Südzucker has reduced its annual sales and profit forecasts amid input-cost pressures in its packaged food and ingredients segment, allied with “low” sugar prices.
The downbeat outlook from the Mannheim, Germany-based company, one of the world’s largest sugar suppliers, cuts across sales, operating profit and EBITDA for the 2025/26 fiscal year.
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Südzucker, which produces finished food products such as pizza, ready meals and snacks, now expects annual revenue to come in at €8.3bn ($9.6bn) to €8.7bn, compared to a previous projection of €8.7bn to €9.2bn.
The top end of that new range would represent a 10% decline from the €9.7bn reported for the prior fiscal year.
Finished food items and ingredients are housed within Südzucker’s special products division, which the company said is facing “higher material costs”.
It added those costs could only partially be passed on to customers. At the same time, the division is up against “price pressure” on sales.
The special products business unit includes Beneo, which produces plant-based functional ingredients for food and animal nutrition, along with flours and starches; Freiberger, a maker of chilled and frozen pizzas, pasta dishes and snacks primarily for private-label customers in Europe and the US; and PortionPack, the foodservice division for items such as sauces, sweeteners and powdered drinks.
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By GlobalDataSüdzucker is now forecasting EBITDA at €470m to €570m, down from an earlier range of €525m to €675m. At best, €570m would translate to a decline of 22% from the previous 12 months.
Operating profit is anticipated at €100m to €200m, compared to the earlier outlook of €150m to €300m. The fiscal 2023/24 result was €350m.
In its sugar segment, the group said: “Persistently low global market prices combined with the EU market environment are expected to result in a reduced earnings contribution in the second half of the current 2025/26 fiscal year compared to the previous forecast. Although the EU market environment shows price increases, it remains below expectations.”
The Food and Agriculture Organization (FAO) of the United Nations reported that in July, its Sugar Price Index fell for the fifth consecutive month, averaging 103.3 points, down 0.2% from June.
The FAO said expectations of a global production recovery in 2025/26, notably in India and Thailand, weighed on prices, although signs of a rebound in global sugar imports moderated the decline.
Meanwhile, presenting its new forecasts, Südzucker warned: “It should be noted that the economic and financial impact of the current geopolitical and global economic situation on the Südzucker Group’s future business performance remains difficult to assess.”
In July, Südzucker reported its first-quarter results. Consolidated net revenue for the group fell 15.7% to €2.15bn.
EBITDA slid to €96m from €230m and operating profit slumped to €22m from €155m.
For the special products division, first-quarter sales dipped 4.3% to €554m. Operating profit for that segment dropped almost 23% to €44m.
