annual financial statements as per 31 december 2014. press ... · − russia's export embargo...

Annual Financial Statements as per 31 December 2014. Press Conference Munich, 26 March 2015

Klaus Josef Lutz, CEO

Andreas Helber, CFO

26 March 2015 BayWa AG

Agenda.

1. Financial Year 2014

2. Performance of the Segments

3. Group Financials

4. Outlook for 2015

BayWa AG

Financial Year 2014

26 March 2015

BayWa AG

Financial Year 2014 Highlights (strategic)

26 March 2015

GROUP

− Internationalisation of core businesses continued − Entry into digitalisation − Placement of a bonded loan (EUR 383 million) oversubscribed multiple times − Further dividend increase

AGRICULTURE

− Expansion into new agricultural markets in Europe (trading of products and input resources) − Acquisitions: 40% Bohnhorst, 100% Apollo, 100% PC-Agrar − JVs with Unifrutti (50:50) and Barloworld (50:50) − Disinvestment: RKW Süd − Restructuring of fruit business in Germany

ENERGY

− Takeovers of Martifer US & HS Kraft (Sweden) − Extension of the value chain through innovative service offerings (Beegy)

BUILDING MATERIALS − Restructuring of building materials trading − Sale of loss-making locations in NRW & RPF

BayWa AG

Financial Year 2014 Highlights (operational)

26 March 2015

AGRICULTURE

− Volatile grain price development; Russian import embargo affects apple business and grain prices − Limited trading possibilities owing to reticence of market participants in Q2 & Q3 − Second global bumper harvest in a row − Significant catching-up effects in Q4

ENERGY

− Multi-year lows in crude oil and heating oil prices − Renewable Energy: - retrospective subsidy reduction in Spain - strongest project business since the founding of BayWa r.e.

BUILDING MATERIALS

− Building Materials stabilizes above prior year's level after strong start into the year

Financial Year 2014 Summary of the Group´s Key Financials


* Subject to approval by the Annual General Meeting of Shareholders

– Price-induced revenue decline to EUR 15.2 billion

(Δ 13/14: EUR -755.8 million / -4.7%)

– Operating EBIT of EUR 186.4 million achieved on the back of the strong closing quarter

(Δ 13/14: EUR -9.2 million / -4.7%) – Dividend increase to EUR 0.80 per share; payout ratio of 39.4% (after minority interest)*

– Earnings per share at EUR 2.03 (negative tax ratio of -3.3% i.a. owing to loss carryforwards)

Overview

-4.7%

2014

15.2

2013

16.0 -4.7%

2014

186.4

2013

195.6

+6.7%

2014

0.80*

2013

0.75 2.03

-28.8%

2014 2013

2.85

Revenues in EUR bn

Operating EBIT in EUR m

Dividend in EUR

Earnings per Share (after minority interest) in EUR


Operating EBIT contribution in EUR m

0

50

100

150

200

2014 2013 2012 2011 2010

Expansion (companies acquired from 2009 onwards) Core region (companies consolidated back in 2008)

20.8% 18.4% 30.1% 44.4% 43.6% Expansion percentage

Financial Year 2014 Expansion progress

BayWa AG

Performance of the Segments

26 March 2015

BayWa AG

Agriculture Segment 2014

Seed

Fertilisers

Crop protection

Grain

Feedstuff

Agricultural equipment

Fruit

26 March 2015

BayWa AG 26 March 2015

Agriculture Segment 2014 Market developments: Products

Products

World grain balance (excluding rice; March 2015)

In million tons

Source: USDA; 2014/15 forecast

− Global production of grain in 2014/15 amounting to 2 billion tons outperforms previous year's record result; German grain harvest posts 51.9 million tons (+9% y/y)

− Global oilseed production reports even stronger growth: production of 665 million tons in 2014/15 ≈ 5% higher y/y

− Despite steady increase in consumption, significant growth in inventories of grain and oilseeds (grain: highest level since 2000/01; oilseeds: record high)

− Consequence of bumper harvests and high inventories: prices drop until September 2014 to lowest level since four years

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

− Recovery of grain prices starting in October 2014; strong collection & storage business and significant improvement of marketing opportunities in Q4

Produc- tion Consumption

Inventory change

100

120

140

160

180

200

220

240

Pric

es in

€/t

MATIF Wheat CBoT Wheat

MATIF and CBoT wheat price in 2014 (front contract)

Source: HGCA

Ukraine / Crimea Record Crops Crop Worries; Russian Export

Restrictions

Agriculture Segment 2014 Price developments: Products


– Growing reluctance of farmers to invest;

exception: stabling equipment

– New tractor registration figures in Germany below previous year´s level (-4.5%)

– In Q4 slump in European demand for tractors; many manufacturers slash production

– Growth trend digitalisation

− Apple production in the EU:

11.9 million tons; +9% y/y − Apple production NZ: 488,000 t; -8% y/y − Russia's export embargo

causes a strong decline in exports; market opportunities in Asia

− Polish fruits increasingly flooding the EU market and exerting strong price pressure

Agriculture Segment 2014 Market developments: Resources, Fruit, Equipment


Input resources

− Strong demand for fertiliser in H1; in 2014 market growth for fertiliser 8.1% y/y

− Fertiliser price development relatively stable

− Steady demand for seed

− Crop protection: early start to the season in 2014 generates sales growth of 3 - 4%

Fruit Agri-Equipment


2013

EBIT

2014

65.1 80.4

-19.0%

Agriculture Segment 2014 Revenues and EBIT as against previous year

Agricultural Trade

8,886.8

Revenues

-7.4% 8,230.7

In EUR m

Revenues: ∆ 13/14 EUR -656.1 million EBIT: ∆ 13/14 EUR -15.3 million Price-induced downturn in revenues Margin pressure in grain & oilseed trading Sales growth fertilizer and crop protection due to early

start to the saison; stable seed business


Agriculture Segment 2014 Revenues and EBIT as against the previous year

Revenues: ∆ 13/14 EUR +16.7 million EBIT: ∆ 13/14 EUR +1.3 million Revenues reach new record level Increase in the sale of stabling equipment High level of service utilisation New & used machinery: sales below record level

in 2013

Revenues: ∆ 13/14 EUR -3.8 million EBIT: ∆ 13/14 EUR +4.0 million Expansion in international trading activities unable to

compensate for the decline in fruit prices Good T&G sales performance compensates for margin

pressure in Germany Special effect through Apollo takeover

2013

+6.1%

EBIT

2014

22.7 21.4

Agricultural Equipment

+1.3%

Revenues

1,294.0 1,310.7

In EUR m

2013

2014

+18.5% 25.6 21.6

EBIT

Fruit

Revenues

-0.7% 567.7 563.9

in EUR m

Agriculture Segment 2014 Key Financials – Income Statement


Agriculture

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

Revenues 3,505.1 4,258.9 5,051.9 10,748.5 10,105.3 -6.0%

EBITDA 102.0 115.4 139.0 178.6 166.8 -6.6%

% of Revenues 2.9% 2.7% 2.8% 1.7% 1.7%

EBIT 63.9 78.0 91.0 123.5 113.4 -8.2%

% of Revenues 1.8% 1.8% 1.8% 1.1% 1.1%

EBT 38.6 47.8 52.8 87.2 77.5 -11.1%

% of Revenues 1.1% 1.1% 1.0% 0.8% 0.8%

BayWa AG

Energy Segment 2014

Fuels

Heating oil

Lubricants

Solid biofuels

BayWa r.e.

26 March 2015

Energy Segment 2014 Market developments


− Crude oil and heating prices drop to multi-year

low in H2/2014 − Decline of 15.8% in heating oil sales in 2014 due

to the mild weather throughout the year − Strong economy in Germany: fuel & lubricants

sales higher y/y (+3.7% and +0.3% respectively)

− Global renewable energies boom: Investments of USD 310 billion in 2014 (+16% y/y); growth in Asia & USA; decline in EU

− PV installation at global record high (approx. 40 GW) in 2014: China, Japan & USA as drivers

− Global installation of wind energy capacity almost 44 GW (+14% y/y); 4.4 GW newly installed in Germany

− 2.0 amendment to German Renewable Energies Act (EEG) enters into force in August 2014

Market trends

Source: TECSON, as of March 2015

Multi-year comparison heating oil prices Development of heating oil prices in Germany (2012-15)


Conventional Energy

2,702.8

-10.2%

Revenues

3,010.4

-45.3%

EBIT

2014

5.8

2013

10.6

Renewable Energy

786.2

+61.8%

Revenues

485.9

2014

EBIT

36.5

+5.8%

2013

34.5

in EUR m in EUR m

Energy Segment 2014 Revenues and EBIT as against the previous year

Revenues: ∆ 13/14 EUR -307.6 million EBIT: ∆ 13/14 EUR -4.8 million Price- and volume-induced decline in revenues Heating business below year-earlier results due

to mild weather Increase in the sale of lubricants; fuel stable Weak heating oil business in Austria

Revenues: ∆ 13/14 EUR +300.3 million EBIT: ∆ 13/14 EUR +2.0 million Sharp increase in revenues due to expansion in project

and service business PV trade: sales generally stable despite EU market

consolidation Income from the increase in project sales (wind, solar)

secures result for BayWa r.e.

Energy Segment 2014 Key Financials – Income Statement


Energy

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

Revenues 2,358.5 3,111.8 3,676.9 3,496.3 3,489.0 -0.2%

EBITDA 41.7 51.9 72.6 77.8 74.0 -4.9%

% of Revenues 1.8% 1.7% 2.0% 2.2% 2.1%

EBIT 30.3 33.4 43.0 45.1 42.3 -6.2%

% of Revenues 1.3% 1.1% 1.2% 1.3% 1.2%

EBT 25.8 23.1 26.6 31.1 30.6 -1.6%

% of Revenues 1.1% 0.7% 0.7% 0.9% 0.9%

BayWa AG

Building Materials Segment 2014

Building Materials

26 March 2015

Building Materials Segment 2014 Market developments


Market trends

− Weather conditions enable early start to the season with building activities through to year-end 2014; high capacity utilisation

− Low interest rate environment and sound budgetary position support German construction sector

− Growth loses momentum over the course of the year; summer months determined by slowdown

in building activities due to holiday period

− Increase of 3.3% (real) in construction investments in 2014

− Residential construction as a growth driver (+3.5%), mostly urban multi-floor residential building

− Decline in energetic refurbishment

Sentiment in German Construction Sector

Source: ifo-Institut; as of March 2015

Construction Industry

Expectationbusiness development Assessment

present state of business


-10.5%

1,703.1

Building Materials

2013 2014*

1,524.8

Revenues: EBIT:

2014*

Building Materials

+13.7%

27.0

2013

30.7

Building Materials Segment In EUR m

Building Materials Segment 2014 Revenues and EBIT as against the previous year

Revenues: ∆ 13/14 EUR -178.3 million

Revenue drop due to disposal NRW & RPF: approx. EUR 190 million Weather conditions enable early start to the building season Following a strong H1, slowing momentum in H2

EBIT: ∆ 13/14 EUR +3.7 million

High-margin renovation and refurbishment business in decline Sales growth in construction and civil engineering product portfolios

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

Building Materials Segment 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 2010 2011 2012 2013 2014* ∆13/14 (%)

Revenues 1,903.1 2,065.5 1,740.4 1,703.1 1,524.8 -10.5%

EBITDA 47.5 65.6 52.8 38.4 40.9 6.5%

% of Revenues 2.5% 3.2% 3.0% 2.3% 2.7%

EBIT 18.3 36.5 35.4 27.0 30.7 13.7%

% of Revenues 1.0% 1.8% 2.0% 1.6% 2.0%

EBT 8.2 24.0 25.9 21.1 27.1 28.4%

% of Revenues 0.4% 1.2% 1.5% 1.2% 1.8%

BayWa AG

Group Financials

26 March 2015


Group Financials Revenues and EBIT as against the previous year

EBIT – EUR 146.8 million (Δ 13/14: EUR -75.1 million / -33.8%)

– Pressure on margins due to unusual market developments in the

Agriculture Segment – 2013 comprises special items from the disposal of 3 real estate

portfolios – Special items in 2014: i.a. restructuring costs from portfolio

streamlining Building Materials

15,201.8

FY 2014

-4.7%

15,957.6

FY 2013

in EUR m

146.8

-33.8%

221.9

FY 2014 FY 2013

in EUR m

Revenues – EUR 15,201.8 million (Δ 13/14: EUR -755.8 million / -4.7%) – Price-induced decline in revenues from Agriculture – Decline in conventional energy due to falling oil prices – Portfolio streamlining leads to downturn in revenues from Building

Materials – BayWa r.e. achieves sharp increase in revenues


Group Financials Final quarter as against the previous year

EBIT – EUR 72.3 million (Δ 13/14: EUR +28.1 million / +63.4%)

– Strong closing quarter in agri-trading and equipment – BayWa r.e. benefits from project sales in Q4, i.a. solar park La Coste

(57.4 MW), wind farm Anderson (14.9 MW)… – T&G takeover of Apollo delivers special effect

-1.1%

Q4/2014

3,759.5

Q4/2013

3,799.7

Revenues – EUR 3,759.5 million (Δ 13/14: EUR -40.2 million / -1.1%)

– Price level of grain and heating oil below previous year – High collection, storage and selling volumes of grain and

oilseeds – Mild weather leads to decline in heating oil sales – Sharp revenue increase BayWa r.e.

in EUR m

in EUR m

+63.4%

Q4/2014

72.3

Q4/2013

44.2

Group Financials Key Financials – Income Statement


Group in EUR m 2010 2011 2012 2013 2014 ∆13/14 (%)

Revenues 7,903.0 9,585.7 10,531.1 15,957.6 15,201.8 -4.7%

EBITDA 228.2 251.3 306.6 360.4 264.6 -26.6%

% of Revenues 2.9% 2.6% 2.9% 2.3% 1.7%

EBIT 128.9 149.2 186.8 221.9 146.8 -33.8%

% of Revenues 1.6% 1.6% 1.8% 1.4% 1.0%

EBT 87.1 95.4 122.6 168.3 87.6 -48.0%

% of Revenues 1.1% 1.0% 1.2% 1.1% 0.6%

Consolidated net income 66.8 68.1 118.0 121.3 90.5 -25.4%

Tax rate 23.3% 28.6% 3.8% 27.9% -3.3%

Share of minority interest 16.4 17.6 21.3 23.1 20.3 -12.1%

as % of net income 24.6% 25.8% 18.1% 19.0% 22.4%

Share of owners of parent company 50.4 50.5 96.7 98.2 70.2 -28.5%

as % of net income 75.4% 74.2% 81.9% 81.0% 77.6%

Earnings per share (EPS) in EUR 1.48 1.48 2.82 2.85 2.03 -31.0%

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

Total assets 3,260.3 3,922.0 4,460.2 5,015.1 5,486.3 9.4%

Equity 987.7 1,045.2 1,078.0 1,182.0 1,127.2 -4.6%

Equity ratio 30.3% 26.6% 24.2% 23.6% 20.5%

Equity ratio adjusted* 27.1% 26.1% 24.5%

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

Non-current assets 1,434.4 1,623.4 1,783.3 1,914.7 2,104.3 9.9%

Current assets 1,776.8 2,039.8 2,444.4 3,057.0 3,363.5 10.0%

Provisions 620.4 639.9 784.2 772.6 921.2 19.2%

Current financial liabilities 538.2 584.3 897.7 1,136.6 1,170.7 3.0%

Non-current financial liabilities 271.2 570.4 649.2 628.6 952.5 51.5%

Group Financials Key Financials – Balance Sheet


* Adjusted for the reserve formed since 2012 for actuarial profits and losses

Group

Group Financials Key Financials – Cash Flow Statement


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

Consolidated net income 66.8 68.1 118.0 121.3 90.5 -25.4%

Cash flow from operating activities -9.4 -27.5 150.0 219.3 -112.4 > -100%

Cash flow from investing activities -113.5 -222.6 -193.6 15.6 -224.7 > -100%

Cash flow from financing activities 131.6 273.9 37.4 -217.1 351.0 > 100%

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

Cash & cash equivalents at the end of the period 28.2 87.0 83.2 92.1 106.1 15.2%

Group


Other Activities 2014


Other Activities 2014 EBIT as against the previous year

in EUR million

Revenues: ∆ 13/14 EUR +73.0 million EBIT: ∆ 13/14 EUR -65.9 million

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

EBIT includes i.a. restructuring costs Building Materials (in 2013 special effect from real estate disposals)

> +100%

82.7

9.7 Revenues

> -100%

-39.6

2014 2013

26.3

EBIT

BayWa AG

Outlook for 2015

26 March 2015

Outlook for 2015

– Strong post-harvest collection and storage business expected – Increase in the volumes of grain and oilseeds through new trading companies in

Italy, Spain and Romania – Input resources at high year-earlier level – High orders on hand in agri-equipment; slowdown in momentum forecasted for H2 – Apollo takeover opens opportunities in international Apple trading (Asia)

− Modest construction forecast for 2015: +2% revenues in construction sector

− Recovery in energetic refurbishment anticipated

− High order book levels of construction companies likely to promote performance

− Expansion planned for own brand product range

− Strengthening B2C sales structure and e-commerce

AGRICULTURE

ENERGY

BUILDING MATERIALS

− No sustainable recovery in oil prices expected; heating oil market remains in decline

− Strong economy raises expectations of stable demand for fuel and lubricants

− Projects with output capacity > 300 MW planned in 2015 (wind, solar)

− Entry into the solar project business in the USA generates additional profit potential

− Ongoing consolidation in the PV trade in EU; expansion of market shares possible


AGRICULTURE

E ENERGY

BUILD. MAT.

Outlook 2015

Thank you for your

attention!

annual financial statements as per 31 december 2014. press ... · − russia's export embargo...

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