interim report first half 2017 conference call · 2017. 8. 3. · baywa ag 03.08.2017 development...

Interim ReportFirst Half 2017Conference Call

Munich, 3 August 2017

Klaus Josef Lutz, CEO

Andreas Helber, CFO

BayWa AG

Agenda

1. Development of the Group in the first half of 2017

2. Development of the Segments in the first half of 2017

3. Outlook for FY 2017

03.08.2017

BayWa AG

Development of the GroupFirst half 2017

03.08.2017

BayWa AG 03.08.2017

Development of the Group Highlights Strategy YTD (1/2)

Agriculture Segment

BAST: Expansion of speciality trading through the takeover of the Thegra Tracomex Group (100%) in January 2017

Fruit: Entry into the tomato growing business in the United ArabEmirates through a joint venture (49%) with the Al Dahra Group

Agricultural Equipment: Operational start of joint ventureBHBW with Barloworld Limited (South Africa)

Development of the GroupHighlights Strategy YTD (2/2)

03.08.2017BayWa AG

Innovation & Digitalisation Segment

Cooperation with ESA in order to use satellite data

Purchase of majority stake (51%) in service developer forsatellite application Vista GmbH

Building Materials Segment

Successful launch of the BayWa Building Materials online portalfor business customers

Energy Segment

Renewable energies: Market entry into Australia (300 MW solar projects)

BayWa AG

Development of the Group in 1-6/2017Revenues and EBIT as against previous year

Revenues

– EUR 8,044.0 m (Δ 16/17: EUR +587.6 m / +7.9%)

– Increase in revenues of Agriculture, Energy and Building

Materials segments

– Higher price level compensates for downturn in grain and

oilseed selling volumes

– Strong expansion of business in renewable energies

In EUR m

In EUR m

+7.9%

1-6 20171-6 2016

7,456.48,044.0

+31.7%

1-6 2017

72.8

1-6 2016

55.3

EBIT

– EUR 72.8 m (Δ 16/17: EUR +17.5 m / +31.7%)

– Significant increase in the earnings of BayWa r.e.

– Building materials trade higher year on year

– Despite strong business in agricultural equipment, Agriculture

Segment reports decline in earnings due to favourable valuation

effects in 2016 (BAST)

– Postponing effects (fruit)

03.08.2017

03.08.2017BayWa AG

Operating EBIT contribution in EUR million

40.9% 34.8% 55.8%Expansion

percentage56.0%

0

10

20

30

40

50

60

70

80

90

100

110

1-6 20171-6 20161-6 20151-6 2014

Core region (companies consolidated back in 2008)

Expansion (companies acquired from 2009 onwards)

Development of the Group 1-6/2017Expansion progress

BayWa AG

Development of the SegmentsFirst half 2017

03.08.2017

BayWa AG

Agriculture Segment 1-6/2017

BAST

BAV

Fruit

Agricultural equipment

03.08.2017

BayWa AG

Agriculture Segment in 1-6/2017Market Developments: products

Products World grain balance (excluding rice; July 2017)

In millions of tons

Source: USDA; 2017/18 forecast

Grain year 2016/17 closes with record volumes:

Global harvest volume exceeds 2.1 billion tons

Oilseed harvest above 700 million t for the first time

ever

Modest expectations for the 2017/18 harvest:

Global grain production at 2,054 million tons (-3%)

EU harvest volume unchanged y/y (ca 300 m tons)

Increase in global demand may reduce inventories in

the 2017/18 grain year

Long period of hot and dry weather in the US and parts

of Europe reduces grain volumes; German harvest

anticipated at an average 46 million tons (previous year:

45.2 m tons)

Heterogenous grain price trend (Matif) in Q2: significant

recovery in wheat to over 180 €/t at the end of June,

recently in decline; after trending sideways, maize at

ca170 €/t, currently in downtrend; following lowest point

for the year, soya with slight increase in July

03.08.2017

– Sustained recovery in the

agriculture sector’s economic

barometer: 3-year high in June

– Great improvement in farmers’

willingness to invest: value of

planned investments up by

43% y/y; strong demand for

stables and machinery

– Registrations of new tractors in

Germany higher y/y in June

(+0.7%)

Sale of remaining inventory from

EU harvest 2016 at stable prices

NZ 2017 apples: rain causes

late harvest start, selling season

delayed; downward revision in

forecast for volume growth

European 2017 fruit harvest

impacted by extreme weather

conditions: apple volumes in

decline in a range of up to 70%,

depending on the region

Agriculture Segment in 1-6/2017Market Developments: Inputs, Fruit, Equipment

BayWa AG

Input Resources

Normal course of spring fertilizer

season: stable sales trend for

fertilizers

Decline in initial fertilizer prices

slightly above last year’s level for

the 2017/18 season; attractive

storage prices for early order

business

Limited pest outbreak causes only

slight y/y increase in demand for

crop protection

Seed sales at previous years’ level

Fruit Agri Equipment

03.08.2017

EBIT: ∆ 16/17 EUR -8,6 million

Positive trend in national sale of input resources;

international business lower y/y

Germany: BayWa sales for crop protection and fertilizer

better than the market (crop protection products +2.6%

vs. -2.5%; fertilizer +1.2% vs. -2.6%)

Volume decline in feedstuff (-11% y/y)

Result almost at year-earlier level despite higher costs

Agriculture Segment 1-6/2017

Revenues and EBIT as against the previous year

03.08.2017BayWa AG

In EUR m

Revenues: ∆ 16/17 EUR +59.9 million

Decline in trading volume (-3% y/y) through focus on

specialities

Operating performance at year-earlier level; absence

of positive valuation effects (€ 12 m)

Restructuring costs for southern and eastern

European activities (ca € 4 m) burdened result

In EUR m

23,9

32,5

1-6 2016 1-6 2017

-26.5%

EBIT

+1.3%

Revenues

4,592.14,532.2

1-6 2016 1-6 2017

BAST (BayWa Agri Supply & Trade) + BAV (BayWa Agrar Vertrieb)

Revenues EBIT


EBIT: ∆ 16/17 EUR -7.4 million

Increase in apple and tropical fruit sales (TFC)

Postponing effect through delay to start of NZ harvest

Previous year’s result benefited from one-off earnings at

T&G (ca € 7 m)

Lower quality of NZ-pipfruit resulted in higher costs

9.3

-1.4

1-6 2017

EBIT

1-6 2016

> +100%

Agriculture Segment 1-6/2017 Revenues and EBIT as against the previous year

Agricultural Equipment

593.9

Revenues

666.1

+12.2%In EUR m


EBIT: ∆ 16/17 EUR +10.7 million

Volume-induced increase in revenues: sales of used

machinery significantly higher y/y (+42%)

Full consolidation of Agrimec as from July 2016

Leap in earnings from greater service capacity

utilisation and lower inventory levels y/y

Fruit

In EUR m

BayWa AG

15.1

1-6 2016

22.5EBIT

1-6 2017

-32.8%

312.8386.5

+23.6%

Revenues

03.08.2017

Agriculture Segment 1-6/2017Key Financials – Income Statement

BayWa AG

Agriculture

in EUR m H1 2014 H1 2015 H1 2016 H1 2017 ∆16/17 (%)

Revenues 5,284.2 5,372.1 5,439.0 5,614.8 3.2%

EBITDA 92.8 92.0 80.7 77.4 -4.1%

% of Revenues 1.8% 1.7% 1.5% 1.4%

EBIT 65.6 65.2 53.5 48.3 -9.7%

% of Revenues 1.2% 1.2% 1.0% 0.9%

EBT 42.2 38.9 25.7 23.2 -9.7%

% of Revenues 0.8% 0.7% 0.5% 0.4%

03.08.2017

BayWa AG

Energy Segment 1-6/2017

Fuels

Heating Oil

Lubricants

Solid Biofuels

BayWa r.e.

03.08.2017

Energy Segment 1-6/2017Market developments

BayWa AG

Renewable Energy

Conventional Energy

Volatile oil price trend as from April with

downturn; recently fluctuations

of between 45-50 USD/barrel

Heating oil demand in Germany

so far lower y/y due to greater consumer

price sensitivity

Sale of fuel and lubricants benefits from positive

economic trend

Heating oil prices Germany (2015-17)

03.08.2017

Global installation wind (onshore) 54 GW

anticipated in 2017; Thereof Germany 4.6 GW

(EU’s largest market)

Solar energy forecast 2017 world: 80 GW.

Germany reports increase along with China, US

and India: installations from January to May +50%

y/y

Price decline in solar modules stopped: shortage

of supply due to stockpiling in the US

BayWa AG

Renewable Energy

316.1

Revenues

+82.2%

576.0

> +100%

EBIT

41.4

1-6 2016

15.7

1-6 2017



Global expansion in PV component trading:

sales growth of around 50% y/y

Result almost tripled through higher number

of projects sold in H1:

sale of 2 solar parks (ca 75 MW) and

3 wind farms (ca 66 MW)

sale of 2 biomethane plants (6.6 MW)

In EUR m

Energy Segment in 1-6/2017 Revenues and EBIT as against previous year

Conventional Energy



Increase in revenues due primarily to oil prices

Sales decline in heating oil (-7% y/y)

Higher volume of wood pellets (+24% y/y) and

lubricants (+10% y/y)

Fuel business with slight improvement in volumes and

margins

1,088.0958.2

Revenues

+13.6%

+5.9%

EBIT

1-6 2017

7.3 7.8

1-6 2016

In EUR m

03.08.2017

Energy Segment 1-6/2017Key Financials – Income Statement

BayWa AG

Energy

in EUR m H1 2014 H1 2015 H1 2016 H1 2017 ∆16/17 (%)

Revenues 1,605.5 1,349.5 1,274.3 1,664.1 30.6%

EBITDA 33.5 15.7 38.8 66.0 70.1%

% of Revenues 2.1% 1.2% 3.0% 4.0%

EBIT 17.5 -0.9 23.1 49.1 > 100%

% of Revenues 1.1% -0.1% 1.8% 3.0%

EBT 9.4 -7.6 15.0 38.5 > 100%

% of Revenues 0.6% -0.6% 1.2% 2.3%

03.08.2017

BayWa AG

Building Materials Segment 1-6/2017

Building Materials

03.08.2017

Building Materials Segment in 1-6/2017 Market developments

BayWa AG

Market trends

Robust development in building activities in

Germany since February

Revenues from construction activities exceed

previous year's figure by 4.7% (January to April)

Very good assessment of the business situation:

order backlog sufficient for 15 weeks on average

Sustained boom in residential building in urban

areas: completion of ca 320,000 homes

anticipated in 2017

Growth forecast for overall revenues in the

construction sector raised to +6% in 2017; along

with residential construction, public-sector

building (+6%) and commercial building (+4%) as

drivers

Sector currently characterised by longer delivery

times and rising construction costs (+2.8%)

compared with previous year

Sentiment in German construction sector

Source: ifo Institute; as of June 2017

Expectation

Business

development

Construction IndustryAssessment of

current businessIfo Index

Average of

current and

expectation

03.08.2017

http://www.baulinks.de/webplugin/2017/i/0960-ifo.png

BayWa AG

1-6 2017

732.5

+2.9%

Building Materials

753.6

1-6 2016

Revenues: EBIT:

1-6 2017

6.85.6

1-6 2016

Building

Materials

+21.4%

Building Materials Segment

in EUR m


Brisk construction activities increase demand for

building materials

Sales growth across the entire product range

Sales specialisations (incl. flat roofs, building

components) paying off


Higher volumes result in higher earnings

Slight improvement in margins y/y through pricing

measures

Optimisation of locations in previous years taking effect

Building Materials Segment 1-6/2017 Revenues and EBIT as against previous year

03.08.2017

Building Materials Segment 1-6/2017Key Financials – Income Statement

BayWa AG

Building Materials

in EUR m H1 2014 H1 2015 H1 2016 H1 2017 ∆16/17 (%)

Revenues 724.9 689.7 732.5 753.6 2.9%

EBITDA 14.2 7.0 13.2 14.5 9.8%

% of Revenues 2.0% 1.0% 1.8% 1.9%

EBIT 6.7 -0.3 5.6 6.8 21.4%

% of Revenues 0.9% 0.0% 0.8% 0.9%

EBT -0.7 -7.4 -1.5 0.3 > 100%

% of Revenues -0.1% -1.1% -0.2% 0.0%

03.08.2017

Innovation & Digitalisation

Innovation & Digitalisation Segment 1-6/2017Revenues and EBIT as against previous year

In EUR m

BayWa AG

Revenues: ∆ 16/17 EUR -0.3 million

EBIT: ∆ 16/17 EUR -1.6 million

Revenues from the activities of FarmFacts GmbH and

its subsidiaries (software licensing fees etc.)

Higher investments in new “Next Farming” product

generation etc. causes R&D costs to rise

-42.1%

-3.8

EBIT

-5.4

1-6 2016* 1-6 2017

-9.1%

Revenues

3.03.3

* Figures of former Digital Farming Business Unit

03.08.2017

Development of the Group 1-6/2017Key Financials – Income Statement

BayWa AG

in EUR m H1 2014 H1 2015 H1 2016 H1 2017 ∆16/17 (%)

Revenues 7,691.0 7,418.9 7,456.4 8,044.0 7.9%

EBITDA 131.3 109.0 116.6 138.6 18.9%

% of Revenues 1.7% 1.5% 1.6% 1.7%

EBIT 68.3 46.7 55.3 72.8 31.6%

% of Revenues 0.9% 0.6% 0.7% 0.9%

EBT 32.7 14.6 19.2 36.8 91.7%

% of Revenues 0.4% 0.2% 0.3% 0.5%

Consolidated net income 25.6 11.6 14.7 27.4 86.4%

Share of minority interest 12.4 13.2 14.5 12.3 -15.2%

as % of net income 48.4% 113.8% 98.6% 44.9%

Share of owners of parent company 13.2 -1.6 0.2 15.1 > 100%

as % of net income 51.6% -13.8% 1.4% 55.1%

Earnings per share (EPS) in EUR 0.38 -0.05 0.01 0.43 > 100%

03.08.2017

BayWa AG

Outlook for FY 2017

03.08.2017

Outlook 2017Agriculture Segment

AGRICU

LTURE

BUIL

DING

MAT

ERIA

LSBayWa AG

– Global production of grain in 2017/18 below previous year (-3% y/y); stable price development and inventory

reduction around the globe anticipated

– Earnings swing anticipated in 2H due to improved outlook for international trading

– Expansion of higher-margin speciality business (Evergrain, Thegra Tracomex)

– Attractive prices for early order of input resources; new fertilizer regulations in force since June

– Agri-equipment investments likely to increase – order backlog in domestic business significantly higher y/y (+41%)

– Postponing effect with fruit caused by delay of NZ apple exports

03.08.2017

Outlook 2017Energy Segment

AGRICU

LTURE

BayWa AG

− Output sold in 2017 set to exceed the year earlier figure of 215 MW (wind, solar); margin pressure due to

increasing competition in the international project business

− Global expansion of the service business (operational & commercial management of wind/solar farms)

− BayWa r.e. as leading supplier in Europe likely to benefit from demand upturn in trading PV components

− Slight increase in oil prices forecast in H2; heating oil sales expected to slow in the summer months

− Rising demand for fuel and lubricants anticipated due to strong economy

03.08.2017

Outlook 2017Building Materials Segment

AGRICU

LTURE

BUIL

DING

MAT

ERIA

LSBayWa AG

− Forecast for construction revised upwards in 2017: overall increase in revenues of 6% in German construction

industry

Positive expectations of residential construction (+7.5% y/y), commercial construction (+4% y/y), public-sector

construction (+6% y/y)

Headroom for price increases possible due to high capacity utilisation in the sector

Additional value-added potential through expansion of online offerings; expansion of own brand product range

Revenue & profit growth: volume-induced earnings increase likely to continue through to year-end

03.08.2017

Thank you for yourattention

The information in this presentation is partly made up offorward-looking statements which are based on assumptions and are subject to unforeseeable risks.In as much as the assumptions on the successfulintegration of acquisitions and on the internal growth ofthe company should prove to be inaccurate, or shouldother unforeseeable risks occur, the possibility of theassets, financial position and results of operations of theGroup diverging negatively from the target figures cited in this presentation should not be discounted.BayWa AG can therefore undertake no guarantee that theactual development of the net worth, financial position andresults of operations of the Group will concur with thetarget figures described in this presentation.

interim report first half 2017 conference call · 2017. 8. 3. · baywa ag 03.08.2017 development...

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