Message From Our CFO

2021 laid the foundations for a new chapter in LDC’s journey. We welcomed ADQ as a shareholder, reinforced our financial position and delivered outstanding operational performance in a challenging environment and volatile markets. Our 2021 results translated into the highest return on equity since 2013 and a strong balance sheet position which, combined with ample available liquidity, will support our activities and investments in the next growth phase for LDC.

In 2021, both our segments contributed to an improved financial performance, delivering Segment Operating Results and EBITDA up 17.6% and 22.6% respectively, year on year. Value Chain Segment Operating Results improved by 18.7% year on year, owing particularly to strong demand for Grains & Oilseeds products, while Merchandizing Segment Operating Results rose 15.6%, driven by cotton demand recovery and new opportunities in sugar-based ethanol.

Thanks to our global presence at both origin and destination, and our edge in core merchandizing activities, LDC successfully mitigated risks and overcame challenges posed by weather events, freight shortages, port congestion and ongoing pandemic-related issues, running our businesses profitably and without compromise on supply chain continuity. Our customer-centric approach and rigorous risk management ensured LDC remains a trusted and reliable organization for all our stakeholders.

Our strong operational performance and cost-efficient financing, as well as the normalization of our effective tax rate, drove a 14.3% return on equity for the year 2021.

On September 10, 2021, the completion of the sale of an indirect 45% equity stake in LDC to Abu Dhabi-based ADQ was followed by the early and full repayment of a US$1,051 million long-term loan granted by LDC to its parent company, originally maturing in 2023. Combined with our strong performance in 2021, this contributed to significant deleveraging, with adjusted leverage ratio halved at 0.9x and adjusted net gearing down to 0.27 at December 31, 2021, while deploying additional working capital in pursuit of our growth plans.

In October 2021, S&P Global Ratings upgraded LDC’s credit rating to ‘BBB/A-2’ with stable outlook, underlining LDC’s solid operating and financial results in the first semester of 2021, and deepening the Group’s access to short- and long-term debt capital markets. Our liquidity position as of December 31, 2021 remained strong with US$11.0 billion available liquidity, resulting in a coverage of 2.2x the current portion of debt.

Guided by our purpose to create fair and sustainable value, we continued to drive sustainability-linked finance models across our value chains. As of December 2021, we had included sustainability-linked mechanisms in all regional revolving credit facilities and raised a JPY10.0 billion private placement with a similar sustainability-linked mechanism in place.

At the end of 2021, LDC’s group equity reached the highest level in our history at US$5.4 billion, thanks to outstanding operating performance over more than a year, owing to our teams’ expertise and excellent delivery. A more robust LDC emerges from 2021, with a new shareholding structure, strong balance sheet and solid position to face upcoming challenges and deliver on our strategic ambitions.

Patrick Treuer
Chief Financial Officer