interim report as per 30 september 2014 conference call€¦ · interim report as per 30 september...

Interim Report as per 30 September 2014 Conference Call Munich, 6 November 2014

Klaus Josef Lutz, CEO

Andreas Helber, CFO

6 November 2014 BayWa AG

Agenda

1. Development of the Group 1-9/2014

2. Development of the Segments 1-9/2014

3. Outlook FY 2014

BayWa AG

Development of the Group 1-9/2014

6 November 2014

Development of the Group 1-9/2014 Summary

BayWa AG

Highlights − Takeover of the remaining 40% in Bohnhorst Agrarhandel GmbH − Sale of RKW Süd's foodstuff production to Deutsche Tiernahrung Cremer − Reorganisation of BayWa's national fruit business as from 1 January 2015 − T&G joint-venture with Unifrutti for cultivating table grapes in Peru − Expansion of BayWa r.e.'s US activities: takeover of Martifer Solar USA; sale of Brahms Wind Farm

(19.8 MW) in New Mexico − Successful placement of bonded loan

Revenues in EUR million Operating EBIT in EUR million

6 November 2014

11,442.3 12,157.9

1-9 2014 1-9 2013

-5.9% -16.7%

133.8

1-9 2014 excl. special effects

1-9 2013 excl. special effects

111.4


Development of the Group 1-9/2014 Revenues and EBIT as against previous year

EBIT – EUR 74.5 m (Δ 13/14 EUR -103.2 m / -58.1 %)

– Pressure on margins owing to declining agri markets – 1-9/2013 comprises special items from the disposal of

three property portfolios – Special items in 1-9/2014: restructuring costs from

portfolio streamlining in the Building Materials segment

Revenues – EUR 11,442.3 m (Δ 13/14: EUR -715.5 m / -5.9 %)

– Agriculture reports price-induced revenues decline – Building Materials portfolio streamlining results in revenues

downturn – Downtrend in Conventional Energy due to falling oil prices – Growth of BayWa r.e.

in EUR m

in EUR m

-5.9%

1-9 2014

11,442.3

1-9 2013

12,157.9

-58.1%

74.5

1-9 2014 1-9 2013

177.7

BayWa AG

Development of the Group 1-9/2014 Expansion progress

BayWa excluding companies acquired from 2009 onwards

BayWa including companies aquired from 2009 onwards

Operating EBIT (in EUR m)

BayWa excl. acquisitions

BayWa incl. acquisitions

+86.6%

1-9 2014

111.4

1-9 2014

59.7

6 November 2014

10/14: LDC and Sofiproterol enter into a cooperation

10/14: ADM acquires Specialty Commodities Incorporated

01/14: Cargill purchases 5% of the shares in UkrLandFarming

06/14: Louis Dreyfus acquires Ilomar Holding N.V.

10/14: DAVA Agravis Int purchases Getreide AG

08/14: Lantmännen Cerealia takes over Stängnäs Valskvarn

05/14: Lantmännen and DLG take over Hage Polska

05/14: Bindewald & Gutting GmbH acquires PMG GmbH

10/14: SHV Holdings N.V. takes over Nureco N.V.

10/14: ADM takes over remaining 40% in Toepfer

04 /14: COFCO Corp acquires 51% in Noble Agri

03/14: COFCO Corp acquires 51% in Nidera

BayWa AG 6 November 2014

Global M&A-Activities Agri-Trading Sector 2014

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Development of the Group 1-9/2014 Key Financials – Income Statement


Group

in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014 ∆13/14 (%)

Revenues 5,855.4 7,042.9 7,852.9 12,157.9 11,442.3 -5.9%

EBITDA 157.7 195.0 212.6 263.3 162.2 -38.4%

% of Revenues 2.7% 2.8% 2.7% 2.2% 1.4%

EBIT 86.0 123.1 125.4 177.7 74.5 -58.1%

% of Revenues 1.5% 1.7% 1.6% 1.5% 0.7%

EBT 55.8 87.4 80.8 136.9 30.5 -77.7%

% of Revenues 1.0% 1.2% 1.0% 1.1% 0.3%

Consolidated net income 42.5 68.2 59.8 101.7 22.7 -77.7%

Share of minority interest 14.2 16.2 20.8 20.4 15.5 -24.0%

as % of net income 33.4% 23.8% 34.8% 20.1% 68.3%

Share of owners of parent company 28.3 52.0 38.9 81.3 7.2 -91.1%

as % of net income 66.6% 76.2% 65.2% 79.9% 31.7%

Earnings per share (EPS) in EUR 0.83 1.52 1.13 2.36 0.21 -91.1%

Development of the Group 1-9/2014 Key Financials – Cash Flow Statement


in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014 ∆13/14 (%)

Cash earnings 114.7 130.6 138.3 190.7 89.6 -53.0%

Cash flow from operating activities 47.9 81.4 180.3 167.5 132.4 -21.0%

Cash flow from investing activities -94.0 -149.9 -221.9 71.7 -128.8 > -100%

Cash flow from financing Activities 56.7 77.6 21.2 -236.9 1.1 > 100%

Cash & cash equivalents at the start of the period 19.7 28.2 87.0 83.2 92.1 10.7%

Outflow/inflow of funds owing to changes in the group of consolidated companies and in exchange rates

2.9 26.3 5.2 8.8 0.7 -92.0%

Cash & cash equivalents at the end of the period 33.2 63.7 71.7 94.3 95.7 1.5%

Development of the Group 1-9/2014 Key Financials – Balance Sheet


in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014 ∆13/14 (%)

Total assets 3,440.9 4,087.9 4,846.9 5,285.3 5,673.7 7.3%

Equity 984.0 1,066.2 1,138.6 1,159.7 1,136.1 -2.0%

Equity ratio 28.6% 26.1% 23.5% 21.9% 20.0%

in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014 ∆13/14 (%)

Non-current assets 1,438.8 1,620.2 2,008.9 1,836.0 1,973.5 7.5%

Current assets 1,959.3 2,350.8 2,826.8 3,445.9 3,680.2 6.8%

Provisions 598.0 608.2 623.1 801.7 770.9 -3.8%

Financial liabilities 759.6 1,151.3 1,736.9 1,700.9 2,054.4 20.8%

BayWa AG

Development of the Segments 1-9/2014

6 November 2014

BayWa AG

Agriculture Segment 1-9/2014

Seed

Fertiliser

Crop protection

Grain

Feedstuff

Agricultural equipment

Fruit

6 November 2014

BayWa AG

Agricultural products

World grain balance (without rice; October 2014)

In million tons − Global grain production of just under 2 million tons in 2014/15 matches record set in the previous year

− Global oil seed production reports even stronger growth; 2014/15 output stands at 528 million tons, up 5% yoy

− Despite the sustained increase in consumption, notable growth in grain and oilseed inventories (grain: highest level since 2000/01; oilseed at record high)

− Consequence of bumper harvests and high inventory levels: prices fall to lowest level for four years

− Reaction of market participants: hesitant buying behaviour of processors in expectation of prices falling further; farmers unwilling to sell the harvest in anticipation of prices rising again

− Considerably improved selling options anticipated in Q4, as prices have meanwhile bottomed out and are starting to rise again, causing buyers and farmers to return to the market

− Higher selling levels likely to hold steady also in Q1/15

Source: USDA; 2014/15 forecast

Agriculture Segment 1-9/2014 Market Developments

6 November 2014

Production Consumption Inventory change

BayWa AG

Agricultural resources

Fruit

Agri equipment

– New tractor registration figures in Germany so far just below previous year level (-1.2%)

– In recent weeks, slump in demand; many manufacturers are slashing production

– Growing reluctance of farmers to invest; exception: stabling equipment

Agriculture Segment 1-9/2014 Market Developments

6 November 2014

− Strong demand for fertilisers in H1; hesitant start to upfront buying business in Q3

− Fertiliser prices recently extremely volatile

− Excess supply causes prices for seed to decline; demand stable

− Crop protection: good start to autumn application

– Apple production in the EU (11.9 m tons;+ 9.2% y/y) and in Germany (1.0 m tons; +29% y/y) running at a high level

– At the same time, Russia's export embargo causes a steep decline in exports to Russia

– Polish produce therefore increasingly flooding the EU market and exerting strong price pressure


Agriculture Segment 1-9/2014 Market Price Trends

Granulated Urea & CAN Baltic Sea Ports, 28/10/2014

Source: www.agrarzeitung.de

= Granulated Urea, Baltic Sea Ports

€/t

Wheat & Corn International Paris, 27/10/2014

= CAN, Baltic Sea Ports

€/t

= Wheat Matif, Paris

= Corn Matif, Paris

325.00 € Closing price on

28/10/2014


28/10/2014


27/10/2014


27/10/2014


1-9 2013

EBIT

1-9 2014

40.3 66.1

-39.0%

Agriculture Segment 1-9/2014 Revenues and EBIT as against previous year

Agricultural Trade

6,897.6

Revenues

-8.7% 6,299.6

In EUR m

Revenues: ∆ 13/14 EUR -598.0 million EBIT: ∆ 13/14 EUR -25.8 million Price-induced downturn in revenues Margin squeeze in grain trading Reluctant upfront buying of operating resources;

narrowing margins for cereal seed due to excess market supply


1-9 2014

13.6

1-9 2013

16.2 -16.0%

EBIT

Agriculture Segment 1-9/2014 Revenues and EBIT as against previous year

Agricultural Equipment

-1.0%

Revenues

971.9 981.7

In EUR m

Revenues: ∆ 13/14 EUR -9.8 million EBIT: ∆ 13/14 EUR -2.6 million

Year-earlier revenues level maintained despite weakening markets

Decline in new machinery (-13% y/y) compensated by sale of used machinery

Shift in demand in favour of lower-margin stabling equipment

-24.3%

EBIT

1-9 2014

15.9

1-9 2013

21.0

Fruit

-3.8%

Revenues

432.7 450.0

in EUR m

Revenues: ∆ 13/14 EUR -17.3 million EBIT: ∆ 13/14 EUR -5.1 million

Good sales trend in Q3 Declining prices put pressure on margins Profit contribution by Apollo Apples Ltd not yet included Enza Foods restructuring burdens result

Agriculture Segment 1-9/2014 Key Financials – Income Statement


Agriculture

in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014 ∆13/14 (%)

Revenues 2,560.9 3,222.8 3,819.9 8,329.3 7,704.2 -7.5%

EBITDA 67.0 103.6 116.6 141.1 108.6 -23.0%

% of Revenues 2.6% 3.2% 3.1% 1.7% 1.4%

EBIT 38.1 75.2 81.8 103.3 69.8 -32.4%

% of Revenues 1.5% 2.3% 2.1% 1.2% 0.9%

EBT 19.6 55.1 54.9 76.9 36.4 -52.7%

% of Revenues 0.8% 1.7% 1.4% 0.9% 0.5%

BayWa AG

Energy Segment 1-9/2014

Fuels

Heating Oil

Lubricants

Solid Biofuels

BayWa r.e.

6 November 2014

− Rohöl- & Heizölpreise sinken auf Mehrjahrestiefs

− Crude oil and heating oil prices fall to multi-year low

− Imminent heating season and downturn in prices boost demand for sources of heating from August onwards

− Lubricants sector unchanged from year-earlier level despite economic deterioration in Germany

− Global renewable energies – boom: 80% of capital investments in generating energy in the industrial nations go into renewables

− PV installation at global record high (around 50 GW) in 2014: China, Japan & UK as drivers

− Amendment to German Renewable Energy Act in force since August

− Spain: revision of energy act approved in July 2014; retrospective cap on wind feed-in tariffs

Energy Segment 1-9/2014 Market Developments


Market Trends

Source: TECSON, as of October 2014

Multi-year comparison heating oil prices

Development of heating oil prices in Germany (2012-14)


Conventional Energy

Revenues: ∆ 13/14 EUR -215.5 million EBIT: ∆ 13/14 EUR -3.5 million Price-induced decline in revenues Sharp increase in demand for heating oil at the

end of Q3 Ground made up in sales backlog y/y in the

heating business; lubricants higher y/y

-9.6%

Revenues

2,032.4 2,247.9

-46.7%

EBIT

1-9 2014

4.0

1-9 2013

7.5

Renewable Energy

289.2 Revenues

+60.4% 463.9

Revenues: ∆ 13/14 EUR +174.7 million EBIT: ∆ 13/14 EUR +10.3 million Sharp profit increase in the project business:

Sale of solar parks and wind farms, e.g. in UK (56.3 MW), wind farm in USA (19.8 MW), solar park in Germany (Selmsdorf III; 9.2 MW)

Start-up costs for location build-up in Scandinavia (wind) and USA (solar) compensated

In EUR m In EUR m

Energy Segment 1-9/2014 Revenues and EBIT as against previous year

> +100%

EBIT

1-9 2014

10.2

1-9 2013

20.5

Energy Segment 1-9/2014 Key Financials – Income Statement


Energy

in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014 ∆13/14 (%)

Revenues 1,723.0 2,143.3 2,651.2 2,537.1 2,496.3 -1.6%

EBITDA 25.8 25.5 47.0 41.0 49.1 19.8%

% of Revenues 1.5% 1.2% 1.8% 1.6% 2.0%

EBIT 17.3 14.1 25.0 17.7 24.5 38.4%

% of Revenues 1.0% 0.7% 0.9% 0.7% 1.0%

EBT 15.4 8.1 13.3 6.1 12.8 >100%

% of Revenues 0.9% 0.4% 0.5% 0.2% 0.5%

BayWa AG

Building Materials Segment 1-9/2014

Building Materials

6 November 2014

BayWa AG

Building Materials Segment 1-9/2014 Market Developments

6 November 2014

Market Trends

− Boom in the German construction sector recently slowing after early start to the season

− Summer months determined by weaker construction activities due to the holiday period

− Ifo Business Climate Index for the construction industry falls to its lowest level since December 2012 (-7.1 points)

− In 2014, expansion limited to multi-family homes: full-year growth of 2.3% in construction volume anticipated

− Rising construction prices: cost of new builds around 1.7% higher than in 2013

− Construction investment favoured by the still low interest rate environment

− Solid budgetary position likely to create scope for future public-sector infrastructure expenditure

Sentiment in German Construction Sector

Source: ifo-Institut; as per October 2014

Construction Industry

Expectationbusiness development Assessment

present state of business


-9.6%

Building Materials

1-9 2014*

1,160.9

1-9 2013

1,284.1

Revenues: EBIT:

Building Materials

1-9 2014* 1-9 2013

17.1 12.8

+33.6%

Building Materials Segment (2013 not adjusted) in EUR m

Revenues: ∆ 13/14 EUR -123.2 million

Year-earlier revenues include disposed

locations Following a strong H1, downturn in demand in

the summer months due to the holiday period

EBIT: ∆ 13/14 EUR +4.3 million

Loss-making sold locations not disclosed in core segment in 2014

Volume growth in the warehouse and transit business High-margin renovation and refurbishment business in

decline

Building Materials Segment 1-9/2014 Revenues and EBIT as against previous year

* 2014 excluding the activities of sold locations in NRW and Rhineland-Palatinate (transfer of ownership in Q2)

Building Materials Segment 1-9/2014 Key Financials – Income Statement


Building Materials

* 2014 excluding the activities of sold locations in NRW and Rhineland-Palatinate (transfer of ownership in Q2)

in EUR m 1-9 2010 1-9 2011 1-9 2012 1-9 2013 1-9 2014* ∆13/14 (%)

Revenues 1,462.8 1,558.9 1,319.7 1,284.1 1,160.9 -9.6%

EBITDA 40.2 51.4 38.0 22.2 24.9 12.2%

% of Revenues 2.7% 3.3% 2.9% 1.7% 2.1%

EBIT 19.2 30.5 23.1 12.8 17.1 33.6%

% of Revenues 1.3% 2.0% 1.8% 1.0% 1.5%

EBT 10.1 21.2 16.2 8.3 12.2 47.0%

% of Revenues 0.7% 1.4% 1.2% 0.6% 1.1%


Other Activities 1-9/2014 Revenues and EBIT as against previous year

In EUR m

Revenues: ∆ 13/14 EUR +73.5 million EBIT: ∆ 13/14 EUR -80.7 million

Revenues primarily comprise Building Materials activities of sold locations in NRW and Rhineland-Palatinate

EBIT consists of profit contributions and disposal losses from Building Materials restructuring (in 2013 non-recurrent effects from property disposals)

> +100%

81.0

7.5 Revenues

> -100%

-36.9

1-9 2014 1-9 2013

43.8

EBIT

BayWa AG

Outlook FY 2014

6 November 2014

Outlook for FY 2014

− Bumper harvest volumes create greater grain selling potential − Agricultural commodity prices should have bottomed out; greater willingness anticipated

to sell and buy grain and oilseeds − Upfront fertiliser buying likely to accelerate in the final quarter − Stable development of agri-equipment expected due to rising demand for indoor systems − International trading network of the Group enables intensified selling of high EU stocks

of apples to Asia and North Africa

ENERGY

BUILDING MATERIALS

− Further project sales in renewables planned by the end of the year (e.g. 57.4 MW solar park in France)

− Entry into the US solar project business creates additional profit potential − BayWa r.e. likely to outperform 2013 result − Oil price decline and cold weather to boost heating oil sales − Stable demand for fuel and lubricants anticipated in Q4

BayWa AG 6 November 2014

E ENERGY

BUILD. MAT.

Outlook 2014

− High building permit figures for homes (+9.6% in H1) support construction activities − Stronger demand for higher-margin products for extension and finishing in the final

quarter − Disbursement of supplier bonuses at year end − Sales trend in construction and civil engineering for Q4 depends greatly on weather

conditions

AGRICULTURE

AGRICULTURE

Thank you for your attention The information in this presentation is partly made up of forward-looking statements which are based on assumptions and are subject to unforeseeable risks. In as much as the assumptions on the successful integration of acquisitions and on the internal growth of the company should prove to be inaccurate, or should other unforeseeable risks occur, the possibility of the assets, financial position and results of operations of the Group diverging negatively from the target figures cited in this presentation should not be discounted. BayWa AG can therefore undertake no guarantee that the actual development of the net worth, financial position and results of operations of the Group will concur with the target figures described in this presentation.

interim report as per 30 september 2014 conference call€¦ · interim report as per 30 september...

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