KTG Agrar SE launches conversion offer for its 2010/2015 bond (EUR 50 million)

- Conversion period from 18 August 2014 to 24 September 2014
- New bond: 7.25% p.a. / 5-year maturity / volume of up to EUR 50 million
- Rising earnings, higher equity ratio
- Company now reaping rewards from investments
- Clearly increased operating cash flow

Hamburg, 18 August 2014 - KTG Agrar SE is today launching an attractive voluntary conversion offer for its 2010/2015 corporate bond (ISIN DE000A1ELQU9). Between 14 August 2014 and 24 September 2014, investors in the 2010/2015 corporate bond (EUR 50 million volume, 6.75% coupon, maturing 15 September 2015) can exchange their bonds for new bonds free of charge on a 1:1 basis at 100% of the nominal value. KTG Agrar SE CEO Siegfried Hofreiter said: "Steadily trading at above 100%, our first bond has been among the top performers in the market. In addition to the fact that we continue to be rated "investment grade" despite our massive investments, this confirms the solidity and economic effectiveness of our business model. KTG has always made its interest payments on time. All bondholders will receive their 15 September 2014 coupon payment as it becomes due." In addition, all subscribers opting for conversion will of course also receive the interest accruing in the intervening period, i.e. from 15 September 2014 to 14 October 2014, on 15 October 2014. The conversion into the bond 2014/2019 will then become effective on 15 October 2014, at which date the duration of the new bond will commence.

"Our bond 2014/2019 is an investment in a secure sector with great potential for the future. The underlying mega trend - i.e. the rising world population - means that demand for farmland, healthy nutrition and clean energy will continue to rise steadily, creating a highly attractive and positive environment for the agricultural industry and, by extension, for KTG's business model. Ever since the issue of our bond in 2010 we have lived up to our promises and have made massive investments in assets of real substance. The past four years have seen the prices of farmland more than double in east Germany and Lithuania, and this trend is continuing. KTG's extended value chain means that KTG is today clearly less exposed to volatility in the prices of agricultural commodities. In the coming years we will reap the rewards from the investments we made," says Siegfried Hofreiter. "We welcome every investor's decision to support us also in the coming years and offer an attractive yield in an exciting, solid and promising market environment."

KTG Agrar's new corporate bond 2014/2019 (ISIN DE000A11QGQ1) matures over five years, carries a fixed annual yield of 7.25% and is divided into EUR 1,000 units. Once the conversion period and a potential subsequent public offering (from 29 September 2014) have expired, the new bond will be listed in the Entry Standard segment of the Frankfurt securities exchange starting 15 October 2014.

Since 2010 KTG Agrar has made massive investments in farmland, modern biogas plants, production sites, brands and employees. In the past three years alone, KTG has expanded its farmland by 13,000 hectares to 43,000 hectares and boosted its biogas output capacity by more than 30 megawatts to its current level of 53 megawatts. In addition, the newly created food segment is forecast to contribute more than EUR 100 million to revenues in 2014 (2013: EUR 50 50 million), with continued strong growth expected going forward. "Having largely completed the investment phase in 2013, we entered the "harvest" phase in 2014 and are now beginning to fully leverage the potential created by our investments. In the coming years we will optimise our costs and processes, boost our profitability, raise our equity ratio and reduce our leverage." This trend was already reflected in the company's 2013 operating performance. Group sales revenues increased by approximately 50% to EUR 164.9 million. Operating profit (EBIT) for 2013 came in at 23.9 million. This compares with EUR 13.4 million (adjusted for the EUR 16.1 million in extraordinary income from KTG Energie's flotation) in 2012.


2014 and beyond: clear sales and profit growth without major new investments

KTG Agrar has set itself two clear objectives for the coming years, namely to strengthen its equity position and to generate a positive cash flow.

In 2014 KTG Agar is focusing on consolidating is business and optimising the investments made in the past. At the same time, the company will continue to grow dynamically at the operational level without requiring any major new investments. Group sales revenues will clearly surpass the EUR 200 million mark, leading to a further rise in earnings before interest and taxes (EBIT). KTG Agrar has firmly set its sights on reaching a quarter of a billion in sales in 2015.

Apart from raising its profits, KTG Agrar also continues to strengthen its equity position by realising hidden reserves. A first step in this direction was taken by selling farmland in Lithuania and leasing it back for 18 years, thereby unlocking some EUR 20 million. Says Siegfried Hofreiter: "Our portfolio of company-owned farmland amounting to some 6,000 hectares currently represents hidden reserves of approximately EUR 100 million. Given the scarcity of this finite resource, we assume that the dynamic price trend in the farmland market will continue. Even assuming a doubling of farmland prices - which we believe to be a realistic prospect - over the next five to ten years, KTG Agrar continues to operate in a favourably priced region compared to prices in western Europe. Our business segments - farming, renewable energy production and regional food production under the motto "from field to plate" - offer not only short-term profit potential but also long-term opportunities and sustainable profitability. Consequently our bond is an ideal finance component in addition to equity and long-term bank loans. This way we can pursue our entrepreneurial vision by acting on opportunities in agriculture, a sector buoyed by a secular trend.

Bondholders will be informed about the details of the conversion offer for the 2010/2015 bond by their depository banks. This information is also available on the Internet at www.ktg-agrar.de. In addition, staff at the KTG information centre will be happy to provide information over the phone (0800/8988870, free calls from German landlines).

Legally relevant prospectus available for downloading at: www.ktg-agrar.de


About KTG Agrar SE

With cultivable land of more than 40,000 hectares, KTG Agrar SE (ISIN: DE000A0DN1J4) is one of the leading producers of agricultural commodities in Europe. As an integrated supplier, the company produces agricultural commodities and renewable energy and food. The Hamburg-based company's core area of expertise is the organic and traditional cultivation of market products such as cereals, potatoes, soy and rapeseed. For organic market products KTG Agrar is the European market leader. The company mainly produces in Germany but has also operated production in the EU member state of Lithuania since 2005. As a result of the takeover of Frenzel Tiefkühlkost and Biozentrale Naturprodukte, KTG has expanded the value chain by the production of food. In the year 2013, KTG achieved a total output of EUR 205.3 million and EBIT of EUR 23.9 million. Since November 2007 the company is listed on the Frankfurt Stock Exchange and had 591 employees at year end 2012. Further information can be found at www.ktg-agrar.de.



Contact

Investor Relations / Presse
Fabian Lorenz

IR.on AG
Phone: +49 221 914097-6
E-mail: fabian.lorenz@ir-on.com