DGAP-News: BayWa AG (vink. NA)

BayWa Increases Revenues and EBIT Year-on-Year After First Nine Months

BayWa AG, Munich, Germany, has successfully wrapped up the first nine months of 2017 with increases in revenues and EBIT. The revenues of the international trading and services group came to approximately EUR12 billion as at 30 September 2017 (9M/2016: EUR11.4 billion). Earnings before interest and tax (EBIT) climbed to EUR90.3 million at the end of the third quarter (9M/2016: EUR85.4 million). This improvement in earnings was carried by all three core operating segments: Agriculture, Energy and Building Materials. In terms of Agriculture, the extremely positive development of agricultural equipment business overcompensated in particular for the weather-related losses in fruit trading. Agricultural trading and sales activities were also able to outperform the previous year, despite restructuring costs. "The process of recovery in the Agriculture Segment has continued and we expect further gains in the final quarter," said Klaus Josef Lutz, Chief Executive Office of BayWa AG. The Energy Segment benefited both from higher volumes of fuel sales and the further expansion of renewable energy project and service business. The Building Materials Segment also developed positively, which was due to the increase in sales of building materials in Germany caused by the upturn in macroeconomic development.
"All in all, we believe that we will carry this positive performance through to the fourth quarter and generate significant year-on-year increases in full-year revenues and EBIT," said Lutz, looking to the end of the financial year.

Agriculture Segment: Positive Development, Particularly for Agricultural Equipment
The Agriculture Segment, which is divided into Grain Origination and Agricultural Trade, Fruit and Agricultural Equipment business units, generated a slight year-on-year rise in revenues to EUR8.25 billion (9M/2016: EUR8.19 billion) as well as a significant improvement in earnings to EBIT of EUR49.6 million (9M/2016: EUR45.1 million) as at 30 September 2017.

The earnings improvement was primarily due to the considerable rise in the sale of new and used machinery (particularly tractors) and cost savings. As expected, the widespread willingness of farmers to invest in agricultural equipment continued. The third quarter in the Agriculture Segment was characterised by subdued export and marketing activities for standard produce such as wheat and corn, which was caused by falling prices. Fruit trading activities also failed to match the level of the previous year due to a delay to the marketing season for overseas apples due to weather conditions and the failed harvest in Germany and Europe; in addition, the previous year had benefited from a one-off effect from the sale of a T&G Global Limited shareholding.

Energy Segment: Conventional and Renewable Energies Increase Earnings
The Energy Segment comprises the BayWa Group's trading activities in fossil and renewable heating fuels, fuels and lubricants as well as its business in renewable energies, which is pooled in BayWa r.e. renewable energy GmbH. This segment recorded significant year-on-year revenue growth to EUR2.5 billion as at 30 September 2017 (9M/2016: EUR2.07 billion). This was primarily due to the international expansion of BayWa r.e.'s activities and the higher oil price compared to 2016. EBIT also rose significantly year on year at the end of the third quarter, standing at EUR63 million (9M/2016: EUR57.7 million). The volume-related increase in earnings in conventional energy business contributed to this positive trend, as did the rise in earnings contributions from BayWa r.e., which sold solar, wind and biogas plants with a total output of over 290 megawatts (MW) in Europe, Australia and the US in the first nine months of 2017. Further plant sales are planned for the final quarter.

Building Materials Segment: Positive Performance Due to Ongoing Strong Trend in the Construction Sector
The Building Materials Segment mainly comprises Group trading activities involving building materials in Germany and Austria. Revenues in the first nine months of the current financial year rose to EUR1.2 billion (9M/2016: EUR1.17 billion), while EBIT climbed to EUR21.6 million (9M/2016: EUR18.8 million). This positive trend was mostly due to demand for building materials in the German construction sector, which is enjoying consistently strong development. However, the segment not only benefited from the rise in order intake due to persistently high demand across the full range of building materials, it also profited from the specialisation of sales in areas such as flat roof construction and building components. This ensured that the volume-related earnings advantage established in the first half of the year was able to be further increased in the summer of 2017.

Innovation & Digitalisation Segment: Significant Rise in Revenues due to Broader Product Range
The Innovation & Digitalisation Segment pools all BayWa Group activities relating to digital farming and e-business and has existed for over a year. Revenues in this segment rose significantly as at 30 September 2017 to EUR4.8 million (9M/2016: EUR4.4 million). This was primarily due to the broader product range and the international expansion of sales activities over the past few months. Due to the year-on-year rise in investments in the development of digital farming solutions and the new BayWa Online World, the segment recorded EBIT of
EUR-7.9 million after the first nine months of the year (9M/2016: EUR-6.2 million).

BayWa Group performance

Agriculture Segment performance

Energy Segment performance

Building Materials Segment performance

Innovation & Digitalisation Segment performance

¹ Includes the figures for the Agriculture, Energy, Building Materials, Innovation & Digitalisation and Other Activities Segments as well as the transition.