Sales and operating profit forecast for financial year 2006/2007 confirmed. Impairment write-down within french sugar segmen in light of sugar-market-reform

Mannheim, 19.03.2007

Based on group sales of EUR 5.7 (5.3) bln and an expected group operating profit of about EUR 420 (450) mln in FY 2006/07, Südzucker group has shown relative strength within a tough environment. Group accounts (IFRS) will reflect the current development within the EU sugar regime with an extraordinary write-down on Goodwill (impairment loss) within the sugar segment of EUR 0.5 bln. As a consequence the net loss for FY 2006/07 (FY end 28th of February) is expected to reach EUR 0.2 bln. The individual financial statement of Südzucker AG (HGB) will show a write-down of book value for Saint Louis Sucre S.A. (SLS), Paris; the ability to pay dividends will not be effected by this measure.

The write-down does not lead to a liquidity drain and therefore no reduction in cash flow (around EUR 500 mln for FY 2006/07) is expected. With an equity ratio exceeding 40%, solid financial ratios will be maintained.

To underpin this fact, net financial debt of Südzucker group (excl. hybrid bond) will be reduced (as of 28th of February 2007) to a level of about EUR 0.8 billion from EUR 1.2 billion in the previous year.

The reform of the sugar market regime and the subsequent change of the framework has already led to the closure of the refinery site in Marseille (France). Beyond our consistent structural improvements over the last years - e.g. pre-campaign 2006 closure of 3 sugar factories (Austria, Poland and Slovakia) - we currently elaborate on a substantial restructuring concept across the group to improve the sustainable profitability of the sugar segment.

Additional Information:

With a volume of 2.2 million tons until the end of marketing year 2007/08 (1st of October to 30th of September), the voluntary return of sugar quota to the EU restructuring fund has not reached the EU Commissions target of 5 million tons and therefore is insufficient and clearly below expectations. Consequently, to reflect the emerging quota excess within the marketing year 2007/08 the EU Commission has decided - depending on the quota reduction so far - to temporarily reduce the production of quota sugar (pre-emptive temporary withdrawal). The temporary withdrawal for member countries not having returned quota to the restructuring fund will amount for 13.5%. In the event of doubts about a balanced market until October 2007, EU Commission has announced a further volume reduction for the marketing year 2007/08 (additional temporary withdrawal).

In the event of a continued EU Commission policy to levy a restructuring charge for non-produced quota sugar , profitability for the European sugar industry (in the next two years, but especially in 2007/08) will be significantly effected. This development will also effect Südzucker group. Against this background and in combination with an additional high withdrawal in October 2007, we expect a circa break-even result (FY 2007/08) within the sugar segment.

On the other hand Südzucker group expects within its dynamic development of the segments special products - especially driven by the bioethanol and functional food divisions - as well as fruit profitability to increase substantially.

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