements including the allocation of responsibilities. A risk management system for the company and the whole Group is in place. The features and functions of this system were explained to us.
Key aspects of the supervisory
and advisory activities
The Supervisory Board held six ordinary meetings in the fiscal year. Short-term corporate planning, the medium to long-term strategy and the refinement of the corporate structure as well as the earnings, financial and risk position for both the company and the Group were discussed at all meetings. The topics of discussion included the audit and the approval of the 2009 financial statements and the 2010 interim report including the risk reports. We also paid special attention to the company’s expansion strategy – especially in the biogas segment – and to the financing of investments. Moreover, the Supervisory Board members personally inspected the locations in Lithuania as well as several locations in Germany. The Supervisory Board recognises the rising requirements made on the efficiency of German supervisory boards and has taken advantage of suitable further education offerings.
The Management Board fulfilled its information duties towards the Supervisory Board under applicable laws, the statutes and the rules of procedure at the meetings as well as in-between the meetings. This was done by way of detailed explanations and, wherever possible, by submitting figures, organisational charts as well as other documents.
24
Thorough review and endorsement
of the separate and
consolidated financial statements
The separate financial statements, the consolidated financial statements and the Group management report were prepared to the standards of the German Commercial Code (HGB). The separate financial statements of KTG Agrar AG, the consolidated financial statements and the Group management report were audited by MDS Möhrle GmbH Wirtschafts-prüfungsgesellschaft, Hamburg, which declared that they fully comply with the principles of the German Commercial Code and issued an unqualified audit certificate.
We received the separate financial statements, the consolidated financial statements and the Group management report as well as the audit reports of the auditors of the separate financial statements and the consolidated financial statements in good time prior to the Supervisory Board's annual accounts meeting on 1 May 2011. At this meeting, the separate financial statements, the consolidated financial statements and the Group management report as well as the audit reports were discussed in detail in the presence of the auditor of the separate financial statements and the consolidated financial statements, Martin Horstkötter, public accountant and tax consultant, of MDS Möhrle GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, and the Management Board, especially with regard to the accounting and reserve policy.
The auditor of the separate financial statements and the consolidated financial statements informed us about the course and the results of the audit and was available to answer questions and to provide additional information. All questions were answered in full by the Management Board and the auditor of the separate financial statements and the conso-lidated financial statements. The audit reports of the auditor of the separate financial statements and the consolidated financial statements meet the legal requirements. Based on our own
review, we agree with the result of the audit performed by the auditor of the separate financial statements and the consolidated financial statements.
In its own review of the separate and the consolidated financial statements for the period ended 31 December 2010, the Supervisory Board detected no violation of general legal provisions governing the separate and consolidated financial statements and the Group management report. In particular, all legal and statutory requirements for establishing reserves were observed. According to the results of the Supervisory Board's review, the disclosures and documents required by law were presented clearly and completely. The estimations provided by the Management Board in the Group management report are in accordance with the reports presented in the course of the year. Based on its own assessment of the situation of the Group and the future performance and trends, the Supervisory Board has arrived at the same estimations. The Supervisory Board is of the opinion that the Group management report provides a realistic presentation of the Group and its prospects.
Following its review, the Supervisory Board raised no objections. We endorsed the separate financial statements, the conso-lidated financial statements and the Group management report prepared by the Management Board at our meeting on 1 May 2011. The financial statements of KTG Agrar AG have thus been approved.
Dependency report
As a precautionary measure, the Management Board issued related-party disclosures pursuant to section 312 of the German Stock Corporation Act (AktG) (“dependency report”), which were submitted to the auditor for approval.
The auditor issued an unqualified audit certificate for the dependency report, which confirms that the facts set out in the
report are correct, that the compensation paid by the company for the transactions listed in the report was not unduly high or that potential disadvantages were compensated for and that there is nothing to suggest that the measures listed in the report require a materially different assessment than that of the Management Board.
The report was also examined by the Supervisory Board. The report lists all legal transactions carried out by the company with the controlling company or an affiliated company or on behalf of or in the interest of these companies as well as all other measures which it took or did not take on behalf of or in the interest of these companies. All other aspects of the report also comply with legal requirements (section 312 AktG). Due compensation was received in return for all legal transactions and/or any disadvantages resulting from legal transactions or measures were offset before the end of the fiscal year.
Based on the final result of our review, we raise no objections against the Management Board’s final statement and agree with the result of the audit performed by the auditor.
Profit appropriation proposal
The Supervisory Board agrees with the profit appropriation proposal submitted by the Management Board, which provides for a dividend of EUR 0.15 per eligible share for the fiscal year 2010 and for the remaining balance sheet income to be carried forward to new account. This dividend increase should meet with a positive response in the capital market. The reduction in liquidity resulting from the dividend payment has been taken into account in the financial planning process and will by no means have an adverse impact on the company’s business activity and the planned investments. Most importantly, the Supervisory Board considers the relation between the profit distributed and the profit carried forward to be appropriate.
Acknowledgements
We would like to thank all employees as well as the Management Board for their achievements and their great commitment in the past fiscal year. Our thanks also go to our customers, business partners and shareholders for the confidence placed in us. KTG Agrar has got what it takes to continue its successful performance.
Hamburg, May 2011
Siegfried Koch
Chairman of the Supervisory Board 26 REPORT OF THE SUPERVISORY BOARD
GROUP
MANAGEMENT
REPORT
Earnings situation
Financial and asset position
Opportunities and risks
Supplementary report
Outlook
Business activity and
business environment
1.1 Business activity
With 32,500 hectares of farmland under management KTG Agrar is a leading producer of agricultural resources in Europe. We specialise in the cultivation of food crops such as grain, maize and rapeseed and have clearly defined core competen-cies, namely organic farming, conventional farming and energy production from biogas. Our farmland is located in Germany and Lithuania.
1.2 Business segments Organic farming
Our organic farming activities comply with the EU regulation on organic farming. Many of our farm operations additionally meet the stricter requirements of renowned associations such as GMP and USDA organic. Consistently high quality is ensured by regular controls. As a specialist in large-scale farming, we produce large quantities of homogeneous quality. This improves our marketing possibilities in this segment.
Conventional farming
With a view to diversifying its activities, KTG Agrar has cultivated conventional food crops since the year 2000. Here, too, we draw on our expertise in the organic farming sector and produce crops to the highest quality standards. This is an important competitive advantage.
Energy production/Biogas
Since 2007, the production of renewable energy from biogas has been the third business segment of KTG Agrar. At the end of 2010, plants with a rated electrical output of roughly 16 megawatts were on the grid or close to operation. The electricity produced by these plants is fed into the public power grid. The heat is used by the company itself and supplied to businesses, public institutions and private households. The biogas activities are based on an integrated concept; the plants are located in
the immediate vicinity of our farms, which cultivate the renewable resources needed to operate the plants. Apart from energy maize, we use residues such as grass and straw. Intercrops are gaining in importance as input materials; these include millet and clover grass, which are sown after the grain harvest in the summer and harvested in late autumn.
Complementary agricultural activities
This business segment primarily serves to ensure the efficient utilisation of available resources within the KTG Group. This mainly includes the acquisition and development of farm operations, agricultural trading and farm management for third parties. The segment also cultivates and markets special cultures (berry crops) in the Berlin region.
1.3 Strategy
KTG Agrar AG is the holding company of the KTG Group. Our business activity is divided into four closely integrated segments. This allows us to leverage synergies and increase our efficiency. The result: significant value added for the Group.
Our vision is our strategy - we want to be the champion in innovative farming. Our sustainable, integrated production sets standards of innovation and efficiency. We are growing in profitable markets. Sustainable success is the objective of our corporate activity.
1.4 Economic environment 1.4.1 Overall economy
According to the International Monetary Fund (IMF), the world economy grew by 4.8% in 2010. While this means that the world economy recovered more quickly from the 2009 recession than expected by experts, the sustainability of the global upswing remains uncertain. The industrialised countries saw GDP rise by 2.7% in 2010, with manufacturing output remaining clearly below pre-crisis levels. Based on figures published by the IMF in January 2011, world trade was up by 12% on the previous year, with lower growth reported in the second half as compared to the first six months of 2010. This is attributable to a slowdown in economic growth in the GROUP MANAGEMENT REPORT ON THE FINANCIAL YEAR 2010
developing and emerging countries, which had driven the upswing until the spring. According to the IMF, the developing and emerging economies nevertheless expanded their GDP by 7.1%, thus increasing their share in total global output.
1.4.2 Industry environment Agricultural resources
Two factors had a strong influence on the 2009 / 2010 agricultural season, namely heat and high prices. With regard to the harvest, it was a below-average year for Germany. A long winter was followed by an early draught and heat. During the harvest, the weather was relatively wet. This led to a below-average harvest and a broad spectrum of qualities of grain and winter rapeseed. According to estimates by the Federal Ministry of Nutrition, Agriculture and Consumer Protection, Germany’s grain harvest was down by 12.0% on the previous year. In this context, it should be noted that 2009 was an absolute record year in terms of harvest.
The reduced harvest led to a sharp increase in the prices of all agricultural commodities. According to estimates by the Federal Ministry of Nutrition, Agriculture and Consumer Protection, producer prices of bread and quality wheat increased by over 90% on the previous year. This is primarily attributable to lower harvests in Eastern Europe. Russia even imposed an export ban. This has reduced the physical goods in the world market and led to sharp price increases. It should not be ignored, however, that prices have picked up from a very low level due to the good harvests of 2008 and 2009.
The organic farming sector showed a similar performance as the market as a whole in the fiscal year. According the estimates of the “Bund Ökologische Lebensmittelwirtschaft” (BÖLW -Association of Organic Food Producers), the 2010 grain harvest was about 13% lower than in the previous year. Some 639,000 tons of organic grain were harvested in Germany, roughly 90,000 tons less than in 2009. This led to a sharp increase in prices. According to the BÖLW, the price of bread wheat stood at around EUR 400 per ton, compared to EUR 300 per ton in the previous year. At EUR 5.9 billion, total sales revenues of the
German organic food and drinks industry were up by 2% on the previous year.
Biogas
In Germany, marketing renewable energy such as electricity, biogas and heat from renewable agricultural resources is an attractive and safe business, which is based on the Gas Grid Access Directive and the Renewable Energy Sources Act (EEG). The EEG was not amended in 2010. The feeding of upgraded biogas into the natural gas grid is governed by the Gas Grid Access Directive (GasNZV), which was amended by the federal government in the first half of 2011. In this context, the legislature decided to facilitate access to the natural gas grid for plant operators and amended the division of costs as well as parts of the cost cap to the benefit of the plant operators. This means that the German biogas market continues to provide an attractive environment to KTG Agrar.
According to the “Bundesverband BioEnergie” (Federal Bioenergy Association), roughly 6,000 biogas plants were connected to the grid at the end of 2010, which represents an increase by 1,000 plants. Some 12.8 billion kilowatts hours of climate-friendly energy from biogas were produced in 2010, up from approximtely 10 billion kilowatts hours in 2010.
Business development in 2010
2.1 General statement on the performance
2010 was another record year for KTG Agrar. We increased both sales revenues and total output and boosted our operating result at a disproportionate rate. All three business segments contributed to this growth. By expanding our farmland and our biogas production capacity, we also laid the basis for a successful year 2011.
2.2 Land portfolio
Farmland is an important success factor for an agricultural company. KTG Agrar continued to expand its farmland in 2010.
At the end of the year, the company was farming a total of roughly 32,500 hectares, which represents a strong increase on the previous year.
Most of our farmland, around 25,700 hectares, is located in Germany, with some 6,800 hectares located in Lithuania. Some 6,400 hectares, or 19.7% of the total, are owned by the company. The rest is leased under long-term contracts.
2.3 Biogas
KTG Agrar has operated its own biogas plants since 2007 and has grown this segment into its third main activity. At the end of 2010, biogas plants with a total capacity of 11 megawatts operated at full load in Putlitz, Dersewitz and Flechtingen. Additional plants with a capacity of around 5 megawatts were taken into service or were nearing completion at the end of the year. Thanks to the integrated business model, we achieve high efficiency in the production of biogas, which results in stable cash flows and a good margin. Moreover, the fermentation residues can be reused as fertiliser on our fields. We will therefore continue to invest in this business segment. The project development activities for new sites were pushed ahead in the fiscal year and will make the biogas segment the main growth driver of KTG Agrar in 2011.
2.4 Employees
The aim of our human resources policy is to retain people in the company for as long as possible in order to benefit from their experience. We therefore offer them safe jobs in an exciting environment.
Our employees are a key success factor of KTG Agrar. Without them, our company cannot grow. Efficient land management and the smooth operation of the biogas plants are huge organisational and logistic challenges, which could not be mastered without a competent and motivated team. This is why we continue to invest in training our teams. Regular seminars and workshops are organised to provide individualised further training opportunities as well as for team-building purposes. We are committed to offering young people a good career start.
In 2010, numerous new people were employed in adminis-tration, on our farms and for the planning and operation of biogas plants. The average headcount including trainees and apprentices increased from 214 in the previous year to 256 in 2010.
Earnings situation
3.1 Total output
Total output and sales revenues grew dynamically in 2010. Total output rose by 18.5% from EUR 59.7 million to EUR 70.8 million. It comprises sales revenues, increases in inventories, own work capitalised and other operating income. Sales reve-nues increased at a disproportionately higher rate than sales, namely by 39.0% from EUR 32.3 million to EUR 44.9 million.
All core segments contributed to the positive performance. In the agricultural segment, we benefited from the increase in farmland and higher sale prices, which more than offset the reduced harvest. In the biogas segment, the new plant in Flechtingen had a positive effect.
The highest increase in sales was achieved in the conventional farming segment, where sales revenues soared by 78.0% from EUR 12.1 million to EUR 21.5 million. Revenues in the organic farming segment rose by 21.4% from EUR 5.9 million to EUR 7.1 million. The biogas segment also showed a positive trend. Revenues of EUR 14.2 million were generated from the production of renewable energy in the reporting period. This represents an 11.9% increase on the previous year. Comple-mentary agricultural activities contributed EUR 2.0 million to Group sales (previous year: EUR 1.6 million).
3.2 Costs
Costs grew in line with the company in the past fiscal year. The cost of materials mainly comprises expenses on raw materials and supplies such as fertiliser, seeds and fuel. It rose by 32.6% from EUR 18.7 million to EUR 24.8 million. The cost of materials GROUP MANAGEMENT REPORT ON THE FINANCIAL YEAR 2010
as a percentage of sales revenues improved from 52.8% to 46.9%. On the one hand, this is attributable to the fact that the prices of supplies did not pick up as strongly as the prices of agricultural commodities. On the other hand, KTG can increasingly replace mineral fertiliser with the fermentation residues from the production of biogas. Personnel expenses climbed in sync with the increase in staff numbers, namely by 22.0% from EUR 6.9 million to EUR 8.4 million. Depreciation and amortisation rose from EUR 3.4 million to EUR 4.2 million in 2010, primarily due to the start-up of the biogas plant in Flechtingen. Other operating expenses, which include repairs, maintenance and asset disposals as well as rents, lease payments and space costs, were reduced from EUR 21.5 million to EUR 20.0 million in 2010. This is due to the fact that the sale-and-lease-back transactions declined from EUR 5.7 million to EUR 0.5 million in 2010.
3.3 Earnings
KTG Agrar AG improved its operating profitability considerably in 2010. Earnings before interest and taxes (EBIT) climbed from EUR 9.2 million to EUR 13.4 million, which represents an increase by 46.1%. The EBIT margin, based on total output, improved from 15.4% to 19.0%. This is attributable to the fact that total output increased while the cost of materials as a percentage of sales declined and other operating expenses were reduced.
The financial result stood at EUR -2.8 million in 2010, compared to EUR -2.3 million in the previous year. The result from ordinary activities rose by 53.6% from EUR 6.9 million to EUR 10.6 million.
The extraordinary result was primarily influenced by the financing of the company’s expansion. KTG increased its share capital by 10% in March 2010 and issued a EUR 50 million bond in September. In contrast to International Financial Reporting Standards (IFRS), the German Commercial Code requires these expenses to be recognised in profit or loss. In addition, we took advantage of the option provided under Art. 67 para. 5 sentence 1 EGHGB to fully derecognise as an
expense the remaining amortised carrying amount of the capitalised expenses for the start-up and activation of the business operations in an amount of EUR 1.8 million. Accordingly, the extraordinary result amounted to EUR -6.4 million (previous year: EUR -0.2 million). Consolidated net profit for the year 2010 amounted to EUR 2.4 million (previous year: EUR 5.6 million). The balance sheet profit rose by 17.1% from EUR 7.0 million to EUR 8.2 million.
Financial and asset position
4.1 Financial position
In the fiscal year, the company’s financial and asset position was primarily influenced by the capital measures, by investments in the biogas segment and in farmland and by the resulting higher inventory levels. At the same time, trade receivables increased.
Total assets rose by EUR 38.6 million to EUR 191.3 million. The Group’s net profit and the capital increase strengthened the company’s equity capital even further. As of the balance sheet date, KTG Agrar’s equity capital amounted to EUR 64.3 million, which represents an increase of EUR 12.6 million or 24.4% on the previous year. The equity ratio stood at a good 33.6% and thus on about the same level as in the previous year.
Liabilities totalled EUR 122.9 million as of 31 December 2010 (previous year: EUR 98.6 million). The bond issue in September resulted in additional liabilities in an amount of EUR 50.0 million. Liabilities to banks were reduced from EUR 61.0 million to EUR 49.8 million. This item primarily includes long-term project loans for biogas plants. Other liabilities were also reduced markedly from EUR 12.3 million to EUR 8.2 million. Trade liabilities declined by EUR 1.6 million to EUR 13.5 million.
4.2 Asset position
The trend of the past years has shown that the management of farmland and the operation of biogas plants are attractive and
sustainable. Investments in the construction of new biogas plants and the acquisition of agricultural machinery and farmland form the basis for this positive trend. Capital expenditures in 2010 amounted to about EUR 24.2 million (previous year: EUR 22.2 million).
As a result of the investments, property, plant and equipment increased from EUR 62.2 million to EUR 81.0 million in 2010. Due to the expansion of the farmland, land and buildings rose by EUR 5.4 million to EUR 28.3 million. At the end of 2010, KTG Agrar’s own farmland totalled roughly 6,400 hectares. In accordance with the German Commercial Code, these are recognised at cost, which enables the formation of hidden reserves. Technical plant and machinery rose by EUR 0.4 million to EUR 25.3 million. The sharp increase in advance payments made and assets under construction by EUR 12.6 million to EUR 23.6 million is attributable to the new biogas plants. Financial assets were up by EUR 0.4 million on the previous year to EUR 1.5 million on the balance sheet date.
Inventories were up by EUR 11.1 million on year-end 2009 to EUR 25.1 million. KTG Agrar bought raw materials and supplies at an early stage and at favourable prices, which is why this item increased by EUR 3.0 million to EUR 6.9 million. Un-finished goods and services rose from EUR 8.2 million to EUR 16.2 million, which is mainly attributable to the increase in farmland, higher prices and the fact that more winter grain was sown.
At EUR 1.2 million, finished goods and products were on a par with the previous year as of the balance sheet date. The increase in receivables and other assets by EUR 5.5 million to EUR 61.0 million is mostly due to higher trade receivables, which climbed to EUR 32.0 million (previous year : EUR 21.3 million). Receivables from unconsolidated affiliates increased to EUR 2.0 million. Receivables from companies in which an investment is held declined by EUR 2.0 million to EUR 6.8 million. As of the balance sheet date, other assets amounted to EUR 20.2 million (previous year: EUR 23.8 million). The decline is due to the repayment of loans.
Opportunities and risks
KTG Agrar is a dynamically growing company that operates in a market characterised by high price volatility. This results in both risks and opportunities, which are inextricably linked with our business activity. Opportunities result from the growing world population, changing eating habits and the change in energy policy. Risks can never be completely avoided, but we aim to keep these risks and the potential consequences for the company as low as possible. Moreover, we take risks only if and when they are matched by opportunities in the form of growth and profit. At this stage, we are not aware of any risks that could have a lasting adverse impact on the net worth, financial and earnings position of KTG Agrar. We see the following risks for our company and take a variety of measures to mitigate them:
• As an agricultural company, we are exposed to elementary risks arising from variable weather conditions. We mitigate these risks through regional and product diversification. Wherever this makes sense, we install sprinkler systems as a protection against droughts. In addition, we have taken out insurance against storm damage on an appropriate scale.
• We are dependent on government funding for both agricultural production and the operation of biogas plants. We employ a small team of experts, who monitor the respective trends and developments very closely to ensure that we can quickly respond to changes at all times. As these changes do normally not occur suddenly, the risk is manageable. Moreover, the long-term regulations, e.g. regarding the Renewable Energy Sources Act (EEG), represent an advantage with regard to long-term corporate and investment planning.
• The main expense items of KTG include seeds, fuel as well as pesticides and fertilisers. A sharp increase in some or all GROUP MANAGEMENT REPORT ON THE FINANCIAL YEAR 2010
of these items may have a strong impact on the profitability. We aim to reduce this impact to a minimum by centralising our purchasing activities. The fact that we use the fermentation residues of the biogas plants as a fertiliser clearly reduces our exposure to market trends.
•Activities outside Germany expose our company to different legal and operational environments. Our presence in the full EU member state of Lithuania means that we have chosen a stable country for our expansion, which offers good opportunities for long-term profits and increases in the value of our investments.
•When acquiring agricultural businesses, it is usually not possible to perform a complex due diligence process like in other sectors. It can therefore not be ruled out that individual transactions entail risks that cannot be identified from the beginning.
•Receivables in a total amount of around EUR 8.8 million are due from companies that are not fully consolidated, associated companies and companies in which an investment is held. From our point of view, the collection of these receivables is ensured.
•Long-term investments in farmland and biogas plants are currently bridge-financed by a medium-term bond. Risks therefore exist with regard to refinancing and the future interest rate level. KTG Agrar has deliberately taken this approach to take advantage of the current favourable market environment and to push ahead the expansion of its biogas capacity and its farmland.
•Some loan agreements signed by KTG Agrar include financial covenants, e.g. in the form of a minimum equity ratio or an interest service cover ratio. Even though the company has met such covenants up to now, the risk that such covenants may not be fully met in future cannot be ruled out entirely. To limit the interest rate risk, we aim to sign longer-term interest rate agreements.
• KTG Agrar needs liquidity to finance the planned growth. Besides the cash flow, the company uses loans to finance this growth. If loans are not granted, there is a risk that investment projects cannot be completed as planned and that the planned growth cannot be achieved. This risk is mitigated by the company’s profitability, the sound equity ratio, the long-standing banking relationships and the bond issue, which has opened up a third source of corporate financing.
Supplementary Report
In March 2011, FZ-Foods AG, a wholly owned subsidiary of KTG Agrar AG, acquired the operations of Frenzel Tiefkühlkost. The production facility of the insolvent company in Ringleben, Thuringia, and all 90 employees were taken over. Established in 1981, Frenzel Tiefkühlkost was considered to be the third largest supplier of frozen vegetables in Germany. Besides vegetables, the company also sold potato specialities and convenience food.
Frenzel Tiefkühlkost GmbH & Co. KG and its two subsidiaries each filed for insolvency on 10 January 2011. The takeover means that KTG Agrar has made inroads into an attractive market segment. The company plans to expand the organic frozen food activities, in particular, which are expected to contribute to the Group’s profitable growth.
Outlook
KTG Agrar is optimistic about the future. The production of healthy food and green energy means that we operate in markets with huge potential. To tap this potential, we will continue to rely on our integrated concept, which forms the basis for the development of our company.
The overall environment remains favourable. The world economy is expected to show a stable trend. Global inventories have declined as a result of the below-average harvest, and no record harvest is anticipated for 2011. Experts assume that the harvests will be low, especially in Eastern Europe. This will have an impact on world trade. The scarce physical supplies contrast with very stable demand. Mega trends such as population growth, growing prosperity in emerging markets, healthy diets
and the growing use of renewable energies remain intact, which means that demand for agricultural commodities will continue to increase. We expect the prices of food crops to show a stable trend in the coming year.
KTG Agrar aims to increase its total output and EBIT in 2011. The foundation for this growth has already been laid. We continue to expand our farmland in our core regions, eastern Germany and Lithuania. We will also review opportunities for expansion to new regions. The expansion of our biogas production capacity will be pushed ahead, with more plants reaching full load in the first half of 2011. The capacity of our biogas plants is projected to reach 25 to 30 megawatts by the end of 2011.
Hamburg, 1 May 2011 Board of Management
GROUP MANAGEMENT REPORT ON THE FINANCIAL YEAR 2010 34
FINANCIAL FIGURES
Consolidated Cash Flow Statement
CONSOLIDATED BALANCE SHEET 36
Assets (HGB)
31-12-2010in EUR 31-12-2009 in EURA. Expenditure the start-up and enhancement of business operations 0.00 1,848,500.00
B. Non current assets 88,604,343.53 69,097,337.80
I. Intangible assets
1. Concessions, industrial and similar rights and values and licences
2,135,649.61 2,328,622.42
2. Goodwill 3,955,017.12 3,416,765.36
6,090,666.73 5,745,387.78 II. Property, plant and equipment
1. Land property, rights equal to land property and buildings, including
buildings on non-owned land 28,319,075.24 22,906,416.87
2. Technical equipment and machinery 25,332,351.44 24,897,796.21
3. Fixtures, furniture and equipment 3,434,716.70 3,144,983.51
4. Permanent crops 329,351.16 272,055.71
5. Payments in advance and plants under construction 23,600,336.55 11,010,992.76
81,015,831.09 62,232,245.06 III. Financial assets
1. Interests in affiliated companie 90,398.50 90,398.50
2. Interests in associates companies 217,438.94 207,438.94
3. Investments 207,883.84 41,864.54
4. Investment securities 213,006.59 210,960.88
5. Other loans 494,104.25 62,087.32
6. Cooperative society shares 53,015.49 51,992.91
7. Reinsurance claims arising from life insurance policies 221,998.10 454,961.87
1,497,845.71 1,119,704.96
C. Animals 730,145.00 603,184.38
D. Current assets 99,008,010.44 79,969,124.21
I. Inventories
1. Raw materials, consumables and supplies 6,934,784.17 3,973,646.09
2. Work in progress and seed corps 16,241,784.46 8,153,997.95
3. Finished goods and merchandise, feed 1,174,380.00 1,234,987.13
4. Advance payments 782,916.84 636,344.39
25,133,865.47 13,998,975.56 II. Receivables and other assets
1. Trade receivables 32,000,101.19 21,283,278.86
2. Receivables from non-consolidated affiliated companies 1,969,853.06 1,684,156.10 3. Receivables from companies in which there is a financal investment 6,797,725.27 8,800,037.01
4. Other assets 20,228,760.06 23,782,062.69
60,996,439.58 55,549,534.66
III. Securities 3,642,527.20 3,636,700.25
IV. Cash, bank balances 9,235,178.19 6,783,913.74
E. Deferred income 1,451,575.30 1,227,022.15 F. Deferred income due to potential tax relief in the subsequent years
in accordance with § 274 (2) HGB 1,517,805.66 0.00
Equity and Liabilities (HGB)
31-12-2010in EUR 31-12-2009 in EURA. Equity 64,271,478.95 51,668,476.57
I. Subscribed capital 5,676,000.00 5,160,000.00
II. Capital reserves 40,241,000.00 32,501,000.00
III. Revenue reserves 1,292,537.46 5,000.19
IV. Difference arising from capital consolidation 5,332,214.82 4,578,305.16
V. Balance sheet income 8,191,374.05 7,022,974.45
VI. Balancing item for minority interest 3,538,352.62 2,401,196.77
B. Special item for investment grants 132,624.94 172,069.46
C. Provisions 2,482,957.46 2,256,689.92
1. Provisions for pensions and similar obligations 195,602.00 133,256.00
2. Provisions for taxes 1,120,580.99 1,318,534.62
3. Other provisions 1,166,774.47 804,899.30
D. Liabilities 122,923,333.00 98,584,494.99
1. Bonds 50,000,000.00 0.00
2. Liabilities to banks 49,792,374.40 61,012,373.11
3. Advanced payments for orders 601,919.50 6,168,573.26
4. Trade payables 13,546,514.14 15,113,126.37
5. Liabilities on bills accepted, drawn and issued 688,497.34 1,243,716.26
6. Liabilities to affiliated companies 130,227.80 2,765,162.95
7. Other Liabilities
• of which from taxes EUR 745,432.39 (previous year: EUR 229,524.46) • of which for social coverage EUR 335.95 (previous year: EUR 0.00)
8,163,799.82 12,281,543.04
E. Deferred income 119,380.60 63,437.60
F. Deferred tax liabilities 1,382,104.98 0.00
CONSOLIDATED INCOME STATEMENT, CONSOLIDATED CASH FLOW STATEMENT 38
Consolidated Income Statement (HGB)
01-01 – 31-12-2010in EUR 01-01 – 31-12-2009 in EUR1. Sales 44,858,207.77 32,251,985.98
2. Increase in finished goods, inventories and work in progress and animals 8,001,848.80 3,206,340.18
3. Other own work capitalised 183,406.39 4,723,200.00
4. Other operating income 17,726,590.21 19,520,116.12
5. Total output 70,770,053.17 59,701,642.28
6. Cost of materials
a) Cost of raw materials, consumables and supplies and for purchased merchandise b) Cost of purchased services
-24,780,948.55 -18,537,668.78 -6,243,279.77 -18,707,099.74 -18,101,554.24 -605,545.50 7. Gross profit 45,989,104.62 40,994,542.54 8. Staff cost a) Wages and salaries
b) Social security and expenses for pensions and benefits
• of which for pensions EUR 32,304.70 (previous year: EUR 39,562.59)
-8,445,107.54 -7,166,875.72 -1,278,231.82 -6,921,788.03 -5,867,305.33 -1,054,482.70
9. Amortisation and depreciation -4,177,997.14 -3,358,831.51
10. Other operating costs -19,948,929.41 -21,534,203.29
11. Operating profit 13,417,070.53 9,179,719.71
12. Income from long-term equity investments 6,534.06 1,626.95
13. Income from securities and and long-term loan receivables 3,080.08 0.00
14. Other interest and similar income 1,346,504.32 1,119,309.21
15. Interest and similar expenses -4,150,263.65 -3,435,823.30
16. Financial result -2,794,145.19 -2,314,887.14
17. Result from ordinary activities 10,622,925.34 6,864,832.57
18. Extraordinary income 3,236.00 0.00
19. Extraordinary expenses -6,449,666.72 -228,980.03
20. Extraordinary result -6,446,430.72 -228,980.03
21. Income taxes -1,546,012.37 -822,057.41
22. Other taxes -230,498.01 -188,522.80
23. Net consolidated income for the year 2,399,984.24 5,625,272.33
24. Retained profit 7,022,974.45 1,648,434.30
25. Profit distribution -567,600.00 0.00
26. Result attributable to minority interests -663,984.64 -250,732.18
Consolidated Cash Flow Statement (HGB)
01-01 – 31-12-2010in TEUR 01-01 – 31-12-2009 in TEURNet consolidated income for the year before extraordinary items 8,846 5,854
Depreciation, amortisation and write-downs on fixed assets 4,178 3,359
Write-ups on fixed assets 0 -143
Increase in provisions 179 174
Non-cash income and expenses -39 -4,709
Loss / profit from disposal of fixed and financial assets 970 -2,653
Decrease in other assets, not attributable to investing or financing activities -14,791 -45,746 Increase in other liabilities, not attributable to investing or financing activities -21,388 33,041
Cash flow from operating activities -22,046 -10,823
Proceeds from disposal of tangible fixed assets 541 1,365
Payments for investments in fixed assets -12,050 -14,939
Payments for investments in intagible fixed assets -97 -755
Proceeds from disposal of consolidated companies 0 0
Payments for acquisition of consolidated companies -1,535 -3,269
Proceeds from disposal of long-term financial assets 0 6
Payments for investments in long-term financial assets -2,022 -130
Cash flow from investing activities -15,163 -17,723
Proceeds from issue of capital 8,256 5,461
Payments for extraordinary items -6,446 -229
Proceeds from bonds and loans 56,792 22,579
Payments for scheduled repayment of bank liabilities -18,473 -6,127
Profit distribution -576 0
Cash flow from financing activities 39,552 21,684
Net change in cash funds 2,344 -6,861
Change in cash funds due to consolidation structure 107 2,199
Cash funds at beginning of period 6,784 11,446
CONSOLIDATED STATEMENT OF EQUITY CHANGES 40
Consolidated statement of
equity changes (HGB)
in EUR Parent Compan Subscribed capitalordinary shares Capital reserve Legal reserve Other reserve
01 Januar 2009 4,730,000.00 27,470,000.00 5,000.00 –
Transfer to legal reserve – – – –
Transfer to revenue reserve – – – –
Capital increase from issue of shares 430,000.00 5,031,000.00 – –
Other changes – – – –
Changes in basis consolidation – – – –
Consolidated net profit – – – –
31 Dezember 2009 5,160,000.00 32,501,000.00 5,000.00 –
01 Januar 2010 5,160,000.00 32,501,000.00 5,000.00 –
Transfer to legal reserve – – – –
Transfer to revenue reserve – – – –
Adaption BilMog (Accounting Law Modernisation Act) – – – 1,287,537.07
Capital increase from issue of shares 516,000.00 7,740,000.00 – –
Profit distribution – – – –
Other changes – – – 0.19
Changes in basis consolidation – – – –
Consolidated net profit – – – –
ny Minority interests
Difference from capital consolidation
Generated
consolidated equity Equity
Minority interests
in equity Consolidated equity
3,732,859.80 1,648,434.31 37,586,294.11 1,627,125.34 39,213,419.64 – – – – – – – – – – – – 5,461,000.00 – 5,461,000.00 – – – – – 845,445.36 0.01 845,445.37 523,339.23 1,368,784.60 – 5,374,540.13 5,374,540.13 250,732.18 5,625,272.33 4,578,305.16 7,022,974.45 49,267,279.61 2,401,196.75 51,668,476.57 4,578,305.16 7,022,974.45 49,267,279.61 2,401,196.75 51,668,476.57 – – – – – – – – – – – – 1,287,537.07 – 1,287,537.07 – – 8,256,000.00 – 8,256,000.00 – -567,600.00 -567,600.00 – -567,600.00 – 0.20 0.39 – 0.39 753,909.66 – 753,909.66 473,171.23 1,227,080.89 – 2,399,984.24 1,735,999.60 663,984.64 2,399,984.24 5,332,214.82 8,855,358.89 60,733,126.33 3,538,352.62 64,271,478.95
