Strong 1st Quarter of 2017 for BayWa: Significant Rise in Revenues and Earnings

Munich, 11 May 2017 – BayWa AG, Munich, started the 2017 financial year exceptionally well: the international trade and services company recorded earnings before interest and tax (EBIT) of €8.0 million as at 31 March 2017. This is an increase of €20.4 million from the previous year (Q1/16: minus €12.4 million). BayWa also recorded a significant rise in revenues, which amounted to approximately €3.8 billion (Q1/16: €3.5 billion). Despite the seasonally difficult market environment in the winter months, all three core operating segments, Agriculture, Energy and Building Materials, were able to improve their revenues and earnings from the same quarter the previous year.

“A successful start to 2017” noted the Chief Executive Officer of BayWa AG, Klaus Josef Lutz, on the 1st quarter and believes that BayWa is on the right track to achieve the significant increase in earnings expected for 2017. Business development benefited from the strong renewable energies business as well as from the rise in the willingness to invest in agriculture and the continuing building boom, explained Lutz. In the Energy Segment, the Renewable Energies business unit reported a strong project business in Great Britain, which included the sale of three solar parks in the quarter under review. In the agriculture sector, the willingness to invest amongst farmers increased due to the rise in producer prices, which primarily benefited the sale of the Group’s tractors and inputs. The Building Materials Segment reported above-average demand for building materials from February onwards and was therefore able to reduce the seasonal downturn. Although the 1st quarter essentially only has limited significance for the rest of the year, Lutz is optimistic: “If the markets play their part, we expect positive business development for 2017.”

Agriculture: More Stable Environment and Higher Liquidity in Agriculture

The Agriculture Segment in the BayWa Group is divided into the four business units of BAST (BayWa Agri Supply & Trade), BAV (BayWa Agriculture Sales), Fruit and Agricultural Equipment and covers the entire value chain from the field through to the marketing of the products. In the first three months of the current financial year, higher revenues compared to the same period the previous year were reported in all four business units in the Agriculture Segment, which led to a noticeable rise in segment revenues (Q1/17: €2.7 billion; Q1/16: €2.6 billion). Besides a rise in the trade volumes of grain and oilseeds as well as fruit, this was also due to higher investments by farmers. The EBIT in the 1st quarter of 2017 improved significantly compared to the previous year (Q1/17: €11.2 million; Q1/16: €0.9 million). The jump in earnings from the first quarter in 2016, which was characterised by difficult agricultural markets, is primarily due to the normalisation of the operating resources business and a strong rise in sales numbers for tractors (new and used machines). In the trade with agricultural products, in the 1st quarter, inventories already sold were not able to be fully delivered and invoiced due to logistical issues, such as low water.

Successful Project Business for Renewable Energies

In the BayWa Group, the Energy Segment includes the trade in fossil and renewable fuels and lubricants as well as the business with renewable energies, which is bundled in BayWa r.e. renewable energy GmbH. Compared to the previous year, after the first three months of 2017, the segment has recorded a significant increase in revenues, which is primarily due to the rise in the oil price level as well as the international business expansion of BayWa r.e. (Q1/17: €770.4 million; Q1/16: €609.8 million). The segment’s EBIT increased significantly from the level reported the previous year, as BayWa r.e. sold three solar parks in Great Britain with a total output of around 100 megawatts (MW) as well as the biomethane plants in Dessau (3.5 MW) and Pessin (3.1 MW) in the quarter under review (Q1/17: €24.3 million; Q1/16: €16.0 million).

Building Materials Trade can take Advantage of an Active Construction Market

The Building Materials Segment is primarily responsible for the trade in building materials in Germany and Austria. In the 1st quarter of 2017, the segment’s revenues rose compared to the previous year, as the high order balances in the building industry had a positive impact on demand for building materials (Q1/17: €290.7 million; Q1/16: €269.0 million). The building materials business also benefited from additional working days as the Easter holidays were in April this year and not during the first quarter, as was the case the previous year. As the continuous optimisation of the site network also had a positive impact, the seasonally negative EBIT in the Building Materials Segment also reduced compared to the previous year (Q1/17: minus €11.4 million; Q1/16: minus €14.9 million).

Further Investment in Digitalisation and Innovation

The Innovation & Digitalisation Segment bundles all the BayWa Group’s activities in the areas of Digital Farming and E-Business. The segment’s slight fall in revenues in the reporting period compared to the previous year is due to the distortion effects of farm management software contracts and will be offset during the year (Q1/17: €1.5 million; Q1/16: €1.8 million). Investments in the development of digital farming solutions as well as the new BayWa Online World mean that EBIT was negative as expected (Q1/17: minus €3.0 million; Q1/16: minus €1.4 million).