Interim Report First Half 2017 Conference Call · 2017. 8. 3. · BayWa AG 03.08.2017 Development...
Transcript of 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 Page 2
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
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BayWa AG
Development of the GroupFirst half 2017
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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)
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Development of the GroupHighlights Strategy YTD (2/2)
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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)
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BayWa AG Page 6
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)
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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
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BayWa AG
Agriculture Segment 1-6/2017
BAST
BAV
Fruit
Agricultural equipment
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BayWa AG
Agriculture Segment in 1-6/2017Market Developments: products
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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
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– 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
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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
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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
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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
Revenues: ∆ 16/17 EUR +73.7 million
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
Revenues: ∆ 16/17 EUR +72.2 million
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
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Agriculture Segment 1-6/2017Key Financials – Income Statement
Page 14BayWa 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%
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BayWa AG
Energy Segment 1-6/2017
Fuels
Heating Oil
Lubricants
Solid Biofuels
BayWa r.e.
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Energy Segment 1-6/2017Market developments
BayWa AG
Renewable Energy
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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)
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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
Revenues: ∆ 16/17 EUR +259.9 million
EBIT: ∆ 16/17 EUR +25.7 million
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
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Conventional Energy
Revenues: ∆ 16/17 EUR +129.8 million
EBIT: ∆ 16/17 EUR +0.5 million
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
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Energy Segment 1-6/2017Key Financials – Income Statement
Page 18BayWa 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%
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BayWa AG
Building Materials Segment 1-6/2017
Building Materials
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Building Materials Segment in 1-6/2017 Market developments
BayWa AG Page 20
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
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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
Revenues: ∆ 16/17 EUR +21.1 million
Brisk construction activities increase demand for
building materials
Sales growth across the entire product range
Sales specialisations (incl. flat roofs, building
components) paying off
EBIT: ∆ 16/17 EUR +1.2 million
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
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Building Materials Segment 1-6/2017Key Financials – Income Statement
Page 22BayWa 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%
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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
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Development of the Group 1-6/2017Key Financials – Income Statement
Page 24BayWa 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%
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BayWa AG
Outlook for FY 2017
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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
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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
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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
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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.