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Interim Report First Half 2014 Press Conference Munich, 7 August 2014
Klaus Josef Lutz, CEO
Andreas Helber, CFO
7 August 2014 BayWa AG Page 2
Agenda
1. Development of the Group in the first half of 2014
2. Development of the Segments in the first half of 2014
3. Outlook for FY 2014
BayWa AG
Development of the Group First half 2014
7 August 2014 Page 3
Development of the Group H1/2014 Summary
BayWa AG
Highlights Specification of internationalisation strategy for Agriculture: - Apollo acquisition in NZ; earnings contribution following the approval of antitrust authorities (Q3) - BayWa Agrar International B.V. in the Netherlands - Setup up of Risk Governance / IT Restructuring Building Materials: Transfer of NRW & Rhinel.-Palatinate incl. 555 employees in Q2 Group-wide reduction of 750 employees Expansion of solar project business to the USA (acquisition of Martifer Solar USA, Inc.)
Revenues in EUR million Operating EBIT in EUR million
7 August 2014 Page 4
7,691.0 8,272.8
H1 2014 H1 2013
-7.0% -9.2%
101.0
H1 2014 excl. special effects
H1 2013 excl. special effects
91.7
7 August 2014 BayWa AG Page 5
Development of the Group H1/2014 Revenues and EBIT as against previous year
EBIT – EUR 62.1 m (Δ 13/14 EUR -95.1 m / -60.5 %)
– H1/2013 includes special effects from the disposal of
3 real estate portfolios – Special effects H1/2014: restructuring costs from
portfolio streamlining in the Building Materials Segment
Revenues – EUR 7,691.0 m (Δ 13/14: EUR -581.8 m / -7.0 %)
– Price- and volume-induced decline in revenues in Agriculture and conventional Energy – Revenue growth of BayWa r.e.
in EUR m
in EUR m
-7.0%
H1 2014
7,691.0
H1 2013
8,272.8
-60.5%
62.1
H1 2014 H1 2013
157.2
BayWa AG Page 6
Development of the Group H1/2014 Multi-year comparison of EBIT
in EUR m
7 August 2014
72.5%
Operating result
2.7%
Other Activities
H1 2014
57.5%
91.7
-9.2%
-29.6
H1 2013
101.0
56.2
H1 2012 H1 2011 H1 2010
56.3
91.1 88.7
Other Activities
BayWa AG Page 7
Development of the Group H1/2014 Expansion progress
BayWa excluding companies acquired from 2009 onwards
BayWa including companies aquired from 2009 onwards
EBIT (in EUR m)
BayWa excl. acquisitions
BayWa incl. acquisitions
+183.6%
H1 2014
62.1
H1 2014
21.9
7 August 2014
Development of the Group H1/2014 Key Financials – Income Statement
7 August 2014 Page 8 BayWa AG
Group in EUR m H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 ∆13/14 (%)
Revenues 3,777.7 4,586.2 5,131.3 8,272.8 7,691.0 -7.0%
EBITDA 104.3 136.3 147.1 213.8 120.2 -43.8%
% of Revenues 2.8% 3.0% 2.9% 2.6% 1.6%
EBIT 56.3 88.7 91.1 157.2 62.1 -60.5%
% of Revenues 1.5% 1.9% 1.8% 1.9% 0.8%
EBT 35.9 66.5 62.3 130.4 32.8 -74.8%
% of Revenues 1.0% 1.5% 1.2% 1.6% 0.4%
Consolidated net income 28.1 48.7 47.0 99.0 25.4 -74.3%
Share of minority interest 8.1 11.7 17.5 16.7 12.5 -25.1%
as % of net income 28.8% 24.0% 37.2% 16.9% 49.2%
Share of owners of parent company 20.0 37.0 29.5 82.3 12.9 -84.3%
as % of net income 71.2% 76.0% 62.8% 83.1% 50.8%
Earnings per share (EPS) in EUR 0.59 1.08 0.86 2.39 0.37 -84.5%
BayWa AG
Development of the Segments First half 2014
7 August 2014 Page 9
BayWa AG
Agriculture Segment H1/2014
Seed
Fertilisers
Crop protection
Grain
Feedstuff
Agricultural equipment
Fruit
7 August 2014 Page 10
Agriculture Segment H1/2014 Market Developments
7 August 2014 BayWa AG
Market Trends
World Grain Balance (July 2014)
in million tons
Page 11
− High forecasts for global grain harvest − Grain volume in Germany > 48 MT ( previous
year: 47.4 MT) − High harvest expectations put producer prices
under pressure (wheat price -19 % since April 2014)
− Another record high anticipated for global oilseed supply 2014/15; downturn in soya prices (-20 % since June 2014)
− Price declines result in farmers' unwillingness to sell and market the harvest
− Early start to the season boosts demand for fertilisers and crop protection
− Tractor registration figures marginally down on previous year's record level (-1.8 %)
− NZ apple harvest almost repeats good year-earlier volume; expectations of EU fruit higher y/y due to favorable weather
Sources: DRV, IGC, Copa, Coceral, ACTI, ZMP, Strategie grains, BayWa
Production Consumption Closing balance
*) 2014/15 Forecast
7 August 2014 BayWa AG Page 12
H1 2013
EBIT
H1 2014
42.4 59.5
-28.7%
Agriculture Segment H1/2014 Revenues and EBIT as against previous year
Agricultural Trade
4,880.0
Revenues
-10.5%
4,367.3
In EUR m
Revenues: ∆ 13/14 EUR -512.7 million EBIT: ∆ 13/14 EUR -17.1 million Volume- and price-induced revenue decline Prices for gene-free soybean meal under pressure Lower trading margins
7 August 2014 BayWa AG
H1 2014
11.2
H1 2013
9.7
+15.5%
EBIT
Agriculture Segment H1/2014 Revenues and EBIT as against previous year
Agricultural Equipment
-0.5%
Revenues
648.7 652.1
In EUR m
Revenues: ∆ 13/14 EUR -3.4 million EBIT: ∆ 13/14 EUR +1.5 million
Revenues at high year-earlier level Used machinery sales growth (+6% y/y) Stable service-business
-31.0%
EBIT
H1 2014
12.7
H1 2013
18.4
Fruit
-11.4%
Revenues
268.2 302.7
in EUR m
Revenues: ∆ 13/14 EUR -34.5 million EBIT: ∆ 13/14 EUR -5.7 million
"Enza Foods" restructuring burdens result "FCC" disposal (fruit boxes) not realised Earnings contribution of Apollo Apples Ltd not yet
included
Page 13
Agriculture Segment H1/2014 Key Financials – Income Statement
7 August 2014 Page 14 BayWa AG
Agriculture
in EUR m H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 ∆13/14 (%)
Revenues 1,732.7 2,277.3 2,573.7 5,834.9 5,284.2 -9.4%
EBITDA 55.4 90.6 90.3 112.5 92.2 -18.0%
% of Revenues 3.2% 4.0% 3.5% 1.9% 1.7%
EBIT 36.2 71.8 68.5 87.5 66.2 -24.3%
% of Revenues 2.1% 3.2% 2.7% 1.5% 1.3%
EBT 23.5 59.5 50.9 69.4 44.5 -35.9%
% of Revenues 1.4% 2.6% 2.0% 1.2% 0.8%
BayWa AG
Energy Segment H1/2014
Fuels
Heating Oil
Lubricants
Solid Biofuels
BayWa r.e.
7 August 2014 Page 15
− Price niveau for heating oil in 2014 continuously lower y/y
− Weather-induced modest demand for heating oil and wood pellets
− Lubricants and fuel sales higher y/y
− 20 % of global energy consumption already sourced from renewable energies
− Global record high (approx. 40 GW) in PV installed capacity in 2014 anticipated; China, Japan & UK as drivers
− Increase in US investment in wind power foreseeable owing to extension of tax credits; in 2014 global installed capacity of 45 GW expected
− Legislative amendment stabilises general conditions for renewable energies in Germany
Energy Segment H1/2014 Market Developments
7 August 2014 BayWa AG
Market Trends
Page 16
Wind farm Brahms (19.8 MW), New Mexico, USA
7 August 2014 BayWa AG Page 17
Conventional Energy
Revenues: ∆ 13/14 EUR -178.5 million EBIT: ∆ 13/14 EUR -4.4 million Downturn in heating business (price- and
volume induced) Fuel margins under pressure due to high price
volatility Weak performance in Austria
-12.1%
Revenues
1,299.2 1,477.7
-86.3%
EBIT
H1 2014
0.7
H1 2013
5.1
Renewable Energy
188.7 Revenues
+62.3% 306.3
Revenues: ∆ 13/14 EUR +117.6 million EBIT: ∆ 13/14 EUR +4.2 million Strong expansion of international project
business (wind & solar) High competitive pressure in European PV trade;
consolidation ongoing Sale of solar park (19.5 MW) and 2 wind farms
(38.2 MW) in Q2
In EUR m In EUR m
Energy Segment H1/2014 Revenues and EBIT as against previous year
+33.3%
EBIT
H1 2014
12.6
H1 2013
16.8
Energy Segment H1/2014 Key Financials – Income Statement
7 August 2014 Page 18 BayWa AG
Energy
in EUR m H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 ∆13/14 (%)
Revenues 1,087.2 1,253.4 1,684.1 1,666.4 1,605.5 -3.7%
EBITDA 18.9 8.6 29.9 33.3 33.5 0.6%
% of Revenues 1.7% 0.7% 1.8% 2.0% 2.1%
EBIT 13.3 1.0 15.9 17.7 17.5 -1.1%
% of Revenues 1.2% 0.1% 0.9% 1.1% 1.1%
EBT 12.0 -1.5 8.5 11.0 9.4 -14.5%
% of Revenues 1.1% -0.1% 0.5% 0.7% 0.6%
BayWa AG
Building Materials Segment H1/2014
Building Materials
7 August 2014 Page 19
BayWa AG
Building Materials Segment H1/2014 Market Developments
7 August 2014 Page 20
Market Trends
− Mild winter leads to early and dynamic start to the building season
− Forecast for commercial construction revenues up 1 % to revenue growth of 4.5 % in 2014
− Residential construction as a growth engine: number of residential building permits in Germany climbs by 8.1 % y/y
− Economic growth creates more scope for public infrastructure spending
− Construction investment still favoured by historically low interest rate environment
− Momentum in the sector likely to slow in summer due to high capacity utilisation since the start of the year and the holiday period
Source: ifo Institut; Statistisches Bundesamt, * Forecast (as of June 2014)
Building Investments in Germany (Δ y/y in %)
2012
2013
2014*
-10.1 -2.1
1.1
4.0
3.2
-0.3
5.1
4.0
-1.7 0.3
0.0
-1.4
Residential Construction
Public-sector Construction Commercial Construction
Total Investments
7 August 2014 BayWa AG Page 21
Building Materials (H1/2013 adjusted) In EUR m
Revenues: ∆ 13/14 EUR +40.5 million EBIT: ∆ 13/14 EUR +7.2 million Figures in H1/2013 adjusted for disposals in
NRW & Rhineland-Palatinate
Revenues: ∆ 13/14 EUR -41.5 million EBIT: ∆ 13/14 EUR +12.2 million No further burden on the result from loss-making
locations in NRW & Rhineland-Palatinate in H1/2014
Building Materials Segment H1/2014 Revenues and EBIT as against previous year
> +100%
EBIT
H1 2014
8.0
H1 2013
0.8
Revenues
684.4 724.9
+5.9%
8.0
> +100%
-4.2
H1 2014
H1 2013
EBIT
724.9 766.4 -5.4%
Revenues
- Increase in revenues and earnings due to growth in civil engineering and building construction (residential) - Greater demand for higher-margin gardening product portfolio
Building Materials (H1/2013 not adjusted) In EUR m
Building Materials Segment H1/2014 Key Financials – Income Statement
7 August 2014 Page 22 BayWa AG
Building Materials
in EUR m H1 2010 H1 2011 H1 2012 H1 2013 H1 2014* ∆13/14 (%)
Revenues 872.8 978.5 813.0 766.4 724.9 -5.4%
EBITDA 17.1 27.2 14.1 2.3 13.2 > 100%
% of Revenues 2.0% 2.8% 1.7% 0.3% 1.8%
EBIT 3.0 13.2 4.1 -4.2 8.0 > 100%
% of Revenues 0.3% 1.3% 0.5% -0.5% 1.1%
EBT -2.9 7.0 -0.2 -7.0 4.4 > 100%
% of Revenues -0.3% 0.7% 0.0% -0.9% 0.6%
* 2014 excluding the activities of sold locations in NRW and Rhineland-Palatinate (transfer of ownership in Q2)
7 August 2014 BayWa AG
Other Activities H1/2014 Revenues and EBIT as against previous year
In EUR m
Revenues: ∆ 13/14 EUR +71.3 million EBIT: ∆ 13/14 EUR -85.8 million
Revenues include building material activities in the locations in NRW and Rhineland-Palatinate
EBIT comprises earnings contributions and disposal-losses from restructuring Building Materials and rental expenses (one-time effect from real estate disposals in H1/2013)
> +100%
76.4
5.1 Revenues
> -100%
-29.6
H1 2014 H1 2013
56.2
EBIT
Page 23
BayWa AG
Outlook for FY 2014
7 August 2014 Page 24
Outlook for FY 2014
Page 25
− Global harvest forecast underpins expectations of higher grain selling potential − Agricultural commodity prices should bottom out in H2; growing willingness to market
and buy grain & oilseeds anticipated − Fertiliser price trend likely to encourage upfront buying − Stable business in agri equipment expected; demand growth in farm/animal equipment − Large harvest volumes & good fruit quality in NZ and EU harbours sales opportunities in
Asia and North Africa
ENERGY
BUILDING MATERIALS
− German economic growth boosts fuel and lubricants business − Growing demand for sources of heating anticipated in H2 − Sale of the 57.4 MW "La Coste" Solar Park in France planned − Acquisitions in the USA and Scandinavia strengthen BayWa r.e.'s project pipeline − Amendment of Renewable Energies Act stabilises general conditions for renewable
energies in Germany
BayWa AG 7 August 2014
E ENERGY
BUILD. MAT.
Outlook 2014
− Good construction activity likely to hold steady through to year end; low interest rate level continues to boost investment in real estate
− Annual sector forecast revised upwards: 4% increase in revenues (nominal) in 2014 − Higher-margin warehouse business often stronger in H2 − Several sales campaigns planned in H2
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.
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